Crain's Cleveland Business

VOL. 38, NO. 51

DECEMBER 18 - 24, 2017

CLEVELAND BUSINESS

NEWSMAKERS OF THE YEAR STORIES, PAGES 13-20

Entire contents © 2017 by Crain Communications Inc.

Illustration by Daniel Zakroczemski for Crain’s

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TECH MATTERS The intern advantage I n just a couple weeks, the new year will eclipse 2017, students will be streaming back onto college campuses, and businesses will be ramping up their first-quarter priorities — which include internship recruiting. The search for interns begins in January and peaks in March, followed by a small second bump in September, according to Burning Glass Technologies, a labor-market data research firm.

Akron-based Goodyear Tire & Rubber Co. falls into the latter time frame, which gives that global tire manufacturer ample time to curate the following summer’s group of bright and motivated interns from local and national colleges.

“Goodyear has developed a very strong internship program over the last several years,” said Tifanie Botzer, Goodyear’s manager of Global Manufacturing IT Systems and intern mentor.

In IT alone, Goodyear accepts about 20 paid full-time interns who, from May through August, gain experience in such areas as business process analysis, applications support and development, business intelligence, IT infrastructure and cybersecurity. The internship program serves as the main pipeline to the IT Development Program, which accepts about five to seven individuals per year in three, yearlong rotations within those tech-specific focus areas.

(Goodyear also offers internship and development programs across other departments.)

“It is a great way to have a 10- to 12-week interview with early associates who we can retain within the organization,” Botzer said.

There’s a lot of value in seeing how interns collaborate with their teams and how they perform, she said.

“For the interns themselves, it is also a fantastic development opportunity,” Botzer said. “They have the chance to build upon their classroom learning in an industry-leading organization, be mentored by experienced subject matter experts, work on current projects similar to other Goodyear associates, interact with business leaders through roundtables and networking events, and put themselves in an excellent position to potentially build into full-time associates.”

Internship programs are valuable to employers for a multitude of reasons, primarily serving as mechanisms for talent incubation and project work help. Companies with internship programs also benefit from the added exposure to local colleges and universities, according to ERC and NOCHE’s 2017 Intern & Recent Graduate Pay Rates & Practices Survey.

“Internship programs are more than a ‘try before you buy.’ We’ve started to see a movement

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From left, Louie Gigliotti, a Goodyear IT Development Program associate; Tifanie Botzer, Goodyear Global Manufacturing IT Systems manager and intern mentor; and Tom Petras, graduate of the Goodyear IT Development Program and senior business process analyst, discuss possible business applications for modern technology, such as mixed reality.

“Internship programs are more than a ‘try before you buy.’ We’ve started to see a movement away from the traditional use of interns for data entry or filing, to companies and organizations looking at internship programs as an investment in workforce development.”

— Margaret Brinich, manager of surveys and research at ERC away from the traditional use of interns for data entry or filing, to companies and organizations looking at internship programs as an investment in workforce development,” said Margaret Brinich, manager of surveys and research at ERC. At Richfield-based OEC, for example, interns work on production code as part of the application development team, said Jennifer Schee, human resources director of the company, which makes ecommerce software for automotive dealerships. “We typically hire 40% of our interns,” added senior recruiter Amy Jacko.

Throughout Northeast Ohio, various efforts are underway to facilitate strong internship programs.

NOCHE, or the Northeast Ohio Council on Higher Education, connects businesses with potential interns, co-ops and jobs through its online Northeast Ohio Talent Exchange matching platform.

Meanwhile, the third annual Cleveland Internship Summit will be held Feb. 27 at Corporate College East, at which businesses and educators will convene to discuss ways to in-

crease the number and quality of internship opportunities in the region, said Shana Marbury, general counsel and senior vice president of education and workforce at the Greater Cleveland Partnership. Key issues to be discussed include generational diversity in the workplace, cross-generational collaboration, international student recruitment, intern hiring and workplace preparedness, pay and legal Marbury issues associated with internship recruitment.

Greater Cleveland Partnership is ramping up its online GCP Internship Central site, which it says is a “one-stop” shop for employers and potential interns. The site features guidebooks for employers on how to create and manage internship programs and resources for students on how to search for, apply and maximize their internship experience.

“We want to provide information that makes it easier and more efficient for companies and students,” Marbury said.

Giving back through mentorship A strong culture of mentorship within an organization is key to attracting and retaining young talent. At Beachwood-based Eaton Corp., various programs are in place to connect interns and new hires with professionals and leaders.

Joanne A. Smith, manager of Early Talent Programs and Intern & Co-Op, explains in her own words how and why these mentorship programs are an Smith asset to the global power management company: BUDDY SYSTEM: Our Intern Buddy program is an informal program created to provide an opportunity for new hires to start to network and build professional relationships with other future talent. This not only welcomes them to Eaton, but it enables the interns to determine if Eaton is the right choice for their career. Interns are matched up with a “buddy,” or Leadership Development Program participant who is a recently hired full-time employee. If there is not a Leadership Development Program participant at their location, we then look for other common areas for them to connect, such as an alumnus of their school or member of a national diversity program. We provide the Eaton mentors with specific guidelines as well as talking points to support the new hire. The goal is for the mentor to reach out immediately to the intern and then meet with them on a regular basis.

PROFESSIONAL DEVELOPMENT: Early Talent program managers also assign “buddies” to incoming new Leadership Development Program hires.

Our IT program manager for the full-time hires, Nina Erney, matches second- and third-year Leadership Development Program participants with senior leaders, providing them more advanced support and guidance. Outside of the mentoring available to interns and Leadership Development Program participants who are early in their career, Eaton also has a formal mentoring program for professionals further down the career track.

THE BOTTOM LINE: The Intern Buddy program provides us another touchpoint with the intern and feedback in regards to potential next steps for the intern at Eaton. The Leadership Development Program participants are thankful for being given a leadership role as an informal mentor, and the interns welcome the resource provided by their buddy.

DEC. 23

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IHE Plug-A-Thon at the IHE North American Connectathon: Huntington Convention Center of Cleveland, 300 Erieside Ave., and HIMSS Innovation Center, 1 St. Clair Ave. NE, Cleveland. Four new plug-a-thon tracks were added to the IHE North American Connectathon: mHealth; Blockchain - Healthcare; Devices on FHIR; and Internet of Things - Medical. Each track explores new capabilities for products to communicate with each other across IT space within the health care industry. Info: iheusa.org/ihe-connectathon-registration

Free StartMart coworking day: 9 a.m. to 5 p.m., 50 Public Square, Cleveland. Step away from the coffee shop or home office for a day, and see what StartMart, a startup and coworking community, is all about.

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Hospitals see increase in community benefit

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

access emergency rooms more regularly, he said. Summa’s Medicaid shortfall totals increased by more than 40% between 2015 and 2016.

The payer mix, which is heavily Medicare and Medicaid patients, has also attributed to Medicaid shortfall’s growing portion of community benefit.

Summa is continuing to right-size the organization, control expenses and improve operating performance, Deveny said, “because we can’t always go back to the well and ask for more. We understand the governor’s position, we understand where the state’s at from a revenue standpoint is that they’ve got limited resources. So we’ve got accountability to be good stewards of the resources that we get and that we’re provided to

take care of this population.�

The opioid epidemic has also helped drive up the Medicaid shortfall amount, he said.

Heidi Gartland, vice president of government and community relations for University Hospitals, agreed, noting that the crisis has driven more patients to come seek care.

UH’s Medicaid shortfall grew by more than 24% between 2015 and 2016.

The region’s infant mortality rate is also contributing to the rise, as babies born too early and too sick can be costly to care for, she said. To help address this, UH has a program that connects pregnant women and new mothers to resources. Programs like this, Gartland said, are important pieces of the community benefit.

“We really see this $304 million of investment as investment into the future of the health and wellness,� she said. “We really want to keep people as healthy as they can so it’s not about provision of care. It’s more about the provision of trying to really invest in population health and community health and wellness.�

Glass said that depending on Medicaid policy decisions, he expects to see the Medicaid shortfall bucket of community benefit continue to increase. “As long as these Medicaid programs are in place in their current form, I expect to see the losses continue to grow,� he said, “because we really are not seeing any signs of getting increases from the state in the rates that we get paid for Medicaid.�

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Hospitals are having to cover more of the cost of caring for Medicaid patients, and that growing figure is being increasingly reflected in their community benefit reports.

Community benefit reports are important tools for hospital systems nationwide, as they are useful in proving their worth to the communities they serve and as a defense for their tax-exempt status. Traditionally, hospitals’ community benefit totals had largely been comprised of the free care they provided to the uninsured, but the coverage expansion made possible by the Affordable Care Act dramatically reduced those figures.

While many saw an increased number of insured patients access their systems, rarely does the coverage, especially Medicaid, cover the full cost of care. That shortfall is driving the increase in the amount of community benefit they report. “Is that where we’re seeing the biggest bucket? Yes,� said Tim Jarm, president and CEO of the Center for Health Affairs, an advocacy group for Northeast Ohio’s hospitals. “Because of the expansion of Medicaid, patients who were traditionally self-pay charity care went (to) coverage with Medicaid, of which we’re not getting paid cost.�

Summa Health System, Cleveland Clinic and University Hospitals all increased their community benefit totals in 2016, according to documents that show the value they report for their contributions to the community.

Akron-based Summa Health System reported a modest increase in its community benefit between 2015 and 2016, moving from $95.9 million to $100.3 million.

University Hospitals and the Cleveland Clinic, however, saw greater community benefit growth of nearly 11% and 17%, respectively.

UH reported $304 million and the Clinic reported $808.7 million in community benefit.

All three saw double-digit percent increases in their total spend on Medicaid shortfall. Changes in the other buckets of community benefit — education, research, charity care and more — varied by system. Because it a public health system, MetroHealth is not required to report its community benefit totals as the other nonprofit health systems are.

The Center for Health Affairs, which represents 36 hospitals in nine Northeast Ohio counties, calculated the total community benefit of hospitals in the region as more than $1.5 billion. Medicaid shortfall accounts for about 27% of that, according to numbers from the center.

The state’s Medicaid expansion initially contributed to the growth in Medicaid shortfall, said Steve Glass, the Clinic’s chief financial officer.

Now, the biggest driver of that growth is inflation. As costs to provide care climb, the reimbursement rate has been going down, he said. Just last month, the state delayed a proposed rule that would have cut hospital rates by 5%. “The expansion has not grown over the last year,� Glass said. “We

saw that several years ago, but now that you have a larger population of individuals that are getting access to their care through Medicaid, it has had a profound impact on the growth in these losses because you have that compounding effect of inflation on expenses, but you’re getting cuts.�

While it’s great that Medicaid patients have access to care that hospitals are able to provide, Glass said that “unfortunately,� hospitals across Ohio lose money on Medicaid patients that come in for services.

The Clinic’s Medicaid shortfall grew by 35% between 2015 and 2016.

The Medicaid population is a “tougher, tougher population,� said Dr. Cliff Deveny, interim CEO of Summa Health. They tend to use services more, often require readmission and

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Flo usually sells people on insurance, but now she wants them to buy into a career.

A new initiative by The Progressive Corp. is taking a different approach to recruiting as the company looks to hire 7,500 people nationwide in 2018.

That’s the most jobs Progressive has projected to fill in a given year in recent memory, if not ever.

That’s special in its own right and signals some strong and steady growth for the company. (It’s worth noting that a bit less than half of those new hires have translated to net job growth on average over the past three years.)

But the related recruiting campaign, which comes with a new promotional video, underscores a strategy aimed at addressing a challenge increasingly faced by finance companies nowadays: the ongoing battle for top talent.

As part of its new ReThinking Progressive campaign, the Mayfield Village-based insurance company has rolled out a short video — which only briefly includes the quirky corporate mascot who’s been starring in commercials for a decade — intended to woo potential employees as the company battles tighter competition for top talent, particularly for more tech-savvy prospects that are usually drawn to ambitious, industry-disrupting startups and mega-companies like Google and Facebook in Silicon Valley.

Job hunters of that sort probably aren’t overwhelmingly thinking about working at an insurance company based in a Cleveland suburb.

The two-minute video touts working at Progressive and in the insurance sector as more interesting and exciting than perhaps some people might consider. “You may think insurance sounds boring,” says the video early on. “But we see things differently.”

The video illustrates a fun and inclusive company culture — there’s footage of company events, a blacklight dance party, basketball competitions and a guy crowdsurfing across the screen at one point. It flaunts a variety of fancy offices and promotes an innovative, technology-driven business. One clip shows a man with what appears to be a VR headset on pinching at the air with the caption “We’re not afraid to nerd out in public.”

“At the end of the day, the rebrand and rethink Progressive campaigns at the core are about showing what our culture is all about,” said Progressive recruiting manager Erin Hendrick. “It’s something we sometimes struggle to put into words. We’re inclusive, innovative and flexible. We say, ‘Come for a job, and stay for a career.’ ”

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A closer look inside the company shows Progressive has clearly been on a steady growth path in terms of people and revenues.

Hendrick said the company hired 6,500 people this year. There were about 6,800 people hired in 2016, about 5,000 people in 2015, and about 3,500 people in 2014.

The Mayfield Village-based insurance giant looks to hire 7,500 people nationwide by 2018. (Contributed photo)

According to company filings, the business closed 2016 with 31,721 employees. They ended 2015 with 28,580 and 2014 with 26,501. Today, Progressive counts about 34,000 total employees (and a network of 38,000 independent insurance agents).

Going by those numbers, approximately 2,279 new net jobs were created in 2017, with about 3,141 jobs added in 2016 and about 2,079 added in 2015.

That means about 35% of the new hires from this year, 46% of the new hires last year and 59% of hires in 2015 translated to new, net jobs.

A spokesperson said it’s too early to tell how many of those projected hires for next year will translate to overall job increases.

But those approximate figures show that over the last three years, an average of about 46% of each year’s class of new recruits has translated to new jobs.

Going by that estimate, Progressive will likely add somewhere around 3,450 new jobs in 2018, which would put Progressive at roughly 37,450 people at the end of next year.

In terms of finances, Progressive ended 2016 with $23.4 billion in revenues. They logged $20.8 billion in 2015 and $19.3 billion in 2014.

So revenues grew 12.5% last year and 7.7% the prior year.

At the end of the third quarter, Progressive marked revenues of $19.7 billion, trending about 14% ahead of the same period last year.

Separately from these new recruiting plans, in October, the company announced it was mulling expansion plans that could add a new building in Highland Heights and more than 2,100 jobs in the region.

While the company is growing across all business lines, seeing a need for more human resources in its hometown and across the country, there’s a concerted effort to draw more tech types with the new recruitment campaign.

Targeting techie talent The video’s YouTube page even prompts “techies who love solving problems” to find the hidden Easter eggs in the video to win a $1,000 gift card for Newegg.com, an online retailer for computer components and electronics that’s a popular site with techies (there will be other offers for runners-up). Easter eggs in gaming culture refer to secrets and inside jokes that developers intentionally leave for players to find. The video was posted on Dec. 7, but there’s no

hard timeline for when the contest portion ends.

Hendrick said Progressive is taking this recruiting approach, punctuated this year by that video, because the “days of post and pray are over,” particularly as the company seeks job seekers with tech backgrounds who tend to yearn for jobs on the coasts.

“I think what differentiates Progressive from some tech giants on the coast is you can still do really interesting work,” Hendrick said. “While our industry isn’t viewed as ‘sexy,’ we are in a very, very competitive industry.”

While there’s an underlying goal of drawing more people with backgrounds in technology, that’s not the only target demographic. After all, of those 7,500 jobs — 1,300 of which are estimated to be placed in Northeast Ohio — the open positions are across the board. The majority will be in customer care, customer service and sales roles (Progressive doesn’t do outbound sales calling itself, though), Hendrick said. Other jobs range from data scientists and developers to other marketing and recruiting positions.

“You don’t have to be a data scientist. You can have that mindset and still go through the challenge on your own,” Hendrick said. “So, yes, the audience can be anyone, but there is definitely that more secondary target audience of tech and analytical talent.”

Other finance-based industries are eagerly clamoring for not just the best recruits, but those with those tech backgrounds as work in data science and app development experience are highly sought after. Large and midsize players in the accounting industry in Northeast Ohio and across the country report heightened level of competition for people that’s creating a veritable war for talent as firms battle not only against themselves but against those Silicon Valley companies.

That’s driving them to recruit people considering accounting careers before they finish high school. Others are creating compelling incentive packages, like PricewaterhouseCoopers, which started a program in recent years to pay down new hires’ student loan debt.

“We are not alone in that there’s some pretty serious competition for the talent we need,” Hendrick said.

“And working in insurance isn’t always on that list of dream jobs. We aren’t always top of mind when people are job hunting. So we want to get ahead of that.”

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State ‘claws back’ at awarded incentives

By JAY MILLER jmiller@crain.com @millerjh

The state of Ohio is citing nine Northeast Ohio companies for failing to live up to the job creation commitments they made when they accepted state financial incentives.

They are among 59 firms statewide that the office of Ohio Attorney General Mike DeWine found did not come sufficiently close to meeting the agreements they made when they accepted state financial incentives. In its annual report on business compliance with state economic development awards, the AG’s office reviewed 272 incentive awards that had their performance period ending in 2016.

It found that 78.3% substantially complied with the agreements the companies had made with the state.

When companies fall short of their commitments, the Ohio Development Services Agency (ODSA) seeks to “clawback” all or a portion of the public investment.

However, at least one company is disputing its spot on the AG’s list.

Republic Steel Co. made the list for not meeting its job creation pledge for a $500,000 economic development contingency grant at its plant in Lorain. The grants are awarded to assist with infrastructure improvements. The Republic Steel grant helped financially with the construction of a new melt shop, which returns scrap steel back to a molten state to create new steel products.

A condition of the 2012 grant was that the company would create 449 jobs and retain 100 jobs within four years. The AG report records the company as having no employees at the end of 2016, neither the jobs it said it would create nor the jobs it said it would retain. The report indicates that ODSA was seeking repayment of $166,667 from Republic.

Elizabeth Evans, executive vice president and general counsel of the Canton-based steel maker, said the company was not aware it was on the AG’s list of noncompliant companies until contacted by Crain’s, though it was aware of ODSA’s demand for the repayment. In a June 5 letter, executive vice president for human relations Robert Koury sought a waiver of

the clawback provision.

Evans said the company ended up investing more than $120 million to build the melt shop in Lorain, nearly double the $57 million it originally pledged to ODSA. It built employment there to a high of 743 people in 2014 before the operation spiraled down due to business conditions in the steel industry. The plant was idled in 2016, though Republic has been working with a partner to reopen the operation.

In response to Republic’s June 5 letter, on July 7 ODSA sent Republic a statement seeking payment of the $166,667. The AG report says the state is “awaiting repayment.”

“Republic remains committed to its investment and ready to restart its idled Lorain facility once there’s a change in the market,” Evans said in a statement to Crain’s. “Republic is in discussions with various state and local officials regarding the claw back of the grant and hopes to wrap up such discussions as soon as possible.”

Todd Williams, an ODSA spokesman, said he was not aware of any discussions between his department and Republic, though he did not rule out conversations with other state offices.

Neither ODSA nor the AG’s office expect to seek clawbacks from all companies that do not achieve 100% of their hiring goals. They generally consider a company to be in compliance if they create 90% of the number of jobs they agreed to create.

Since many of the awards are tax credits for anywhere from five to nine years, ODSA may, for example, reduce a six-year tax credit to perhaps three or four years if the hiring goal is not met. If the state made a low-interest loan, it may raise the loan’s interest rate one or two percentage points.

Mark Barbash, an economic development consultant and former chief Ohio economic development officer, said Republic Steel is like many manufacturing companies in industries like steel and auto-making. They use public financial incentives to help fund long-term investments but, because of volatile business cycles, a public benchmarking deadline can come at a low point.

“That’s one of the real sensitive points about incentives,” he said. “On the one hand you want to be supportive of companies (struggling) to meet their commitments. On the other

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“Government faces criticism that it is too soft if it doesn’t get the clawbacks in the original contracts.”

— Mark Barbash, an economic development consultant and former Ohio economic development officer

hand, there is a document out there, that says, ‘We’ll give you this, if you do that.’ Government faces criticism that it is too soft if it doesn’t get the clawbacks in the original contracts.”

JobsOhio, the business development nonprofit created by Gov. John Kasich that benefits from the profits of the state’s liquor monopoly, is a significant player in the state’s economic development effort. But it does not disclose details about its internal operations, so its evaluation report does not identify how individual companies performed.

Most of the companies that fell short of their job creation goals got letters in June outlining what action the state would take. In some cases, interest rates on loans were increased. In others, multiyear tax credits were reduced to fewer years.

Park Place Technologies of Mayfield Heights was cited for not meeting the job creation and payroll targets for a job creation tax credit approved by the Ohio Tax Credit Authority (OTCA). That tax credit agreement, which began in 2011 and grew with two amendments, would have given the company a 50% credit against their commercial activity tax or personal income tax based on the state income tax withheld by the taxpayer for new jobs created for eight years. The company had pledged to create 168 jobs but had created only 109 by the end of 2016.

When notified, the company sought an extension. In a letter to ODSA, the company unsuccessfully sought a oneyear extension, explaining that it failed to reach its new-job goal because of space constraints at its Mayfield Heights office, but that it expected it could reach the goal by the end of 2018.

Earlier this month, Crain’s reported that the company would be taking over additional space at its office at Landerbrook Corporate Center II in Mayfield Heights.

In a statement emailed to Crain’s

by Judy Collister, Park Place’s global human resources leader, the company acknowledged the remedial action taken by the OTCA. “Our experience with the Ohio Tax

Credit Authority has been overwhelmingly positive, and the incentives that our company has and continues to receive have been a tremendous asset to our growth and job creation efforts in Cleveland,” the email said. “The resulting amendments made by the Ohio Tax Credit Authority were completely fair and have been agreed upon by Park Place Technologies and the Ohio Tax Credit Authority.”

The other Northeast Ohio companies cited for noncompliance in the AG’s report are: Acumen Solutions Inc., Seven Hills, a cloud services consulting firm; Clinical Outcomes Management Systems, Broadview Heights, a health care software firm; Kent Displays Inc., Kent, a maker of liquid crystal displays that can be used as writing tablets; MAC LTT Inc. of Kent, a manufacturer of stainless steel and aluminum liquid tank trailers; MIC-RIC LLC, an Akron real estate firm; MOVband LLC, Brecksville, a fitness technology subsidiary of DHS Group of Houston; PRC Medical LLC, Green, which operates StreamlineMD, an information technology firm specializing in the electronic medical records industry; Spearfysh Inc., Hudson, a sales technology firm; and VeDiscovery LLC, Cleveland, the parent of Heureka Software, a provider of cyber security software.

Fisher Phillips Announces the Relocation of its Cleveland Office Effective December 18, 2017 our new location is: 200 Public Square Suite 4000 Cleveland, OH 44114 Phone: 440.838.8800 Fax: 440.838.8805 Telephone and fax numbers will remain the same

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A $12.9 million apartment building in Brooklyn Centre may be the final puzzle piece in solving chronic homelessness in Cuyahoga County.

Housing First, a collaboration of community organizations in Cuyahoga County fighting long-term homelessness, has announced it is on pace to end the problem in the county by 2020. With the construction of this new apartment building, slated to be completed in 2019, the group said the county will have enough permanent supportive housing to sustainably serve all individuals and families with disabilities who are struggling with long-term homelessness.

Housing First defines long-term homelessness as an individual with a disability (mental health needs, drug addicted, HIV/AIDS, other physical limitations) who has been homeless for a consecutive 12-month period or at least four episodes totaling 12 months of homelessness in the past three years.

“This is a really exciting time for our community to really be able to, with all the partners, to really say that

Emerald Alliance IX, a $12.9 million apartment building in Brooklyn Centre, should be completed by 2019. (Contributed rendering)

we’re on pace to end long-term homelessness by 2020,” said Susanna H. Krey, president of Sisters of Charity Foundation of Cleveland, which, in partnership with Enterprise Community Partners and the Cleveland/ Cuyahoga County Office of Homeless Services, brought the evidence-based, national model of permanent supportive housing to Cleveland. “What a rare and incredible event this is.”

Housing First’s model links decent, safe, affordable housing with on-site flexible voluntary support services that are designed to help residents stay housed and live productively.

Housing First said it has reduced long-term homelessness in the county by 86% in the past decade.

People who are chronically homeless make up about 20% of the county’s overall homeless population, but use about 70% of community emergency resources when cycling in and out of shelters, jails, emergency rooms and more.

At the forefront of the initiative have been Housing First’s main oper-

ating partners: Enterprise Community Partners, CHN Housing Partners (formerly Cleveland Housing Network), EDEN Inc. and FrontLine Service. Housing First’s health care partner is Care Alliance Health Center, which provides mobile health care and mental health services to residents.

Housing First offers rent-subsidized, permanent housing and onsite access to medical care, mental health, recovery and employment services for as long as a resident chooses to live there.

The new apartment building in Brooklyn Centre, dubbed the Emerald Alliance IX building, will be Housing First’s 13th building, capping an investment of more than $131 million into Cuyahoga County neighborhoods since Housing First started in 2002.

KeyBank, which has been involved with Housing First since the beginning, saw an opportunity to support the initiative by providing equity, debt and ultimately philanthropic investments.

SEE HOUSING, PAGE 29

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Magnet aims to aid entrepreneurs, too

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

When Brandon Cornuke set out to revamp Magnet’s approach to business incubation, he found that it wasn’t always clear what the organization had to offer entrepreneurs.

Magnet had long focused on serving small and midsize manufacturers to become more efficient and grow.

Startups hadn’t necessarily been front and center.

“I think they’ve realized that helping entrepreneurs is just as important as helping established companies, because it kind of completes the circle,” said Cornuke, vice president of startup services for Magnet.

So Cornuke turned his attention to what could make the organization stand out in the entrepreneurial landscape, landing on the experience and expertise of Magnet’s team of engineers. Today, the program puts a much stronger focus on programs and services than it does on giving companies physical space.

And although the program is called the Magnet Incubation Center, Cornuke views it as a step between traditional business incubators and accelerators.

“I truly believe that there’s a step between incubation and acceleration, and it looks like iteration, right?

It’s this idea that you don’t just go through set steps,” he said. “And you don’t just go off on your own and do it without anybody’s help. You work in cycles to understand the critical assumptions you’ve made and whether those have some kind of evidence behind them.”

Cornuke in early 2017 came to Magnet to run the Magnet Incubation Center from American Greetings, where he most recently worked as the director of digital strategy and innovation. He also has experience in retail, having worked in Target’s apparel and consumer television businesses, in consulting and in starting his own business.

Since the Magnet Incubation Center launched in May, it has served 12 new clients, 10 of whom are still involved. Cornuke said that growth is better than he had expected, as he had originally hoped to add one new client a month, and he recently brought on a Venture for America fellow to help with the workload. Cornuke could see the program continuing to grow, but he wants to make sure each client gets the individual attention and support they need.

One of the center’s clients, Alium Adaptive Apparel, which aims to make comfortable, stylish clothes for seniors with caregivers, recently launched online. President Carla Macklin reached out to Magnet in the spring, a couple months after starting on the idea. She wasn’t sure what type of services she needed, but without formal training in running a business, she knew she wanted help.

She has found the incubation center useful as questions have arose. And if they don’t have all the answers, they have a broad network to reach out to, she said.

“I feel a lot less isolated as an individual entrepreneur being able to call Brandon and the team whenever I need something,” Macklin said.

There are just a few guidelines for who can participate in the center: companies or individuals must make

Brandon Cornuke has led the Magnet Incubation Center since early 2017. (Contributed photo)

a physical product, they must live in or operate in Northeast Ohio and they must be working on a new business model. Clients must sign up for at least three months at $400 per month, which gets them regular meetings with Magnet’s experts (engineering or otherwise), discounts on the organization’s other services and space, if they need it.

Notably, those guidelines don’t bar established businesses from taking part. Take client Kay Chemical Co., for example.

The Cleveland-based company has been around for more than 50 years, with the current owner, Lisa Oswald, taking over in 2012 when her uncle was ready to get out of the business. The company makes industrial hand cleaner, a competitive market.

Oswald said she had tried to do some new marketing before reaching out to Magnet, but the company was struggling to get traction. Now, it’s working with the center to find new niches it could sell its products into — an effort Oswald had started before joining the center, but one that she’s now able to do in a more systemic way.

Instead of having a set program in place, work at the center is tailored for each client based on the “critical assumption” they want to address in their product, Cornuke said. He doesn’t want to just help companies fix a product — he wants to make sure customers want that product.

To get to that point, Cornuke has companies answer a set of questions to find their value proposition, including: Who’s their customer? What solutions are they offering? Are they the best team to deliver those solutions?

“You can come up with the greatest cost structure, the best pro forma P&L you’ve ever seen, and if you’re not solving a problem that matters to anybody, it’s just dust,” Cornuke said.

“So we spend a lot of time on those questions, and we do so in a very organized way so that we’re always sure that we’re marching toward that.”

And the program is still evolving, as Cornuke firmly believes in using the iterative model himself.

While there are some clients from Magnet’s previous incubator program that still have space in the building, Cornuke has discovered that the new clients don’t necessarily want the office space Magnet can provide in-house, but instead space for equipment. He’s begun looking for partners that may be able to provide that. He’d also like, in the future, to create a platform for interested funders to connect with these companies.

CRAIN’S

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Opinion From the pen of Crain’s cartoonist Rich Williams

Time to turn the page on a turbulent 2017 Jan. 9

Jan. 23

Feb. 13

Feb. 27

April 3

Sept. 11

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

CLEVELAND BUSINESS

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Turning Passion Into Purpose W I T H T H E C L E V E L A N D F O U N D AT I O N CELEBRATING THE FINE ART OF GIVING WITH THE

Frank Hadley Ginn & Cornelia Root Ginn Foundation PROMINENT FAMILY FOUNDATION CONVERTS TO CLEVELAND FOUNDATION SUPPORTING ORGANIZATION TO ADDRESS EDUCATION; COMMUNITY HEALTHCARE NEEDS As art collectors with an eye for impressionist masterpieces and other European art, early 20th century Clevelanders Frank Hadley Ginn and Cornelia Root Ginn enjoyed meeting with New York art dealers at their home in Gates Mills. With each purchase, they were curating Cleveland history

modern art dealers. He kept the family appraised of upcoming works and good prices, and dealers would visit the Ginn home to demonstrate artwork in certain settings. “It’s a mystery how they became interested in art, and how they developed the ability to know what

Frank and Cornelia’s art collection, as well as their passion for the Cleveland community, was passed on to their four children, Francis, Marian, Alexander (Sandy) and Barbara.

Over the years, several of the paintings were sold or donated, including a handful of pieces given to the Cleveland Museum of Art. One of the donated paintings, “Mother and Child,� is regarded as one of Renoir’s best pastels.

Their son Sandy would follow in his father’s footsteps and join Jones Day in 1938 to practice there for 40 years. Also, in 1938, Sandy married Helen Vilas, a member of a prominent Cleveland family, and they would have four children: Frank, Mary, Patty and Walter.

Cornelia Root Ginn to the third generation, Helen and Sandy’s children began encouraging their parents to auction the art for a charitable endowment. Nearly 10 years before Sandy’s passing, the paperwork was drafted to establish the Frank Hadley Ginn and Cornelia Root Ginn Charitable Trust, which would be seeded by the sale of the art.

In May 2000, the five remaining Current Ginn Foundation trustees (front row) Mary Ginn, Walter paintings were sold at Christie’s major Ginn and Patty Feeney and (back row) Peter Ginn, Anne Ginn, spring sale for about $4 million, and Meredith Carr and Tara Feeney Helen and Sandy’s children became the first charitable trustees. Over the and laying the groundwork for what was really good,� said last 17 years, the family foundation would become an active and engaged grandson Walter Ginn. has awarded 309 grants to 99 local family foundation. “The collection was organizations, totaling more than Both born in the mid-1800s, Cornelia’s considered an excellent $2.7 million. The grants focus on the family ran the Root Dry Goods store representation of a education and healthcare needs of in downtown Cleveland. Frank was variety of impressionist low-income individuals, primarily in born in Clyde, Ohio, and came to artists.�

Cuyahoga County.

Cleveland for a legal apprenticeship In addition to their Over time, as there was interest and after attending Kenyon College. The passion for art, the available seats, Ginn spouses and first firm that he worked for merged Ginns loved classical other family members were added as with another to create Tolles, Hogsett, music. Frank was trustees. In 2009, the next generation Ginn and Morley, a forerunner to Jones one of the founders began to participate as non-trustee Day. In 1913, Frank was appointed of the Musical Arts grant reviewers, learning about the managing partner, a position which Association, and at organization and the family’s process he held until shortly before his death the request of his for determining awards. The trustees in 1938. While Frank was practicing close friend John may review as many as 50 proposals law during a period of great prosperity Severance, chaired the twice a year, drafting and circulating in Cleveland, Cornelia was raising construction committee written recommendations and holding four children, staying active in the for Severance Hall. two days of in-person meetings. faith community, and, to ensure Alexander (Sandy) and Helen Vilas Ginn’s children, Frank and Cornelia “When we meet to consider requests, the best education for her children, also hosted “musicales� Frank Ginn, Patty Feeney, Walter Ginn and Mary Ginn we do so with the firm conviction maintaining a correspondence with several Sundays each that we are fulfilling the wishes of Madame Montessori. This even led to “Throughout their marriage, Helen and year in their home for orchestra our parents, grandparents and great establishing an early Montessori school Sandy gave generously of their time members and visiting musicians. Their grandparents,� said second-generation in the Ginn attic. and money to many area organizations guest book is even signed by Maurice trustee Meredith Carr.

At the time impressionism was and causes,� Walter said.

Ravel, who played on a piano that is In recent years, the Ginn family realized being introduced in America, the still in the family.

In the early ‘90s, about the time that that there was an emerging need to Ginns formed a relationship with the paintings would have been passed Following their deaths in the late 1930s, “reinvent� the foundation. Three of the Paul Durand-Ruel, one of the first

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Frank Hadley Ginn four original trustees—all but Walter— and each of the grandchildren were living outside of Cleveland. “Our first trustees grew up in Cleveland and were pretty knowledgeable about the nonprofit landscape,� said Patty Feeney, Ginn Foundation President. “But we were concerned about how future trustees would carry on our grantmaking without that insight.�

The family turned to the Cleveland Foundation as a charitable partner, recently converting the family foundation into a Supporting Organization, which would essentially operate as a “foundation within a foundation.� “The Cleveland Foundation offers a level of flexibility allowing future generations to be involved and supported by the structure and expertise of foundation staff,� said Tara Feeney, another second-generation trustee.

The Cleveland Foundation will assist the family with reviewing grant proposals, investing the dollars for increased future giving and providing administrative support. As planned, the family’s next batch of grants will begin having an impact in summer 2018. “It’s remarkable that the Ginn family’s artwork remains a charitable source for the community 80 years after Frank and Cornelia’s passing,� said Kaye Ridolfi, Cleveland Foundation Senior Vice President of Advancement. “The ink is definitely not dry on this amazing local history and family legacy that we look forward to continuing in perpetuity.�

CRAIN’S CLEVELAND BUSINESS

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PA G E 13

Crain’s Newsmakers of the Year It was a year of disruption, transition and gridlock — and not just in Washington, D.C. In Cleveland, longtime leaders — Frank Jackson, namely — fought newfound battles. In Akron, a new energetic mayor is trying to shift course in a city rooted in tradition. Also, that familiar sting of our sports teams falling short was as piercing as ever. 2017 may not have been as triumphant or celebratory as the prior year, but it will surely be remembered. Pages 13-20.

Contributed rendering

Quicken Loans Arena

By SCOTT SUTTELL

TIMELINE

ssuttell@crain.com @ssuttell

Dec. 13, 2016: Officials unveil a plan for a $140 million facelift for Quicken Loans Arena, paid for by a roughly 50-50 split between the public sector and the Cavs.

The Cleveland Cavaliers' biggest win of 2017 came off the court.

An organization accustomed to victories — at least as long as LeBron James is on the roster — in the NBA’s regular season and playoffs struggled in the world of politics as it sought approval for a plan to finance a $140 million renovation of Quicken Loans Arena. The Cavaliers ultimately got the financial commitments they needed from the city of Cleveland and Cuyahoga County to make the project a go, and construction began in September on an upgrade that should be ready for the 2019-2020 season. But the process was about as smooth as a Derrick Rose jumper.

More than a year ago, officials from the Cavs/Quicken Loans Arena organization, the city of Cleveland and Cuyahoga County announced a financial partnership to pay for The Q’s makeover in a project that would extend the life of one of the NBA’s oldest arenas. That announcement came about two years after the Cavs initially approached the county and

Feb. 14, 2017: At a packed public hearing of Cuyahoga County Council, many residents raise objections to using public money for The Q's renovation.

March 28: Cuyahoga County Council approves the financing plan.

April 24: Cleveland City Council signs off on the deal for the project.

May 22: Clerk of Cleveland City Council Patricia J. Britt refuses to accept petitions that seek to overturn the legislation authorizing an extension of the city’s admissions tax to cover a portion of the project.

Aug. 10: The Ohio Supreme Court rules the petitions must be accepted, which would force a special election in early 2018.

Aug. 28: The Cavs announce they’re pulling out of the project.

Sept 6: After the petitions are withdrawn, the Cavs recommit to The Q deal.

Sept. 14: Construction begins on the renovation of The Q, beating by one day the Sept. 15 target date set by Cavs/Quicken Loans Arena CEO Len Komoroski.

the city for financial help in a project that would split costs of the update evenly between the public sector and Cavs majority owner Dan Gilbert.

While Cleveland Mayor Frank Jackson and Cuyahoga County Executive Armond Budish were on board with the deal from the beginning, the arrangement was far from a slam dunk. Residents at a series of public

hearings that began early in 2017 raised philosophical objections to using public money to renovate a professional sports facility on behalf of a billionaire team owner. One faction of the opposition to the deal, which called itself the Greater Cleveland Congregations, argued that any arrangement to provide public money for The Q should be accompanied

by a community equity fund of about $35 million for better health, mental health and addiction services, and the physical redevelopment in Cleveland neighborhoods and the suburbs.

By April, sensing that the deal was struggling to win Cleveland City Council approval in the face of public opposition, the Cavs introduced some sweeteners to the measure, including a guarantee that for every dollar of admissions taxes to arena events that goes to the debt service for the bonds that will pay for the expansion, the city’s general fund would get an equal amount. The Cavs also said they would resurface the basketball courts at all city recreation centers.

After both Cuyahoga County and Cleveland approved the funding package without a community equity fund, the groups in opposition mounted a petition campaign to repeal the ordinance that approved the city’s piece of the funding package.

The groups got enough signatures to force a special election in early 2018 and, critically, delay the start of construction on the project. Cleveland tried to nullify the petition effort, but the Ohio Supreme Court on Aug. 10 ordered the petitions to be accepted.

And that led to a bombshell: The Cavaliers on Aug. 28 announced they were canceling the project altogether.

“It is very disappointing to see our further private investment into The Q transformation project reach this ending point,” said Len Komoroski, CEO of the Cavs, in a statement.

That move ultimately marked not an end, but a new beginning for the project.

Critics withdrew their petition after county officials promised to commit to mental health and substance abuse clinics, allowing renovation plans to move forward again. And by Sept. 6, the Cavs announced that they were recommitted to the deal.

All the politicians who were part of the drama throughout the year claimed victory. Jackson, for instance, reiterated that the arena deal was “one of the best I’ve seen, because it provides opportunities for all of Cleveland.” His unwavering support for the deal was an issue during the primary, but Jackson survived a multiple-candidate race and then won an easy re-election to a history-making fourth term.

The Cavs, meanwhile, are locked in even longer and will be at The Q through at least 2034.

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CRAIN’S CLEVELAND BUSINESS

Newsmakers of the Year

Frank Jackson

By JAY MILLER

TIMELINE

jmiller@crain.com @millerjh

Jan. 31: Jackson announces he will run for an unprecedented fourth term as mayor of Cleveland.

When Frank Jackson ran for mayor for the first time in 2005 against incumbent Jane Campbell, he campaigned on restoring hope to his battered hometown. He believes he has had some success, and now, as he begins his fourth and probably last term, he has some ambitious goals for closing out his time in office.

There is some evidence he’s been successful — the national image polishing that followed the successful Republican National Convention in the summer of 2016 being Exhibit A. Most recently, the December/January issue of National Geographic Traveler included the city among the 21 places to go in 2018, calling it a shining example of urban renewal.

“Few cities exemplify this as does Cleveland, an immigrant-established industrial city that pulsates with creative energy,” the magazine stated.

“You can feel this in revived neighborhoods boosted by a Millennial-driven restaurant renaissance, from Tremont’s casual-chic to the brews of Ohio City to the upstarts on East Fourth and Gordon Square.”

But as his competitors in his latest electoral run were vocal in pointing out, signs of that revival are not seen in all of the city’s neighborhoods.

To his two leading primary opponents, councilmen Jeff Johnson and Zack Reed, Jackson was the mayor of downtown, too focused on projects like the $30 million that went to FirstEnergy Stadium renovations and the city’s $88 million contribution to renovating Quicken Loans Arena. In-

May 10: Jackson commits $25 million of city money to a $65 million plan with the city’s major bank to revitalize three Cleveland neighborhoods.

Sept. 12: In a light turnout, Jackson places first among nine candidates in the mayoral primary election with 38.7% of the vote.

Oct. 19: Jackson says the city’s schools have made “significant progress” but still achieve only a C+ grade.

Nov. 7: Jackson wins a fourth term as mayor with 59% of the vote.

Dec. 8: Cleveland wins an appeals court battle in its defense of its “Fannie Lewis” law that requires contractors on public projects to employ a certain percentage of individuals who reside within the city.

stead, they said, they would focus on investing in the city’s neighborhoods.

They complained, too, about unabated crime, struggling schools and even Jackson’s plan for a $2.4 million dirt bike track, a recreational facility designed to move a growing number of dirt bikes off city streets. Indeed, the city ranked No. 1 on a list of the country’s most distressed cities for the last two years in a study by Economic Innovation Group, a Washington, D.C., think tank funded by tech industry entrepreneurs. That study ranked cities on their struggle to create jobs, add population and foster “local dynamism.”

In the runoff, Reed was supported by the Cleveland Police Patrolmen’s Association, the union that represents rank-and-file police officers.

While Jackson had pledged to increase the number of patrol officers, the union believed Reed would add more officers than Jackson, who cited budget concerns for his smaller staffing plan.

Jackson defended his record at the City Club of Cleveland’s mayoral debate.

“I have demonstrated over the last 12 years that we have done things, we have moved the city through challenging times — moving the city through the Great Recession without going into default, weathering the whole predatory lending crisis, maintaining our neighborhoods as best we could,” he said.

Now as he moves into his last four years, he has set three top goals.

The first is moving the “Say Yes to Education” program forward. It’s a program imported from New York City that uses scholarships to get more Cleveland kids to finish school and go on to college.

Second is to create jobs and new commercial and residential development in the city’s struggling neighborhoods and along the Opportunity Corridor, the new road that will run through some of the city’s poorest East Side neighborhoods. In May, Jackson announced a $65 million program to boost both housing and commercial development in targeted city neighborhoods.

Among the businesses and organizations that have pledged their financial support are Fifth Third Bank, Huntington Bank, Key Bank and PNC Bank.

Andrew Harrer/Bloomberg

Jackson hopes that making this public investment in city neighborhoods will bring real estate investors in, reducing the decline of the city’s housing stock that, he said, has had the city spending $70 million in his 12 years on demolition.

And finally, the city will be hiring additional police officers. Police chief Calvin Williams told city council early in the year that he would like to add 250 officers.

Jackson also discussed plans for

the redevelopment of 2 million square feet of lakefront development and for a new police headquarters to replace the 41-year-old building at the downtown Justice Center.

Jackson believes that education and jobs are key to reducing crime in the city and making the city a better, more attractive place.

“We’re not over the hump,” he said.

“It gets back to this whole notion that I want Cleveland to be better off, in a better position, than where I found it.”

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PA G E 15

Newsmakers of the Year

Dan Horrigan

TIMELINE

By SUE WALTON

Feb. 6: Horrigan announces the “Planning to Grow Akron” initiative, the city’s plan to bring in more residents through housing initiatives, including a tax abatement program that would be passed in July.

swalton@crain.com @SueWalton_Bolts

Dan Horrigan is not cut from the same cloth as Don Plusquellic, but like his predecessor, Horrigan is moving the city forward — and with ambitious initiatives.

On Jan. 1, Horrigan marked his first year in office as Akron’s mayor. Akron voters elected Horrigan in November 2015, the first time citizens had tapped someone other than Plusquellic for mayor in 28 years. Plusquellic resigned in May 2015 after nearly seven terms in office.

While he can be credited with transforming the city’s economy after the flight of the rubber companies, his bombast and sometimes antagonistic leadership style weren’t loved by all.

Horrigan’s style is that of a listener and a collaborator. He described himself as a servant leader in a February interview with Crain’s and said, “Being mayor is about delivering service.”

In that vein, the former Akron city councilman and Summit County clerk of courts spent a lot of his first year listening. Yes, he helped introduce a Downtown Vision and Redevelopment Plan to breathe life into the heart of the city and guided Akron through the first year of its billion-dollar federally mandated sewer project, among other initiatives.

But he also spent a lot of time studying and learning. As soon as he was elected, he set up a task force — made up of 15 business, government and civic leaders — to “look under the hood” of city management and make recommendations going forward. Horrigan also held several town hall meetings in 2016 — and they continued this year — to get resident input.

Come 2017, though, it was time to get even busier.

First on Horrigan’s list was to bring in more of what is arguably Akron’s most important resource: people.

“I want to be the mayor that grows Akron’s population again,” Horrigan said when the city

“I want to be the mayor that grows Akron’s population again.”

— Dan Horrigan

in February released its “Planning to Grow Akron” report, which outlined initiatives to do just that after examining the city’s housing demand and supply.

Among the recommendations: a citywide property tax abatement program to spur residential development, which was implemented in July; developing neighborhood hubs of activity and increased walkability; and making vacant office space housing instead.

The ambitious goal is to bolster the city’s population, which stands at fewer than 200,000 today, to 250,000 by 2050.

In addition, Horrigan and leaders from Summit County and three area nonprofits unveiled the Strategic Welcome Plan to grow population and increase diversity by enhancing the network of private and public partners to serve new Americans, among other components.

Knowing that along with people, a city’s future lies with its economy, Horrigan unveiled another hugely ambitious initiative: the Bounce

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Aug. 11: Horrigan announces the creation of Bounce, an innovation-based hub for the city’s economic development and entrepreneurship initiatives.

Nov. 7: Voters pass the quarter-percent income tax increase, which Horrigan proposed in June for street work and improving the city’s safety services.

Dec. 6: The city appoints a five-member board to oversee the startup of Bounce and the hiring of its CEO.

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Feb. 21: Horrigan announces plans to change Exchange Street and other roads from one-way streets to two-way to make downtown more walkable and livable.

Heathyr Ullmo Senior Commercial Banking Officer 216-462-0673 Hullmo@geaugasavings.com

innovation district, planned for the current Akron Global Business Accelerator building on South Main Street.

Bounce will be the nerve center of the city’s innovation-driven economic development strategy. The city already supports the Akron Global Business Accelerator and the Bit Factory software startup unit, and Bounce will encompass some of those initiatives — likely in some reorganized fashion — while adding programming space, equipment such as 3-D printers, support-service providers, technical help for entrepreneurs, makers, investors and, of course, technical innovators.

Bounce also will look to involve established local companies and the area’s colleges, universities and students, all in the name of innovation.

“This is not something other cities have not done, but I’m trying to take the best pieces of parts of other programs I’ve seen,” Horrigan told Crain’s in September.

Along with those big initiatives, Horrigan focused on his leadership idea of delivering service. In an effort to increase funding for what he called deteriorating roads and police and fire needs, he introduced a quarter-percent income tax increase to the November ballot. He then helped lead a successful campaign to pass the initiative, which will bring in an expected $16 million annually.

And there was much more that filled Horrigan’s busy year, from plans to change traffic flow on one of the city’s main arteries to increase walkability and encourage downtown living to working with the United Way of Summit County to bolster residents’ financial literacy. Not to mention the establishment of the Akron Civil Rights Commission to work against discrimination in housing or employment within the city.

In the wake of Akron’s longest-running mayor, Horrigan isn’t afraid to forge his own path — and the city is better for it.

The Streak PA G E 16

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CRAIN’S CLEVELAND BUSINESS

Newsmakers of the Year

The Streak

By KEVIN KLEPS

TIMELINE

kkleps@crain.com @KevinKleps

Aug. 24: The streak starts with a 13-6 rout of the Boston Red Sox at Progressive Field.

It began in an unconventional manner — with a Cleveland Indians lineup that was missing four injured regulars roughing up Boston Red Sox ace Chris Sale on Aug. 24.

By the time the Tribe’s 22-game winning streak ended more than three weeks later, the Indians had been so dominant that there were national debates about the legitimacy of a 26-game run by the New York Giants 101 years earlier.

The streak is an American League record, and the 1916 Giants — who had a tie in the middle of their record run — are the only club that is ahead of the Indians on the all-time annals.

When it was over, the Tribe’s magic number to clinch the Central Division was down to two. Just as significantly, Progressive Field again was abuzz with a World Series-type vibe, and the club’s broadcasts on SportsTime Ohio were producing Travis Hafner-sized ratings.

The Indians, incredibly, outscored the opposition 145-41 and led for 195 of 207 innings during the streak. And even when the Kansas City Royals finally brought the ridiculous stretch to an end on Sept. 15, all the Indians did was rip off another five-game winning streak to begin a span in which they closed the regular season with 11 wins in their last 14 contests.

While it’s true that the postseason ended in the most disappointing of fashions — with the Tribe again blowing a two-game lead, this time against the dreaded New York Yankees in the AL Division Series — there’s no denying the huge impact that the streak, following on the heels of a World Series trip and the offseason signing of slugger Edwin Encarnacion, had on

Sept. 7: The Indians top the franchise-record winning streak they set the year before with win No. 15 in a row — 11-2 over the White Sox in Chicago.

Sept. 13: The Tribe sets an American League record by defeating the visiting Detroit Tigers 5-3 for consecutive victory No. 21.

Sept. 15: The incredible stretch ends with a 4-3 loss to the Kansas City Royals at Progressive Field.

Oct. 11: The Indians, the top seed in the AL after a 102-win regular season, are eliminated by the New York Yankees, who rally from a 2-0 deficit by winning the final three games of the AL Division Series.

with a total attendance of 2,048,138, a year-over-year increase of 28.7% that easily was the largest in MLB. The final 42 home games featured 12 sellouts and an attendance norm of 27,775. All told, the 2017 Indians had 13 sellouts, their most in 16 years, and 26 crowds of at least 30,000. In the previous five seasons, non-home openers had resulted in a combined total of 21 such gatherings.

The average rating for Tribe broadcasts on STO was 8.33, the best in MLB and the highest for the club since 2001. Possibly the craziest

number, though, was 20.44 — the Cleveland market rating for win No. 22 in the streak. The rating was the best for an MLB broadcast on a regional sports network since 2007.

The Indians were also a huge conversation piece on social media, with interaction rates on Twitter and Instagram that were No. 1 in baseball, and a Facebook engagement rank of No. 7.

Again, the season, like so many before it, didn’t end as planned.

But the winning streak was still an all-timer.

It also provided a huge jolt to an organization that has turned around its business — thanks, not coincidentally, to a product that is every bit as fun as it is successful.

As of late November, the Indians had already topped 13,000 full-season equivalents for 2018, guaranteeing their largest season-ticket base in a season since 2008.

Clinic and almost all major health systems throughout the state, according to Medical Mutual. In place of this plan, Medical Mutual is offering a Health Maintenance Organization (HMO) network affiliated with several systems and hospitals — UH, MetroHealth, Summa Health, Southwest General Health System, St. Vincent Charity Medical Center, Lake Health System and Mercy Medical Center in Canton — but not the Clinic.

The Clinic remains in Medical Mutual’s SuperMed and Medicare Advantage networks and stresses that it maintains a strong working relationship with Medical Mutual.

The Clinic and UH’s decisions to enter into the Medicare Advantage space could mean a financial incentive for each of them if they’re able to contain costs.

Medicare Advantage plans are considered attractive products, offering stability to insurers, a chance to keep patients within the system for providers and potential profitability for both.

Such Medicare Advantage plans are privately run versions of the federally funded health care program for seniors. Many insurers have reported significant membership gains in the plans over the last few years as baby boomers age into the Medicare program.

Medicare Advantage offers a “significant business opportunity,” Allan Baumgarten, a Minnesota-based consultant who studies health care markets across the country, told Crain’s in October.

The market is stable and growing.

In 2017, 19 million people were enrolled in Medicare Advantage plans — more than triple the 5.3 million people in 2004.

The percent of Medicare beneficiaries in Northeast Ohio counties who are enrolled in Medicare Advantage plans ranges from 19% in Huron County to 47% in Stark County. Some areas offer a clear opportunity to pick up more Medicare Advantage enrollees, while that may be a heavier lift in counties with a higher penetration rate.

Cody Allen and the Indians registered win No. 21 in a row on Sept. 13. (Jason Miller/Getty Images)

the organization’s business.

The Indians added 1,500 new season-ticket accounts in one week during the winning streak. The stretch sparked so much activity, in fact, that the Tribe had to remove a coveted carrot from their sales pitch — guaranteeing 2017 playoff access to anyone who committed to buying a season ticket for the following season.

Jeff Stocker, the Indians’ senior manager of ticket sales, said the streak generated a demand that even exceeded that of the Encarnacion signing.

That December 2016 move helped the

Tribe add about 2,500 full-season equivalents to their 2017 season-ticket total in the ensuing months.

From Aug. 25, win No. 2 of the streak, to Sept. 17, when the Indians celebrated their second straight division crown, the Tribe played 13 games at Progressive Field. Those contests produced five sellouts, nine crowds of at least 30,000 and an average attendance of 29,676.

The abnormally high September gatherings provided another clincher — the Indians’ first 2-million season at the gate since 2008. The Tribe finished

The health insurance market

By LYDIA COUTRÉ

TIMELINE

lcoutre@crain.com @LydiaCoutre

June 6: Citing the “volatile” individual market, Anthem Blue Cross Blue Shield announces it will pull out of Ohio’s insurance exchange.

With new partnerships, products and players in the insurance market, Northeast Ohio’s health insurance industry experienced monumental change in 2017.

Medical Mutual of Ohio and University Hospitals, for one, came to an agreement to include all UH facilities in Medical Mutual’s SuperMed network, reversing a contractual decision made more than 20 years ago that excluded UH main campus and UH Bedford.

UH also entered into a collaborative agreement with SummaCare to cobrand existing SummaCare Medicare products in markets with UH facilities.

Meanwhile, the Cleveland Clinic made some bold moves, entering the individual insurance market with a product bearing its name in partnership with New York City-based Oscar Health. The Clinic has flirted with entering the insurance business for years, though branding plans with existing insurers isn’t as risky as going forward on its own. The experimental endeavor could have a big payoff.

The health system also teamed up first with Humana Inc. (NYSE: HUM),

June 15: In partnership with New York City-based Oscar Health, Cleveland Clinic announces it is entering the health insurance market with a product bearing its name.

July 27: University Hospitals facilities announce it will be included in Medical Mutual’s SuperMed network, reversing a contractual decision made more than 20 years ago that excluded UH main campus and UH Bedford.

Oct. 2: Cleveland Clinic and Humana Inc. (NYSE: HUM) create two $0 premium Medicare Advantage health plans for seniors in Cuyahoga County. Days later, the Clinic announced it’s working on one with Anthem.

Oct. 17: Cleveland Clinic is not a part of the provider network for Medical Mutual of Ohio’s exchange offering this year, leaving open the possibility that in some counties, people shopping on the exchanges will not have access to a plan that includes the region’s largest health system.

Nov. 8: After months of uncertainty, Cleveland Clinic and Dayton-based CareSource sign a long-term contract that will allow Medicaid patients to continue to receive uninterrupted care from the Northeast Ohio health care juggernaut.

and then with Anthem Blue Cross and Blue Shield in Ohio to offer Medicare Advantage plans.

While it took some big steps forward in these moves, the Clinic hit some bumps in the road as well. The Clinic spent months in negotiations with Dayton-based CareSource, leaving open the possibility that thousands of CareSource members wouldn’t have access to the Clinic.

Ultimately, the two signed a long-

term contract that will allow Medicaid patients to continue to receive uninterrupted care from the Clinic.

Separately, the Clinic is no longer a part of the provider network for Medical Mutual of Ohio’s insurance exchange offerings.

For the 2018 individual Affordable Care Act health insurance plans, Medical Mutual is no longer offering its Point of Service network, which was a broad network that included the

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PA G E 17

Newsmakers of the Year

Jimmy Haslam TIMELINE

By KEVIN KLEPS

Feb. 8: On the same day Dee and Jimmy Haslam send a letter to season-ticket holders that says “no one was happy with the results” from a 1-15 season, the Browns announce that they’re dropping the prices of about 40% of the seats at FirstEnergy Stadium in 2017.

kkleps@crain.com @KevinKleps

Jimmy Haslam might be as eager to put 2017 behind him as almost anyone in sports.

On Dec. 7 — a few months after he told the assembled media at the start of training camp that the Cleveland Browns were “gonna be patient” — the Browns fired Sashi Brown.

Brown, a former general counsel who was promoted to head the front office, led the beleaguered franchise’s football operation for 23 months.

His replacement — John Dorsey, whose hiring was announced about 10 hours after Brown’s ouster — is the fourth general manager Jimmy and Dee Haslam have employed since their $1.05 billion purchase of the Browns was finalized on Oct. 25, 2012.

Turnover is nothing new for the Browns, nor the Haslams, but the last two seasons have been brutal even by team standards. And 2017 has been as bad as it gets.

The Browns haven’t won a game since Christmas Eve 2016, and 31 of their last 32 contests have ended in defeat.

As the losses have piled up like a child’s growing list of Christmas wishes, a significant portion of their dedicated fanbase, long frustrated, has seemed apathetic.

Beginning with that rare victory last Dec. 24, the Browns have played three of their last seven games at FirstEnergy Stadium before announced crowds of 59,061 or fewer.

(The actual gatherings have been sig-

Oct. 3: Warren Buffett’s Berkshire Hathaway purchases a stake in the Haslam-owned Pilot Flying J. Nov. 6: The trial begins for four former Pilot Flying J executives who are accused of participating in a scheme in which trucking companies were defrauded.

On Dec. 7, Jimmy Haslam hired John Dorsey, left, as the Browns’ general manager. (Jason Miller/Getty Images)

nificantly smaller.) Worse yet, the last nine home contests have produced the five lowest announced attendance totals for the franchise since 1995 — the year Art Modell confirmed he was moving his team to Baltimore.

The Browns, if you don’t count a “home” game in London that drew 74,237, are on pace for their lowest attendance norm in a season since 1984 — when Marty Schottenheimer replaced Sam Rutigliano as coach and prior to Bernie Kosar’s selection in the ’85 supplemental draft.

The winless season, however, might not have been as jarring as what’s transpired in U.S. District Court in Chattanooga, Tenn.

There, Jimmy Haslam’s voice was heard during a secret recording that was played in the trial of four former Pilot Flying J executives who have

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been accused of committing mail and wire fraud.

Haslam hasn’t been charged, and he has repeatedly denied any wrongdoing in a case that dates back to a 2012 raid of his family’s Knoxville, Tenn.-based chain of truck stops.

Still, the case has cost Pilot a combined $177 million in fines and civil settlements, and the company is footing the legal expenses for a trial that includes former Pilot president Mark Hazelwood.

A month before the trial started, Warren Buffett’s Berkshire Hathaway purchased a 38.6% stake in Pilot. By 2023, Buffett’s group will own 80% of the company, with the Haslams retaining the rest.

There have been no indications that the owners will examine a similar move involving the Browns, who, despite the constant losing, are still

believed to be a big money-maker.

Forbes has pegged the Browns’ value at $1.95 billion. It estimated the team’s revenues at $347 million and its operating income at $53 million.

Somewhat lost in the turbulent year was the Haslams’ donation of new fields and scoreboards to five high schools in the Cleveland Metropolitan School District. The donations were made over two years, and cost about $2 million.

The owners also announced in October that the Browns would donate all of the proceeds from sales at the FirstEnergy Stadium Pro Shop — an annual commitment of at least $250,000.

The Browns, as has been their custom, will also be giving out lucrative salaries to fired coaches and executives.

Brown joined that group prior to

Nov. 19: The Browns’ 19-7 loss to the Jacksonville Jaguars draws an announced crowd of just 57,003 — the lowest for the franchise since Dec. 17, 1995.

Dec. 7: The Browns fire executive vice president of football operations Sashi Brown and replace him with general manager John Dorsey.

the team’s 14th consecutive loss, dating back to the final game of the 2016 season. In announcing the move, Haslam said Hue Jackson wouldn’t be added to the list, as the head coach “will return for the 2018 season.”

Jackson, then, will work with Dorsey to try and turn around a franchise for which a handful of victories — let alone a winning season — is a challenge.

“That record is on all of us, including ownership,” Haslam said on the day the Browns introduced their seventh GM in the last nine years.

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PA G E 18

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CRAIN’S CLEVELAND BUSINESS

Newsmakers of the Year

Signet Jewelers

TIMELINE

By DAN SHINGLER

Feb. 27: Signet responds to reports in The Washington Post and other media that its executives have engaged in sexual harassment.

dshingler@crain.com @DanShingler

If you’re tired of the average dry business story, here’s one with diamonds, allegations of theft and claims of sexual misdeeds.

Unfortunately for Fairlawn-headquartered Signet Jewelers, that was the story all too often and pretty much all year in 2017.

The multichain seller of diamond engagement rings and other jewelry — the world’s largest diamond retailer, by its own account, with roughly 3,600 stores — was in the headlines for all of the wrong reasons from the get-go. It ended 2016 with customer claims of ring-swapping and sexual harassment only to be haunted by them through much of the last year as well.

It finally ended 2017 having to disclose in a Securities Exchange Commission filing that it was being investigated for its lending practices by the federal government and the state of New York.

This is a big deal in the jewelry business, where Signet operates Sterling Jewelers, Kay Jewelers, Zales, Jared the Galleria of Jewelry and a slew of lesser-known chains. All told, they tallied sales of $6.4 billion when Signet ended its last fiscal year in January 2017.

It’s an even bigger deal in and around Fairlawn, where the company recently said it employs about 2,000 people in the area, mostly at its large headquarters on Ghent Road. It employed about 1,000 more before a recent sale of some of its lending operations.

Those employees began 2017 reading stories in The Washington

April 19: Signet brings in former federal Judge Barbara Jones to review its internal policies.

May 5: The company reaches an agreement with Equal Employment Opportunity Commission to resolve claims of sexual discrimination, but private claims against it remain.

July 17: CEO Mark Light resigns, citing health reasons, and is replaced by current CEO Virginia “Gina� C. Drosos.

Signet Jewelers CEO Mark Light stepped down in July and was replaced

by Virginia “Gina� C. Drosos. (Chris Goodney/Bloomberg)

Post and other national media about widespread reports and legal claims against the company for sexual harassment. The company dubbed the stories “distorted and inaccurate,� but they persisted, as did the decline in Signet’s stock price that began, roughly, with The Post’s reporting and follow-ups in many other media outlets, including this one.

Things got pretty salacious, too, with a court memorandum cited as saying, “Multiple witnesses told attorneys that they saw (Signet Jewelers CEO Mark) Light ‘being entertained’ as he watched and joined nude and partially undressed female employees in a swimming pool.�

Light would step down as CEO in July, for health reasons not specified by him or the company, and replaced

by Virginia "Gina" C. Drosos.

The company took steps to address its problems. In April, it brought in a federal judge to review its policies and practices.

Then, in May, it reached an agreement with the federal government to resolve claims brought against it by the Equal Employment Opportunity Commission over the pay and promotion of female employees. But that still left a huge class-action case against the company.

The company more or less hunkered down after Drosos took the helm. And things were quiet as Signet appeared to stick to its core business issues — addressing flat or declining same-store sales in a tough retail environment and working hard to increase its online sales. In other words, the same challenges affecting most retailers these days.

Nov. 21: Signet downgrades its earnings expectations for the year and its stock price drops.

Dec. 1: The company discloses it is being investigated by the federal government for its consumer lending practices.

Signet even did some extra, heavy lifting. Long criticized for having too large of a loan portfolio, generated by its own lending to finance customer purchases, Signet offloaded almost half of its outstanding loans in October. It sold nearly $1 billion worth of prime consumer loans to the Columbus-based credit-card service company Alliance Data Systems.

Signet also made an acquisition aimed at boosting its online sales, when in September it paid $328 million to buy the online retailer R2Net. That’s only expected to add a little more than $80 million in first-year sales — small potatoes on a farm that counts its crops in the billions — but

the real test may be whether Signet can integrate it so that sales grow further over the long term.

Then, just after Thanksgiving and right at the start of the critical holiday shopping season, the company again was hit with claims related to how it deals with consumers.

Most significantly, Signet disclosed in a Dec. 1 SEC filing that it was being investigated by the Consumer Financial Protection Bureau for its in-store credit practices.

Needless to say, these are not the sort of issues any retailer wants to deal with — but one has to wonder if they are not even more damaging in a hightrust business such as jewelry sales.

Shareholders have already been hammered. The stock that was trading in 2016 at more than $70 a share can now be had for a bit more than $50 per share, while the rest of the stock market has been flying to new record heights.

In November, the company exacerbated that situation, when it downgraded its earnings outlook for the year.

Observers will get an important look at how the company is really doing in the spring, after its year ends in January and Signet reports its annual sales, revealing how it did over the holiday season. So far, most analysts are predicting that sales will be flat or a little down from the year before.

But what will really be critical is whether the company seriously addresses some of the issues that got it to this state, which one suspects were at least at some point a result of corporate culture. It needs a long run of, if not good news, at least fewer bad headlines if it’s to fully repair its image and, likely, renew its sales growth.

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PA G E 19

Newsmakers of the Year

Karen Gahl-Mills

By TIMOTHY MAGAW tmagaw@crain.com @timmagaw

The steady decline in smoking rates has been a healthy development for virtually all involved, though that’s not necessarily the case for arts and cultural institutions in Cuyahoga County who depend on tax revenue from the sale of cigarettes to help fund their operations.

Voters renewed the 10-year, 30-cent-a-pack tax in 2015. But as the funding source continues to erode, the agency that doles out the dollars — Cuyahoga Arts & Culture — has had to make difficult decisions regarding which organizations to support, especially as the number of arts and cultural organizations continues to rise in the county. In 2008, the cigarette tax brought in $19.54 million.

In 2016, that figure shrank to $14.77 million — a 24% decline that shows no signs of slowing.

“This was a really smart solution for a community that didn’t have any public investment in the arts at all,” Karen Gahl-Mills, CAC’s executive director, told Crain’s earlier this year.

“It is not a 100-year solution. Nobody thought it was when it was built.”

At the center of the debate, of course, is Gahl-Mills, who along with her board has faced a brash of criticism as the agency has tweaked, quite considerably, how it’s done

business over the last few years. At the center of the debate, of course, is how the agency can equitably support a growing pool of grant applicants with a shrinking pool of cash.

Notably, last month, the agency approved a $10.2 million allocation to support the 2018 operations of 61 local arts organizations. That’s almost 20% fewer dollars than the $12.7 million allocated for each of the previous three years — a fairly sizable decrease that will certainly be felt by many organizations already on shoe-string budgets. The knowledge that revenues were shrinking was hardly a secret, especially given that CAC has dipped into its reserves to buoy its grant allocations.

With this round of cuts, CAC hopes to maintain the 2018 funding levels through at least 2019 — maybe even 2021. While many organizations that received funding appeared understanding of cuts, others argued they came without warning. Some even used the word “surprise” at an October meeting discussing the funding expectations, according to a report in The Plain Dealer.

At the November meeting when CAC approved the grants, David Hooker, a trustee of the Musical Arts Association, the parent of the Cleveland Orchestra, urged the board to postpone its decision. He said those recipients will be “severely and negatively impacted by the proposed sudden and unexpected 20% cut in gen-

“This was a really smart solution for a community that didn’t have any public investment in the arts at all.”

— Karen Gahl-Mills

eral operating support.”

Hooker said the cut was unfair to organizations that had come to rely on CAC’s prior level of financial support. He questioned providing firsttime support to new organizations and said he would hope the cuts would have been more gradual.

“It seems unfair to us to make such a severe cut now,” Hooker said at the meeting. “Funds should not be taken from (existing support) for new pro-

grams. It would be one thing to look at new programs if the amount of tax revenue were increasing.”

That said, discord regarding funding cuts came as emotions already ran high in the local arts community. Last year, CAC made a controversial decision to retool the Creative Workforce Fellowship, which, using the Community Partnership for Arts and Culture as the distribution vessel, sent funding to individual artists in the community rather than the institutions CAC funds on its own. CAC had wanted to spur more involvement from minority artists — something it said CPAC had not done, despite requests to tweak the program.

For example, from 2009-2016, the program supported 161 artists, though only 16 — or 9.3% — of those were identified as African-American.

By comparison, 30% of the county’s population is black. CAC moved to replace the fellowship program with something administered by National Arts Strategies, a Washington, D.C.based nonprofit, but the group bailed amid community uproar.

Over the last six months, a team of local artists and residents met more than 20 times and pieced together a plan on how it believes CAC can provide meaningful support to individual artists. Last week, CAC’s board formally received the planning team’s recommendations and charged the CAC staff with evaluating the proposals. Namely, the proposal recom-

TIMELINE Jan. 24: Cuyahoga Arts & Culture unveils the results of its 18-month listening project that will guide its grantmaking strategy over the next several years. The center of that discussions is regarding how it can most equitably support the local arts community.

July 6: For the 10th year in a row, CAC receives a “clean” audit report from the Ohio Auditor of State.

Oct. 16: CAC’s board approves $10.2 million in general operating support for 2018-2019 — almost 20% fewer dollars than the previous funding round.

Nov. 13: CAC’s board approves its largest slate of grants totaling more than $12 million to 257 organizations.

Funding included almost $1.8 million to nearly 200 organizations for project support.

Dec. 11: CAC formally accepts recommendations of a working group on how to retool its individual artist support program to support more minority artists.

mends the “majority of funding and support for individual artists goes to Cuyahoga County residents who have been historically excluded, namely persons of color.”

CAC’s 2018 operating budget includes $400,000 to support that work.

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CRAIN’S CLEVELAND BUSINESS

Newsmakers of the Year

By STAN BULLARD

Forest City Realty Trust

sbullard@crain.com @CrainRltywriter

Only two ways remain for Forest City Realty Trust to make more and bigger news as a company in 2018 than it did in 2017.

The biggest would be if the Cleveland-based real estate developer gets bought by another public company or private equity firm under its plan announced last September to review alternatives and hire investment bankers and lawyers to find and configure such a deal.

The other would be if its management proves wrong the activist investors who believed the company would find many suitors, and no one serious shows up.

Even if that is the case — and likely a better outcome for downtown Cleveland to keep intact a major corporate citizen — the company is bound to reverse course and start buying major assets in major U.S. markets.

Signals of either direction are apparent in recent company documents, spurred by two rounds of criticism in the last two years by activist investors.

In a Nov. 30 Securities and Exchange Commission filing, the company has said it would have a longer period than in the past for shareholders to submit names for board posts. It opened that window Dec. 3 and would close it in late spring unless the company announces the name of a board member or members if it finds a buyer or major investor. In that case, it said it would immediately close the nomination process for the next annual meeting. The meeting is usually held in June.

The other option might be for the company to find some significant assets or another company to buy. It signals as much in plans for selling the remaining shares of its last 10 enclosed regional malls to partner QIC, an Australian institutional investor.

Forest City has said it would time sales of about four of the malls so that they would coordinate with asset acquisitions. That would diminish the potential federal tax impact of so many dispositions, the company has said.

However, imagine what type of acquisitions those might be given the far-flung and high-profile nature of the company’s assets, from the multitenant portion of The New York Times Building in New York City to big apartment buildings in California. Think big New

TIMELINE June 9: Stockholders approves reclassification of Forest City’s dual-class share structure.

Aug. 24: The company sells Post Office Plaza, its last downtown Cleveland property, for $15 million.

Sept. 11: Forest City’s board announces review of options to enhance stockholder value.

Sept. 20: With Madison International, Forest City enters definitive agreement for sale of its New York City retail portfolio.

Oct. 2: Forest City and QIC execute definitive agreements for a regional mall portfolio sale.

Forest City sold the Post Office Plaza office building for $15 million. (David Kordalski)

York City skyscrapers like the Empire State Building (which is available) or some big tech company’s headquarters.

That in itself is a huge change for Forest City.

For the most part since it morphed into a real estate developer from its start in the 1920s building garages and selling lumber, it has developed properties for its own account and bought properties with development potential.

The biggest close-to-home example was the multiple acquisitions of pieces of the Union Terminal complex and Terminal Tower in the 1970s. That provided the foundation to produce Tower City Center in 1990. It sold those parts in separate deals in 2016, separating ownership of Terminal Tower from The Avenue retail center

and two of the property’s 1990-built skyscrapers.

From being one of the region’s dominant property players in the post World War II era, the company has shifted its focus from Northeast Ohio to 10 metropolitan areas, from Boston and Washington, D.C., to Los Angeles.

In a quest to raise its stock price to levels mirroring the value of its underlying real estate, the company undertook draconian efforts over the last five years. The largest was undertaken this year in its corporate structure as the company collapsed its dual shares into one, a move which reduced effective founding family control of the company from the Ratners, Millers and Shafrans. The founding families gave up

shares with 10 times the weight of others.

The move became effective in June.

The Ratner family giving up handcuffs on the control of the company was as unthinkable a few years ago as it once was to have a non-Ratner CEO. Moreover, David LaRue is now in LaRue his sixth year as the first non-Ratner in that role.

As it pursued a leaner structure easier for investors and analysts to appreciate, it shed millions of dollars in enterprises. In August, the concern that was for years downtown’s largest commercial property owner shed its last holding there, the 400,000-square-foot Post Office Plaza Building, 1500 W. Third St., for $15 million to Willoughby-based K&D Group. Also, Forest City in 2017 shed about half the Scranton Peninsula across the Cuyahoga River from downtown Cleveland. The more than $5 million sale Aug. 1 to a trio of developers led by Fred Geis signed the major developer off a onetime plan to add more than a thousand housing units to the peninsula.

Hopefully, for the Northeast Ohio real estate community and downtown Cleveland’s corporate roster, Forest City will remain a big tenant downtown.

Even with its operations far-flung, it is still a big corporate presence. Its Cleveland staff now numbers about 500.

Amazon

By STAN BULLARD

TIMELINE

sbullard@crain.com @CrainRltywriter

May 6: Amazon opens package pickup location at 2020 Euclid Ave.

Northeast Ohioans knew the rise of online retailer Amazon in shopping patterns from the flood of cardboard boxes popping up on porches and apartment mail stops throughout the region the last few years.

However, Amazon’s impact — and some of its benefit — hit home here in a big way in 2017 as the juggernaut and its real estate vendor, Atlanta-based Seefried Industrial Properties, bought sites to build two really big boxes in Northeast Ohio.

Together the buildings are large enough to put 26 NFL fields under their roofs.

And those millions in buying land and building are all being spent in the name of infrastructure. They are part of the titan’s reach to provide prompt delivery across what online companies refer to as the last mile of distribution to serve the population center that is Northeast Ohio.

Moreover, effectively serving the region meant putting properties close to town rather than on the outer fringe, near population centers that provide both customers and employees as the two properties togeth-

Aug. 27: Amazon commits to an 880,000 square foot distribution center in North Randall.

Aug. 28: With its purchase of Whole Foods, Amazon gains three food stores in Northeast Ohio, and when its Akron store opens in September, a fourth.

Sept. 28: Amazon commits to a 1.7 million square foot fulfillment center in Euclid.

Oct. 19: Cleveland submits its bid for Amazon’s second headquarters project.

er will hire more than 3,000 workers.

It also just so happened finding sites transformed two big problem properties with the just-launched razing of Euclid Square Mall in Euclid and accelerating beyond its developer’s wildest dreams the repurposing of Randall Park Mall in North Randall to industrial use.

Although millions of public investments in terms of state job credits and bonds from the Cleveland-Cuyahoga County Port Authori-

ty to snag low interest rates and federal tax enhancements are supporting the projects, the impact of eliminating the problem properties in two strokes cannot be overstated.

North Randall Mayor David Smith used the word “generation” when discussing the Amazon project because it redefined the future of his community.

“Words cannot begin to express what Amazon’s commitment to the

development of its fulfillment center means for the Village of North Randall,” he said.

And Randall Park Mall already was demolished and four years along in the process of redevelopment when the Amazon option surfaced.

In Euclid, the city had already won a substantial Amazon investment.

The Seattle firm had leased more than 65,000 square feet in a building at Bluestone Industrial Park, which Ray Fogg Corporate Properties installed in converting the site of a former massive copper plant to dirt for industrial redevelopment.

But Euclid Square Mall had been troublesome for years. No clear alternative to rejuvenate it was apparent.

Then Amazon lightning struck.

“We are thrilled to welcome Amazon and Seefried to the City of Euclid,” was the way Euclid mayor Kirsten Holzheimer Gail put it when the official word came out in September. “The Euclid Square Mall site has been a prime target of our redevelopment efforts. While some saw a vacant mall, we saw an opportunity for growth and development.”

Sanjay Shah, Amazon’s vice president of North America customer fulfillment, in a news release pointed out the growth in Ohio is due to its workforce and “incredible customers.”

Amazon said it already has 55 such fulfillment centers in operation around the nation.

And the work? In both locations, the company said its associates will pick, pack and ship customer items such as electronics, books, housewares and toys.

Amazon made other impacts on the region as well. Last spring, it opened a pick-up store in downtown Cleveland, an area where every retail addition is a victory.

Cleveland also put in a bid in the online company’s quest to find a second location in the U.S. Competition is intense, but at least the city had the chutzpah to join 237 other localities hoping to land the economic plum — and challenge.

Insiders note that Amazon has only said it will make an announcement about HQ2 in 2018. After 2017, it’s good to have something else to watch for as well as the filling of all those jobs in the region.

But it’s also good to note the basics. By the numbers, there will be an 880,000-square-foot warehouse in North Randall and a 650,000-squarefoot property in Euclid. Their scale rivals the region’s massive industrial plants.

Amazon is adding a new layer of big boxes to the region for a new era.

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THE PANEL LLOYD BELL

Director, Corporate Finance Group Meaden & Moore

ROUNDTABLE DISCUSSION FINANCE STRATEGIES FOR PRIVATELY HELD COMPANIES SPONSORED CONTENT

As director of Meaden & Moore’s Corporate Finance Group, Lloyd advises clients on the value of their privately held business interests. He identifies strategies and structures transactions that maximize corporate value to his clients. His assistance includes forecasting future cash flow needs, securing capital and offering advice on new business acquisitions. His range of expertise extends to several aspects of financial management, including business valuation, transaction advisory, banking and finance, growth consulting and private equity. He holds both the Certified Merger & Acquisition Advisor and Certified Business Appraiser designations. Lloyd is chairman of MidTown Cleveland’s Board of Trustees and serves on the board of the Cleveland Skating Club.

He also frequently speaks about private company corporate finance and valuation to business and student groups. Lloyd earned his bachelor of arts in economics degree from Denison University and an MBA with a concentration in banking and finance from Case Western Reserve University’s Weatherhead School of Management.

HOWARD BOBROW Partner Taft

Howard Bobrow is a partner and business and transactional lawyer in Taft’s Business & Finance Practice Group, which is primarily devoted to mergers and acquisitions, private equity and venture capital. Howard is also chair of the Venture Capital Practice Group and member of the firm’s executive committee. He counsels private equity and venture capital funds and other institutional investors, as well as angel investors, on all aspects of acquisitions, dispositions, capital formation and private placements. He has extensive experience in structuring and closing early stage and growth-stage capital formation transactions, including technology validation, technology transfer, technology licensing, seed investment, early stage investment and follow-on investment transactions. Howard serves on the Board of Trustees of the Ohio Venture Association. He has been recognized in various publications, including Best Lawyers in America since 2007 and was named as “Lawyer of the Year” for Venture Capital Law in Cleveland in both 2017 and 2013. He is a member of Association for Corporate Growth, Cleveland Chapter, and Ohio Venture Association. Howard graduated from Miami University and Case Western Reserve University School of Law.

TJ GLIHA

Director, Private Client Services Sequoia Financial Group

TJ Gliha works closely with business owners and entrepreneurs, advising them on financial and strategic management as well as asset management. His individualized approach to client service enables him to understand and develop a strategy that meets each client’s needs and goals. TJ also participates in the firm’s investment committee to review investment performance and strategies. Prior to joining Sequoia, TJ was as a senior position manager for a proprietary trading company in Chicago. He is a board member with the Avon Lake City School Foundation and Cleveland Clinic Children’s Council.

He is a member of University Hospitals Diamond Advisory Group. TJ earned his bachelor’s degree in communication management from University of Dayton.

Gain, maintain a competitive edge in your industry

A

solid financial plan is a key part of unlocking the potential of your business. There are numerous opportunities through which to achieve your business goals, whether you are looking to start, scale, merge or sell. Crain Content Studio - Cleveland turns to four finance industry professionals for their perspectives on financing opportunities available to privately held companies and how those strategies can help business owners reach their desired outcomes.

EFFRAM KAPLAN

Managing Director Brown Gibbons Lang & Co.

As head of BGL’s Environmental & Industrial Services Group, Effram Kaplan serves both public and private industry, including public and private companies, credit institutions and private equity sponsors. He works within key subsectors of the environmental and industrial services industry, including solid waste, special waste, plant and field-based services, metals and electronic waste, engineering and consulting, and energy services. He also publishes the Environmental Services Insider, a nationally recognized research publication that addresses operating statistics, valuation metrics, and mergers and acquisitions trends in the industry. Effram is a member of the National Association of Responsible Recyclers, National Solid Wastes Management Association and the Association for Corporate Growth. He is a speaker at industry events and enjoys presenting on the state of the capital markets and micro- and macro-economic themes within the environmental and industrial services sector. Prior to BGL, he worked in corporate finance at Key Capital Markets and in management consulting at Arthur Andersen and Cap Gemini. Effram has a bachelor of science in finance degree from Miami University and an MBA from the University of Chicago.

ROUNDTABLE DISCUSSION

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Q&A I’m interested in financing my small business. How do I select my team of advisers?

EFFRAM KAPLAN: You must first understand the purpose for the financing. Is the financing for a specific growth initiative or for a liquidity event?

Are you looking to engage a partner to help you grow your business? You also need to consider the strategic plan for the business. Is there an eventual sale in the future? Is it a generational transition?

When you are thinking about accessing the capital markets, you will want to engage advisers who have sector expertise, firm scale, geographic reach and cultural fit. Does the adviser have a long track record of transactional experience in your industry?

The private capital markets are becoming crowded, and new players are entering the market. The ability to access the investor community on a regional, national or global scale is critical in today’s market, which requires an adviser with scale and reach.

A capital raise or sale is a significant transaction for a family owned or privately held business. There has to be a comfort level with your adviser from both a working relationship and a cultural perspective because you are going to be spending a lot of time together.

HOWARD BOBROW: There are a couple things that I always advise clients to consider when selecting a professional adviser: Make sure the adviser is an expert and has actual and relevant experience in the specific subject matter and your industry. If you are exploring financing strategies for a small technology business, then find an adviser with experience advising emerging technology companies and assisting those companies with their growth financing strategies.

The second, and not to be overlooked, is choosing a professional adviser whom you like and who fits your style and your needs, as well as one that will be accessible to you and your team. Keep in mind that you will likely be spending a substantial amount of time with this person, whether on the phone or otherwise.

Do I need to prepare a forecast in order to obtain financing and, if so, for how long?

LLOYD BELL: If you’re going to ask someone to loan you money, it’s generally a good idea to model out exactly how much your business will need and how and when you will be able to pay it back. A good starting point is looking out over the next three to five years. It’s also important to keep in mind that the reason for the request may impact the overall cash needs of the business.

FINANCE STRATEGIES FOR PRIVATELY HELD COMPANIES

‘‘

The cost of equity . . . is really an opportunity cost and is a function of the risk in an investment.”

— LLOYD BELL, Director, Corporate Finance Group, Meaden & Moore

EFFRAM KAPLAN: It’s always good practice to maintain both a budget and a forecast, which aid in operations and long-term direction of the business. You should have a purpose for the financing and a reason for accessing the capital markets, which will dictate the type of forecast and/or financial model that you will need to produce. Forecasts typically vary anywhere from one to five years.

The level of detail and frequency of reporting budgets and forecasts depends on the type of capital being pursued and the type of partner you engage with.

If you are accessing the debt markets, the scrutiny around the financials and the specific metrics that are analyzed will vary from other participants in the capital structure. The level of detail that a regulated banking institution requires will differ from an equity investor.

When does it make sense to finance with a bank loan or raise money from investors?

HOWARD BOBROW: As a general rule, financing from a lending institution is the least expensive capital, and financing from an equity investor is the most expensive capital. The cost of financing from a lending institution is generally the payment of some form of interest rate. Evaluating and quantifying the cost of financing from an equity investor is more complicated because you are giving up equity, which can end up being very expensive capital in the long run. Of course, from an investor’s perspective, it’s not “cost,” it’s a “return on investment.”

If your business is “bankable,” it means that your business can qualify to obtain traditional bank financing.

This would often be the preferred form of financing because of the relatively low cost. Unfortunately, many small businesses are not bankable because they don’t have the assets or cash flow necessary to be approved for a traditional loan, or at least they are not bankable without one or more personal guarantees. In those situations, it may be more prudent to obtain growth capital from equity investors.

However, in addition to the upside that you give up to an equity investor, there are other non-economic costs, including less control of operations and decisionmaking. Equity investors can also bring value to your business that a traditional bank lender can’t, such as operational and financial expertise and connections.

TJ GLIHA: For a traditional business, debt financing is typically easy to obtain due to the possibility of generating

steady cash flow. Other businesses can have more difficulty obtaining bank financing, and therefore may have to give up equity to raise funds. For most businesses, the two primary methods for funding are debt and equity.

Advantages of debt include allowing business owners to maintain control, potential income tax deductions for interest, a known timeline in advance and often being the least expensive form of capital. However, personal guarantees and less flexible terms are associated with this type of financing.

A main advantage of equity financing is an immediate increase in working

‘‘

capital. If working with a strategic investor, equity financing may help cover the talent gap or leverage industry expertise. However, equity financing can be more costly than debt financing and may result in a partial loss of ownership and control.

Apart from traditional lenders, alternative lenders and investors (including angel investors and venture capitalists), are there any other creative ways to finance a small business, and if so, what are they?

HOWARD BOBROW: If you exclude financing from traditional or alternative lenders and investors, you are not left with many options. One alternative is non-dilutive financing.

We are seeing more small to middle market clients implement a sale leaseback strategy to inject capital into their businesses.”

— TJ GLIHA, Director, Private Client Services, Sequoia Financial Group

December 18, 2017 S2

This method can accelerate growth and does not dilute the existing owners of a business because it does not require the sale of a company’s shares. Non-dilutive financing can include government research grants, government industry grants and grants from foundations and other nonprofits.

Another financing alternative is financing through organic growth or financing a small business through its existing revenue streams or new product development. This can be a viable alternative for many small businesses, but is often challenging, or at least slower than obtaining outside growth financing.

A third alternative is crowdfunding, which is obtaining funding for a business by raising relatively small amounts of capital from a relatively large number of people, typically online. But crowdfunding isn’t for everyone, as there are still numerous complicated rules and regulations that need to be followed, some of which can be prohibitive to a business.

TJ GLIHA: Some other creative ways to finance a small business include government grants and sale leaseback transactions. We also see that some of CONTINUED ON NEXT PAGE

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‘‘

The middle market has become much more efficient due to an increasing level of investor sophistication and operating talent.”

— EFFRAM KAPLAN, Managing Director, Brown Gibbons Lang & Co.

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our clients use the strategy of accounts receivable financing, whereby using outstanding monies owed by customers as collateral. This strategy helps companies instantly obtain working capital, though it can be costly due to higher costs and expensive borrowing rates.

The business also can acquire quick capital by executing a sale leaseback transaction, through which the business sells an asset, most commonly real estate, to an investor and immediately leases the property back at agreed upon terms.

How are lenders approaching deals, and what factors are behind their decisions?

EFFRAM KAPLAN: Lenders are looking at the asset base, including fixed assets and working capital, and cash flow generation of a business to assess its lending capacity. They also are looking at trends over some defined period of time. Quality of revenue is also a key metric, or the share of revenue that is recurring versus project-based, which speaks to customer stickiness.

Lenders are also considering timing in the economic cycle and business performance during the last recession.

If lenders see that there are equity investors in your transaction, they may have a more aggressive lending appetite.

TJ GLIHA: When approaching deals, lenders are constantly evaluating the current and projected economic climate. Where are we in the business cycle? Where are we in the credit cycle?

We advise small business clients to be proactive in taking advantage of available credit when interest rates are low or lenders are more willing to lend.

Lenders are looking at a deal’s strength, stability, collateral and the borrower’s ability to repay. They want to see that the financials and key performance indicators are in line with industry standards. Lenders will also evaluate the company’s cash conversion cycles and its customer base concentration: Is the business product offering and client base diversified? The softer items are critical to the lenders as well. What is the company’s reputation in the community? Is this a business they want to partner with?

How much leverage should a balance sheet have?

LLOYD BELL: Different industries can have vastly different amounts of leverage based on the nature of their business.

For example, a distribution company

will have far more debt on its balance sheet than a business services company.

That being said, each company has an optimal capital structure based on how much debt the cash flow or collateral can support without negatively impacting the cost of equity or investment risk. The leverage should be enough to generate an adequate return to investors but also be able to withstand a protracted decline in the business.

When is a company a good candidate for private equity funding?

LLOYD BELL: The business should be in a position to achieve a significant amount of growth that it would be unable to do organically through its annual cash flows. The best way to gauge the readiness of the company is to review its strategic plan. This plan should make a compelling case as to how the company can use its advantages to maximize the investors’ returns and how additional capital will allow it to do so. The corollary is that a company without a strategic plan is not a good candidate. A best-in-class business is far more attractive to an investor than a fixer-upper.

The business also needs to be at a certain size to attract the interest of private equity funding. All time and expense of due diligence being equal, a private equity fund would prefer to invest in larger transactions to achieve their targeted returns.

EFFRAM KAPLAN: Industry dynamics, including market fragmentation, and the dynamic of the existing management team are key. A highly talented management team is critical for most private equity platform investments. Private equity is interested in businesses that are in fragmented industries because they present opportunity for consolidation through accretive add-on acquisitions.

HOWARD BOBROW: Private equity funding can make sense if you are looking for more than just capital, and one of your objectives is growing your business and achieving an exit or sale. Private equity can bring valuable operational and financial expertise to your business, as well as industry connections with customers, suppliers, board members, managers and other strategically valuable industry participants. All of these things are intended to help facilitate growth.

Companies need to keep in mind that when you finance through private equity, you are selling a portion of your company, which leads to giving up a portion of your upside when the value

ROUNDTABLE DISCUSSION

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of your company appreciates. However, the goal is for your reduced stake in the aggregate business to be worth more than if you proceeded without private equity investors and continued to own 100% of a business that was worth less.

Private equity can have disadvantages, including very high cost of capital as well as giving up some level of control to the private equity investors. It is also important that your growth trajectory aligns with that of the private equity investors, or there will likely be friction in the relationship.

It is critical to understand your all-in cost of capital in terms of equity vs. debt.

How do you evaluate your all-in cost of capital to get an accurate return?

LLOYD BELL: I love this question because we often fail to consider the cost of equity in a business. The cost of debt is an easy concept to understand because it’s a stated rate that gets paid in cash. The cost of equity, however, is really an opportunity cost and is a function of the risk in an investment. Business owners with millions of dollars of equity value in a privately held company don’t often think about what level of return they should be earning on that investment but will watch very closely the equity returns in their retirement accounts which, by their nature, tend to be far less risky.

A company is generating an economic profit, that is, it is creating value for its shareholders, only when the earnings are enough to satisfy both the cost of debt and the cost of equity.

TJ GLIHA: If return on invested capital is greater than your cost of capital, you are creating economic value. Simply put, you are making money. That being said, when evaluating the cost and return, where is it relative to competitors or the industry?

It’s helpful to know roughly how much capital a business requires, how much of its earnings it can retain and reinvest, and what the returns from those investments will look like going forward. Since cost of capital provides the business with the minimum rate of return it needs on its investments, it is an essential part of financial decisions.

How do you measure return on invested capital? Furthermore, how do you measure your compounded rate of return over a full business cycle?

TJ GLIHA: Companies that can retain and reinvest most or all of their earnings at high rates of returns do well no matter what is going on with the economy or where we are in the business cycle. A durable business with predictable cash flows and higher returns on capital leads to a compounding effect that sees earnings grow. A business’s compounding power

FINANCE STRATEGIES FOR PRIVATELY HELD COMPANIES

‘‘

with equity will bring in new owners whose views on growing the company for maximum return may differ from the way the owner is used to running the business. The economic return, however, could be far greater to the business owner by bringing in outside capital to grow the company at a rate far faster than it could on its own.

Private equity can bring valuable operational and financial expertise to your business, as well as industry connections with customers, suppliers, board members, managers and other strategically valuable industry participants.”

— HOWARD BOBROW, Partner, Taft

is determined by the percentage of earnings that a business can reinvest back into the business; the return that the business can achieve on this investment; and what the business does with excess cash flow (if the reinvestment rate is less than 100%).

So ideally, a successful business should produce high returns on capital and retain large portions of its earnings to reinvest at similar high rates of return.

We briefly discussed sale leaseback transactions as a creative way to finance a business. When is this an appropriate strategy?

TJ GLIHA: We are seeing more small to middle market clients implement a sale leaseback strategy to inject capital into their businesses. This strategy frees up cash that may help the business grow through acquisition, invest in technology or replace aging equipment and can also help the owner take some chips off of the table.

This transaction is the monetization of an asset (typically real estate) owned by the business, while at the same time entering into an agreed-upon long-term lease. This allows the business to maintain its current operations and unlock the capital to be deployed more effectively.

We see this strategy as an alternative to bank financing. It provides the seller with more flexible terms in rents, tax savings and a higher financing ratio — that is, the sellers typically receive 100% of the value of the property when compared to mortgage financing, in which they are limited to 60% to 80% of appraised value.

What are some of the key considerations in a recapitalization versus an outright sale of a business?

EFFRAM KAPLAN: Why would you pursue a recapitalization of the business?

As the management team, you may see ways to grow the business and need the capital to do it. You may choose to access the capital markets to pursue an acquisition or facility expansion, or you may be looking to enhance your service offering by acquiring more assets and need working capital funding.

Or you still want to participate in the industry growth, but you are not ready to transition the business to a new owner.

The capital markets are very creative in the middle market, so there are a number of ways to recapitalize the balance sheet.

LLOYD BELL: An owner wouldn’t consider a recapitalization if he or she is looking to cash out then retire. A recapitalization makes sense when the owner wants to diversify their investment risk by cashing in a portion of their investment in the company. The owner should recognize, however, that management of the company post-recapitalization can be very different than before.

If the recapitalization is provided by leveraging the company’s balance sheet with debt, it may not have the same flexibility as before because the debt service will take a significant portion of the annual cash flows. A recapitalization

How long do you anticipate continued strength and stability in the financing markets?

LLOYD BELL: I think the financing markets will remain strong longer than those seeking financing. Within our client portfolio, we saw a general deleveraging of balance sheets since the recession. Over the last three years, corporate borrowings have crept up a bit, partially to fund deferred investment in capital equipment but also to fund working capital growth. But some sectors, such

Managing editor, custom and special projects: Amy Ann Stoessel, astoessel@crain.com

December 18, 2017 S4

as retail, have such thin margins as it is that continued increases in interest rates will put a real strain on their ability to service their debt.

In general, however, I’d say that I don’t foresee any problems for borrowers or lenders absent a significant shock to the economy.

EFFRAM KAPLAN: We are seeing continued capital flows and investment into the middle market relative to the large cap or public markets. The middle market has become much more efficient due to an increasing level of investor sophistication and operating talent. As a result, the risk profile and expected return on investment for middle market companies has come down, which has attracted more capital into the market.

While we don’t have a crystal ball to predict certain levels of volatility within the capital markets that might lower valuation, we are very optimistic about the long-term trends for investment, whether it be private equity, debt, or strategic acquisitions, in the middle market.

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Through a comprehensive set of M&A and capital raising services, BGL delivers tailored solutions to meet the unique corporate finance needs of middle market businesses.

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AKRON

Kent building gets makeover, new tenants

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By DAN SHINGLER

By B

dshingler@crain.com @DanShingler

As far as downtown businesses go, a city can do worse than having a topnotch, progressive architecture firm.

Case in point, Kent, which has not only just such a firm as a growing source of professional employment, but it’s also helping facilitate the redevelopment of the city’s historic L.N. Gross Building, which soon will house Richard Fleischman|DS Architecture.

That “soon” — according to principal Jeffrey Meyers — is Jan. 11, when DS will be one of two tenants sharing the 20,000-square-foot building.

“We’ll be fully occupied, but with plans for expansion already,” Meyers said.

The other tenant is Meyers’ client — and the owner of the L.N. Gross building — Canfield-based Renaissance 2000, a development company owned by Youngstown’s Cene family, said Renaissance vice president Ryan Cene.

The Cenes are the building’s sole owners, and DS is their architectural firm for the project, Cene said.

Renaissance purchased the building in 2015 and will use it to house another family startup, the bottled water company On Us Aqua LLC, which Ryan Cene will lead as president, he said.

The company plans to access limestone-filtered water from a deep local aquifer and put it in locally made recyclable aluminum bottles, a process Meyers said his architects had to design around. Renaissance says on its website that the water is worth it, though. Cene said the bottles will be produced in Youngstown, where his family was previously in the aluminum extrusion business.

“We discovered that the water in Kent, Ohio, was highly praised year after year as the “Best Tasting Municipality Water” at the long-running Berkeley Springs International Water Tasting. So we will produce a bottled water brand called On Us that emphasizes recycling,” the company says on its site.

For Fleischman|DS, designing around needs of a water bottler was only one of the things that has made the project challenging, Meyers said.

The L.N. Gross building, downtown on Gougler Avenue, is a local

The L.N. Gross Building in Kent has gotten a complete makeover and will house Richard Fleischman|DS Architecture and On Us Aqua LLC. (Contributed photos)

The building was constructed in 1928 and required a full rehab at a cost of about $6 million.

art-deco landmark that was built in 1928, and there’s about $2.1 million in state and federal government grants and tax credits backing the $6 million project, Meyers said. That comes with some limitations, particularly those attached to historic tax credits that guide how a building can be altered, especially in the front. For example, Meyers said his firm had to find a custom glass maker that could make windows for the front of the building that would preserve its historic look but also meet standards for

high efficiency.

That’s why when the architecture firm does expand, it’s eyeing ways to do it in the rear of the building, he said.

But so far, the firm has been able to meet the tax credit requirements as well as those required for LEED certification for sustainability, Meyers said.

The building includes features like a slow-release watery system for its roof, which slows water and filters it through substrate before allowing it

to run off into the Cuyahoga River or storm sewers, Meyers said.

There’s also access to a bike path in the back and green space.

The entire project was a labor of love that included taking some parts of the building apart and putting them back together again as before, just with far more structural integrity.

The building got new central heat and air, but designers put its old boiler system to use in a new and highly efficient way, Meyers said. It wraps around the base of the building’s exterior, warming it. As the heat rises up, the building becomes more or less enveloped in a blanket of warmed brick, he said, making heating the interior a snap.

But why put so much love, and money, into an old building with such needs? For one, it’s a great building and for another, Fleischman|DS needed a landmark home, Meyers said. The firm has been growing quickly in recent years.

The firm works so closely with Renaissance president Bob Cene that he’s a regular visitor with his own keys to the offices, Meyers said, noting that Cene is an architect himself.

If you’re wondering, yes, that means Fleischman|DS staffers had Cene looking over their shoulders, or even coming in to “do sketches,” Meyers said.

But, to be fair, the main reason the building is opening a month or so later than planned is because Fleischman|DS made its own “change orders” with the buildings’ custom furniture maker, he conceded with a chuckle.

Not all of the firm’s business in recent years has been as challenging or as sexy as its home office project. But a steady stream of industrial plants, prisons, government facilities, universities and other projects have kept the firm plenty busy on a regional basis.

“I’d say we’re kind of an east-of-the-Mississippi firm,” Meyers said.

Locally, it’s either recently done or is working on major projects for Kent State University, the University of Akron, Cuyahoga Community College and Kent’s police department, he said.

Earlier this year, DS joined with Cleveland architect Richard Fleischman, along with three of Fleischman’s professionals, to form Richard Fleischman|DS Architecture.

Since 2010, DS has had big growth generally.

“In 2010, there were four people at the firm … now we’re up to 28 people with 12 architects,” Meyers said.

Revenues have followed suit, he said, increasing from about $300,000 to more than $2 million annually, Meyers said.

Between the new digs in Kent and offices that the firm maintains at Fleischman’s former site on Huron Avenue in downtown Cleveland, Fleischman|DS probably has the room it needs for the next two years, Meyers said.

“We’re beyond happy — our firm now has two of the premier design spaces in NEO,” Meyers said.

The firm has, at both locations, snazzy digs that are required to attract new talent in the industry — something the firm intends to keep doing, he noted.

“The (L.N. Gross) building right now is set up for 30 (employees), and the Cleveland office is set up for 10, so that should allow us to grow for the next couple of years,” Meyers said.

Plans have not been made yet, he said, but the firm envisions one day expanding at its new offices in Kent, according to Meyers.

“We believe in it — we signed a 20year lease,” he said. “If we need to go bigger, we will.”

Like Santa, UDS’ workforce bustles at holidays

By JUDY STRINGER clbfreelancer@crain.com

The holiday season is a busy one for United Disability Services of Akron, whose South Main Street facility is not unlike how one might envision Santa’s workshop this time of year — workers busily putting the final touches on gifts soon to travel far and wide.

Santa’s helpers in this case are people with disabilities, and rather than making toys for good little boys and girls, they are assembling gift baskets that Northeast Ohio companies purchase as holidays presents for their employees, clients or business partners.

Yes, gift-giving season is crunch

United Disability Services of Akron provides work, including assembling gift baskets, for about 250 people with disabilities. (Contributed photo)

time for UDS. The Buckeye Baskets program, however, is only one social enterprise the nonprofit operates to provide meaningful employment to a group of people who, despite being “loyal and dedicated employees” often have difficulty finding employment, said Carrie Herman, business development group manager for UDS. In 2015, fewer than 1 in 5 people with disabilities — 17.5% — were in the labor force, according to a June 2016 report from the U.S. Bureau of Labor Statistics.

For people without disabilities, the labor force participation rate hovers around 65%.

Disabled adults, Herman said, face unique challenges when it comes to employment. They may have a hard-

er time with transportation and commuting, for example, or may lack necessary skills or need special accommodations. Sometimes they fear losing their health insurance or Medicaid.

Still, “people with disabilities very much appreciate opportunity to have a paycheck, just like everybody else,” Herman said.

Then, there’s the social benefits of working — being part of a team, interacting with peers and even making friends — which people without disabilities often take for granted, added Anna Adelman, a sales and procurement specialist in UDS’ social enterprise group.

UDS provides employment for about 250 people with disabilities in Summit County. Most of them have

developmental disabilities. Roughly 100 work at the nonprofit’s South Main Street headquarters, while the rest are spread among UDS’ three other locations: Twinsburg, Kent and a second Akron site at Firestone Park.

Adelman said when not bustling with basket-making, many of the UDS clients staff “outsourcing workshops,” where they collate, staple, pack, sort and sometimes do light assembly for as many as 20 Northeast Ohio organizations.

The bulk of its outsourcing customers are manufacturing-type companies, but it also contracts with service organizations.

“If a company has a new product launch or a trade show coming up, for example, it might want to put SEE UDS, PAGE 27

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clbfreelancer@crain.com

After spending the past 20 years working as buyer and co-owner of a high-end clothing store on the east side of Cleveland, Andrea Pierce-Naymon now finds herself in unfamiliar territory — trying to scale up her Akron-based all-natural skin care products company, OY-L. The company was created almost by accident. When her daughter went through two years of being sick without a clear diagnosis, Pierce-Naymon started looking critically at the foods they ate and the products they were using to see if she could find any culprits. Although her daughter’s condition turned out to be unrelated to products, Pierce-Naymon couldn’t turn her back on what she had learned: Most people put more than 300 chemicals on their body every day.

“It was really quite frightening when you start Googling what those chemical names are,” she said.

During this exploration time, Pierce-Naymon started to create skin care products in her kids’ playroom, using natural products such as avocado and honey. She gave some away as gifts and earned rave reviews. It was in early 2016, when her sister-in-law reported back that the body cream cleared up her longstanding eczema, that Pierce-Naymon began to think she was really on to something. She was able to get a private investment of $200,000 to start to turn her experiment into “a real company,” she said.

During 2017, the company has experienced growth of 230%, and its products are on the shelves at about 30 retail locations, with more being added each week. The products are available on the Saks Fifth Avenue website as well. OY-L ships out anywhere from 50 to 800 jars of product per week.

Pierce-Naymon’s timing in joining the cosmetics industry is good. Inde-

UDS

CONTINUED FROM PAGE 26

together a goody bag. Something like that could take hours of overtime or mean pulling people from their regular jobs,” she said. “Often we can do it more cost effectively, and sometimes faster.”

The UDS workforce also can prepare materials for shipping, as needed, or deliver items for customers.

The service tends to benefit organizations most when they have a large project that needs to get out quickly or a very repetitive piece of work that requires too many hours when done in-house, Adelman said.

Clean machine Workers at UDS’ Twinsburg facility assemble Purell dispensers as part of a unique partnership with GOJO Industries of Akron, which also allows UDS to sell GOJO products to state agencies.

Herman said Ohio’s state use law requires state offices, cities, counties, villages and townships to purchase products from organizations that employ disabled workers whenever possible.

Five years ago, GOJO approached

OY-L’s products are sold in about 30 retail locations and through Saks Fifth Avenue. (Contributed photo)

Andrea Pierce-Naymon started her company, OY-L, out of her home. (Contributed photo)

pendent beauty brands are a fast-growing segment in the market and retailers are seeing them as crucial to their success, said Jillian Wright, co-founder of Indie Beauty Expo.

“Indie beauty helps to differentiate a retailer’s environment from their competitors,” Wright said. “As mass beauty becomes more cookie cutter and redundant, indie brands offer a uniqueness, a curative approach to beauty that is appealing to not only beauty retailers, but fashion as well.”

Consumers also are drawn to independent brands because they see their purchases as having a connection that doesn’t exist within a mass

“Not everybody is aware that there is a workforce out here, just ready and waiting.”

— Carrie Herman, business development group manager, United Disability Services of Akron

UDS about being one of its state-use partners — the company has 17 across the country, according to Herman — and over the years, the company has “reverse engineered” several of its sanitizer products so that they could be assembled, packaged and shipped by the UDS workforce, she said. Currently, 44 customers purchase GOJO products through UDS’ state use program.

UDS client employees also staff a cafeteria and catering business called Taste Buds, which operates at the Summit County Children’s Services office building on South Arlington.

Local businesses can order boxed lunches or trayed foods for meetings or events, Herman said, while UDS workers see to the daily lunch needs

retail environment, she said.

Wright’s trade show in New York was one of Pierce-Naymon’s first stops with her product line. There, she received great encouragement and positive press coverage from several national media outlets.

Two weeks later, she got a call from Saks, asking her to come back to New York to show them her line. She agreed, as she was going anyway to buy items for the clothing store, Kilgore Trout in Woodmere. Saks loved her products and packaging and thought it would be a good fit for their “apothecary” department, which puts natural products in some of their stores.

Pierce-Naymon elected to be a “drop ship” vendor for now, which means her products are not on store shelves, but available for same-day shipment when ordered on the Saks website. She chose that route because she wasn’t confident she could handle it if she got inundated with large orders. Her current facility is small, about 800 square feet in the Akron Global Business Accelerator, and it’s just herself and one employee doing all the work.

Moving into 2018, Pierce-Naymon hopes to add more retailers but also wants to drive more business through her website, as those sales are more profitable for her. Her goal is to be at $250,000 in sales by the end of 2018, including an in-store role with Saks. of Summit County Children’s Services employees.

“Much of our philosophy has to do with personal choice,” said UDS communications director Lisa Armstrong. “There are a lot of different options for our clients with disabilities. We have a program called Bravo as well, where clients can volunteer for different opportunities in the community. Some people might volunteer two days a week and on the other three days work at one of our facilities or elsewhere in the community.”

Right now, however, is Buckeye Basket season, and UDS anticipates it will fill between 1,800 and 1,900 basket orders between Thanksgiving and year’s end. The baskets, stocked primarily with Ohio products, are available year-round but are most popular during the holiday gift-giving rush.

Herman, who oversees the jolly basketers, has one wish: She hopes more local organizations will learn about and use the UDS workforce, and help the nonprofit grow and reinvest, resulting in more jobs and income for Summit County adults with disabilities.

“Not everybody is aware that there is a workforce out here, just ready and waiting,” she said.

But she knows such growth will require many things.

At the top of that list is securing a second round of investment, and she’s in search of mentors who can help her scale the company. She found that many of the traditional regional resources for entrepreneurs, such as Magnet and JumpStart Inc., are more into developing technology than cosmetic brands.

“I haven’t found any that was interested in funding or helping out a cosmetic company,” she said.

She plans to look beyond local options and jokes that she’s even considered applying to TV’s “Shark Tank.”

When she finds the resources, one of her top priorities will be to find more space, which she hopes to be able to secure within the accelerator building, which is in the process of being converted into an innovation hub called Bounce.

“I love working in downtown Akron and seeing the blimp fly over. I love the feeling of the old building.

It’s just so cool to be here, but if we can’t get a bigger space, maybe we’ll go somewhere else,” she said.

She’d also like to hire more people

to help with the labor-intensive business. Everything from making the products to sanitizing and filling jars, labeling, making boxes and packing is done by hand. Each package even goes out with a hand-written note.

She also is looking to add more automation to her production process and is considering working with a manufacturer or a co-packer to scale up production, although she wants to tread cautiously so as to not lose control of her quality.

“You have to really find somebody you trust to put out a clean product and not add anything that you don’t want in it,” she said.

Another challenge to growth is that her chemical-free products cannot sit on shelves for more than a few months, so she needs to have a good inventory-control plan going forward.

She believes the time is right for her business to continue to grow, citing forecasts that the natural cosmetics industry could be worth $7 billion within the next five years.

“I’m very happy that I got in when I did,” she said. “I definitely want to keep building and hopefully become a household name.”

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December 18, 2017

ASK THE PROFESSIONAL

Your business and municipal taxes

Insights from the head of Regional Income Tax Agency

D

How are local government operations impacted by recent changes to Ohio tax policy?

onald W. Smith oversees the shared income tax collection and administration services for more than 2 million taxpayers in 300 municipalities throughout Ohio. Prior to joining RITA, Don served as tax commissioner for the City of Akron and fiscal officer and tax director for the Village of McDonald in Trumbull County. He maintained a private tax practice and spent 16 years in various managerial positions in finance and IT at a Fortune 50 company. Now, as RITA’s executive director, Don is responsible for that municipal tax agency’s personnel, operations and strategy.

He also serves as its public advocate, working with and on behalf of elected officials and representatives from municipalities of all sizes throughout Ohio. Given some of the recent changes to Ohio tax policy and potential legislative changes moving forward, Crain Content Studio — Cleveland asks Don to discuss RITA’s role as a statewide municipal tax collector and administrator.

What are some of the main benefits of the services RITA provides for business owners?

As the single point of contact for almost 50% of the municipal tax jurisdictions in Ohio, RITA provides a comprehensive suite of services and resources for businesses, including

electronic filing of withholding returns and W-2s, 24-hour online assistance, and access to RITA’s trained staff of professionals through our automated phone service, via walk-in or by phone during business hours. Business professionals regularly receive municipal tax updates at seminars we

sponsor or conferences at which we are invited to speak.

What is the municipal net profit tax, and to whom does it apply?

Corporations, partnerships, trusts and estates that conduct business in a municipality must file a return and pay tax on their net profits. These taxes fund municipal operations that include the construction and maintenance of roads, bridges, parks and emergency services such as police, fire and ambulance.

Can net profit tax filings be audited? If so, what are some ways that businesses can reduce their risk of being audited?

Business returns are routinely reviewed for reasonableness and completeness and, yes, some are subjected to further examination. The most effective way for a business to minimize the likelihood of an examination is to file complete returns and to provide full explanation, with supporting documentation for unique or more complicated tax situations, whenever possible.

What’s the biggest challenge for Ohio businesses when it comes to municipal tax collection?

Although the most commonly claimed challenge is that of complying with the variations between reporting requirements imposed by more than 600 municipal taxing jurisdictions in Ohio, the reality is that the loudest voices making that complaint come from the smallest percentage of those required to file municipal net profit taxes. Of the 71,000 net profit returns processed

by RITA last year, nearly 90% were filed with three or fewer municipalities — meaning that for 90% of Ohio’s net profit return filers, that challenge is a non-issue. And it is important to consider that differences in reporting

requirements between municipalities were practically eliminated through recent changes to municipal tax law.

Businesses deserve a vehicle through which they can file a single municipal net profit return for all municipalities in Ohio. However, significant questions have been raised in legislative hearings and elsewhere regarding the readiness of the systems and staff at the Ohio Department of Taxation to handle the processing and collection of municipal net profit filings across the state.

Businesses and tax professionals alike need to weigh whether it is advisable to opt-in with the ODT and assume the risk associated with the state’s beta test.

What are the recent changes to Ohio tax policy, and who do they affect?

Significant changes were made to eliminate differences between how municipalities administer the net profit tax when Gov. John Kasich signed H.B. 5 into law in 2014. Most of those changes positively impacted returns filed this year for tax year 2016.

This past summer, the governor signed the 2018-2019 biennial budget, which contained two significant changes to Ohio municipal tax policy.

For businesses that sell and distribute product from a warehouse or manufacturing facility, the definition of a taxable sale was changed for municipal tax and created what many refer to as a “nexus to nowhere.” RITA estimates that the 300 municipalities it serves will see a reduction in tax revenue of $10 million per year, in perpetuity.

For tax years beginning on or after Jan. 1, 2018, businesses may elect to report and pay their municipal net profit tax with the Ohio Department of Taxation through the Ohio Business Gateway. Calendar year taxpayers must make the election by March 1.

The changes contained in the biennial budget are very new, and much about how they will be administered is still unclear. There are two things that concern municipal officials and about which the new law is clear.

According to the law, a tax payment that is received by Ohio Department of Taxation in one month will be reduced by a .5% administration fee before it is remitted to the municipality as much as two months after being received by the state. Such a delay will certainly hurt municipalities that are unable to maintain large fund balances.

When a business opts to file with the ODT, the Ohio tax commissioner assumes complete authority to administer and enforce the tax law. The municipality may request that the commissioner audit a return, should the municipality have evidence of an understatement; however, nothing in the law requires the tax commissioner to provide that municipality with access to returns filed with the ODT. Without access to municipal return data, it is unclear whether economic development incentives between businesses and municipalities will be negatively impacted and if so, to what extent.

What does the new stateadministered municipal net profit tax system mean for businesses that currently work through RITA?

Businesses that currently enjoy a single point of contact with RITA for both their business withholding and net profit tax returns will find that RITA will be unable to assist them with returns filed with ODT. In fact, ODT will not assume responsibility for any tax year prior to 2018, so businesses needing assistance with multiple tax years may find that communication becomes twice as difficult.

Beginning in 2019 for tax year 2018, RITA will be able to accept electronic net profit return filing through MeF (Modernized e-File), but not for businesses that have opted to file with ODT.

How can Ohio businesses get help, or ask questions if they are unsure about municipal tax changes, new filing regulations and procedures?

RITA has set up a website to assist business and tax professionals at Ritaperspectives.com. They may also contact us during regular business hours by calling 800-860-7482.

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Edwins team to display its chops at Beard House Fire Food and Drink: Fire will offer brunch from 9:30 a.m. to 2:30 p.m., then serve dinner from 5 to 10 p.m.; 13220 Shaker Square, Cleveland; 216-921-3473; firefoodanddrink. com.

Today, any aspiring chef or restaurateur strives to distinguish himself or herself through association with organizations that lend distinction to their reputation. Few carry quite the same cachet as the James Beard Foundation in New York City.

The crew from Edwins Restaurant in Shaker Square will be cooking at the James Beard House, a decidedly upscale location, on Wednesday, Jan. 17.

Founder and president Brandon Chrostowski and his culinary team will present a Grand French Adventure at 7 p.m. at the foundation’s home, 167 West 12th St. in Manhattan’s West Village.

Anyone familiar with the organization’s mission — its full name is EDWINS (“Education Wins”) Leadership and Restaurant Institute — knows its back story. Chrostowski, who himself has spent time in jail, created a 501 (c)(3) organization that aims to help formerly incarcerated individuals get training in food service in order to re-enter society on a stronger footing. The Shaker Square restaurant he and his supporters created offers education, counseling, housing and other forms of support to those admitted to Edwins’ strenuous program.

“Cooking at Beard House means taking our cuisine and our mission to the pinnacle of the culinary world,” Chrostowski said. “People can see us, and what we do, for all that it is: We’re displaying the potential of individuals who’ve been given a fair and second chance.

“Beard House is a stage, one of the world’s best stages, and being there means we’re able to show that we can do the very best of French cuisine.”

For the upcoming road show, Chrostowski will be accompanied by chef Gerry Grim, Edwins’ director of culinary education; Chris Terry, the restaurant’s executive chef; and five students of the program, still to be named.

Following a course of passed appetizers, the menu will include chestnut-pheasant soup; brioche with foie gras; poached Dover sole with black lobster mousse and black truffles; veal cutlets with rutabaga, blue foot mushrooms and veal jus; and for dessert, puff pastry with pastry cream, candied orange and chocolate sorbet. A selection of wines will accompany each course.

“We went back to the old playbook, and I just started playing with it,” Chrostowski said.

His aim was to bring a menu of what he calls French Elegant Haute Cuisine: “The cuisine as you would find it at its peak: a Parisian touch to the hors d’oeuvres, things from the

north of France, the foie gras with the brioche baked into it,” he said.

He intends to showcase Cleveland’s finest, not only in terms of Joe culinary profesCrea sionals but products. Chrostowski said he’ll bring Adam Gidlow’s On The Rise bakery’s bread and incorporate ingredients from area dairies in the menu.

Other Cleveland chefs have displayed their artistry at Beard House, among them Dante Boccuzzi (Dante, Ginko, DC Pasta), Michael Symon (Lola, B Spot, “The Chew” on ABC TV), Paul Minnillo and Matt Mytro (Flour Restaurant) and a crew of Northeast Ohio chefs, including Karen Small, Adam Bostwick, Brian Okin, Jeff Jarrett, Britt-Marie Culey and others. This time, it’s the Edwins team stepping into the spotlight.

Seats for the Grand French Adventure are $135 for JBF members and $175 for the public. For additional information or to purchase tickets online, visit www.jamesbeard.org or call 212-627-2308.

HOUSING

“There’s not many community challenges like this where the community can say we’ve actually solved that problem, and we can do that in this case.”

CONTINUED FROM PAGE 6

“I’m most pleased with the fact that we saw the problem and we decided collectively that we each could do something to make a difference,” said Bruce Murphy, KeyBank’s head of corporate responsibility. “And we also sustained that commitment over a period of time, which then allows us to ultimately reach the kind of success that we’re starting to see.”

The Brooklyn Centre building will bring the total number of such apartments to 781, which is projected to be sufficient in meeting needs into future years for individuals and fami-

Flying Fig: Patrons will find Christmas Eve brunch available from 11 a.m. to 3 p.m. at The Fig; 2523 Market Ave. (Ohio City), Cleveland; 216-2414243; theflyingfig.com.

Geraci’s: The restaurant will be open until 5 p.m.; 2266 Warrensville Center Road, University Heights; 216-371-5643; geracisrestaurant. com.

A crew from Edwins Restaurant will cook at the James Beard House in Manhattan’s West Village on Jan. 17. (Crain’s file photo)

Lago Cucina: Dinner is served from 4 to 10 p.m.; 1091 West 10th St. (Flats East Bank), Cleveland; 216-862-8065; lagoeastbank.com.

L’albatros Brasserie: Dinner service will be available 3 to 8 p.m.; 11401 Bellflower Road (University Circle), Cleveland; 216-791-7880; albatrosbrasserie.com.

Beer 101 Think you know all you need to know about beer? Maybe not. And if you’re still scratching around for a gift for your favorite hops-head (or fishing for some domestic fun during the dead of winter), a brew seminar may be just the thing.

Collision Bend Brewing Co. is offering Beer 101, a four-part course in the art and science of beer. During each two-hour program set for Wednesday evenings, brewmasters will lead participants through the major factors of beer making as well as characteristics, flavor profiles and a range of essentials.

Highlights include: J Feb. 7: A look at the brewing process and the history of style, plus tasting light ales and American pale ales.

J Feb. 21: Basic beer ingredients and the characteristics of IPAs and double IPAs. J Feb. 28: Quality control, and the style and tastings of Belgian beer styles.

J March 7: Designing beer recipes, and a look at porters and stouts.

A pair of beers (one of them produced by CBBC) will be served, along with small bites of food, at each session.

Classes run from 6 to 8 p.m. Each session is $30, or sign up for the four classes for $100. (Purchase admission before Jan. 1 and get a $10 gift

Lopez: The restaurant’s popular Southwest Sunday Brunch begins at 11 a.m. (to “2-ish”), and dinner will be served until 5 p.m.; 2196 Lee Road, Cleveland Heights; 216-932-9000; lopezonlee.com.

Melt Bar and Grilled’s Northeast Ohio locations, including this one in Montrose, will be open on Christmas Eve. (Crain’s file photo)

card for use at CBBC.) Collision Bend is located at 1250 Old River Road (Flats East Bank), Cleveland. For more information, call 216-273-7879 or email christinewakelee@collisionbendbrewery. com.

Dining out on Christmas Eve Christmas Eve can be a wonderful time for gathering family and friends.

But with all the bustle and chaos the next day brings, those gatherings are often all the better held in a restaurant.

If you’re hunting around for a spot to get together with your favorite people, here’s more than a dozen Northeast Ohio restaurants that will serve dinner (and, in some cases, brunch only, or both) on Sunday,

— Mark McDermott, vice president and Ohio market leader, Enterprise Community Partners

lies with disabilities struggling with long-term homelessness.

As Housing First approaches this milestone, players are thinking about what’s next for the collaborative.

“I think that that will be very important that as communities are making progress toward ending homelessness among chronically

Hyde Park Prime Steakhouse: Two Hyde Park locations will offer Christmas Eve dinner from 4 to 9 p.m.; 26300 Chagrin Blvd., Beachwood; 216-464-0688; and 21 Main St. (Crocker Park), Westlake; 440-8924933; hydeparkrestaurants.com.

homeless veterans, that lessons from that work is applied to these other vulnerable populations like youth and families,” said Angela D’Orazio, program officer for housing at the Sisters of Charity Foundation of Cleveland.

And, of course, the existing housing and services need ongoing sup-

Dec. 24.

Unless otherwise noted, opening hours posted are for Christmas Eve only. By all means, call your own favorite spots for more options.

Blue Canyon: The restaurant will be open from 4 to 8 p.m., and the tavern will be open from 10:30 a.m. to closing. No brunch will be served. 8960 Wilcox Drive, Twinsburg; 330-4862583; bluecanyonrestaurant.com.

Cabin of Willowick: Christmas Eve service runs from 4 to 8 p.m.; 28810 Lakeshore Blvd., Willowick; 440-9435195; thecabinofwillowick.com.

Melt Bar and Grilled: Cleveland area locations (Lakewood, Cleveland Heights, Mentor, Independence, Avon, Akron and Canton) will offer menu items until 4 p.m. Christmas Eve.; meltbarandgrilled.com.

Sasa: Sasa’s Japanese-themed menu will be served from 5 to 10 p.m. on both Christmas Eve and Christmas Day; 13120 Shaker Square, Cleveland; 216-767-1111; sasacleveland. com.

Sol: The Latin American and European-themed restaurant will be open for brunch and dinner from 10 a.m.-9 p.m.; 38257 Glenn Ave., Willoughby; 440-918-1596; solwilloughby.com.

Edwins: Traditional French cuisine is available from 5 to 8 p.m.; 13101 Shaker Square, Cleveland; 216-9213333; edwinsrestaurant.org.

Table 45: Meal service will be available from 3 to 11 p.m. on both Christmas Eve and Christmas Day; 9801 Carnegie Ave. (in the InterContinental Cleveland Hotel and Conference), Cleveland; 216-707-4045; tbl45.com.

port, Krey said.

This permanent supportive housing model can potentially be a solution for other high-need populations of folks who could benefit from stable home and services, said Mark McDermott, vice president and Ohio market leader for Enterprise Community Partners.

“There’s not many community challenges like this where the community can say we’ve actually solved that problem, and we can do that in this case,” McDermott said. “It’s not ending homelessness overall. But it’s solving the problem for those folks who are on the street the longest and who use up so much of the resources that are allocated for assisting homeless.”

And, he notes, it creates a savings.

Housing First estimates it saves the community nearly $7 million a year because its residents aren’t straining costly safety-net services.

“When people who are homeless on the street see the opportunity to have an apartment for the long run and get the support that they need to move on, and be stable, get a job … deal with the addiction in their life, etc., I mean that is just such a gift that we as a community can provide to somebody to have that opportunity,” McDermott said. “It’s quite remarkable when you talk to folks who have lived in Housing First units what an amazing difference it makes in their lives.”

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As a private banker for CIBC Private Wealth Management, Jim is responsible for creating customized credit, asset management and financial planning solutions for closely held business owners, corporate executives and affluent families. Jim brings over 30 years of banking and wealth advisory experience to our organization.

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Bank of the West David Dannemiller will lead the new Bank of the West Commercial Banking Center to deliver solutions that companies in this region need to continue to grow and thrive. His wealth of knowledge and expertise will help our clients be more agile, efficient and competitive. This new Center will bring our bankers closer to our clients in the Cleveland area, providing them with world-class banking execution and global capabilities with a local footprint.

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PA G E 31

Hillary Stewart

Torchbearers president for 2018 For Hillary Stewart, Torchbearers was a way to get more connected. Despite growing up in the Akron area, Stewart, who started as an analyst at FirstEnergy Corp. and is now a project manager there, didn’t feel connected. “I knew I wanted to be more involved in the community,” she said. So Stewart applied and was accepted in the 2013 class of Torchbearers.

Akron-based Torchbearers links young professionals, or evolving leaders, as the group calls them, with area nonprofits.

After serving on the board and in 2017 as vice president, Stewart will lead the group in 2018, and now for her, Torchbearers also is about helping people find their passion. Torchbearers helps members gain leadership skills as they’re bettering the community through their work with nonprofits. Stewart thinks that linking people to causes that really mean something to them can help young talent make a strong connection to the area. And who doesn’t want to retain young talent? Finding that right fit “can plug people into something they’re passionate about, even if it’s not their job,” she said. — Sue Walton

Five things Best TV line ever?

“Whenever I’m sad, I stop being sad and be awesome instead.” — Barney Stinson, “How I Met Your Mother”

Guilty pleasure?

“Reading in the sun. Neither reading or the sun are bad, but I’ve been known to let myself sit there for HOURS. And then, of course, I look like a lobster. Also, this is, of course, a poor heath choice.”

Hidden talent?

“I’m a pretty good cook. I just need to find more time for it! I often go to restaurants and think, ‘Well, I wish I’d just made it myself.’ ”

Biggest regret?

“I think I’m glad to say that I don’t have one! (Something to look forward to?)”

Favorite vacation spot?

“My husband, Neil, and I enjoy exploring different cities. Two of our favorites have been San Diego and New Orleans.”

Lunch spot Nepali Kitchen 399 E. Cuyahoga Falls Ave., Akron

The meal One had the Nepali spaghetti with shrimp and water; the other had curry chicken and a diet soda.

The vibe In a simple building, Nepali Kitchen is well-known in Akron, and everyone from businesspeople to the neighborhood residents come to dine on the authentic Nepali and Southeast Asian cuisine the restaurant offers up.

The bill $27.49, plus tip

Tell me about Torchbearers’ mission.

We want to enhance Greater Akron by investing in the development, connection and engagement of our membership comprised of evolving leaders with a passion to impact our community. Essentially, we exist to equip our members to go out and make a difference in our community in whatever way they are most passionate about.

How has that evolved?

I don’t know that the heart of our mission has changed. Over time, the focus may move between impacting Greater Akron directly as a whole organization compared to impacting Greater Akron through our individual members, but regardless of how you focus that lens, Torchbearers continues to enhance our community through our membership. One way we’ve grown is through our partnership with Leadership Akron. The groups have complementary missions, so it’s natural that we work together. In 2009, we formalized our relationship as affiliated community partners, and since then our relationship has grown each year.

Why are groups like Torchbearers important for evolving leaders?

Torchbearers as an organization is important not just for our members, but for Greater Akron as a whole. We develop and mobilize young talent to be change agents for the good of the community. Not only does that make us more effective citizens making a difference in the community today, it also provides connections and opportunities that will keep young talent and energy here.

What are your goals for your coming presidency?

This is an exciting time, as we are heading into our 15th year. We need to talk about what growth looks like for this organization and what the ideal member experience will look like, how we can maximize our collective impact on the community, and the best way to maintain and communicate our strong brand. Plus, how do we tell our members’ stories? I’m looking forward to hard work but also fun.

What do you think are the biggest challenges for workplace leaders?

It varies, but I think there are unique challenges at the point in a person’s career when they begin to take real responsibility for the outcome of the

organization — whether that’s as a newer member of management or taking the lead on a major project.

When you make that shift, you have to rely on yourself and your relationships with others differently than you did in the past. It’s an exciting time, and full of new opportunities and challenges to learn from.

Do you see generational differences in the workplace?

What do you think is the best way for employers to address them?

I think that in some cases, previous generations were held to a more routine standard, and my generation has come to expect a bit more flexibility in terms of work times, locations and wardrobes. I’d encourage employers to, when they can, allow some of that flexibility and hold employees to performance as the standard. Younger employees want to get results for you, and the freedom to do it our own way helps motivate us to succeed.

What do you want members of older generations to know about young professionals?

Remember that our perspective is valuable, too. Sometimes those with more experience can find themselves projecting that experience onto a younger person and expect that the younger person will have the same path they did. I would ask that everyone remember that we all have a different path, with our own steps, trials, and pace — and that this is a good thing. Let younger generations work hard on our own paths, and help us remove obstacles where you can. We’ll find plenty of our own challenges to grow from even if they’re different from yours, and I think you might be surprised and learn something by that, too.

What’s the best piece of advice you’ve ever been given?

One of the fantastic but challenging things about being a young leader in this city is that there are so many opportunities, and it’s easy to take on too much. Former Torchbearers president Amanda Leffler gave me a great piece of advice a few months ago: “Whatever it is that you would fight for the opportunity to do, say yes to that right now. Everything else you want to do can wait.” I think that’s really key to success: Stay focused on what you are really passionate about doing.

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