Crain's Cleveland Business

VOL. 38, NO. 42

OCTOBER 16 - 22, 2017

Source Lunch

Worthwhile trip Port Authority leaders work to bolster dealings with Cuba. Page 3

CWRU Urban Social Research professor Claudia Coulton Page 31

CLEVELAND BUSINESS

The List Largest manufacturing firms in region Page 24

SPORTS BUSINESS

Cavs, Tribe make FSO, STO prime-time destinations

By KEVIN KLEPS kkleps@crain.com @KevinKleps

Now that the Cleveland Indians have joined their next-door neighbors as annual championship contenders, there are very few days on the Northeast Ohio sports calendar in which at least one of the clubs isn’t about to play a game.

That might not be a good thing for your wallet, nor your blood pressure, but it’s a heck of a bonus for Fox Sports, which operates two regional sports networks in the market.

Since LeBron James returned in the summer of 2014, the Cavs’ average ratings on Fox Sports Ohio have ranked second in the NBA each season, reaching an average of at least 111,000 households per broadcast. In the championship season of 2015-16,

“Sports are tribal.

We’re enjoying the benefit of that.”

Francois McGillicuddy, general manager of FSO and STO

the Cavs’ ratings norm was a franchise-record 9.31, and they were watched by 140,000 households per contest in the Cleveland market.

In 2017, when the Indians compiled the best record in the American League, the Tribe’s ratings norm of 8.33 was the best in baseball and the highest for the franchise since 2001.

Together, FSO and STO had a combined 157 Cavs and Indians prime-time broadcasts in the most recent regular seasons, which means the regional sports networks are dominating the coveted time slot

in Northeast Ohio for as much as 40% of the year.

“When consumers go home after a long day of work and are trying to decide what they’re going to watch on TV, we believe they’re going to watch the Cavs or they’re going to watch the Indians,” said Francois McGillicuddy, the general manager of FSO and STO. “Sports are tribal.

We’re enjoying the benefit of that.”

SEE NETWORKS, PAGE 28

MANUFACTURING

Winemakers toast industry’s booming biz

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

For Andy Codospoti, who was stomping grapes barefoot on his family’s personal farm in Italy at four years old, wine consumes him as much as he does it.

And while he’s relatively new to wine as a commercial business, this expert feels that consumer interest in the drink has never been stronger.

If nothing else, the success and growth of the now-sprawling, 55acre, Tuscany-inspired Gervasi Vineyard in Canton, where he’s been the designated winemaker since the business’ inception, would certainly support that.

Codospoti’s family moved to Ohio in the 1950s, emigrating from the post-World War II Italian countryside. But it was the late 2000s when he was brought on to design a wine portfolio and vineyard plans at Gervasi, which officially opened in 2010.

“For the better part of my life, I’ve been a hobbyist. I have no wine degrees or anything like that,” said a humble Codospoti, who doesn’t even flaunt the variety of award-winning wines Gervasi has produced. “But in the some eight or nine years I’ve been here, interest in wine has climbed exponentially. I don’t think I’ve seen interest in wine this high in my entire life.”

It’s not just Codospoti.

Ohio’s wine industry is surging to new heights, growing in tandem

with an expanding U.S. wine market that saw $3.1 billion in total sales in an annual period ending in August, according to a September report by California’s BW 166 LLC, an advisory company to the wine, beer and spirits industry.

Meanwhile, according to a September report by the Ohio Grape Industries Committee, Ohio’s wine industry carried an economic impact of $1.3 billion in 2016, providing more than 8,000 full-time jobs, with 2,700 of those added since

2012 (when the last study was done).

The total number of Ohio wineries grew 51% since 2012 from 175 then to 265 in 2016, according to the report, which doesn’t account for wineries added this year.

Christy Eckstein, executive director of the Ohio Grape Industries Committee, noted that there are actually 272 wineries in Ohio today, with 24 applications currently pending.

SEE WINERIES, PAGE 29

The 55-acre Gervasi Vineyard in Canton opened in 2010. (Gervasi Vineyard photo)

Entire contents © 2017 by Crain Communications Inc.

Manufacturing << Manufacturers

wonder if Trump’s lofty promises will come true. Page 14 Drugs add to recruitment woes. Page 16 Cleveland record press is grooving and growing. Page 18

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PA G E 3

Port works on strengthening Cuban ties

By JAY MILLER jmiller@crain.com @JayMiller

Officials with the Cleveland-Cuyahoga County Port Authority and two Northeast Ohio businesses have taken the first steps to promote trade between the Port of Cleveland and Cuban ports.

Though the administration of President Donald Trump has moved to restrict the trade opening former President Barack Obama made, the Port Authority and the companies believe opportunities exist for a commercial connection between Northeast Ohio and the Caribbean island nation.

“We had a very successful trip,” said Darrell McNair, chair of the Port Authority board of directors and president and CEO of Middlefield-based MVP Plastics.

A memorandum of understanding signed Oct. 6 in Havana by McNair and José Joaquín Prado Falero, general director of the Maritime Administration of Cuba, states that the two parties agreed “to establish an agreement of cooperation aimed at facilitating international trade and generating new business” between Northeast Ohio and Cuba.

Along on the trip, in addition to Port Authority directors McNair and Chris Ronayne were Oscar Rubio, Latin American regional manager of RustOleum Corp., a subsidiary of Medina-based RPM International Inc.; Eduardo Silva of Hiram-based Great Lakes Cheese Co.; and Lee Weingart of Cleveland’s LNE Group, a government relations consulting firm with international business development experience.

Rubio told Crain’s Rust-Oleum sees an opportunity to sell its paint and other products in Cuba.

“We have submitted a license application to start selling our products in Cuba through a Mexican company that is building a paint factory in Cuba,” he said. “The goal is to sell the product through this company.”

Great Lakes Cheese officials did not respond to an email query at press time.

The U.S. embargo on travel and commerce with Cuba limits trade with the island. A company needs a license from the Office of Foreign Assets Control of the U.S. Department of the Treasury to do business.

While president, Obama took some steps to normalize bilateral relations, restoring diplomatic ties and easing travel restrictions. However, Donald Trump has reversed some of Obama’s policies and is threatening further restrictions, though no new restrictions have yet been imposed, said Luis Alcalde, of counsel with the Kegler, Brown, Hill + Ritter law firm in Columbus and a Cuban native whose practice focuses on global business.

Trump announced in June limits on travel to Cuba and barred most commerce by American firms with businesses tied to Cuba’s Armed Forces Business Enterprises Group, an arm of the Cuban military, which is involved in all sectors of the economy.

Still, Rubio believes the opportunity exists and that, because Rust-Oleum has its principal warehouse in Wisconsin, it could ship through the Port of Cleveland, which is the closest seaport with container shipping capacity.

Ronayne said the impetus for the Cuban trade mission was a comment about a year ago by Cleveland Mayor Frank Jackson.

“Mayor Jackson had been down there, and he took note of the Port of Mariel,” Ronayne said. “He encouraged

us to set up contacts and make the trip.”

Ronayne said the group landed in Havana on Oct. 5 and met with officials of the Cuban ministries of foreign trade and investment. The next day they met with representatives of the ministry of transportation.

McNair recognizes that the shortterm trade opportunities will be limited by the change in U.S. administration.

He said short-term opportunities will be more difficult to engage with, but there are certain licenses you can apply for with the department of commerce, and Rust-Oleum is one of the companies that is in the process of applying for one of those licenses after the trip.

In fact, the group arrived in Cuba the day after the U.S. government expelled a group of Cuban diplomats.

But McNair was undaunted.

“To (the Cubans), it’s about relationships, and relationships take time to develop,” he said. “So this was planting the seeds for the longer term as our governments work out their diplomatic differences. This gives us an opportunity to be in the forefront.”

During one meeting, Ronayne said, an official said, “Please send your businesses to us. We want to do business with them.”

Local businesses that likely would benefit from more open trade with Cuba are Ohio’s farmers.

Brad Moffitt, director of market development and membership for the Ohio Corn & Wheat Growers Association, said in an email that his group applauds the Port Authority’s move.

“Ohio ranks in the top 10 in several Midwest agriculture commodity cate-

gories, and the region is a significant supplier of grain, meat, eggs and specialty commodities to the international marketplace,” he wrote. “We welcome opportunities to one day work with customers in Cuba and utilize the strength of Ohio’s Lake Erie ports.”

Alcalde said that since Obama started talking about expanding trade with Cuba, he had been hearing about negotiations between U.S. ports and Cuban maritime officials. When contacted Oct. 12 about the Port of Cleveland’s visit, he said he had already read about it in Cuban news accounts.

Alcalde, who has been to Cuba seven times in the last year, said Cuba is working hard to attract foreign investment, and he has been advising businesses in a variety of fields — aviation, transportation, retailing, manufactur-

ing, pharmaceuticals and energy — about potential opportunities. However, he said, Cuba is cash poor and there is not a lot of consumer income.

But he added that if trade were normalized, he would be in Cuba right now assisting solar energy companies building joint ventures with the Cuban government. The country also needs to build hotels and a tourist infrastructure to generate cash, he said.

Alcalde is not so optimistic about the short term, however.

“My personal opinion is that U.S.-Cuba trade has come to a big stop right now, because of the policies of the Trump administration and weather turmoil,” he said. “There was optimism two years ago, but it’s hard to predict the long term. It depends on how long Trump is president.”

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CRAIN’S CLEVELAND BUSINESS

“We see that as a very exciting opportunity, being able to redefine, a little bit, how we do business and who we are going forward.”

— Andy Reynolds, president and CEO, NeoGraf

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NeoGraf, formerly a division of GrafTech, makes treated natural graphite in sheet and flake form, as well as synthetic-based graphite sheet products. (Contributed photo)

Lakewood company has new name, same focus Former GrafTech subsidiary, now NeoGraf, was sold in June

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Northeast Ohio has a new graphite company.

Well, kind of.

NeoGraf Solutions officially launched as an independent company this summer, but the facility in Lakewood where it’s headquartered has been making graphite products for decades, most recently as part of GrafTech International.

An affiliate of New York-based Aterian Investment Partners purchased what is now known as NeoGraf from GrafTech in June of 2017.

The products made by NeoGraf are used in a variety of applications, including products that control heat in electronics such as smartphones and TVs. And that is an application for graphite, both natural and synthetic, that has grown drastically in recent years, said Andy Reynolds, the recently named president and CEO of NeoGraf.

Reynolds joined GrafTech’s corporate research center in 2000 — his first job in the non-academic side of the industry — and worked his way up to general manager for the company’s advanced energy technologies business. Aterian asked him to take on the CEO role after the sale.

Aterian did not respond to requests for comment, but in a news release on the sale, principal Brandon Bethea said the firm was “excited to acquire NeoGraf, not only for its longstanding leadership position within the synthetic and natural flexible graphite market, but also for the opportunity to partner with the management team in the next stage of NeoGraf’s growth.”

GrafTech, which had been taken private by Brookfield Asset Management Inc. in August 2015, announced plans to review its engineered solutions segment, which included the advanced energy technologies unit, in 2016. Reynolds said the advanced energy technologies division was

NeoGraf Solutions LLC at a glance JJ11709

Madison Ave., Lakewood

JJAbout

180 employees

JJNeoGraf

may be a new company, but the Lakewood plant where it’s headquartered was first founded in 1886 as National Carbon Co.

turned into a subsidiary in the fall of 2016 to make a sale easier, and the sale to Aterian was completed at the end of June 2017. Reynolds declined to comment on the sale price for NeoGraf, and GrafTech and Brookfield did not respond to requests for comment.

So far, Aterian has been focused on growth. Reynolds said NeoGraf has added employees in finance and sales. Adding or growing corporate functions has been a challenge, but a welcome one.

“We see that as a very exciting opportunity, being able to redefine, a little bit, how we do business and who we are going forward,” Reynolds said.

NeoGraf has about 180 employees, about 160 of whom are at the Lakewood and Sharon Center sites. The rest are in global sales and technical support. Reynolds declined to share annual revenue.

And Aterian has encouraged NeoGraf to look at possible capital investment projects where it might be able to bring some services inhouse and even inorganic growth opportunities.

Lakewood Mayor Mike Summers was surprised to hear about the new company, but said it was exciting that Lakewood was now its headquarters.

The plant on Madison Avenue has a lot of “historical importance” to the city, as it was originally a draw for the immigrant population.

“We’re very emotionally attached to it,” Summers said.

The NeoGraf Solutions name is designed to highlight both the newness of the organization — neo meaning new — and its “heritage,” Reynolds said. The company’s new logo and

imagery were finalized recently, and Reynolds said he hopes the new branding is complete by Jan. 1.

What’s now known as NeoGraf makes treated natural graphite in sheet and flake form, as well as synthetic-based graphite sheet products. The flake product is often used in products that need fire resistance, Reynolds said, like shingles or industrial roofing. The natural graphite can be used for products in industrial settings with high temperatures or otherwise corrosive environments, and both it and the synthetic product are used in electronics. In consumer electronics, the graphite products made by companies like NeoGraf are used to improve the performance of the devices, keeping heat in check.

The synthetic-based graphite product, which GrafTech started selling commercially in 2009, can be made much thinner than natural graphite, Reynolds said, an advantage as products like TVs and smartphones grow thinner. The synthetic product also has some thermal performance benefits, but it is more expensive. The polymers used as the base ingredients have to be heated and converted first into carbon and then into graphite.

“We have to artificially do what nature did for us for free,” Reynolds said.

While NeoGraf has been making graphite products for quite some time, Reynolds still sees potential for innovation. For example, there are opportunities to take advantage of graphite’s different properties to replace multiple layers of material in a given product, basically letting a customer consolidate their product from something like five layers to two. That would let customers make thinner products for a lower cost.

Another area of interest is the hybrid-electric vehicles and electric vehicles market. There’s a lot of heat to be managed in those products, Reynolds said, and opportunities to use that heat in other ways — such as defrosting applications — throughout the vehicles.

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Corboâ&#x20AC;&#x2122;s Bakery eyes downtown expansion

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In a sweet development for Playhouse Square, the Italian bakery Corboâ&#x20AC;&#x2122;s has leased space for a downtown store tentatively scheduled to open in early December.

Selena Corbo, president of the family-owned bakery known for cassata cake and cannoli, said it was attracted to downtown because she and her husband Joe Corbo have long toyed with a downtown store but decided to pursue it now because of the growth of downtown as a residential neighborhood and the theater district in the region. â&#x20AC;&#x153;We plan to offer hours for the theater patrons,â&#x20AC;? she said, â&#x20AC;&#x153;staying open an hour after shows seven days a week. Weâ&#x20AC;&#x2122;ll open at 7 in the morning.â&#x20AC;?

She said the family had â&#x20AC;&#x153;gotten the tasteâ&#x20AC;? for expanding distribution the last seven years, providing pastry to Marcâ&#x20AC;&#x2122;s stores and operating in-store bakeries in three of the chainâ&#x20AC;&#x2122;s locations.

The Corbos have leased the retail space at the Keith building, 1621 Euclid Ave., next to the entrance to the Connor Palace theater.

A baker will cook some items on site and others brought in from its Little Italy bakery. She believes it will take about six people to staff the store. It will have 30 seats.

Corbo said the firm has found it needs to cater to each locationâ&#x20AC;&#x2122;s demands. â&#x20AC;&#x153;At Marcâ&#x20AC;&#x2122;s, weâ&#x20AC;&#x2122;ve found that chocolate cake sells good at one store, and two miles away white cake is the most popular,â&#x20AC;? she said. â&#x20AC;&#x153;You have to gauge each location.â&#x20AC;?

Corboâ&#x20AC;&#x2122;s has had success operating in-store bakeries in three Marcâ&#x20AC;&#x2122;s locations, such as this one in Brecksville. (Susan Kordalski for Crainâ&#x20AC;&#x2122;s)

Dyann Davison, whose Davison & Co. represents Keith landlord K&D Group of Willoughby, said Corboâ&#x20AC;&#x2122;s will occupy 3,600 square feet and fill the buildingâ&#x20AC;&#x2122;s last empty storefront. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re excited they will offer coffee and confections before and after shows. They are a well-established Cleveland tradition,â&#x20AC;? Davison said.

Allen Wiant, director of strategic development for Playhouse Square, said, â&#x20AC;&#x153;We believe Corboâ&#x20AC;&#x2122;s will be a great addition to the Playhouse Square district for nearby downtown workers, residents and our theater guests.â&#x20AC;?

Selena Corbo said the bakery also

landed at Keith because the family knows Doug Price, K&D CEO, socially. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re as excited as we are,â&#x20AC;? she said.

Corboâ&#x20AC;&#x2122;s joins several Cleveland-area institutions gravitating downtown, such as Yours Truly, Heckâ&#x20AC;&#x2122;s and Heinenâ&#x20AC;&#x2122;s.

Corboâ&#x20AC;&#x2122;s was founded by Joe Corboâ&#x20AC;&#x2122;s grandparents in 1958 on Kinsman and was moved to Mayfield Road in Little Italy in the early 1960s. Selena Corbo declined to disclose revenues. But Corboâ&#x20AC;&#x2122;s is truly a family business, as its roster of 40 workers includes 10 members of the Corbo family.

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Collier-Williams among judges named to commercial docket

Docket, which was disbanded in ’15, will be restored in January

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Three years after the state said she wasn’t fit to do so, Judge Cassandra Collier-Williams will finally get to preside over commercial docket cases in Cuyahoga County Common Pleas Court.

The Cuyahoga County court’s general division judges voted in their September meeting to restore the docket in January 2018.

The docket was formally adopted in Cuyahoga County in 2013 following a three-year pilot program. However, judges disbanded it in January 2015 following Collier-Williams’ rejection from being a commercial docket judge by the Ohio Supreme Court. According to rules at the time, the high court had to affirm any local judges appointed to dockets in their respective courts.

Attorneys disappointed to see the docket go away — it’s believed to be good for business because of how it’s designed to resolve often complex business-to-business cases faster and with more predictability — pushed for its restoration by encouraging the state to change rules governing how the docket operates.

At the heart of the issue with Cuyahoga judges was a desire for local benches to have the final say on the appointment of judges to their Collier-Williams c o m m e r c i a l docket. Judges were miffed that Collier-Williams, whom they asserted was as qualified as any county judge would be to hear cases on the docket, was rejected, and the docket effectively was disbanded in protest.

This spring, however, the Ohio Supreme Court amended its rules,

“It was a long road, and there were very valid viewpoints on both sides of the topic. I’m just really pleased at the end of the day that this specialized court will be reinstalled.”

— Phil Ciano, principal at Ciano & Goldwasser

which included granting local benches the authority to appoint judges to the specialty docket without the high court signing off on them. With that change made, judges moved to restore the commercial docket last month.

So, come January, Judge Nancy Fuerst and Judge Joseph Russo will finish three-year terms they were serving when the docket was shut down.

Meanwhile, Collier-Williams will begin the term she was supposed to start in 2015.

A fourth docket judge, Judge Maureen Clancy, will begin a term she was approved for by the bench at the judges’ recent monthly meeting on Oct. 11.

Cleveland attorneys are eager to begin using the docket again.

“It was a long road, and there were very valid viewpoints on both sides of the topic,” Phil Ciano, principal at Ciano & Goldwasser and a leader of the local team of lawyers who pushed for the docket’s restoration, told Crain’s in September.

“I’m just really pleased at the end of the day that this specialized court will be reinstalled. I think the nuance of the commercial matters deserves differing treatment. And I think that the legal community will welcome this.”

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CRAIN’S CLEVELAND BUSINESS

UPCOMING EDITORIAL FEATURE

top 10 newsmakers of 2017 ISSUE DATE: DECEMBER 18 | AD CLOSE: DECEMBER 7 For more information and to advertise, contact Nicole Mastrangelo at 216.771.5158 or nmastrangelo@crain.com.

Hospitals team up with lawyers to aid healing Partnering with attorneys is becoming more common in NEO

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

Some health issues, try as doctors might, cannot be fixed within the walls of a health care facility — especially for children or other vulnerable populations.

Recognizing this, some hospitals in Northeast Ohio are adding attorneys to their care teams through medical-legal partnerships, or MLPs. A child with asthma may be living in an apartment infested with mold. A struggling family may be losing access to food stamps. Or a young student with a learning disability isn’t getting the support he or she needs.

“The idea is that so much of what helps us be healthy happens outside of the doctor’s office. We think that maybe 20% happens within clinical care and the other 80% is not clinical care,” said Marie B. Curry, managing attorney of the Health, Education, Advocacy and Law (HEAL) project at Community Legal Aid in Akron. “So when doctors and nurses and health care providers are trying to provide medical care that’s going to gain some traction, sometimes it’s helpful for them to have a lawyer as part of the health care team.”

The HEAL project, which partners with various health care facilities to offer legal support to patients, has been in place for several years.

MetroHealth and the Legal Aid Society of Cleveland have been in partnership for such work for 15 years.

But others are popping up more recently.

St. Vincent Charity Medical Center and the Legal Aid Society of Cleveland have teamed up and are starting a MLP this month focusing on the needs of those in treatment for behavioral health and addiction diseases.

In collaboration with Case Western Reserve University School of Law, University Hospitals Rainbow Babies & Children’s Hospital recently announced an MLP that will guide families and pediatric patient caregivers on legal issues beyond the scope of clinical care that affect children’s health. It’s one of various programs UH is piloting ahead of the opening next year of its $24 million Rainbow Center for Women and Children, a three-story, 40,000-square-foot outpatient health care center at the corner of Euclid Avenue and East 59th Street that is largely being funded by philanthropy.

Nearly 300 health care institutions in 41 states have developed these partnerships, according to the National Center for Medical-Legal Partnership “There’s only so much that we in medicine can do to help with patients’ real concerns,” said Dr. Marie Clark, medical director of the UH-Rainbow medical-legal partnership and an assistant professor of pediatrics at CWRU. Cleveland Clinic and Legal Aid signed a memorandum of understanding several years ago to bring free-advice clinics to the community.

The Clinic recently applied for a grant to fund the establishment of a medical-legal partnership between the two, and is still waiting to hear if the grant will be approved.

MetroHealth was one of the first in the country to start an MLP after the idea began at Boston Medical Center in the early ’90s (then called Boston City Hospital).

Dr. Robert Needlman, a pediatric physician at MetroHealth with a background at the Boston hospital, was a cheerleader from the very beginning.

“We’re in the business of taking care of the most disadvantaged kids, and those are the kids who have

“The idea is that so much of what helps us be healthy happens outside of the doctor’s office.

We think that maybe 20% happens within clinical care and the other 80% is not clinical care.”

— Marie B. Curry, managing attorney of the Health, Education, Advocacy and Law (HEAL) project at Community Legal Aid in Akron

medical problems that are a direct consequence of their legal issues,” he said.

The program at MetroHealth began focused on pediatrics, but has grown since, now involving some adult medicine and other programs.

Needlman, who refers a couple of patients every week for legal advice, sees a handful of issues in which the MLP has been most valuable to his work in pediatrics: children with learning disabilities, children with a cognitive or developmental disability, and families with housing issues.

A lawyer works with the family to figure out what they need and offers advice and information on what the family is entitled to. The attorney then continues to work with them in various capacities, be it representation, letter writing, advocacy or

“We feel like when we just do what we do every day, unfortunately it’s like putting a Band-Aid on this thing. But then the patients, when they’re released, they kind of just go into the community, suffer the same results and then come back.”

— Dr. Albana Dreshaj, medical director of the psychiatric emergency room at St. Vincent

more, until the problem is resolved.

In starting the program at UH Rainbow, Needlman offered advice to Clark, who trained at Boston Medical Center and later developed a MLP in a previous position in Pittsburgh.

“It really made an impression on me, and I don’t really know how to process medicine any other way,” she said.

Clark teamed up with Laura McNally-Levine, law professor and director of the Kramer Law Clinic Center at CWRU. McNally-Levine has also had a long interest in participating in an MLP, which will offer training, education, advocacy and individual representation on non-medical legal issues.

Through the Kramer Clinic’s Health Law Clinic, third-year law students can, under faculty supervision, represent children and adults in administrative and court proceedings. MLPs also work to train doctors on what the signs of issues that may be rooted in legal problems.

At St. Vincent, rather than focusing on children, the MLP will be the first of its kind in Ohio to focus solely on behavioral health and addiction diseases. St. Vincent estimates that 40% of the nearly 4,000 patients treated within its geriatric and adult psychiatric units need immediate legal help to remove barriers to improved health.

“We feel like when we just do what we do every day, unfortunately it’s like putting a Band-Aid on this thing,” said Dr. Albana Dreshaj, medical director of the psychiatric emergency room at St. Vincent. “But then the patients, when they’re released, they kind of just go into the community, suffer the same results and then come back.”

The MLP can help people with issues like eviction, guardianship issues, health insurance, homelessness, custody issues and more, she said. A two-year, $280,000 grant from the Jones Day Foundation will support a full-time Legal Aid attorney to partner with St. Vincent Charity clinicians, case workers, patient navigators and other caregivers. The hospital estimates that in the first year, the program will assist 175 patients and family members through 75 legal cases.

Many involved in MLPs are looking for ways to address systemic legal issues or greater policy decisions that impact health.

“We know that we only even meet a small fraction of the people who would be eligible and need our help, and of those, we can only help a very small number, because we’re not a big shop,” said Curry, of the HEAL project.

Clark is hoping that work will be down the line for the program at UH as people from different disciplines work together to address legal determinants of health.

“Coming together, we can kind of think about some systemic changes that could happen or how we could better work within the system to support families,” she said. “So instead of working on an individual level, you can work on a more broad level and hopefully impact more families that way.”

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PA G E 9

At the Table

Beard celebrity chef tour to make Cleveland stop If you’re hungry for some fun, there’s a major James Beard Foundation tour coming to town, Cleveland Restaurant Week is on the horizon and you still have time to dig into a bountiful clambake.

Eight of Ohio’s top chefs, most of them Northeast Ohioans, will prepare some of their finJoe est creations Crea when the James Beard Foundation’s Celebrity Chef Tour debuts Wednesday, Nov. 1, in Cleveland.

Hilton Cleveland Downtown’s executive chef, Maxime Kien, will host the event, which kicks off at 6:30 p.m. with a cocktail reception at the hotel’s Bar 32 on the 32nd floor. Kien will be assisted by the Hilton Cleveland’s pastry chef, Justine James. Festivities will continue in the hotel’s ground level restaurant, The Burnham.

Kien and James will be joined by Dante Boccuzzi (Dante, DBA, Ginko, Dante’s Inferno), Rocco Whalen (Fahrenheit, Cleveland and Charlotte, N.C.), Emily Marine (pastry chef, Spice Headquarters, Cleveland), Vishwatej Nath (Urban Farmer at the Westin Downtown Cleveland), Jamie Simpson (Culinary Vegetable Institute, Milan) and Bill Glover (Hilton Columbus Downtown).

The chefs will produce a multicourse dinner paired with wines. Patrons will have an opportunity to meet the chefs and discuss their dishes during a question-and-answer session.

Each year, the Beard Foundation brings its Celebrity Chef Tour to about 20 cities across the U.S. and the events promise an evening of extreme feasting. Proceeds from the $180 tickets support the foundation’s ongoing efforts to nurture and educate chefs.

Additional information and tickets are available online.

Cleveland Restaurant Week is coming If you’ve been waiting for a chance to try some of the restaurants on everyone’s radar, your opportunity is right around the corner.

Cleveland Restaurant Week is set from Wednesday, Nov. 1, through Wednesday, Nov. 15. Yes, it actually spans two weeks. During the stretch, more than 50 locally owned, independent restaurants will offer three-course meals mostly priced at $33.

While you’re marking your calendar, add another date: Monday, Oct. 23. That’s when the host group, Cleveland Independents, will announce the menus to be offered by each participating restaurant. That’s also the kickoff date for booking reservations.

Hilton Cleveland Downtown executive chef Maxime Kien will host the James Beard Foundation’s Celebrity Chef Tour stop at the hotel on Wednesday, Nov. 1. (Hilton Hotels & Resorts)

Roxu will rock a new name

Still time for bakes

Looks like Roxu Fusion has served its last meal. A sign has been posted in the window of the restaurant at 15607 Madison Ave. in Lakewood that a newcomer will take its place.

Actually, Roxu’s replacement will be a not-so-newcomer. Sushi Rock, another Asian-themed restaurant that once boasted locations in downtown Cleveland and Beachwood, will open in the building.

The once-popular Sushi Rock operations closed in 2012 and 2014, respectively.

Clambakes aren’t a distinctly Cleveland thing, but here in Northeast Ohio, they’re practically an art form. You’re not too late to dig into one of the area’s luscious bakes. But don’t wait; most are limited-time offers (so call ahead to confirm).

Here are five current options …

J Don’s Pomeroy House (13664 Pearl Road, Strongsville; 440-572-1111) is offering Don’s Taste of New England. It includes a whole Maine lobster, clams, corn on the cob and potatoes for $42.90, with a $10-off promo on Sun-

days and Mondays. Its sister restaurant, Don’s Lighthouse Grille (8905 Lake Ave., Cleveland; 216-961-6700) offers a similar menu with the same discount on Sundays and Thursdays.

J Salmon Dave’s Pacific Grille (19015 Old Lake Road, Rocky River; 440-3312739) offers its popular annual special, The Maine Event. It includes a whole Maine lobster, half a chicken, steamed clams, steamed redskin potatoes and corn on the cob. The spread is typically priced at $39.95, but on Sundays after 1 p.m. you’ll get $15 off.

J Every Saturday through October, The Cabin of Willowick (28801 Lakeshore Blvd., Willowick; 440-943-5195) offers a choice of clambakes. Start with clam broth, mussels and clams; move on to chowder, salad, corn and a baked or sweet potato; chow down on your choice of chicken ($26), steak ($39) or lobster ($50); then conclude your meal with apple cobbler. Prices are complete (sans tax and tip) for the spread.

J Cap off your Sunday with a major bake at Blue Canyon Kitchen and Tavern (8960 Wilcox Drive, Twinsburg; 330-486-2583). The meal begins with “endless” portions of black garlic clam chowder, then moves on to salad, cornbread, corn on the cob, whipped potatoes, a dozen littleneck clams with butter and broth, a portion of roasted chicken, and dessert of pumpkin spice cream puffs. Price is $28.95 per person ages 13 years and older ($14.95 for ages 8-12; $8.95 ages 3-7).

Additional dozens of clams and a 6-ounce beef tenderloin are available.

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

A cautionary tale for boards

Editorial

Bad medicine It’s difficult to argue against the need for lower drug prices.

It’s beyond disheartening, for one, that in 2017 Ohioans too often have to decide whether to pay for medications or put food on the table. It’s not an issue unique to those living in poverty or on the state’s Medicaid rolls. In the face of climbing health care costs, employers have increasingly shifted the burden to employees with steep deductibles, which forces those with coverage to pay thousands of dollars out of pocket for medical care and prescriptions before their plans pick up the tab.

So, Ohio’s Issue 2, which if passed Nov. 7, would “require the State of Ohio, including its state departments, agencies and entities, to not pay more for prescription drugs than the price paid by the U.S. Department of Veterans Affairs.” Today, the VA gets a 24% discount on drugs it purchases for veterans. California voters rejected a similar measure in 2016.

Sound like a good deal right? Hardly, and here’s why we’re urging a no vote on Issue 2.

Prices of pharmaceuticals are woefully under-regulated, but Issue 2, if passed, has the potential to further upset the market.

Because Issue 2 deals with health care paid for by the state — which already aggressively negotiates drug pricing — the vast majority of Ohioans will not see the cost of their drugs decrease.

In fact, because of simple economics, they might even see their costs increase as pharmaceutical companies shift the burden to those with private insurance. Today, 7 million Ohioans — two-thirds of the state’s population — buy their own insurance or get it through their employers.

If passed, taxpayers also would have to foot the bill for the eventual lawsuits challenging the law. Greg Browning, a former state budget director, wrote in a memo that this would “allow four identified proponents of the measure to advance their position through the courts should they, and they alone, determine that action is warranted due to legal challenges” of the proposal.

“This may well be an unprecedented development in Ohio

legal history,” Browning added in the memo.

The group advocating for Issue 2’s passage is preying on vulnerable Ohioans who are all too familiar with the burden of rising health care casts. The entire campaign has lacked the nuance necessary in any debate about health care policy. And, in many cases, where nuance has lacked, deception has flourished by the group that calls itself the Ohio Taxpayers for Lower Drug Prices.

The group recently distributed a flier with an image of Dr. Toby Cosgrove and a quote from the Cleveland Clinic CEO about the disparity of medical costs around the world. The quote, of course, was made in a public forum, but the placement on the flier incorrectly implied that Cosgrove — one of the most powerful voices in the world on health care issues — is publicly supporting the initiative.

Cosgrove nor the Clinic has taken a stance on the issue, and attorneys for the Clinic have demanded the group retract the flier and distribute a correction to the households that received the mailing. While we don’t see any legal qualms with the campaign using Cosgrove’s likeness in the literature, doing so in this context was woefully irresponsible.

As a nation, we should be doing everything in our power to lower the cost of health care, especially for the most vulnerable. Unfortunately, it’s not clear whether this proposal could actually achieve that. In fact, it has the potential to do just the opposite, assuming it can be implemented — a tall task in of itself.

By embracing the Medicaid expansion afforded by the Affordable Care Act, the state of Ohio has been a leader in how it cares for its citizens. Gov. John Kasich has also emerged as one of the few voices of reason in the Republican Party over the future of health care in America.

The bottom line is that, compared to many other states in the country, Ohio has performed well when it comes to health care policy. But if Issue 2 passes, that statement would certainly be up for debate.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Sections Editor:

Timothy Magaw (tmagaw@crain.com)

Contact Crain’s:

216-522-1383

Let Harvey Weinstein be a wake-up call for boards of directors: No longer can you sit idly by while a top executive behaves badly. Your legal and fiduciary responsibilities require your vigilance.

Sadly, in the case of the Weinstein Co., vigilance was in short supply.

While the Hollywood mogul was allegedly sexual harassing and abusing countless women, the Weinstein Co.’s allmale board of directors turned a blind eye.

Did they not hear the rumors that swirled for decades? Did they value protecting their business over protecting women who may fall prey to their CEO? Thanks to a courageous handful of those Elizabeth women — and the light shone by a free and McIntyre independent press — his predatory behavior has finally been exposed, and the film company’s board of directors finally fired Weinstein.

The New York Times was first to give voice to the accusations, reporting that Weinstein had paid off at least eight claims of sexual harassment over several decades. The New Yorker expose that followed highlighted more allegations of abuse and rape.

Last week, Weinstein Co. board members issued a statement saying they were “shocked” by the allegations and denied any previous knowledge of the claims.

The problem is, according to a Times story published the day after the board’s denial, members did know about Weinstein’s reputation and behavior, if not every specific detail of allegations against him.

And still the board extended his employment contract. ... Interviews and internal company records show that the company has been grappling with Mr. Weinstein’s behavior for at least two years.

David Boies, a lawyer who represented Mr. Weinstein when his contract was up for renewal in 2015, said in an interview that the board and the company were made aware at the time of three or four confidential settlements with women.

It appears the board was either complicit or incompetent.

Did its failure to act imperil more women?

Weinstein now joins a seemingly ever-growing list of powerful men forced out or disgraced because of sexual misconduct: Uber CEO Travis Kalanick, and Roger Ailes and Bill O’Reily at Fox News, are just a few examples.

In all these cases, corporate culture had eroded to the point of leaving these companies fiscally and legally vulnerable, and, frankly, morally questionable. In Weinstein’s case, in addition to board members being complicit in allowing his behavior to continue unchecked, staff members played a role by ignoring or excusing his behavior.

Why didn’t Weinstein’s victims expose him? It’s well known that many of these instances come down to power, and Weinstein had it. Lots of it. You can see why someone hoping to succeed in the entertainment industry wouldn’t go up against one of its kings. Similarly, employees beholden to Weinstein may have been reticent to risk his wrath.

But the board? The board doesn’t serve the CEO; it’s the other way around. The board has the power and, more importantly, the obligation to take action. And failing to act until the bombshell drops only proves there’s a huge problem not just with corporate culture, but boardroom priorities.

Let this be a cautionary tale for board members everywhere.

Do not be blinded by profits, by power or by personality. Take allegations seriously. Create a system of due process and follow through, every time. Insist on business practices that are above reproach. Turn no blind eye.

It’s the board members’ duty — for the sake of the shareholders, the business itself and, perhaps most importantly, those who might fall victim to illegal behavior — to do the right thing.

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

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 11

Providing a private travel experience that exceeds expectations

Web Talk Re: Former Cleveland Clinic Innovations leader pleads guilty Nice to see that Gary Fingerhut will finally get what he deserves. You can bet that he’s not sorry for what he did (wire fraud and making false statements), only that he got caught.

Hope he rots in prison, knowing that he’ll need to make restitution and will be labeled a felon from this point forward. He can say goodbye to his wealthy lifestyle in the suburbs and instead get used to others finally dictating to HIM how he'll spend his day, and with whom he can associate. He's a disgrace to his extended family and community.

— Justicehasfinallybeenserved

Re: North Randall hotel sold for Amazon-linked redevelopment This hulk is an eyesore. Doing away with it will be a real plus to the site and the whole area. My

hope is that it will spur some development and freshening up of the neighborhood. Logistics-wise, it is a great location and is ripe for redevelopment of much of the industrial land that lies fallow around it. — Lou Vascek

Re: Trouble for the Browns Ownership needs to take ownership, avoid knee-jerk decision-making based on widely held fan opinion, and have the stomach to ride this out however long it takes. But ... ticket sales matter, and if history is any indication, prepare for another “cycle” of change. Who knows, maybe Warren Buffett takes over along with his new ownership stake in (the Haslam family’s) Pilot Flying J, and then we’ll see a more prudent, longer-term approach. On the QBs: Supporting cast via the draft has to come before the eventual stud QB, and that QB has to come at a reasonable price.

— Clebrindavalier

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CRAIN’S CLEVELAND BUSINESS

Personal View

Why the Midwest can’t afford new cuts to immigration

By SARA McELMURRY and ROB PARAL

The Senate’s Raise Act, along with new House legislation, aims to halve legal immigration by implementing an ultra-selective, points-based system of awarding visas to new immigrants to the U.S. The bills claim to support American workers by reducing “competition” from immigrant labor.

Yet the Midwest — cities like Cleveland, Chicago and Detroit — has a cautionary tale to tell about cutting immigration: We know from experience that it harms our cities’ populations, economies and workforces.

Immigrant populations bouncing back After decades of decline, the foreign-born populations of all large Midwest cities are starting to tick upward.

2 million

958,319

1.5 million

1 million 0.5 million

1900

’10

’20

’30

’40

’50

’60

’70

’80

’90

’00

’10 ’15

A century ago, Congress curtailed immigration from non-Western European countries through a series of laws and hurt the growth of 13 major Midwestern cities, according to a new report from the Chicago Council on Global Affairs. Between 1900 and 1930, the population of those cities (Akron, Chicago, Cincinnati, Cleveland, Detroit, Grand Rapids, Kansas City, Milwaukee, Minneapolis, Omaha, St. Louis, St. Paul and Toledo) mushroomed 120%. The boom largely was driven by a 55% increase in immigrants and their children.

But in the years following the restrictions, the cities’ foreign-born population plummeted 64%. The decline of immigrants correlated with cities shedding 7.5% of their total population. The region has yet to recover from this demographic hit, having grown at half the rate of the rest of the country over the last 50 years.

Immigrants matter to Midwestern cities because they are more likely than the native-born to choose to live in cities. As immigration plunged in the 1930s, 1940s and 1950s, there wasn’t a replacement for population lost to suburbanization, de-industrialization and Sun Belt migration.

These trends compromised the region and continue to sap our numbers today.

Our modern immigration system — built in 1965 — reversed the 1920s-era restrictions, offering a lifeline for the stagnating Midwest.

The 1965 law created new avenues for family-based migration that ushered newcomers back to Midwestern cities, resulting in a collective 45% growth of foreign-born residents since 1990.

These new Midwesterners hail mostly from Asia and Latin America, with skillsets as diverse as their backgrounds. Immigrants are revitalizing shrinking cities like Chicago, which has lost nearly 30% of its native-born population since 1970 and currently leads the nation in population decline. The city’s foreign-born population is up 53% over its 1970 numbers, buffering the city from all-out decline. Mayor Rahm Emanuel, accordingly, has become an outspoken critic of restrictive immigration policies.

Detroit and Cleveland have fared less well, losing both foreign-born and native-born population since 1970. These cities are working overtime to woo refugees and other foreign-born talent, and cuts to visas will choke off prospects for even modest growth.

Yet if the architects of today’s restrictive policies have their way, future immigrants will be hardpressed to meet lofty new requirements, which favor young applicants with doctorate degrees, high-salary job offers and, perhaps most brazenly, Olympic medals and Nobel Prizes. The focus on highskilled labor largely ignores the workforce needs of health care, agriculture and hospitality, big Midwestern industries that increasingly depend on lower-skilled foreign-born workers to stay fully staffed.

Backers of these bills claim that being pro-restriction is also pro-U.S. worker and pro-U.S. economy. But research does not support this argument. Studies show that

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PA G E 13

Change in population

immigrants and native-born workers have complementary skills, meaning they usually seek jobs in noncompetitive labor markets. Im1970 to 2011-15 population changes migrants are job creators, twice as for the six largest Midwest cities: likely as their native-born counterparts to start businesses. Nearly Native born 900,000 Midwesterners are emForeign born ployed at immigrant-owned firms.

1. CHICAGO Analysts estimate that the Raise Act would compromise 4.6 million jobs -28.2% by 2040 and reduce the U.S. GDP by 53.0% 2%.

Instead of wholesale restrictions, 2. DETROIT our region needs a careful recali-53.1% bration of our 50-year-old immigration system, reconciling the visa -68.9% channels and quotas created in 3. MILWAUKEE 1965 with today’s economic realities.

-20.2% Yes, reforms are critically need48.6% ed. But we can’t let the “America First” call to close the door further 4. KANSAS CITY compromise the very region -13.0% where previous immigration restrictions 249.3% ushered in stagnation 5. OMAHA and decline. The Midwest cannot afford 17.4% this history to repeat 312.3% itself.

6. CLEVELAND -46.5% -66.2% Note: 2011-2015 represents a multiyear estimate that includes data collected through the American Community Survey.

Source: Rob Paral and Associates

McElmurry is assistant director of immigration at the Chicago Council of Global Affairs. Paral is a non-resident fellow and author of “Looking Back to Look Forward: Lessons From the Immigration Histories of Midwestern Cities.”

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CRAIN’S CLEVELAND BUSINESS

Focus MANUFACTURING

The president’s agenda has stalled, but manufacturers are still hopeful

By DAN SHINGLER dshingler@crain.com | @DanShingler

There’s no new adjustment tax even planned on goods crossing the Mexican border. China has not been called on currency manipulation. The North American Free Trade Agreement still stands. ¶ However, President Donald Trump has not yet failed U.S. manufacturers. ¶ That’s in part, experts say, because the sector has been buoyed by Trump’s ongoing efforts to tear down the government’s regulatory structure, which get far less attention than his tweets. It’s also because Trump still has a chance to deliver something manufacturers want more than perhaps any other single government action — major changes and cuts to federal taxes. ¶ “I would say the number one issue, bar none — the number one, two and three issue, really — is tax reform,” said Ryan Augsburger, a spokesman and public policy officer for the Ohio Manufacturers’ Association. ¶ “The U.S. tax code is not competitive globally, so the opportunity to improve that is very important,” he added.

SEE TRUMP, PAGE 20

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PA G E 15

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Drug use adds to recruitment woes for manufacturers

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Manufacturers have long talked about a skills gap in the industry that’s making it difficult for them to find the workers they need.

But there’s another hurdle employers haven’t always been as open about: applicants’ inability to pass drug tests.

What’s brought it to the forefront?

The opioid epidemic ravaging the state has played a part, as have concerns about the legalization of medical marijuana.

Bill Adler, president and CEO of Stripmatic Products Inc. in Cuyahoga Heights, said drug use has been affecting the company’s ability to hire people for years. Right now, Adler’s looking for entry-level employees that he can train, and he’s struggled to fill six positions. There have been candidates he thought would be “phenomenal,” but drug tests have gotten in the way.

That puts the growing metal stamping company, which has just under 40 employees, in a difficult position.

And it’s not just small and medium-sized companies like Stripmatic that are struggling.

In a recent Crain’s survey of the largest manufacturers in the area, 10 of 21 respondents cited applicants’ ability to pass a drug test as a top hiring challenge just behind finding workers with proper technical skills.

In response to a specific question about whether the opioid epidemic in particular had affected hiring efforts, seven of 23 respondents said it had.

Today, reports suggest drug overdoses now account for more deaths in the United States than traffic deaths or suicides, and the bulk of that spike since 2010 can be attributed to a rise in the abuse of opioids.

Recent commentary from economists at the Federal Reserve Bank of Cleveland noted that while the issue needs to be studied further, the “rising overdose death rates are a clear signal that the situation is getting worse, and that while our estimates of usage rates are very uncertain, they suggest that the opioid epidemic could be large enough to have an impact on the labor force.”

But while the opioid epidemic has gotten headlines — and for good reason — that’s not manufacturers’ only concern.

Adler, for one, is loathe to point the finger at opioids as the cause of the company’s failed drug tests, as he doesn’t get a breakdown of those results. Darrell L. McNair, president and CEO at Middlefield-based MVP Plastics, has seen more of an “indirect effect” from the opioid epidemic, but marijuana has served as more of a direct challenge to hiring.

While drug use has been a hurdle for manufacturers since Donna Rhodes joined manufacturing advocacy and consulting group Magnet three-and-a-half years ago, the problem of finding workers has been exacerbated by low unemployment and a smaller available talent pool. Rhodes, senior business consultant for Prism

Join the discussion Be sure to join us for the Crain’s Cleveland Business Manufacturing Assembly from 8:30 a.m. to 1 p.m.

Nov. 14 at Corporate College East.

The event — “Stories from the Front Lines: The Workforce Crisis” — will include a discussion on the drug crisis and its toll on the sector.

Moderated by reporter Rachel Abbey McCafferty, the conversation will feature Darrell McNair, president/CEO, MVP Plastic.; Kevin E. Griffith, office managing shareholder (Columbus), Littler Mendelson; and Pamela Gill, president and CEO, Recovery Resources.

The event also will feature a panel discussion on education’s role in the talent pipeline; and a closer look at the Medina County Manufacturers Partnership.

For more information and to register: go to http://www. crainscleveland.com/manufacturing or contact Megan Lemke at 216-7715182 or mlemke@crain.com.

and workforce talent development, said that makes retaining existing employees even more critical.

Bottom line? That’s the workforce available now and, likely, into the foreseeable future, said Kevin Griffith, office managing shareholder in Columbus for Littler Mendelson.

“That’s our reality,” he said.

One clear concern of under-the-influence employees on factory floors is safety. Though manufacturing has gotten more high-tech over the years, employees are still responsible for and working around heavy, sharp and potentially dangerous machinery. While most people would rank marijuana and opioids as very different substances, any type of possible impairment is frowned upon.

And the opioid epidemic in particular is affecting employers in less tangible ways, too.

At companies like MVP Plastics and Fredon Corp., it has shown up in the families of its employees. That can lead to issues like productivity loss as people ask for time off to care for a family member struggling with addiction, according to Rich Ditto, vice president of operations at Fredon in Mentor. And it can make workers less focused, which can be a danger. Fredon makes parts for the aerospace and aircraft industries.

Those parts are precise, with close tolerances, and it’s critical that people are paying attention.

“People’s lives depend on the parts we make,” Ditto said.

At MVP, the company has been able to help some employees affected by the epidemic. McNair said that, for example, MVP worked with one of its employees who had to take in her grandchild and was unable to work as much. The company has also approached a few employees he suspected were using drugs and offered them counseling. Some took him up on it; others quit.

“If I can keep a healthy employee,

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MANUFACTURING

“If I can keep a healthy employee, it’s better for the business and those around them.”

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it’s better for the business and those around them,” McNair said.

Policy protections The question, of course, is how employers react.

On the hiring side, many of Cheryl Perez’s clients have taken to accepting a large number of applications in the hopes that they’ll have enough who could be a good fit and also pass a drug test. Perez is president of human resources consulting firm Benefit Innovations Group in Seven Hills.

She also recommends that, if her clients want to implement a drugfree policy, they make sure it’s clear and well communicated.

To further protect employers, Sam

Lillard, attorney in Fisher Phillips’ Columbus office, recommends companies expand the drug test they’re using to test for more substances and update drug use policies to include sections on appropriate use of prescription drugs. It could also help to educate employees on the opioid epidemic and about alternatives to opioids for pain management, he said.

When it comes to medical marijuana, employers who want to maintain a drug-free workplace won’t have any legal challenges when it comes to the medical marijuana expansion, as Ohio’s law does not have protections for employees who choose to use it, Griffith of Littler said.

But it all depends on whether that’s the route they want to take.

MVP Plastics, for example, has been discussing how it will handle medical marijuana usage, assessing what functions can and cannot be safely performed. McNair expects to keep a zero-tolerance policy for high-risk jobs, like those operating equipment. As for Fredon, Ditto said the company would remain a drug-free workplace.

Stripmatic’s Adler said if a way to test dosage or levels of usage was developed, that could be a step toward figuring out if people were capable of carrying out work.

But until that happens, Adler likely won’t let someone use medical marijuana and then operate heavy equipment.

“It’s not just their safety,” he said.

“It’s their coworkers’ safety at risk.”

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Q&A: Vince Slusarz Owner and founder, Gotta Groove Records

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What’s old is new, and what’s old can sometimes be good business.

Just ask Vince Slusarz, who in 2009 started the Gotta Groove record pressing plant on Cleveland’s East Side. Today, Slusarz’s outfit employs almost 40 people and presses more than a million records a year. Not bad for a guy who didn’t know much about making records and spent the bulk of his career with Kinetico, a water treatment product maker in Newbury. “I just had a great appreciation for manufacturing and the belief that it’s a critical component of our overall economy,” Slusarz said. “There were a lot of discussions then about everything going offshore, how we were going to be a service economy and all that. I just thought it was still important to make stuff.” Crain’s recently chatted with Slusarz about the growth of his company, and why making records is still good business in 2017. This interview has been edited for length and clarity. — Timothy Magaw We last touched base in 2011, when you were first turning a profit. How are things now?

Profit was and is a relative term. As we were structured then, we had turned a profit, but we still didn’t have benefits for our employees or paid holidays. I wasn’t taking any kind of salary out of the business. We were still in startup mode. Going forward now, we are certainly profitable in the more traditional sense.

Where have you found your niche?

From the beginning, we believed the market was growing and was going to continue to grow. The underserved portion of the industry was the artists themselves — the DIY people or small independent labels. A lot of the bigger labels had relationships with existing plants. There were capacity issues — and there still are to a degree — but new presses have come online in the last year and a half or two years. We do some big-label business, but we intentionally keep that to around 15% to 20% of the overall business, so we can keep the focus on smaller labels and independent artists.

Was it challenging to learn this particular business?

Extremely. I had a level of confidence due to my experience in manufacturing, but despite that, there is a lot of art to this. It’s not all science. You can have one record in the press, and the next one you put in there with the same type of raw material could sound completely different. Over time, you learn these things and what you can do on the pressing end to make a good pressed record. There are still mysteries in this business that confuse people who have been in it for decades, which is a little frustrating because you always want to find the root cause and solve an issue.

As you see it, what’s the allure with vinyl?

Eight-tracks, cassettes, iPods and now with the cloud and your ability to have music on your phone, the portability argument is over. But there are people who want to own something physical that represents what they like in music and means something. While it’s not the majority of the population, it’s a chunk of the population — and a growing chunk.

It’s a much better experience to have friends over to listen to a record than go through your hard drive. It’s a richer overall experience. The

artwork is a big part of it as well. It’s overall a more tactile experience.

What’s the biggest challenge to maintaining this growth trajectory?

Just managing all this growth. Do we add a third shift as we continue to grow? From a physical standpoint, we’re getting close to our capacity. A third shift is a possibility.

How is this business different than others in which you’ve worked?

I came from a larger company, and I realized pretty quickly all the hats I had to wear. But as we’ve grown, I’ve learned to develop people and shed some responsibilities. You’re never going to grow unless you can do that. There’s that, but also scrap is still our No. 1 issue. It’s a reality of the process and our obsession with quality. I was used to a manufacturing world where you’re talking about one-tenth of 1% of scrap, and here we’re talking 10% or more. It’d be easy if it were just one or two things, but a lot things can cause that. So, we’re focused on that.

What are some lessons you’ve learned along the way you wished you would have known early on?

Everybody tells you when you start a business it’s going to consume you to a degree, and it’ll be different than anything you’ve done before. You can mentally take that in, but you don’t realize it until you do it. But also you’re going to run into things no matter how much you plan or what your business plan says. You’re going to run into things you don’t expect.

You have to hope you have the personnel to handle that, and in many cases with small businesses, you don’t. But there are answers out there for everything. With enough work, you can find those answers.

What sort of employees do you hire?

On the packaging or assembly side, we’re looking for some people who might have done some kitting work or prepared pallets. On the quality end, we’re looking for people with a good ear. We’ve reached out to Tri-C and their recording program and hired a few people. It’s always good to have people who have done some record engineering or recording on their own. On the pressing, we’re looking for people with some kind of mechanical aptitude. That said, we’re certainly looking for people with a passion for the product. You definitely can’t teach that.

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MANUFACTURING Adviser: John Archer

Ignoring California labeling rules could be costly Manufacturing companies are no strangers to product labeling regulations, whether it’s ingredient labeling for food products, OSHA hazardous material statements for chemicals or recycling symbols for packaging.

But there’s one labeling requirement that’s less well known and can carry hefty penalties for manufacturers who unwittingly violate it. It’s known as Prop 65, and it requires the following: “WARNING: This product contains a chemical known to the State of California to cause cancer, birth defects or other reproductive harm.”

Prop 65 was created in 1986, when California voters approved the Safe Drinking Water and Toxic Enforcement Act by ballot measure, with the stated intention of ensuring that Californians be informed about the ingredients in the products they buy.

That means anyone who sells their product into the state of California must display this warning if the product contains levels of certain chemicals above a safety threshold. There are more than 900 restricted chemi-

Archer is a partner in the law firm Kohrman Jackson & Krantz.

cals in the Prop 65 regulations, making this a minefield of liability for manufacturers. Many of the chemicals are found in common household products, plastics, food, building materials and even medicines. In fact, aspirin, alcoholic beverages and wood dust are on the list.

Haven’t heard about it? You’re not alone. Many manufacturers aren’t aware of Prop 65 or even that they’re subject to it. For some, the notice from a plaintiff’s counsel that they’ve violated this law is the first time they’ve learned of its existence. Worse, they find out they are facing a hefty fine of up to $2,500 per violation per day.

Lest you think this regulation doesn’t apply to you, consider this

example: If a tiny plastic component of your electronic or automotive product contains an additive on the Prop 65 list, your product must carry the warning if you sell anywhere in California. The only manufacturers exempt are those with fewer than 10 employees.

Here are four important things you need to know now about Prop 65: J Warning requirements will soon apply online, too. During a time in which e-commerce accounts for about 9% of all U.S. retail sales, many consumers don’t see a product’s packaging before they buy. Starting in August 2018, if you sell products online that could be shipped to California consumers, a Prop 65 warning must be displayed on the product information page in a way that can clearly be seen before a customer completes the purchase.

J Talk to your vendors and resellers of your products. Even if you sell your products through a distributor, you still are responsible for making sure your products are properly labeled.

The same is true of any materials you

purchase or use in the manufacturing of your product. Be sure to talk with your vendors, distributors and resellers to be sure they are aware of and are in compliance with Prop 65. Their error could become your liability.

J Penalties can be steep and unpredictable. While the language of the act provides for penalties of up to $2,500 per violation per day, there’s much uncertainty about how those violations might be counted, especially for consumer products. In some cases, each unit sold or on the shelf in California can count as a single violation.

J More changes are ahead in 2018.

Manufacturers face a critical new Prop 65 challenge in an upcoming 2018 rule change. It was once acceptable to place a general warning on all products potentially subject to the rule out of an abundance of caution.

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But beginning in 2018, to cut down on such potential overwarning, every product containing at least one of the listed chemicals must specify the material by name. That means manufacturers who want to sell into California will likely be forced to make a hefty investment into product testing and major packaging revisions.

Because Prop 65 allows for private enforcement, a significant number of plaintiff’s attorneys are actively seeking these types of cases. They are hiring individuals right now to walk the aisles of major retailers looking for products that don’t have warnings and likely contain one or more of the 900 listed chemicals. The first step to protecting yourself is to do your own due diligence to determine exactly what’s in all components of your products and make sure none of them are on the Prop 65 list.

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CRAIN’S CLEVELAND BUSINESS

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CLEVELAND BUSINESS VOL. 36, NO. 47

NOVEMBER 23 - NOVEMBER 29, 2015

ALLYSON O’KEEFE, 37 Partner; Porter Wright

35th Anniversary

CLEVELAND BUSINESS

VOL. 36, NO. 47

NOVEMBER 23 - NOVEMBER 29, 2015 Allyson O’Keefe started her legal career at Porter Wright in 2004 after completing a summer internship there as a Case Western Reserve University law student. Since then, she has worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been promoted to real estateALLYSON partner.

O’KEEFE, 37 “Young professionals who live downtown are so excited about the city,” said O’Keefe, a Partner; Porter Columbus native who lived downtown forWright 10 years before moving to Rocky River. “The ones who aren’t from here are often more excited about it. When you move here from somewhere else, you don’t for granted.”

VOL. 36, NO. take 47 it Allyson NOVEMBER 23 - NOVEMBER NOVE EMBER 29, 29, 2015 201 O’Keefe started her legal career at Porter Wright in 2004 after completing a sumWhen O’Keefe is not working or spending time with her husband and two children, she can mer internship there as a Case Western Reserve University law student. Since then, she has be found volunteering on the boards of nonprofit organizations and watching college football. worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been proWHAT INSPIRES YOU ABOUT YOUR WORK? moted to real estateALLYSON partner.

O’KEEFE, Just seeing what Cleveland has gone through in the time that I’ve 37 been here, there’s obvious“Young professionals who live downtown are so excited about the city,” said O’Keefe, a ly a lot of excitement around real estatePartner; development.

I started in 2004 when we were crazy Porter Columbus native who lived downtown for Wright 10 years before moving to Rocky River. “The ones busy with development. That was sort of the boom from ’04 through ’08. I saw it go through who aren’t from here are often more excited about it. When you move here from somewhere the downturn, then I saw it rise again, even stronger than before locally. else, you don’t take it for granted.”

Allyson O’Keefe started her legal career eer at Porter Wright in 2004 after comple completing etin ng a sumsumWhen O’Keefe is not working or spending time with her husband and two children, she can mer internship as a Case Western Reserve University law student. Since tthen, hen, she sh he has has WORKED ON there ARE MIXED-USE URBANnPROJECTS. IS MANY OF THE PROJECTS YOU be found volunteering on the boards of nonprofit organizations and watching college football. worked on many significant deals across ss Cleveland, including Flats East Bank, The The THAT AN AREA OF EXPERTISE? Metropolitan at the 9, Uptown in every University and Steelyard Commons, and rsity d has has ha s been be een proproro Yes, definitely. Real estate is extremely interesting because deal Circle is differWHAT INSPIRES YOU ABOUT YOUR WORK? moted to real estate ent. You can never get bored because there’s so partner. much variety there, from tax Just seeing what Cleveland has gone through in the time that I’ve been here, there’s obviousown are O’Keefe e, a “Young who live downtown so excited about the city,” said O’Keefe, credits to historic renovations, from professionals ground-up development to rehab, from ly a lot of excitement around real estate development. I started in 2004 when we were crazy Rive er. “The “T “The ones ones mixed-use to residential. Columbus native who lived downtown for 10 years before moving to Rocky River. busy with development. That was sort of the boom from ’04 through ’08. I saw it go through who aren’t from here are often more excited xcited about it. When you move here from m somewhere som somew ewhere ere the downturn, then I saw it rise again, even stronger than before locally. else, you LEADERSHIP don’t take it for granted.”

YOUR STYLE? HOW WOULD YOU DESCRIBE

CLEVELAND BUSINESS USINESS

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O’KeefeI expect is not working or spending timeI work, children, she can with her husband and two child dre en, sh he c he an I definitely believe in leadingWhen by example. the people withding whom MANY OF THE PROJECTS YOU WORKED ON ARE MIXED-USE URBAN PROJECTS. IS be found volunteering on the very boards off nonprofit and watching college collle eg ge football. foo fo ottball. my associates, to work hard, and they see me working hard.

For me, it’sorganizations all THAT AN AREA OF EXPERTISE? about working hard and doing good work.

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Shestronger has an than before locally.

HOW WOULD YOU DESCRIBE YOUR LEADERSHIP STYLE? uncanny ability to encourage the ‘adversaries’ in her negotiations to work in I definitely believe in leading by example. I expect the people with whom I work, OF THE PROJECTS YOU YOU WORKED Wsaid ORKED ON ON ARE ARE MIXED-USE MIXED-USE URBAN URBAN PROJECTS. PROJECTS. IS IS concert with her to achieve win/win MANY solutions to difficult problems,” my associates, to work hard, and they see me working very hard. For me, it’s all THAT AN AREA EXPERTISE? TISE?of the Scott Wolstein, CEO of Starwood Retail Partners andOF co-developer about working hard and doing good work. e is extremely interesting because every deal deal is differdifferrYes, definitely. Real estate Flats East Bank project. ent. You can never get bored there, red because there’s so much variety the ere, ffrom rom m ttax ax — Lee Chilcote WHAT OTHERS ARE SAYING: WHAT WAS IT LIKE TO WORK WITH O’KEEFE ON credits to historic renovations, tions, from ground-up development to rehab, re ehab, from fro om THE FLATS EAST BANK PROJECT? mixed-use to residential.

“Allyson is extremely bright and quick witted, but what truly distinguishes her

successfulInc. attorneys is reserved. her exceptional people skills. She has an Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications All Rights YOU DESCRIBE RIBE YOUR YOUR LEADERSHIP LEADERSHIP STYLE? STYLE? HOW WOULD ability to encourage the ‘adversaries’ in her negotiations to work in Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040

I definitely believe in leading ding by example. I expect the people with h whom whom m I work, rk concert with her to achieve win/win solutions to difficult problems,” said my associates, to work hard, and they see me working very hard hard. d. For For me, me e, it’s all a Scott Wolstein, CEO of Starwood Retail Partners and co-developer of the about working hard and doing good work.

Flats East Bank project.

— Lee Chilcote YING: WHAT WHAT WAS WAS IT IT LIKE LIKE TO TO WORK WORK WITH WITH O’KEEFE O’KEEFE ON ON WHAT OTHERS ARE SAYING: THE FLATS EAST BANK PROJECT? PROJECT? “Allyson is extremely bright right and quick witted, but what truly distinguishes dis stin nguish hes her hes

successfulInc. attorneys her exceptional people skills. skills s. She She has has an ha Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications All Rightsisreserved. ourage negotiatio ons to to work w wo orrk k in n ability to encourage the ‘adversaries’ in her negotiations Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040

hieve win/win solutions to difficult probl bllem ms,” s,” said concert with her to achieve problems,” co-deve evel velo ve elo el ope pe er off the the e Scott Wolstein, CEO off Starwood Retail Partners and co-developer ct.

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Lawyers who are diverse di•verse /de'vers,di'vers/ adj.

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Augsburger said. “People talk about roads and bridges, but there’s also water infrastructure, electricity inCONTINUED FROM PAGE 14 frastructure — all sorts of infrastrucThat’s an issue that has manufac- ture that needs to be addressed. turers ranging from global multina- Those are good for getting raw matetionals to smaller regional operators rials to manufacturers, getting finconcerned, especially if they either ished products out to markets and sell overseas or compete with foreign also good for people who make companies at home. That covers things that go into infrastructure, so infrastructure is very important to most U.S. manufacturers these days.

The corporate tax rate in the United manufacturers.”

That’s something that neither the States is too high, they say, making them less competitive internationally president nor Congress have deliv— and, meanwhile, a value-added-tax ered on either, so far.

And it’s the inaction, generally, that system abroad interacts with a U.S.-income-based profit system here to fur- might be the most disappointing thing to manufacturers, said Elizabeth ther steepen the hill they must climb.

Trump has promised sweeping Bartz, CEO of State and Federal Comchanges, which he has promised munications in Akron. Her firm does manufacturers would address these not lobby for its clients, but it works to concerns, and many in Congress are keep them in compliance with both on board. But, tax reform is still a state and federal lobbying and discloHerculean task for any president and sure laws. So, she knows a lot of lobbyany Congress, observers also point ist in the manufacturing sector both out. Moreover, the current group in here and around the country.

These days, federal lobbyists often Washington seems unable to do much even on smaller issues. Repub- have little to do. They’re in wait-andlicans can’t even seem to act on see-mode because they’re waiting to things on which they all seemingly work on specific initiatives, like tax previously agreed, like replacing the reform. But until they see specific plans, they often can’t Affordable Care Act. And, even on tax re- “I know nobody do much, Bartz said.

“We have a federal form, Trump and other who is a fan of government that has Republicans leading not been doing much the discussion seem- the tweets he except irritating peoingly have abandoned is posting.” ple,” she said. some issues near and “Nobody’s lobbying dear to small manufac- — Elizabeth Bartz, CEO — people start, but turers, including an of State and Federal there’s too much indeelimination of the es- Communications cision about what’s gotate tax and the establishment of a border adjustment tax ing on ... We’re not hearing (details). that would penalize Mexican im- We’re only hearing, ‘You’re going to ports, something often talked about love my tax reform’ or ‘You’re going to love my plan for health care,’ but during the campaign.

“That’s a huge disappointment then we never get that far,” Bartz said.

She also said her contacts are more and one that I can’t explain. Because it would have had the practical effect frustrated with the things the presiof putting a tariff of 20% on goods dent does that have nothing to do with that were coming into this country,” policy goals, especially the personal said Alan Tonelson, an economist battles he engages in via Twitter.

“I know nobody who is a fan of the and research fellow at the U.S. Business and Industry Council who tweets he is posting,” Bartz said.

To be fair, Trump is still in the first writes on protecting American inyear of a four-year term and still has dustry on his blog, RealityChek.

Trade protection is an area where time to deliver on his promises. Some Trump has not delivered so far, To- are more patient with him than others, but most say he himself built up expecnelson and others said.

NAFTA is still being discussed, but tations beyond what might have been the president has not taken action on reasonably expected — with promises border adjustment taxes, protecting such as "we’ll have so much winning, the U.S. steel industry, calling out you’ll get bored with winning.”

While most new presidents enjoy a China for currency manipulation or honeymoon period that is often acother trade issues.

“We’ve seen modest progress I companied by legislative victories, would say. But the progress has been Bartz said that Trump is frustrating surprising, because we haven’t seen observers not only with a lack of reany major trade policy changes as sults, but a lack of detailed plans that could even be debated, let alone put such,” Tonelson said.

Trump has gotten trade too mixed up for a vote in Congress.

Others, especially those who have up with other issues, he contended, such as linking China policies with backed the president all along, say that that companies help on the North while they’re frustrated, it’s more with Congress than with the president.

Korean nuclear controversy.

“This guy’s trying to do something “I thought that was a huge mistake … mainly for the manufacturing and he’s getting ridiculed, laughed at economy. But I also don’t think it fur- and joked at. I feel bad for him,” said thers the cause of world peace. It rep- Roger Sustar, CEO of Mentor-based resented, to me, a chance for China Fredon Corp.

Sustar said he’s been disappointed to string the president further along,” Tonelson said, “while continuing to a new health care law was not passed, or that other manufacturing initiaforestall U.S. trade actions.”

Outside of trade and taxes, another tives have not gotten much traction. area where Trump has promised ac- He said he worries the system is just tion is in U.S. infrastructure invest- broken and, though he has a lot of ments. Those, however, may now be faith in what he says is Trump’s canforced and guided by recent hurri- do attitude of a CEO, nothing of subcanes, rather than focused on replac- stance will get done.

“I’m hopeful,” Sustar said. “But I ing aging bridges and roads. But any infrastructure spending will be wel- really believe nothing’s going to get comed by manufacturers, Augsburg- done over the next three-and-a-half years. There’s too much fighting goer said.

“There’s also a lot of interest in in- ing on between Republicans, Demofrastructure. That’s something the crats and independents. They’re all president talked a lot about here,” screwball people.”

CRAIN’S CLEVELAND BUSINESS

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O C T O B E R 16 - 2 2 , 2 017

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PA G E 21

MANUFACTURING

Thinking outside the box is key to survival

By DOUGLAS J. GUTH clbfreelancer@crain.com

Since 1952, Mantua Manufacturing Co. has provided bedding support products to retail stores, hotels and government facilities. When Mantua’s margins started getting squeezed, the Avon-based company expanded its product line to offset challenges associated with commodity items, where customers see little difference between products coming from one manufacturer or another.

Mantua is still making bed frames and headboards, while also extending its reach into electric adjustable beds distributed to furniture stores and national chain mattress shops. Company president David Jaffe said the transition to an innovative business model re-energized a company set to clear $80 million in revenue this year.

“Bed frames have always been a commodity product, but as the world becomes bigger via the internet and people get more access to information, all products have this type of price competition and thus are commoditized,” said Jaffe. “You have to adapt if your business is selling a product that’s viewed as a commodity.”

The so-called “commodity box” is a worldwide phenomenon, according to Magnet, the Cleveland-based manufacturing advocacy and consulting group.

Nearly two-thirds of companies researched by the advocacy organization offer commodity products or services, a trend that keeps producers stuck in price-centric, buy-and-sell relationships with customers.

“Around 80% to 90% of all manufacturers are contract manufacturers, which by definition means they don’t control the design of the products they produce,” said Andrew Thomas, an associate professor of marketing and international business at the University of Akron. “You may just have one big company to work with that’s controlling your portfolio, so they can pit supplier against supplier and it becomes a downward spiral. If that big contract goes away, you’re really left holding the bag because the design of your business was to meet the needs of that customer.”

Thomas points to the recent DowDuPont merger as just one example of the type of market concentration that boxes in smaller manufacturing companies. Escaping this trap requires producers to pivot into new products and add value to existing goods and services.

“You’ve got to get these companies to be innovators and brand creators,” Thomas said. “Think about what you do well and where that might work somewhere else.”

UA’s Taylor Institute for Direct Marketing has partnered with Magnet to assist area manufacturers in finding customers and marketing their new wares. Overall, Thomas sees a reluctance to innovate among Ohio manufacturers — many of them multi-generational, family-owned businesses — accustomed to making products on a contract basis.

“They only know how to build stuff and take orders,” he said. “It’s like this all across the country. There’s a cultural hesitancy to break out of their comfort zone.”

Companies on the path to innovation start with internal market research, said Thomas, seeking new applications for current products alongside enhanced services and

support, extended warranties, and other areas that help distinguish them from competitors.

With help from Magnet, Mantua determined that adjustable electric beds would make the company more agile and buoy existing products.

“We already support a box spring and mattress, so let’s take that to the next level with adjustable beds,” said Jaffe. “Those (beds) still support mattresses, but have a higher value proposition because there’s more features and a design element with health benefits. You’re telling a value-added story rather than a price story.”

Mantua is also proactive in collaborating with customers on their specific

“You’ve got to get these companies to be innovators and brand creators. Think about what you do well and where that might work somewhere else.”

— Andrew Thomas, associate professor of marketing and international business at the University of Akron

needs. For the retailers the company sells to, this means offering rebates or giving salespeople additional training.

The customers of First Power Group in Twinsburg are utilities in need of equipment, maintenance and installation at their electrical substations.

Utility officials told owner Jack Harley

about the difficulty of opening high-voltage switches placed 20 or 30 feet off the ground. First Power Group responded with The Stinger, a tool that fits on the end of a “hot stick” and safely delivers lubricant to hard-toreach components.

The Stinger, introduced this month

following a year of field trials, was the eight-person company’s innovative answer to behemoths like General Electric moving into the field service space, Harley said.

“When these companies see a potential market they’re able to get it into it faster and better,” he said. “We can’t compete with them in a big way, so we have to find products that help utilities minimize their maintenance costs and time for power outages.”

Ultimately, breaking out of commoditized markets is about survival.

“If you’re not innovating, you’re slowly dying,” he said. “When you have competition, or products that can be duplicated, you have to innovate.”

“Ordnance Technology Service, Inc. supports the U.S. Navy with Commercial and Industrial Loans • Lines of Credit Commercial Real Estate Acquisitions & Refinancing Corporate Credit Cards • Treasury Management Services Business Online & Mobile Banking

components for undersea weapons programs. Because our company is very unique, ERIEBANK took the time to understand the challenges of our business and the responsibility to work through them with us.

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offering a program that was customized to our specific needs.

ERIEBANK is an integral part of our success. They are in business to be a long-term financial partner in our endeavors.”

— Jeff Allenb y

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PA G E 2 3

TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. Liens reported here are $10,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.

LIENS FILED JJ Musa Inc. 8502 Quincy Ave., Cleveland Date filed: June 2, 2017 Type: Not listed Amount: $3,232,576 JJ eGenio Education Solutions LLC 1301 12th St., Suite 2320, Cleveland Date filed: June 12, 2017 Type: Partnership Amount: $64,350 JJ Sports Focus Sporting Goods Inc. 6659 Pearl Road, Suite 103, Cleveland Date filed: June 12, 2017 Type: Employer’s withholding Amount: $63,228.74 JJ Management Solutions LLC 18 N. Main St., Suite 200, Chagrin Falls Date filed: June 12, 2017 Type: CIVP, partnership Amount: $58,302.24 JJ Sexton & Assoc. Inc. P.O. Box 347025, Cleveland Date filed: May 17, 2017 Type: Employer’s withholding Amount: $57,123.54 JJ E A Sports & Recreation Inc. 8111 Rockside Road, Suite 102, Cleveland Date filed: June 12, 2017 Type: Employer’s withholding Amount: $54,838.33 JJ LCP Finishing Solutions LLC 24816 Aurora Road, Suite F, Bedford Heights Date filed: May 17, 2017 Type: Employer’s withholding Amount: $48,122.48 JJ East Park Retirement Community LLC 6360 Elmdale Road, Brookpark Date filed: May 26, 2017 Type: Employer’s withholding Amount: $47,802.40 JJ D&D Lock Service LLC 7710 Ragall Parkway, Cleveland Date filed: May 26, 2017 Type: Employer’s withholding, unemployment Amount: $40,699.99 JJ Just Like Home LLC

13712 Bellaire Road, Cleveland Date filed: May 26, 2017 Type: Employer’s withholding Amount: $36,378.99 JJ Signature Interiors Inc.

13275 Strathmore Drive, Cleveland Date filed: May 17, 2017 Type: Unemployment, failure to file complete return, employer’s withholding, corporate income Amount: $34,254.92 JJ Amroc Construction Inc. 3210 Scranton Road, Cleveland Date filed: May 17, 2017 Type: CIVP, employer’s withholding Amount: $28,113.63 JJ Osto LLC 20595 Beachwood Drive, Rocky River Date filed: May 17, 2017 Type: Partnership Amount: $28,080 JJ Will Repair Inc.

2901 E. 65th St., Cleveland Date filed: June 6, 2017 Type: Employer’s withholding Amount: $26,446.58 JJ SJC Partners LLC

88 E. Belmeadow Lane, Chagrin Falls Date filed: May 17, 2017 Type: Employer’s withholding Amount: $21,846

JJ JHG Inc. 1337 W. 10th St., Cleveland Date filed: May 26, 2017 Type: Employer’s withholding, unemployment Amount: $15,042.67 JJ Canvas Specialty Manufacturing Co. 4045 St. Clair Ave., Cleveland Date filed: June 12, 2017 Type: Employer’s withholding Amount: $14,723.39 JJ Marrali Landscaping Inc. 4373 Prasse Road, South Euclid Date filed: May 17, 2017 Type: Employer’s withholding, corporate income, failure to file complete return Amount: $11,404.68 JJ Baker’s Bakery Inc. 22055 Lorain Road, Fairview Park Date filed: May, 17, 2017 Type: Employer’s withholding Amount: $10,983.82

LIENS RELEASED JJ Close to Home Child Development (two liens released) 3865 Carnegie Ave.; 4450 Cedar Ave., Cleveland Dates filed: Dec. 2, 2014; July 11, 2015 Date released: May 26, 2017 Type: Employer’s withholding, corporate income, unemployment Amounts: $227,920.98; $113,979.76 JJ 21st Century Concrete Construction 13925 Enterprise Ave., Cleveland Date filed: May 5, 2017 Date released: July 26, 2017 Type: Corporate income, unemployment Amount: $121,000.77 JJ Dunecraft P.O. Box 808 Chagrin Falls Date filed: Aug. 11, 2016 Date released: May 5, 2017 Type: Employer’s withholding, unemployment Amount: $103,852.44 JJ Lakeside Building Services Inc. 812 Huron Road, E., Suite 407, Cleveland Date filed: July 18, 2014 Date released: June 12, 2017 Type: Employer’s withholding, unemployment Amount: $74,689.15 JJ Pattea Kake EMBPD LLC 5040 Northfield Road, Mayfield Heights Date filed: May 20, 2016 Date released: May 17, 2017 Type: Employer’s withholding, failure to file complete return Amount: $53,548.70 JJ C M C & M Inc. 17109 S. Miles Road, Cleveland Date filed: Sept. 19, 2007 Date released: May 26, 2017 Type: Employer’s withholding, unemployment Amount: $15,588.89 JJ Blue Star Partners LLC 28020 Miles Road, Solon Date filed: Feb. 9, 2017 Date released: May 17, 2017 Type: Employer’s withholding Amount: $11,511.73 JJ Avon Pizza LLC

1260 Smith Court, Rocky River Date filed: April 4, 2014 Date released: May 17, 2017 Type: Employer’s withholding, unemployment Amount: $10,629.38

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

THE LIST

Largest Manufacturing Companies Ranked by Full-Time Equivalent Local Employees FTE EMPLOYEES THIS YEAR COMPANY

LOCAL

OHIO

PARENT COMPANY HEADQUARTERS

MANUFACTURING FACILITIES

PRODUCTS MADE LOCALLY

TOP LOCAL EXECUTIVE

1

General Motors Co., Detroit (313) 556-5000/www.gm.com

4,500

7,000

General Motors Co. Detroit

Lordstown Complex, Parma Metal Center

Chevrolet Cruze and vehicle parts

Rick Demuynck, plant manager, Lordstown Complex; Lamar Rucker, plant manager, Parma Metal Center

2

Sherwin-Williams Co., Cleveland (216) 566-2000/www.sherwin.com

4,325

NA

Sherwin-Williams Co. Cleveland

Bedford Heights

Paint

John G. Morikis president, CEO, chairman

3

Swagelok Co., Solon (440) 248-4600/www.swagelok.com

4,140

NA

Swagelok Co. Solon

Solon, Highland Heights, Strongsville

Tube fittings, valves, hoses, regulators, fluid systems components, assemblies

Arthur F. Anton chairman, president, CEO

Ford Motor Co., Dearborn (800) 392-3673/www.ford.com

3,381

NA

Ford Motor Co. Dearborn, Mich.

Avon Lake, Brook Park

E-Series strip chassis, F-650/750 mediumduty trucks, 3.5L EcoBoost and 3.7L Duratec engine

Kevin Heck, plant manager, Cleveland engine plant; Deborah Manzano, plant manager, Ohio assembly plant

5

Goodyear Tire & Rubber Co., Akron (330) 796-2121/www.goodyear.com

3,000

NA

Goodyear Tire & Rubber Co. Akron

Akron

Race tires

Richard J. Kramer chairman, CEO, president

6

Lincoln Electric, Euclid (216) 481-8100/www.lincolnelectric.com

2,680

2,710

Lincoln Electric Holdings Euclid

Euclid, Mentor

Welding and cutting systems

Christopher L. Mapes chairman, president, CEO

7

TimkenSteel Corp., Canton (330) 471-7000/http://timkensteel.com

2,503

2,597

TimkenSteel Corp.

Canton

Canton

Special bar quality (SBQ) steel and seamless mechanical tubing

Ward J. "Tim" Timken Jr. chairman, CEO, president

8

Nestle, Solon (440) 349-5757/www.nestleusa.com

2,438

3,600

Nestle S.A. Vevey, Switzerland

Solon

Stouffer's and Lean Cuisine frozen entrees

Paul Grimwood chairman, CEO

The Lubrizol Corp., Wickliffe (440) 943-4200/www.lubrizol.com

2,309

2,372

Berkshire Hathaway Inc. Omaha, Neb.

Avon Lake, Painesville

Lubricant additives for engine oils and other transportation fluids; industrial lubricants

Eric R. Schnur chairman, president, CEO

Arconic Inc., Cleveland (216) 641-3600/www.arconic.com

2,300

2,325

Arconic Inc. New York City

Cuyahoga Heights, Cleveland, Barberton, Canton, Niles

Aerospace structural components, commercial vehicle wheels, titanium ingot

Eric Roegner, president, GRP and Arconic Defense; Tim Myers, president, TCS; Merrick Murphy, president, AWTP; Jeremy Halford, president, ATEP

ArcelorMittal, Cleveland (216) 429-6000/www.usa.arcelormittal.com

2,165

3,003

ArcelorMittal Luxembourg

Cleveland, Warren

Steel

Mike Madar vice president, general manager

Avery Dennison, Mentor (440) 534-6000/www.averydennison.com

2,055

2,626

Avery Dennison Corp.

Pasadena, Calif.

Painesville, Mentor, Concord, Painesville Township

Pressure-sensitive adhesive label, packaging and graphic materials; pressuresensitive tapes; reflective sheeting

Nick Tucci, vice president and general manager, Label and Graphic Materials North America

13

The J.M. Smucker Co., Orrville (330) 682-3000/jmsmucker.com

1,985

2,406

The J.M. Smucker Co. Orrville

Orrville

Fruit spreads, ice cream toppings, syrups and foodservice items

Mark T. Smucker president, CEO

14

Rockwell Automation Inc., Mayfield Heights (440) 646-5000/rockwellautomation.com

1,812

1,914

Rockwell Automation Inc. Milwaukee

Twinsburg

Automation products

Frank Kulaszewicz senior vice president, architecture and software

1,800

2,900

Parker Hannifin Corp.

Mayfield Heights

Akron, Avon, Elyria, Fairlawn, Kent, Mentor, Ravenna

Motion and control technologies

Thomas L. Williams chairman, CEO

4

9 10 11 12

Hannifin Corp., Mayfield Heights 15 Parker (216) 896-3000/www.parker.com THE LIST

Largest Manufacturing Companies

YOUR BUSINESS IS OUR BUSINESS

Ranked by Full-Time Equivalent Local Employees

Â&#x2DC;Â&#x2014;Â?Â&#x160;Â&#x152;Â?Čą Â&#x160;Ä´Â&#x2018;Â&#x17D; ȹ Â&#x160;Â&#x2022;Â&#x2DC;Â&#x2014;Â&#x17D;¢ȹƸȹÂ&#x2013;Â&#x2013;Â&#x160;Â&#x2022;Â&#x2DC;Â&#x2014;Â&#x17D;¢Č&#x201C;Â&#x2013;Â&#x160;Â&#x2022;Â&#x2DC;Â&#x2014;Â&#x17D;¢Â&#x2014;Â&#x2DC;Â&#x;Â&#x2DC;Â?Â&#x2014;¢ǯÂ&#x152;Â&#x2DC;Â&#x2013;ȹƸȹĹ&#x2DC;Ĺ&#x2014;Ĺ&#x153;ÇŻĹ&#x2122;Ĺ&#x153;Ĺ&#x2122;ÇŻĹ&#x2013;Ĺ&#x2014;Ĺ&#x2013;Ĺ&#x2013;

FTE EMPLOYEES THIS YEAR COMPANY

PARENT COMPANY HEADQUARTERS

MANUFACTURING FACILITIES

LOCAL

OHIO

PRODUCTS MADE LOCALLY

TOP LOCAL EXECUTIVE

Schaeffler Group USA, Wooster (330) 264-4383/www.schaeffler.us

1,700

NA

Schaeffler Group Herzogenaurach, Germany

Wooster

Transmission system components, such as torque converters, hybrid modules, e-axles

Marc L. McGrath president, Automotive Americas

Scott Fetzer Co., Westlake (440) 892-3000/www.scottfetzer.com

1,324

1,803

Berkshire Hathaway Inc. Omaha, Neb.

Avon Lake, Bedford Heights, Chagrin Falls, Cleveland, Westlake, Wooster

Diversified manufacturer of products for the home, family and industry

Bob McBride president, CEO

Eaton, Beachwood (440) 523-5000/www.eaton.com

1,322

2,363

Eaton Corp.

Dublin, Ireland

Brooklyn, Parma, Euclid

Aerospace, electrical and hydraulic products

Craig Arnold chairman, CEO

Shearer's Foods LLC, Massillon (330) 834-4030/www.shearers.com

1,310

NA

Ontario Teachers' Pension Plan Ontario

Brewster, Massillon

Snack foods: potato chips, tortillas, extruded products (i.e. cheese curls)

Scott W. Smith interim CEO

20

Bridgestone Americas Inc., Akron (330) 379-7000/bridgestoneamericas.com

1,177

1,833

Bridgestone Americas Inc. Nashville, Tenn.

Akron

Racing tires

Nizar Trigui chief technology officer

21

The Timken Co., North Canton (234) 262-3000/www.timken.com

1,079

1,436

The Timken Co. Canton

Canton

Bearings

Richard G. Kyle president, CEO

RPM International Inc., Medina (330) 273-5090/www.rpminc.com

1,013

1,217

RPM International Inc. Medina

Cleveland, Medina, Euclid, Twinsburg

Roofing materials, sealants, adhesives, concrete admixtures and coatings, fluorescent colorants

Frank C. Sullivan chairman, CEO

23

PPG Industries Inc., Cleveland (412) 434-3131/www.ppg.com

945

945

PPG Industries Inc. Pittsburgh

Cleveland, Strongsville

Automotive OEM coatings

Stanley Zaharewicz plant manager

24

Associated Materials Inc., Cuyahoga Falls (330) 929-1811/associatedmaterials.com

930

950

Associated Materials Inc. Cuyahoga Falls

Cuyahoga Falls

Vinyl windows, replacement and new construction

Brian Strauss president, CEO

BWX Technologies Inc., Euclid (216) 912-3000/www.bwxt.com

930

930

BWX Technologies Inc. Lynchburg, Va.

Barberton, Euclid

Pressure vessels, steam generators, electro-mechanical components

Doug Paulson, general manager, BWXT Nuclear Operations Group Euclid; Jim Bittner, general manager, BWXT Nuclear Operations Group Barberton

26

PolyOne Corp., Avon Lake (440) 930-1000/www.polyone.com

799

1,079

PolyOne Corp.

Avon Lake

Avon Lake, Massillon, Norwalk, Berea, Barberton

Specialized polymer materials, services and solutions

Robert M. Patterson chairman, president, CEO

27

A. Schulman Inc., Fairlawn (330) 666-3751/www.aschulman.com

745

NA

A. Schulman Fairlawn, Ohio

Akron, Geneva, North Canton, North Kingsville

Thermoplastics and thermosets

Joseph M. Gingo chairman, CEO, president

28

Nordson Corp., Westlake (440) 892-1580/www.nordson.com

716

724

Nordson Corp.

Westlake

Amherst

Precision dispensing equipment for coatings and sealants

Michael F. Hilton president, CEO

29

Vitamix, Olmsted Township (800) 848-2649 /www.vitamix.com

702

702

Vitamix Olmsted Township

Olmsted Township, Strongsville

High-performance blending equipment for home and commercial use

Jodi L. Berg president, CEO

30

Pepperidge Farm, Willard (419) 933-2611 /www.pepperidgefarm.com

700

1,000

Campbell Soup Co. Camden, N.J.

Willard

Biscuits and crackers, Milano and Goldfish brands

Jeremy Jones director, Human Resources

16 17 18 19

22

24

RESEARCHED BY CHUCK SODER

Want the full version of this list Ă&#x2018; and every other Crain's list? Become a Data Member: CrainsCleveland.com/data The full digital list includes 47 companies and names of additional executives. Information is supplied by the companies. Send questions, corrections and suggestions to Chuck Soder: csoder@crain.com.

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ANALYSIS

List: Opioids haven’t caused manufacturers major HR pain

By CHUCK SODER csoder@crain.com @ChuckSoder

Northeast Ohio’s largest manufacturers tell us that hiring is getting harder — and drug abuse is one of the main reasons why it’s so hard.

But many of the businesses on our Largest Manufacturing Companies list say their hiring efforts haven’t been significantly hurt by opioid abuse, in particular.

While researching a Page 16 story about how drug abuse has affected local manufacturers, we asked the 47 companies on the full digital version of the list four optional multiple-choice questions on hiring challenges, including a few related to drugs. Here are the questions and their responses: Over the past 12 months, has it become easier or harder to hire new employees?

Of the 22 respondents, 14 said it’s gotten harder. Only one said it was getting easier. The other seven said it hadn’t changed much.

What are the largest hiring challenges the company has faced over the last 12 months (choose all that apply)?

Eleven of the 21 respondents picked “Applicants lacking technical

skills,” making it the most popular choice out of five options, but “Applicants not passing drug test” was a close second with 10. Eight picked “Too few applicants,” and two chose “Applicants lacking soft skills.”

Has the opioid epidemic had an impact on the company’s ability to hire new employees?

Eleven of the 23 respondents said “No” — by far the most popular answer out of five choices.

Seven said “Yes,” but they didn’t exactly shout it out loud: Only one picked the most extreme option: “Yes, a significant impact.” Just two picked “Yes, a moderate impact,” while four chose “Yes, a slight impact.” The other five picked “Not sure” (but three of those companies did choose “Applicants not passing drug tests” in the previous question).

Has the opioid epidemic had an impact on the company’s ability to manage and/or retain employees?

Four out of 22 respondents said “Yes.” Fourteen said “No” and the other four said “Not sure.”

But don’t go thinking that manufacturers aren’t at all worried about opioids. A few of them describe why they’re worried about drug abuse — including the use of opioids — in the story on Page 16.

And the companies in this survey don’t speak for all manufacturers.

For instance, the largest companies on the list were less likely to answer these questions, so they’re underrepresented. And the smallest manufacturers aren’t represented at all: They aren’t included on the extended list.

And there’s always the chance that some respondents weren’t willing to say their hiring efforts have been hurt by opioid abuse, though we did promise anonymity.

As for the list ...

General Motors is once again the largest manufacturer on the list, a spot it has held for several years.

The auto industry is well-represented, with Ford at No. 4, Goodyear at No. 5 and suppliers like The Timken Co., TimkenSteel, Schaeffler Group USA, ArtiFlex Manufacturing and Shiloh Industries throughout the list.

But the auto industry doesn’t dominate the list.

You’ll also find plenty of aerospace suppliers (like Arconic, Eaton and Sifco Industries) and packaged food companies (such as Nestle, J.M. Smucker, Shearer’s Foods and Pepperidge Farm).

Twenty-eight of the 47 companies on the full list are based in Northeast Ohio. Four are owned by foreign companies.

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AKRON

Neighborhood Watch

New blood is keeping North Hill pumping The scenic spot continues to attract immigrants, bringing the city its biggest resource: people

By DAN SHINGLER

About this series

dshingler@crain.com @DanShingler

We thought we knew a fair amount about Akron, which is the hometown of some of us at Crain’s. That is, until we started driving around with Akron planning director Jason Segedy, who agreed to take part in an ongoing series to show us his knowledge and passion for the city — one neighborhood at a time. This month, we look at North Hill, and Akron mayor Dan Horrigan, a longtime North Hill resident, comes along for the tour. With places exemplifying immigrants old and new, “The Hill” is one area of the city that’s growing.

North Hill is just doing what it’s always done.

The big neighborhood that sits mainly between the Gorge and Cascade Valley metro parks and state Route 8 has been an important part of Akron for about a century, though it’s been around longer than that.

It has always given what the city needed most, something more important than oats, rubber, tires or polymers. It has attracted more Akronites, of course, and it still does.

“North Hill is one of the only communities in Akron that’s been growing population-wise,” said Kyle Kutuchief, Akron program director for the John S. and James L. Knight Foundation.

Depending on how far back you go, you’d find North Hill full of the new arrivals from Italy, Ireland, central and eastern Europe, and, most recently, Nepal and Bhutan.

For a recent tour, we found a longtime resident named Horrigan: North Hill is where Akron mayor Dan Horrigan grew up and where he still lives.

It’s also home to former mayor Tom Sawyer and some other city leaders, Horrigan said.

“I live right over on North Howard Street,” Horrigan said.

He most recently lived across the street but pounced when his current home, which backs up to Akron’s famous Gorge Metro Park, became available a few years ago. Before that, he lived down the street, where his mother still resides. He’s about as steeped in North Hill as anyone could be.

“I’ve lived here almost 50 years,” said the 54-year-old mayor, who during our tour unexpectedly yelled “Hey!” out the car window.

“There goes my brother,” he explained.

But it’s more than nostalgia that keeps the city’s mayor in North Hill.

He loves the neighborhood, and it’s simply where he wants to live.

When he shows it off, you can see why. There are scenic sections of the Cuyahoga River separating the neighborhood from Cuyahoga Falls to the north, and the river is the foundation of the two parks that make much of North Hill one of the most picturesque parts of town.

“To anyone from Akron, all you have to do is say ‘the gorge,’ and they know it,” said Jason Segedy, director of planning and urban development, while overlooking a steep drop to the Cuyahoga near Riverside Drive.

“Look at this place. You could easily think you were in the middle of the Appalachian Mountains.”

The neighborhood’s — and the city’s — natural assets are not something Horrigan takes lightly. He’s working hard to remove a dam on the river, which would re-expose some of the original Cuyahoga Falls and some rapids, and help restore the health of the waterway, he said.

The Cuyahoga River is the foundation of the two parks, Gorge Metro Park and Cascade Valley Metro Park, that make much of North Hill one of the most picturesque parts of town. (Shane Wynn for Crain’s)

North Hill has long been a welcoming neighborhood to immigrants and newcomers, from those from Italy and Europe to Nepal and Bhutan.

It’s already a far cleaner river than it was back in the city’s industrial days.

“We were canoeing here about a year ago, and a smallmouth bass jumped right in the boat. That would have never happened years ago. It was kind of cool,” Segedy said.

While the river and parks might attract some longtime Akronites who know about the scenic sections along the north and western edges of North Hill, they are not what necessarily helped the neighborhood attract new residents over the decades.

People have come, like many new Americans, for opportunity. And they chose North Hill because it was welcoming to immigrants and, perhaps, because their own countrymen and women already had established communities there.

Growing population These days, many new arrivals are assisted by the International Institute of Akron. The nonprofit works with newcomers to help them be-

Akron mayor Dan Horrigan has lived in North Hill for 50 years. His current house backs up to Gorge Metro Park.

DeVitis Italian Market, on Tallmadge Avenue, was founded by an Italian immigrant. The third generation of the family runs it today.

come established and self-sufficient quickly, including a recent influx of Bhutanese and Nepalese refugees.

Those new residents are largely why North Hill, which has about 15,000 residents, has not only maintained its population but grown it, all while the rest of Akron has generally

been losing people, Kutuchief said.

They’re also the reason that rents are stable in the neighborhood, why housing values have kept up and why the Akron Public Schools have seen enrollments increase, Horrigan said.

Not that North Hill is a neighborhood of luxury homes — far from it.

It would not be the first place new immigrants bought a house if it were. But it does not have many vacant lots, like some worse-off parts of the city, and its housing stock is doing well, Segedy said.

“You’ll see some houses in disrepair, but you also see some houses that are very nice ... and I think demand is picking up in the neighborhood,” he said.

Like their predecessors, new immigrants also have dotted the neighborhood with new businesses, including the popular Nepali Kitchen on Cuyahoga Falls Avenue. Though not fancy, the restaurant is a favorite of local immigrants and many civic leaders.

But you can still find vestiges of earlier residents, too.

“Some of the best Italian food you’ll ever find — anywhere — is right there,” Segedy said, pointing to DeVitis Italian Market on Tallmadge Avenue.

That’s where, most mornings at least, you’ll find Rob DeVitis, the third generation of his family to own and run the place. It started back in the 1920s, he said, when his grandfather, Francesco, arrived in Akron from Italy and opened a fresh produce stand.

DeVitis watched his father, Angelo, expand it to its present form and has been working there ever since.

“My wife, Angela, and I have been working here for 45 years,” DeVitis said.

DeVitis said he’s seen the composition of the neighborhood change over the years, to be sure. The current round of immigrants don’t go so much for gourmet Italian food, he said, but business is still brisk and the market still does more than $3 million a year in sales.

“Fortunately for me, all my previous customers, they moved to the suburbs, but they still come in and are my current customers,” he said.

They can probably keep coming, too.

“We also have a fourth generation. My son is one of the managers — Nicholas,” DeVitis said. “And he has three sons, so there’s a good chance there will be a fifth generation as well.”

Still sticky That’s something else people such as Kutuchief like about the neighborhood — and a reason that places

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AKRON

like the Knight Foundation support it. While new waves of immigrants seem to keep coming, and many people end up moving out at some point, North Hill is still sticky. It keeps a lot of its longtime residents and businesses, and many of the people who live there are very engaged, Kutuchief said.

The Knight Foundation just granted $240,000 to the North Akron Community Development Corp., which works in North Hill as well as the nearby Cascade Valley and Chapel Hill neighborhoods.

North Akron CDC executive director John Ughrin is an example of the community’s engaged residents, all of whom help coordinate things such as North Hill’s 2015 Better Block event and this year’s opening of the Exchange House, a hostel and international community center on Elma Street.

“Our goals are the encouragement of neighborhood entrepreneurship, beautification and the creation of more meeting places, and more social and educational programming,” Ughrin said.

That includes operating what Ughrin calls a “business concierge

North Hill has affordable housing that makes it attractive to immigrants.

(Shane Wynn for Crain’s)

The Nepali Kitchen is among the new businesses that the latest wave of immigrants to North Hill have started.

service” to help connect entrepreneurs with the spaces they need.

“We've noted that sometimes commercial properties can enter a sort of limbo where it might be hard to discover the place or figure out how or if you can rent or buy it,” Ughrin told Crain’s for a story when the grant was announced in September.

“The owner might be out of con-

tion and others think North Hill is a good place for Akron to stake out some growth.

Kutuchief noted that between 2007 and 2013, the foreign-born population of Akron increased by more than a third, while the rest of the population dropped 1%.

“North High School was discussed as being potentially on the chopping block. Now it’s doing well

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tact for a variety of reasons, or perhaps it’s unclear who owns the property.

“We want to create a database of our neighborhood commercial properties, so that we can help fill them with businesses that want to be here in North Akron.”

With engaged residents, longtime businesses and continued populations increases, the Knight Founda-

because enrollment is up,” Kutuchief said.

There’s little wonder, then, why the Knight Foundation has chosen the neighborhood as an area of focus.

“It’s one of the three community development corps we just announced grants for. It’s definitely a targeted neighborhood,” Kutuchief said.

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NETWORKS CONTINUED FROM PAGE 1

To some extent, the two regional sports networks would be reaping the rewards no matter what, since even a 3.93 rating, as the 2015 Indians averaged, is a valuable property, considering the number of hours and days that STO can fill with the Tribe’s 162-game schedule.

But with both clubs playing for championships in the last year, the ratings bonanza has led to “revenue records on both our networks,” McGillicuddy said. (The senior vice president and GM wouldn’t specify how much the revenue has increased, however.)

The 2016-17 Cavs averaged a 7.56 rating in prime time, which, according to sources, is two to four ratings points better than the prime-time norms of the market’s four major networks — WOIO, WJW, WKYC and WEWS — during the same broadcast window.

The Indians’ numbers were even more staggering — a 9.22 prime-time norm that was 10.7% ahead of the club’s overall ratings average, and for STO, filled 27 more broadcasts during the night-time window (92, to the Cavs’ 65 on FSO).

“When you have those games that are being played, you’re offering up the most popular program in the market that day,” said Lee Berke, a Shaker Heights native who owns LHB Sports, Entertainment & Media, Inc., a New York-based sports media consulting firm. “It can be a ratings powerhouse.”

That’s certainly the case in Northeast Ohio, which loves a winner as much as anyone. And for FSO and STO, it’s led to what McGillicuddy describes as “very high” advertiser renewal rates, a widening partnership base and a 250% increase in video views across the networks’ digital platforms.

Jim Ganzer, the director of media strategy for The Adcom Group in Cleveland, said the monstrous ratings give the two regional sports networks “a lot of clout in the marketplace.”

And, just as importantly, he pointed out, Cavs and Indians broadcasts aren’t just a hit with one demographic.

“The younger audience, the Gen X, the millennial audience, they actually tune in and watch live TV, especially live sports,” Ganzer said. “You can replicate that to get around the fragmentation of the on-demand mentality. But sports delivers across the whole spectrum.”

RSN is ‘fifth network’ Here, the sports teams are such destination viewing that if you add up the gross ratings points for 2017 Indians broadcasts (the sum of all Tribe broadcasts in the regular season), the total is higher than the combined tally of seven of the eight TV programs that earned the highest ratings in the Cleveland market in 201617. Included in that group are such ratings forces as “The Big Bang Theory,” “NCIS,” “The Walking Dead,” “This Is Us” and “Game of Thrones.”

The fervor is reflected in a national study Fox did with Nielsen that measured how essential consumers view regional sports networks (RSN). The RSN viewers’ “passion scores” — basically, they said they “couldn’t live without” a network, or they “don’t need this at all” — were the highest of any channel, and topped the four major broadcast networks by a considerable margin. And when the study was widened to all respondents (not just RSN viewers), the regional sports networks’ “essential score” was higher than every cable network, and trailed only the four major networks (ABC, CBS, NBC and Fox).

SportsTime Ohio’s pre- and postgame shows air live from Progressive Field when the Indians play at home. (Photos by Ken Blaze for Crain’s)

Prime-time players 157: Combined Cavs and Indians prime-time broadcasts on Fox Sports Ohio and SportsTime Ohio in the most recent regular seasons.

9.22: Average Indians rating in prime time on STO during the 2017 season.

92: Tribe prime-time broadcasts on STO in 2017.

7.56: Average Cavs prime-time rating on FSO during the 2016-17 season.

From left, Jensen Lewis, Rick Manning and Al Pawlowski break down the Tribe’s playoff opener.

If the study was done only in Northeast Ohio, McGillicuddy believes the RSN scores would be even higher. It’s part of what he calls the “fifth-network concept,” which refers to the belief that in sports-mad markets such as Cleveland, the regional sports networks often are on the same level as, or above, the four broadcasting heavyweights.

That, in turn, is great for the teams, which command large rights fees (though the numbers pale in comparison to the national-TV deals).

In June 2015, FSO exercised a multiyear option to keep the Cavs on the network through at least the 2020-21 season. The deal, according to Crain’s sources, is one of the NBA’s five richest, and reports have pegged the value at $35 million to $38 million per year.

And when Fox Sports purchased SportsTime Ohio from the Cleveland Indians in December 2012 (a $230 million windfall for the Dolans), the network agreed to a rights extension that, according to The Plain Dealer, started at $40 million per year and kept the Tribe on the RSN for at least a decade.

Those costs are, of course, passed on to the consumer in the form of car-

riage fees, which for RSNs, are often in the range of $3 to $4 per subscriber, Berke said. AT&T — which came under scrutiny earlier this year for charging regional sports fees that, for some customers in the same region, differed wildly — charges a regional sports fee of $7.29 to the vast majority of its subscribers in Northeast Ohio.

The fees, which were introduced in 2015, have been so unpopular that in 2016, Comcast was sued by customers who said they were falsely told that the charges are taxes or otherwise mandated by the government.

The cable and satellite providers contend that the fees allow them to recoup the expensive carriage fees they’re paying for the RSNs. Aside from ESPN, which has a subscriber fee of nearly $8, RSNs generally have the second-largest fee in a market, Berke said.

And Jim Liberatore, who played a vital role in the Indians getting STO off the ground as the network’s president and CEO from 2006-13, believes the RSN’s carriage fees are too low.

“I would argue that the regional sports networks don’t get enough,” said Liberatore, who in July was promoted to president and CEO of Outdoor Sportsman Group, which operates a series of TV networks, magazines and websites. “Even if they’re the second-highest, if you add up their ratings in the course of the year, they’re higher than ESPN. You have 150 nights, let’s say, of programming that are live, family friendly, and you have no idea what the outcome is going to be.”

The RSNs, thus, are not as susceptible to cord-cutting, since even as the practice becomes more common, consumers who stream all of their broadcast content often still view live sports as a crucial part of their digital menu. FSO and STO, for instance, are available on all of the major over-thetop services, such as Sling, PlayStation Vue, DirecTV Now, YouTube TV, Hulu and Fubo. And those providers, as Berke points out, are “not getting a discount” on carriage fees.

“I think it goes back to this fifth-network concept,” said McGillicuddy, who was tabbed to run FSO and STO not long after Fox completed its acquisition of STO. “When people are making a decision about how

they’re going to consume television content, video content, one of the first questions they’re going to ask is, ‘Can I watch the Cavs on Fox Sports Ohio? Can I watch the Indians on SportsTime Ohio?’ ” Liberatore, McGillicuddy’s predecessor at STO, recalls being told by friends at Fox more than a decade ago that “there’s no way two regional sports

network will work in Cleveland.”

He takes quite a bit of satisfaction in knowing that it has — and, ironically, Fox is now the beneficiary of the night-to-night powerhouse.

“I think the biggest testament to fans is there is a Cleveland Indians regional sports network in Northeast Ohio,” Liberatore said. “It will always be carried because it has to be.”

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WINERIES CONTINUED FROM PAGE 1

There were just 89 licensed wine manufacturers in Ohio 10 years ago.

Comparing now with then, the number of Ohio wineries has grown more than 200%.

Ohio produced some 1.23 million gallons of wine in 2016, which equates to more than six million bottles.

That output ranks the state as the sixth-largest wine producer in the country. And it comes with Ohio ranking as the country’s ninth-largest grape producer with 1,500 acres dedicated to vineyards — a figure that would be larger if not for the polar vortexes in the harsh winters of 2012 and 2013 that decimated some vineyards.

“We’re really excited to see this industry expand and grow like this,” Eckstein said. “It may be small (in Ohio), but it’s powerful and mighty.”

Northeast Ohio: Wine Country Northeast Ohio plays a special role in the state’s wine industry.

The 15-county region comprises 110 of the state’s currently licensed wine manufacturers, or 40% of the statewide industry. Of the wineries that opened between 2012 and 2016, more than one-third are in Northeast Ohio. Many cluster around the most northeastern corner in areas abutting Lake Erie, like those in Ashtabula, Geauga and Lake counties that comprise the Grand River Valley, an American Viticultural Area.

Some of these wineries have been around for decades. But it’s only been in more recent years that the state has more actively promoted the region as a wine destination, said Nick Ferrante, the third-generation owner of Geneva’s Ferrante Winery & Ristorante.

The Ferrante family started its first winery in Collinwood in 1937, but opened the current operation, featuring a 45-acre vineyard, in 1980.

Ferrante said he grows about 10 kinds of grapes — it’s about 80% whites — and makes 20 different wine styles. He said total revenues for the business have been growing about 10% annually in recent years.

“The growth is steady,” Ferrante said. “I think people in general seem more excited about coming to this area and coming for wines we are producing. People want to go somewhere and buy the wine on premises.

And people are taking two-, threeday long vacations and spending more money close to home. I don’t see that stopping.”

Indeed, creating a “destination” is key for a winery’s success, said Clevelander David Popp, an enology and viticulture consultant running Bacchus Vineyard & Winery Services.

“The one common factor is wine quality is a given now,” Popp said. “So, above all things, a winery is an entertainment destination: You need to have a reason for people to go there.”

This is why many wineries band together on wine trails, open their own restaurants, provide entertainment and, in the case for Gervasi, build their own swanky villas for guests to stay at — which, consequently, have earned the hotel industry’s coveted AAA Four Diamond award.

The original vision by Gervasi founder Ted Swaldo was for a small winery on some overgrown, neglected farmland. But plans changed as Swaldo obliged customers who were clamoring to hold weddings on the property, which led to other developments along the way.

The sprawling Gervasi campus today includes an upscale Italian din-

Enology and viticulture consultant David Popp, left, is shown with The Vineyards of Chateau Hough founder Mansfield Frazier. In 2010, Frazier opened Cleveland’s only truly urban winery at the corner of Hough Avenue and East 66th Street. (Tim Harrison for Crain’s)

led to a lot of return on our investment.

It’s what people are asking for. That’s the biggest trend we’ve seen.”

Serious business

Marvin Foster applies labels by hand to freshly bottled Traminette at The Vineyards of Chateau Hough. Foster is the vineyard’s foreman.

ing room, an outdoor dining patio with lawn games, its own marketplace, a 5-acre lake, a Tuscan-style pavilion that will soon be expanded, a more casual wine bar and, of course, the ritzy guest suites, among other amenities.

Gervasi wouldn’t disclose revenues, but their director of marketing, Nichole Cardinale, said they’ve doubled in the past five years. The property now sees an average of 250,000 to 275,000 visitors annually.

Today, Gervasi makes 27 wines, with 21 bottled on site and six private-labeled in Italy. On average, the winery produces about 20,000 gallons of wine, or about 100,000 bottles, annually.

They’re actually planning to release a new, yet-to-be unveiled wine in November, a Franciacorta Rose made from 100% pinot noir grapes.

It’s basically like an Italian champagne — though it’d be blasphemous to call it that as true champagnes are made with grapes from the Champagne province of France.

The wines laid the foundation for the business’ seemingly explosive growth. But it’s the shaping of the business to consumer demands, led by some ambitious owners with deep pockets, that has made the entire operation such a success.

“We have evolved into a winery resort,” Cardinale said, “and that’s what’s

Andy Codospoti has been the designated winemaker at Gervasi Vineyard in Canton since its start in 2010. (Gervasi Winery photo)

The whole industry has been on a steady growth path since the economic downturn, said Edward Trebets, director of the wine degree program at Kent State University’s Ashtabula campus.

“While a lot of industries took a hit during the recession, our industry was either stable or increased, depending on the winery,” he said.

“Coming out of that, you’re getting some serious entrepreneurs putting millions into wineries. That’s happening in Ohio now. My prediction is, in the next five to 10 years, it will swing toward those just wanting to invest.”

In terms of the consumer interest, experts chalk up the growth there to a variety of factors. What seems to stand out most of all is the farm-totable movement, which has generally made people more interested in where their food and drink comes from, leading consumers to seek their booze right from the source.

That same movement has equally lifted the craft beer industry as well.

Marketing plays a huge part, Trebets said. The state and individual winemakers are doing better at that. So with Ohio, and Northeast Ohio in particular, becoming more widely known for its wines, and a consumer base clamoring for more, Trebets sees the wine craze only continuing to grow.

If he didn’t, he probably wouldn’t be making wine on his own. Besides teaching, Trebets makes wine under two brands, Muddy Paw, where proceeds go to the Geauga County Humane Society, and Urban Vintner in Willoughby. By the end of this year, he expects to have produced about 6,000 bottles in total.

In Cleveland, Mansfield Frazier runs the city’s only truly urban winery in The Vineyards of Chateau Hough.

Located at the corner of Hough Avenue and East 66th Street, the operation includes a vineyard a little smaller than 1 acre and a small biocellar in a refurbished barn on the lot.

The winery, which opened in 2010 with $15,000 from a ReImagining Cleveland grant, is actually owned by

Frazier’s nonprofit Neighborhood Solutions Inc. The point of the nonprofit, explained Frazier, a former federal convict, is to provide steady, paying work to other formerly incarcerated people (there’s a halfway house about a quarter-mile away), and the winery was a way to create those jobs while tying them to a high-value crop: wine grapes.

It also makes use of an otherwise vacant property on Cleveland’s East Side.

“We want to recreate the black middle class,” said Frazier, who also lives near the property. “We want to help, but we don’t want to be armslength liberals. We want to live where the problems are.”

The winery has been producing about 1,000 bottles of wine a year in six different styles, though they’ve been handling bottling at a location in Solon.

The finished wine has been given away, usually to donors. But that Hough name has been gaining some recognition, having won some county fair awards.

The winery is now at an exciting juncture. This season marks the first time Hough’s wines were bottled on its property.

Meanwhile, Hough has met the criteria for a winery license and is simply awaiting to receive it from the state — they’re one of those pending applicants — which will allow them to start selling their wine to customers. That’s something Frazier has been working toward for the past seven years, noting he’s “exhausted,” but excited. Grant dollars have mostly kept the operation functioning, but Frazier and his wife have used their personal funds through the years to close financing gaps.

“There was no way we were going to let this fail,” he said.

Once sales start coming in, the expectation is Hough will become profitable and self-funded.

“That’s the plan,” Frazier said. “And then I can stop going around rattling my tin cup.”

That should lead to an expanded winery with on-site tastings that will create more jobs and, if Frazier gets his wish, will lead to more vineyards in vacant city lots.

“Demand is absolutely high right now,” said Popp, who’s also working with Frazier. “If you do the right thing, and you market correctly, you won’t go out of business. Very few do.”

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PA G E 31

Claudia Coulton

Professor of Urban Social Research, CWRU Inspired by Martin Luther King’s Poor People’s Campaign, Claudia Coulton joined the fight against urban poverty back when she was a sociology student at Ohio Wesleyan University. She thought of herself as a radical, but not the kind “who could run for public office or lead marches.” She admits that she fits the stereotype of a quiet, numbers person. So she decided to address the problem the best way she knew how: by collecting data and using it to hunt for solutions. Coulton, a faculty member at Case Western Reserve University since 1978, founded the Center on Urban Poverty and Community Development roughly a decade later. Since then, she and her colleagues have built multiple databases that serve as weapons in the war on poverty. They’ve studied issues like housing, health and child development on the neighborhood level in Cleveland. Insights from those databases — portions of which are accessible at povertycenter.case.edu — have been used to fight foreclosures, help homeless parents and create better bus routes. — Chuck Soder

Five things New grandmother Her grandson just started walking.

I want to ride my bicycle Coulton often rides through Cuyahoga Valley National Park, near her home in Shaker Heights.

The word data — singular or plural?

“It’s ‘data are,’ not ‘data is,” she said.

Then she hedged: “You know how language changes due to use? It’s now acceptable to do either.”

Just got back from China She visited Guiyang, a city she’d never heard of. She was amazed at how big it was.

Woman of the people When Coulton visits a foreign country, she likes to meet regular people and see regular stuff.

Lunch spot Michelson and Morley 11038 Bellflower Road, Cleveland

The meal Grilled vegetable couscous and soda water; artichoke pesto flatbread and Diet Pepsi

The vibe It’s an upscale lunch spot on the Case Western Reserve University campus that serves salads, sandwiches and flatbreads. They’re big on using local ingredients and sustainable practices. The place is named after a famous physics experiment that took place on campus in 1887.

The bill $26.89 plus tip

There are many problems in the world you could’ve focused on.

What drew you to poverty?

My mother was very concerned about poverty. She didn’t work in the field.

She actually didn’t work outside the home. But she was very cognizant of inequality and people she didn’t think were getting a fair chance. She would comment on things like that and point them out. I came into it sensitized to those issues.

At what point did you say to yourself, “Data might be able to find solutions to some of those problems?”

I worked as a social worker in Columbus. That was just further motivation to not just put Band-Aids on problems. Because a lot of times as a social worker all you can do is help somebody pick up the pieces of their life after they’ve been battered by something bigger than themselves and out of their control. That further drove me to how I could contribute to having a bigger-picture solution. I’m not the kind of personality who could run for public office or lead marches, being a more quiet person. I’m a numbers person. I always loved math and statistics. So that just seemed to be the right path for me.

Can you give an example of one way this data has been used to solve something specific?

One of the most important discoveries recently has been the relationship between vacant housing and lead poisoning, and vacant housing and crime. You can really find the hot spots. You can really point to where conditions are worsening. You can point to how having one vacant house can spill over into having more vacant houses.

The vacant housing data — was that used in a specific project?

Community Development Corporations, they use that information all the time to decide “What street am I going to start working on?” “Which houses should we recommend the city prioritize for demolition?” Also, we worked with the Thriving Communities Institute, the (Cuyahoga) Land Bank and other partners to use that data to advocate for the U.S. Treasury to direct funds for demolition — the Hardest Hit Funds. Those are just the two opposite extremes of how the data are used.

Can you remember a situation where data pushed you to change your own view?

I used to have, I guess you might call it a bias or an opinion, that the best way to reach families and children was to set up services in their neighborhoods close to them. ...

Then we started doing a lot of research. We discovered that there’s a huge amount of residential mobility, especially in young families. ... So it means that neighborhood solutions are going to miss a lot of people. It’s just not the way people live. If I’m being pushed to enroll in this early childhood program by the system, and then I move, there are now barriers to me getting services — that’s not a good thing. I think my eyes were opened about setting up boundaries and zones and trying to keep people within those.

So maybe some part of that idea still works, but you might have to bend those rules to make it work.

Now the harder question is, “How do you get the benefits of working in a smaller community but also deal with a highly mobile population?”

How else could this data be used, be it by nonprofits or even businesses?

One example is working with tech entrepreneurs or startups. They might want to make apps. We’re working with a big coalition of partners to have something citizens could use when they’re looking at a house to get some risk score on adverse health conditions in that house. We would never reveal that there was a child with a health problem in that house.

It’s more, how can you mine data of that type to show that this type of house contributes to asthma?

You’re not only a researcher, but you’re also a relationship builder, getting the data and getting people to use the data. As a quiet numbers person, at some point did you have to say, “Alright, I’m going to have to come out of my shell.”

This goes back to having a master’s degree in sociology. In social work school, even if you’re a quiet person, you’re really taught to pay attention to what’s in it for other people and taking their point of view. ... I guess you could say I went to school for that. If I had just done the numbers and coding or something, it would be really easy to stay in the office.

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