Crain's Cleveland Business

VOL. 38, NO. 31

JULY 31 - AUGUST 6, 2017

Source Lunch

Long road back Invacare might have benefited from crisis.

Page 2

Mark Krohn, principal, The Law Office of Mark E. Krohn Page 23

CLEVELAND BUSINESS

FINANCE

Investors starting to shower their love on Cleveland

Firms with ‘enormous’ appetites are focusing attention on region

The List Cybersecurity firms in NEO Page 19 REAL ESTATE

Gilbert is sizing up May Co. building

By STAN BULLARD sbullard@crain.com @CrainRltywriter

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Veteran investor and global business authority Frederick Shepperd left Ohio in 2007 to establish a family office for high-net-worth people from a base in Zurich, Switzerland.

Capital was flowing away from major markets like New York and into Europe at the time, Shepperd said, as U.S. property values began to plummet and other market indicators pointed to a coming recession. So the New Philadelphia native followed the money overseas.

He has run Shepperd Investors AG from a European foothold for more than a decade now. Through a related alliance of family offices based in London, Shepperd’s network has grown to roughly 200 European families from some 15 different countries with more capital than massive U.S. investment firm The Blackstone Group. His office invests directly in companies long-term, often targeting family owned operations.

This March, Shepperd returned to Ohio.

He’s now living in Akron, vetting investments for his European families with an eye fixed on Northeast Ohio. Shepperd hasn’t closed a deal here yet, but he expects to soon. Real estate, manufacturers and mid-

firms. But it’s that legacy of big business and old money today’s regional business sector is built on that, in turn, spurred the sprawling development of investment banks, law firms, private equity and professional service firms supporting the market today.

And at a time when the investing sector at large is loaded with money to put to work, private equity is flush with dry powder and middle-market companies are hungry for capital, established investors are looking for fresh opportunities here while new players are being drawn to the market.

stream oil and gas and companies are where he’s focusing his attention.

“Fact is, with global capital flow, it’s coming to Ohio,” Shepperd said. “And for us, our capability to handle transactions is significant. And our appetite is enormous.”

Shepperd isn’t the only business person particularly bullish on the investment scene in this market nowadays, one that decades ago featured a density of large public companies comparable to major business metros like New York.

Over the years, many of those businesses have moved out of Cleveland. A handful are still here, though a large-company demographic largely has been replaced by middle-market

Perfect storm There is a confluence of events behind this trend.

According to research firm Preqin, global private equity fundraising stood at $269 billion as of late July.

That puts this year on track to beat out a record year of fundraising in 2007, which came out to $413 billion, by a solid margin.

SEE INVEST, PAGE 20

Crain’s illustration by David Kordalski Entire contents © 2017 by Crain Communications Inc.

Cybersecurity Ransomware attacks are on the rise. Page 11 Industries are slow to recognize the risks Page 16

Cavaliers owner, financier and casino operator Dan Gilbert’s Bedrock Real Estate Services may be starting to step up its game in the downtown Cleveland property market.

Bedrock’s name has surfaced as the potential buyer of the old May Co. department store on Public Square. The building also has an often overlooked side on Prospect Avenue across from the Jack Cleveland Casino’s welcome center, parking garage and recently installed Wahlburgers eatery.

Three sources familiar with the situation, who asked not to be identified because they are not authorized to discuss it, said Gilbert’s real estate arm is in due diligence to buy the building’s upper floors from Euclid of Cleveland LLC, the Miami Beach, Fla.-based affiliate of real estate investor Robert Danial.

SEE MAY CO., PAGE 4

K&D targets Post Office Plaza buy

By STAN BULLARD sbullard@crain.com @CrainRltywriter

In downtown Cleveland, the pending sale of the five-floor Post Office Plaza office building to K&D Group

by Forest City Realty Trust Inc. completes a changing of the guard in the city’s property ownership ranks.

If Willoughby-based K&D closes the purchase of the 435,000square-foot building, it would make the apartment-building ownership and development firm one of downtown’s largest office landlords, approaching 2 million square feet of offices.

Meanwhile, Cleveland-based Forest City would shed its last commercial property in its hometown as part of its years-long movement to focus on bigger cities with more dynamic economies and bigger rent rolls.

SEE K&D, PAGE 6

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CRAIN’S CLEVELAND BUSINESS

Crisis gave Invacare freedom to change

By CHUCK SODER csoder@crain.com @ChuckSoder

For Invacare Corp. CEO Matt Monaghan, July 25 was a good day — as evidenced by the high school drumline in the company’s parking lot.

That morning, employees from all over the company’s Elyria campus gathered outside to hear an announcement that could change the trajectory of the company: While standing on the bed of a pickup truck, Monaghan and other executives told the crowd that the U.S. Food and Drug Administration had finally given Invacare the freedom to build as many wheelchairs as it sees fit.

The announcement was a long time coming. It has been four-and-ahalf years since the FDA issued the consent decree that forced the medical equipment maker to shut down most manufacturing in Elyria and overhaul its quality control system.

Judging by the company’s stock price, which jumped 26% in 24 hours, investors seem to think the announcement could help Invacare get back on its feet.

Since the consent decree was issued, the company has lost money every year, on an adjusted basis, despite layoffs that reduced its Northeast Ohio workforce from about 1,300 in mid2012 to just over 600 today. (Worldwide employment fell from 6,200 at the end of 2011 to 4,600 at the end of 2016.)

But Monaghan believes that Invacare in some ways has benefited

Marnina Williams, a brazer at Invacare, hugs a coworker after the announcement cleared the way for more production. (Contributed photo)

from the crisis. He says it gave Invacare the freedom to make big, structural changes that go way beyond quality control.

The decree was “like a health event that makes a person take a doctor’s recommendation more seriously,” Monaghan said.

“What the FDA did was force us to really look at ourselves and say, ‘You know what? There’s an opportunity to do a lot of things better,’ ” he said.

As a result of the company’s ongoing transformation effort, Invacare now focuses more on selling products that serve patients with complex medical needs. Though the broader company still sells canes, rolling walkers and other relatively simple products, it plans to focus more on high-margin goods like the power wheelchairs it makes in Elyria.

Digital shop floor The most visually obvious changes are directly tied to quality control: The company’s Taylor Street complex now has computers at every workstation, he said. Before workers can start putting together wheelchairs, they have to scan their badges so the computer knows who’s doing the work and whether they’ve been properly trained. They also scan each part as they put together the final product.

“By the time one of these really complex wheelchairs gets to the end of the manufacturing line — and literally they have thousands of components each — we know exactly what’s been in there, who’s done each step and how it performs,” Monaghan said.

Before, much of that work was

done on paper, and fewer steps were documented. That wasn’t good enough for the FDA, which identified several documentation issues at Invacare during multiple inspections over the years.

“Essentially the FDA says, if you don’t document it properly, it didn’t happen,” Monaghan said.

The decree also drove Invacare to revamp the way it develops products.

The company was initially prevented from designing power wheelchairs and power beds at its Elyria headquarters. The FDA has since lifted those restrictions, but first Invacare had to re-evaluate the methods it uses to design and test products, as well as the documentation processes that ensure those methods are properly followed.

The decree also affected product development in an indirect way: It pushed Invacare to hire Monaghan in 2015. He then hired other executives. One of them started a group that observes how people use the company’s products, at home, work and school.

Getting to know you That knowledge allows the company to go into much greater detail when conceiving new products, he said, giving an example: Say Invacare wanted to create a wheelchair for kids. It might come up with a hundred requirements for it. It would need strength to endure the stress of going over curbs on the way to school, wheels that could roll through playgrounds and puddles, and, say, a

TECH +

battery that lasts for six hours and charges in two hours.

Through the new process, the company aims to create products that fill needs users didn’t know they had, he added.

Invacare is in the process of launching a new power wheelchair that went through that process. Last week, the company started taking orders for the TDX SP 2, which will be built in Elyria. The chair can be ordered with a wirelessly programmable control system that, among other things, allows the chair to make automatic adjustments as it rolls over different types of surfaces.

The company’s focus on high-end products has helped Invacare push up its gross margins over the past two years, Monaghan said. Now the company just needs to sell more of those products. That may not be easy, especially when it comes to selling Elyriamade power wheelchairs: Since the consent decree went into effect, the only way for a patient to receive an Elyria-made Invacare wheelchair was to have a clinician fill out a form of medical necessity. As a result, many consumers turned to competing products.

But the company did keep selling other products without that restriction, which helped it maintain its brand and customer relationships.

Thus, Monaghan believes the company can win those consumers back. It will have to if the company is to get back into hiring mode in Elyria.

“We’ve got to grow sales ... based on products out of this facility,” he said.

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PA G E 3

Micro Fantasy is eager to take next step

By KEVIN KLEPS kkleps@crain.com @KevinKleps

Joel Crites only has about $2,500 in revenue to show for Micro Fantasy, his predictive-gaming startup of two years.

But the North Canton Hoover High School graduate continues to swing for the fences, and he’s drawing a crowd of people who believe he can make it happen.

The company — which has developed software that allows users to predict which plays will occur in a sporting event in real time, thus giving host organizations the chance to run contests and bring in sponsorships — has had a hectic last 12 months, even by startup standards.

Crites, who is working full-time as a controller for a Twinsburg manufacturing company, in March negotiated a three-year contract with Pointstreak Sports Technologies. The deal — just in time for the start of baseball and softball season — allows Micro Fantasy to use Pointstreak’s real-time stats feed to run its in-venue contests.

Micro Fantasy’s web-based platform (the company also has free apps for Android and Apple users) was on display during the National Pro Fastpitch League draft in April, plus the Florida Collegiate Summer League’s All-Star Game earlier this month. The company’s technology also is being used by such teams as the Lake Erie Crushers of the independent Frontier League, as well as the Akron Racers and Chicago Bandits of the National Pro Fastpitch League.

“We have taken all the guesswork out. That’s what the past year is all about,” Crites said. “If you have a minimum amount of labor, it can work.”

And that’s the key, said Crites, who came up with the idea while trying to keep his then-16-year-old son, Koby, interested at a Cleveland Indians game in 2014.

Teams such as the Bandits, whom Crites said employ a pair of interns to promote the softball team’s contests, have shown that the more consistent the promotion, the greater the likelihood that fans will be willing to join a Micro Fantasy contest during a game.

Another National Pro Fastpitch team, the Racers, have sent staffers from their promotions department into the stands at Firestone Stadium in an effort to round up fans for that night’s Micro Fantasy contest.

“We’d get 20 people who were interested in playing. Then they’d compete for prizes,” Akron owner and general manager Joey Arrietta said.

“It’s been a fun ingredient.”

Like most things right now, that’s relatively small potatoes for what Crites anticipates will one day be an all-out feast.

During its first full year with live automation capabilities, Micro Fantasy isn’t charging clubs to use its product, though it is asking for a revenue share should an organization sell a sponsorship related to its inpark Micro Fantasy promotion.

With his model producing proven results, Crites believes he can begin to bring in licensing fees of at least $1,000 per team, plus a 50/50 sponsorship share in 2018 — and he thinks there are several hundred clubs who can be signed up for the services.

‘Working every angle’ Contest participants choose one of 10 options prior to an at-bat in baseball or softball, with a correct answer generating points based on a scale of

somewhat likely (such as a groundout or single) to improbable outcomes (i.e., a triple in baseball).

The 10-option interface allows Micro Fantasy to Crites seamlessly transition to other sports. The company’s first football contests went live at several restaurants and bars in November 2015, and Crites has developed versions for basketball, hockey, tennis, soccer, esports and even rodeo.

And just as taking his oldest of four kids to a Tribe game led to his big business idea, time spent with his grandmother, who has dementia,

gave Crites another reason to think his product can work on a large scale.

Nursing homes, unlike bars, don’t expect a big return on their investments, and they have budgets set aside for events such as a Micro Fantasy night — which Crites said has “been a hit” during Indians games at The Oaks of Brecksville.

“I think that will be more profitable than sports bars,” Crites said.

“We’re still working every angle.”

A product with the potential to work in more than one industry, and with so many sports, has impressed Ken Cook, who had been Pointstreak’s CEO until the Canadian company was acquired by Blue Star Sports, a Frisco, Texas-based youth sports management giant that is backed by Dallas Cowboys owner Jerry Jones.

“I really like the way he’s taken a look at different market segments,” said Cook, who’s been a mentor to Crites and said he “wouldn’t hesitate” to invest in Micro Fantasy “if the timing was different.”

Crites has put in $80,000 of his own money since founding the company.

He’s hoping to raise $300,000 in a current round of investing, which would allow his “core four” group of employees (himself, a chief marketing officer, a chief technology officer and a software engineer) to focus more of their efforts on the startup. (The other three are currently working part-time.)

Micro Fantasy is one of 20 finalists for a $100,000 investment from Stadia Ventures, a St. Louis-based accelerator that chooses to work with two up-and-coming startups per year.

Crites is also awaiting approval from Major League Baseball Advanced Media, which he believes could lead to Micro Fantasy working with a large group of minor league clubs.

“I love Joel’s commitment and his enthusiasm for it,” said National Pro Fastpitch commissioner Cheri Kempf, whose six-team organization held Micro Fantasy contests during its 2016 championship series.

Crites, full-time job and all, continues to meet with potential investors and believes he’s one big break — one huge agreement — from his startup being a sports industry staple.

“The goal now that we have that strong foundation laid is to get that investment to devote ourselves to it,” Crites said. “That’s the only constraint right now.”

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CRAIN’S CLEVELAND BUSINESS

RNC helped sales taxes surge 5.9% in July 2016

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The 2016 Republican National Convention held in Cleveland last July certainly gave the economy of Northeast Ohio a boost. Exactly how much likely will never be precisely known, even though a report on the convention’s economic impact is due soon from Destination Cleveland, the regional convention and visitors bureau.

Economists disagree on the accuracy of such after-event analyses to tally the economic impact. Recent estimates on the impact of hosting a Super Bowl, for example, range from $30 million to $300 million. But that hasn’t stopped communities and economists from studying the phenomena.

One measure, though, can offer something reasonably solid to chew on: sales tax collections.

Ohio, like most states, requires restaurants, discount stores and other shops to levy a sales taxes on retail sales (notably excepting food for home use). The Ohio Department of Taxation audits and compiles the results county by county.

The sales taxes collected in July 2016 in the seven counties of the Cleveland metropolitan area, the counties most affected by transactions with convention visitors, were up 5.9% over the taxes collected in July 2015 — an increase to $33.5 mil-

MAY CO.

CONTINUED FROM PAGE 1

However, a key part of Bedrock’s interest in the May Co. complex is that it incorporates a nine-floor parking garage at the northeast corner of Prospect and Ontario Street, across from the casino, one of the sources said. The garage originally served downtown shoppers.

Although revenues from casino gaming operations have failed to meet expectations before Jack, then known as Horseshoe Casino Cleveland, swept casino gambling into Ohio in May 2012, the operation has made parking a prized — and pricier — commodity in the area near Public Square, especially on weekdays and game days at nearby Quicken Loans Arena and Progressive Field.

Whether Bedrock, which has developed and renovated substantial properties in downtown Detroit the past few years, would pursue the most recent proposal for May to become apartments on its upper floors is unknown, but it does have lofts in its Detroit portfolio.

The potential Bedrock maneuver surfaces as the last venture targeting May Co. for 220 apartments comes to naught.

A trio of Cleveland developers — John Carney, Robert Rains and David Goldberg — had pursued a plan since 2013 to convert the May Co. building’s upper floors to apartments while the Florida owner would have continued to operate the first two floors of the building as retail space.

A Taco Bell is the latest addition to the building’s frontage to the renovated Public Square.

Carney, a principal of Landmark Management, said in an interview last Tuesday, July 25, that the May Co. project is “dead to us.” He said anoth-

lion from $31.6 million. Those tax collections represent taxable retail sales of $3.67 billion and $3.48 billion, respectively. County sales taxes, tacked on to the state’s 5.75% sales tax, range from 0.5% to 1.25% (not including transit taxes). That translates into an increase in sales subject to sales tax of about $190 million, not factoring in modest year-to-year inflation.

Those figures, of course, don’t count purchases of services, such as internet access or accounting fees, or cash transactions such as tips to restaurant servers or cab drivers. Nor do they include the kinds of secondary impacts economists include that swell economic impact, such as purchases made with money earned by working at the convention.

Though conventiongoers spent their nights in hotels across the region, much of the increase, $132.5 million, was tallied in Cuyahoga County, the convention’s epicenter.

One substantial portion of the increased retail spending can be broken out: the increase in hotel occupancy. Though hotel guests pay sales tax, many Ohio counties, and some cities, levy a lodging tax.

Cuyahoga County tacks a 5.5% lodging, or hotel bed, tax on the more than 150 hotels in the county, all of which were full to capacity during convention week, July 17-23, 2016, and at higher-than-normal levels in the weeks leading up to and following the actual convention. For July

2015, Cuyahoga County collected $1.81 million in bed taxes. That shot up to $3.22 million in 2016, a $1.41 million increase. Extrapolating from the 5.5% bed tax, that represents a boost in visitor spending on hotels of $25.6 million.

That bulge in retail sales, however, falls short of the growth of taxable sales in Tampa, after that city hosted the 2012 Republican convention.

A study by Brian Kench, then an economics professor at the University of Tampa, reported a 9.8% increase in taxable sales between August 2011 and August 2012, the month of the convention. Actual taxable sales in the Tampa area during the convention month were $363.5 million higher than the same month a year earlier, Kench reported.

The economic impact Destination Cleveland is to soon announce likely will be similar to the results announced in April by the Philadelphia Convention and Visitors Bureau for the 2016 Democratic National Convention, held in that city a week after the Republicans met in Cleveland.

Its annual report estimated the impact of the convention on the five-county metro Philadelphia area at $230.9 million, including $132.9 million in direct convention-related spending. That was less than the pre-convention predictions, which ranged from $250 million to $350 million.

er group is working with Danial to buy the building but he does not know the next would-be buyer’s identity.

The local group had let its option expire during protracted efforts to secure highly competitive Ohio State Historic Preservation Tax Credits for the project, without success, in 2015 and 2016.

Such credits are crucial to raising enough money to finance such a major construction project, estimated to cost a total of $140 million. The oldest part of the former store dates from 1911.

“Someone else will develop the building,” Carney said. “A lot of time, effort and treasure went into it. I am disappointed. That building needs to get done. If it does, it will be good for Cleveland.”

Whether a Gilbert-led group winds up with the May Co. building, Bedrock is a likely buyer for the property for several reasons.

Alec Pacella, an investment property expert and managing partner of NAI Daus real estate brokerage in Beachwood, said Gilbert’s other area interests make the property more valuable to Gilbert and his partners than to others. Those include The Q, the casino and its upstairs multitenant office space in the Higbee Building, 100 Public Square, and Ritz-Carlton Hotel and Chase Office Tower, 1515 W. Third St. If parking needs are driving the deal, another scenario might play out.

Pacella in 2003 was the broker on the $10 million sale of the May Co. building to a prior owner who wanted to use all of its upper floors for parking.

“That building is built like a fortress,” Pacella said. “I’m sure it structurally could handle it. It wouldn’t be cheap.

But it’s an interesting idea as downtown has become under-parked.”

However, dropping the May Co. apartment conversion plan could leave money on the table.

The state has an allocation of $25 million in Ohio tax credits that could be called into play if another owner pursues a similar adaptive reuse of the landmark that also satisfies federal standards for historic preservation. Most real estate developers do not have enough cash flow for the federal and Ohio tax credits to be useful to their own firms, so they sell them. However, several of Gilbert’s ventures might be able to use the federal tax credits or the Ohio credit for his Ohio operations directly to reduce their tax liabilities.

The other intriguing development at Bedrock is internal. Bedrock has on its website an ad for a position for a director of development who would be based in Cleveland. The company seeks a mid-career applicant with at least 10 years of experience who holds an undergraduate degree in urban planning or a law degree.

The listing comes more than a year after Bedrock bought the long-suffering Avenue at Tower City from Forest City Realty Trust.

All that’s happened since at the formerly posh urban mall is that vacancy has increased, most recently with storefronts for The Children’s Place retailer, which is shutting more than 100 stores, and Sakio Japan, a food court venture, going dark in the last two months. However, retail closings are an epidemic in the nation as e-commerce increasingly challenges bricks-and-mortar retailing, along with store over-supplies.

For its part, Bedrock declined comment.

Gabrielle Poshadlo, a Bedrock spokeswoman, said, “Our official stance is that we don’t comment on rumors in the marketplace.”

The May Co. building’s owner did not return two phone calls and an email about the changing prospective buyer lineup by 7 p.m. last Thursday, July 27.

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Circumstances at its longtime headquarters in the 10-story Rose Building in downtown Cleveland may make it attractive for Medical Mutual of Ohio to stay in place.

The health insurer, which has 1,000 workers stationed at the building at 2060 E. Ninth St., for almost a year has conducted a search for a new headquarters, or perhaps staying in place, that also considers combining its suburban and downtown workforces at another location.

The buy-and-stay possibility has surfaced in a brief in a Cuyahoga County foreclosure case between its landlord, an affiliate of Los Angeles-based Bentley Forbes Group referred to as MMCO LLC, and the holder of the mortgage on the property.

Court-appointed receiver Donald Green of Cleveland in a July 27 brief asked the court to approve a $38 million sale of the building to the insurer. The brief asks Judge Cassandra Collins Williams to approve a motion authorizing the sale by Aug. 28, as the Medical Mutual offer has to be accepted by Oct. 2.

“If Medical Mutual does not have such certainty, it will exercise its other options for locating its headquarters in the greater Northeast Ohio area,” the brief stated.

K&D

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Doug Price, K&D CEO, confirmed the company he runs with co-founder Karen Paganini has a contract to purchase the office building that Forest City installed in the former downtown post office in the 1990s as part of its Tower City Center project.

The building at 1300 W. Third St. converted the empty 1925-vintage U.S. Post Office building to office use, preserving its stainless steel-lined art deco lobby for future generations. It was sometimes overlooked because of the scope of Tower City, which incorporated the landmark Terminal Tower and installed a since-failing downtown mall in part of the former rail station and two skyscrapers on pads in the complex that had sat empty since the Great Depression.

Rico Pietro, managing principal of Independence-based Cushman & Wakefield CRESCO, confirmed K&D has the property under contract. Pietro and Bill Saltzman, head of Cushman’s office unit, had promised a “full-court press” when Forest City awarded the firm a listing for sale and leasing of the building last year.

K&D bested offers from out-oftown landlords hailing from Pittsburgh, Detroit and Los Angeles, Pietro said.

A public record signaled K&D’s unexpected play for the office property. KD Post Office Plaza LLC was incorporated June 23 at the Ohio Secretary of State’s office, according to online records.

Price said in a phone interview last Wednesday, July 26, that K&D plans to continue to market Post Office Plaza as an office building due to the layout of its floors. K&D is currently converting part of the Halle Building, 1228 Euclid Ave., to apartments. It just finished adding apartments to part of Leader Building, 526 Superior

The brief was filed after attorneys for the landlord, which owns the property through BFG Holdings LLC, argued earlier in July that the receiver should be replaced and does not have the authority to sell the property.

Meanwhile, counsel for the mortgage holder maintained in court filings that if the property owner wanted to challenge the receiver’s appointment, it had substantial time to do so before this summer. Green was appointed receiver on July 15, 2016, according to court records.

Jared Chaney, chief communications officer for Medical Mutual, confirmed in a statement that staying at the headquarters building is among options the company is considering.

“It’s an active option,” Chaney said, though he downplayed the urgency reflected in the court filings.

“All options are still open. We have plenty of time to make the right decision. We’re not there yet.’’

The mortgage holder is represented

by U.S. Bank National Association as the trustee for a securitized loan sold to bond holders referred to as Banc of America Commercial Mortgage Inc. commercial mortgage pass through Certificates Series 2001 of Torchlight Loan Services LLC of Miami.

The lender filed suit on June 21, 2016, saying BFG Holdings had not satisfied a nearly $58 million mortgage when it became due Jan. 1, 2016.

Bentley Forbes did not return a

phone call and email by last Thursday, July 27.

When Medical Mutual acknowledged it was pursuing a potential headquarters move and consolidating offices last December, it said it has a requirement for 380,000 square feet, as much space as it has in the Rose Building. Medical Mutual also has 700 workers in Beachwood, Copley and Strongsville offices that it may consolidate in some to-be-determined fashion.

All of Medical Mutual’s leases expire in a 2020 timeframe that might allow it to consolidate disparate operations in fewer or different combinations with a blank slate. In an interview last year, Chaney emphasized the company might stay at its current building, but that it also was interested in arranging its offices in such a way they will operate efficiently using current technologies. The structure dates from 1900.

MMCO, the Bentley Forbes affiliate owning the building, had acquired it from Medical Mutual for almost $48 million in October 2000 and then leased back the entire structure until 2020. Bentley Forbes owns 66 assets with a total of 14 million square feet of office space, according to its website.

Such transactions are common and generally allow companies to free cash for their balance sheets by selling their properties, yet still maintain control of their operations.

Ave., and installed dwelling units in three others.

“We’re in that business now,” Price said of the downtown office market.

“We’ve leased about 150,000 square feet of office space the last few years.

It’s one of the last big pieces of real estate available. The floors are large.

We’re also already in the Tower City project with the Terminal Tower (which K&D bought last year from Forest City). We’re open for business and ready to make deals.”

Pietro and Saltzman also will handle Post Office Plaza leasing brokerage for K&D, Price said.

Pietro is excited about the opportunity.

“We’re going big-game hunting,” Pietro said. “We want to find office tenants who need space for operations with 100 to 500 employees such as tech companies that will bring jobs to downtown Cleveland. There’s new ownership of The Avenue (Detroit-based Bedrock Real Estate Services) and the location is attractive to companies hiring millennials. It’s connected to public transit. And it’s near downtown amenities from restaurants and coffee shops to pro sports.”

However, tenants seeking large offices are scarce, and Post Office Plaza competes in the mid-range Class B office market, where downtown vacancy is 23% and some 4 million square feet of office space is vacant, according to online commercial realty data provider CoStar. The building has a 31% vacancy rate, surpassing considerably the vacancy rate of its market and that of all downtown, which was 19.5% at mid-year, CoStar reported None of the parties would disclose the proposed purchase price.

Cuyahoga County assigns the building a market value of $21 million for property tax purposes.

However, values of downtown office buildings have climbed the last

few years. In its most recent report, CoStar reports that between April 2016 and April 2017, sale prices of office buildings of 250,000 to 499,000 square feet in size averaged $77 a square foot. Prices for all office building sizes sold in the same period ranged as high as $105 a square foot from $45 a square foot, according to CoStar.

If the sale closes as expected, Forest City will have shed its last piece of Tower City Center, a project that put it on the map as a major developer. It had taken more than a decade to ready the project by consolidating the rail terminal and multiple buildings from multiple ownerships.

Now the iconic property on Public Square is in multiple hands. Besides K&D, Bedrock Real Estate Services, the real estate ventures led by Cavs owner and financier Dan Gilbert of Detroit, owns the retail center, the former Chase Office Tower with the Ritz-Carlton above it and land sloping on Tower City’s south side to the Cuyahoga River. Woodland Hillsbased Hertz Investment Group owns the Skylight Office Tower.

Forest City itself plans to move its headquarters from Terminal Tower, its home for 20 years, to Key Tower.

The offering of Post Office Plaza, the sale of other pieces of Tower City as well as its Halle Building have accompanied vast changes in Forest City’s portfolio under CEO David LaRue, as it sheds holdings around the country that don’t fit its current mission. The company is narrowing its focus on large mixed-use projects in 10 major cities from New York City to San Francisco to simplify its business and seek stock values in tune with its property values.

Forest City spokesman Jeff Linton declined comment on the potential transaction. The company as a rule comments on transactions only after the sale of the property is consummated.

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Camps could be start for future in manufacturing One constant in manufacturing in recent years has been the need to get the next generation interested in the industry. Summer camps are one way companies and organizations have been reaching out to these young adults, typically letting them get some hands-on experience in making things while also showing them what manufacturing is all about. In Ohio, some of these camps are independently run, while others are affiliated with a larger effort, like those hosted by U.S. Sen. Sherrod Brown’s office. Information supplied by the senator’s office noted that the number of camps it hosts has grown from one in 2013 to 18 this year. Here’s a look at some of the manufacturing camps being held this summer. A quick disclaimer: A lot of these camps are collaborative efforts, and there simply isn’t room to list all the partners involved. — Rachel Abbey McCafferty Teamwork and problem-solving One of the Cleveland camps this summer has a slightly different approach than most. While the focus will be on manufacturing, it will also work to teach soft skills, said Jonathan Rivera, youth workforce development coordinator for Wire-Net. The camp, which is associated with Brown’s office, is for rising sixth through eighth graders and will be held in August at Max S. Hayes High School. Rivera said the areas of focus came up as the leaders were thinking about what students need to know for the workforce. And he wanted to make sure students enjoyed themselves at the camp, instead of just making it about education, so there will be physical activities like dance, too.

Students also will get to travel to Mitchell’s Homemade Ice Cream for a demonstration of how the product is made and for a special treat. His goal is that students walk away from the camp with soft skills like teamwork, communication and problem-solving. Brianna Schultz, director of youth programs at Wire-Net, said those particular skills were chosen from industry feedback.

Learning manufacturing through making

From boats to guitars to jobs

Steel, toys and giving back

Welding skills for the summer and beyond

The Alliance for Working Together Foundation in Mentor is in the second year of its summer manufacturing camps for Lake and Geauga counties, which are also affiliated with the efforts of Brown’s office. The organization in June held one co-ed camp and one camp just for girls, both aimed at rising fifth and sixth graders. That age range is perfect for capturing a “sense of wonder,” said AWT executive director and camp director Alice Cable. Exposing students to manufacturing before they reach high school is important because by then, they’ve already started on a path. Each camp made time for field trips to local manufacturers, as well as hands-on projects. The camps made miniature speakers and clocks, Cable said.

“The Mahoning Valley is really strong in manufacturing,” said Lisa Long, associate director of OH WOW! The Roger & Gloria Jones Children’s Center for Science & Technology in Youngstown. But manufacturers can’t find enough skilled people. To that end, OH WOW! has been holding manufacturing camps in the region for the past five years, with the support of Brown’s office. The camps help students learn what they’re interested in, Long said. That may lead to jobs down the line, which could help them and the community. This year, OH WOW! has three different curricula for students entering fourth through sixth grade on music (in which students got to build a guitar and mix music), boat building and construction. The camps are held throughout the summer in Youngstown and Warren.

There’s a lot of competition for skilled workers in Northeast Ohio, and it’s important to show students that STEM skills can lead to a “great career path,” said Greg Oprisu, electrical maintenance manager for steel producing at ArcelorMittal Cleveland.

This is the second year the plant has partnered with Open Doors Academy to host a summer STEM camp for rising sixth to ninth graders. Students who take part get tours of ArcelorMittal, a trip to the Great Lakes Science Center and lessons about electrical and mechanical concepts. They also have the chance to put those lessons to work by adapting battery-operated toys for children with physical challenges. Oprisu said the camp is rewarding for the adults, too, especially when students are learning how to do something new.

The WorkRoom Program Alliance’s camp is a bit more intensive than many in the region. The group hosted a two-week training program for older teens that gave them the opportunity to earn an industry-recognized certificate in welding. Jason Drake, executive director of the alliance, said the goal was to show students that earning a certification didn’t have to be a “far-flung dream.” The credentials can help improve job prospects for the participants, as well as count toward graduation requirements for those still in school. Eight young adults — seven rising seniors and a recent graduate — took part in the camp. The camp used Lorain County Community College’s welding trailer on site at the Dan T. Moore Co.’s Cleveland Industrial Innovation Center. Dan T. Moore Co. was one of the sponsors.

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Opinion From the Editor

Up in arms over dress codes

Editorial

Tackling a problem The annual Pro Football Hall of Fame Game, taking place this Thursday, Aug. 3, between the Arizona Cardinals and Dallas Cowboys, and the accompanying enshrinement ceremonies are a nice financial shot in the arm for Canton, but they’re mostly notable as a symbol: Football is back.

A new initiative surrounding the Hall of Fame, though, stands to have more than just symbolic importance for young minorities looking for work.

Fairlawn’s Welty Building Co., the city of Canton and the American Center for Economic Equality (ACEE)/Black Contractors Group recently announced a plan to help minorities ages 18 and over from Cleveland and Canton get jobs working on the construction of the $700 million Hall of Fame Village at the Hall of Fame.

As Crain’s outlined in a July 13 story, the program will run through Canton’s employment and camps programs and ACEE programs that develop work skills. Participants will work with contractors and unions; some will get apprenticeship opportunities. Welty, which manages construction of the Hall of Fame Village, is working to secure jobs for participants and is encouraging carpenters, plumbers and other trades to participate in the program.

Participants will attend two weeks of skills from the Stark County Community Action Agency and a three-week training program at Operators’ Union Local 18 in Richfield.

The initiative is in its infancy, but it aims to address a critical opportunity gap in the workforce.

The nation’s official unemployment rate was 4.4% in June, the lowest point since May 2001, according to data from the Bureau of Labor Statistics. But break down the data a bit more and the employment picture is more problematic.

For Hispanic and Latinos, the unemployment rate last month was 4.8%. Meanwhile, the jobless rate for blacks in June was 7.1%. And among all people ages 16-19, the unemployment rate was 13.3%. In short, there’s a critical need in the minority and youth segments of the workforce for more job opportunities,

particularly for positions, such as those in the Hall of Fame Village project, that pay well.

A study last week by Georgetown University’s Center for Education and the Workforce found that despite profound shifts in the U.S. economy, there are still about 30 million jobs paying more than $35,000 a year for workers without four-year college degrees. It’s not always easy for companies to find workers for those jobs, the study found, nor are potential workers’ skills always a good match for the positions available.

The Hall of Fame Village initiative tackles these issues head on and gives young people what they need: a chance to break into the workforce. We wish it success and encourage others to emulate its ambitions.

Not playing this game

In this summer of Cleveland Cavaliers-related discontent, one of the most egregious comes from outside the organization: the NBA’s declaration (or, less politely, threat) that it will no longer consider Cleveland as a host city for the 2020 or 2021 AllStar Game if the battle over the proposed $140 million transformation of Quicken Loans Arena goes on much longer.

In a letter included in documents filed with the Ohio Supreme Court over a possible ballot challenge to the transformation financing deal, Mark Tatum, the league’s deputy commissioner and chief operating officer, wrote that the league “will not be able to consider Cleveland” for the game unless the project begins “on or before” Sept. 15.

The dispute over the transformation of The Q will have to be resolved soon, since August is the deadline for issues to be placed on the November ballot.

No doubt, the All-Star Game would be great to have. And we’re on the record, with some reservations, in supporting The Q financing deal. But given the scope of the project and the level of community debate about it, the NBA’s Sept. 15 deadline is an ultimatum that should be ignored.

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

CLEVELAND BUSINESS

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Scott Suttell (ssuttell@crain.com)

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Timothy Magaw (tmagaw@crain.com)

Contact Crain’s:

216-522-1383

Forget the debate surrounding health care in Washington, D.C., for just a bit. I mean, really, is that so important when you compare it to another pressing issue roiling Capitol Hill this July?

I am talking, of course, about the dress code.

Yes, the dress code. Seriously. For you fans of the Constitution, let’s call it the right to bare arms.

If you’re not up to speed, here’s the short version: A few weeks ago, a female reporter was rebuffed when she tried to enter the Speaker’s lobby, an area outside the House of Representatives’ chamber where reporters often interview lawmakers. The reason?

She was wearing a sleeveless dress, a violation of a decades-old dress code that also prevents entry for men who are not wearing a suit jacket or tie.

Elizabeth And before this thing creases along parMcIntyre tisan lines, I’d like to add that it’s a dress code that’s been enforced under Republican and Democratic leadership, and not only when a man was in the Speaker’s chair.

There’s a rack of ugly ties available for forgetful men, forced to wear a “tie of shame” if seeking an interview sans neckwear.

It appears, however, that no sweaters or jackets are available for sleeveless women.

CBS News explains what happened after reporter Haley Byrd was told she could not enter the Speaker’s lobby because she lacked sleeves: “Forced to improvise, she ripped out pages from her notebook and stuffed them into her dress’s shoulder openings to create sleeves, witnesses said. An officer who’s tasked with enforcing rules in the Speaker’s lobby said her creative concoction still was not acceptable.”

As you can imagine, the internet exploded, with cries of sexism and comparisons to Margaret Atwood’s dystopian novel “The Handmaid’s Tale.”

Speaker of the House Paul Ryan stepped into the fray and announced he was working with the House sergeant-at-arms to “modernize” and “update” the dress code for the Speaker’s lobby, a reasonable response that was applauded by House Minority Leader Nancy Pelosi.

Ryan was right to inject some common sense into the matter.

Sleeveless dresses are inappropriate? Really? How did skirts skirt by?

Still, even if it’s antiquated, the dress code is no surprise. It’s been in place for years. And while private business is different than the halls of Congress, dress codes appropriately exist there, too. And business leaders might take a cue from Ryan and consider updating them.

Businesses are entitled to establish standards of how they expect employees to appear and perform in the workplace, but they also should be willing to clarify and update policies as times change. That doesn’t mean suddenly allowing crop tops in the boardroom, but a little more flexibility might go a long way toward boosting employee morale. It’s just smart business to adjust to the times while still maintaining professionalism and projecting the right image. But it’s not mandatory.

Yes, we have a right to bare arms, and cutoff jeans and even untucked oversized Hawaiian shirts. Heck, we even have the right to wear a Golden State Warriors jersey. But if the rules prohibit such attire, employers have the right to enforce those rules. And if you, as an employee or consumer, don’t want to conform, you can make that choice.

Case in point: Earlier this spring, I decided to dine at a private club in Detroit with a colleague. When we arrived, my co-worker was turned away from the restaurant because he was wearing dress jeans with his sports jacket. Unbeknown to us, the club prohibits denim in its dining room, so we ate elsewhere that evening.

Rather than turning a sleeveless dress into a federal case, perhaps it’s wiser to know the dress code, respect it and, when it’s as outdated as shoulder pads and scrunchies, review it and update it.

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.

Sound off: Send a Personal View for the opinion page to emcintyre@crain.com.

Please include a telephone number for verification purposes.

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PA G E 9

Web Talk Re: Employers and marijuana use

Re: JobsOhio’s new ‘SiteOhio’ program

Why any business would volunteer to act as enforcement agents for a failed federal law that is unjust by any measure is beyond me. And let's be clear about the canard of cannabis law reform somehow reducing public or workplace safety. Anyone who wants cannabis now can get it, and will consume it regardless of the law, and usually regardless of drug testing. That means that workplaces will be no more or less safe as a result of sensible laws than they are with our current nonsensical laws. — JohnB

The rollout of this program validates that JobsOhio needs to be reworked, evidenced by the fact that NO SITES in Northeast Ohio qualify as being immediately ready for development. That tells it all. They apparently rely on technical bureaucrats mandating these unrealistic qualifying regulations.

— Dan Dehoff

Re: Dining etiquette Sadly, I get into heated arguments with Europeans, whose custom is to NOT tip servers. Why? Because they make a living wage over there, somewhere near $10 an hour. So, they come here for vacation and stiff our servers. I try to tell them it’s our custom to tip, but they still argue with me about it. Then they wonder why they get lousy service as soon as the server finds out they are from Europe. — SonnyBoy007

Re: Kyrie Irving’s trade request Interesting that Kyrie gets the shade while LeBron James, who plays “leaving” games daily, skates free. The Cavaliers should trade LeBron to a Los Angeles team for about five possible starters unless he signs a five-year extension.

— Bruce Terry

Re: New CEO at Signet Jewelers The company keeps on taking care of itself instead of taking care of its employees. — Michael

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At the Table

LeBron is the fire behind Blaze Pizza’s growth Cavs superstar LeBron James doesn’t confine his talents to the basketball court. Turns out he’s also a force behind what’s being called the nation’s fastest-growing restaurant chain.

Food and Wine magazine recently reported that James is the economic clout behind Blaze Pizza.

The Southern California-based, create-your-own pizza operation was founded in 2011. A year later, James invested, then became a franchisee.

“In just the past four years, they have gone from operating two eateries to 200 — the fastest start for a restaurant chain in the U.S., according to a report from Forbes,” wrote F&W’s Elisabeth Sherman.

It’s a fascinating sideline adventure. Read more: bit.ly/2uTJlWt More Ohio restaurants delivering: Today, Americans consume at least one in four of their meals outside of the home, says the U.S. Department of Agriculture. Some sources show that our reliance on food cooked by others is nearing roughly 50% or more.

And that doesn’t necessarily mean we’re sitting in restaurants or chowing in restaurant parking lots. A recent study by the Ohio Restaurant Association says that at least 40% of the state’s food-service operations now offer home or business delivery.

Chains like Panera and Jimmy John’s are among the most recent to grab

“In just the past four years, they have gone from operating two eateries to 200 — the fastest start for a restaurant chain in the U.S., according to a report from Forbes.”

sales by hustling food to diners’ doors. Among indie eateries, 40% use an array of small delivery services to complete transactions.

Joe Now, larger Crea t o - y o u r- d o o r servers are jumping in. UberEats, GrubHub and Amazon Restaurants are among the growing third-party providers that eateries rely on to get your food to you quickly (and, presumably, hot and fast).

Want to know more? Check this out: bit.ly/2ux7PSP Another Melt on its way: A 10th Melt Bar and Grilled will soon ooze its way into a nearly 6,000-squarefeet space at 35546 Detroit Road (near Route 83) in Avon. A late August opening is planned.

It’ll be among the largest of the Northeast Ohio-based, heavy-onthe-dairy sandwich-and-fries restaurants. Seating for upward of 250 guests is in the works.

Meanwhile, if you know someone who’d be just right to join Melt’s team in a front- or back-of-house position, owner Matt Fish is taking job applications.

Though a hiring fair was recently held (July 22-28, at the Cambria Hotel, behind the coming location), job

—Elisabeth Sherman, Food and Wine magazine, writing about Blaze Pizza’s growth

Blaze Pizza has increased its number of locations from two to 200 in the last four years. (Ricardo DeAratanha/Los Angeles Times)

seekers can go to meltcareers.com for opportunities.

Where we’re eating: Once in a while, I like to share where Northeast Ohioans are sitting down to what they consider a good meal.

Alan Glazen, former ad man and irrepressible business incubator, recently weighed in on an area landmark that has found newer digs:

Recognizing the fastest-growing companies in Northeast Ohio.

G-Lancer on 21, 1425 E. 21st St. at Rockwell Avenue (adjacent to the back corner of Plain Dealer Plaza). “(G-Lancer) for steak, scampies, Jambalaya,” he recently jotted. “Not fancy service, not hip at all, but utterly friendly, really tasty food served at fair prices and, I must say, we keep enjoying it!”

Glazen, who is part of the teams behind the Ontario Street Cafe, ABC

the Tavern and XYZ the Tavern locations, suggests you remember the old Mardi Gras Restaurant.

“This is a whole new take on that space,” Glazen said.

Hours are 11 a.m to midnight (later on Saturday). Call 216-344-3222.

Freelancer Joe Crea has been covering the Cleveland dining scene for nearly 20 years. Share your dining experiences, concerns, recommendations and tips by emailing him at clbfreelancer@crain. com. (Put “At the Table Dining Tips” in the subject line.) He’ll address reader topics in future columns.

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PA G E 11

Focus

CYBERSECURITY

Click at your own peril Surge in worldwide ransomware attacks prompts need for security reviews

By TIMOTHY MAGAW tmagaw@crain.com @timmagaw

Some of the world’s most vicious criminals are lurking in your office.

Maybe not in a nearby cubicle, but most certainly in your email inbox.

And if you or a co-worker were to click one of those unassuming links or attachments, your entire business could be compromised.

Already this year, major ransomware events have paralyzed businesses across the globe, and cybersecurity experts say these criminals are getting bolder by the day, so it’s more important than ever to be vigilant.

“Companies need a top-down pro-

gram,” said Craig Marvinney, a litigation attorney with a cybersecurity practice at Cleveland-based Walter | Haverfield. “It needs to protect you in the sense that the board approves of it, the C-suite is on board with it and believes in training programs. If someone’s board isn’t paying attention or if the C-suite is just giving lip service and not doing anything about it and they get hit, there’s some potential liability down the road.”

In May, an attack by the WannaCry cryptoworm targeted computers running the Microsoft Windows operating system, hijacking and holding hostage critical data while demanding ransom for its eventual release. That worldwide attack infected more than 230,000 computers.

And just last month, another viscous worm dubbed Petya ravaged systems, largely in the Ukraine. Also, in late January, a malware attack even crippled the Licking County government in Central Ohio after hackers demanded $31,000 worth of digital currency, according to The Columbus Dispatch.

And while these types of attacks aren’t necessarily new — the first dates back to 1989 — they’re occurring much more frequently for one simple reason: People pay, contrary to what authorities recommend. The FBI argues that paying the ransom only emboldens the criminals, and there’s no guarantee that encrypted data would be freed.

SEE RANSOM, PAGE 12

Illustration by dane_mark via iStock

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CYBERSECURITY

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That said, in many cases, these cyber criminals aren’t demanding large sums of money — just a few hundred dollars, usually in the digital bitcoin currency — which is why many aren’t balking at paying the ransom.

“The folks that are out sending these phishing emails and other things don’t care about size of organization or what industry it’s in,” said James Giszczak, a Detroit-based attorney and co-chair of the data privacy and cybersecurity practice group at McDonald Hopkins, which is headquartered in Cleveland. “We’re seeing businesses big and small get hit by this, and paralyzed if they’re not prepared to deal with it.”

According to Symantec, the Mountain View, Calif.-based cybersecurity giant, the United States remains the biggest target for ransomware attackers. The firm reported that 64% of Americans are willing to pay a ransom to unlock their data, compared to 34% globally. Even more striking, in 2016, the average ransom spiked 266%, with criminals demanding an average of $1,077 per victim, which is up from the $294 reported a year prior.

The missing link The safeguards that can be put in place to prevent ransomware from strangling your business are many.

Backing up one’s data, unsurprisingly, is critical so that it can be properly restored if an attack takes hold. However, even with a strong backup in place, a ransomware attack can slow business for days, weeks or even months. For example, according to The Dispatch, it took Licking County, which did not pay the ransom, weeks to restore its systems.

Bloomberg reported earlier this month that FedEx Corp.’s TNT unit, which it acquired last year to expand its European footprint, is still processing transactions by hand and that the company’s systems may never fully recover from a June cyberattack — a slog expected to ding its earnings. Cybersecurity experts reported that particular attack wasn’t so much focused on collecting ransom but rather causing havoc, but underscores the need for companies to remain cautious of cyberthreats.

FedEx also was affected by the WannaCry ransomware attack, although the company said it didn’t cause a material disruption to its systems or result in material costs, Bloomberg reported.

The bottom line? Make sure your employees aren’t clicking suspicious links or opening unexpected attachments.

Email, after all, presents the most pressing threats. According to the Symantec report, one in 131 emails contained some sort of malicious software in 2016, the highest rate in five years. In many cases, these emails use vernacular seen every day in the office — fax, scan, invoice, etc.

— so it’s important for users to only open attachments or click links from those they trust.

It sounds like a simple charge, but one not many take lightly despite the fact that employees are a company’s first line of defense. Because once one person opens an infected file, it’s only a matter of time before it spreads throughout an entire network.

“It’s always the people in the room who say they would never fall for that,” said Anthony Catalano, a man-

Email malware rate by company size The highest rate of malware received in emails was at companies with 251 to 500 employees, with 1 in 95 emails received containing malware.

Employees 1-250

Malware rate (1 in) 127

251-500

95

501-1000

139

1001-1500

224

1501-2500

104

2501+

170

Source: Symantec

agement consultant for the health care and technology industries at SecureState in Bedford Heights.

“They’re always it.”

But if an attack takes hold and you’re presented with an ultimatum from some veiled criminals, the first thing to do — after calling legal and security counsel, and law enforcement — is isolate the infected machines and take them off the network.

“You can go as far to unplug it,” said Bill Mathews, chief technology officer and co-founder of Hurricane Labs, an IT security services firm in Independence. “That’s literally about the only real option you have. Keep it from spreading and doing the thing it’s trying to do. Once it hits, you’re pretty much hosed because there’s not a lot you can do about it.”

Ransomware, of course, is only one of many types of cyberattacks.

And like all of them, having a modern and regularly updated technological infrastructure is another critical defense in the fight against malware.

The WannaCry attack, for example, exposed vulnerabilities in the Windows XP operating system — a system that debuted in the early 2000s and Microsoft stopped supporting a little more than a decade later.

And while these criminals don’t discriminate, some industries have proven more vulnerable than others: health care and manufacturing, both of which are significant players in Northeast Ohio’s economy.

Experts say manufacturing has proven to be a lucrative target in these cyber heists because of its outdated technology and, perhaps more importantly, the stringent timetables on which their business is based — something that makes them much more likely to pay up.

As for health care organizations, their repositories are filled with sensitive personal and financial information, making them lucrative targets for criminals. Also, and somewhat surprisingly in an industry known for innovation, their outdated infrastructure makes these sort of attacks possible.

Complicating matters further, security patches needed to shore up emerging threats to devices regulated by the U.S. Food and Drug Administration require significant testing to ensure they won’t complicate devices’ functionality. That opens another door for hackers.

But at the end of the day, it always comes down to human error, experts say.

“What ransomware does is it exploits the weakest link, and that’s always the people,” Catalano said. “We encourage organizations not to treat employees as the weakest link, but as the first line of defense. They need to educate them and set the tone.”

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CYBER SECURITY

Security concerns lead to a conference boom

By BETH THOMAS HERTZ clbfreelancer@crain.com

In 2002, when workers in the information security industry were operating on especially tight budgets in the wake of “Y2K” preparedness spending, two local professionals wanted to find a way to help their colleagues remain up to date without having to pay for travel.

Seeing that the options for training in the Cleveland area were scarce, they decided to band with other local professionals to form the nonprofit Information Security Summit (ISS).

The event ISS put on that first year drew about 170 attendees. That volunteer-run event is now in its 15th year and has grown so much that it has been moved to the IX Center to accommodate more people.

The previous location, La Center in Westlake, was maxing out with 600 to 700 attendees per day. Last-minute registrations couldn’t be accepted. At the IX Center, organizers hope to draw 1,500 to 2,000 people for the event, which is now part of the weeklong Security Summit Week 2017, set for Oct. 30 through Nov. 3. The expansion from two days to a full week started last year.

“In 2002, we recognized there were a number of smaller local groups that focused on different aspects of information security, and we wanted to all work together to make something happen,” said Gary Sheehan, who is the chief security officer and governance risk and compliance services director at ASMGi, a Cleveland company that offers IT and business solutions. He also volunteers as executive director of the ISS organization, which he co-founded with Glenn

Packed houses at previous ISS events prompted the move to the IX Center this fall. (Contributed photo)

Brzuziewski, an attorney with an emphasis in technology law.

This year’s event is being held in partnership with EnergyTech, which Sheehan described as an organization that is similar to ISS but that is focused on the energy sector and critical infrastructure organizations such as utility companies.

The first three days of the summit each have a specific topic. On Monday, it will be “The Internet of Things.” Tuesday will focus on the legal implications of corporate compliance requirements, and Wednesday will be devoted to the security issues behind health care.

“We are hoping to bring IT and business people together over these three days, because the only way a business can be successful, and the only way the information technology and security people can be successful, is if everybody works together and we all have a common understanding of what needs to be done,” Sheehan said.

Then, Thursday and Friday is the “flagship event,” which will feature six tracks of educational sessions.

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or what industry you’re in, you’re going to find something good to listen to,” he said.

He said that although the meeting will be focused on specifics of security, technology and resiliency, it won’t be “a bunch of technology geeks talking acronyms and the sort of things that business people don’t understand, because that is not what we are trying to accomplish. We are trying to spread the information around and trying to get everybody on the same page.”

He acknowledges that most people

can’t take a whole week off work and encourages participants to “mix and match” and attend the days that appeal to them most. Tickets are available on a per-day or full-week option.

Security Summit Week attendees get full access to the EnergyTech sessions, and vice versa, at no extra charge, he added.

“This is a new collaborative effort that we’ve never tried before, but we are hoping that works. It’s having two events with overlapping subject matter at one venue,” he said.

He said the hottest topics at ISS will include ransomware/malware, which is affecting consumers as well as IT professionals, and the so-called Internet of Things — a term used to describe the large interconnected network of electronic devices that is revolutionizing how people interact with technology.

“Everything is connected to the internet today. Is that good? Is that bad? Should you connect your refrigerator and your car and your furnace to it?” he said.

It goes well beyond household products, too — medical devices, au-

tomobiles and manufacturing equipment are increasingly connected to the internet. “It’s a hot topic that people may not necessarily understand, but they want to learn about it because it goes across many different industries,” he said.

While ISS has remained true to its original mission to educate and train security professionals, Sheehan said it also is focusing on creating training and networking opportunities for returning veterans and students who are interested in information security careers.

“Veterans served our country, and we want to help them as much as we can,” he explained. “As for the students, God willing, I hope to retire in five, six, seven years, and I want the people who are taking over security to be smarter than I am.”

He emphasized that a key to the success of ISS has been partnering with other security-oriented groups, including ISACA (previously known as the Information Systems Audit and Control Association), International Information System Security Certification Consortium (also called ISC2), InfraGard, the Northeast Ohio Information Security Forum, the Open Web Application Security Project, the Ohio County/City Information Technology Association and the Cuyahoga County Police Chiefs Association. ISS has been able to donate about $300,000 back to these organizations as a result of the collaborations.

“Over the last 15 years, I have found that it is very difficult for one organization to make a difference, but when you get two or three or four or five organizations together that have the same vision, things can happen a lot easier, and a lot quicker,” he said.

PA G E 14

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CRAIN’S CLEVELAND BUSINESS

CYBERSECURITY Adviser: Thomas F. Zych

Don’t ignore the human element in reducing risks The key to effective cyber defense is knowing your critical vulnerabilities. Whenever we use the prefix “cyber� to discuss data security, we think first about electronic systems. But that is not where the No. 1 data risk lies.

Walt Kelly’s classic Pogo Earth Day 1970 comic tells us where to look first when assessing data risks: “We have met the enemy and he is us.�

Cyber defense planning too often begins with data system review and upgrade, and typically ignores the human factor: Your own employees are the most easily exploited and hard to close holes in your defenses.

System security measures are critical components of effective data security. Your business would no sooner ignore the maintenance of secure processing environments than you would leave your car unlocked with the keys in the ignition or a bank vault open and unattended. That said, system defenses are necessary but not sufficient by themselves.

Zych chairs Thompson Hine’s emerging technologies practice and heads its privacy and cybersecurity team.

We recently have seen ransomware (and other viruses masquerading as ransomware) infect and even disable enterprise systems.

While much attention focuses on failure to patch software vulnerabilities, the critical weakness necessary for the infiltrations to succeed is the carelessness of system users who open emails, attachments and other infected communications, letting the malware in. Of course, we don’t necessarily accuse careless users of intending to harm the company (although malicious insiders certainly exist) or even of reckless disregard for the organization. As Shakespeare reminds us,

“The fault, dear Brutus, is not in our stars, but in ourselves.� We must look at the environment we create to understand the challenge.

First, in a connected world, we require everyone to communicate electronically, setting expectations that demand trust in the systems we use. No one gets rewarded for taking extra time to finish a task.

Second, the old lines between the work and off-work contexts are gone. Our laptops, phones, tablets and other devices support both the business and private sides of our lives.

Third, trusting others is necessary simply to get anything done.

It’s not feasible to perform background checks on everyone you encounter. You often must trust someone based on who they represent.

These assumptions are realities, and we cannot expect our people to ignore them. What we must do is recognize they exist, honestly admit the vulnerabilities and do our best to empower employees to be a real first line of defense. How do we do that?

While much attention focuses on failure to patch software vulnerabilities, the critical weakness necessary for the infiltrations to succeed is the carelessness of system users who open emails, attachments and other infected communications, letting the malware in.

Here are a few experience-based strategies: J Start with executive sponsorship. There is no substitute for clear communication from top management (and not just IT leadership) that vigilance is expected, encouraged and funded.

J Align good practices with company values. For example, in a law firm environment, protecting confidential client information is a baseline ethical obligation, and maintaining security consciousness can be explained as part of that ethic. Indeed, for most commercial enterprises, not harming customers or employees is a necessary business value. In other words, good data hygiene cannot be sold as a “nice to have� but, rather, it has to be articulated as core to your organization’s mission.

J Address everyone who touches your information, including all employees as well as contractors and service providers (including business advisers). Any one of these people can be your weakest link.

J Train, train, train. It’s not an employee’s fault if she or he hasn’t been given timely, accurate and practical advice. Your entire team should receive regular (and mandatory) data security training.

While you may have good trainers

J Enable effective response.

In the end, you can’t prevent every incident — it’s a matter of when, not if. Every business should have a clear, written plan for responding to a data breach, but that plan will be effective only if your employees are aware of it and their responsibilities. While your response team is specifically tasked with addressing a breach, everyone in the organization has a role in protecting the company’s data. “If you see something, say something� applies as much to cybersecurity as national security. Employees should know how and to whom to report a suspected incident, even if it’s their own mistake. In fact, if the person who accidentally opens a questionable email attachment knows she or he won’t be punished and complies with the expectation to report what happened, the chances of corralling the infection are much greater than if it lingers in the system.

We’re all human, and we can be careless or fooled into communications we ought not have. By acknowledging and addressing the human factor vulnerabilities, we can minimize the risks, and perhaps the enemy won’t be us, at least not this time.

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PA G E 15

CYBERSECURITY

Colleges trying to fill cysecurity talent gap

By DOUGLAS J. GUTH clbfreelancer@crain.com

With world economies becoming more dependent on technology, cybercrime is one of the biggest challenges faced by businesses in the coming decades.

Market analyst Juniper Research predicts data breaches will cost businesses over $2 trillion by 2019, while research firm Cybersecurity Ventures ups the ante to $6 trillion by 2021.

As businesses search for trained professionals who can protect their networks, area universities are responding with degrees and certifications aimed at filling the gaps in a fast growing technological space. The U.S. Department of Labor forecasts the market for cybersecurity experts to rise 18% between 2014 and 2024 — a much faster rate than most occupations. As such, University of Akron, Stark State College, Cuyahoga Community College, Kent State University and other schools are striving to meet the burgeoning demand.

Beginning this fall, the University of Akron will offer a bachelor’s degree in cybersecurity, becoming the only public university in Ohio to do so. Meanwhile, Kent State is currently providing a post-secondary certificate in computer forensics and information security. At the same time, Stark State and Tri-C are bringing a variety of related degrees and certifications. “All areas of IT are growing, but cybersecurity is a hot field because hacking tools have become easier to use,� said John Nicholas, a professor of business and information technology at the University of Akron. “If students learn the fundamentals, they can pick up the tools much faster.�

Akron’s cybersecurity degree, an extension of the university’s computer information systems networking

bachelor’s degree, teaches computer network configuration, data security, network intrusion prevention and digital forensics. Mathematics integrated into modern data decryption is an additional part of a curriculum suggested by an advisory board comprised of local companies.

Typically, cybersecurity professionals guard databases, hardware, firewalls and networks from an array of ransomware and malware, to name a couple of hacker tactics. Last year, the largest ever Distributed Denial of Service (DDoS) attack took down hundreds of websites, including Netflix, Twitter and Reddit. Many breaches derive from existing IT and network infrastructure, but newer threats are targeting mobile phones as well as an ever-expanding list of devices with internet connectivity. “We’re going to do hands-on work so our students get experience with real-world situations,� Nicholas said.

Security analyst, network security associate and cybersecurity specialist are among the jobs available in a field with a median salary of $92,600 annually, according to the U.S. Bureau of Labor Statistics. A report from Cisco estimated more than one million unfilled cybersecurity jobs globally as of last year. In Northeast Ohio, a security professional skills shortage has led to regional “negative unemployment� in the industry, Nicholas said. “I hear from companies three or four days a week who are asking for help,� he said.

“An IT specialist needs to know how to retrieve information, because that’s what companies want,� said Gabriela Rosu, department chair for Stark State’s information security and digital media department. “We also have ‘ethical hacking’ classes where students are learning how to defend a system.�

The program has grown alongside changing cyber threats, Rosu said.

Phishing and spear phishing, for example, involve a perpetrator sending a fraudulent email requesting personal information from the recipient.

A bank employee answering the email could unknowingly trigger a virus that gives a hacker access to customer credit card numbers and other private data. “Banks are constantly attacked for information rather than money,�

Rosu said. “Any industry has information that can be grabbed and sold online.�

Program partner companies Schumacher Homes and Spectrum hire Stark State graduates for entry-level help desk specialist or network administrator positions, offering starting salaries between $35,000 and $45,000.

The program’s

post-graduation hiring rate stands at about 80%. “IT is a huge space,� Rosu said. “We reach out to students to show them what possibilities there are in the security field.�

A problem for all industries Largely due to a lack of investment in cybersecurity, the manufacturing sector is one of the most frequently hacked industries, second only to health care. According to the National Institute of Standards and Technology, 55% of small- to mid-sized manufacturers have experienced a breach.

While big hacks like the WannaCry ransomware attack garner headlines, small companies are not left unscathed. A client of the Cleveland-based Manufacturing Advocacy and Growth Network was recently hit with a ransomware attack that cost $60,000 to resolve. “Most of our clients think hackers are only going after social security or credit card numbers,� said Mike O’Donnell, vice president for external affairs at MAGNET. “They see it in the news and don’t think it can ever happen to them.�

All major industries are vulnerable to some form of cybersecurity risk, meaning qualified talent is at a premium, said Hamid Abdollahian, executive director of the Cisco Technical Training Institute at Cuyahoga Community College. The institute offers short-term certification in Cisco network security and a threat detection/analysis course that prepares students for future work in the areas of cybersecurity and attack mitigation.

Program grads are prepared to set up an organization’s firewalls or run penetration tests at a company data center. Abdollahian said company reps he speaks with are calling for the type of brainpower able to or enhance a larger computer network. “Our role is getting people ready to advance, monitor or manage that infrastructure,� he said. “High-end technicians are always in need.�

As threats evolve, so must the academic efforts putting that talent out into the world, said Nicholas of the University of Akron. “We can build those fundamentals while putting new information into the curriculum as quickly as we can,�

Nicholas said.

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CYBERSECURITY

Despite cybercrime’s pervasiveness, many businesses ignore risks

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Greg Kelley recalled how a large Ohio finance company not only suffered the heavy costs and disruption in business from a major hack of its systems, but a damaged reputation that led to the exodus of its largest client.

Kelley is the chief technology officer at Medina’s Vestige Ltd., a digital forensic investigator and cybersecurity consulting firm that works with companies on protection proactively and helps them deal with breaches once they occur.

He noted how the client in his example didn’t necessarily have 100% of its sensitive information — like employee-identifying personal data and tax information — exposed in the hack.

Yet, the damage in reputation was enough for the firm’s most lucrative client to walk out the door.

Those issues could have been more appropriately protected against. Yet, cybercrime is so common and pervasive, with major breaches reported with such frequency, that they’re easy for observers to forget when the next one hits a few weeks later.

Some of the most high-profile cases have involved major companies, like banks and retailers. But the reality is, every business is a potential target, no matter the size or industry —

even though those in some sectors seem to lag a bit more than others.

And while cybercrime becomes increasingly common, companies are, bafflingly, well behind in protecting themselves with proper software safeguards, training of employees to prevent hacks or even covering themselves with effective cyber-focused insurance policies.

“People do lag in cybersecurity.

There’s no question,” Kelley said.

“They usually think they’re not a target. They see the stats, they see the articles. Yet companies like to differentiate themselves, so they think: We’re different from company ABC. Or they think they’re too small or have nothing of importance. That thinking is causing problems.

“What they don’t realize is that they all have something important,” he added.

“And just by being connected to the internet, you’re a target.”

‘Everyone is a target’ The world of cybercrime is akin to criminals walking in droves up and down neighborhood streets, Kelley said, jiggling doorknobs at each house to see which are loose. In this scenario, doors are IP addresses.

When it comes to cybersecurity, experts say business people tend to believe they’re less likely to be negatively impacted by something that’s clearly affecting others. In psychology, it’s a phenomenon known as optimism bias.

In many cases, company execs realize they could be targets, but just aren’t doing anything about it, convinced those worst-case scenarios — like suffering a costly hack that causes a major client to flee — aren’t going to hit them.

Or they just don’t know how to go about it.

“Although cyber risk has been tagged uniformly as a top-of-mind issue for boards of directors in recent surveys, many directors do not know how to approach the problem, and many manufacturing companies think cyber risk does not apply to them because they do not handle consumer data,” said Frances Goins, co-chair of the data privacy and information security practice at Ulmer & Berne LLP, who works with some of Northeast Ohio’s largest companies, particularly manufacturers.

She pointed out how the high-profile Target breach involved data that was actually taken through a breach of an HVAC vendor of the retail giant.

“Everyone is a target on this stuff,” she said. “You’re pulling the blanket over your head if you think you’re not.”

Indeed, the business world recognizes there’s an issue here.

But it’s not doing a great job of addressing it.

According to a May report by FICO, an analytics software company, 99% of companies surveyed across the globe expect cybercrime to either increase or remain at current levels.

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CYBERSECURITY The same amount said they expect to spend more or the same on cybersecurity. Yet, only 20% said they have comprehensive cyber insurance that would protect against all risks.

At a June event hosted by the Association for Corporate Growth and the National Center for the Middle Market, Israel Martinez, CEO and chairman of consulting firm Axon Global, said 60% of small businesses that come under a cyberattack close in three months.

The notion a company is small potatoes next to Chase Bank or Walmart and therefore not a target of hackers is a fallacy. In fact, small companies â&#x20AC;&#x201D; which naturally have fewer resources to invest in cyber research and protection anyway â&#x20AC;&#x201D; are low-hanging fruit for hackers, said Ian Friedman, a cyber expert with Friedman & Nemecek LLC who also teaches cybercrime as an adjunct professor at Clevelandâ&#x20AC;&#x201C; Marshall College of Law. â&#x20AC;&#x153;Companies will say, well, these guys are going after the Targets and big box stores, they wonâ&#x20AC;&#x2122;t go after a little guy like me,â&#x20AC;? he said. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s just not true. A lot of small companies are breached because they have no real protection lines. Companies play the odds that they wonâ&#x20AC;&#x2122;t be hit. Or they do the bare minimum, putting up anti-virus software but doing nothing to really protect their system.â&#x20AC;?

While Friedman and other experts say companies are exposed across the board â&#x20AC;&#x201D; not just hospitals and banks and retailers with sensitive data that tend to come to mind â&#x20AC;&#x201D; there are some industries that seem to lag more than others.

Recipe for disaster

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Manufacturers have trade secrets, yet small shops are likely to worry less about cyber breaches.

Accounting firms have troves of data, yet Kelley said one of the most common breaches he has seen in

Ohio recently involves CPA firms having information stolen so hackers can file bogus tax returns.

Those are two sectors increasingly facing attacks.

And then there are law firms, which, these experts say, seem particularly susceptible.

Notably, U.K.-based big-law firm DLA Piper in late June suffered a major ransomware attack that comprised virtually every attorney and sensitive client data and case info.

The attack prevented lawyers from accessing documents, shut down of-

â&#x20AC;&#x153;Everyone is a target on this stuff. Youâ&#x20AC;&#x2122;re pulling the blanket over your head if you think youâ&#x20AC;&#x2122;re not.â&#x20AC;? â&#x20AC;&#x201D; Frances Goins, co-chair of the data privacy and information security practice at Ulmer & Berne LLP

fice phones and computers, and stands to cost the firm millions, according to their insurance broker, as reported by The American Lawyer. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve actually been seeing signs lately that law firms are catching up when it comes to cyber. Some are realizing theyâ&#x20AC;&#x2122;re targets. Others are seeing pressure from clients,â&#x20AC;? Kelley said. â&#x20AC;&#x153;But they tend to lag behind in technology in general, and thatâ&#x20AC;&#x2122;s whatâ&#x20AC;&#x2122;s led them to be behind in cybersecurity.â&#x20AC;?

While difficult to quantify as each attack can vary, Kelley said even a small company in any given industry could be looking at costs of at least $100,000 to manage a breach after it happens just for response and remediation â&#x20AC;&#x201D; and that doesnâ&#x20AC;&#x2122;t even account for the new cyber protections the firm will likely procure afterward.

Goins said she sees reports indicat-

ing the average cost of any given cyberattack is around $200,000.

And by the time a breach has happened, itâ&#x20AC;&#x2122;s likely a hacker has already been farming data for months. Kelley said the national average for the amount of time a company has been exposed to a hack before a breach is noticed, or the hacker confronts the business, is between seven to eight months.

In Cleveland, he said, in Vestigeâ&#x20AC;&#x2122;s experience, thatâ&#x20AC;&#x2122;s more like nine to 15 months.

Companies can buy cyber insurance thatâ&#x20AC;&#x2122;s becoming more comprehensive â&#x20AC;&#x201D; past critiques of those insurance products have centered on them not fully covering a company after a breach, Goins said, and insurers have been â&#x20AC;&#x153;playing catchup.â&#x20AC;?

Other best practices nowadays include education for employees on how to avoid breaches caused by things like phishing scams, and testing cyber protections already in place. Often times a breach is caused by software thatâ&#x20AC;&#x2122;s simply out of date, Goins said.

But while those options are out there, many are simply choosing to continue rolling the dice and playing the odds, figuring they wonâ&#x20AC;&#x2122;t be hacked and cybersecurity, therefore, isnâ&#x20AC;&#x2122;t a necessary expense.

But that perspective could be setting a business up for disaster. â&#x20AC;&#x153;Nothing is impenetrable. Even the federal government is breached constantly. So there is no expectation people are going to be absolutely intrusion proof,â&#x20AC;? Friedman said. â&#x20AC;&#x153;But they need to protect themselves. And if theyâ&#x20AC;&#x2122;re later sued, they need to be able to say they did everything they could do. You have to give this constant attention.â&#x20AC;? â&#x20AC;&#x153;Five years ago, people went and got the basic box software from Best Buy, and that was the end of it,â&#x20AC;? he added. â&#x20AC;&#x153;Those days are long gone.â&#x20AC;?

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CRAIN’S CLEVELAND BUSINESS

CYBERSECURITY

U PCOMI NG ENTERTAI NMENT

Startup Heureka Software makes funding inroads

By SCOTT SUTTELL ssuttell@crain.com @ssuttell

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Cleveland startup Heureka Software, which last year raised $1.1 million from Northeast Ohio angel investors and venture development organization JumpStart Inc., has added new funding to help fuel its development.

The software-as-a-service company on Tuesday, July 25, announced the new funding comes from Columbus-based NCT Ventures and Chicago’s Bridge Investments. Combined with the previous funding from JumpStart and angels, Heureka said its current fundraising round has reached $1.8 million.

Heureka describes itself as helping companies “increase their resilience to cyber threats, while dramatically reducing operating expenses associated with governance, risk, compliance and litigation activities.”

CEO Greg Pacholski, in a news release announcing the new funding, said large enterprises “have an exponentially increasing volume of data that resides on file shares, desktop

Member FDIC

and laptop endpoints. These companies simply cannot continue to operate without locational awareness of sensitive, valuable and strategic information stored on endpoints.”

Bill Frank, a partner at NCT Ventures, said in a statement that with the General Data Protection Regulation deadline approaching in May, “businesses need to take action and prepare for the increasing regulations to protect consumer data. Corporations need to be more proactive about how they monitor and manage data, and Heureka is the tool to comply with these regulations. That's why we’re excited to support the company in this funding round.”

Heureka said in the release that its enterprise customers includes Salesforce, Ohio State University and the Western Reserve Group.

Rem Harris, JumpStart’s senior partner in charge of investing, said in the Heureka release that the company “is solving a real problem in endpoint file analysis and management.

We are excited to be partnering with other respected investors like NCT Ventures and Bridge Investments to help accelerate the company’s growth.”

In a news conference at Mercyhurst on Tuesday, July 25, MCPc CEO Andy Jones said the gift is part of the company’s growth strategy in western Pennsylvania.

“To grow, we not only need new customers — we need specialized tech talent that can serve them,” he said, according to the release. “That talent, which is in short supply nationwide, is an important outcome of the cyber lab and secure network operation center we are creating at Mercyhurst.”

Cleveland-based information technology company MCPc Inc. announced it has made a $1 million investment in Mercyhurst University of Erie, Pa., that will create a computer laboratory that helps prepare undergraduate and graduate students for jobs in the cybersecurity field.

In addition, the money will establish a high-security network operations center that employs those and other students who are supervised and paid by “To grow, we not only need new MCPc. Construction customers — we need specialized tech on the new facili- talent that can serve them. That talent, ties is planned to start this fall, which is in short supply nationwide, is an MCPC said in a important outcome of the cyber lab and news release. The secure network operation center we are network operations center and creating at Mercyhurst.” the cyber lab are projected to be — MCPc CEO Andy Jones ready by spring.

In a news release from Mercyhurst, MCPc said the cyber lab will include 20 work stations and will be university president Michael T. Vicused as a teaching facility by Mercy- tor named U.S. Army Lt. Col. (retired) hurst faculty who are part of the Duncan E. McGill as the new dean Ridge College of Intelligence Studies. for the Ridge College. He said the The network operations center will MCPc gift and the new dean will accommodate at least 16 stu- “take the university’s intelligence dent-employees. MCPc staff will studies program into a new era of oversee students working in the cen- growth and innovation.”

The Ridge College is named after ter, and the students will engage with MCPc customers, according to the former Pennsylvania governor Tom Ridge, who during the George W. release.

There are eight MCPc locations na- Bush administration served as the tionwide, including in Erie, where it first U.S. Secretary of Homeland Security. employs 30 people, and Pittsburgh.

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THE LIST

Cybersecurity Firms Ñ Software Ranked by local employment THIS YEAR COMPANY

LOCAL STAFF (1) SECURITY SOFTWARE DESCRIPTION

CIO/CTO

TOP LOCAL EXECUTIVE

1

Certified Security Solutions 6050 Oak Tree Blvd., Independence, 44131 (216) 785-2990/www.css-security.com

50

Digital certificate lifecycle management software

Ted Shorter chief technology officer

Kevin von Keyserling CEO, president

2

Binary Defense 5 Aurora St., Hudson, 44236 (800) 246-2792/www.binarydefense.com

45

Endpoint detection and response

David Kennedy chief technology officer, chief hacking officer

Mike Valentine CEO

3

Securable.io 11000 Cedar Ave., Cleveland, 44106 (216) 810-4966/www.securable.io

25

Cybersecurity awareness training software

NA

Bradley Reynolds CEO

4

PreEmptive Solutions LLC 767 Beta Drive, Suite A, Mayfield Village, 44143 (440) 443-7200/www.preemptive.com

24

Tools to shield desktop, mobile, server and embedded applications from hackers

William Leach chief technology officer

Gabriel Torok CEO

5

Heureka Software 1382 W. 9th St., Suite 410, Cleveland, 44113 (888) 968-7199/www.heurekasoftware.com

10

Software that helps companies find and eliminate data with no business value

Mark Minehart chief technology officer

Greg Pacholski CEO

6

Stealthcare LLC 24950 Country Club Blvd., Suite 102, North Olmsted, 44070 (800) 961-0708/www.stealthcare.com

8

Zero | Day | Live, a cyber threat intelligence platform that predicts cyber attacks; reseller of Fidelis, Proofpoint, Palo Alto, FortiNet

NA

Jeremy Samide CEO

7

InfoGPS Networks Inc. 8261 Market St., Suite H, Boardman, 44512 (844) 446-3647/www.infogpsnetworks.com

3

Organizational cybersecurity risk prioritization by real time data discovery, classification and sensitivity

NA

Paul B. Hugenberg III CEO

RESEARCHED BY: CHUCK SODER Information is supplied by the companies. There is no guarantee these listings are complete or accurate. Want to be included in this list? Have corrections, suggestions or questions? Contact Chuck Soder: csoder@crain.com (1) Full-time equivalent, as of June 30, 2017.

Discover

Data Privacy and Cybersecurity Proactive compliance

Response workshops

Breach coaching

Litigation & class action

Regulatory response

THE LIST

Cybersecurity Firms Ñ Technical Services Ranked by employees focused on cybersecurity offerings THIS YEAR

COMPANY (1)

LOCAL STAFF CYBER/ TOTAL (2)

SECURITY SERVICES DESCRIPTION

CIO/CTO

TOP LOCAL EXECUTIVE

1

Hurricane Labs 4511 Rockside Road, Suite 100, Independence, 44131 (216) 923-1330/www.hurricanelabs.com

54 60

Managed security services provider

Bill Mathews chief technology officer, coowner

Bill Mathews, CTO, co-owner Glenn Brzuziewski managing partner, co-owner

2

SecureState Consulting LLC 23340 Miles Road, Bedford Heights, 44128 (216) 927-8225/www.securestate.com

39 56

Penetration testing, vulnerability/risk/vendor risk management, physical security, PCI compliance, incident response testing, app testing, social engineering

NA

Ken Stasiak CEO

3

TrustedSec LLC 14780 Pearl Road, 3rd Floor, Strongsville, 44136 (877) 550-4728/www.trustedsec.com

20 22

IT security consulting, penetration testing, application security, social engineering, incident response, governance risk and compliance, PCI, HIPAA, ISO 27001, NIST

NA

David Kennedy CEO, founder

4

CBIZ Inc. 6050 Oak Tree Blvd. S., Suite 500, Independence, 44131 (216) 447-9000/www.cbiz.com

11 245

Penetration testing, vulnerability assessments, web/mobile assessments, digital forensics and litigation support, facility breach exercises

John A. Fleischer senior vice president, chief information officer

Jerome P. Grisko Jr. president, CEO

5

ASMGi 800 Superior Ave. E., Suite 1050, Cleveland, 44114 (216) 255-3040/www.asmgi.com

11 36

Assessments, information security management system design, virtual CISO, security awareness, DR/BC, penetration tests, vulnerability scans, phishing, MSSP, 3rd Party Risk

Steve Faykus chief technology officer

Steve Roesing president, CEO

6

Lazorpoint 737 Bolivar Road, Suite 100, Cleveland, 44115 (216) 325-5200/www.lazorpoint.com

9 19

Managed metwork security, managed system security, managed application security, managed end-user security, managed backup and recovery

NA

Dave Lazor CEO

7

JURINNOV, a TCDI Company 1375 Euclid Ave., Suite 400, Cleveland, 44115 (216) 664-1100/www.jurinnov.com

8 10

Penetration testing, cybersecurity assessments, incident response, managed security services, computer forensics, awareness training, policy development and CSO On-Demand

NA

Timothy Opsitnick president

8

Protiviti 1001 Lakeside Ave., Suite 1320, Cleveland, 44114 (216) 696-6010/www.protiviti.com

8 8

Security strategy, identity management, incident response and forensics, penetration testing, privacy management

Jeffrey Weber managing director

James R. Aerni regional managing director

9

Kimmell Cybersecurity 326 S. Rose Blvd., Akron, 44313 (330) 338-4433/www.kimmell.com

7 7

Certified information security assessments, remediation, implementation and managed services including 24/7/365 system security monitoring

Abdullah Alkhulaiwi partner

Brett L. Kimmell managing partner

10

Accellis Technology Group Inc. 9000 Sweet Valley Drive, Suite 4, Valley View, 44125 (216) 662-3200/www.accellis.com

5 17

Vulnerability management, cyber risk assessment, managed security monitoring, penetration testing, cybersecurity planning and managment

Brian Guscott director of operations and technology

Joesph Marquette president, founder

11

Vestige Digital Investigations 23 Public Square, Suite 250, Medina, 44256 (330) 721-1205/www.vestigeltd.com

5 9

Data breach investigation and response, proactive assessments, BreachReady(TM) proactive data breach preparation and provider of Hunt Team services

Greg Kelley chief technology officer

Damon S. Hacker president, CEO

12

Cornerstone IT 7333 Corporate Blvd., Mentor, 44060 (440) 639-1234/www.cornerstoneit.com

4 14

Services for small and medium businesses including event monitoring, management and mitigation, breach response, consulting

Joshua Rosen chief technology officer

Raymond J. Paganini CEO

13

Skoda Minotti 6685 Beta Drive, Mayfield Village, 44143 (440) 449-6800/www.skodaminotti.com

3 225 (3)

SOC 1, 2, 3, PCI DSS compliance, HIPAA HITECH compliance, penetration testing & vulnerability assessments, Drug Enforcement Agency (DEA) compliance, risk assessments

James P. Sacher chief information officer

Gregory J. Skoda chairman

RESEARCHED BY: CHUCK SODER Information is supplied by the companies. There is no guarantee these listings are complete or accurate. Want to be included in this list? Have corrections, suggestions or questions? Contact Chuck Soder: csoder@crain.com

(1) This list excludes data centers and managed IT services providers that offer cybersecurity services exclusively to managed services clients. (2) Full-time equivalent, as of June 30, 2017; cybersecurity figures include nontechnical employees focused on cybersecurity offerings, but they exclude administrative employees. (3) This figure is from Aug. 31, 2016; Skoda Minotti did not provide an updated figure in time for this list's deadline.

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INVEST

CONTINUED FROM PAGE 1

Buyout fundraising, which is included in that number, also is growing at a record pace, with buyout dry powder currently at $613 billion, according to Preqin.

That means investors are clamoring for the alternative asset class of private equity. And it’s that hunger by investors forcing that universal build-up of dry powder, which is helping to heighten competition for deals and inflate transaction values.

A growingly sophisticated class of investors is keeping competition tight, too.

“It’s a very attractive M&A and capital market here,” said Effram Kaplan, a managing director at Cleveland-based investment bank Brown Gibbons Lang & Co. “But whether it’s this market or any other one we play in, private capital markets are becoming incredibly efficient. When you have much more efficient, smart, sector-focused investors, it becomes more competitive, which is driving prices up and returns down.

“And I don’t think that’s a shortterm trend. That’s here to stay.”

Ohio has some features of its own that are undoubtedly attractive to investors.

According to the National Center of the Middle Market’s 2Q report, revenue growth among middle-market companies in the state is expected to be at 11.8% through the next 12 months, compared with 5.3% nationally. Meanwhile, 71% of companies are preparing for growth through capital investments.

Those are promising numbers to any prospective investor.

And while the Ohio market is generally diverse, 23% of the sector is composed of manufacturing — much of it calls Cleveland home — which is nearly double the prevalence of the next largest industry of wholesale trade, according to the center.

CRAIN’S CLEVELAND BUSINESS

Investors dig Cleveland Of course, there are other strong sectors here besides manufacturing, including biotechnology — which is a big draw for venture capital — and health care. But as activity kicks up, it’s logical for investors to gravitate toward growing manufacturing businesses.

Not surprisingly, middle-market manufacturers are what many private equity firms in Northeast Ohio, both newer and established, like to focus on. That includes Align Capital Partners, a young firm based in Cleveland and Dallas whose principals closed their first fund at $325 million in 2016 after splintering off from Riverside, clearing their fundraising target by 30%.

Not everyone is focused on manufacturing, though.

Brandon Short is the 25-year-old CEO of DynamicVentures LLC, which, Short said, is operating both venture capital and private equity arms. The latter is in its early fundraising stages. The business started as a consulting firm for health and fitness companies, which it still does today, but at a higher level with a crew of seven people.

Short moved back to Cleveland from Manhattan when his brother became ill, but he decided to build out a private equity strategy here with his partners, focusing on retail, health and fitness companies both in Northeast Ohio and across the country.

Besides opportunities in the market, the Cleveland native also says he’s personally motivated to affect change in his hometown through the investing realm. DynamicVentures may one day be just the private equity arm of something much bigger, said Short, a self-described “dreamer.”

“We think we have the ability to do something special here,” he said. “If you can get a homegrown, even mid-

cap size firm and put it together the right way, you could have a homegrown Cleveland investment bank big enough to house all those tertiary business items and impact in a bigger way.”

In terms of drawing limited partners, Short said prospects outside Cleveland often are surprised by the business sector here once they become more familiar with it.

“People don’t realize Cleveland has a lot of money in it,” he said.

“Who would’ve thought so, right? But as more and more dust gets kicked up, you’re seeing more eyes turned toward Cleveland. I think that’s part of why you’re seeing the deal flow out here.”

Even established firms are seeing growing interest in their funds from investors in other markets.

“Historically, our LP base has centered around Ohio and now, even though we are a microcap fund, we receive interest from San Francisco, New York, Boston and European investors looking for outsized returns,” said Bobby Kingsbury, vice president at Beachwood’s MCM Capital Partners. “The investing environment is substantial and growing here in Cleveland. As local funds continue to demonstrate a strong track record, more of the next generation have gained tremendous deal experience, and as a consequence, some have the ability to form new funds with an experienced investor base.”

A refreshed Cleveland identity doesn’t hurt things, either. The city has basked in the national spotlight in recent years, particularly with championship-caliber sports teams and the city’s recent hosting of the Republican National Convention, where narratives from visitors centered on amazement with a city once described as the “mistake on the lake.”

“You’re hearing about Cleveland in a positive way, and that becomes imprinted in people’s minds,” said

Ralph Della Ratta, founder of Cleveland investment bank Western Reserve Partners LLC, which was acquired by Citizens Financial Group earlier this year as part of a capital markets strategy for them.

“I think people are discovering Cleveland is a major deal market. It’s no secret to us. It’s why we’re here,” he added. “And you’re seeing the other guys come here to play on our home field, where we have the advantage.”

‘Ohio is where it's at’ Benesch managing partner Gregg Eisenberg, whose practice focuses on mergers and acquisitions and debt and equity financing, said the surge of private equity activity going on right now is leading to increased exposure of the Cleveland market as investors look for deals.

“This year has been fairly intense with lots of deals happening, strategic buyers doing deals and lots of private equity money out there,” Eisenberg said. “And here in Cleveland and Ohio in general, you’re seeing a lot of activity. We have a lot of privately held middle-market companies, so you have a lot of opportunities for private equity to acquire these companies and continue to grow them.”

For those like Shepperd, who like to sidestep the private equity middle man to invest directly, the opportunities are equally promising. It was enough to pull him back from Europe, after all.

Non-local newcomers are surfacing as well.

Ryan McGovern joined New Yorkbased asset manager Star Mountain Capital LLC in 2014 and moved to Independence shortly afterward. A one-man force, he’s looking for deals here in the lower middle market, but planning to build out a bigger team soon.

“If you’re locally based, you are

hopefully going to see things a little easier than someone else might,” McGovern said.

“Most people think if you’re going to be in the Midwest, Chicago is the obvious space,” he said. “But that’s not the case. Chicago is larger, for sure, but there’s a lot of heritage benefit that Cleveland has, and a business structure, like niche manufacturing, that’s been strong here for 100 years.”

Greenwich Capital Group is a middle-market-focused investment bank based in Michigan that broke into the Cleveland market when Peter Frankfort opened an office in Pepper Pike in February 2016. The manufacturing base here was a major appeal.

“I looked at Ohio, and it’s in the heart of the nation’s industrial region,” he said. “There’s diversity across industries, but manufacturing is still the largest overall sector in Ohio. We thought about the resurgence of U.S. manufacturing and decided it’s a good place for me to focus.”

The positivity about Cleveland itself, coupled with the need to find good deals and an overall economic resurgence, is clearly a recipe for drawing new investment here.

“I hear what everyone else hears: the RNC, sports victories. But I would say, more importantly, there’s the economic and growth perspective,” Frankfort said. “Some of it is perception and some of it is tangible, but things are probably as positive or as good as they’ve been in a while.”

When an economic resurgence and increasingly positive Cleveland identity couple with a market teeming with hungry investors, it’s apparent businesspeople are seeing plenty in Northeast Ohio that’s whetting their appetites.

And investors like Shepperd are looking famished.

“Europe is treading water,” he said.

“Ohio is where it’s at.”

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CRAIN’S CLEVELAND BUSINESS

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PA G E 21

AKRON

Pearl Coffee still brewing strong business

By JENNIFER KARPUS-ROMAIN clbfreelancer@crain.com

Pearl Coffee was just a dream for Nicholas Economou, who studied the art of coffee roasting in Egypt before setting up shop in Akron in 1919.

But what started as a dream has endured for nearly 100 years and three generations — and is finding new avenues of growth.

Pearl’s current owner, Johnna Economou (Nicholas’ granddaughter), said the company’s focus on a consistent roast, quality beans and customer service are still at the center of its business.

“These food service companies are very good, but one thing they don’t have is one roaster,” Economou said.

“They have seven different roasters, so they’re not always going to get a consistent roast. With us, you will.

That is what we do here. That is our niche.”

Large food companies, such as Sysco and US Foods, may struggle to get a consistent roast. Small roasters are coming up as competitors, said Economou, who added that the wholesaler gets beans from all over the globe: Brazil, Sumatra, Colombia, Costa Rica.

“We have a lot of single origin coffees, and then we do our own special blends,” she said, adding that they are known for their Diana-brand house blend.

When the company started, it was just Nicholas Economou and his three brothers. Now, there are seven employees, including Johnna.

“We do all the roasting, flavoring, packaging, right here on the premises,” she said about the facility at 675 S. Broadway St, where the company moved in 1952. It had previously been located on Exchange Street.

Pearl Coffee owner Johnna Economou’s family has been roasting coffee beans in Akron for nearly a century.

(Shane Wynn for Crain’s)

In the 1980s, under the ownership of John Economou (Johnna’s father), Pearl added flavored coffees. When he started, Pearl made its product in 5-pound batches. The company is now up to 40-pound production runs.

That is how much the business has grown, said Johnna Economou, who declined to give specific financials, but said the company roasts more than 100,000 pounds of beans a year.

About 90% of Pearl’s business is wholesale, and much of it in private labeling (though walk-in coffee drinkers are welcome at its shop).

Acme Fresh Market is one of the company’s biggest customers. Pearl

exclusively has made the house brand for the 16-store chain since 2003.

“It made sense. You have two family owned companies joining together,” Economou said about the partnership.

Pearl supplies private labels for other large customers, too, but Economou declined to disclose them. Local restaurants, coffee houses, hospitals and other institutions round out its customer base.

And after nearly a century of roasting, Pearl still is finding new business avenues. It is just sticking its toes into its latest market: the craft beer indus-

try, where local brewers are infusing the company’s specialty beans into their own products.

Wadsworth Brewing Co., Hoppin’ Frog Brewery and R. Shea Brewing all use Pearl’s beans.

While Pearl wasn’t actively marketing to breweries and sales to beer makers currently only account for 5% of revenue, word caught on quickly.

Ericha Fryfogle-Joy, co-owner of Wadsworth Brewing, said she is a longtime customer of Pearl, and when the brewery was looking for ingredients for its coffee porter beer, she knew where to turn. She and her husband are such Pearl enthusiasts,

they named the brew with the company in mind.

John Economou, who died in 2011, was nicknamed “Buckets” when he played basketball at the University of Akron.

“We named our coffee porter Bucket’s Coffee Porter in honor of him and Pearl Coffee,” Fryfogle-Joy said.

Crafted Artisan Meadery in Mogadore also discovered using Pearl beans in its spirits. The meadery uses the Island Rum flavor bean in its Banana Foster Forever mead and coconut cream coffee in its Coconut Cream Pie mead.

“We’re not allowed to add rum. It would be illegal for us to do that,” said Crafted mead maker Jared Jones.

“When we were coming up with the recipe, we were kicking around what could we use to get the rum flavor for bananas foster, and we landed on the coffee. The coffee not only had the rum character, but the coffee itself actually gives this deep richness to the mead that really helped smooth it over.”

While Crafted intended for Bananas Foster Forever to be a one-time offering, demand was so high the meadery has made about six 500-gallon batches already this year.

The burgeoning brewery market is starting to open up a new customer base for Pearl, said employee Elizabeth Campbell.

“People who are not necessarily into coffee, but they want it for their beer because they are trying to imitate or better up,” she said.

And breweries aren’t the only new customers. Economou said there are some other new collaborations coming, but it’s too soon to discuss them.

After nearly 100 years, new things are still brewing in the coffee business.

415 Group recalculates to help recruitment

By JUDY STRINGER clbfreelancer@crain.com

Fortunate. That is one adjective Rich Craig uses to describe 415 Group.

Sure, he is quick to point to the Canton accounting firm’s deep talent base, broad capabilities and some significant strategic decision-making in recent years as keys to growth, yet he doesn’t discount how fortunate it is to have “open-minded partners.”

And today, Craig said, he needs his fellow partners to be as open-minded as possible. Revenues jumped 30% in 2016 to about $8 million. 415 Group expects to see another 20% growth this year.

Driving 415 Group’s growth, Craig said, are changing dynamics in the Northeast Ohio accounting climate.

Many of its former competitors — local, mid-sized firms — are getting bought out by large national firms.

“That has created a really nice niche for us,” he said. “The small CPA firms can’t service the larger clients, but the large national firms charge a lot higher rates. And a lot of people just want to stay local.”

That growth means 415 Group needs more and more accountants to service clients.

The expectation of young workers — yes, millennials — however, are

“There are a lot of sentences that start with, ‘That is not the way I learned how to do it.’ No, it’s not how we grew up, but we have to adapt.”

— Rich Craig, 415 Group partner

quite different than previous generations. They want more flexible schedules, more social offices, and bright and open spaces to work and play.

These are not things that meld very easily with the traditions or demands of the often regimented and stodgy accounting profession.

“There are a lot of sentences that start with, ‘That is not the way I learned how to do it,’ ” Craig said.

“No, it’s not how we grew up, but we have to adapt. We have to learn to adapt to them and let them learn why we do some of the things that we do.

It’s on ongoing process.”

Then there’s the added challenge of attracting skilled workers to Canton. Unless they hail from Northeast Ohio, accountants graduating from Ohio State University, Ohio University, Ohio Northern or Miami University typically don’t know much about Canton, Craig said.

Chad Isler, 415 Group’s manager, spearheads much of the company’s recruiting activity. Most of the stu-

dents he meets have their compasses pointed to bigger cities, such as Chicago, Columbus or Cleveland.

To lure talent, Craig and his team are rethinking and retooling the way 415 Group does business. Meetings with the younger workers, for example, suggested millennials place a high value on flexible work schedules. The firm now allows more work from home than it had in the past.

During the summer, it also permits employees to swap five eight-hour workdays per week with four 10-hour days, providing longer blocks of time off.

Semi-annual gatherings like holiday parties and summer picnics — traditionally organized and hosted by upper management — have been supplemented with a revolving calendar of events planned by a social committee.

“As a partner group, we set a budget for internal social activities, and then none of us (is) on the committee that decides how that money is spent.

We walk away,” Craig said.

Rather than emphasizing Canton’s low cost of living, which may have appealed to baby boomers and Generation Xers, 415 Group touts the city’s proximity to urban centers like Akron and Cleveland, its cultural amenities and intimate feel.

“I often challenge the college kids to think about their long-term goals,” Isler said. “Where can you fit into the community and get involved in things, make a difference? Canton is a place where you can do that.”

Even 415 Groups’ new digs, necessary to accommodate growth, were arranged and outfitted to be more millennial friendly. The 61-person firm — up from about 45 three years ago — recently moved into the remodeled first floor of the former Brown Mackie College in the Belden Village area. Cubicles have low walls that allow light to flow naturally through internal working spaces. The lunch room doubles as a multipurpose center that is fully wired for video and sound, and can as easily be used for a large meeting or training session as for gatherings or a fantasy football draft. The walls throughout are decked with commissioned artwork from several of the firm’s longtime clients.

Each of these ideas, Craig said, came from employees.

“We let them bring a lot of ideas to

the table — and some of the stuff I would have never thought of — but it has worked well for us,” he said.

Craig said 415 Group anticipates it will add another dozen or so staffers to its accounting and IT team in the next three years, but could see that jumping to 80 or even 100 “if we could find a good acquisition.”

Of course, 415 Group is not alone.

Companies all over the country are embracing new and innovative strategies meant to appeal to millennial workers — not the least of which involves giving employees greater flexibility over where and when they work. For deadline-driven accounting businesses, that is a tall order, but one Craig believes is already paying off, and not just with entry-level workers. 415 Group recently recruited mid-level professionals from Buffalo, N.Y., and Erie, Pa., who moved their families to Canton.

“It has helped with recruiting talent because people like to know they have more control over what they do and when, versus the old-school mentality,” he said, adding the firm is now considering “doing something that is virtually unheard of in accounting” by rethinking its 55- to 60hour week requirement during busy season.

“We may just say, ‘OK, from Jan. 1 to April 15, we want you to have 825 billable hours. You guys figure it out.’ ”

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Mark Krohn

Principal, The Law Office of Mark E. Krohn Mark Krohn is an Akron lawyer who works exclusively with small businesses in and around the city – but he might just as easily be described as a businessman with a law degree.

One who happens to spend most of his time advising other businesses. ¶ Krohn has gone back and forth between practicing law and running businesses himself – and still serves as chairman of Focal Point Social Media, a brand promotion firm in Akron. But most of his time these days is spent with clients of his new firm, The Law Office of Mark E. Krohn, which he started in March after leaving Brouse McDowell, where he had been a partner for nearly three years. ¶ The native of eastern Pennsylvania has become a huge booster of Akron – a town he says he has fallen in love with over the last 20 years and can’t imagine leaving. – Dan Shingler

Five things Recreational activity “Golf is my one relief. I belong to Portage (Country Club) and I play a lot there, but I have a Sunday morning group and we play at Turkeyfoot (Golf Course, in Portage Lakes) every week,” he said.

Vacation spots Aruba and Italy

Restaurants Diamond Grille and Hyde Park

Meal Steak, especially the bone-in filet at Hyde Park

Favorite car “I love cars, so you would have to identify the purpose of the car for me to tell you my favorite. … If I could have any touring car, it would probably be a Bentley. ... No, I don’t have one,” he said.

Lunch spot Ken Stewart’s Grille 1970 West Market Street, Akron kenstewarts.com/grille

The meal Both had pan seared walleye, with sun-dried tomatoes, scallions, parsley, basil, beurre blanc, with iced tea. An appetizer of crispy calamari was shared.

The vibe While there are salads on the menu, Ken Stewart’s caters to those who love well-prepared steak, chops and fish. The hip, modern art, which is largely cowboys and cows, attests to the restaurant’s devotion to meat.

The place is a hotspot for those looking to impress their dates, and also for local business people.

The bill $58.45, plus tip

You achieved partner status at one of the big firms in the region, but then went out on your own.

Why? The primary reason I started the firm is because I think, to a large degree, for small and midsize businesses the legal model is broken. I’ve always hated the concept of billable hours. I think it frustrates communication between a lawyer and their client. … I think what people want out of a lawyer is a relationship that is suited to both sides. But when you charge by the hour, people are averse to calling their lawyer to talk about things.

was a year-and-a-half behind me, and then my brother is 10 years younger than me.

Were you guys the typical oldest, youngest and middle children?

Yes, I took all the crap first. (Laughs) We all fit the mold, though. There’s a reason there’s a mold, and we all fit it in my family.

And who influenced you the most?

My wife, Lori, is my greatest mentor, coach and teacher. She’s always helping me. For example, ever since I’ve been in Akron, I’ve volunteered for stuff and we’ve been to community event after community But then how do you manage event. But I was always kind of a client relationships and get paid wallflower. After about six events, for your services? she said, “Why are we here? … We I have a lot of clients on just a simple come, but we never talk to anyone.” monthly retainer.

I said, “I guess I’m We have regular scared I won’t Yes, I took all the meetings, we have anything to crap first. (Laughs) have regular say.” She said, phone calls and “Mark, you love to We all fit the mold, we talk about solve problems. though. There’s a business and the Why don’t you law and how I can just look at that reason there’s a help them as a problem to accelerate their mold, and we all fit it solve?” And that’s business what I did … So, if in my family.

— sometimes I’m a good using the law, conversationalist sometimes using my business model today, it’s mostly because of her and sometimes also using my ripping me out of my shell. business contacts. … There are very few exceptions — maybe litigation or So you're a lawyer who doesn't a big acquisition are things you might like to talk? be excluded from a retainer — but I know, it sounds funny, but to me, people don’t mind that because they talking is just a byproduct of what I understand that that’s a different have to do. level of engagement.

You’re very involved with Akron What do you like most about nonprofits and volunteer at practicing business law?

United Way, YMCA, Rotary and My favorite thing is to work on other organizations. Fair to say business growth and strategy — how you like Akron? do I help a company and how do I fit You want to talk about falling in love; in with the team to help a company I don’t think I’ve ever fallen in love achieve its growth goals? Whether with a place the way I have with that’s strategic joint ventures, Akron. It would take a really, really, whether it's acquisitions or whether special opportunity — and probably it's introducing them to people also a small army of people — to they’re not aware of that represent ever get me to leave. mutually beneficial relationships, that’s what excites me the most.

What is that you love about Akron?

Did you grow up around the law?

For one thing, I’m a golfer and the Yes. My dad was a lawyer in availability of world-class golf Wilkes-Barre, Pa., when I was growing courses here is amazing. Also, our up. park system is one of the most amazing in the country. We have What sort of household did you world-class arts, entertainment and grow up in? sports. I don’t know what this area I was one of three kids. There was doesn’t have except maybe for a me, I was the first. Then my sister little better morale.

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