Crain's Cleveland Business

VOL. 39, NO. 3

JANUARY 15 - 21, 2018

Source Lunch

Akron FirstEnergy, PUCO are striving for more reliable electricity grid. Page 19

Page 23

GOVERNMENT

They’ll leave a light on

By JAY MILLER jmiller@crain.com @millerjh

SEE CUTS, PAGE 5

How long is too long to stay at your table? Page 4

REAL ESTATE

Tax cuts won’t be evident for months When you check on your first payroll direct deposit of 2018, don’t expect to see any increase in take-home pay from the new Tax Cut and Jobs Act of 2017.

The new tax rates, lower for many workers, will apply to all income for all work in 2018. But workers won’t see the extra take-home dollars for those early weeks until they file their taxes and get a larger-than-expected refund, said Jeff Ahola, CEO of the Ahola Corp., a Brecksville payroll management firm.

“We’re going to get the new tables from the IRS in January,” Ahola said in an interview in late December.

“Then it's going to take two to six weeks after we get tax guidance from the IRS to get all the programming changes for the new withholding. So that means the new, bigger paychecks probably won’t be coming until late February or early March.”

Ahola said late last week that preliminary tables have been released. So payroll processors should be able to use the new withholding in a few weeks after the tables have been audited and loaded into payroll software.

Thomas Finucane, president of Compass Payroll Services in Mayfield Village, said the IRS issued a brief, two-paragraph guidance that said the IRS “would issue initial withholding guidance in January, and employers and payroll service providers will be encouraged to implement the changes in February.”

At the Table

CLEVELAND BUSINESS

Duane Bishop, COO, Forest City Realty Trust

Apartments at The Garfield hit the market last fall, following a $30 million conversion of an office building at 1965 East Sixth St. (Stan Bullard)

‘Build it and they will come period is over’ for downtown apartments

By STAN BULLARD sbullard@crain.com @CrainRltywriter

The cross your fingers, take a number and hold your breath period for getting a downtown Cleveland or nearby apartment is likely over after an eight-year run.

Incentives are even cropping up at the East 4th Street Neighborhood of

Focus: Entrepreneurship Business owners who ‘think outside the box’ are aiding in battle against drug abuse and addiction. Page 9

MRN Ltd. and the Marshall Place, both downtown, and Edge32 Ohio City apartments of Vintage Development Co. All three are offering a free month's rent to entice customers, at least during the winter months. Waiting lists — a staple for downtown apartments since 2009 — are no more.

Doug Price, CEO of Willoughby-based K&D Group which has five downtown apartment buildings and is in the throes of adding apartments

Northeast Ohio’s largest apartment complexes: Page 18

to a sixth in the $60 million renovation of the Halle Building, 1228 Euclid Ave., in an office-residential hybrid, said he believes the market is beginning to normalize.

“We have suites now when we did not have them before,” Price said in a

phone interview. “We had some move-outs, but Residences at 668 has been full since we opened it — until now. We have two suites available, while in past years we had none.”

As new apartments have started to hit the market, Price said that for the first time during leasing the apartments at Residences at Leader, tenants, for the first time in years, moved in from other downtown buildings.

SEE LIGHT, PAGE 5

SPORTS BUSINESS

Agent joins Lil Wayne’s team

By KEVIN KLEPS

Entire contents © 2018 by Crain Communications Inc.

Inside: The List

kkleps@crain.com @KevinKleps

Andy Simms wasn’t looking to sell the sports agency he founded with Wesley Spencer in 2000.

And he wasn’t anticipating his name would be mentioned in the same sentence as rapper Lil Wayne.

But after PlayersRep Sports Management landed current Jacksonville

Jaguars wide receiver Dede Westbrook as a client prior to the 2017 NFL draft, Simms’ company caught the attention of Cortez Bryant, Wayne’s manager and the chief operating officer of Young Money Entertainment.

At the time, Young Money APAA Sports — launched in 2014, and boosted by the acquisition of APAA Sports Group two years later — was repping a few NFL players, including Westbrook, on the marketing side. It

was then that Bryant, an influential figure in the music industry, started thinking about how PlayersRep could help Young Money get much more entrenched in sports.

“They were one of the companies that took care of their guys,” Bryant said of Simms, a Hawken High School graduate and Solon resident, and PlayersRep. “They had all the intangibles. That was the perfect piece of the puzzle that was missing.”

SEE AGENT, PAGE 5

PA G E 2

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J A N U A RY 15 - 21, 2 018 |

CRAIN’S CLEVELAND BUSINESS

Key is ‘seeing the fruits’ of SBA focus

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

A big year for KeyBank in government-backed small business loans underscores an unfolding strategy by the bank to refocus efforts on a sector considered the backbone of the U.S. economy.

The bank has long touted its efforts to serve small businesses, which certainly extend beyond the issuing of loans and credit. Nonetheless, Key’s efforts to provide clients capital through the Small Business Administration’s 7(a) loan program — which jumped 43% in total dollars and 37% in total loans in fiscal year 2017 — indicate the bank is putting its money where its mouth is not just in securing loans, but in making the surrounding process easier.

“We are creating an easier bank for clients to deal with, and we’re doing that through investments in some digital systems,” said Jamie Warder, who joined Key as head of business banking last February. “We are tripling down on the expertise of teams and building their industry-specific capabilities. ... We are not growing as much as I want to grow. But we are seeing the fruits.”

Nationally, Key jumped from the 14th-largest SBA lender in FY 2016 — with 538 loans made, amounting to $222 million, which marked growth stronger than any other top-20 SBA lender in the country at the time — to ninth place in FY 2017, issuing 739 loans totaling $318 million. That's 201 more loans and an additional $96 million compared with the prior year.

In its hometown of Cleveland, Key is the second-largest SBA lender behind Huntington Bank, which has

been the market’s most aggressive SBA lender for many years.

Key made 82 loans in FY 2017 totaling $38.7 million in the Cleveland region. That’s 28 more loans (a 51.8% increase) and $24 million more (a 164% increase) than what was issued in the year prior, which saw a dollar increase of 34% over 2015.

Comparatively, Huntington — which nationally ranks second in SBA lending by total loans (4,065) and third in total dollars ($793 million) — issued 1,145 loans in this region in FY 2017, totaling $149 million. That’s 54 more loans than they made last year (a 4.9% increase) and about $15 million more (an 11.1% increase) over FY 2016.

For Key, those increases both locally and nationally are still among the largest by the SBA’s most active lenders.

It’s worth noting that on a national scale, some of Key’s growth is attributable to the bank’s acquisition of First Niagara Financial Group. The deal added the Buffalo-based bank’s loan portfolio to its own. Some of the new SBA districts those loans are tied to include Connecticut, New Hampshire, Philadelphia and Pittsburgh.

However, Warder said small business lending will remain strong in those markets in general, as it’s a way to promote brand familiarity in regions the bank is looking to grow in the wake of the acquisition.

In Cleveland, Key is lending through the SBA program at levels comparable to 2012, which also saw $38.7 million lent out, though those were over 114 loans.

Those levels fell afterward and have been on the rise since hitting a valley in 2015, when $11 million was lent out through 62 loans.

Warder said demand is increasing and Key is working to meet that need.

KeyBank SBA loans A look at the number of small business loans KeyBank made in the Cleveland region in the last 10 years: Fiscal year

No.

Dollar value

2017

82

$38,795,400

2016

54

$14,693,900

2015

62

$11,001,800

2014

48

$15,048,500

2013

71

$19,280,000

2012

114

$38,701,600

2011

101

$31,495,900

2010

71

$10,521,000

2009

62

$12,673,700

2008

64

$7,523,400

He expects more growth to come through 2018 in the SBA program.

“We just see enough underlying demand here that this is not a flash in the pan,” he said. “We are building and growing capacity in this space because there is great underlying demand.”

Demand does, indeed, appear to be growing as the economy steadily improves.

Andrea Roebker, regional spokeswoman for the federal SBA program, said that in the first quarter of FY 2018 (which would be October through December 2017), the Cleveland district has approved 500 loans, compared with 400 in the like period in FY 2017, a 22% increase. Those loans total more than $159 million, a 50% increase over the $104 million made by this time in the year prior. Companies seeking that money most prevalently fall in the food services, transporta-

tion and warehousing, wholesale trade, and professional, scientific and technical services sectors.

While the SBA office itself is working closely with lenders across the country to see the program expand, doing the program well and drawing customers means investing in and generally improving the surrounding services.

Adding people, along with streamlining internal operations at Key to make the program run smoother, was one of the top priorities when Jim Fliss was named national SBA manager in fall 2015 as the bank was revisiting an emphasis on its own small business banking segment.

Fliss said the bank is continuing to invest not just in better tech, but people. There are some 20 business banking relationship managers in the Cleveland market alone, with 150 of those positions across the country.

He said about one-third of each one’s time is spent on SBA loan products specifically. He added that staff will continue to grow this year.

Yet, improving tech and streamlining the lending process itself has been key to the bank’s growth in the SBA loan segment.

“There were plus or minus 20 different approaches to this. We had an opportunity to get everyone in a single line of business to better serve clients,” Fliss said. “It was an opportunity for us to sing out of the same hymn book for the first time.”

Some of Key’s legacy markets that were barely doing SBA lending were re-energized afterward. Alaska is a prime example. The bank made $3.6 million in SBA loans there in FY 2017, marking a 413% year-over-year increase. Alaska, Massachusetts and Syracuse are the only offices that outpaced the growth in the Cleveland

SBA district.

“Growth is now coming from a lot of markets we historically have not seen any meaningful growth out of,” Fliss said.

Other multimillion-dollar investments — amounting to “dozens of millions,” Fliss said — have gone toward merchant services and payment capabilities for small businesses as part of that renewed holistic approach to small business that seems to be lifting success in the bank’s SBA segment.

Much of that comes from Key’s ongoing investment in and partnering with numerous fintech companies.

In just the past year, Key has come out as a lead supporter of the FinTech71 business accelerator in Columbus and committed to injecting JumpStart with $24 million over the next four years.

Other efforts have streamlined the loan application process. Warder dreams of a day when that whole process can be completed in 24 hours, calling it something like a “rocket mortgage” (think Quicken Loans) for business.

“I tell (Fliss) he’s not done until a client can spend a couple hours in a day to get into this … and by the end of the day, we can tell them what they’re getting and how much,” Warder said.

“We are putting tens of millions of dollars behind getting to that point. And we are absolutely dedicated to it.”

However, that quick turnaround raises questions of whether credit quality would take a hit as the bank brings on this deluge of new small business clients. But Warder says that’s not the case and asserts credit quality standards have not changed.

“If we are seeing quality slip, we will grow less, and that’s OK,” Fliss said.

“We’re not trying to stretch for growth.”

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CRAIN’S CLEVELAND BUSINESS

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J A N U A RY 15 - 21, 2 018

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PA G E 3

Rents rise and options dwindle in office market

By STAN BULLARD sbullard@crain.com @CrainRltywriter

Malone University has been placed “on notice” by the Higher Learning Commission. (Contributed photo)

NEO universities find value in HLC scrutiny

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Malone University in Canton has been working to grow its enrollment, add academic programs and cut costs. It’s in the midst of a fundraising campaign. But it’s also been placed “on notice” by its accrediting agency, the Higher Learning Commission.

The Higher Learning Commission is the regional accreditation agency for close to 1,000 institutions in a 19-state region. Basically, being “on notice” means the university is still accredited, but the commission has some concerns about the way it’s being run.

“It’s surprising to a certain extent, given all the other good things happening here,” said Tim Bryan, Malone’s chief of staff and vice president for communication and marketing.

While Malone’s the only institution in Northeast Ohio on notice at this time, it’s not alone in this challenge. There are 13 schools on notice across the commission’s region, with another 18 on probation. Additionally, 10 schools have had a sanction or designation removed in the past six months, including the Cleveland Institute of Music.

In fact, over the last decade or so, accrediting bodies across the country have been taking closer looks at the institutions under their purviews.

Cleveland Institute of Music president Paul Hogle said there have been concerns about the amount of debt students were taking on. Accreditors had to respond to those concerns and validate the worth of students’ degrees.

There’s a generation of people who went through the financial crisis of 2008, Malone Provost Nate Phinney said, and that crisis called into question the notion that higher education led to a better life given the difficulty many graduates had finding jobs.

“I think everything changed for higher education in 2008,” Phinney said. “And it might seem like a lot to put on one year, but it was a pretty big deal.”

At Malone, the commission’s concerns were over “resources, planning and institutional effectiveness” — one of the five criteria upon which it evaluates its institutions.

Phinney said one of the areas of concern for the commission was data-driven decision-making, which is a “gap” for Malone and an area in which it needs to improve. The commission also wanted to see Malone

identify its ideal enrollment and better its financial management in “lean times,” Phinney said.

“It’s not an indictment of Malone’s academic quality, and it’s not an indictment of really anything in those first four criterion that I mentioned,” Phinney said. “And for us, as we’ve kind of processed this, we feel like that’s extremely important. It’s not an indictment of our mission, of our integrity and — most importantly to us — it’s not an indictment of the academic quality of our programs or their rigor, the qualifications and expertise of our faculty, the learning experiences of our students, the success and skill of our graduates and our demonstrated ability to make those experiences even better. The stuff that matters.”

Being placed on notice, which happened in November, won’t necessarily change Malone’s direction, Bryan said, but it will make the university more intentional in tracking it so the commission can see the work being done when the follow-up visit is held in 2019.

Phinney said Malone views this as the commission telling the leadership team that it needs to improve its “stewardship” of the university.

Overall, the university is disappointed in the outcome of this process, but it accepts it and appreciates the work of the commission. Ultimately, it will help the university get better, he said.

The idea of the commission wanting more data-driven decisions in higher education was also seen when John Carroll University in University Heights was placed on notice in early 2015. The commission’s various concerns included whether data was being used to make program and curriculum decisions. The notice was lifted in 2017, and John Carroll didn’t have anyone available to comment on the process last week.

The story is similar at Notre Dame College in South Euclid, which, while it’s not on notice, will be the site of a focused visit by December 2019. The commission had concerns in a lot of areas as it relates to the use of data analysis, as well as concerns around the college’s declining enrollment, revenue base and others. Work to address much of what the commission was concerned about is underway, said chief communications officer Brian Johnston, noting the creation of the Office of Institutional Effectiveness, but it hadn’t been well-documented. Eric Matthews, the college’s dean of academic programs, said Notre Dame got behind the curve in

terms of tracking data and analytics, and it welcomes the focused visit as a way to be held accountable.

Hogle said it was the accreditation process that actually drew him to the Cleveland Institute of Music, which he joined in July 2016. The institute was placed on notice in 2015, with a host of concerns to address from governance to retention and completion, and saw that notice lifted in 2017.

Hogle views the accreditation process like a regular visit to the doctor.

And, much like doctors want their patients to be healthy, he said the “HLC wants you to succeed.”

Challenges show what people are made of, Hogle said, and he saw an organization made up of people who had heard the commission’s concerns and were actively incorporating the necessary improvements into their daily lives. Hogle said one of the institution’s big issues had been that its programs and processes weren’t universally implemented.

The point of the accreditation process is to take that outside feedback and make the institution stronger, Hogle said. His advice to schools going through it is to take advantage of the network of advisers and colleague institutions.

The accreditation process has a “lot of value,” said Rex Ramsier, senior vice president and provost for the University of Akron. The University of Akron is not under a sanction, but has concerns to address from the commission, which it will do through an interim report in late 2018.

Faculty members in particular believe in the peer review process, which is how the commission conducts the evaluations. It’s part of pretty much everything faculty do: hiring, tenure, publishing. Overall, the process is about continuous improvement, he said.

“It’s inherently about quality,” Ramsier said.

Akron agrees with the commission’s concerns, which are related to its program review process, fiscal resources and governance structures.

Ramsier said the university knew these issues existed and had already been working to resolve them.

For example, in a letter to the commission, it explained it had a new program review process and that there had been a hiatus prior to the new program starting in spring 2017.

And its attempts to right the ship in terms of enrollment and finances have been well-documented.

Renters and buyers in Northeast Ohio’s office and industrial markets face the same reality this year, according to the Newmark Knight Frank real estate firm’s latest survey: rising prices and fewer choices.

And that’s with new office and industrial space hitting the market.

As of Dec. 31, 2017, average asking rent in the office market rose to $18.26 a square foot from $17.74 a square foot at the end of 2016, according to NKF. Regional office vacancy fell to 16.4% at the end of 2017 from 17.3% a year earlier.

David Hollister, a managing director in NKF’s Cleveland office unit, said he expects more of the same this year.

It’s common, he said, for tenants just beginning to negotiate for space to receive a higher asking rate than office tenants just a few months earlier.

“It’s the lead end of a trend,” Hollister said in a phone interview.

“The downtown office market and the east suburban office markets are hot, and they’re landlord markets.”

Office rents are back to the same number as in 2010 when vacancy in downtown and suburban markets hit 23%, the NKF data show.

The situation is the same in the industrial market. Asking rents hit $4.16 a square foot at the end of 2017 with a vacancy rate of 6.5%, compared with $4.11 a square foot at the end of 2016, when vacancy was 6.8%.

Vacancy in the region’s 294 million square foot industrial market went down even though almost 1 million square feet of industrial space was under construction at the end of 2017, double that of the prior year.

Since most of the industrial construction is from mammoth fulfillment centers being built for Amazon in Euclid and North Randall, Terry Coyne, vice chairman of NKF’s Cleveland industrial unit, expects little to change for the typical manufacturer or distributor based in Northeast Ohio.

“There’s not a lot out there for lease or for sale,” Coyne said. “It’s clearly a landlord’s market, and it has been for a while.”

He said there are no concessions, such as periods of free or reduced rents, to induce companies to buy or lease space.

Those who buy industrial space also face increased prices, which will make building more palatable than otherwise.

“We’re seeing buildings from the 1950s and 1960s in the 50,000-square-foot range go for $30 a square foot, compared to $10 a square foot during the downturn,” Coyne said.

Since most industrial users in the region are manufacturers who expand only when they must do so, they just accept the price hikes, Coyne said.

Although the office market in downtown Cleveland — the re-

Market snapshot A look at the 2017 fourth-quarter vacancy rate and average asking rent per square foot for the Cleveland office market: Vacancy

Price/SF

Downtown

19.1%

$18.84

East suburbs

13.1%

$18.38

South suburbs

11.4%

$18.64

S’west suburbs

19.8%

$16.17

West suburbs

14.1%

$14.73

Suburbs total

13.3%

$17.50

Source: Newmark Knight Frank

gion’s largest — dominated the headlines with news of suburban tenants such as NRP Group of Beachwood and Electronic Merchant Systems of Independence readying moves for downtown, its vacancy remains the highest of any subsection of the region.

Downtown office vacancy fell to 19.1% at the end of 2017 from 19.9% at the end of 2016, NKF statistics show. Moreover, NKF estimated the volume of office space downtown fell by 2.3 million square feet due to office-to-apartment conversions downtown.

However, downtown will add 60,000 square feet when Hemingway Development completes its three-floor Link59 office building at East 59th Street and Euclid Avenue later this year. Technically in the MidTown Cleveland neighborhood, brokerage firms count it as part of the central office market.

Meantime, in the suburbs, vacancy fell to 13.3% at the end of 2017 from 14.2% a year earlier.

In the east suburbs, the second-largest office market after downtown Cleveland, vacancy fell to 13.1% at the end of 2017 from 14.3% at the end of 2016. That decline came although the first multitenant office building was added in the east suburbs in a decade, Highland Centre, a 47,000-squarefoot structure in the Beachwood section of Chagrin Highlands Corporate Center. The structure had 11,000 square feet of space preleased.

However, 2018 will be a different story.

NKF estimates 277,000 square feet of office space is under construction in the east suburbs, between two buildings at the Pinecrest mixed-use complex in Orange Village and the Van Aken District in Shaker Heights.

In the south suburbs of Cleveland, the other large suburban office market, NKF estimated vacancy was flat at 11.4% at the close of 2017 and 2016.

Although there has been substantial leasing in the southern suburbs, primarily on the Rockside Road office corridor, the market got a big setback from the move of Chart Industries to Canton, Ga., from Garfield Heights. That emptied a 30,000-square-foot building in Garfield Heights, NKF said.

PA G E 4

J A N U A RY 15 - 21, 2 018 |

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CRAIN’S CLEVELAND BUSINESS

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On warmer days, Zack Bruell’s Alley Cat overlooks the Cuyahoga River. While a higher rate of table turnover means higher sales for restaurants, operators also have to be aware that some diners like to linger, especially in settings like this one. (Peggy Turbett for Crain’s)

The art of turning tables while keeping your customers happy Just how long is that table yours when you’re dining out?

Is that a lame question? On one hand, it seems like the old “possession is nine-tenths of the law” equation. After all, you’ve been seated, you’re paying for food and service, and you should be allowed to stay as long as you like, right?

Not so fast. Granted, chances are good that table is yours for as long as you choose, and even better that you’re probably not going to be hassled to move along. At least theoretically. Because another “equation” comes into play: The customer is always right.

In an age of burgeoning dining alternatives, few restaurateurs are going to hustle you out the door, even when you may have overstayed your welcome.

“Customers are our whole reason for being in business, and staying in business,” said Chris Kneeland, a managing partner in Rocky River-based Hospitality Restaurants and director of operations for their Rosewood Grill restaurants in Hudson, Strongsville and Westlake.

“They’re choosing your restaurant to create their own experience. If it’s 20 years since they’ve seen their long-lost roommate, and they’ve chosen this place to have their reunion, I’m not going to tap the time clock,” Kneeland said.

That sentiment is shared by virtually every one of the six operators with whom I spoke for this story.

But still …

Consider the behind-the-scenes view of those operators, chefs and other staff members. From their perspective, tables are salable commodities, and guests are their meal tickets. Depending where you’re eating, those goods can be quite valuable.

Check averages vary, of course, but four seats at an upscale restaurant can easily represent $350 to $400. If the owner can “turn that table” — industry parlance for clearing away one party and seating another — profits are amplified. A particularly hot restaurant might land three seatings by accommodating the early crowd (pregame or pre-show, for instance), the mid-evening set (those who are typically seated during the conventional 7 p.m. to 8:30 p.m. slot)

and the sophisticates who dine late, say 10 p.m., after the night’s “main event” has concluded.

Not every business enjoys that kind of high demand, of Joe course.

Many Crea eateries are built around the quick-service model, where tables turn over in roughly 40 minutes to one hour. There’s a big difference between those places, where you’re basically refueling, and the ones where guests seek a full dining experience.

Once you grasp the underlying urgency, you sometimes sense as you’re lingering over your dessert or after-dinner drink, however, it’s easier to understand why your server seems to be hovering.

There is a quiet equation at hand.

Virtually every restaurateur shared a rule-of-thumb equation for the amount of time they assume a party will take during their meal. These are not set deadlines, but guesstimates that come into play when reservationists are booking seats.

Generally speaking, a party of two (a “deuce” or “two-top”) requires roughly an hour and 15 minutes to enjoy and complete their meal. A four-top will take closer to an hourand-a-half, maybe two hours. Parties of five or six should be allowed at least 2 1/2 hours, while larger groups are likely to need closer to three hours or more.

“And a lot of that time is consumed by just waiting for everyone to show up,” said Zack Bruell, chef-owner of eight restaurants in Cleveland.

“There are lots of variables you have to consider. The guests who want a second cocktail, the ones who want to share war stories, one person orders dessert and after it arrives everyone else decides they want one, too.”

Paul Minnillo, chef-owner of Flour restaurant in Moreland Hills, said so much depends on the restaurant itself.

“If it’s a fine-dining situation, you plan on a minimum of two, 2 1/2 hours,” Minnillo said. “But if it’s bistro style, like our place, we typically plan an hour, hour-and-a-half. But

On crainscleveland.com Tips for restaurateurs to expedite service without ruffling feathers.

we have a big restaurant, so we have a lot of flexibility.”

He comes from a fine-dining background. Clevelanders remember the Minnillos as former owners of the Baricelli Inn, long a landmark in Cleveland’s Little Italy neighborhood.

“I really can’t imagine going up to a party and telling the guests, ‘I’m sorry, but we need your table,’ ” Minnillo said, adding that a savvy manager plans for just that kind of situation and makes accommodations.

Brandon Chrostowski has a basic rule of thumb for orchestrating the flow of guests at Edwins Restaurant in Cleveland’s Shaker Square.

“We have predictions, but we have parachutes,” Chrostowski said.

There’s the almost inevitable noshow, or the extra table left unreserved to accommodate the unplanned walk-in guest, or the party managers thought would occupy a table an earlier crowd hasn’t yet left.

“You can follow loose guidelines, but you absolutely must have a Plan B,” he said.

For Anthony Romano, chef-owner of Sarita in Lakewood, the offer of a complimentary drink in the bar can be an ace in the hole.

“Recently, we had a 6 o’clock table that just wouldn’t leave, even though we told them when they booked that we’d need the table at 8 p.m.,” he said. “We had a party of eight waiting and waiting. Finally, we came up and asked, ‘Can you help us out? We’ll be happy to offer you an after-dinner drink over in the bar.’

“If you’re cool about it, people usually are, too.”

Dante Boccuzzi, who operates Dante in Cleveland’s Tremont neighborhood and several other Northeast Ohio spots, said that keeping a cool attitude — on both sides of the table — helps to make the dining experience enjoyable all around.

“Keep in mind, everybody’s working hard and paying good money, but remember, these are businesses that are trying to survive. This is someone’s livelihood,” he said.

CRAIN’S CLEVELAND BUSINESS

AGENT

CONTINUED FROM PAGE 1

In December, the groups had a deal. Young Money APAA Sports acquired a majority stake in PlayersRep (with Simms and Spencer retaining a minority share of their business), and Simms, Spencer and PlayersRep’s four other football agents would bring their 40-plus clients under the Young Money umbrella.

“Now football is taken care of,” Bryant said.

The deal also fills a significant void for Simms and his crew. Bryant — a partner in Maverick Management, which works with the likes of U2, Nicki Minaj, Paul McCartney, Britney Spears, Madonna, Miley Cyrus and Florida Georgia Line — and his team have the marketing prowess most big-time athletes covet.

“The ability to build our clients’ brand — we were not where we wanted to be on that end,” Simms said. “Most agencies are not. That gives us a huge competitive advantage over everyone else. That’s why we made the move.”

The transaction already is paying dividends.

Young Money APAA Sports has signed six prospects who could be selected in this spring’s NFL draft. One — former University of Texas linebacker Malik Jefferson — is projected

LIGHT

CONTINUED FROM PAGE 1

“The downtown renter is price-conscious,” Price said. “We’re seeing residents of downtown buildings shift between buildings. They’re shopping now to find the best value and fit because they can. It’s not doom and gloom. But the build it and they will come period is over. If buildings are not well-conceived, at the right location and at the right price point, (landlords) are going to suffer.”

The other factor, he said, is the strong housing market. This is the first year since the 2008 housing collapse that K&D has had a noticeable number of tenants departing because they bought homes, both downtown and throughout the region, Price said.

A Crain's survey of downtown apartment operators supports rising concern but not hand-wringing.

Most of 23 downtown apartment managers who responded admit to reservations about the market’s future. By the numbers, five are very concerned, six are concerned and three are slightly concerned about the more than 3,000 suites in construction or planning downtown. Six were not concerned about the volume, and three had no opinion.

Robert Rains, a partner with the Carney family in Landmark Management which converted three Warehouse District office buildings to apartments, said its buildings have more empties this winter than the same time last year.

“I’m not sure if it’s the weather, but there are certainly more suites coming on the market.”

Landmark, he said, “is fixing up our units and marketing them like hell. We’re doing social networking and videos and have someone working on that pretty much all the time.

Ask me again in April.”

Because new projects typically have a leasing advantage over older ones, Landmark recently won Cleveland City Council approval to repay a federal loan early that helped finance the original conversion of the Perry Payne Building, 740 W. Superior Ave., to apartments because it will refinance

Andy Simms, left, and Nicole Lynn, right, are two of the six PlayersRep Sports Management agents who are now part of Young Money APAA Sports. That group also includes Cortez Bryant, second left, and Adie von Gontard. (Contributed photo)

as a first-round pick.

The college standouts join a group of Young Money clients that includes the likes of Cleveland Browns cornerback Jason McCourty and his twin brother Devin, a two-time Pro Bowl safety for the New England Patriots.

Philadelphia Eagles Pro Bowl tackle Lane Johnson and Patriots safety Duron Harmon (who, with the help of PlayersRep, inked a four-year, $17 million extension last March) have also switched over to Young Money.

The move to Young Money, however, isn’t “to sign more draft picks,” the 43-year-old Simms said.

“It’s to sign the guys we want to sign,” he said. “It’s never been about quantity. It’s about the quality of the guys.”

Bryant believes the same.

Wayne’s manager thinks the combination of Simms’ and Spencer’s two decades as NFL agents, plus Young Money’s marketing muscle, could vault the company into the same conversation as such heavyweights as Creative Artists Agency.

“It could be the top NFL agency,” Bryant said of Young Money APAA. “The CAAs of the world, they work with all these guys, and what they offer is what we built — especially on

the building, in part to pay for upgrading suites, lobbies and come up with $900,000 needed to repair the office building’s ailing terra cotta facade.

Even so, like other real estate developers, Landmark is expanding its downtown residential portfolio.

After buying the former Quay 55 apartments and changing its name to The Shoreline last summer, Landmark has been installing 29 additional units in space that was not converted to apartments from warehouse space more than a decade ago.

“They’re all one-bedrooms because there is a strong market for one-bedrooms,” Rains said.

Those suites will start going onto the market in February at the lakefront building at 5455 N. Marginal Road.

At The Edge, a student housing development that opened last July at 1750 Euclid Ave., there was a surprising benefit from strong demand for one-bedrooms.

Constance Campbell, regional manager of Peak Campus Management, said the company leased several apartments to young professionals working downtown because so few were available in the market. She said she could not say how many non-students are in the building because of federal fair housing laws.

She declined to disclose specific leasing levels but said they are beyond expectation.

Downtown Cleveland still has incredibly high occupancy levels.

Rob Vogt, a partner at Columbus-based housing consultant Vogt Strategic Insights, said his firm recently studied downtown Cleveland and nearby markets and found 96% occupancy, although its survey did not include University Circle.

“Most analysts like to see a 5% vacancy factor,” Vogt said. “That allows tenants to have choices and to move around.” He said he believes the downtown market will hit at least 7% vacancy this coming year.

With downtown rents still climbing and vacancy levels at this level, Vogt said, “It’s hard to tell a developer he should not build.”

Vogt believes that in the Midwest, downtown markets will support additional apartment construction for some time.

“They’re shopping now to find the best value and fit because they can.”

— K&D Group CEO Doug Price, on downtown Cleveland apartment renters

“Young people are staying single longer,” Vogt said, and delaying children and the move to a single-family house. Many developers worry about it, Vogt said, but he believes aging baby boomers will reinforce the market downtown as millennials age and have children.

“There are people commuting from Cleveland Heights and Parma who are getting tired of the commute.

They’ll move from that big house in the suburbs to downtown,” Vogt said.

With most office-to-apartment conversions and new apartment buildings going up downtown, just-completed third-quarter statistics from the Marcus & Millichap real estate firm shows how vacancy is skewed downtown. As of the end of the third quarter last year, central Cleveland vacancy stood at 5%, compared with 3.7% in the Cleveland Metropolitan Statistical Area. Downtown effective rents declined 2% to $1,323 a month compared with the like period in 2016, while rents dropped half a percent to $870 a month in the metropolitan area. The Marcus & Millichap study shows the downtown apartment market is by far the region’s most expensive.

The big factor in the coming year is how recently opened projects — several finished after the prime spring and summer leasing season — fare. New projects may add a huge number of apartments to the market at one time.

For example, the $60 million The Standard apartments opened Jan. 4 at 99 W. St. Clair Ave. in downtown Cleveland, marking suburban-based Weston Inc.’s entry into the city’s apartment market from the office and industrial segments. That meant 277 apartments and four penthouses all hit the market on one day. However, that doesn’t mean things there are quiet.

“The phone is ringing. We are busy,”

the branding and marketing side. We can offer the exact same thing. But we’re more hands-on, more boutique-oriented. Our guys aren’t going to get lost in a field of hundreds and hundreds of guys.”

Simms stressed that the new name doesn’t change how the agency deals with its clients. Instead, they can offer their clients more — and avoid going the way of so many businesses that have failed in the always-competitive, often-brutal industry.

“We could’ve stayed and continued what we were doing,” Simms said.

“What it comes down to is I’ve seen a lot of businesses come and go the last 20 years. I’ve seen agencies who had a large market share and seen what happens to them over the years. We are not going to be a dinosaur.”

Young Money APAA Sports now has almost 50 clients on the football side. The group includes some NFL assistant coaches, including former Oakland Raiders offensive coordinator Todd Downing, and some who are working at the college level, including Nick Hill, the 32-year-old head coach of Southern Illinois.

The company’s basketball division is led by APAA Sports Group founder Adie von Gontard, whose great grandfather founded Anheuser-Busch and whose grandfather owned the St. Louis Cardinals.

Simms, who was still a student at the said Julie Colby, manager of The Standard, which is suspending the typical $150 application fee as it opens. The day the doors opened, tenants moved into 25 suites, and another 30 are rented. With match day, when hospitals name their new residents, and the launch of internships, she expects to be busy through April and feels the building will lease quickly. Rents are upward of $1,350 for a one-bedroom and $2,850 for two bedrooms. Four top-floor penthouses will rent for a minimum of $5,000 and will be customizable, she said.

Meantime, an affiliate of Independence-based Dalad Group opened Worthington Yards, 725 Johnson Court, Oct. 1 in the Warehouse District.

Greg Deming, property manager, said he’s been surprised by the number of people relocating to Cleveland for new jobs this winter and believes it’s the busiest of the last four.

“Usually, December through February are slow,” Deming said. “I’ve never seen it like this. We’ll be filled by springtime.” He said 70 suites are leased — 60 occupied — and 38 remain to be filled.

At Cleveland-based Millennia Co.’s The Garfield, 1965 E. Sixth St., 40 suites were listed Tuesday, Jan. 9, as available, out of 123 suites that hit the market last fall after a $30 million conversion to apartments from offices. Millennia owner Frank Sinito, through his assistant, declined to comment on the project or the downtown market.

However, Michael Barron, a managing director of Marcus & Millichap who specializes in selling apartments, is confident both Garfield and other new projects will fill.

“I’m a believer in downtown,” Barron said. “It’s different from when the Health Line opened and that is all that was going on. Now there are lots of exciting things going on in downtown Cleveland.”

Ralph McGreevy, executive vice president of the Northern Ohio Apartment Association, believes the market will stay in growth mode, although there may be bumps in vacancy as new projects get absorbed by the market.

“I don’t think we’ve hit our zenith yet,” McGreevy said.

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PA G E 5

Draft hopefuls Andy Simms and Young Money APAA Sports have signed six NFL draft prospects who could be selected this spring.

Malik Jefferson, LB, Texas: Projected as a late first-round pick by Walter Football.

Keke Coutee, WR, Texas Tech: Projected as a second- or third-round pick by Walter Football.

D’Montre Wade, CB, Murray State: Projected as a third- to fifth-rounder.

Jeremy Reaves, S, South Alabama: Projected as a third- to fifth-rounder.

Dimitri Flowers, FB/TE, Oklahoma: Projected as a fourth- to sixth-rounder.

Daurice Fountain, WR, Northern Iowa: Projected as a late-round prospect or an undrafted free agent.

Case Western Reserve University School of Law when he signed his first NFL draft prospect in 1999, isn’t nearly as in tune with the hip hop industry as he is the agent game. But he knows how increasingly intertwined music and sports are, and he loves the potential of the bulked-up Young Money brand.

“This move was put together with an eye toward the future,” Simms said.

“This wasn’t to be a top-10 company, but to be the best in our business.”

CUTS

CONTINUED FROM PAGE 1

The guidance said firms will not need new paperwork from employees but may continue to use existing W-4s, which are filled out by employees who state the number of dependents they have and certain other childcare expense that go into calculating the amount of tax to be withheld.

But implementing changes for February payrolls may be an ambitious goal, Finucane said. He cited a recent Wall Street Journal article that reported that because of budget cuts, the agency is struggling to create new regulations and to update forms mandated by the new law.

“An additional issue is going to be the payroll tax software companies, as they will need time to update their systems, test the changes and roll it out to their customers — the payroll providers and accountants,” Finucane said. “That all will require time.

I’m not sure that time is factored into the IRS guidance.”

Taxpayers who want to speed up their access to additional take-home pay do have an alternative.

“They could always make an adjustment to their withholding, but I wouldn’t recommend that,” said Jay Lucarelli, president and CEO of Minute Men Staffing & HR Services of Cleveland, which writes paychecks for 60,000 employees. “They will get their money back at the end of the year.”

How much is withheld is based on the W-4 tax form filled out by employees that spells out deductions and by the tables the IRS creates setting withholding levels. The new tax law makes a withholding adjustment more difficult because it ended personal exemptions, which have been a key factor in calculating withholding.

At deadline last week, the IRS was still deciding how much tax to withhold from paychecks.

That decision could shape public opinion about the new tax law. A large decrease in the amount withheld would mean higher take-home pay, making more people happier about the new tax law.

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Young pros fond of North Coast

Editorial

Brain power Given the economic makeup and continued aging of Northeast Ohio’s population, the region’s health and human services sector is under considerable pressure.

The opioid epidemic, which has continued to wreak havoc, is only heightening that pressure. And for the most part, Northeast Ohio’s health and human services space is organized and funded in a way that manages — not solves — the opioid crisis.

As Crain’s health care reporter Lydia Coutré outlined this week, Ohio’s business community is lending its own intellectual might to the crisis.

“Entrepreneurs do it,” said David Goodman, director of Ohio Development Services Agency and chair of the Ohio Third Frontier Commission, which has put significant dollars toward the effort. “They think outside the box and take chances and find solutions to problems. That’s why we can fly airplanes.”

Some companies are developing non-pharmacological pain treatments; another is looking at tech solutions to ensuring people take the correct dosing of medications; others are focused on treatment and support for those struggling with addiction.

Too often, private businesses are focused on the bottom line and forget that they, too, can be part of a solution to society’s ills.

In fact, businesses — namely, the makers of opioid painkillers — have been the target of lawsuits and a barrage of negative press for their role in the crisis. So, it’s encouraging to see entrepreneurship for reasons other than wealth.

Hit reset

In the last two election cycles, Ohio has lost its traditional prominence in the political world, the result of a disastrously bad Democratic gubernatorial nominee (2014) and an easy, eight-point victory in the state for now-President Donald Trump over Hillary Clinton in 2016.

That seems poised to change in 2018, at least in the state's U.S. Senate contest, in the wake of Republican state Treasurer

Josh Mandel’s Jan. 5 withdrawal from the race to challenge the two-term incumbent Democrat, Sen. Sherrod Brown, due to a health issue facing his wife, Ilana.

We wish the best to the Mandels and applaud the candidate for putting his family above personal ambition. At the same time, we are glad there will not be a rematch of the 2012 race that Brown won by 6 percentage points. Mandel during that race was not a substantive candidate, and his recent willingness to flirt with the alt-right did not auger well for 2018.

The Republican Party now has a chance to hit reset and give Ohio voters a candidate who will debate Brown on policy grounds — trade, taxes, environmental protections, health care, the opioid epidemic and other things that matter in people's lives — rather than running a campaign based on junk issues and personal attacks.

Will that happen in the Trump era? We’d like to think it still can.

The GOP nomination race got more crowded last Thursday, Jan. 11, when U.S. Rep. Jim Renacci, R-Wadsworth, announced he would leave the gubernatorial contest to run for Senate. The only other declared candidate is Cleveland investment banker Mike Gibbons, a political novice. Gibbons has been an active campaigner and announced he would put $5 million of his own money into the race, so he’s not going away anytime soon. Renacci and Gibbons both are running to help move Trump’s agenda forward, and on substance, they’re pretty similar.

The filing deadline to enter the race is Feb. 7, so there’s still time for other candidates to jump in. Among the most intriguing: J.D. Vance, who wrote the 2016 best-seller “Hillbilly Elegy” and runs a nonprofit called Our Ohio Renewal that is dedicated to “promoting the ideas and addressing the problems” identified in the book. Vance has spoken with Senate Majority Leader Mitch McConnell about a potential Ohio bid, and if he made the race, he’d add a somewhat different policy voice to the GOP side of the debate.

Ohio’s recent statewide elections have been dispiriting, one-sided affairs. This race can change that, if candidates approach it seriously. We hope Republican voters demand that they do.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS

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Scott Suttell (ssuttell@crain.com)

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Timothy Magaw (tmagaw@crain.com)

Contact Crain’s:

216-522-1383

We’ve got a lot of momentum in Cleveland.

Downtown development, our hospitals, our arts, the food culture, vibrant neighborhoods, the improving economy, the RNC and an NBA championship.

Yes, we still have our problems and, yes, the renaissance must extend to those neighborhoods that still struggle. But no longer are we paralyzed by negativity and cynicism. There’s been a positive shift in attitudes, most notably among longtime locals — some of whom have a reputation for being down on their hometown.

TNS Global documents that shift in recent surveys that show the percentage of local residents who would recommend Cleveland as a visitors destination has jumped from 34% in 2013 to 77% in 2016.

Elizabeth Key to keeping those good vibes going is McIntyre engaging and investing in young professionals. These millennials — those born between 1981 and 1997 — are now the largest living generation in the United States, according to the U.S. Census Bureau.

Last week, I had the privilege of talking with a dozen members of the Cleveland Professional 20/30 Club, a nonprofit that provides young professionals with opportunities to connect and grow through more than 100 social, networking, philanthropic and educational events.

The club’s “CEO Dinner” is a monthly event where 12 young professionals meet with a business person in town. I was honored to be their guest, but much more interested in listening than talking.

I was encouraged to hear the words these young professionals used to describe our town: Authentic. Manageable. Lots of opportunities. Fiercely loyal. Gritty and real. Cool. What I found was a group taking advantage of what our region has to offer, connecting with their surroundings and acting as ambassadors.

Demetri Kachevas, a business travel sales coordinator at the downtown Ritz-Carlton, came here from Minneapolis more than a year ago. He was admittedly a bit leery about the move.

He was pleasantly surprised, though, to find how much Northeast Ohio has to offer. “You literally have everything, whether it’s the foodie scene, the Metroparks, the corporations,” he said.

“Anything I want to do, I’ll find it in the Cleveland area.”

We literally have everything, Demetri. You’re one of us now.

Cleveland today is far different from the city Carly Boyd moved to in 2011. The Dublin, Ohio, native has seen the city’s transformation firsthand and is impressed. “I’ll still always have my loyalties to Columbus,” said Boyd, secretary of the 20/30 Club and a family practice lawyer in town. “But it’s a different world. There’s not as much culture down there.”

Michael Fitzpatrick, director of engagement for the Boy Scouts of America Lake Erie Council, took the time to follow up with an email. He came here from Hartford, Conn., and has moved several times for work, arriving in Cleveland a year ago.

“No matter how experienced one becomes at relocating, certain realities are inescapable. Relationships do not travel with you. While social media and technology bridge the divide, ultimately you arrive as a stranger in a strange land: devoid of the connections that are the bulwark against loneliness and ennui or which aid professional success. If it’s ‘all about who you know,’ then surely nothing shakes the etch-a-sketch of life quite like knowing no one,” he wrote.

That’s why a group like the 20/30 Club is so valuable, he said.

“Inquisitive, bright and talented people will always seek out their own, and it’s in our best interests as a society to make sure we have a place that calls them together and leverages their energy,” Fitzpatrick wrote.

And it’s in all of our best interests to establish relationships with young professionals, to assure that they’re not a stranger in a strange land for long.

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

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

Please include a telephone number for verification purposes.

CRAIN’S CLEVELAND BUSINESS

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PA G E 7

Analysis

After D.C. snub, the Rust Belt is the best bet for coal bailout

By BLOOMBERG

The U.S. coal industry’s best hope for a bailout may lie in the Rust Belt now that Washington’s plan has fizzled.

The largest U.S. power grid, covering Pennsylvania, Ohio and other states, has been considering an initiative that may keep struggling coal plants afloat.

The idea, which would boost revenue for generators including coal and nuclear plants, has drawn skepticism from analysts and isn’t nearly as sweeping as the White House plan rejected Monday, Jan. 8, by regulators. But at least one coal miner says it could aid his industry.

“It certainly sounds like it’s in the same direction,” Murray Energy Corp. CEO Robert E. Murray said in an interview. “We have to see what they’re proposing.”

Dozens of U.S. coal plants have closed in recent years as they’ve struggled to compete with low natural gas prices and a flood of wind and solar farms. Energy Secretary Rick Perry’s proposal would have paid coal and nuclear plants extra to store fuel on site in the name of making grids more “resilient.” But the Federal Energy Regulatory Commission rejected the idea after it drew criticism from gas producers, grid operators and others who argued it would undermine competition.

The proposal from the regional power grid, PJM Interconnection LLC, was formally introduced in November.

It aims to revamp the way generators are paid during peak demand.

Letter to the Editor Reject fossil fuels Regarding Crain’s Jan. 8 article “Ohio’s power sector leads nation in cutting carbon output,” touting the drop in carbon pollution from Ohio’s energy sector without recognizing the surge in methane emissions from fracked gas ignores a critical piece of the puzzle when it comes to fighting climate change and protecting public health.

Closures of highly polluting coal plants is good news, and the growth of clean energy in Ohio has helped drive the drop in carbon emissions, but the push to deregulate the oil and gas industry and dramatically expand fracking means that even as our carbon emissions may be decreasing, we’re seeing an increase in emissions of methane, a greenhouse gas that’s 87 times as powerful as carbon dioxide during the time it remains in the atmosphere. Increased methane emissions also create a public health crisis, increasing rates of asthma and cancer and putting our most vulnerable populations, like children and seniors, at risk.

Clean energy is already a growing industry in our state, employing over 105,000 Ohioans. But for Ohio to truly be a leader in the fight against climate change, we need to reject fossil fuels — and that includes fracked gas — and continue to invest in clean, renewable energy.

Cheryl Johncox, Sierra Club’s Beyond Dirty Fuels organizer, Columbus

When electricity use spikes, bottlenecks form on transmission networks, preventing the cheapest sources of power from flowing to the areas where they’re needed most. As a result, inefficient power plants that happen to be closest to demand centers are forced to ramp up and operate at a loss. In many cases, they’re coal plants.

Currently, PJM compensates these plants with out-of-market “uplift payments.” The pending proposal, which ultimately needs approval from federal regulators, would allow coal and nuclear plants to set the price of energy when they’re in use, reducing the need for uplift payments.

Proposed rule The new rule may raise market prices by $4 per megawatt-hour, Guggenheim Securities analysts including Shahriar Pourreza said in a Jan. 8 note. Over the course of a year, it could earn generators “hundreds of millions of dollars,” Moody’s Investors Service analyst Toby Shea said in a November note.

The losers, according to critics of the plan, would be ratepayers who may ultimately have to shoulder that extra bill.

“There’s a contingent of folks who believe this is just a more technical way to sneak across the finish line a proposal that will benefit struggling coal and nuclear generators,” said Christina Simeone, a director at the Kleinman Center for Energy Policy.

For coal producers, the plan has

some of the benefits of Perry’s proposal without the opposition. Because it would raise revenues for all power producers, it’s less likely to draw the ire of natural gas and renewable generators that assailed Perry’s plan.

Hurdles ahead But salvation may not come quickly enough for Murray and other coal miners. PJM has yet to submit its proposal to federal regulators for approval, a process that could take months and face legal challenges.

And PJM has only begun its own lengthy stakeholder process to get the proposal cleared by the companies that operate in the region.

“Bob Murray is willing to support anything that’s going to direct incremental revenue of any kind to coalfired power plants,” said Christine Tezak, managing director of ClearView Energy Partners in Washington.

“But if you ask where PJM’s price proposal is, it’s nowhere.”

Already, federal officials are showing signs of marshaling support behind PJM’s plan. Deputy Energy Secretary Dan Brouillette, in a congressional hearing Jan. 9, suggested that Perry’s plan all along wasn’t asking for anything special, but rather responding to the desires of grid operators such as PJM. “It was the people running the grid, PJM folks, who were asking for changes in the rules,” he said. “It was to provide more appropriate compensation for services that are provided each and every day.”

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PA G E 9

Focus

ENTREPRENEURSHIP

Illustration by erhui1979/iStock

In search of an answer Entrepreneurs, businesses providing know-how to bolster fight against drug abuse and addiction

By LYDIA COUTRÉ

Also in this section

lcoutre@crain.com @LydiaCoutre

Local artist adds flair to brainstorming sessions. Page 10

If the growing opioid epidemic has taught us anything, it’s that solely traditional methods of combating the crisis will not solve the complex problem.

To address such a significant, deadly problem, innovative thinking is clearly needed, said David Goodman, director of the Ohio Development Services Agency and chair of the Ohio Third Frontier Commission.

“Entrepreneurs do it,” he said. “They think outside the box and take chances and find solutions to problems.

That’s why we can fly airplanes.”

Entrepreneurs and businesses are bringing their backgrounds and expertise to bear in the fight against drug abuse and addiction, with ideas stretching along the spectrum of addiction, from prevention to treatment.

Some companies are developing non-pharmacological pain treatments; another is looking at tech solutions to ensure people take the correct dosing of medications; others are focused on treatment and support for those struggling with addiction.

“We need ideas all the way across the spectrum,” said Brad Pulver, president of Innovative Medical Equipment in Lyndhurst, which has developed a thermoelectric device to deliver heating and cooling therapy rather than opioids to treat chronic and post-operative pain. “We believe our idea is at sort of the front of the spectrum. So if you can get somebody off of the opioids, or rather never even give them the opioids to begin with, then there’s no way for them to become addicted to it.”

Innovative Medical Equipment was awarded $177,000

by Ohio Third Frontier last month to validate its technology. It was one of a handful of grants Ohio Third Frontier awarded in December, totaling $10 million. It was part of $20 million made available to advance new technology in the battle against drug abuse and addiction.

Pulver said that anecdotally, doctors prescribing the

Five entrepreneurial predictions for 2018 Page 12

Hiram graduate hopes to hit it big as toymaker. Page 12

Q&A with new RVshare CEO Jon Gray Page 13

device, ThermaZone, have reported seeing a dramatic decrease or, in some cases, an elimination of the need for opioids to treat pain after surgery. He said the company will use the money from Ohio Third Frontier to conduct clinical trials needed in order to prove the device can reduce the need for opiates.

Neuros Medical Inc., a nerve stimulation company in Willoughby, has been able to measure the impact of its technology though studies. The most recent study showed that patients using its technology, which blocks the nerve transmission on demand with a high-frequency electrical signal, had about an 80% to 85% pain reduction rate and a 92% pill count reduction. As companies are bringing solutions to the market, it’s important that they’re not layering on cost to the health care system, said Jon Snyder, founder and chief business officer at Neuros.

“So if you look at narcotic pain medication reduction usage, that could be $5,000 to $7,000 a year that a patient is spending for that,” he said. “This is a great opportunity not only to increase a patient’s quality of life with their pain reduction, but if we’re able to reduce their narcotic pain medication usage, you could also have a great economic story there too with regards to reducing costs to the health care system.”

Solutions to address the opioid epidemic can come with entrepreneurship, said Anthony Sterns, founder and CEO of Cleveland-based iRxReminder, a company focused on medication adherence by empowering patients and health care professionals to better manage their medications together.

SEE ANSWER, PAGE 13

PA G E 10

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CRAIN’S CLEVELAND BUSINESS

ENTREPRENEURSHIP

NEO artist brings plenty of flair to biz meetings

By JUDY STRINGER clbfreelancer@crain.com

Johnine Byrne created this mural when Moreland Rising, Shaker Heights’ art, business and development collaboration, welcomed Detroit strategic planning director Kimberly Driggins. (Contributed photo)

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Doodling in the classroom may raise some eyebrows, but a local entrepreneurial artist is finding a receptive audience for her spontaneous drawings and designs in boardrooms and at meetings around Northeast Ohio.

Johnine “Jo” Byrne is a graphic recorder. Organizations hire her to translate seminars, workshops, brainstorming sessions and conferences — in real time — into images and text using colorful pens and markers on large sheets of paper.

“When the meeting starts, that big piece of paper is white, but by the end, hopefully it will be full of all kinds of juicy, good stuff,” Byrne said.

A trained graphic designer with a degree from Rochester Institute of Technology, Byrne formed SeeYourWords, one of the region’s few graphic recording services, about five years ago. She was working as a freelance graphic designer when the Jewish Education Center of Cleveland asked her to give graphic recording a whirl.

“Judy Schiller (director of JECC’s Retreat Institute) had seen someone do it at a meeting in Washington, D.C., and was trying to find someone to do it here,” Byrne said. “I said ‘Yeah, sure I will do that,’ then I panicked and tried to figure it out.”

It works something like this: Byrne stands in the front of the room, usually to the side of the presenter. At first she listens and jots down key ideas and phrases in a notebook — much like anyone else taking notes.

After a bit, however, she picks up her colored markers and begins sketching a visual interpretation of the spoken words with vivid illustrations and expressive lettering.

The lively mural of words and drawings, which happens right in front of participants, reinforces key concepts and helps with comprehension and retention, Byrne said.

“I am trying to leave a trail of bread crumbs from whatever people are saying so others can follow it,” the Shaker Heights resident said, musing “and it adds a dynamic element to a room full of tables, chairs and cold coffee!”

Leslie Yerkes, who runs organizational behavior consultancy Catalyst Consulting Group in Cleveland, has been hiring graphic recorders for more than a decade. Also called graphic facilitation, Yerkes said graphic recording “came in vogue” about 15 years ago and is one of the design principles of World Café, a community dialogue methodology often used when large groups of participants are asked to engage in conversation.

Good graphic recorders, she said, not only capture the content of the meetings but make those ideas stick.

“Graphic facilitation can capture the sort of metaphorical context of the conversation,” Yerkes said. “A picture takes complex thinking and makes it very relatable and memorable.”

“When the meeting starts, that big piece of paper is white, but by the end, hopefully it will be full of all kinds of juicy, good stuff.”

— Johnine “Jo” Byrne

According to Yerkes, one of Byrne’s greatest assets is her ability to quickly create “the most wonderful little visual sound bites” based on dialogue.

Most graphic recorders have about 20 icons they use regularly to illustrate concepts, Yerkes said. Byrne, she added, has a seemingly endless library.

Byrne has applied her professional doodling to a variety of meetings — from corporate brainstorming sessions or strategy and visioning meetings to community and professional workshops and seminars.

The longer the meeting, the more paper. For full-day events, Byrne unfurls rolls of white paper along walls.

“I start in one corner and literally work my way down the wall or around the room,” she said.

Byrne said the diverse topics at meetings she’s covered in greater Cleveland have opened her eyes to the breadth of ideas and initiatives being pursued in her own backyard.

She is especially proud of being asked to record guest speakers such as journalist Connie Schultz and U.S. Sen. Sherrod Brown at Trinity Cathedral’s Bicentennial Speaker Series in 2016. Byrne “geeked out” at the opportunity to meet Segway inventor Dean Kamen while working at the Rockwell Automation TechED conference that same year.

Still, some of Byrne’s most memorable experiences are when she is asked to visually transcribe and document difficult dialogues like a corporate restructuring.

“What is powerful about graphic recording is the ability to demonstrate to people that they have been heard,” she said. “I have had people come up to me and cry because of what they saw on the board.”

Byrne and Yerkes agree that while graphic recording is a great tool to spice up a meeting and keep everyone on the same page, the biggest wins often come after markers are capped and people are out of their seats. Crowds gather at the murals pointing to illustrations, rehashing key points and/or sharing small group conversations.

Yerkes said it is not uncommon for participants to take pictures to share on social media or for organizations to hang the murals in their offices or lobbies. Recently, Byrne created a graphic record of a strategic planning meeting for a local nonprofit.

“One board member said it was the best meeting of our entire process,” Yerkes said. “The graphic is used over and over again like a compass.”

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Graphic recorder Johnine Byrne formed SeeYourWords five years ago.

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Hiram grad has hit toy

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

In November, years of hard work and setbacks paid off for Hiram College graduate Nathaniel Eaton when he saw the toy he created for sale at Toys R Us. “To see your product on shelves is definitely humbling, but it just reminds you that all the hard work was worth it. All the denials, all the nos you got along the way,” Eaton said.

Eaton was the winner of the second season of ABC’s “The Toy Box,” a competition show in which inventors pitch their toy ideas to child judges. The winner gets an exclusive licensing deal with Mattel Inc. to make his or her product, as well as a $100,000 prize. Eaton’s product, now called the Hydroshield Water Dodger, comes with two colorful foam shields and a set of foam “Aqua Ammo” balls, Eaton said. The foam balls can be used dry for dodgeball, or they can be dipped in water to behave like water balloons with less waste.

Eaton said he had been a kid who “always took apart things” and knew he wanted to be an entrepreneur. He wasn’t afraid to invest the time to make that happen.

He started college at Walsh University, where he came across a documentary on how Mattel made jackin-the-boxes in the 1950s. That sparked his interest in toy-making.

Eaton came up with an idea for a water gun with a variety of accessories, including a shield, but the idea didn’t go far.

He left Walsh and started college up again at Hiram, in large part because of Hiram’s entrepreneurship program. It was there that he came across his origi- Eaton nal idea and thought of a new way to approach it: a shield that kids could use to block water balloons. He knew he needed to create something unique, and he wanted his toy to give children and families the chance to interact.

Eaton started making sketches and cardboard cutouts in his dorm, moving to plastic when it was time to start testing the product.

The first test of what Eaton called the Water Dodger took place at Hiram between four lacrosse players and four football players. He gave them buckets of water balloons, shields and told them to try it out.

After seeing the product in action, Eaton said he realized he needed a lighter shield, so he switched to foam and a more durable net to hold whatever is being thrown.

Eaton sought feedback and stayed flexible, adapting his idea multiple times, said Kay Molkentin, director of the Center for Integrated Entrepreneurship at Hiram.

For example, the product started by using water balloons, but Eaton soon realized how much of a mess they created and how not-environmentally friendly they were. He shifted to foam balls and had another realization: customers wouldn’t need to use water at all, if they didn’t

want to.

That kind of flexibility is critical for entrepreneurs. Ideas can’t be developed in a vacuum, because the final product is only as good as someone’s willingness to buy it, Molkentin said.

Getting from idea to prototype to winning product wasn’t without its challenges, but it seems they often came hand-in-hand with luck for Eaton. For example, take his failed Kickstarter, which only raised about $500.

Eaton said he had heard about the platform but didn’t do much research into how to make a campaign work. But Eaton said it was that failed campaign that “The Toy Box” team saw, and it was what prompted the casting team to reach out to him.

Eaton was on the premiere and the finale of the second season of the show, winning the competition overall. The finale premiered on Nov. 19, 2017, and the Hydroshield was on the shelves at Toys R Us the next day.

Eaton graduated from Hiram with a degree in business management and a minor in entrepreneurship in spring 2017. He is working as an intern at marketing firm Maximum Velocity LLC in Westlake. And he wants to continue to create products in the future.

In addition, Eaton wants to use his product and his success so far to inspire young adults. He plans to use some of the cash prize from “The Toy Box” to create a business that would take him to schools. The program would ideally include a speech from Eaton, a chance for students to play a game with the Hydroshield Water Dodger and time to reflect on how lessons learned in the game can apply to real life.

Adviser: Todd Goldstein

Five entrepreneurial predictions for 2018 LaunchHouse, a co-working community, will celebrate its 10-year anniversary this year. Ten years ago, my business partner Dar Caldwell and I started our dream out of a room above Geraci’s Pizza.

During the last decade, I watched as the city of Cleveland and the Northeast Ohio region grew to accommodate the hungry entrepreneurs who decided to make this place their home. The one feeling that has sustained me the most during this last decade has been one of hope. I have that same feeling as I look forward to what this year will bring for our region’s entrepreneurial community.

Here are my thoughts and predictions on what 2018 will mean for our economic future in Northeast Ohio: 1. The companies that do the best will be the ones that play to Northeast Ohio’s strengths.

If you look at the startup landscape in Cleveland, it seems as though the city is trying to be Silicon Valley with app-based companies winning startup competitions and seed funding.

Yet, our region excels at manufacturing, health care and food. While companies involved in those areas aren’t flashy, they are poised for steady and consistent growth in 2018.

Companies like NRS Industries, Vitamix and Peaceful Fruits all demonstrate how non-tech companies can start and grow in our region.

Cleveland does not have to mimic the West Coast tech-hub to be relevant — it simply needs to keep playing to its strengths.

2. Libraries will continue to evolve as hubs for entrepreneurs.

Cuyahoga County has taken the lead by creating innovation centers, and the trend will spread to other systems throughout Northeast Ohio. This trend is not isolated, and I expect other library systems to follow suit. Just as Amazon changed how we consume books and ordered goods online, automation and technology will do the same for libraries across the state and country. Libraries will evolve to be more than just repositories of knowledge. They will be places where entrepreneurs launch their next big idea.

3. The conversation around supporting startups will shift from “funding” to “community.”

Ask any startup founder and they will tell you that getting seed funding for their venture is on the top of their mind. Yet if you look around Cleveland, the valuations and requisite funding are nowhere on par with that of California, New York or any VCheavy area. To keep our startup community vibrant, rather than asking, “How can we ensure that startups are funded in Cleveland?,” we ought to shift to asking, “Besides funding, what can we do as a community to help a startup become successful?”

Many in the business community

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Goldstein is the founder and CEO of LaunchHouse, a co-working community in Highland Heights.

can provide access to their networks, mentoring opportunities and guidance for many of the new startups that will be founded in 2018.

4. There will be an increase in collaboration between the entrepreneurial communities in Cleveland, Akron and Youngstown.

If you look at the startup landscape in Cleveland, it seems as though the city is trying to be Silicon Valley with app-based companies winning startup competitions and seed funding. Yet, our region excels at manufacturing, health care and food.

Over the past few years, each city has developed its own unique entrepreneurial community, and it’s only natural that collaboration will increase among them. Whether it’s Bounce in Akron, the Youngstown Business Incubator or the network of incubators and co-working spaces in Cleveland, each city and their surrounding suburbs have a wealth of talent and knowledge to share with each other.

5. Suburbs will play an increased role in Northeast Ohio’s economic development.

While tax incentives can work to lure large businesses to an area on the promise of bringing jobs, much of where our economy will change will be on the individual level. Members of the “gig economy” and freelancers are increasing; more parents are staying at home and starting side hustles while raising their kids.

Suburbs are uniquely positioned to take advantage of drawing in these new types of workers through offering places to work along with communities suited to raising families.

I truly believe Cleveland and Northeast Ohio can continue to grow as a place where entrepreneurs can launch their dreams. Our region is more than an area that has a cheap cost of living.

It has people who will work hard to turn their dreams into reality. Whether it’s an app or a food truck or a selfmade product, you have the ability to build it this year in Northeast Ohio. I am excited to see what our region’s entrepreneurs create in 2018.

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Q&A: Jon Gray CEO, RVshare Growing up in a rural community in Texas, Jon Gray never figured he’d be an internet executive, especially one poised to take a Northeast Ohio startup to the big time.

Gray is best known for his critical role in one of the sharing economy’s biggest success stories.

For more than a decade, Gray served as an executive with Austin, Texas-based HomeAway, an online vacation rental marketplace that now boasts 2 million homes in more than 190 countries. Gray held various roles during his 12-year tenure with the vacation rental giant, which was sold in 2015 to Expedia for $3.9 billion.

Gray’s next challenge? Taking RVshare, an Akron-based startup that provides a peer-to-peer platform for RV rentals, to the next level. The company, which employs about 50 at its Akron location, already is off to an impressive start, but the hope is that Gray can translate some of the HomeAway success to the RV market.

Joel Clark, one of RVshare’s co-founders who is transitioning to the role of president from CEO, described Gray this way: “He was a superstar at HomeAway, rising quickly through the company’s ranks while managing large teams and delivering revenue well into the hundreds of millions,” Clark said.

“He is exactly the type of executive to take our business to the next level.”

Crain’s recently chatted with Gray, who will split his time between RVshare’s Akron and Austin offices, about what he can bring to the burgeoning company. — Timothy Magaw

Given your résumé, I’m sure you had options. What attracted you to RVshare?

There is a clear marketplace. A lot of other businesses are built on top of other marketplaces and optimize them. But with RVshare, this is the marketplace. It was first to market and has become the clear market leader. They have a really good team and have grown the business quickly.

You’ve pretty much spent your entire career in the sharing economy. What is it about this space that interests you?

I love marketplaces where you have a discrete supply side and demand side, and can bring them together online so it’s easier for both sides.

If you think about the RV business,

you have someone who wants to go on a trip, maybe to a national park, or you have your in-laws coming in for a holiday and you don’t have a bedroom for them to stay. There is a better way to solve those problems than sending them to a hotel or going out and buying an RV.

What are some lessons you learned at HomeAway that you think will translate to RVshare?

The list is long on this one. When you’re an early stage business, there are a lot of different things you can do. But what’s at a premium is focus.

You need to understand the three or four things that matter most and do

ANSWER

University of Akron professor Matthew Becker, who is the lead on this project, said that the business and entrepreneurial expe- Becker rience of those working on his team are absolutely critical to bringing his ideas to reality.

He’s working with 21MedTech, where he holds the title of inventor “I’d like to think I’m a reasonably good scientist,” said Becker, the W. Gerald Austen Endowed Chair in Polymer Science and Polymer Engineering at the University of Akron. “But I don’t know anything about running a business. I learned a long time ago that you can own a little piece of something great or you can own 100% of nothing.”

In addition to the grants awarded in December, Ohio Third Frontier also launched the Ohio Opioid Technology Challenge, which solicited ideas for combating the crisis from folks around the world. People in the scientific community and beyond reached out with ideas.

Someone may have a really great idea but lack the resources needed to turn it into a reality, Goodman said.

The Ohio Third Frontier challenge created a vehicle for that, in the hopes of reaching the ideas that could help solve the crisis.

“It was a very simple process for folks to be able to use to get their ideas out there and to the right people who can evaluate it and perhaps find an out-of-the-box solution to this problem,” he said.

You mentioned how RVshare has only begun to a scratch the surface of this category. What did you mean by that?

This is very early stage. We have 60,000 RVs today listed on the site, but there are 15 million in the U.S. If you talk to most of your friends, they’ll say they’ve never heard of this site, but the value proposition is incredible. You can take an RV, go to a park and sit under the stars. You can’t do that with a hotel. But in this marketplace, the things that matter most are awareness and trust. The awareness in this category is fairly low. We’ll get that higher. We’ve got trust around things like insurance and making sure what our customers see on the site is what they’re going to get.

them exceptionally well so that customers can use the site for what they’re trying to do.

So, what does RVshare do exceptionally well?

One of the things that RVshare does well is that it has a strong insurance program that allows you to insure the RV experience on both sides — the renter and the owner. RVshare also allows for instant bookings.

Renters like to be able to book instantly. Once they’re on the site, they can click a couple of buttons and start traveling in a couple of weeks. That is something that is important in any sort of sharing economy marketplace.

There are lots of peer-to-peer sites these days. What is the biggest mistake you’ve seen these sorts of companies make?

A lot of times they’ll get wrapped up in this dynamic of trying to build communities — making people working in these marketplaces all friends, opposed to just providing great experiences for customers.

Peer-to-peer sites need to focus on delivering a great experience and value to their customers, holding themselves to the same standards as a more professionalized product offering. If they believe their customers will evaluate them more favorably just because they are peer-to-peer, they are wrong.

You’re expected to split your time between RVshare’s Akron and Austin offices. Based on your observations, what sort of

opportunities does the Austin office provide?

I live in Austin, and so does my family, and will continue to do so. So, that’s one. But this is a city that, in many ways, is similar to Northeast Ohio. We have a pretty strong university presence. But we have a young population that’s been steeped in consumer internet from the beginning. The areas I’m interested in scaling in Austin are around marketing and product capabilities. Being in Northeast Ohio and Austin gives us options.

You were part of the team that positioned HomeAway for a sale.

Is the ultimate goal to position RVshare for a sale?

It’s not on the horizon at the moment. Our focus is on growing the business. We want to make this the category leader everyone knows about. That’s our focus.

What’s it going to be like going from a giant like HomeAway to a startup like RVshare?

It’s kind of like going back to the future in a way. This was a stage I was at HomeAway for. I remember it.

I hope not to replicate some of the mistakes I made, but I feel like I have a pretty good playbook and frame of reference of how to scale.

What’s the best lesson you’ve ever learned about running a business?

Find the fastest way to profitability because it will open up a lot of options.

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CONTINUED FROM PAGE 9

In the case of opioids in particular, medication adherence is critical so patients don’t take too much or have it accessed by others or have too much left over sitting around the house, Sterns said.

“I think there’s definitely good evidence in health care that the kind of disruption that’s required here can be delivered through entrepreneurship,” he said. “But it also takes partnership and a supportive environment to implement those changes.”

Current processes alone aren’t working, said Brian Bailys, founder of Cleveland-based Ascent, which was awarded $464,000 by Ohio Third Frontier. Ascent has created an app that offers 24/7/365 peer recovery coaching, in which certified “coaches” living with at least three years of sobriety offer support to those currently struggling with addiction. The grant will support the company as it launches a new app that takes the services national, after it had primarily focused on Ohio.

A recent study demonstrated that users of the app had an increased completion rate of 20% for their intensive outpatient treatment programs, Bailys said.

Ohio Third Frontier awarded money to three Northeast Ohio entities in total: Innovative Medical Equipment, Ascent and the University of Akron, which received $2 million to commercialize a degradable mesh that releases a local anesthetic as a substitute for oral opioids to manage post-operative pain.

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THE PANEL ALICIA BOOKER

Vice President of Manufacturing Cuyahoga Community College

ROUNDTABLE DISCUSSION MANUFACTURING

Alicia Booker has more than 20 years of workforce development experience, including work as the executive of a dual-county Workforce Investment Board and administrative roles within community colleges. Alicia brings higher education expertise and experience from her work with the North Carolina Community College System, where she provided policy and program guidance to 15 community colleges. She also has served as the assistant vice president of workforce development, administering open enrollment and noncredit programs as a part of a two-college workforce alliance in Richmond, Va. Prior to joining Tri-C, Alicia served as the vice president for workforce development for the Community College of Allegheny County in Pittsburgh. She earned a bachelor of communications degree at DePaul University in Chicago. She received her master’s degree from Central Michigan University and is currently a doctoral student at Ferris State University.

JOHN GRABNER

SPONSORED CONTENT

Cultivating a 21st century workforce

T

ectonic shifts are happening in manufacturing. Employers are working with an employee base that spans five generations, which presents unique challenges and opportunities for companies and workforce development organizations. On one end, an aging and highly trained workforce is headed for retirement, while demand for experienced workers is outpacing the talent supply. But manufacturing and technology are increasingly becoming interdependent, giving the industry an opportunity to groom, attract and drive new talent into a range of dynamic careers. In November, Crain’s Cleveland Business and Cuyahoga Community College convened a manufacturing assembly that drew more than 150 individuals to discuss these themes. To augment that discussion, Crain Content Studio — Cleveland brings in three panelists to expand upon some of the key issues surrounding workforce education, recruitment and retention, and what it means for the future of manufacturing.

Client Executive of Major Lines, Property & Casualty Hylant

John Grabner is focused on developing business relationships with middle market and largemarket organizations as a client executive at Hylant, an insurance brokerage. As founder and president of a manufacturing company, John brings a multi-faceted approach to his relationship with clients by understanding their needs and goals from both a risk management and overall business perspective. John has been or is involved with several organizations, including U.S. Manufacturing Council, American Wind Energy Association, Industrial Fasteners Institute, National Fasteners Distributors Association and U.S. Bank. He is a member and Cleveland chapter chairman of Young Presidents’ Organization and Association for Corporate Growth, serving as the latter organization’s programming and innovation pillar in 2017. John graduated from Emory University with a bachelor of business administration degree, with a concentration in accounting.

PATRICK HOYLE

Director of Business Operations Aerotek

As Aerotek’s director of business operations, Patrick Hoyle is responsible for leading and managing sales and recruiting personnel to ensure the acquisition, growth and retention of long-term customer relationships for Aerotek’s Cleveland, Canton and Toledo offices. Patrick joined Aerotek in 2004 as a recruiter who supported the engineering division for the Philadelphia office. The following year, he was promoted to account manager for engineering skillsets in the manufacturing industry for Aerotek’s Willow Grove, Pa., location. He then moved to the Reading, Pa., office to mentor junior account managers and increase client acquisition. The following year, Patrick opened Aerotek’s Bethlehem, Pa., office and helped to build out the team, supporting all facets of manufacturing from engineering and production to corporate functions.

He subsequently was selected to help lead the Washington, D.C., market and support government services. Patrick was promoted to director of business operations for Northern Ohio in 2013.

Q&A What are some of manufacturing’s primary employment challenges and opportunities?

JOHN GRABNER: In surveying our manufacturing clients, we have found the most resounding challenge is attracting and retaining quality people.

Offering a competitive benefits package is key. One of the biggest challenges for employees is making sure they have a valued benefits package, including medical, dental and ancillary coverage. These programs represent a major expense for most companies, and creating a member engagement strategy around them is a fundamental piece that many organizations miss in ensuring employees understand and value the plans offered.

PATRICK HOYLE: There are a lot of interesting advancements in the manufacturing industry today, but the worry for many employers is that the demand for experienced workers is outpacing growth in the talent pool.

Factors that complicate this issue include the number of skilled tradesmen retiring or leaving the profession and the lack of emphasis on skilled trades in middle and high school.

In order to take advantage of the opportunities for growth and innovation, employers are realizing the need to stay current with the market rate for local wages. They’re also taking a fresh look at where they draw the line between “must-haves” and “nice-to-haves” when they’re screening applicants for a new job.

Inflexible hiring parameters don’t work well in real life, and it’s limiting the candidate pool even further in organizations that already are struggling to fill critical jobs.

‘‘

— ALICIA BOOKER, Vice President of Manufacturing, Cuyahoga Community College

them competitively — creating a culture of continuous improvement.

And in the long term, those are the businesses that receive the most referrals, further easing recruiting challenges and enabling them to attract the best talent.

JOHN GRABNER: It is statistically confirmed that most people are hired through referral. In addition, it has been proven that this method also creates the highest retention levels in organizations. As a service provider, we are often asked for referrals and have found great success in providing these for our clients. Of course, this becomes a benefit for both the client and the candidate. Keep your referral sources robust and active, and make sure your clients know you can be a valued resource when it comes to helping them find people.

Additionally, don’t overlook the power of the internal referral.

next generally have a different view of working. They also tend to have a few things in common: they generally want to work and do a good job.

Employers are faced with a dilemma when trying to accommodate those different views in the workplace. Here are some suggestions that may help: 1. Develop career pathways to highlight growth opportunities and upward mobility. This may help keep newer employers who are looking to advance quickly. They may feel more vested if they can see an opportunity in the near future.

2. Establish an engaging culture,

with coaching, mentoring and social activities. This will engage your seasoned workforce who have knowledge and expertise to share with your new employees who are networking and looking for a career track within your organization.

3. Look for flexible work opportunities. Although this may be more difficult to accomplish, it could prove valuable to both groups. The

January 15, 2018 S2

may change. What is important is understanding the talent goals of the organization, understanding the needs and wants of the best employees for those targets and assessing the organization against those expectations. By engaging current and future employees in this discussion, organizations can address the real wants of the target groups as opposed to guessing. It is then a question of whether the organization is able to provide a way to meet that desire.

I think the presence of things like 3-D printing, driverless vehicles, collaborative robots, drones and smart technology will continue to intrigue the minds of the future workforce and drive a new breed of individual toward a career in manufacturing.”

What advice do you have for manufacturers in terms What other roles should employers play in addressing of addressing the talent retention of employees in the talent shortage and various age groups? in building a pipeline for future workers? What is your ALICIA BOOKER: The nature of work organization’s strategy as it has evolved over the years. As a result, pertains to these issues? individuals from one generation to the

PATRICK HOYLE: At Aerotek, we’re seeing great success with pursuing strategic partnerships with other organizations. We’ve worked with local economic development councils, regional colleges and trade groups like the National Tooling and Machining Association to develop and implement programs that help train manufacturing workers and prepare them for jobs in the industry.

Successful companies are addressing the talent shortage by creating apprenticeships and internships, promoting employees and paying

MANUFACTURING

ROUNDTABLE DISCUSSION

idea may sound outrageous; however, providing an opportunity to split a shift, especially if it’s one that is hard to fill, may prove a more viable and sustainable option than forced overtime.

JOHN GRABNER: The problem is often not just retention, but attracting and onboarding the right people.

Turnover will naturally occur, and demographics of a workforce

PATRICK HOYLE: As everyone knows, there are a lot of baby boomers retiring or preparing to retire, so I think this is a question on many employers’ minds.

Although when to retire is a personal decision, I believe employers can ensure senior employees feel valued by acknowledging and taking advantage of their organizational knowledge and company-specific skillsets. That can be done through having them mentor lessexperienced workers or asking them to create documentation on best practices.

Since we’re now in the first five-generation workplace, it’s also important to consider the needs of employees who have more recently CONTINUED ON NEXT PAGE

There is a huge demand for skilled workers in Northeast Ohio’s manufacturing industry.

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• Stackable certificates build skills for those seeking entry-level jobs • Fast-track job training programs can be completed in as little as five weeks • Financial assistance is available for those who qualify

• Associate degree programs available in a variety of areas, including Engineering and Manufacturing Technology • Advanced training for industry professionals available in many areas

• Many programs offer internship opportunities and job placement assistance

tri-c.edu/manufacturing 216-987-3075

16-1063

SPONSORED CONTENT

ROUNDTABLE DISCUSSION

S3 January 15, 2018

CONTINUED FROM PREVIOUS PAGE

entered the workforce. And although broad generalizations can be drawn — that millennials are skilled at technology, for instance — we think it’s important to understand that different employees have different motivations and to try to recognize and build on that.

MANUFACTURING

‘‘

Successful companies are addressing the talent shortage by creating apprenticeships and internships, promoting employees and paying them competitively — creating a culture of continuous improvement.”

— PATRICK HOYLE, Director of Business Operations, Aerotek

How does your company or organization address the skills gap between what workers know and what employers need?

PATRICK HOYLE: Most manufacturers agree that the No. 1 priority is finding the top talent through a rigorous program of sourcing and screening candidates. Beyond that, they’re increasingly realizing the benefits of identifying candidates who may not have experience in the industry, but who have transferable skills, an exemplary work ethic or great potential and are training them on the job.

That way, they’re doing the best job of preparing the employee for what success means in their organization.

ALICIA BOOKER: National attention is focused on meeting the workplace skills gap that exists between unfilled jobs and the skills of unemployed

individuals who are seeking to enter the workforce. Most employers will say they have also faced this challenge.

However, one of the underlying issues that adds to the skills gap issue is access to the training needed to fill the void.

At Tri-C, one of the ways we are addressing this important issue is by expanding available training opportunities throughout Northeast Ohio. Tri-C recently launched its Mobile Training Unit, which is a classroom and lab on wheels. Housed in a 53-foot trailer, this new addition allows us to offer manufacturing

training (such as CNC machining) that traditionally had to be done in one fixed site at multiple locations throughout the region.

Through the use of the unit, we are reducing the barrier that exists for some individuals who struggle to get to the training they need and are providing the industry with a center for place-based skill development training.

How can apprenticeships be utilized to increase the flow of talent into manufacturing

YOU NEED THE RIGHT PEOPLE TO SUCCEED We believe in people and their amazing potential. We work hard to connect great people with great organizations. Whether you’re seeking new hires or contract support, you’ve come to the right place.

For more information, please contact our Independence, OH office at 216-573-5520.

Aerotek is an equal opportunity employer. An Allegis Group Company. ©2017

and support the needs of industry?

ALICIA BOOKER: Although apprenticeship training has been around for quite some time, it remains an under-utilized resource in the fight for a skilled workforce. Apprenticeship programs benefit employers because it allows them to grow their own talent. Since apprenticeships are employer-sponsored, employees tend to stay with the company as they continue to learn and become productive members of the team.

These individuals can fill the skill gaps that exist at some companies and can provide stability to the workforce, especially if high turnover is an issue.

Students who access apprenticeship training through the college like the idea that employers are investing in them and their future, and that they have the opportunity to earn while they learn. With this opportunity, students no longer have to choose between college or career. They can have both. Apprenticeships offer a true win-win scenario for employers.

All they have to do is participate.

Contacting your local community college is all it takes.

PATRICK HOYLE: We’re seeing a groundswell of support for apprenticeships, starting with the June announcement by the U.S. Labor Department that it will call for up to $200 million in new funding. There’s a huge opportunity for manufacturers to have a leadership role in utilizing apprenticeships to future-proof their hiring needs. The result is a real win-win situation that creates a pipeline to sustain workforce needs now and to come.

How are changes in product mix, benefits offerings and equipment impacting the skillsets and types of employees who are being sought?

JOHN GRABNER: Tailoring your employee benefits offerings to appeal

SPONSORED CONTENT

to the needs of different age groups is critical in the attraction and retention process. For example, younger people are traditionally healthier and therefore are inclined to have higher deductible plans. In addition, they are seeking ancillary benefits, such as pet insurance. Offering more of a “rewards-based” benefit package, which encourages healthy living habits both in terms of exercise and diet, should be done across the board.

PATRICK HOYLE: Because of increased competition, it’s more important than ever for companies to pursue high-margin products — and speed-to-market is even more crucial.

Add to that a more technologically advanced workplace and you can see why manufacturers have a constant need for labor and a more diverse level of skill sets.

To that extent, what does the Internet of Things (IoT) and emerging technologies such as artificial intelligence, augmented reality and 3-D mean for manufacturing?

PATRICK HOYLE: The IoT provides an enormous opportunity for manufacturers because there is such a demand to make products “smart.”

From cars to medical devices to consumer products, the marketplace is nearly limitless in terms of what consumers are looking for in utility, connectivity and convenience.

JOHN GRABNER: When it comes to manufacturing employment, and attracting and retaining people, the use of technology as it relates to benefits is significant. For example, making sure your company offers an electronic means to get medical questions addressed, such as virtual medical consultations. When it comes to open enrollment time, it is important to not only communicate options on a face-to face basis, but to offer an online enrollment choice that features options with thorough explanations.

Companies are trying to attract a younger workforce, so make sure you have the employee benefits tools that these folks are comfortable using.

What are educational institutions in the region doing to support manufacturers in Northeast Ohio?

ALICIA BOOKER: Northeast Ohio has long been a strong resource for education. From secondary to post-secondary institutions, this region ranks high in quality of education. What is even better is the institutions are working collaboratively to ensure students are exposed and connected to opportunities that exist. Manufacturing continues to be an employment leader in the region, so a

MANUFACTURING

ROUNDTABLE DISCUSSION

SPONSORED CONTENT

number of organizations have undertaken initiatives to connect individuals to the industry. Some colleges have developed programs to support specific employers or industry sectors. Others are working with area high schools to connect high school-aged students with internship opportunities.

Tri-C has several employer-led initiatives designed to provide a talent pipeline for industry. Through short-term training, certificate and credit bearing programs, we are offering training that produces the skilled talent the industry needs. In addition, Tri-C and other educational institutions are taking the lead to support industry by convening employer groups to address challenges, providing access to talent through featured employer series and increasing awareness of manufacturing careers through our community engagement activities.

An organization’s involvement with its community can have a direct impact on workforce development. What is the extent of your organization’s involvement with the community, and how does that impact manufacturing workforce development in Northeast Ohio?

PATRICK HOYLE: At Aerotek, we have a direct impact on workforce development in Northeast Ohio.

We are involved with helping client companies solve their recruiting needs and helping job seekers find the jobs they’re looking for. We also fill a consultative role, helping clients stay informed on hiring trends, local market data and workforce development, or by coaching candidates on what skills will make them most competitive. Our organization is involved in developing the manufacturing workforce both locally and nationally.

JOHN GRABNER: Although we are not a manufacturer, we have found that we benefit our manufacturing clients by being involved in the community. Whether it be volunteering at a nonprofit,

‘‘

Tailoring your employee benefits offerings to appeal to the needs of different age groups is critical in the attraction and retention process.”

— JOHN GRABNER, Client Executive of Major Lines, Property & Casualty, Hylant

participating on a community board or supporting community outreach programs, we are in touch with the manufacturing workforce. Our goal is to make a positive impact in the community, thereby improving the lives of the people, which in turn, presents better potential employees to the manufacturing industry. In the end, this will help our current and future clients.

What is your outlook on the manufacturing industry workforce in Northeast Ohio?

ALICIA BOOKER: In my opinion, the manufacturing workforce outlook is positive. I understand there are challenges with identifying the right candidates, but I believe the opportunities caused by the impact of technology on the industry outweighs those. Manufacturing has to do more as an industry to demonstrate the benefits that come with working in the sector. A lot is already being done statewide through the Ohio Manufacturing Association and the Making Ohio campaign. But marketing in only one part.

I believe the next generation of workers are very interested in the industry’s technological advancements. Although more marketing is needed to continue to shift the perception of manufacturing, I think the presence of things like 3-D printing, driverless vehicles, collaborative robots, drones and smart

technology will continue to intrigue the minds of the future workforce and drive a new breed of individual toward a career in manufacturing.

JOHN GRABNER: We are fortunate to have a very diverse group of manufacturing companies as clients.

This affords us the opportunity to listen, survey and compile data on the activity levels of these companies that represent so many industries.

This information is used to gauge activity levels so we may be able to better address their needs from an insurance standpoint. To that point, a

preponderance of our manufacturing clients are active and expect to remain active for the next several years. They are hiring people, spending money on capital improvements and working hard to meet their customer’s needs.

We have also found that this means there is competition for people in the marketplace, often leading to higher wages, enhanced employee benefit offerings and creative recruiting methods. As a service provider, we find ourselves needing to be at the forefront and being proactive with data analytics and innovative solutions to offer current and future clients.

January 15, 2018 S4

PATRICK HOYLE: The outlook is strong. We have good people in our community working in increasingly technical jobs. Our challenge is to make sure the workforce keeps up with technology-driven manufacturing and that employers realize the value of investing in their people.

Many companies are now targeting high school-level students to expose them to all the benefits of a career in manufacturing and to encourage them to look into a trade school or vocational school. The barrier to entry in manufacturing is relatively low with a baseline of fundamental skills, and the opportunity for growth, supervision and leadership opportunities is at an all-time high.

We’re also seeing companies increase their focus on succession planning, ultimately to retain “tribal knowledge” and success factors that have been a direct result of these workers’ longevity and growth within these companies. In Northeast Ohio, both engineering and skilled trade unemployment rates are less than 1%, so everyone is tapping into a passive job seeker market. Companies are actually selling themselves and the opportunities within them, to create a value add and entice an employee to leave a current position to pursue something great.

In a world of uncertainty, you can be sure we have your back.

Whether it’s supply chain disruptions, cyberattacks, or attracting and retaining skilled workers, rest assured: Your Hylant manufacturing industry expert will work with you to tailor a program that addresses your specific insurance and risk management challenges.

Managing editor, custom and special projects: Amy Ann Stoessel, astoessel@crain.com Project editor: Kathy Ames Carr Graphic designer: Staci Buck For more information about custom publishing opportunities, please contact Amy Ann Stoessel.

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PA G E 18

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J A N U A RY 15 - 21, 2 018 |

CRAIN’S CLEVELAND BUSINESS

THE LIST

Downtown Cleveland Apartments Ranked by number of units THIS YEAR NAME

# OF UNITS

YEAR OPENED/ 1 BEDROOM RENT/ RENOVATED 2 BEDROOM RENT

LEASING CONTACT

UNIT AMENITIES

SITE AMENITIES

1

Reserve Square 1701 E. 12th St. (216) 861-2715/www.reservesquareapts.com

828

1973 2013

$815-1,077 $1,178-1,819

Leasing office reservesquare@kandd.com

Upgraded suites available featuring stainless steel kitchen appliances, kitchen island, granite countertops

Indoor pool, fitness center, convenience store, dry cleaner, restaurants, rental car agency

2

The Bingham 1278 W. 9th St. (216) 694-8792/www.thebingham.com

340

2004 NA

NA NA

Randa Afour (216) 579-4000 x101

Washer/dryer in suite

24/7 concierge, fitness center and market

3

The Langston 2303 Chester Ave. (855) 620-3707/www.thelangston.com

316

2013 NA

$924-1,329 $1,794-1,838

Justin Young justin.young@buckingham.com

Balcony, all appliances, walk-in closets, pantry, washer/dryer, internet

Business center, fitness center, garages, courtesy officer, paid cable, tanning bed

4

Statler Arms 1127 Euclid Ave. (567) 203-6170/statlerarmsapartments.com

295

2003 NA

$890-1,045 $1,275-1,500

Amy Lawlor propertymanager@ statlerarmsapartments.com

In-suite washer/dryer connections, updated, fully equipped kitchen, spacious closets with organizers

24-hour front desk attendant, fitness center, rooftop sundeck, yoga studio with saunas

5

Standard Building 990 W. St. Clair Ave. (216) 539-4218/thestandardcle.com

281

2018 NA

$1,150-1,800 $1,300-7,500

Julie Colby thestandardmgr@lincolnapts.com

In-suite washer/dryer, gourmet kitchens w/ quartz countertops, luxurious bathrooms and brand new operable windows for fresh air

Apartments with historical details, modern refinements and tech-savvy touches

6

Bridgeview Apartments 1300 W. 9th St. (216) 781-8510/http://1300bridgeview.com

247

1999 NA

$1,000-1,400 $1,300-2,000

Jenn Hardulak JHardulak@landmarkmgt.com

Exposed brick and wood beams, high ceilings, loft-style living

Three story fitness center, indoor parking, concierge, 24-hour on-site maintenance

7

Flats at East Bank Apartments 1055 Old River Road (216) 487-7002/www.flatsateastbank.com

241

2015 NA

$1,495-2,600 $1,795-3,300

Sales team flb@villagegreen.com

Luxury finishes, private balconies, floor-toceiling windows, stainless steel appliances

24/7 concierge, 24/7 fitness center, outdoor green space with BBQ grills and fire pit

8

Edge on Euclid 1750 Euclid Ave. (440) 528-1082/www.theedgeoneuclid.com

240

2017 NA

$1,370 $879

NA NA

Each of the one-, two-, three- and fourbedroom suites include private baths, living room, kitchen, washer/dryer

Double height lobby, fitness center, lounge, study areas, 163-car secured parking garage, private courtyard

9

The Residences at 668 668 Euclid Ave. (216) 579-1668/www.668euclidave.com

236

2010 NA

$957-1,551 $1,436-1,953

Leasing office residences@668euclidave.com

Expansive windows, stainless steel appliances, kitchen island, maple-finished cabinets, granite countertops

Business center, restaurants, fitness center, 24/7 security; near shopping, East 4th Street and Quicken Loans Arena

10

Residences at Leader 526 Superior Ave. (216) 241-7706/www.ResidencesAtLeader.com

224

2016 NA

$875-1,450 $1,390-2,985

Leasing office leader@kandd.com

Granite countertops, custom cabinets

Restaurant, bar, barber shop, convenience store, pizza shop

11

Residences at 1717 1717 E. 9th St. (216) 443-1717/www.residencesat1717.com

223

2014 NA

$1,018-1,460 $1,838-2,880

Leasing office 1717@kandd.com

Energy Star stainless steel appliances, washer/ dryer, granite countertops

Silver LEED certification, marble lobby, business center, fitness center, party room, Al's Deli

12

Crittenden Court Apartments 955 W. St. Clair Ave. (216) 781-4884/NA

208

1996 On-going

$550-900 $950-1,200

Leasing office crittendencourt@roadrunner.com

Spectacular views, kitchen appliances, washer/ dryer hookups

On-site parking, workout room, lounge, security

13

Iconic Living at The 9 2017 E. 9th St. (216) 239-1300 /metropolitancleveland.com

194

2014 NA

$1,100-2,160 $1,775-6,400

Rebecca Lemieux rebecca@geisproperties.com

Stainless steel appliances, in-suite washer/ dryer, cork flooring, dimmable lighting, zebrawood cabinetry, electric fireplace

Security, room service, front desk staff, valet, maintenance, onsite grocery store, theater, restaurants and social lounge

14

Beacon (1) 515 Euclid Ave. (216) 464-2860/www.thebeaconcleveland.com

187

2019 (1) NA

To be determined To be determined

Brian Weisberg Bweisberg@starkenterprises.com

Stainless steel appliances, granite countertops, floor-to-ceiling windows, high-end appliance packages

Fitness center, roof top lounge, party room, business center

15

Stonebridge Waterfront 1500 Detroit Ave. (216) 344-2310/stonebridgewaterfront.com

159

2001 2010

$976-1,252 $1,063-2,153

Leasing office stonebridge@kandd.com

Private balcony, kitchen island, black and white appliances, granite floors and countertops, custom cabinets

Fitness center, dry cleaning service, garage or gated surface parking, rent-toown

16

The Shoreline (2) 5455 N. Marginal Road (216) 432-0622/www.theshorelineapts.com

138

2002 NA

$1,345-2,254 $1,730-3,310

Hannah Rohrer hrohrer@landmarkmgt.com

Lake views, granite, stainless steel appliances, washer/dryer, over-sized windows, loft ceilings, open floor plans

Resort pool, bark park, fitness center, party room, business center, coffee bar, security, gated

17

The Garfield 1965 E. 6th St. (866) 659-6613/www.thegarfield.com

123

2017 NA

$1,095-1,695 $1,995-3,095

Lia Neylon lneylon@livemillennia.com

Washer/dryer in unit, stainless steel appliances, quartz countertops

Complementary draft beer, gourmet coffee, valet laundry and trash service

17

Halle Building (1) 1228 Euclid Ave. (216) 696-7701/www.ResidencesAtHalle.com

123

2018 (1) NA

$1,298-2,123 $1,675-4,605

NA residencesathalle@kandd.com

Luxury kitchens, crown molding, stainless steel appliances, double ovens, beverage centers, hard surface flooring, spacious floorplans

On-site fitness and resident centers, conference center, historic building in Playhouse Square, atrium

19

Huron Square and the Osborn Apartments 1001 Huron Road (216) 575-1175/www.huronosborn.com

120

1990 1999

$1,000 $1,400

Nicole St. Pierre playmgt@gmail.com

Washer/dryer, ceramic tile, dishwasher, breakfast bar

Workout room, laundry center, package pickup, dry cleaning service

20

Lofts at Rosetta Center 629 Euclid Ave. (216) 589-1111/www.east4thstreet.com

115

2013 NA

$600-1,295 $1,325-1,795

Jessica Taylor info@east4thstreet.com

Modern design, gray wood design plank flooring, high efficiency kitchens and baths, white Corian countertops

Located in the Historic Gateway Neighborhood with numerous dining and entertainment options

21

The Residences at Hanna 1401 Prospect Ave. (216) 357-2672/www.residencesathanna.com

104

2013 NA

$902-1,381 $1,298-1,894

Leasing office hanna@kandd.com

Granite countertops, porcelain tile floors, Energy Star stainless steel kitchen appliances, washer/dryer

On-site parking, fitness center, business center, corporate housing, on-site restaurant

22

Water Street Apartments 1133 W. 9th St. (216) 771-8600/http://waterstreetapts.com

101

1997 NA

$900-1,200 $1,300-1,500

Laura Wagner lwagner@landmarkmgt.com

Great views

24-hour fitness center, rooftop deck

23

Worthington Yards 725 Johnson Court (216) 704-4441/www.worthingtonyards.com

98

2017 NA

$1,250.00 $1,895.00

Greg Deming gdeming@daladgroup.com

New construction, quartz countertops, vinyl and ceramic flooring, balconies, washer/dryer, appliances included, large windows

Outdoor courtyard, community living room, art gallery, fitness center, yoga room, rooftop patio, recessed patios

24

Perry-Payne Apartments 740 W. Superior Ave. (216) 781-8510/http://perrypayneapts.com

93

1995 NA

$1,000-1,200 $1,300-1,700

Jenn Hardulak JHardulak@landmarkmgt.com

Huge windows, amazing river and lake views, bright loft-style suites with open floor plans

Rooftop deck, 24-hour fitness center, 24-hour emergency maintenance

25

The Tower Press Building 1900-2100 Superior Ave. (216) 241-4069/http://towerpress.com

85

2002 2017

$1,200 $1,500

Dave Perkowski info@towerpressdevelopment

T-1 high-speed internet, exposed duct, brick and heavy beam structures, large original historic windows, central air

Cafe and galleries on-site, professional fitness center, interior courtyard with seating and grills

26

The Creswell on Playhouse Sqaure 1220 Huron Road (216) 245-3343/www.thecreswell.com

80

2015 NA

$1,250.00 $1,500.00

Greg Deming gdeming@daladgroup.com

New appliances, HVAC, high ceilings, vinyl floors, stone countertops, pet friendly, suite storage available

Fitness center, first floor restaurant, onsite management

26

1900 Euclid Ave. Lofts 1900 Euclid Ave. (216) 241-9800/www.thecoralcompany.com

80

2002 NA

$1,000-1,145 $1,250-1,595

Lisa C. Micheli lcm@thecoralcompany.com

9'-16' ceilings, expansive windows with lake and city views, gas fireplaces, and in-suite washers and dryers

Fitness center, sauna, tanning bed, secure indoor parking, evening lobby attendant

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Want the full version of this list Ă‘ and every other Crain's list? Become a Data Member: CrainsCleveland.com/data Source: Building owners and property managers. Have questions, suggestions or corrections? Contact Chuck Soder: csoder@crain.com.

(1) Not yet open; under construction (2) Formerly Quay 55.

CRAIN’S CLEVELAND BUSINESS

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J A N U A RY 15 - 21, 2 018

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PA G E 19

AKRON

PUCO, FirstEnergy striving for better grid

By DAN SHINGLER dshingler@crain.com @DanShingler

The Public Utilities Commission of Ohio and Akron-based FirstEnergy Corp. appear to want the same thing: the development of a smarter, more reliable electricity grid in Ohio that likely will cost hundreds of millions of dollars but should make the state more attractive to business and provide better electric service for all.

Not to mention that it will generate guaranteed profits for utilities such as FirstEnergy.

The PUCO is pushing and promoting its Power Forward program, which aims to review new technologies and regulatory strategies to shape how the commission and the state’s utilities roll out new grid developments.

PUCO chairman Asim Haque said in a recent interview that the commission will no longer focus on regulating generation — which has increasingly become the domain of unregulated competitors to traditional utilities like FirstEnergy — and instead focus on the state’s massive transmission and distribution system. That’s still largely regulated, run by the utilities that the PUCO has been overseeing since its inception, and critical to ensuring that the future needs of businesses and consumers are met, Haque said.

“I dealt with those (generation) cases for three years at the agency, and the bulk of my time was spent thinking about the future of power plants in the state of Ohio. … We really weren’t, in that dialogue, focused on what’s best for customers,” Haque said.

The PUCO has worked to try to give FirstEnergy and other utilities relief that would stave off the closure of some of their old coal and nuclear plants, which are having difficulty

In December, FirstEnergy filed plans with the Public Utilities Commission of Ohio to invest $450 million to modernize the grid in the state during the next three years. (FirstEnergy)

competing with cheap natural gas from the nation’s shale drilling boom.

But its efforts, involving years of hearings and work, have been overturned by the courts and federal regulators who said those measures were unjustly passing on costs to consumers or not allowing market forces to do their work.

That convinced Haque to change course.

“We’re out of the generation business,” he said of the PUCO’s role.

Consumers want more flexibility, more services and more information, Haque said. That ranges from hookups for electrical vehicle charging stations to connections that allow solar panels to also sell power back into the grid, to smart apps and applianc-

es that are told by the grid when is the most expensive time to use power and when is the cheapest.

This comes just as FirstEnergy and others also are focusing on their regulated distribution businesses — operations where they are guaranteed a return on what they invest in delivering power to customers with whom they have a near monopoly.

It also comes when the grid really does need substantial investment, not just for fancy new gadgets and apps, but just to maintain and improve its reliability.

Just in December, FirstEnergy filed plans with the PUCO to invest $450 million to modernize the grid in Ohio during the next three years. And that’s on top of a whopping $742 mil-

lion the company spent on transmission and distribution investments between 2004 and 2016, FirstEnergy spokesman Doug Colafella said.

Haque sees a rare confluence of need on the part of consumers, desire on the part of government, and a combination of the two creating a great willingness on the part of utilities like FirstEnergy.

“You think about consumers wanting more, then you have a government appetite for that, and then you have utilities saying they want to do it. It’s an exciting time,” Haque said.

For utilities, this can be a tricky subject. Not surprisingly, they’re more than a little reluctant to say anything that might make it look like they’re taking advantage of ratepay-

ers with the chance to make investments that they know will be returned to them in future electric rates.

But at the same time, the companies have a duty and a business reason to provide the most reliable power possible and the services that customers want, said Eileen Mikkelsen, FirstEnergy vice president of rates and regulatory affairs.

More investments will be needed, she said, because the utility already is seeing an increase in residential solar panels and more electric vehicles plugging into its system.

Mikkelsen has participated in the first two rounds of Power Forward meetings and will be at the third round in March in Columbus. She has seen broad-based support for grid investments.

“I’ve participated in both phases so far, and they’re three-day seminars. You see representatives from all areas,” Mikkelsen said. “I think there’s enormous support for modernizing our distribution system to meet the current and also the future needs of our customers. But we realize we need to balance that with customer affordability.”

Some of the company’s efforts already have borne fruit. For example, repairs in some areas are being made more quickly, thanks to apps that repair crews use to send information to engineers in real time. And customers are getting increasingly more and faster information about outages and repair times online from systems that talk to one another more effectively.

Such investments are likely to be critical to FirstEnergy, which has said its unregulated generation business is in danger of bankruptcy. The company even has said it may close its two nuclear power plants in Ohio.

Consumer and business advocates are well aware that FirstEnergy is looking for opportunities to make SEE GRID, PAGE 20

Startup helps advertisers get smart on social

By JUDY STRINGER clbfreelancer@crain.com

Brian Deagan knows he is teetering on the edge of hyperbole when he talks about the power of Facebook as an advertising platform. But he’s also acutely aware of the social media site’s impressive capabilities.

With Facebook, advertisers have the ability to pinpoint winning campaigns in ways not possible with print or other traditional channels.

“I don’t mean to seem too dramatic, but as a civilization, it is the most sophisticated advertising platform … ever,” Deagan said.

The problem is that most advertisers — save the Fortune 500 gang with teams of data scientists and analytics departments — basically are guessing on their Facebook spend, according to Amy Martin, a senior partner in marketing for JumpStart Inc. The Cleveland-based nonprofit recently awarded Deagan and his fellow CompanionLabs founders $250,000 to accelerate commercialization of a trio of plug-and-play apps that are designed to help companies optimize their digital marketing dollars.

“The larger advertisers and their agencies, they already know how to

“I don’t mean to seem too dramatic, but as a civilization, (Facebook) is the most sophisticated advertising platform … ever.”

— Brian Deagan, CompanionLabs co-founder

use these powerful capabilities, but where the gap exists is for a lot of mid-size or micro advertisers,” he said. “What our technology does is closes that gap and allows them to very easily start to use those capabilities better.”

Ten-month-old CompanionLabs, based in the Wallhaven Building in downtown Akron, launched its first app on April 3 with hopes to have 2,000 trial users by October. It met that goal April 18.

Deagan would not disclose the number of active users today or the percent of trial users who convert to subscribers, but he said more than 10,000 advertisers across 65 countries have used CompanionLabs’ apps to date. While advertisers can apply these tools in their Google or Amazon marketing strategies as well, he attributes the “high velocity”

launch to the company’s Facebook origins. It was able to identify Facebook advertisers and, using the platform, “rapidly acquire them,” he said.

Another part of its secret sauce was making the tools as easy to use as possible.

“It is a radically different approach,” Deagan said. “Often when people are buying advertising or marketing technologies to improve their campaigns, it can take weeks — if not months — to get them implemented, up and running and see results.”

CompanionLabs “companion apps,” by contrast, are what Deagan called “bite-sized apps,” ones that are easy to install and deploy, and they provide value faster. The apps work with existing marketing systems, such as Ads Manager or Power Editor, and advertisers get campaign

performance data in days.

The six-person company has raised a total of $500,000 in venture funds.

Neither Deagan nor the CompanionLabs team is new to the startup world. Members of the founding team — including CEO Bill Landers — were part of Knotice, an Akron marketing technology startup founded in 2003 that received funding from JumpStart in 2006. That company was sold in 2014 to New York-based marketing firm IgnitionOne. It was during their Knotice tenure, Deagan said, that the CompanionLabs partners first became aware of the “distinct advantages Facebook had as a marketing platform.” When Deagan started a consumer brand called Human Unlimited in 2014, he used Facebook and Instagram as the primary platform to build the brand.

The company was growing at a good clip, according to Deagan, but as demand for Facebook advertising grew, so did the cost.

“In January 2016, the cost of 1,000 ads on Facebook was $3. By May, it was $6,” he said. “We began to think about how we could buy ads differently to reduce our exposure to this demand and the cost increases.”

That summer, Deagan gathered a

development group to build a prototype of what would become CompanionLabs’ first offering, an app that automates the testing of advertising bids. Even with more than 2 billion active users, Facebook has limited space for advertisements so it auctions off available slots. Advertisers run tests to find the “sweet spot” — the best bid for a specific ad, audience and budget — often manually.

By the end of the summer, Deagan said Human Unlimited was getting the same return on Facebook that it had in January, even though advertising costs had doubled. He opened up the prototype to more pilot users in the fall.

“When it worked for them, we started to assemble the CompanionLabs team,” he said.

It also attracted the attention of Facebook itself, which took notice of the activity and encouraged the fledging startup to apply to be one of its official marketing partners. In August 2017, CompanionLabs became one of only 190 companies globally with the Facebook accreditation.

“It’s exciting from the standpoint that Facebook picked up what we are doing — this small team in Akron — and saw value in the app that we had developed,” Deagan said.

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CRAIN’S CLEVELAND BUSINESS

AKRON

Covelli makes aid part of culture

GRID

By LYDIA COUTRÉ

money, and they are watching closely to see what sorts of investments the company proposes.

But at least some of them say that grid investment is needed.

“Absolutely. Reliability is critical to customers,” said Matt Brakey, head of Shaker Heights-based Brakey Energy, which consults with area industrial energy customers, such as mills and foundries.

“I’ll tell you the most panicky calls I get is from clients when there’s an outage and there’s a real sense of desperation, and the cost can be enormous, both in lost productivity and scrap. So, it’s critical that this is done.”

Brakey and others will be watching the PUCO as much as the utilities to ensure that it allows only investments that will improve service in a cost-effective manner.

“The job of the commission is going to be to look at proposals from the utilities and distinguish between those investments that are critical to grid stability and those that are being done to generate a rate of return,” Brakey said.

Haque promised vigilance.

“We’re going to be very cautious on the utility spend,” Haque said.

“We’re asking utilities to be more thoughtful and forward-looking about the infrastructure updates they might make. When you upgrade that line, what are you really trying to achieve?”

But in the end, he said, the investments will improve service and probably Ohio’s business competitiveness as well.

“When a business is locating in this state, they want to know that they will receive their power reliably and that they will have some control over their bill on a month-to-month basis. … It really creates the business case for government in terms of why you should take on something like this,” Haque said.

lcoutre@crain.com @LydiaCoutre

When Houston faced disastrous flooding last year, Covelli Enterprises sprang into action and decided to give proceeds of chocolate chip cookies sold in its Panera stores to an organization helping with the relief effort in the city.

Members of the marketing team created the Chip in for Houston program in just several days. They drew from their broad experience in cause marketing, in which for-profit and nonprofit organizations team up to fundraise in a mutually beneficial arrangement.

“It’s probably one of our top things that we focus on as a marketing department, because it allows us not only to help the people in those communities and in those organizations that we support, but it also adds value to the company and we get to show them that we are a partner, a true partner in the communities where we’re doing business,” said Allen Ryan, director of corporate affairs at Warren-based Covelli Enterprises, the country’s largest franchisee of Panera Bread.

Covelli Enterprises’ philanthropic efforts often combine a corporate gift with some sort of in-store fundraising, Ryan said.

The company has partnered with the Cleveland Clinic for several years and supported the health system through awareness drives and fundraisers in its stores, raising more than $1 million for the Clinic through cause marketing.

“I’ve always said if a business is successful and they’re not giving back to the community, who’s going to give back?” said Sam Covelli, owner/operator of Covelli Enterprises. “I think it’s an obligation of a successful business to do that. We’ve always felt

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Covelli Enterprises, which makes cause marketing part of its strategy, recently sold cookies at its Panera stores, with proceeds going to hurricane relief in Houston. (Contributed photo)

that way as a company.”

In addition, Sam Covelli and his wife, Caryn, recently gave $2 million to the Clinic to benefit the Taussig Cancer Institute. Dr. Brian Bolwell, chairman of the Clinic’s Taussig Cancer Institute, said that gift will support various programs for patients, as well as research.

As Covelli Enterprises has grown in recent years, it has brought a philanthropic mindset to the new communities it’s serving.

Covelli Enterprises acquired bakery-cafes in the Columbus, Dayton and Cincinnati markets in 2010, 2014 and 2016, respectively. Also in 2016, it acquired 22 bakery-cafes in South Carolina and Georgia. And in 2017, it acquired 15 in North Carolina.

In addition to taking over cafes, the

CRAIN'S CLEVELAND BUSINESS

company has been aggressive in building new ones at a rapid pace, Ryan said. In total, Covelli Enterprises owns 314 Panera bakery-cafes.

“Every community has one, two or three things that they really care about, and so we try to identify those and then create partnerships that make sense in order to partner with whatever they may be in that community,” Ryan said.

In support of Autism Awareness month in April, Covelli Enterprises sells a specialty puzzle piece cookie for a one-week campaign and donates 100% of the proceeds to autism programs in the communities it serves. Since 2011, that has meant more $1.5 million has been given to local beneficiaries.

In October, Panera sells its Pink

REAL ESTATE

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Ribbon Bagel and has raised more than $3 million to support breast cancer programs in the communities it serves.

And since 2011, Covelli Enterprises has given more than $1 million in food and monetary donations by saluting those in uniform on Veterans Day and giving veterans and service members free You-Pick-Two meals at participating bakery-cafes.

“We want to be kind of the heartbeat of that particular community, whether it’s a small town or a large city,” Covelli said.

In Northeast Ohio, Covelli Enterprises has raised money for the Clinic, as well as numerous other local nonprofits, including the Cleveland Animal Protective League, the Animal Welfare League of Trumbull County and Toys for Tots.

The Clinic’s partnership with Covelli Enterprises has been a win-win for everyone involved, Bolwell said.

The corporation is associated with an important cause that ideally generates more business from customers who are inclined to purchase that Pink Ribbon Bagel or puzzle cookie for Autism Awareness month, he said. It’s of course a win for the Clinic, where any increase in philanthropic gifts is helpful. And third, he said, it’s a win for customers, who have a sense of giving back and helping others.

Covelli Enterprises has supported nursing scholarships at the Clinic, as well as the VeloSano cycling event, which raises money to support cancer research at the Clinic.

In addition to the funds themselves, the awareness that Covelli Enterprises’ campaigns bring is huge, Bolwell said.

“I think cause marketing is a great opportunity,” he said. “The Covellis have been doing it with Panera Bread for a while, but I think it’s an opportunity for many other corporations to take a look as well.”

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ADVERTISING SECTION

J A N U A RY 15 - 21, 2 018

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PA G E 21

MBA

WEATHERHEAD SCHOOL OF MANAGEMENT

www.crainscleveland.com/onthemove

To place your listing or for more information, please call Lynn Calcaterra at (216) 771-5276 or email lcalcaterra@crain.com

ACCOUNTING

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ENGINEERING & CONSULTING

weatherhead.case.edu

FINANCIAL SERVICES

FINANCIAL SERVICES

James R. Graham

Ferzan M. Ahmed

Kevin Huebschman

Justin McCarty

Shareholder

Director, Ohio Transportation

Maloney + Novotny LLC

AECOM

Vice President and Wealth Management Advisor

Vice President and Commercial Relationship Manager

Maloney + Novotny is pleased to announce the election of Jim Graham to Shareholder. Jim joined Maloney + Novotny LLC in 1996 and has worked primarily in the firm’s not-for-profit practice with organizations including higher education and private secondary schools. Jim also has expertise in service and manufacturing accounting. Jim is a highly skilled auditor and enjoys getting to know his clients and in helping to bring success to the businesses in which they are involved.

AECOM has recently named Ferzan M. Ahmed, P.E., as Director of Transportation throughout Ohio.

Ferzan will lead the transportation practice in AECOM’s four offices in Ohio and will help expand its practice throughout the state. Ferzan holds a Bachelor of Science in Electrical Engineering from Kansas State University, and a Professional Engineer license in the State of Ohio.

He was appointed and confirmed to the Ohio State Board of Registration for Engineers and Surveyors.

Fifth Third Private Bank

Fifth Third Bank

Fifth Third Private Bank is proud to welcome Kevin Huebschman as vice president and wealth management advisor. In this role, he will work closely with individual, business and institutional investors to help them build their wealth and achieve their financial goals. Kevin brings more than 13 years of financial services experience to Fifth Third Private Bank.

Fifth Third Bank is pleased to welcome Justin McCarty as vice president and commercial relationship manager. In this role, he will focus on profitable business development as well as monitoring the quality of an extensive existing portfolio of companies with annual gross sales of $20 - $500 million. Justin will have direct responsibility for client sales and marketing efforts in Northeast Ohio with a focus on the Akron, Canton and Youngstown markets.

REAL ESTATE

REAL ESTATE

Lee Burger

Carol Smith

Senior Vice President

Senior Vice President, Director of Development Services

LAW

LAW

IRG Realty Advisors, LLC. Lee Burger has been promoted to Senior Vice President and will maintain his role as Director of Project Management and Transactions. Lee has been a vital member of our team since joining us in 2005 and we are thrilled to announce his new title.

Amanda Martinsek

Christina T. Hassel

Partner

Partner

Ulmer & Berne LLP

Hahn Loeser & Parks LLP

With over 20 years of experience managing complex commercial disputes, Amanda Martinsek joins Ulmer & Berne LLP as partner in its Cleveland office. Martinsek has wide-ranging experience handling complex cases, including class actions, shareholder derivative claims, breach of contract disputes, products liability claims and other corporate matters. She also regularly represents public and private clients in administrative proceedings and arbitrations. Martinsek joins Ulmer from Ice Miller LLP.

Hassel works in the firm’s litigation practice where she focuses on commercial litigation, including both individual and class action disputes regarding contracts, business torts, fraud, consumer protection defense, unfair and deceptive trade practices, ADA, and intellectual property, as well as appellate litigation. She also has extensive experience negotiating complex commercial agreements in areas including IT, real estate, intellectual property, licensing, marketing and human resources.

IRG Realty Advisors, LLC. Carol Smith has been promoted to Senior Vice President, Director of Development Services. Carol joined our firm in 2006 and quickly rose through the organization in several supervisory and management positions. She not only oversees all of Development Services but has been instrumental in overseeing the development of Johnson Controls Hall of Fame Village in Canton, Ohio.

MANUFACTURING

REAL ESTATE Andrea Green

Steve Allison

Vice President, Director of Human Resources

President

IRG Realty Advisors, LLC. Andrea Green has been promoted to Vice President, Director of Human Resources.

Andi’s role in HR has been an integral part of our organization and one that has helped us to grow our greatest asset, our people.

Fire-Dex Fire-Dex, headquartered in Medina, OH, promoted Steve Allison to President. As successor to Bill Burke, Owner and CEO, Allison will take over operational responsibilities for the company worldwide. Allison is a 28-year veteran of the fire service personal protective gear manufacturing and sales marketplace. He joined the company in 2014 to serve as Director of Sales then was promoted to VP of Sales & Marketing in 2016.

Fire-Dex continues to grow with a facility expansion finalizing this year.

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CRAIN’S CLEVELAND BUSINESS

ADVERTISING SECTION To place your listing or for more information, please call Lynn Calcaterra at (313) 446-6086 or email lcalcaterra@crain.com

www.crainscleveland.com/onthemove

LAW

LAW

LAW

LAW

Ryan Babiuch

Trevor G. Covey

Matthew P. Delguyd

Robert E. Haffke

Partner

Partner

Partner

Partner

Benesch

Benesch

Benesch

Benesch

Ryan Babiuch has been named a partner in Benesch’s Litigation and Energy Practice Groups. He focuses his commercial litigation practice on representing businesses in high-stakes litigation and complex commercial disputes and his energy practice on representing public utilities and other energy companies in a variety of litigation and regulatory disputes.

Trevor G. Covey has been named a partner in Benesch’s Litigation Practice Group. He focuses on complex commercial and business litigation. He regularly argues in trial and appellate courts across the country, and in front of arbitration tribunals internationally. His clients are in many industries, including industrial manufacturing, consumer manufacturing, energy, private equity, and technology, and range in size from range from multinational corporations to privately held family businesses.

Matthew P. Delguyd has been named a partner in Benesch’s Commercial Banking & Finance Practice Group. He his practice on representing banks, other financial institutions, and borrowers in secured and unsecured lending transactions.

Robert E. Haffke has been named a Partner in Benesch’s Litigation Practice Group. He his practice on complex civil litigation involving product liability, business tort, and commercial matters. He has experience in all aspects of discovery and trial preparation, evidentiary and privilege issues, briefing and motion practice, and appellate practice in state and federal courts.

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Margarita S. Krncevic

David M. Krueger

Chris F. Moratschek

Daniel J. O’Brien

Of Counsel

Partner

Partner

Partner

Benesch

Benesch

Benesch

Benesch

Margarita Krncevic is a skilled labor and employment attorney with prior in-house legal experience at a Fortune 500 financial services company in Washington, D.C. She counsels employers to comply with federal, state, and local laws in taking workforce actions, such as hiring, progressive discipline, terminations, requests for religious or ADA accommodations, managing FMLA (including intermittent) leave, and mitigating co-employment issues.

David M. Krueger has been named a partner in Benesch’s Litigation and Transportation & Logistics Practice Groups. He represents businesses in commercial and business disputes, consumer disputes, transportation/aviation, and class action litigation. He has successfully defended and prosecuted claims on behalf of clients serving as lead and second chair counsel at the trial level, appellate level, and in alternative dispute resolution forums.

Chris has been named a partner in Benesch’s Real Estate Practice Group. He focuses his practice on counseling property owners, developers, businesses and governmental entities on a wide variety of real estate and real estaterelated legal issues. He has represented both owners and developers in the purchase, sale, development, redevelopment and financing (CMBS and traditional) of a variety of commercial and multi-family properties.

Daniel J. O’Brien has been named a partner in Benesch’s Health Care & Life Sciences Practice Group. His practice focuses on counseling individuals and entities engaged in the health care industry on transactional and regulatory business matters, with a particular focus on health care deal work. Dan’s understanding of the varied health care regulatory issues facing providers allows him to bring a unique perspective to transactions that helps to solve problems and close deals.

LAW

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NONPROFITS

Shaka S.J. Sadler

Adam N. Saurwein

Jennifer E. Horn

Mary P. Patton

Staff Attorney

Partner

Partner

Benesch

Benesch

Mansour Gavin LPA

Development and Marketing Director

Shaka Sadler’s practice involves representing and counseling management clients. She regularly drafts legal documents for clients, including motions, legal briefs, and position statements and advises clients in a wide range of employment matters, including discrimination, wrongful termination, harassment, retaliation, labor relations, and wage and hour issues

Adam N. Saurwein has been named a partner in Benesch’s Real Estate & Environmental and Energy Practice Groups. He is a corporate attorney and business advisor whose practice focuses on energy, real estate and finance. Adam has represented buyers and sellers in the acquisition, development, redevelopment and disposition of all types of multifamily residential and commercial properties.

We are pleased to announce that Jennifer E. Horn has been promoted to partnership. Ms. Horn practices in the areas of corporate and intellectual property law. Her wide-ranging experience includes mergers and acquisitions, commercial lending, corporate governance matters and general business counseling, as well as copyright and trademark registration and maintenance. Jen earned her B.A., magna cum laude, from American University, and her J.D., cum laude, from Cleveland-Marshall College of Law.

The First Tee of Cleveland Mary has been appointed to lead fundraising and marketing for The First Tee of Cleveland, an activity-based youth development program integrating Life Skills, Core Values and Healthy Habits through the game of golf. Mary’s extensive experience will help expand the organization’s impact. She recently served as President of Patton Public Relations, a firm she founded in 2001, and as Director of Marketing for Perspectus Architecture. She has a BA in Communications from John Carroll University.

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Source Lunch

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Duane F. Bishop

Executive VP and chief operating officer, Forest City Realty Trust Inc. Although Duane Bishop is well-known within Northeast Ohio real estate circles, the chief operating officer of the Clevelandheadquartered developer and property owner is not as widely known as the public real estate company’s prior generation of executives — members of the Ratner, Miller and Shafran families. A Lakewood native and graduate of what’s now Baldwin Wallace University in Berea, he ascended to Forest City’s top ranks in a 33-year career that included opening Tower City Center, running an outof-town mall in his 20s and serving as chief operating officer of its former commercial real estate group, which included malls and office buildings around the nation. When Forest City became a real estate investment trust in 2016, CEO David LaRue named Bishop to his current job. Bishop is responsible for the asset management, property management and leasing of Forest City’s $8 billion real estate portfolio, as well as corporate operations. He played a big role within the company as LaRue reorganized its operations and portfolio. — Stan Bullard

Five things Favorite hobby “Playing piano. I regret I don’t do it as much as I would like,” Bishop said.

What kind of music do you like?

“Classic rock. I like it to such a degree my wife wishes I’d mix it up sometimes.”

What is your drive-time listening?

“I have Sirius. It’s tuned to the Beatles, the Bridge and CNBC. I also listen to WTAM-1100.”

Favorite superhero and superpower?

“Batman. Look at his car, his house and, of course, where he lives. In terms of a superpower, it would be knowing the future. It would be great to know how people feel as you go into your next meeting with them."

First career job?

"I worked in accounting at Oerlikon Motch Corp. I left for Forest City after I realized I could go an entire day without speaking to anyone."

Lunch spot Hyde Park Prime Steakhouse 123 W. Prospect Ave., Cleveland The restaurant occupies a corner of the Landmark Office Towers.

The meal One had the salmon burger with French fries. The other had a salad.

One had a diet soda and the other had water.

The vibe This is a busy place. Lots of business lunches, and it’s perfect for them.

Rich woods on walls, art deco period artwork and elements of its origin as a bank branch: a one-time bank vault.

The bill $ 42.92 with tip

What was it like to work on developing Tower City Center and then watch The Avenue’s decline?

It was caught in a retail cycle that most downtowns experienced around the country. The suburban malls grew. Nordstrom opened in Beachwood, South Park opened, and downtown Cleveland saw May Co. and then Dillard’s close. Add to that the office vacancy growth and lack of downtown residents, and it was the perfect storm. I see the same retail coming back to downtown as the residential population grows.

What was your first out-of-town assignment for Forest City, and how did you feel about it?

I went to California to manage South Bay Galleria in Redondo Beach, Calif. I was 23, so it wasn’t that tough of a lifestyle decision.

After eight years, I came back to Cleveland to manage Tower City. I was glad to come back. Cleveland was a better place for me to raise a child, and the job opportunity was great. We’ve just sold South Bay Galleria as part of our overall retail sale. It’s bittersweet.

At one time, Forest City had a reputation as being limiting for a career if you were not named Ratner. That’s clearly no longer the case with LaRue’s tenure as CEO and other non-family members in management. How do you look back on your career at Forest City?

It has been fulfilling with a lot of fun along the way. I have had the opportunity to work on each of our product types — retail, office and apartments.

What are your civic engagements?

I have been actively involved with the Providence House for years.

Have been on the board since 2011 and was chair for three years. Also serve on the board of the Western Reserve Fire Museum being built downtown. In the retail business, I have been actively involved in the International Council of Shopping Centers, where I served on the foundation board and am past treasurer.

How do you size up downtown Cleveland today?

I feel good about it, and it has been a good home for our company. The apartment growth downtown has been impressive. I probably enjoy the city of Cleveland more than ever. It was a lot of fun in the mid-1990s when the arena, baseball stadium and rock hall opened. Now you see cranes again in the city.

What does downtown need to do to keep the momentum?

To continue growing, Cleveland needs to land major employers who are not yet here. Downtown. I know this is an obvious answer, but the residential development is progressing and will continue to thrive with companies outside of this market moving to call downtown Cleveland its home. Retail growth will then follow.

What advice do you give people when they are picking their college major and career?

Be open. Don’t think that just because you study something in college as a major that it must be your career forever. If someone has a business degree and is not fulfilled in that career, he or she should pursue something else. Do what you love, not what you feel obligated to do. There are many people at our company who were not business majors. They are great leaders and communicators. You can always train people in the business.

Was there anyone you considered a mentor? Who was that and how so?

I have had the fortune of working with great leaders over my career.

Each had his own style and vision, and I have learned and experienced more than I ever dreamed I could working for the company.

What is it that you enjoy about the real estate business?

The real estate industry experiences cycles, and as Forest City has developed and operated multiple product types in various markets, the challenge of managing change and improving asset value has been extremely satisfying.

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