Crain's Cleveland Business

VOL. 38, NO. 27

JULY 3 - 9, 2017

Source Lunch

Akron

Lawrence Benders, president & executive director of the Cleveland Sight Center

The Rubber City looks to Nashville for inspiration. Page 16

Page 19

CLEVELAND BUSINESS

The List Largest nonprofits, Page 14

HEALTH CARE

AT THE TABLE

Summa presses on amid turmoil

Area restaurants love to take it outside

By LYDIA COUTRÉ @LydiaCoutre lcoutre@crain.com

The lower-level of the patio at Jekyll’s Kitchen offers a spectacular view of the Chagrin River falls on an early summer evening. (Peggy Turbett for Crain’s)

Outdoor seating boosts bottom lines, keeps patrons happy

By JOE CREA clbfreelancer@crain.com

Clevelanders are sun-struck. At least where patio dining at restaurants is concerned.

It hit me, one broiling summer day, while walking in the city’s Warehouse District. I discovered streets lined with cafe tables, filled with diners, chugging iced tea and gulping exhaust fumes. Sun worshippers all.

Definitions of “perfect” patio conditions vary. For winter-weary Cleve-

landers hungry for every day that doesn’t involve a snow shovel, any temperate day will do.

WKYC-TV chief meteorologist Betsy Kling is glad to tackle the question of why outdoor dining is such a big hit on the North Coast.

“In Cleveland, we know how to appreciate great weather when we have it — whether it’s the summertime when the nights are warm and the mosquitoes are few and far between, or even in the spring or fall, when we get those perfect snapshots when better weather comes along,” Kling said.

Entire contents © 2017 by Crain Communications Inc.

Inside Al fresco options: Joe Crea’s list of 12 can’t-miss restaurant patios. Page 17

Low humidity is a prerequisite for Kling’s definition of a great day for lingering over dinner and drinks under the sun.

“That, and temperatures that are in the 70s or 80s in the shade. So you’re not sweating it up,” she chuckled.

Area restaurateurs share Kling’s ardor for dining under open skies.

“Being a Clevelander and cooking here for 25 years, anyplace I’d open I’d want a patio,” said Brian Okin, chefco-owner of Graffiti Social Kitchen in the Battery Park neighborhood and Cork & Cleaver in Broadview Heights.

“We just don’t get enough time outdoors here. Clevelanders want their patios,” Okin added.

Joe Saccone, chief operating officer of the Hyde Park Restaurant Group and operator of Jekyll’s Kitchen in Chagrin Falls, considers patios very important.

SEE PATIOS, PAGE 17

Community trepidation, tense provider relationships and tumbling revenues at Summa Health in Akron are making an already difficult job more challenging as interim CEO Dr. Cliff Deveny tries to right the ship after a tumultuous start to 2017.

Deveny shared some grim facts with staff and the community last week “not to create fear,” he said, but to state the reality facing the health system: Dramatically decreased inpatient and outpatient volumes have resulted in staggering operating losses that, at the current pace, would mean a more than $60 million loss projected this year.

This would come on the heels of a nearly $30 million profit last year.

Deveny began taking steps and making cuts to address this, but he does not believe the health system can break even this year, which started with a $15 million operating income loss in the first quarter. Deveny expects the second quarter to look similar.

And the forces that have largely driven the falling revenue and restricted patient volumes will likely take more time to address.

For one, the payer mix has become challenging. Summa saw a greater-than-expected shift in the portion of patients using self-pay, Medicare and Medicaid, which reimburse at lower levels than commercial insurance.

Health systems across the country are already facing tough-to-swallow reimbursement levels that are potentially facing drastic changes as Washington works through health reform.

And in the first quarter of the year, outpatient visits were down 5% and inpatient admissions were down 7% compared to the same timeframe last year, according to Summa’s first quarter financial disclosure.

SEE SUMMA, PAGE 15

Small business << Amid

a residential boom, fitness businesses thrive downtown. Page 10

Shiner shortage dings bait shops. Page 11 Family relationships can be challenging during succession planning. Page 12

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CRAIN’S CLEVELAND BUSINESS

Gent jumps from South Euclid to Cleveland

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Gent Machine Co. has seen significant growth in recent years, but its building wasn’t keeping up.

Sales and employment numbers had increased about four times over since 2009, said vice president Rich Gent. The building it had occupied since the 1940s in South Euclid was, of course, the same size. Even after buying and renovating a bus garage next door to add more space, the company only had about 23,000 square feet with which to work.

This spring, Gent Machine moved into a renovated, 83,000-square-foot building at 12315 Kirby Ave. in Cleveland. Even with plans to rent out about 23,000 square feet, the move gives Gent Machine the room it needs.

“You go back and you look, and you’re like, ‘How did we fit in here?’

But like anything, we just kept squeezing and squeezing,” Gent said.

“And here, we just have so much space to just grow into.”

Gent and his brother, president Adam Gent, bought the family business in 2009. Their father, Richard Gent, still owns a minority share. The screw machine company makes a variety of small, precise parts for different industries. While it has long focused on screw machining, it has expanded capabilities in recent years to include CNC machining and rotary transfer. Automotive has been

This spring, Gent Machine moved from South Euclid into a renovated, 83,000-square-foot building in Cleveland. (Contributed photo)

strong, and the company has grown that portion of its business from about 30% five years ago to above 50% now.

The company’s growth really started to take off about five years ago.

That was when it picked up a notable client in electric car manufacturer Tesla, Gent said.

“I mean, for a small firm like ours, certainly, getting a big customer like Tesla, it can be a game-changer,” Gent said. “Which it was.”

Gent Machine is on target to post $8 million to $9 million in sales this year, up about 5% from last year, Gent said. The company has about 50 employees.

Gent said the company looked for a way to stay in South Euclid, even going as far as to get architectural

“Companies, such as Tesla, sought out firms like ours because they’re aware of the synergy that we have here, in terms of, we can take a part from raw material to finished good within Northeast Ohio.”

— Richard Gent, Gent Machine vice president

drawings for its South Green space.

But it couldn’t find a way to make it work, logistically or financially. It’s

Recognizing the fastest-growing companies in Northeast Ohio.

now working to sell those buildings.

Gent said the goal was to keep the company in eastern Cuyahoga County to make the transition as smooth as possible for employees, so the Kirby Avenue location fit the bill. And Gent said there’s some “curb appeal” to having an address in Cleveland city’s limits.

“Cleveland has a reputation of being a manufacturing hotbed,” Gent said. “And companies, such as Tesla, sought out firms like ours because they’re aware of the synergy that we have here, in terms of, we can take a part from raw material to finished good within Northeast Ohio.”

But the building wasn’t without its challenges.

The previous occupant was a commercial laundry service, which meant there were environmental precautions to take. That was a “big wild card” because no one could quickly tell Gent Machine how much it would cost to clean up the property, if clean-up was required. But the company was able to make it work with the help of some funding from JobsOhio, the state’s private nonprofit for business attraction, retention and expansion.

Gent said the building had to go through a more basic phase I environmental report and a more extensive phase II report to receive loans.

The latter step analyzed the site, looking at features like groundwater and soil. JobsOhio gave the company a revitalization grant of almost $180,000 for that, as well as another $250,000 revitalization grant that

Gent said went toward a vapor mitigation system. Ultimately, everything on site was within EPA limits, Gent said, but the company wanted to go a step further to ensure safety.

“JobsOhio and Team NEO worked closely with the Gent Machine Company early in the process to overcome some of the challenges of acquiring a property that needs to be revitalized,” JobsOhio spokesman Matt Englehart said in an email. “This enabled us to take the additional steps necessary to ultimately help the company move forward with property purchase and grow in Greater Cleveland.”

In total, Gent said Gent Machine is investing about $1.7 million in the purchase and renovation of the building, not including the money from JobsOhio. The purchase closed in May 2016, and heavy construction started last November, Gent said. The company officially began moving May 1, 2017, staggering production so it never had to shut down completely. The whole process took about three weeks.

In addition to the funding from JobsOhio, the city of Cleveland gave Gent Machine a $180,000 Vacant Property Initiative loan. The term of the loan is five years, and it’s 100% forgivable if Gent Machine brings 50 new jobs to the city of Cleveland, said David Ebersole, interim director of economic development for Cleveland. Meeting that shouldn’t be a concern for Gent Machine, as simply moving the jobs to the city counts as creating new jobs there.

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PA G E 3

I-X Center lands a big piece of its history

By JAY MILLER jmiller@crain.com @millerjh

The I-X Center has rescued an aircraft with ties to the massive, World War II-era building and plans to showcase it on the complex's 1 million-square-foot exhibition floor.

The airplane, a KC-97 Stratofreighter flying tanker, is in pieces for now. But within a year, with the investment of $1 million-plus, I-X Center executive vice president Bill Perrien hopes to have it put back together and on display at the building, where many of the parts and assemblies of the aerial refueling tanker and its brother, the B-29 Superfortress bomber, were manufactured.

“It’s amazing,” said Ray Park, chairman of the Park Corp., owner of the I-X Center, as he watched two of the five restoration workers puttering around the plane. “It’s what the building was built for.”

Park credits his staff, led by Perrien, with seeking out a plane and planning its future at the exhibition hall. But it fits nicely into his long history of building the Park Corp.

In 1997, Forbes described Park as building “a billion-dollar fortune recycling yesterday’s industrial wonders, among them a copper mine in Green Valley, Ariz., road-building equipment in Costa Rica, steel mills in Pittsburgh and unused nuclear reactor parts from the Tennessee Valley Authority.”

For now, the 117-foot-long fuselage, cut into two pieces for shipping, sits on stands in a corner of the immense main exhibition space at the center, which was built by the federal government in 1942 to manufacture parts and assemble aircraft for the war effort. Two engines, two wings,

Within a year, the I-X Center hopes to have the KC-97 Stratofreighter flying tanker put back together and on display. (Jay Miller for Crain’s)

two fuel tanks, the horizontal stabilizer, tail rudder and tires lay scattered nearby.

Perrien said he found the aircraft at the U.S. Air Force’s Aerospace Maintenance and Regeneration Center (AMARC) in Tucson, Ariz., a part of Davis-Monthan Air Force Base. It had sat there since 1960, he said.

AMARC claims to be the largest aircraft boneyard in the world, at times having an inventory of nearly 4,000 planes. The planes are either damaged, in various stages of disrepair or nearly ready to fly. While many will end up being scrapped, they also are salvaged for parts and even used by the Air Force for target practice.

“The thing landed in the desert back in 1960, and we were able to acquire it,” Perrien said, during a onehour tour. “We always wanted to get a B-29 bomber here because of the history of the building. The closest thing

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we could get was this KC-97, so we had it disassembled and shipped here.”

The KC-97 has a wingspan of 141 feet and was 39 feet 4 inches tall and could carry between 9,000 and 15,000 gallons of fuel, depending on the model. It would carry a crew of five. In various configurations, it survived in service into the Vietnam War. The building, which has a total of 2.2 million square feet on three levels, was built in 1942 by the federal government to supply the war effort.

It was operated by the General Motors Corp. to build the Boeing Co.-designed B-29, which was used mostly for fighting the Japanese over the Pacific Ocean.

But, said Perrien, whose father worked in the plant, the government decided that final assembly was taking up too much manufacturing floor space so final assembly was done at a plant in Wichita, Kan. The Cleveland

The 117-foot-long fuselage, cut into pieces for shipping, sits in a corner of the main exhibition space at the center. (Jay Miller for Crain’s)

plant was used to make parts and to build and assemble wings and the tail rudders. The plant employed as many as 15,000 at its peak, according to the Encyclopedia of Cleveland History.

The Cleveland Bomber Plant, or Fisher Body Aircraft Plant No. 2, as it was more formally known, was turned over to GM’s Cadillac division in 1950, as the Korean War was heating up, to build tanks. The Cleveland Tank Plant, as it became known, operated until 1960, producing tanks and a variety of other heavy military vehicles until 1972.

The building was purchased by Park Corp. in 1977 and turned into the International Exposition Center, as it was formally dubbed.

Perrien said he’s still working out the best way to take advantage of the plane.

“The plan is to have it on the exhibition floor available for visitors to tour,” he said. “The idea is we’re going

to clean it up, renovate it and make it a centerpiece of the shows here.”

The center has 17 major events annually and many smaller trade shows, conferences and other events, some with transportation or military themes. Among the major attractions are the annual Cleveland International Auto Show, The Cleveland Outdoor Adventure Show, The Great Big Home & Garden Show, the Ohio RV Supershow and Wizard World Comic Con. Earlier this year, the Military Vehicle Preservation Association held its annual conference at the I-X Center.

Perrien said he thinks it might end up being flanked by a bar and restaurant, though it will be movable.

“We have four hangar doors 150feet by 152-feet and it will have foamfilled tires, so we could push it outside,” he said.

Asked again his role in the project, Park just said, “I just helped pay for it.”

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CRAIN’S CLEVELAND BUSINESS

J U LY 3 - 9 , 2 017 |

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M&A deals blanket local architecture landscape The latest is a venture with Fleischman and DS Architecture

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Cleveland architect Richard Fleischman and his firm have over five decades put a distinctive, modernist stamp on structures as varied as the University of Akron’s Goodyear Polymer Building and the Ohio Aerospace Institute in Brook Park.

The design of the buildings may be timeless, but Fleischman is 88 — he prefers to call himself vintage — so he has shut Fleischman Architects and has formed a joint venture with Kent-based DS Architecture to allow him to continue practicing.

The unconventional combination (Fleischman said what else could be expected of him) is part of a trend in mergers and acquisitions sweeping architecture and engineering firms locally and nationally. Aging of the generations younger than Fleischman, especially baby boomers, and strategic mergers to gain expertise and aid recruitment are driving the trend, practitioners and consultants say.

Locally, Cleveland-based Westlake Reed Leskosky, the city’s largest firm, joined Minneapolis-based DLR Group. Seven Hills-based KA Architects was bought by Nelson, also headquartered in Minneapolis, and local firms have merged, as with Akron-based Chambers, Murphy & Burge Historical Architecture joining Shaker Square-based Perspectus.

Other reasons also factor in: Westlake Reed boosted DLR’s design chops, KA is part of a move by interior design firm Nelson into groundup architecture, and Chambers Murphy added to the Perspectus portfolio in historic preservation.

Experts expect this round of mergers to exceed the last big round in the late-1980s and early-1990s.

Several experts foresee at least 10% of Northeast Ohio architecture firms merging with out-of-town firms, if not larger local firms. Pent-up demand accounts for the surge, primarily due to the downturn surrounding the Great Recession that put many real estate service firms into survival mode, according to Phil Keil, a strategic planning mergers and acquisition consultant with Fayetteville, Ark.based Zweig Associates, which also tracks merger activity and other metrics among architecture and engineering firms.

“When 2008 rolled around, a lot of principals of firms extended their careers beyond their regular retirement date,” Keil said in an interview. “With the graying of America, principals in a lot of 30-employee firms are in that range. A lot of firms also lost personnel, including the middle management and mid-career people. They don’t have anyone to turn the firm over to.”

The Midwest is on the cusp of the M&A action because the feeling is that firms on the coasts have plucked prizes in their region and are looking in the middle of the country, especially in growing second-tier markets, Keil said. The much-watched Zweig survey in 2017 estimates that 62% of the architecture and engineering firms surveyed nationally have M&A intentions.

Many firms also seek merger or acquisition targets for strategic reasons.

Keil said firms want to move into

Jeffrey Meyers of DS Architecture, left, and architect Richard Fleischman have formed a joint venture. (Stan Bullard for Crain’s)

areas where they may not be represented, such as health care, to expand faster than they could organically, or to get into a region where it is difficult to start an office.

Recruiting also plays a role. For instance, DS Architecture will pay Fleischman’s remaining five staffers, rent for the office and other overhead as it gains a Cleveland presence.

Jeffrey Meyers, a DS principal, called it a relationship that allows Fleischman to mentor his firm’s designers and continue to practice. It also frees Fleischman of the fiscal responsibility of joining a younger, growing firm, which may present financial risk, Meyers said.

Meanwhile, the DS NineTwelve office will help Meyers in his firm’s crucial Cleveland recruiting efforts. Two DS staffers already work in Fleischman’s Cleveland office because it’s a shorter commute than Kent.

Brian Fabo, president of Flatsbased Fabo Architecture, said he considered going the merger and acquisition route because of difficulty recruiting trained personnel. This

“With the greying of America, principals in a lot of 30-employee firms are in that range.

A lot of firms also lost personnel, including the middle management and mid-career people.

They don’t have anyone to turn the firm over to.”

— Phil Keil, strategic planning mergers and acquisition consultant with Zweig Associates

spring, the fast-growing firm had to add jobs to a staff that has grown to 23 from 13 just two years ago.

Even though the firm resorted to posting fliers in the Warehouse, NineTwelve and Theater districts — near where multiple architecture firms have offices — to recruit, Fabo made do with short-term solutions such as hiring an intern and a post-graduate designer taking a break before graduate school. He rejected the idea of buying a firm to add staff and grow.

“I’m really torn by the question,” Fabo said. “I also look to grow strategically in other parts of the state or country. If I buy a firm, it has to have the same culture, which is everything to us. Would I be better off to grow from scratch?”

Architect Scott Maloney, president of Ohio City-based k2m Design, isn’t looking to be acquired but to buy, as k2m recently did with an Indianapolis firm.

He has intentionally grown the firm with acquisitions, adding four other companies since he set up shop 16 years ago. Culture is always a part of each deal, he said, as talent is the largest thing such firms have to offer; he noted his firm’s chief operating officer joined the firm via a merger.

“A lot of baby boomers want to continue practicing into their 70s and they have a lot to contribute,” Maloney said. “I call this an opportunistic market because sellers are making money, and acquirers are making money and have cash to do deals or are able to get loans to give partners (in potential targets) what they want."

He continued, “It’s also a seller’s market because a lot of bigger firms are looking for acquisitions in the 100- to 300-person range. A small firm typically closes when the principal retires, but when the firms get to about 30 to 50 people, it becomes a different question in terms of what becomes of the firm.”

Finding qualified staff on the coasts is a challenge, Keil said, adding, “Instead of recruiting, a lot of firms are turning to mergers and acquisitions.” It’s an incredible turnaround for an industry where grads during the downturn were termed a “lost generation” because entry level jobs grew so scarce.

Keil added that, thanks to all the action, firm values are climbing. He estimates architecture and engineering firms are trading for prices averaging as much as 73% of net fee income now, compared with 50% historically.

Meyers of DS said working with Fleischman, who bounced back from a stroke last December and continues to create innovative solutions to design problems, will help the Kent firm meet its growth goals. DS, with a staff of 23, including 11 registered architects, hopes to hit 40 staffers in 2020 and 100 by 2027.

“This is like merging with a national firm,” Meyers said. “We’re just not there yet.”

CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS

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PA G E 5

Darko plots expansion in Bedford Heights

By JAY MILLER

â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a custom company, mainly working with brands but also with retailers. Weâ&#x20AC;&#x2122;re very heavy into technology, LCD screens, a lot of motion, a lot of audio.â&#x20AC;?

jmiller@crain.com @millerjh

Despite the boom in internet selling, Darko Inc., an in-store marketer, believes brick-and-mortar retailing will continue to flourish. After all, online giant Amazon already is a customer.

Darko, a maker of retail point-ofpurchase displays, has been growing and it wants to expand as the business dives deeper and deeper into high-tech displays. So the brother-owned business is putting together a $5.8 million financing package, with some help from Cuyahoga County, to move from Twinsburg to larger facilities in Bedford Heights.

The business is owned by brothers Dan, Dean and Derek Rinicella. They bought it from their father, who started the business in 1974, a dozen years ago. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a custom company, mainly working with brands but also with retailers,â&#x20AC;? said Derek Rinicella, the companyâ&#x20AC;&#x2122;s vice president of operations. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re very heavy into technology, LCD screens, a lot of motion, a lot of audio.â&#x20AC;?

Consumer products makers use point-of-purchase marketing to draw attention to their products and away from competitors, or to use special offers to influence shoppers at the moment the shopper is making a buying decision.

The company last year designed and built more than 2,000 displays for a new Whirlpool refrigerator. The display was an actual refrigerator with the back removed so that a 65inch television screen could be built in to run a video for any shopper who opened the refrigerator door. Those displays ended up in stores such as Loweâ&#x20AC;&#x2122;s and Home Depot across the country.

â&#x20AC;&#x201D; Derek Rinicella, vice president of operations

Darko Inc. specializes in manufacturing point-of-purchase displays like this one for Philips. (Contributed photo)

â&#x20AC;&#x153;We mostly work with brands,â&#x20AC;?

Rinicella said. â&#x20AC;&#x153;But we do some work for stores.â&#x20AC;?

Other customers include Mattel Inc., maker of Mattel and Fisher-Price toys, Phillips Sonicare toothbrushes and Sherwin Williams paints, Rinicella said. He said sales have been fluctuating in an $18 million-to-$30 million range in recent years. A program like the Whirlpool job can push revenue up, he said. It also works with retailers including Walmart and Target.

The company currently has operations in two Twinsburg buildings and is planning to bring them under a single roof in the East Side suburb.

The administration of Cuyahoga County Executive Armond Budish is asking county council to approve for

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Darko a 15-year, $1.5 million loan at a 2% interest rate to help make the financing work for the business.

The loan was brought to council at its June 27 meeting and was referred to the economic development committee.

The loan, already approved by a loan screening committee, is expected to be back before council for approval before the end of summer.

A county loan summary said the move will bring 60 employees to the Richmond Road building the compa-

ny is buying for $5 million. It expects to invest $800,000 on renovations.

Rinicella said the sale of the Twinsburg buildings â&#x20AC;&#x201D; a buyer is already lined up â&#x20AC;&#x201D; will cover much of the cost of the move.

Despite the shift to online shopping, the company sees a future for its in-store marketing products. â&#x20AC;&#x153;Surprisingly, Amazon is one of our biggest customers,â&#x20AC;? Rinicella said. â&#x20AC;&#x153;The first program we did for them was for the Fire 2 product, the first color product of the Kindle tablet. Our displays (ended up in) Best Buy, Walmart, Target and a lot of the smaller retail chains.â&#x20AC;?

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By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Ohio Baler Co. is in the midst of a lot of changes.

For one, it will soon cease to publicly go by the name of Ohio Baler, a change that has been in progress in recent years. What was once a recycling equipment distributor also has been expanding beyond just that industry in recent years and will continue to do so. The company also is moving into a new building that will give it room to grow and the opportunity to add new capabilities.

Mike McChrystal, president and owner of Ohio Baler, started the business in 2001. It began as a small venture, with McChrystal brokering used equipment from his home. As the business grew, he began to branch out.

Today, the company sells new and used recycling equipment, rents out compacting equipment and offers rigging and relocation services.

The rigging division, which began as an acquisition of assets, allowed the company to better control the services it could offer to customers. It was also the company’s first push beyond recycling, as it can move equipment like X-ray machines for doctors or vats for microbreweries, McChrystal said.

“We didn’t want to be pigeonholed into just recycling, because it’s a very commodity-based business,” he said.

The addition of the compactor rental business put Ohio Baler into the waste industry, where McChrystal said the goal is to duplicate what it does for the recycling industry.

Those expansions meant Ohio Baler needed some rebranding. Around 2012, the company began to move Elizabeth McIntyre Scott Suttell Tim Magaw David Kordalski Damon Sims Sue Walton Kevin Kleps Stan Bullard Real estate/ construction Reporters Jay Miller, Government Dan Shingler Energy/steel/auto Rachel McCafferty Manufacturing/ energy Jeremy Nobile, Finance Lydia Coutré, Health care Data editor Chuck Soder Cartoonist Rich Williams *** Events manager Ashley Ramsey Events coordinator Megan Lemke Integrated marketing manager Michelle Sustar

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away from the Ohio Baler name and started defining its divisions separately, like OBC Rigging Services or OBC Used Equipment. The goal was to expand recognition McChrystal of the brand nationally instead of being defined by its location in Ohio. And the company didn’t want the word “baler” to confuse customers as it began offering services outside of the recycling business.

Now, as the company has continued to evolve, the pendulum is swinging the other way. Ohio Baler is in the process of making its DBA name OBC Industries. McChrystal said the company is broad enough and has enough brand recognition now that it doesn’t have to define each of the services that fall under its name.

McChrystal said the goal overall isn’t just to be a supplier of equipment, but also to offer comprehensive services to its customers.

Mickey Bowman, a Cincinnati-based sales representative for recycler Royal Paper Stock, said he often brings in Ohio Baler when one of his customers needs to repair or replace a baler. The recycler serves companies like distribution warehouses or print shops, which need to bale material before Royal Paper can pick it up to recycle. Ohio Baler is able to show Royal Paper’s customers the application that would work best for them, Bowman said, and the consultations have even helped Royal Paper win new work.

“He’s the person I trust, and he does a great job for me,” Bowman said.

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The latest addition for the company is hydraulic equipment repair, which also allows it to target customers beyond recyclers. McChrystal said he sees the most opportunities for job growth in the rigging and hydraulic repair businesses, and he expects the latter to get underway with the company’s move into a new, larger building.

The company closed on the new building in April of this year, McChrystal said, purchasing it for about $1.5 million from Zanotti Enterprises Ltd. The 60,000-square-foot building at 11288 Alameda Drive in Strongsville will mostly be used for shop space, but the company’s offices will now be under the same roof, too. The offices at present are in Cleveland’s Ohio City neighborhood, and the shop is in a 30,000-square-foot plant in Euclid, both of which the company is leasing.

“We were stuffed to the gills over there,” McChrystal said.

The offices will move in August with the rest of the employees moving in over the next two years. There is a tenant in part of the building now, which will be leaving by April 2019 or earlier, McChrystal said. Ohio Baler has about 19 employees, and McChrystal said he plans to hire another eight to 10 in the next two years. He does not share annual sales.

The new building is on 10 acres, which gives the company room to expand in the future and opens up the possibility of new capabilities.

McChrystal said the company might even start doing some of its own manufacturing in the next couple of years. He didn’t want to name specific products because of the company’s existing relationships with suppliers, but said it would likely be on the waste side of the business.

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Jergens opens Shanghai space to others Cleveland company is allowing manufacturers to use Chinese office in effort to drum up business there

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Jergens Inc. doesn’t want to sell just its own products in China. It wants to help other companies sell in China, too.

To that end, Jergens has opened up its office in Shanghai to its fellow manufacturers, offering administrative support and the opportunity to jointly market the companies to Chinese distributors.

Jergens has been selling its workholding and tooling products into China for almost 20 years, and it has had its own wholly foreign-owned enterprise, Jergens Shanghai Commercial Co. Ltd., for about the past 10. When the company started in China, it worked with the Association for Manufacturing Technology, which offered administrative support to companies, said Jergens president Jack Schron Jr. After opening its own office, Jergens leadership realized they could offer the same kind of services to other companies.

“We said that you don’t have to jump into the deep end of the pool and create your own corporation there, as we’ve done. You can use our entity,” said Bryon Shafer, general manager for ASG, one of Jergens’ divisions, and the Jergens Shanghai office. “And not only is it scalable, so you can start with, you know, one or two people, and as your business

Jergens has a Chinese-language website to market its products.

grows, we’re very flexible to allow you to kind of scale it up from there.”

Jergens offers its partner companies physical space at its 5,000-square-foot office and warehouse in Shanghai, as well as administrative services like human resources, logistics and finances. Compliance is a big challenge for midmarket companies looking to sell in China, Shafer said, and Schron said he feels its important to hire locally in China.

Jergens has a few of its own companies in the Shanghai office now, including the ASG division and subsidiary Acme Industrial Co., as well as

Fullerton Tool Co. of Saginaw, Mich., and Visi-Trak Worldwide LLC of Valley View. The original partner, SGS Tool Co., left after six years when it was acquired by Kyocera Corp. Shafer said more partners are in the pipeline.

Patrick Curry, president of Fullerton Tool, said the maker of solid carbide cutting tools has been working with Jergens for years and had a great existing partnership. Jergens serves as a distributor for Fullerton’s products in Ohio.

The two companies share values and work well together, he said. So, when the opportunity arose to work with Jergens in China, Curry said he viewed it as

a great way to expand further into that market. The company started working with Jergens in that space in January.

It can be difficult for small companies to grow internationally, and having a partner like Jergens helps, Curry said. Fullerton has about 170 employees. Curry said Fullerton already had a small presence in China through a single distributor, but that business there hadn’t taken off. He hopes to see Fullerton’s market share grow in China in a variety of industries.

Visi-Trak Worldwide began working with Jergens in Shanghai last October. President Tom Vann said Visi-Trak had tried to set up an office in China on its own in recent years but ran into a lot of regulations. The company had been doing business in China for years through OEMs, but it needed sales and technical support on the ground in the country.

But Visi-Trak, which provides industrial monitoring and control systems for die-casting machines, only has 20 employees. The opportunity to work with Jergens and let them take care of the administrative components seemed like a “perfect fit,” Vann said.

Schron declined to share sales figures, but said business is strong in China. There are about 25 employees in the office and in regional sales throughout the country, Shafer said, and that number has been growing.

One of the benefits to Jergens is that having partners in the space in Shanghai helps to lower overhead costs,

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Schron said. But the bigger picture is how combined marketing could help position the companies in that country. The goal is to begin taking about six to eight brands within the partnership and presenting them to distributors as a group, Schron said. Shafer said that work has started.

By design, the companies in the partnership complement one another in terms of products instead of competing, and that’s the plan going forward. Jergens only plans to work with industrial companies, but Schron said it’s not tied to any particular geographic area.

Schron said these kinds of efforts aren’t as necessary in regions like Europe, where the distribution channels are firmly in place. But China’s distribution systems aren’t as mature and are more fragmented, he said.

Presenting distributors with a group of high-quality brands could help those distributors get up to speed faster than if they had to form relationships with each individually.

“And they’re not afraid of spending money in China,” Schron said.

Now Jergens has its sights set on the future. The company has had an independent business in India, similar to the one in China, for about eight years, and Schron said the company is now ready to begin offering similar joint services to partners.

Schron said he expects that to get underway this year, and his goal is to spread this model to countries such as Mexico in the future.

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Cross-country treks have left quite a legacy

Editorial

Moving out Over the last few years, Northeast Ohio’s higher education landscape has undergone a considerable number of presidential transitions, and with the looming retirement of Cleveland State’s Ronald Berkman, it’s set for one more — one that couldn’t come at a more critical time for the institution and the city it calls home.

By all accounts, Berkman’s tenure has been a success. Berkman proved to be a remarkable fundraiser — which, for better or worse, could be characterized as a public university president’s most important role. Cleveland State’s graduation rates and enrollment have inched upward — the 2016 freshman class was the largest in its history — and the university’s urban campus and its surrounding area on downtown’s eastern rim continued to blossom.

Despite those successes, Berkman had his tumbles. In 2013, Cleveland State’s faculty senate voted “no confidence” in him and his administration amid a proposal to drastically rework the curriculum under an aggressive timeline.

And while those tensions eased, Berkman and Cleveland State’s board received just criticism for their spending habits — namely an almost $10,000 charter flight to Columbus for Berkman and the two board-approved moves of his residences. The university sold for $808,000 the presidential residence in Shaker Heights, then footed the bill for a posh apartment downtown.

Then, citing a lack of space for entertaining, the university paid $800,000 for a home in Cleveland Heights to be used by Berkman and future presidents.

Distractions from Berkman’s overall accomplishments? Perhaps. Ones that will cripple his legacy? Hardly. Today, Cleveland State is a fundamentally better place than it was before Berkman’s arrival.

However, those stumbles, namely the spending, are emblematic of a lack of self-awareness permeating higher education across the country — one we are hopeful the presidential search committee chaired by Bernie Moreno takes steps to avoid when it comes to naming Berkman’s successor.

Students, donors and the corporate community deserve a president who understands that any action — no matter how small — can impede his or her ability to move an institution forward. Look no further than the University of Akron, where the purchase of a $556 decorative olive jar for the presidential mansion became a rallying cry for a presidential ouster.

Cleveland State should put charisma, empathy and, most importantly, a willingness to collaborate on the list of qualities it would like in its next leader. Academic credentials are important for the role, of course, but the university needs a leader as comfortable in a boardroom as he or she might be chatting with a group of first-generation college students.

Cleveland State is a deeply critical institution to this town.

We hope its next leader can only build upon the momentum generated under Berkman’s watch and, ultimately, do the same for Cleveland.

Schorgl’s stand

We can thank Tom Schorgl — the CEO of the Community Partnership for Arts and Culture, who announced last week he would retire at year’s end — for turning a nasty habit for many into a financial windfall for the region’s arts and cultural organizations.

The Cleveland Foundation and the George Gund Foundation formed CPAC in 1997 and hired Schorgl, then president of a Dayton arts organization, to lead the effort. And in 2006, Schorgl led the campaign that approved a 30-cents-a-pack county tax on cigarettes that now generates about $15 million a year for local arts and cultural institutions — from giants like the Cleveland Orchestra to smaller neighborhood-based efforts like LakewoodAlive’s front porch concert series.

Without question, because of that, Cuyahoga County is a better place to live. Tom, we thank you, and perhaps we’ll see you at a show.

Publisher and Editor: Elizabeth McIntyre (emcintyre@crain.com)

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Certain childhood memories are as vivid as the day they happened, even if they were more than 40 years ago.

Three weeks before our country celebrated its bicentennial in 1976, my Uncle Ray packed up five of his youngest brother’s six kids in his Gran Torino and took them on a grand tour out West. (If you ever sat in a Gran Torino, imagine a cross-country trek with six people stuffed inside.)

I, the youngest of those kids, was only 9 years old. I swear I could give you a playby-play of most of those 21 days as we traversed the Midwest and Southwest states on the way to California. After we dipped our toes in many spots along the Pacific coast, we returned along the Upper Midwest.

Elizabeth In just a few weeks, I had come to learn McIntyre that I wasn’t just a kid from Youngstown. I was a citizen of America the beautiful. It wasn’t just a song we sang in school anymore. I saw with my own eyes the spacious skies, the amber waves of grain, the purple mountains majesty above the fruited planes.

We got back home a few days before the Fourth of July, 1976, and every year when Independence Day rolls around, I remember that trip.

I remember it for a lot of reasons. I remember how my uncle, a history teacher, would assign each of us kids a state to study and navigate.

He’d put us in charge of the spiral-bound AAA TripTix. (I had Missouri on the California trip because of my love of “Little House on the Prairie” author Laura Ingalls Wilder.)

Uncle Ray never had children, but he treated his nieces and nephews like his own and infused history lessons when he could.

I don’t remember my parents taking a vacation when I was young, but every summer, Uncle Ray provided them with a vacation from us.

He’d plan an educational trip, load up his car with our brood, and give my parents a break. New England. Washington, D.C. The Midwest. California. By the time I was 12, I had visited most of the U.S., thanks to Uncle Ray’s summer excursions.

What I’ve come to recognize in the 15 years since my uncle’s death is the importance of his legacy to me and to my brothers and sisters. During those trips and the years after them, he was constantly sharing stories of his youth, about his parents and grandparents, aunts and uncles. He’d often refer to relatives only by their first names. Little did I know then that he was giving me an oral history of where I came from.

Over the past seven years, I’ve dabbled in genealogy and have traced my paternal line back multiple generations. Suddenly, those names of distant relatives that my uncle spoke of in my youth have meaning, and the stories he told bring these people to life beyond milestone dates such as birth, marriage and death.

It’s the time of year now when I think about that seminal cross-country trek, about Uncle Ray, and about the shoulders I stand on.

I think about my family history and our nation’s history, and about the importance of knowing where we come from and where we’re going.

And about the importance of doing justice to the legacy they’ve left.

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

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Personal Views

Housing finance market is unsustainable, needs reform

By MARIANNE COLLINS

The housing market in Ohio is booming. More houses are being scooped off the market, the demand for homes is surging, and the competition is causing prices to soar. But the current real estate financing system is jeopardizing this active Ohio real estate market — along with the rest of the country.

Right now, the housing finance system is monopolized by two quasi-private companies under government conservatorship, more commonly known as Fannie Mac and Freddie Mac. These two entities were placed under the government’s watch nearly 10 years ago to preserve the housing market during the financial crisis. It’s hard to believe that they remain the last piece of unfinished business from the 2008 market crash that left the economy in shambles.

We have seen bipartisan support for reform for years, but gridlock in Congress has yielded little change. As chief operating officer of the Ohio Mortgage Bankers Association and previously a 35-year veteran of the mortgage banking industry, I am calling on officials in Washington to put aside their political bickering and work toward a compromise before it is too late.

In an effort to jumpstart the conversation, the Mortgage Bankers Association (MBA) released a proposal in April, titled “GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Market,” that should guide Congress to a strong housing, residential and commercial real estate financing system. The MBA plan lays out detailed guidelines to replace the current system with a more sustainable and competitive market.

MBA’s recommendation would generate more competition and liquidity by transitioning to a newly regulated private-run market, reducing the system’s reliance on government support. This would promote

safe and conventional investment decisions and shift any financial burdens from taxpayers to private capital. During the Great Recession, taxpayers were on the hook for $187 billion because of the catastrophic failure with the secondary mortgage market. The MBA’s plan is designed to ensure taxpayers are protected.

Additionally, MBA’s suggested housing finance system reflects the full scope of America’s housing needs. According to an MBA study on housing demand, there will be a demand for an additional 1.4 million to 1.6 million household units each year over the next decade. This demand will come from individuals of all walks of life and locations across the country, making it even more essential that our system can provide proper liquidity to develop, preserve and purchase all types of housing.

Under MBA’s plan, the secondary mortgage market would seek to serve three critical affordable housing missions. First, it would facilitate access to affordable mortgage credit for prospective first-time homebuyers. This is critical for low- and moderate-income borrowers. Secondly, the housing system would also place a renewed focus on developing, renovating and preserving affordable rental homes to enhance social mobility and promote economic growth. Lastly, the plan would improve the liquidity for underserved parts of the market.

Over the last month, the Senate has held two hearings that have kick-started conversations surrounding housing finance reform. The response has been unanimous on both sides of the aisle — the current system is not sustainable. If Congress and the Trump administration are committed to a viable and booming housing market like they say, I urge them to seriously consider the MBA’s reform proposal.

Collins is executive director and chief operating officer for the Ohio Mortgage Bankers Association.

Conditions are right to bring manufacturing back to Ohio

By RAJU PATEL

They say manufacturing is dying in Ohio. “Those jobs aren’t coming back,” has been the common pushback whenever optimistic business and political leaders discuss reestablishing the Midwest’s manufacturing dominance. While the sector still employs 700,000 Ohioans, and is responsible for nearly $17 out of every $100 contributed to the state’s economy, some argue the outsourcing of jobs and factories in the 1990s and 2000s has killed the possibility of future new growth.

A few years ago, they may have been right. Now, things have changed. Ohio could be on the cusp of seeing both jobs and plants return, as manufacturers begin to “reshore” their operations back to the United States.

According to a recent report from the Boston Consulting Group, manufacturers with at least $1 billion in annual revenue plan to add more production capacity in the U.S. than they do in China. Why would a company that’s already downsized or even sold its Ohio plants years ago decide to return now? It comes down to four main factors where Ohio has an advantage: cost, quality, supply chain and profitability.

For years, China delivered significant cost-savings compared to manufacturing in the U.S. because of labor costs. However, these Chinese costs have increased significantly over the last decade. In contrast, U.S. labor costs have remained stable for the past 20 years. According to Oxford Economics, labor costs adjusted for productivity in China are only 4% cheaper than in the U.S. When manufacturers account for shipping, packaging, executive travel and freight costs, as well as significant U.S. tax incentives for manufactur-

ing in the U.S., the savings of manufacturing in China and other countries diminishes.

It’s also hard to beat American manufacturing quality and consistency. The automobiles, aerospace, steel and rubber and plastics produced in Ohio are known worldwide for their quality.

Intellectual property protection is another important factor for manufacturers in highly skilled industries. The U.S. maintains the gold standard in protecting the intellectual property of manufacturers.

On the supply chain, the world is smaller than ever before. The expansion of the Panama Canal in 2016 makes it easier for finished goods from Ohio to be shipped internationally around the world. There are other new transportation technology and infrastructure investments being made that are making it faster and easier for Ohio companies to get raw materials and ship finished goods. For example, the rise of “smart” cities, like Columbus, with large sensor networks, delivery drones and driverless cars, can further improve connections to customers and suppliers.

Bringing manufacturing back to Northeast Ohio allows companies to tap into a vibrant financial market and raise the necessary capital for production. Right now, capital is available at relatively low interest rates, which makes it easier for companies and factories to invest.

These encouraging developments bolster confidence in Ohio’s manufacturing potential. It also increases the likelihood that the next time someone says “those jobs aren’t coming back,” they won’t be referring to the Midwest.

Patel is a Bank of America Merrill Lynch senior vice president of global commercial banking.

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Focus

SMALL BUSINESS

Downtown’s heart-pumping harvest Tammy Lyons of Inner Bliss Yoga takes yoga to the masses through her Believe in CLE movement. In December, she opened a new studio in Playhouse Square. (Contributed photo)

Fitness businesses in Cleveland’s core thrive amid residential boom

By DOUGLAS J. GUTH

A positive energy

clbfreelancer@crain.com

Tammy Lyons takes yoga to the masses through the Inner Bliss Yoga Studio and her Believe in CLE movement, which brings large-scale classes to public spaces such as the Cleveland Museum of Art and the rooftop at The 9.

In December, Lyons opened a new 3,000-square foot studio at 1224 Huron Road in Playhouse Square, where a staff of 12 teachers conduct 30 Vinyasa-style yoga classes each week. Lyons’s third Northeast Ohio location — she already has studios in Rocky River and Westlake — attracts 300 students weekly, most of them living, working or attending school downtown.

“We have a small percentage of students who usually practice at our other locations, but love the idea of downtown being a destination,” Lyons said. “They can practice, go to our store for a juice, then walk to the Arcade. They’re getting the downtown experience.”

Lyons’ focus since launch has been building a community of clientele who live or work near the studio. To that end, she is sitting down with young professional organizations, store owners and others committed to meeting the needs of downtown residents and workers. As part of her outreach plans, Lyons is coordinating off-site classes this summer at the Kimpton Scholfield Hotel and another on Public Square to celebrate International Yoga Day. Inner Bliss is also the official yoga provider for the Cleveland Indians.

Attendance at the studio is solid, but that’s not say there haven’t been challenges. Parking, for one, in the area is not overly convenient, although street parking is available,

Sculpt Fitness owner Josh Dickey only needs to step outside his new downtown location at the corner of East 21st Street and Superior Avenue to realize he’s in the right place. Within walking distance or a short drive from his year-old gym are restaurants, grocery stores and four residential buildings.

“People down here see they’re in proximity to work, food and fitness,” said Dickey, whose boutique personal training facility celebrates its first anniversary in Cleveland on Aug. 1.

“That’s just the way people’s minds work when they’re downtown. As a small training business, I definitely see us as a big amenity.”

Dickey is in good company these days, as the Cleveland downtown area has undergone a surge in new fitness- and wellness-related storefronts. Among the heart-pumping harvest is Inner Bliss Yoga Studio, Harness Cycle, Barre Fly and Orangetheory Fitness. Adding to the city’s recent health kick are Cleveland Clinic’s express care center on Euclid Avenue and MetroHealth’s walk-in clinic at the Parker Hannifin Downtown YMCA. The cloudburst of new fitness retail is meeting the city’s long-held dream of Cleveland as a walkable lifestyle destination, said gym owners and downtown observers interviewed by Crain’s Cleveland Business.

Sculpt Fitness provides its mostly young professional clientele with a mixture of core, cardio and strength workouts under the tutelage of two trainers. Owner Dickey has four additional locations, all in the suburbs,

Sculpt Fitness opened its downtown outpost about a year ago at the intersection of East 21st Street ad Superior Avenue. (Contributed photo)

and felt he had enough brand cachet to bring his business to the urban core. His 2,600-square foot downtown space is packed most days with commuters and energetic 20-somethings living nearby.

“Exercising among that (younger) group is a big topic of conversation for them,” Dickey said. “Cleveland is becoming a really active city, so people want to match their workouts to their lifestyle.”

and Inner Bliss is currently negotiating discounts with neighboring garages.

“The biggest variable to being downtown over the suburbs has been parking,” Lyons said. “We realize convenience is important.”

Ultimately, Lyons sees Inner Bliss as one small facet in a citywide effort to draw residents into Cleveland’s burgeoning urban core.

“Positively impacting downtown gets people to visit local restaurants, go to games and concerts, and engage with the city overall,” Lyons said.

“Long term we’re building a community of people committed to spreading positive energy throughout the city.”

Growth of an industry Seven new health and wellness storefronts have opened or started construction downtown in the last year, according to the Downtown Cleveland Alliance, the nonprofit that oversees maintenance, security and marketing of downtown.

Michael Deemer, DCA’s executive vice president of business development, said the influx of health and wellness facilities speaks directly to the growth of downtown’s residential population.

About 14,000 people live downtown, while rental unit occupancy rates have hovered above 95% for the past six years.

A residential base comprised of health-conscious millennials accounts for the lion’s share of Cleveland’s workout industry upswing, noted Deemer.

As urban living inherently involves an on-the-go lifestyle, more fitness entrepreneurs are taking notice.

SEE FITNESS, PAGE 12

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SMALL BUSINESS

Shiner shortage has bait shops all in a tangle

By D’ARCY EGAN clbfreelancer@crain.com

Chris Overmyer wants to put the sparkle back in fishermen’s bait buckets. He’s not alone along Ohio’s expansive Lake Erie shoreline.

Emerald shiner minnows, a native of Lake Erie, are by far the most popular live bait for catching tasty yellow perch and other panfish. The small baitfish with the dazzling silvery sides is an easy-to-see magnet for hungry fish. No other minnow will satisfy the armada of Lake Erie anglers trying to catch a Friday night fish fry.

“No one seems to know why the shiner minnow population is in such a slump,” said Overmyer, 40, one of the youngest bait wholesalers in the country at N.A.S. Wholesale and BestBait.com in Marblehead, Ohio.

“Minnow netters on Lake Erie have not been able to find the schools of shiners for a long while. Many are giving up.”

Overmyer was once a minnow netter, but now buys emerald shiner minnows from a small fleet of commercial minnow boats docked at Lakevue Marina on the Marblehead Peninsula. Catches have been meager and Overmyer often processes the few minnows he can buy, dunking them in salt brine, curing them with fine salt and freezing them for later use.

“I could sell a ton of salted minnows if I had them,” Overmyer said.

“These days, I mostly supply bait shops and online customers with nightcrawlers and other live bait, from waxworms to butter worms, the rather large grub of a Chilean moth found only in the Andes Mountains.”

To compound the minnow problems and a slump in Lake Erie yellow perch fishing, schools of Lake Erie walleye have exploded this year after excellent reproductive success in 2014 and 2015. The traditional summer perch hot spots around Lorain, Cleveland, Fairport Harbor and Conneaut have been surprisingly chilly for sport anglers this year, while young walleye seem to be everywhere.

A large percentage of the walleye are just a smidgeon smaller than Ohio’s 15-inch size limit.

“It is about six to one right now,” said owner Craig Lewis at Erie Outfitters in Sheffield Lake, with fishermen catching six under-sized walleye for every “keeper” fish stretching more than 15 inches.

“I sent one guy out this week and he and a buddy caught about 100 walleye. Not many keepers, but they had a blast.”

With shiners not available, bait dealers are importing golden shiners, spot tail minnows and fathead minnows, mostly from Arkansas. Those species of baitfish will catch yellow perch, but perch fanatics want the sparkle of emerald shiner minnows.

“The schools of yellow perch from Lorain to Fairport Harbor have been in decline the last five years,” said Lewis. “The great walleye fishing will keep us going, but we’ve got die-hard perch anglers around here. Their

boats don’t leave the driveway if the perch aren’t biting.”

Theories as to why emerald shiner minnows and yellow perch are in steep decline abound along the Lake Erie shoreline.

“I firmly believe the proliferation of invasive zebra mussels and quagga mussels the past few decades played a big part in the demise of lake shiners,” said Mike Fedorka at Shine’s Bait & Tackle, the largest bait shop in the Cleveland area. “Mussels and shiner minnows both feed on plankton, a competition the mussels are winning.”

For many years, Fedorka gathered emerald shiner minnows after dark from Cleveland Harbor and the area rivers, from the Rocky River to the Grand River. He was proud of his constant supply and low prices. Today, he imports golden shiners from Arkansas.

“I think there should be a moratorium on the commercial netting of shiner minnows to allow the population to rebound,” he said. “Lake Erie is at a tipping point, like it was in the 1960s. If something is not done, the fishery could crash. Walleye are slowly came back on Lake Erie because of Mother Nature. We might have to wait 10 years to get the perch back to where they were.”

Anglers often blame the Ohio and Ontario commercial fishing industries for a lack of walleye and yellow perch. The netters are rigidly controlled, handed a harvest quota each spring by the Lake Erie Committee of the Great Lakes Fishery Commission made up of fisheries experts from Ohio, Ontario, Michigan, Pennsylvania and New York.

This past spring Ohio and Ontario, the two biggest players on Lake Erie, saw walleye and yellow perch quotas rise again. The Ohio Division of Wildlife forecast yellow perch catch rates should be above average for the fifth consecutive year. The best perch fishing was expected be around the Western Basin, where commercial trap nets for yellow perch had been restricted in recent years.

Ohio sportsmen are allocated the lion’s share of 65% of the state’s quota of yellow perch, said Fairport Fisheries Unit Research Supervisor Janice Kerns, though it is unlikely the hookand-line anglers will catch that quota this year.

“There has been a steep decline in perch catch rates, a quicker drop-off than population estimates would suggest,” said Kerns. “Our fisheries biologists believe there is a disconnect between where anglers are fishing and where the fish are located.”

Kerns blames extensive hypoxia, or oxygen-starved water. Lake Erie’s deep water “Dead Zone” in central Lake Erie is fueled by harmful algal blooms that have plagued western Lake Erie in recent years. Phosphorus pollution from agricultural runoff and sewage treatment plants feeds the algal blooms, which turn western Lake Erie into a slimy, green mess in late summer and early fall.

The algae dies as Lake Erie cools down. As it sinks to the lake bottom, the algae robs the water of its oxygen,

“Minnow netters on Lake Erie have not been able to find the schools of shiners for a long while. Many are giving up.”

— Chris Overmyer, N.A.S. Wholesale and BestBait.com

Chris Overmeyer of N.A.S. Wholesale processes the few minnows he can buy by freezing them for later use. (D’Arcy Egan for Crain’s)

creating hypoxia.

“Our fisheries biologists believe when there is a low oxygen event on the lake bottom, where perch are traditionally found, the schools of fish move,” Kerns said. “They begin to suspend higher in the water column and move closer to shore, away from their traditional haunts.”

Fisheries experts have few answers about the emerald shiner minnow shortage.

“We simply do not have a method to survey or sample the schools of shiner minnows,” said Travis Hartman, head of the Lake Erie fishery for the state wildlife agency. “We don’t have gear capable of netting minnows, like we do for walleye and perch. The only way to get an idea of their abundance is sampling the stomachs of the game fish that eat them.”

PA G E 12

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CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS

SMALL BUSINESS Adviser: Sam V. Butcher

Sibling rivalry takes on new meaning when fighting for the family business Every day for the next 12 years, an estimated 10,000 baby boomers will turn 65.

That figure carries tremendous impact on how family businesses will cycle down to the next generation. In fact, retirements by boomers could affect nearly half of all U.S. companies in the next decade.

Statistically, only 30% of family businesses survive the second generation. Among those that fail, 60% fall to domestic infighting. But family feuds are easily avoided, and business value can be preserved with the right succession planning.

A common objective during estate planning is to transfer wealth equitably among children, while maintaining peace and family unity. Itâ&#x20AC;&#x2122;s not often difficult, but when a business muddies the waters, that goal becomes a significantly greater challenge.

In a typical example, a small business owner â&#x20AC;&#x201D; weâ&#x20AC;&#x2122;ll call him Josh â&#x20AC;&#x201D; spent his life building a company as a general contractor. He accumulated trucks, trailers and machinery, among other assets â&#x20AC;&#x201D; not to mention a good name and long-held reputation. The company was by far his greatest personal asset, and he relied on it for his primary income.

His daughter, Jennifer, earned a business degree and worked loyally alongside her father for years. She became a close confidante. Her brother, James, worked for the company shortly during college but later pursued an unrelated career.

As he approached retirement age,

Sam V. Butcher is the principal of Butcher Elder Law, a firm specializing in estate planning, asset protection, business succession, Medicaid and special needs planning.

Josh became aware that Jennifer expected one day to inherit the company. Nothing would make him prouder than to see her carry on his legacy, despite little discussion or planning on the matter. Jennifer saw the business as her birthright, not to mention her primary source of income.

Josh knew that leaving the business to Jennifer might alienate his son.

James began to assume his sister would inherit the company, and his attitude toward the family soured. Josh understood the need for a succession planning, but he needlessly neglected it as the situation worsened. He reasoned that as long as he remained in charge, he could avoid deeper conflict and tearing the family apart.

What Josh failed to consider was a sudden illness or even death. Without proper planning, chaos was almost certain. The company would likely implode and the family would splinter. Infighting would lead to litigation and quickly erode the assets Josh worked a lifetime to amass.

Had there been equal yet separate

A common objective during estate planning is to transfer wealth equitably among children, while maintaining peace and family unity. Itâ&#x20AC;&#x2122;s not often difficult, but when a business muddies the waters, that goal becomes a significantly greater challenge. assets, Josh could have easily handed the business over to Jennifer and transferred the balance of wealth to James.

But thatâ&#x20AC;&#x2122;s rarely the case. For this reason, there are many effective strategies to arrange an equitable distribution.

One approach ensures that Josh continues to receive income from the business after retirement. He could sell his business to his daughter with a self-canceling installment note shorter than his life expectancy, and the balance of the note would cancel upon his death.

The advantage is that if Josh dies before the note expires, the remaining value of the installments is excluded from his estate. Josh could set

aside payments to provide a greater inheritance for James, who would see that Jennifer was not simply gifted the business.

But if Jennifer were financially unable to buy the business, Josh could separate the operational assets from the passive assets and form two companies. For example, real estate might serve as a passive asset for which an LLC would hold the property.

The active operational assets could be operated within an S corporation.

The LLC interest would be given to James, while Jennifer would receive the S corporation. Terms for the LLC and the S corporation could be set to include a long-term lease agreement and provisions requiring the active daughter to buy out the inactive son, if both parties agreed.

A third option is to create a buy-sell agreement or shareholder agreement funded with life insurance proceeds.

A buy-sell can ensure that the beneficiaries receive their inherited interest in the business without court intervention. The business valuation would be determined in the estate proceedings, but the agreement could give shareholders the option to purchase stock after Joshâ&#x20AC;&#x2122;s death, disability or separation from the company.

There are many strategies for business succession planning that will facilitate a calm transition, preserve income, wealth and a legacy of its creator. Itâ&#x20AC;&#x2122;s an approach that can bring welcomed peace to a family and maintain harmony among its successors.

FITNESS

CONTINUED FROM PAGE 10

â&#x20AC;&#x153;Certain market segments are drawn downtown for the aspect of walking or using bike share,â&#x20AC;? Deemer said. â&#x20AC;&#x153;Wellness businesses are a response to a growing office and residential population demanding these types of services.â&#x20AC;?

Downtownâ&#x20AC;&#x2122;s promising future motivated Anne Hartnett to open a new cycling studio in the Garfield building at the intersection of East 6th Street and Euclid Avenue. Already finding success with her first Harness Cycle location in Clevelandâ&#x20AC;&#x2122;s Hingetown neighborhood, Hartnett will introduce studio No. 2 with 35 stationary bikes, with room for expansion should demand warrant it. â&#x20AC;&#x153;The studio has room for 60 bikes,â&#x20AC;?

Hartnett said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ll be a small box studio that grows as residents continue to come downtown.â&#x20AC;?

In the run-up to her Labor Day grand opening, Hartnett is working with DCA, the local community development corporation, and a host of companies and property managers to share her business model and give out a free pass or two. Ideally, weaving Harness Cycle into the downtown tapestry will recreate the â&#x20AC;&#x153;all inâ&#x20AC;? vibe Hartnett has found with her neighbors in the Hingetown area of Ohio City. Additional new workout studios and gyms can lend to that urban dynamism as well, she said. â&#x20AC;&#x153;Plugging into a healthy atmosphere of like-minded people is awesome,â&#x20AC;? Hartnett said. â&#x20AC;&#x153;More studios opening will elevate all of us.â&#x20AC;?

Fitness clubs and other amenities are the natural evolution of a decadeâ&#x20AC;&#x2122;s worth of new downtown apartment and office space, said DCAâ&#x20AC;&#x2122;s Deemer. Every new gym that opens points to a connected urban community thatâ&#x20AC;&#x2122;s steadily becoming Clevelandâ&#x20AC;&#x2122;s strength.

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SMALL BUSINESS Tax Tips: Carl Grassi

‘Church plans’ get some relief thanks to a recent U.S. Supreme Court decision

Anne Hartnett is opening a downtown spinning studio in the Garfield Building. (Nathan Migal)

“These businesses are exciting because they allow residents and workers to go about an active lifestyle,” Deemer said. “This (growth) reinforces that.”

Dickey of Sculpt Fitness is pumped to connect with a hustling network of professionals and city dwellers interested in his services. Business has been so good over the last 10 months that he’s headhunting for at least two more trainers.

“Cleveland is hot right now,” Dickey said. “If you’re a young business owner, the city is the place you want to be.”

In June, the U.S. Supreme Court issued a decision — Advocate Health Care Network v. Stapleton, et al. — that is sure to have a substantial impact.

The Supreme Court determined that church-affiliated organizations, such as religious-affiliated hospitals and parochial schools, can establish employee benefit plans known as “church plans.”

Church plans are retirement plans which are exempt from having to comply with the requirements of the Employee Retirement Income Security Act of 1974, commonly known as ERISA. ERISA provides protections to participants in qualified retirement plans, such as stringent funding, notice and disclosure requirements, and fiduciary duties, from which church plans are exempt. In addition, church plans are not covered by the Pension Benefit Guaranty Corp. (PBGC), saving such plan sponsors substantial dollars that would be incurred by paying premiums for such coverage.

These exemptions can result in substantial savings to sponsors of such church plans that would be incurred were they to sponsor a non-exempt plan.

As originally enacted, a “church plan” was simply defined in ERISA as an employee benefit plan “established and maintained” by a tax-exempt church or convention of churches. To qualify for the “church plan” exemption in ERISA and obtain other tax benefits, organizations could obtain a letter ruling from the Internal Revenue Service stating that the organiza-

Carl Grassi is chairman of McDonald Hopkins LLC.

tion qualified for the exemption.

Unfortunately, this required the IRS to review each plan sponsor to determine whether it qualified as a church. When an adverse IRS letter ruling determined that a retirement plan for a group of nuns did not qualify for the exemption because the nuns did not qualify as a church, Congress amended ERISA in 1980 to state that a plan established and maintained by a church shall include a plan maintained by a church-affiliated organization. This change permitted church-affiliated nonprofits, such as parochial schools and faithbased hospitals, to avail themselves of the church plan exemption. Over 500 church-affiliated organizations obtained private letter rulings from the IRS stating that their retirement plans qualified for the exemption over the next 25 years.

Beginning in 2013, however, a wave of lawsuits were filed across the country, alleging that employees of these nonprofit church-affiliated hospitals and other organizations were improperly deprived of the protections of ERISA in their retirement plans.

The claims were that the organiza-

Church plans are retirement plans which are exempt from having to comply with the requirements of the Employee Retirement Income Security Act of 1974, commonly known as ERISA. tions’ retirement plans — many of which were multi-million-dollar retirement plans — while, perhaps maintained by church-affiliated entities, were not church plans under ERISA because they were not actually established by a church. Eventually, a number of federal circuit courts ruled in favor of the employees of the nonprofit hospitals, finding that these church-affiliated organizations should not be able to rely on the “church plan” exception under ERISA, and the issue was appealed to the Supreme Court.

In the Advocate Health Care decision, the Supreme Court focused on the mechanics of the 1980 amendment, noting that the amendment did not just leave the ability to establish a church plan to a “church,” but added that a church plan includes a plan “established” by a church-affiliated organization, such as a non-profit hospital. By a simple anal-

ysis of the statute, the Supreme Court held that the category of plans “established and maintained by a church” “includes” plans “maintained by” church-affiliated organizations.

Justice Elena Kagan noted that the effect of the 1980 ERISA amendment was to essentially broaden, not limit, the number of organizations eligible for the exemption.

The Supreme Court’s decision in Advocate Healthcare Network v. Stapleton provides relief for many church-affiliated hospitals and other organizations across the country — these organizations’ retirement plans remain exempt from ERISA as “church plans.” For the time-being, the Supreme Court decision has averted adverse consequences against numerous church plans across the country, and these sponsoring organizations have potentially avoided millions of dollars in penalties, attorney fees, back fees, and PBGC premiums.

Nonetheless, many of these plans are in poor financial shape and Congress may still step back in with new legislation. In addition, lawyers representing the losing employees have vowed to keep the fight up. Therefore, the future of the “church plan” exemption may still be unknown. Thus, organizations that sponsor “church plans” should still be reviewing their situations to confirm they qualify as a church-affiliated organization and to determine how they will fund their future retirement plan liabilities.

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PA G E 14

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CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS

THE LIST

Largest Nonprofits Ranked by 2017 Expenses NAME THIS ADDRESS YEAR PHONE/WEBSITE

EXPENSES EXPENSES 2017 2016 (MILLIONS) (1) (MILLIONS)

TOTAL REVENUE 2016 (MILLIONS)

INCOME FROM PRIVATE SUPPORT

INCOME 2016 FUND FOR PROGRAM BALANCE SERVICES (THOUSANDS) PURPOSE

TOP LOCAL EXECUTIVE

1

Christian Healthcare Ministries Inc. 127 Hazelwood Ave., Barberton 44203 (800) 791-6225/www.chministries.org

$331.0 (2)

$192.4

$220.3

100.0%

84.0%

$57,870.2

To glorify God, show Christian love and experience God's presence as Christians share each other's medical bills

Howard S. Russell president, CEO

2

Catholic Charities, Diocese of Cleveland 7911 Detroit Ave., Cleveland 44102 (216) 334-2900/www.ccdocle.org

$100.9

$96.9

$101.5

49.0%

83.4%

$86,986.0

To provide help and create hope for people of every race and religion throughout the eight counties in the Diocese of Cleveland

Patrick Gareau president, CEO

3

Jewish Federation of Cleveland 25701 Science Park Drive, Cleveland 44122 (216) 593-2900/www.jewishcleveland.org

$100.0

$98.1

$93.2

100.0%

88.7%

$350,443.0

Allocates funds to social service, religious and educational organizations in Cleveland and worldwide

Stephen H. Hoffman president

4

Hospice of the Western Reserve 17876 St. Clair Ave., Cleveland 44110 (800) 707-8922/www.hospicewr.org

$98.8

$105.0

$100.1

NA

83.3%

$69,529.0

To provide hospice, palliative care and bereavement support services

William E. Finn president, CEO

5

Greater Cleveland Food Bank 15500 S. Waterloo Road, Cleveland 44110 (216) 738-2265/www.greaterclevelandfoodbank.org

$90.3

$85.4

$86.6

61.9%

94.0%

$6,410.7

Works to ensure that everyone in our communities has the nutritious food they need every day

Kristin Warzocha president, CEO

6

Menorah Park 27100 Cedar Road, Beachwood 44122 (216) 831-6500/www.menorahpark.org

$77.5

$77.5

$75.6

48.2%

96.3%

$20,892.3

To provide health care on both a residential and outpatient basis

James Newbrough CEO

7

The Cleveland Museum of Art 11150 East Blvd., Cleveland 44106 (216) 421-7340/www.clevelandart.org

$65.0

$62.0

$59.9

53.6%

78.7%

$905,027.7

One of the world's comprehensive art museums and one of Northeast Ohio's principal civic and cultural institutions

William M. Griswold director, CEO

8

Western Reserve Area Agency on Aging 925 Euclid Ave., Suite 600, Cleveland 44115 (216) 621-0303/www.psa10a.org

$60.0

$60.8

$60.5

26.5%

91.2%

$4,800.0

To provide choices for people to live independently in the place they want to call home

E. Douglas Beach CEO

9

OhioGuidestone 434 Eastland Road, Berea 44017 (440) 234-2006/www.ohioguidestone.org

$59.4

$56.2

$58.6

4.1%

91.8%

$24,924.4

To provide pathways for growth, achievement and lifelong success

Richard R. Frank president, CEO

The Centers for Families and Children

$57.8

$54.2

$54.6

15.0%

88.4%

$41,931.3

Improve lives through integrated health care, early learning and workforce services

Elizabeth Newman president, CEO

Euclid Ave., Cleveland 44103 10 4500 (216) 432-7200/www.thecentersohio.org THE LIST

Largest Nonprofits

SOUND SOLUTIONS FOR NOT-FOR-PROFITS

Ranked by 2017 Expenses

EXPENSES EXPENSES 2017 2016 (MILLIONS) (1) (MILLIONS)

TOTAL REVENUE 2016 (MILLIONS)

INCOME FROM PRIVATE SUPPORT

INCOME 2016 FUND FOR PROGRAM BALANCE SERVICES (THOUSANDS) PURPOSE

11

Playhouse Square Foundation 1501 Euclid Ave., Suite 200, Cleveland 44115 (216) 771-4444/www.playhousesquare.org

$57.5

$52.3

$58.8

96.0%

87.0%

$147,443.1

To operate the performing arts center and help restore and develop the Playhouse Square district

Art Falco president, CEO

12

Oriana House Inc. P.O. Box 1501, Akron 44309 (330) 535-8116/www.orianahouse.org

$54.1

$54.8

$50.9

2.0%

98.0%

($8,175.3)

Community corrections programs and chemical dependency treatment

James J. Lawrence president, CEO

13

Judson Services 2181 Ambleside Drive, Cleveland 44106 (216) 721-1234/www.judsonsmartliving.org

$51.3

$49.8

$45.6

90.0%

89.0%

$24,090.2

Bringing community to life

Cynthia H. Dunn president, CEO

14

Volunteers of America of Greater Ohio 8225 Brecksville Road, Suite 206, Cleveland 44141 (440) 717-1500/www.voago.org

$50.6

$52.9

$53.3

40.5%

86.4%

$36,687.4

Spiritually based human services organization providing social services that promote selfsufficiency and foster independence

Dennis J. Kresak president, CEO

15

Coleman Professional Services 5982 Rhodes Road, Kent 44240 (330) 673-1347/www.colemanservices.org

$45.9

$40.2

$43.5

4.6%

87.4%

$11,545.3

Behavioral health, addiction, rehabilitation, employment and residential programs for Ohioans

Nelson W. Burns president, CEO

16

Positive Education Program 3100 Euclid Ave., Cleveland 44115 (216) 361-4400/www.pepcleve.org

$43.4

$41.2

$43.4

2.0%

89.0%

$27,848.3

Helping troubled and troubling children learn and grow

Frank A. Fecser CEO

17

Montefiore One David N. Myers Parkway, Beachwood 44122 (216) 360-9080/www.montefiorecare.org

$40.8

$40.5

$38.8

10.0%

89.0%

$27,700.0

To provide a comprehensive system of health care and wellness services to aging seniors on two campuses and throughout the community

Seth Vilensky president, CEO

18

Ohio Living Breckenridge Village 36855 Ridge Road, Willoughby 44094 (440) 954-8364/www.ohioliving.org

$30.6

$29.3

$31.8

48.0%

NA

NA

Provide adults with services toward the enhancement of physical, mental and spiritual well-being consistent with the Christian Gospel

David Schell, executive director; Lisa Mansour, administrator

19

Emerald Development & Economic Network (EDEN) Inc. 7812 Madison Ave., Cleveland 44102 (216) 961-9690 /www.edeninc.org

$29.9

$27.3 (3)

$28.2 (3)

19.0% (3)

96.8% (3)

$17,422.9 (3)

To provide housing solutions to people facing the challenges of housing insecurities and homelessness

Irene Collins executive director

20

Cleveland Housing Network 2999 Payne Ave., Room 306, Cleveland 44114 (216) 574-7100/www.chnnet.com

$29.2

$30.3

$32.9

77.0%

93.5%

$24,677.9

To build strong families and vibrant neighborhoods through quality affordable housing and strengthened financial stability

Robert S. Curry executive director

21

Rock & Roll Hall of Fame 1100 Rock and Roll Blvd., Cleveland 44114 (216) 781-7625/www.rockhall.com

$28.3

$25.8

$39.6

90.0%

73.0%

$98,637.9

To engage, teach and inspire through the power of rock & roll

Greg Harris president, CEO

22

Jewish Family Service Association of Cleveland 3659 S. Green Road, Suite 322, Beachwood 44122 (216) 292-3999/www.jfsa-cleveland.org

$28.2

$27.4

$28.2

44.0%

85.0%

$10,934.9

JFSA provides solutions to individuals and families to help build connections and empowers them to realize their potential

Susan Bichsel president, CEO

23

Vocational Guidance Services 2239 E. 55th St., Cleveland 44103 (216) 431-7800/www.vgsjob.org

$27.9

$26.3

$26.4

8.0%

85.0%

$15,619.3

Preparing people with barriers to employment for a brighter future

Robert E. Comben Jr. president, CEO

NAME THIS ADDRESS YEAR PHONE/WEBSITE

Pam Lebold + maloneynovotny.com + 216.363.0100 TOP LOCAL EXECUTIVE

RESEARCHED BY CRAIG MACKEY

Want the full version of this list Ă&#x2018; and every other Crain's list? Become a Data Member: CrainsCleveland.com/data The digital version of this list includes 50 facilities and names of additional executives.

Includes 501(c)(3) nonprofits. Universities, colleges, foundations and hospitals were excluded. Information is supplied by the organizations. Crain's does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all feedback and will include omitted information or clarifications in coming issues.

(1) Organizations that have not finalized 2017 expenses are permitted to submit projected figures. (2) Christian Healthcare Ministries has increased its membership by about 50% since 2016, which accounts for most of the projected increase for calendar year 2017. (3) Estimate

CRAIN’S CLEVELAND BUSINESS

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PA G E 15

ANALYSIS

Obamacare pushes Christian group to top of nonprofit list

By CHUCK SODER csoder@crain.com @ChuckSoder

What is Christian Healthcare Ministries — and how did they end up getting to the top of Crain’s Largest Nonprofits list so quickly?

The organization didn’t even break the top 30 back in 2010. But much has changed since then.

That year, Congress passed the Affordable Care Act, which requires most adults to buy health insurance or pay a penalty.

Although Christian Healthcare Ministries doesn’t technically provide “insurance,” it does offer a different type of health care coverage that meets the standards of the law (also known as Obamacare). The group is considered a “health cost sharing ministry” where members (Christians, in this case) pay fees that are then used to help other members pay their medical bills.

In 2011, Christian Healthcare Ministries broke into the top 20, but

SUMMA

CONTINUED FROM PAGE 1

Deveny attributes the drop to competition in the market as well as provider and patient perception of Summa following a rocky start to 2017.

Deveny began his role in March, replacing Dr. Thomas Malone, who resigned after strong backlash to a decision to not renew the contract of the independent physician group that had staffed the hospital’s emergency departments for decades.

Summa’s bond rating and balance sheet put it in a good position to be able to weather this, Deveny said, but changes had to be made.

He announced in a June 26 memo to Summa employees, staff and boards that the system would eliminate about 300 positions — saving an estimated $12 million — as well as discontinue services, consolidate units and re-evaluate ongoing capital needs. Next year, Summa will also see a $14 million improvement to finances as a Medicaid sanction lifts.

“We’ve had a long history of doing well, and this is a very unique situation (that) compounded with everything else that went on,” he said. “And the precipitous drop in volume and revenue was unprecedented.”

The cuts come as Deveny has already spent months trying to mend the wounds of a contentious relationship between administrators and providers.

Despite efforts, bad blood remains.

Summa nurses have been organizing in the hopes of forming a union — something the administration is advising against — and independent physicians have been raising concerns about quality, which Summa adamantly disputes.

Deveny said he’s worked to ensure that the cuts don’t reach bedside positions. About half of the positions eliminated were open, and he focused on administrative and overhead roles.

Though Deveny wrote in his memo that changes will include “re-evaluating our ongoing capital needs,” this will primarily affect day-to-day capital spend. He said Summa’s $350 million investment announced last year, which includes a new inpatient facil-

things didn’t really get crazy until 2014, when the individual mandate went into effect.

Since then, the group’s membership has grown substantially and its expenses (mostly consisting of medical reimbursements) have jumped from about $45 million in 2013 to $192 million in 2016 (the nonprofit topped the list last year, too). Expenses are projected to be between $288 million and $331 million in calendar year 2017. The organization submitted the higher number for the list (we accept projections for 2017 figures), but the group later noted that final figures depend on a few factors that remain in flux. One fact that’s not in flux: Membership is up by about 50% over the past 12 months, according to a statement from the organization.

The list is ranked by expenses, which makes Christian Healthcare Ministries look like it’s more than three times larger than the second nonprofit on the list, Catholic Charities, Diocese of Cleveland.

But by employment, Christian

Healthcare Ministries is only ranked 31st — which makes sense given that it’s constantly taking payments and sending them right back out. By employment, Catholic Charities would be in the eighth spot, with 612 full-time-equivalent employees. Menorah Park would be first, with 923.

Counting Menorah Park, the full digital version of the list contains 10 organizations focused on elder care, including three in the top 10. The full list includes 50 local 501(c)3s. It doesn’t include hospitals, colleges and foundations. (They have their own lists.)

We also asked the nonprofits to tell us about trends that have affected them over the past 12 months.

Four mentioned the opioid epidemic. For instance, Oriana House, which among other things provides addiction treatment services, says the problem has “increased our expenses on Treatment Services by 28%.”

Five nonprofits mentioned changes related to Medicaid (declining reimbursements, increased regulations and uncertainty regarding its future).

ity and medical office building on its Akron campus, will move ahead as planned. The investment would help keep Summa competitive as University Hospitals and Cleveland Clinic stretch into Akron.

Deveny said the system has seen about a 70% reduction in patients from Portage County since UH took over Robinson Memorial Hospital — now known as UH Portage Medical Center — in 2015.

The Clinic, meanwhile, took full ownership of Summa’s rivaling Akron General in November 2015 and has since seen a boost in patient volumes. Admissions at Akron General in 2016 were up 5% from 2015 and outpatient visits increased 2%. A hospital spokesperson said patient volumes and revenue were also up in the first quarter 2017 compared to the first quarter last year, but didn’t provide specific numbers.

Deveny also sees referral practices hitting Summa’s volumes. Leaders of some of the area’s bigger physician groups have told Summa they’ve moved patients over to Akron General, citing concerns around quality.

“We’ve spent a lot of time trying to understand what those specific concerns are and addressing those,” Deveny said. “And what we’ve found is in many cases, there isn’t a lot of substantiation of that concern.”

Summa points to various metrics: SummaCare returned to a four-star rating; metrics in the emergency departments have all improved other than length of stay; Summa received an award from the Ohio Patient Safety Institute for a quality improvement project between January 2015 and September 2016.

But concerns remain, as is evidenced by a June 9 internal memo from Dr. Kevin Mineo, medical director for Unity Health Network, an independent physician network that earlier this year lost a contract that its division of Neurology, Neuroscience and Sleep Medicine had with Summa.

In the memo to providers, Mineo wrote that he is “increasingly concerned about continuing to refer our patients to an institution that is not focusing on quality care.” He cited concerns about the nurses’ recent efforts to unionize, the impact on providers of

a conversion to a new electronic medical record and the use of physician extenders to see patients independently in the emergency department.

If Unity was unable to get satisfactory answers or a plan to improve some of their concerns, Mineo wrote that sanctions need to occur in which the physician network “ceases its support of Summa Health, its providers and its subsidiaries.”

Representatives from Summa and Unity have since met and talked. In a statement, Mineo said that the two had a “positive initial meeting” and he considers it an “ongoing, active discussion.”

Summa has met with other groups as well and is seeing “a lot of acknowledgment of the facts,” Deveny said. “The question is how it will play out, so it’s probably too early to tell.”

In 2013, Mercy Health purchased a 30% stake in Summa for $250 million through HealthSpan, a non-religious auxiliary of Mercy. The deal was designed to bolster Summa’s finances and allow Mercy to share in Summa’s revenues.

Mercy has maintained a low profile during Summa’s administrative and financial turmoil this year, but said through a spokesperson: “The minority stake allows for participation in the Summa Health board of directors. We are not directly involved in the day-to-day operations of Summa Health.”

Mercy said HealthSpan will continue to work closely with Summa’s leadership, and Summa spokesman Mike Bernstein said that the relationship remains “very strong,” and the two are engaged in active conversation.

Keeping Akron locally managed and controlled is key, he said. People in the community say they want local decision making, Deveny said, but notes that they’ve welcomed the Cleveland Clinic “with open arms” over at Akron General.

Still, following that acquisition and Huntington Bancshares Inc.’s acquired Akron’s FirstMerit Corp., local control remains important for Summa and its board, he said.

“Akron has been in a situation where we lost the health system, and now we’ve lost the bank, and you know, what’s next?” Deveny said. His direction from the board: Not Summa.

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AKRON

Rubber City following tune of Music City

By DAN SHINGLER dshingler@crain.com @DanShingler

Someone might want to start a hot-chicken restaurant in Akron, because the Rubber City is taking a lot of cues from the Music City these days, especially when it comes to urban schools and nonprofits.

A group of 18 Akron civic leaders recently saw how it’s done on a June 21 trip to Nashville, Tenn.

“I was impressed. Nashville does a nice job with a lot of different things, but I was really impressed that there was so much collaboration among various institutions,” said Akron mayor Dan Horrigan, who made the trip.

“We’re trying to do some of the same things up here, so it was a very worthwhile trip for me,” Horrigan said.

The connection between the two cities did not happen by chance.

Akron Public Schools (APS) has been working closely with area businesses and looking to Nashville in recent years for clues as to how schools can better prepare students for available jobs that go unfilled and careers in industries poised for growth.

And when United Way of Summit County hired CEO Jim Mullen from the United Way of Metropolitan Nashville in 2015, the board knew Mullen brought a slew of ideas that he helped implement and had seen work in the southern city.

Schooling APS has been watching Nashville and efforts related to education initiatives there since 2011, said APS superintendent David James, who has visited Nashville schools three times, including once with local CEOs.

Students at McGavock High School in Nashville work on a flight simulator. Akron civic leaders visited McGavock to learn about its academy program. (Contributed photo)

What he’s seen, he said, has impressed him and guided his strategy in Akron.

Schools in the Tennessee capital cover all the basic math, science, English and history as other schools, but they also offer students intensive vocational education at dedicated high school academies.

“If anything, it’s more rigorous,” James said.

A kid might leave high school prepared for pre-med, for a career in television, or even with a private pilot’s license and a start to a career in aviation. McGavock High School, which the Akron contingent visited, has flight classes and its own simulators.

“In Nashville, since they’ve implemented this, their attendance rates have increased along with the amount of engagement with kids.

When kids get involved with something they like, it makes a huge difference,” James said.

“Every student in high school picks

a career path way — and we’re going to do the same thing in Akron,” he added.

In Akron, North High School is the first to adopt the academy approach.

It began last year, with freshman selecting and enrolling in specific curriculum. This fall, they’ll start in a North academy for health and human services, or global technology.

Each academy will have four paths, James said. The health and human services academy will offer a curriculum for biomedical engineering, another for allied health, one for health care operations and one for childhood education.

Over the next three to four years, James plans to roll out academies at high schools across the district. Akron Children’s Hospital has partnered to help with one academy at North, he said, but the Cleveland Clinic, Kent State University and Stark State College have also expressed interest.

Workforce advocates for business

love the district’s initiative.

“I can’t say enough about the district in terms of them supporting a wall-to-wall approach. This is not just for a select group of students; it’s for everyone,” said Sue Lacy, president of ConxusNEO, which works to develop a skilled workforce in the region and connect job seekers with employers often struggling to find help.

Lacy said she’s been impressed with APS’ willingness to “step out of the mold and take some risk to truly make education in APS more relevant and more meaningful to students in terms of what they’re prepared with when they graduate, including industry credentials.”

Business interests hope that what they saw in Nashville portends good things for Akron.

“We’re looking into the future of what successful community engagement looks like 10 years down the road,” said Laura Duda, a Goodyear vice president and United Way volunteer who was on the trip.

Community impact While APS works on its educational strategy, United Way also is adopting tactics that have worked in Greater Nashville, Mullen said.

He sees similarities between the two places. There are about 625,000 people in Davidson County, of which Nashville is the seat, and about 550,000 in Summit. Both urban areas have struggled with impoverished inner-city populations, poor city schools and a lack of upward mobility for many residents.

But Nashville has found ways to address many of those issues, according to Mullen.

“They’re probably 10 years ahead of us,” he said.

Mullen said Nashville’s United Way has succeeded in part by pushing services into neighborhoods,

with 18 family resource centers and five financial empowerment centers.

They help residents learn to secure and manage housing and transportation – keys to employment – and with economic challenges ranging from budgeting to paying down debt and filing income tax returns.

In the past four years, those programs have helped 5,000 Nashvillians increase their wealth by $7 million, by both paying off debt and beginning to build savings and investments, Mullen said. More importantly, the programs also taught them how to continue to build wealth, rather than debt, he added.

Such efforts fit with the goals Mullen has set for United Way of Summit County and with the goals of Horrigan and other city officials to draw residents to Akron’s downtown and strengthen its neighborhoods.

Mullen said he’ll ask the Summit County United Way board to approve a plan to begin opening its own neighborhood centers later this year.

He said those on the recent trip — including many of his board members — think the centers are a good idea after seeing them firsthand.

“Most of the people came away and said, ‘We need to get these instituted in Akron as soon as possible,’” Mullen said.

Of the seven visitors to Nashville who spoke to Crain’s about the trip afterward, none said they came home either unimpressed or unenthused about copying some of what they saw.

“It was very educational with regards to some of the stuff we’ve been talking about, especially with regards to some of the financial empowerment stuff we’re starting to do here,” said real estate agent Bill Lowry, a United Way board member and a member of the committee that sets the organizations goals in Summit County.

‘Brain retain’ is goal of UA internship program

By BETH THOMAS HERTZ clbfreelancer@crain.com

The University of Akron’s Experiential Learning Center for Entrepreneurship and Civic Engagement (EXL Center), created to give students more hands-on work experience, has been through many changes since its inception in early 2016, with shakeups in funding, leadership and more.

But the center’s co-directors are looking ahead and excited about a new signature program — the Akron Community Internship Program — that launched in May to combine real-world experience with the chance for students to learn about the many assets that make Akron a special place to live and work.

“People talk about brain gain to combat brain drain. Well, one of the things we need to focus on is brain retain, and we have a wealth of population right here at the university.

And we view it as our job to try to turn these students on to the dynamism and vibrancy in Akron, Ohio,” said Anoo Vyas, who along with Carolyn Behrman, associate professor of anthropology, became co-director of the center in January. Vyas formerly taught at the University of Akron

School of Law before taking this post. Behrman has been involved with the center since its inception and became co-director at the same time as Vyas.

Anoo Vyas Vyas said that students today care about more than just the income from their future jobs. They also want to be part of a vibrant work-life community and culture, he said.

“We want our students not to just be proficient in the language of Akron. We want them to be fluent in the language of Akron. The more they know about the city, the more excited they become about the city and they are more likely to stay here after they graduate,” he said.

In the program, UA students are matched with a “community champion” for 100-hour internships in which the student creates a specific deliverable item that is meaningful for the organization. This gives the student something to put on their resume and links them with a mentor who can help with their career development and making introductions, he said.

For example, one student is working with the Community AIDS Network/Akron Pride Initiative to increase AIDS awareness and find ways to help the area’s LGBTQ homeless population. Another is working with Crafty Mart to write grants that would help refugees and immigrants start craft businesses. Other placements include the Gay Community Endowment Fund, the city of Akron, the Downtown Akron Partnership and Kenmore Neighborhood Alliance.

Many organizations are eager to participate because the intern can help them accomplish a specific goal that they might not have time to get to otherwise, Vyas said.

Although most students are just placed with one organization, Savannah Sprankle, a marketing management and graphic design major, is dividing her time between two: Leadership Akron and the Halloween Charity Ball. At Leadership Akron, she is developing marketing materials and will help launch a podcast later this summer. With the Halloween Charity Ball, she is doing marketing and identifying ways to network for the event in the community. She said the blend is good preparation for her future career.

“Leadership Akron offers a more traditional office approach with very

set-in-stone marketing approaches, so I get to see that side of things, and then the Halloween Charity Ball is a lot more creative and I get to throw ideas out there and see what works,” she said.

Mark Scheffler, president of Leadership Akron, said his organization is grateful to be partnering with the EXL Center to engage UA students.

“We are thrilled to provide some real-world experience and deepen the connection to Akron for one of the university’s best and brightest,” he said. “It’s a real win-win and we look forward to building on it in the future.”

Students are paid $1,000 for the internship, money that is provided equally by the community partner and through a $35,000 grant from the GAR Foundation. Each partner also gets a $50 stipend to take the intern out to see some of the cool aspects of Akron that they might miss as a student, along with a long list of suggested destinations. That list includes the Akron Art Museum, Canal Park, the F.A. Seiberling Nature Realm, Stan Hywet Hall & Gardens, Musica and Summit Artspace.

A version of the program was piloted last summer with nine students, Vyas said. About 50 students are enrolled now, and he hopes to see 200

enrolled in the upcoming academic year. The program is open to any student. They must apply through the EXL Center, which sends along who it deems are good matches to community partners. The partners then interviews candidates.

The process is competitive by design, Vyas said, to mimic the real-world hiring processes students will see after graduation.

Behrman said one strong aspect of the program is that participants have a wide range of interests.

“It is across all disciplines. Students are coming from math, biomedical engineering, philosophy, English, sociology and more. It’s a really great mix,” she said.

Kirstin S. Toth, senior vice president at the GAR Foundation, said her organization is happy to support the program. The money is part of a larger grant the foundation provided the center last year to develop connections between students and the community.

“We thought this was a great way to showcase the EXL Center’s work and provide a meaningful way for students to discover the community beyond the campus while earning a small stipend,” she said.

“It also is a great way to support organizations throughout the community,” she added.

CRAIN’S CLEVELAND BUSINESS

PATIOS

CONTINUED FROM PAGE 1

“Frankly, it’s a leg-up on the competition,” he said. “It gives you another venue, and in a way it gives you a second opportunity to get that guest (to return). You have a chance to bring them back another time.”

Zack Bruell, chef-owner of nine eateries in Cleveland, said that “you offer a patio because people like them.”

“When the weather flips, people want to sit outside,” he said. “People get cabin fever here. As soon as the days are nice, they want to be outside, at least until it gets past a certain point, when the humidity is high.”

All but one of the Bruell Restaurant Group properties offer some sort of outdoor dining option. Cowell & Hubbard’s location at the corner of Euclid Avenue and East 13th Street doesn’t configure to permit outdoor seating.

“But I’d have it there, too, if we could,” Bruell said.

Outdoor seating at Bruell restaurants ranges in size from a 20-seat area out front and about 50 patio seats enclosed on the side at Parallax Restaurant & Lounge in Tremont, to the three outdoor dining areas with a total capacity of about 130 at Alley Cat Oyster Bar on the East Bank of the Flats.

Along with customer satisfaction, the financial boost is what appeals most to restaurateurs. Though numbers vary, most restaurateurs say that having outdoor seating can represent a significant bump in annual sales.

Anthony Romano, chef and co-owner of Sarita Restaurant in Lakewood (formerly Players On Madison), is a big fan of what a patio can do for the bottom line.

“Right now, business is up about 15%, and I attribute that to patio season,” Romano said, adding that revenue during patio season are roughly 20% higher than during the cold weather months.

Eighteen years ago, when Romano came to what was then Players On Madison, the about-99-seat restaurant offered no outdoor seating.

“I’d been working at the old Sergio’s (now Trentina, in University Circle) and I saw what a patio could do for business,” Romano recalled. When former chef-owner Sergio Abramof added a 40-seat patio in front, “he essentially doubled his business.”

Romano persuaded Players’ then-owner Gary Lucarelli to transform a parking lot into a dining space. The result was one of the area’s prettiest hideaways. Within the fenced confines, tables are surrounded by hanging baskets and floral plantings, a sweet oasis within an urban neighborhood.

So what makes a successful patio, terrace or deck? It’s largely a matter of personal style.

Graffiti Social Kitchen’s patio is a kind of legendary spot. Back when the area known as Battery Park was rundown and largely overlooked, the former Snickers patio was a quiet hideaway. Today the once-deteriorating mixed industrial neighborhood is a hip destination and home to half million-dollar condos.

Okin attributes his patio’s success to its unvarnished hominess.

“The thing I hear from customers all the time is that it really does feel like you’re sitting in someone’s backyard, and that’s something a lot of people like,” he said.

It typically seats around 120 outside (“actually, more seating than we have in both the dining rooms inside”) and can max out at 200.

“And it generates well over half, at least a good 60% to 70%, of our income. This neighborhood lends itself to foot traffic, but in poor weather it’s

The two-level patio at Zack Bruell’s Alley Cat overlooks the Cuyahoga River. (Peggy Turbett for Crain’s)

12 terrific al fresco spots Alley Cat Oyster Bar, 1056 Old River Road, Cleveland; 216-574-9999.

Waterfront views are a too-rare commodity in an area blessed with aquatic settings. Alley Cat’s tables on the Cuyahoga River are a great setting to watch the parade of crafts floating by, as well as a place for drinks and fine seafood.

Azure Rooftop Lounge, Metropolitan at The 9, 2017 E. Ninth St., Cleveland; 216-239-1200.

Craft cocktails and invigorating views make Azure an after-work destination.

Don’s Pomeroy House, 13664 Pearl Road, Strongsville; 440-572-1111.

The patio is a bustling meet-and-greet spot for locals, open for lunch then later for dinner until closing. Reliable casual fare from the popular Pub downstairs.

Graffiti Social Kitchen, 1261 W. 76th Street (Battery Park), Cleveland; 216-651-6969.

Chefs (and brothers-in-law) Brian Okin and Adam Bostwick turn out imaginative fare boasting vivid flavors. Their big patio is a lot like a buddy’s backyard gathering place — friendly, lively and fun.

Hodge’s, 668 Euclid Ave., Cleveland; 216-771-4000.

Playful food, the better for snacking, is the right fare for this sprawling urban patio. A great spot for people watching and to drink in the surrounding cityscape.

David Kordalski

Jekyll’s Kitchen, 17 River St., Chagrin Falls; 440-893-0797.

Among the most lovely settings imaginable, Jekyll’s twin patios offer a lovely view of the tumbling waters spilling over the town’s famous falls.

Very good modern American cuisine to boot.

Johnny’s Bar, 3164 Fulton Road, Cleveland; 216-281-0055.

Long applauded for its excellent food, Johnny’s is less known for the unassuming dining area behind the restaurant — the modest sort of piazza you’d find hewn by your grandfathers. Lunches, Thursday-Friday only.

Lockkeepers, 8001 Rockside Road, Valley View; 216-524-9404.

Consistently fine Italian cuisine is well-matched to outdoor seating overlooking the historic wood-lined Erie Canal.

Merwin’s Wharf, 1785 Merwin Ave., Cleveland; 216-664-5696.

Live entertainment, drinks, casual fare and big plates: All are among the offerings of this gathering place operated by the Cleveland Metroparks. Come early: Merwin’s draws big crowds.

Sarita, 14523 Madison Ave., Lakewood; 216-226-5200.

If you want to woo someone, this pretty little oasis ensconced among a profusion of plantings will provide just the right hint of romance. Imaginative and Italian-inspired cuisine, too.

Townhall, 1909 W. 25th St., Cleveland; 216-344-9400.

An extensive menu of brews is just the beginning of this lively watering hole (which features some delectable fare). The hip patio out back balances the space up front, which overflows with revelers on balmy evenings.

Welshfield Inn, 14001 Main Market Road, Burton (Troy Township); 440-834-0190.

Terraced among the manicured grounds of this historic property, Welshfield provides a lovely setting to refresh. Homey American-style comfort foods abound.

— Joe Crea

pretty dead. Summer is obviously our prime time,” Okin said.

Of the 17 Hyde Park Restaurant Group’s eateries across the country, nine have outdoor seating.

“We’d have patios at all our locations, under the right circumstances,” Saccone said.

“Getting the right energy” is important in determining whether a given property can sustain outdoor dining, he explained.

“If the potential patio area is too disconnected from your restaurant in some way or form, you’ll lose that energy,” Saccone said. “We like to have them attached to our bars, or very near to the main dining room. It creates a gathering place.”

Probably the best example of an ideal patio-restaurant configuration is Jekyll’s Kitchen. Its two-tier outdoor seating area (24 seats on the original lower level, another 60 or so on the upper street-level deck) overlooking the Chagrin falls. You simply cannot create that kind of captivating backdrop to an evening of dining and drinking.

Nor can its financial value can’t be overlooked.

“It’s probably our MOST successful patio,” Saccone said. “I’d probably say you’re looking at, in-season, probably a 60% increase in sales.

Sometimes, if the weather is perfect, it can probably get up to 65%. It’s pretty substantial.”

Even if an operator has viable space, it takes more than hauling out the chairs. Municipal laws and codes pose far more technical restrictions.

“There are all sorts of considerations that must be taken into account,” Bruell said. “In the city, you need to consider the width of the sidewalks, because there are fire codes for egress from the restaurant plus pedestrians, fire trucks. And you have to get permits for everything.”

And passing muster with one agency doesn’t guarantee smooth sailing with another.

“When I opened Parallax, I had this patio in the front and a closed pavilion on the side, with the idea of having an open-air dining area,” Bruell said. “So when I built it the city approved it, but the state liquor agency came by … and they told me the front of that patio was part of the sidewalk, which was illegal.”

The addition of planters to create a formal barrier satisfied open-container laws forbidding alcohol on public walkways.

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PA G E 17

Even then, if an operator has access to a massive amount of outdoor space it doesn’t mean they have a kitchen sufficient to crank out enough plates to feed crowds. Strain on staff and facilities has to be factored in.

How operations handle outdoor dining and drinking is all over the board. Some have patios equipped with bars to facilitate speedier service. Others offer entirely separate menus pitched to the casual spirit of al fresco eating.

At Bruell’s Alley Cat, the chef created an upstairs kitchen “because you have the issue of stairs and running food up there,” he said.

Something as seemingly simple as a drink order take on added difficulty when served outside, Romano added.

“It’s more of a challenge for the servers,” he said. “It’s mostly the location to the bar, getting cocktails out there quickly — it’s mostly the extra steps back and forth.”

In the end, weather remains the single biggest variable.

No one interviewed said they book advance reservations on the patio: Seating is usually on a first-come, weather permitting basis. And then it becomes that endless ballet of keeping indoor tables full when almost everyone wants to sit outdoors.

“We’re watching the [weather] radar all the time,” Bruell said.

“Imagine you have a full patio, and a storm blows in in the middle of it. It completely disrupts service. If THAT occurs you’ve got to find a table for people who’re in the middle of a meal.

To me, the customer is sacred: You could say, ‘Sorry, it started raining.

What do you want us to do?’ You cannot. And all of a sudden they’re moving tables, it disrupts the kitchen…

“Restaurant dining is a show. And you cannot disrupt the show.”

So, places like Sarita keep open the same number of seats indoors as

“If the potential patio area is too disconnected from your restaurant in some way or form, you’ll lose that energy.”

— Joe Saccone, chief operating officer of the Hyde Park Restaurant Group and operator of Jekyll’s Kitchen in Chagrin Falls

they have available outside. Just in case, Romano explained.

There is some seasonal hiring, most restaurateurs say, but because of the balancing act of indoor-outdoor seating, it becomes more a matter of shifting and reassigning staff to different areas.

At best, patio season is a finite window of opportunity in Northeast Ohio’s dicey climes. Romano said that, with luck, he’ll have a four to 4½-month span, ranging roughly from early May to late September.

Some operators do everything they can to extend patio season by ensuring customer comfort. Tenting, drop-down plastic walls, radiant heaters, fireplaces — all have been employed.

“Those factors can extend a patio’s season by as much as a month or better,” Saccone said. “Towards the end of the season, people are scrambling to take advantage of those last nice days.”

There’s the other side, too.

“But towards the end of the summer, even if the weather is still fairly nice, a lot of our guests are just pretty much done with it,” Romano said.

“They ask for a table inside.”

PA G E 18

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PA G E 19

Lawrence Benders

President and executive director, the Cleveland Sight Center Boston native Larry Benders’ career has taken him from corporate marketing to nonprofit management. He came to Cleveland in 1999, when he was named vice president of marketing and sales at the Rock and Roll Hall of Fame. He stepped back into the for-profit world briefly seven years later, becoming president and CEO of HF Food Technologies, a Cleveland maker of food products under the Heritage Fare brand. In 2008, he stepped away again, becoming executive director of Employment Connections, the joint Cleveland-Cuyahoga County workforce service now called Ohio Means Jobs. In 2011, he became Cuyahoga County’s director of development. In 2015, he was named president and executive director of the Cleveland Sight Center, the 111-year-old nonprofit resource for those who are blind or have low vision. The organization provides vision screenings for preschool children, education programs and transportation services and employs 70 blind or low-vision workers at a call center for the Ohio Secretary of State and other agencies. His other music job? See below. — Jay Miller

Five things Hobbies Music and woodworking

Next vacation Santa Cruz, Calif., with family

Favorite restaurant in Cleveland Fluffy Duck on Chester Avenue

Job goal in high school To be an architect

Musical instrument Piano

How did you get from a career in consumer marketing to this philanthropic, social service job at the Sight Center?

I was brought to Cleveland to be vice president of the Rock and Roll Hall of Fame. When I got here, I was put on a number of boards, including the Sight Center board. A few years later, before I got the workforce job, I was talking to my father and he said, “You’ve made a lot of investors a lot of money. It’s time you did something of value.” You don’t listen when you’re 18. You listen when you’re 40.

So I was always a fan of the Sight Center. Then 2 1/2 years ago I got a call from a recruiter (for the Sight Center job). My job is to hold the vision and make sure we have the resources, the money and the people in the right places to realize that vision. I try to hire good people and get out of their way.

What should sighted people understand about losing vision?

There is something unique about vision. We are such a visual society.

All of our social cues are visual.

When you came into this place (the Fluffy Duck), you immediately assessed it. You knew what the decor was, you knew about the staff.

Without vision, you would have no idea whether you were in Chipotle, McDonald’s or a fancy restaurant like Pier W.

Lunch spot The Fluffy Duck Cafe 10001 Chester Avenue, Cleveland 216-218-9447 fluffyduckcafe.com

The meal One had the Croissant BLT, the other the Rustic Turkey sandwich with avocado, lettuce and tomato on Rustic Oat bread.

The vibe On the ground floor of a new apartment complex across from the Cleveland Clinic main campus. Its artisan breads and pastries and its coffees overshadow a small sandwich, pizza and salad menu.

The bill $25.81, with tip

So do you believe being sightless is a unique disability?

Yes, and there is an underlying discrimination against blindness.

Blindness is not a covered condition

by Medicaid or insurance. Here’s an example. You’re in a terrible car accident, and you break your leg and you lose your vision. You go to the hospital. They do surgery on your eyes, but you lose your sight. They set your leg and put it in a cast. You get discharged from the hospital. For your leg, you go to physical therapy.

They pay for your crutches. They pay for all the rehab to get around on your crutches. For your vision, they just discharge you. Your crutches and your walker are covered, but your white cane isn’t covered by insurance or Medicaid. It’s not durable medical equipment. The white cane costs 20 bucks and the rehabilitation you need is not covered by insurance. It’s

such a profound inequality.

So what can you do at the Sight Center for someone who loses their sight?

One of the issues we have is isolation and depression. You lose your vision, you’re afraid. You don’t want to go out. So much of what we do is building people’s confidence back up, talking to them about what they can achieve, maybe learning to use a computer. It’s helping kids learn how to play on the playground. To moms, it’s convincing them that it’s OK if their kid falls on the playground.

That’s part of being a kid.

You were born in the Boston area, you went to school in the East and had jobs all over. How did you end up in Cleveland?

My wife’s parents were long-time Clevelanders. My late mother-in-law was Pat Mearns, mayor of Shaker Heights. So she said, “You’ll live in Cleveland and live on these (Shaker Heights) streets and no others.” It took 15 years to find a good marketing job here. Now we’re happy here.

Before coming to Cleveland you worked in some interesting places.

We lived lots of place. In Boulder, Colo.; Burlington, Vt.; Chicago; Philadelphia; Princeton. N.J. We went from Coors beer to Ben & Jerry’s ice cream; from the far right to the far left politically. Coors was developing new products, which is very hard for a big, established beer company. Ben & Jerry’s was a lot of fun, a wild place. At Ben & Jerry’s, my job was to raise sales, making it a much more saleable commodity. It eventually sold to Unilever.

Where did you get your start in marketing?

I cut my teeth at Johnson & Johnson, doing classical marketing mostly in the United States but also overseas, Australia, Germany, England.

What’s The Whiffenpoofs?

A group of 14 a cappella singers, all seniors at Yale University. I was the student musical director. When I was with the group, we sang all across the country — San Francisco, Chicago, Tampa. It was great.

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