Crain's Cleveland Business

VOL. 38, NO. 11

MARCH 13 - 19, 2017

Source Lunch

It’s a ‘crisis’ Center tries to find way to tackle antibiotic resistance. Page 2

Yvette Ittu, president of Cleveland Development Advisors Page 23

The List

CLEVELAND BUSINESS

NEO’s largest employee benefit firms Page 18

SMALL BUSINESS

Walking 15 states in four 15 states,months four months On his 3,600-mile walk across the United States, SmartShape Design founder Mike Maczuzak wore out four pairs of shoes and endured temperatures as high as 120 degrees in the Mojave Desert.

1

15

1.

2.

3.

4.

5.

6.

7.

8.

14 12

11

10

9

8 7 65

3

4

2

13

New York New Jersey Pennsylvania Maryland West Virginia Ohio Indiana Illinois

9.

10.

11.

12.

13.

14.

15.

Missouri Kansas Colorado Utah Arizona Nevada California

Crain’s map, via VectorTemplates.com

SmartShape Design founder Mike Maczuzak stands on the rim of Bryce Canyon, Utah — the 12th state he walked through. Find the story and more pictures, Page 12. (Contributed photo)

REAL ESTATE

SPORTS BUSINESS

Retail vacancy rises, but so does the rent

By STAN BULLARD sbullard@crain.com @CrainRltywriter

Following trends in national retailing and its own market, CBRE Group Inc. has started reporting downtown Cleveland statistics as part of its just-completed annual retail survey covering eight Northeast Ohio counties.

CBRE reported downtown vacancy at 10.4% among the 1.6 million square feet of selling space on the city’s broad thoroughfares and the long-suffering enclosed malls The Avenue and Galleria.

Surprisingly, that’s not far from areawide averages as retail gets roiled

by oversupply and competition from the internet.

CBRE estimates the region has 11.7% retail vacancy as of year-end 2016 from 10.3% a year ago. However, regional asking rental rates climbed to $12.13 a square foot at year-end 2016 from $12.02 a square foot a year ago.

In-demand retail locations are able to command far higher rates than the regional ask, with taking rates at some new retail centers commanding rents of $40 a square foot. Adding more downtown retail specifics required the realty brokerage to rejigger its approach for a different selling environment.

SEE CBRE, PAGE 19

Entire contents © 2017 by Crain Communications Inc.

Who’s investing Private buyers were investing in Cleveland metro commercial real estate at a much higher rate in 2016, compared to the national average and to the Cleveland market of 2015.

User/Other Private Public listed/REITs

Institutional Cross-border

100%

75%

50%

25%

2015

2016

2016

Cleveland U.S. avg.

Source: Real Capital Analytics

‘Legit’ BoxCast poised for a breakout year

By KEVIN KLEPS kkleps@crain.com @KevinKleps

In a back room reserved for BoxCast’s employee pingpong tournaments, a staffer on a recent afternoon was on a sales call — taking advantage of what might have been the only quiet space in the company’s second-floor offices at Burke Lakefront Airport.

When the startup, which delivers high-definition streaming services to a wide array of businesses, teams and organizations, moved into the 3,600-square-foot spot in 2013, it had only a handful of employees. Now, with 27 full-time employees, plus a collection of contractors and wellheeled advisers, BoxCast co-founder

Gordon Daily believes the company is primed to really take flight.

That eventually could mean a move from its airport headquarters, but Daily is much more focused on the months ahead, which will include the unveiling of a new product, another fundraising round and additional hires.

In late December, BoxCast reported raising $1.43 million in a $2 million round that disclosed a notable new board member: Sam Gerace, the CEO of Veritix until it was acquired by AXS in 2015. Gerace, who has been an adviser since BoxCast hired its first employee, has been the founder and/or leader of five tech startups (most recently LaunchVector, a 5-month-old software company).

SEE BOXCAST, PAGE 22

Akron: New life for the Portage County Municipal Courthouse in Kent. Page 21

PA G E 2

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

Attempting to cure antibiotic resistance Case Western-Cleveland VA center aims to solve ‘one of the biggest threats to global health’ “As a result of this escalating crisis, we’ve been faced with challenges clinically. The challenges that the future holds (are) even more scary than the present. ... The antibiotics that we have now are not going to be able to stop resistance. We have to think of other ways.”

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

In the 1990s, when Dr. Robert Bonomo began studying how bacteria became resistant to antibiotics, he had a limited view of the issue.

At the time, he and his peers thought resistance was just what they could observe, but unfortunately, the problem has escalated, said Bonomo, medical service chief at the Louis Stokes Cleveland VA Medical Center. Today, the World Health Organization calls antibiotic resistance “one of the biggest threats to global health, food security and development today.”

With this in mind, Case Western Reserve University School of Medicine and the Cleveland VA have teamed up to study and tackle antibiotic resistance through the establishment of a new center.

Bonomo will be the director of the new Case VA CARES (CWRU-Cleveland VAMC Center for Antimicrobial Resistance and Epidemiology), which will include work ranging from basic science to drug discovery to new treatment approaches.

“As a result of this escalating crisis, we’ve been faced with challenges clinically,” said Bonomo, who also is a professor at the CWRU School of Medicine. “The challenges that the future holds (are) even more scary than the present.”

Increasingly, bacteria and other microorganisms are developing resistance to the antibiotics used to kill them, both imperiling health and adding to health care costs as doctors try different medicines, according to

— Dr. Robert Bonomo, medical service chief at the Louis Stokes Cleveland VA Medical Center, and professor at the CWRU School of Medicine

a news release. Studies show antibiotic resistance adds as much as $20 billion per year in excess direct health care costs.

“The antibiotics that we have now are not going to be able to stop resistance,” Bonomo said. “We have to think of other ways.”

Every year, at least 2 million people in the United States are infected with antibiotic-resistant bacteria and at least 23,000 die as a result, according to the Centers for Disease Control and Prevention.

The inappropriate use of antibiotics in humans and in livestock have contributed to the growth in antibiotic resistance, Bonomo said — plus the “inevitable consequence of evolution,” as bacteria fight to survive.

Because the problem is a moving target, the center and a multidisciplinary group of dedicated research-

ers are crucial, he said.

Roughly a dozen physicians and scientists have been collaborating with Bonomo for years and have published about 100 papers in total.

Case VA CARES formalizes this work and is a timely partnership for a “critically important problem,” said Dr. Murray Altose, chief of staff at the Cleveland VA. It provides a more systematic, organized approach to coordinating basic science, clinical science and patient care, he said.

Scientists and physicians with Case VA CARES will conduct new research, modify existing antibiotics, work toward new ones and use decoys to trick uncooperative bacteria.

The new center, one of only a handful of its kind in the country, is likely to benefit from Bonomo’s connections to labs and scientists around the world. He developed this net-

work over his more than two decades of work, during which he published nearly 340 peer-reviewed manuscripts of original research in scientific journals.

Mark Chance, vice dean for research at the CWRU School of Medicine, said the new center both recognizes Bonomo’s accomplishments and gives him a foundation to expand his work with new faculty and recruits, as well as the involvement of other departments.

The loosely affiliated group of researchers that have studied antibiotic resistance with Bonomo have many strengths, Chance said, but there are some gaps that the new center can help to fill as CWRU and the VA pool resources.

The center’s faculty members will come from both organizations and have expertise in infectious diseases,

microbiology, molecular biology, biochemistry, pharmacology, proteomics and bioinformatics. Over the next few years, the goal is to bring about three new recruits to Cleveland to join the center with a focus on junior people to mentor and develop over time, Chance said.

“It’s part of the brain gain strategy of building high-quality programs around the medical school, around the university, leveraging the assets in Cleveland,” he said.

Cleveland can be a bit “pigeon-holed” as a medical device town, Chance said, but it can become equally successful in other biotech areas. Case VA CARES is a step toward that.

“We’re already recognized for being a great health care center,” said Bonomo, who also is a member of the National Institutes of Health-funded Antimicrobial Resistance Leadership Group, which addresses priorities for clinical research on antibiotic resistance.

“I think this broadens the impact of the health care delivery that Cleveland can bring and lead for the rest of the world,” Bonomo said.

Although the center is a partnership between CWRU and the VA, Chance said that medical affiliations or appointments in other hospitals across the city will help make the effort Cleveland-wide.

“We want to make sure the researchers have the maximum opportunities for collaboration with other researchers, that they have the best equipment, and just sort of a level playing field across the entire city where they can go wherever they need to go to get things done,” Chance said.

What’s Your Competitive Advantage?

In business today, often the only advantage over your competition is the talented people who work for you. At Nesco Resource, we put over 60 years of experience into our work with companies to

STEPHEN F FORMER COO, LUBRIZOL TREASURER, CSU BOARD OF TRUSTEES

understand their needs and find the right talent to meet their goals.

From tech startups to industrial giants, we’re matching talent with opportunity to grow business. And with some of the highest satisfaction ratings in the industry, Nesco Resource is working for both the companies and talent we serve.

Let Nesco Work For You www.nescoresource.com/works

A Nesco, Inc. Company

Nesco Resource is a wholly owned subsidiary of Nesco Inc., a privately held diversified holding company focused on sectors including manufacturing, human resource services, and real estate.

Take it from someone who earned his MBA there: Four out of five CSU graduates stay in the region, providing the human capital that powers Northeast Ohio.

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 3

Security firm unlocks its growth potential Certified Security Solutions is part of crowded field, but sees ‘significant’ chance to expand

By JAY MILLER

internet-linked computer or device has the digital equivalent of a driver’s license, called a certificate, to identify itself. When you log your computer on to a bank’s or online seller’s website, the receiver can check your ID and move you onto its secure server (you see the lock on your address bar). But it isn’t yet able to see your purchase or credit card information, you may not realize, you’ve encrypted.

Your bank or retailer then sends your message back to you with what’s called an encryption key. Now, your computer will send your credit card information. But since the business sent you one of their encryption keys and applied its encryption to your message, only the business can open the purchase information.

Seemingly, a simple system. But your bank or retailer has to keep track of hundreds of thousands, even millions, of those transactions.

CSS software manages those encryption keys and the rest of the security involved in those transactions on both corporate servers and on computing clouds. It’s working in a crowded field, but the opportunities are large as the IoT market explodes.

“There’s a significant opportunity for CSS to provide a software piece of glue to help glue the security model together,” von Keyserling said. “It’s going to grow exponentially over the next five to seven years.”

BI Intelligence, a research service, estimated last August there will be 34

jmiller@crain.com @millerjh

According to leaked emails, the CIA can listen in on conversations through a turned-off television set.

That revelation from WikiLeaks shines a spotlight on the work of Independence-based Certified Security Solutions (CSS), which works in an important sector of the cybersecurity business. Among its customers are corporations who need a secure way to communicate with their customers. It also has begun to provide for its corporate clients secure communications links between their clients’ customers and the internet-linked devices they’ve sold them.

“That’s where our service comes in,” said company president and CEO Kevin von Keyserling. “It allows you to essentially do what we think of as the fundamentals of operating a PKI.” A PKI, or public key infrastructure, is the software that controls the locks on the doors of many transactions.

PKIs have been used for years by banks and e-commerce firms. Increasingly, PKIs are used to secure communications with devices — everything ranging from home security systems to medical devices to autonomous vehicles. The devices that make up what is being called the Internet of Things, or IoT. PKI security works like this. Every

How PKI security keeps you safe A PKI, or public key infrastructure, is the software that controls the security of many online transactions.

Here’s a simplified view of how it works: 1. Every internet-linked computer or device has a certificate to identify itself. Think of it as a digital equivelent of a driver’s license.

2. When you log on to a business website to make a purchase, the business’ computer verifies your ID and moves you onto its secure server. But it isn’t yet able to see your purchase or credit card information, because that information is encrypted.

3. The bank or retailer then sends your message back to you with an encryption key for their system.

4. Your computer then sends your credit card information. Because the business sent you one of their encryption keys and applied its encryption to your message, only they can open it, keeping your purchase information secure.

billion devices connected to the internet by 2020, up from 10 billion today. Most of that growth will come from IoT devices and $6 trillion dollars will be spent on IoT solutions over the next five years.

Since security will be critical to all

of those devices, the field has attracted a lot of competition. “It’s a fairly competitive environment. There’s a lot of mom-and-pop players in the IoT security space,” von Keyserling said.

“So it’s fairly fragmented, and over the course of the next three to five years, I would expect a lot of consolidation.”

CSS has been in business since 2003, starting as a security consultancy. It moved to Independence in 2009, when von Keyserling was named CEO. He was already living in the area and wanted to stay here.

The company has 100 employees, 60 of them in Independence, the others scattered around the country.

“We’re growing faster than anticipated,” von Keyserling said. “We’ll double in size every year for three years.”

Some of those employees are coming from local universities, including through co-op programs with Case Western Reserve University and the University of Akron. “We try to convince them to become full-time employees when they graduate, and that’s been working pretty well for us,” von Keyserling said. “We’re getting some really great talent here.”

CSS is privately held and does not disclose financial information. The CEO also would not disclose customers, though he said the CSS software platform is up and running at 100 of the Fortune 500 companies, including in the automotive industry, helicopter and medical device industries.

Last year, the company and SAP, a

German software firm behind only Microsoft and Oracle on Forbes magazine’s list of the world’s largest software firms, agreed to make CSS’s PKI certificate management software available with SAP’s cloud platform for the Internet of Things.

The company is venture financed, von Keyserling said. Among its investors are two Michigan firms. One, who he declined to name, is in the automotive industry. The other is Plymouth Ventures of Ann Arbor, which invests in post-startup firms. It made an undisclosed investment in CSS in 2015.

“CSS has developed a unique software platform providing issuance, management and reporting solutions needed for nearly all companies who wish to securely manage their identification and authentication needs, Mark Horne, Plymouth Ventures CEO said at the time of the investment.

“The software platform is the culmination of nearly 13 years of experience setting up the most robust and secure infrastructures within some of the largest corporations in the world.”

As a venture financed firm in a field where consolidation is likely, von Keyserling acknowledges CSS could be a merger candidate down the road.

“I would expect we would become an attractive acquisition candidate as we grow and prove out the model and the recurring revenue grows,” he said. “Although, I’m having an awful lot of fun.”

NORTHEAST OHIO COMMERCIAL REAL ESTATE LEADERS INVESTMENTS, SALES, LEASING, MANAGEMENT AND ADVISORY RECENTLY-COMPLETED TRANSACTIONS

FEATURED LISTINGS

INVESTMENT SALE

INVESTMENT SALE

FOR LEASE

FOR LEASE

800 Nave Road, Massillon, OH Seller representation; 85,000 sq. ft.

Sold for $6,200,000 ($73.18/sq. ft.); 8.0% cap rate

1933 Highland Road, Twinsburg, OH Seller representation; 62,200 sq. ft.

Sold for $2,520,000 ($40.51/sq. ft.); 10.5% cap rate

14720 Foltz Industrial Pkwy., Strongsville, OH 336,880 sq. ft. industrial spec warehouse/office

5821 Harper Road, Solon, OH Up to 40,000 sq. ft. available (flex, office, showroom)

INDUSTRIAL USER SALE

INDUSTRIAL USER SALE

FOR LEASE

FOR LEASE

22720 Stelfast Parkway, Strongsville, OH Seller representation; 100,000 sq. ft.

Sold for $5,000,000 ($50.00/sq. ft.)

787 Renaissance Parkway, Painesville, OH Seller representation; 110,669 sq. ft.

Sold for $4,200,000 ($37.95/sq. ft.)

Higbee Bldg., 100 Public Sq., Cleveland Up to 103,000 sq. ft. of office space

17000 Rockside Road, Maple Heights, OH 86,521 sq. ft. industrial building

INDUSTRIAL LEASE

INDUSTRIAL LEASES

FOR SALE/INVESMENT

FOR SALE/INVESMENT

365 Victoria Road, Austintown, OH Landlord representation 207,160 sq. ft. lease

8037 Bavaria Road, Twinsburg, OH Landlord representation 99,200 sq. ft. (between two tenants)

5180 Greenwich Road, Seville, OH 270,000 sq. ft.; 100%-occupied absolute net lease

365-375 Victoria Road, Austintown, OH 866,627 sq. ft. industrial building; 92% occupied

For all property sale and lease availabilities, as well as commercial real estate news

Visit www.TerryCoyne.com

TERRY COYNE, SIOR, CCIM Contact Terry today to discuss your commercial real estate needs

VICE CHAIRMAN

216.453.3001 tcoyne@ngkf.com

PA G E 4

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

Spicer’s comments put scare into pot business But Ohio activists say industry has no plans of slowing

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

THE KEY TO YOUR NEXT DEAL Purchase and Refinance Commercial Real Estate Loans up to $10,000,000.00 +

Contact Jonathan A. Mokri 440.526.8700 jmokri@cbscuso.com www.cbscuso.com Providing Commercial Loan Financing in Partnership with Area Credit Unions SM

White House press secretary Sean Spicer’s recent commentary suggesting the federal government could crack down on states permitting recreational use of marijuana exacerbated what tends to be mixed messaging on the treatment of an industry whose mere existence defies federal laws.

That sent chills down the spines of businesspeople across the country working in the myriad industries legalized marijuana touches, from cultivators, processors and dispensaries to their bevy of supporting operations. And that included investors and entrepreneurs in Ohio, where a medical marijuana program now six months in development is to be up and running by September 2018.

The initial reaction from most stakeholders and aspiring cannabis businesspeople was one of concern, said Kevin Murphy, a Cleveland-based lawyer at Walter | Haverfield LLP who works with marijuana business owners and investors across the country.

Attorneys like Murphy spent a few days after Spicer’s Feb. 23 press conference calming fretful clients. Can, or will, the government really go after recreational marijuana? Could an administration’s anti-marijuana platform bleed impact medical programs?

How could all this affect an industry supported by medical marijuana programs in 21 states and recreational use in another eight?

Spicer’s comments came in response to a reporter’s question about recreational marijuana use.

“I think that is a question for the Department of Justice,” he said. “I do believe you'll see greater enforcement of it. Because again there is a big difference between the medical use … that’s very different from the recreational use, which is something the Department of Justice will be further looking into.”

That statement briefly shook the marijuana industry and spooked investors — particularly in Ohio, where money is quietly building up to support growers, cultivators and processors the instant each can apply for licenses.

“I think if you ask if people are worried, yes. But if you look at the remarks, everything (federal officials) say, although it’s ambiguous or inconsistent, it’s about adult use,” Murphy emphasized. “They’re being very careful to draw a distinction between recreational and medical. In Ohio, it’s very encouraging that they’re treating them differently.”

So the key distinction there is the administration’s apparent disinterest in medical marijuana.

Yet, a wider, plausible concern is

CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113 Phone: 216-522-1383 www.crainscleveland.com Customer service and subscriptions: 877-824-9373

whether an administration looking unfavorably on marijuana — which remains a prohibited Schedule 1 drug in the same class as heroin — in general could shape statewide policies on the substance.

Ohio, after all, is in the midst of finalizing a litany of rules for its medical program. Rules for cultivators are to be adopted by May 6, and deadlines for other rules stagger behind that through next September.

Garett Fortune, CEO of FunkSac, a Denver-headquartered company founded on Cleveland's West Side that makes child-resistant, odorproof plastic bags for the pharmaceutical industry and legal cannabis, among other end-users, said the anxiety that washed over the industry was relatively short-lived. The company, which does a lot of business out West, still has manufacturing op-

“As an attorney, we make sure clients know that whether it’s medical or recreational, it’s still currently illegal federally.”

— David Croft, a lawyer with Meyers Roman Friedberg & Lewis

erations based here and isn’t concerned that business will be negatively affected or that a program in Ohio would be thrown off course by Washington.

“Those comments were made offthe-cuff, and there was a quick reaction. But now, everything is starting to play out as normal,” Fortune said.

“I’m not seeing anything slow down.

In fact, I’m seeing things increase.”

Fortune was referencing business activity in states like Colorado, Nevada and California, where marijuana is treated and regulated similar to alcohol and tobacco.

Even the industries there, serving recreational and medical users alike, have seen nerves calmed. Experts and businesspeople tend to recycle euphemisms like “the train has left the station” and the “genie is out of the lamp.” And while Murphy, like any attorney, reminds clients of federal prohibition and the inherent risk associated with the business, he said there’s something to that.

The industry is thoroughly ingrained in places like Colorado, where recreational laws were passed in 2012. Those states are used to their surging in tax revenues — $131 million last year in Colorado — and won’t want to give that up. Any federal actions undermining state laws would result in immediate lawsuits Volume 38, Number 11 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2017 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00.

POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912.

1-877-824-9373.

Reprint information: 212-210-0750

that would most likely go to the Supreme Court.

“You have so many states where this is happening and the market has grown so much,” Murphy said. “It would be very, very difficult to put Pandora back in the box.”

And besides that, the federal government doesn’t have police power.

Would that government send in the Army or federal agents to shut down small dispensaries?

Is it possible? Sure. It is it likely?

The consensus among most experts is no.

But that doesn’t mean the fog of uncertainty hanging over the industry will lift anytime soon without federal laws being addressed. The same risks persist.

“Some will say the federal government can’t really enforce this, which I don’t necessarily agree with,” said David Croft, a lawyer with Meyers Roman Friedberg & Lewis who also works with current and aspiring businesspeople and investors in the cannabis industry.

“As an attorney, we make sure clients know that whether it’s medical or recreational, it’s still currently illegal federally.

“So folks outside the state are either up in arms, or where they were before: wait and see. Ohio is kind of in a wait-and-see mode. But everyone is still moving forward, especially in Ohio, where everyone has been cautious because of the risks.”

Interestingly, though, risk is what draws some investors to marijuana in the first place. Any business surrounded in risk has potential to yield even bigger rewards. And because the risk is out there, most large companies aren’t pursuing the cannabis industry, which is creating openings for smaller and medium-sized businesses to get involved.

When Fortune says he’s seeing activity increase, that’s where the momentum in the market is driving from.

Nonetheless, the government’s view of the marijuana industry is something that remains on every stakeholders’ mind, Croft said, be that in states where the industry is a few years old or those where laws and medical programs are in development.

The sentiment and prevailing trend in the industry is that medical programs usually give way to recreational policies a few years later because states grow fond of the tax revenue and the stigma with marijuana fades as people get comfortable with the plant’s use in their states.

That progression is something investors and entrepreneurs in Ohio are, naturally, hopeful for in the future.

“I think that’s the plan, though I’m not so positive Ohio has that plan,” Fortune said. “Overall, I think that’s what will happen in three to five years.”

Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-8249373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 5

New Loveman Steel owner sees potential

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

The employees of Bedford Heightsbased Loveman Steel Corp. had no idea what was going to happen to the business when it went into receivership in the summer of 2015.

Robert Campbell, who has been with the company for more than two decades, said it was tough, since no one knew if they’d have a job day-today. But some employees stayed, and more than a year later, the steel service center is under new ownership that’s investing time and money in the plant and in its culture.

Donald A. Kruschke, president and CEO of Solon-based Plastics Machinery Group, had never been in charge of a manufacturer before now. Plastics Machinery Group doesn’t make products of its own, and instead buys and sells equipment for its customers. It also does work in mergers and acquisitions, plant liquidations and appraisals.

The company has grown in recent years, and Kruschke was looking for additional warehouse space when he came across Loveman Steel.

One of the company’s services is making large, fabricated metal parts for a variety of industries, from construction to steelmaking. “I saw all these pictures of these neat things that were gigantic,� Kruschke said. “So that intrigued me. I went back. I met the people there.

And I really took a liking to them and

Bedford Heights-based Loveman Steel Corp. was purchased by Donald A. Kruschke, owner of Plastics Machinery Group, in 2016. (Contributed photo)

their attitude, especially as long as they had been in the receivership.�

Though he hadn’t planned on owning a manufacturer, he saw a possibility in Loveman Steel, and an opportunity to apply the sales and marketing model he uses at Plastics Machinery Group. Kruschke began managing the company in the summer, contacting the company’s customers from the start to share their

new approach, and closed on the deal at the end of last year. He declined to disclose the purchase price.

Loveman Steel had been a family-owned business, started in the 1930s, said Rob Loveman. Loveman, now a sales executive with the company, said he had been a non-voting owner before the sale. Plastics Machinery Group’s involvement has changed the culture of the organization, Love-

man said, and he hopes to see sustainable growth that allows the company to pay its employees and serve customers’ needs going forward.

Loveman had dropped to nine employees by the time of the sale, Kruschke said. Employment is now up to 11, and he’s looking to add to that.

Kruschke said Loveman’s sales were around $17 million in 2015. At one time, he said he was told they had

been as high as $52 million. His main goal is to get the company profitable, but he’d really like to see the sales back to that high level again.

The companies are being run separately in terms of financials, but there’s a lot of potential overlap between Plastics Machinery Group and what’s now being called Loveman Steel and Fab. SEE STEEL, PAGE 6

7KH ULJKW EDQN IRU EXVLQHVV At First Commonwealth, we work to build long-term relationships with the businesses we serve so that we’re DEOH WR SURYLGH ERWK SHUVRQDO DQG SURIHVVLRQDO À QDQFLDO VXSSRUW DQG JXLGDQFH 7KDW¡V ZK\ ZH SURPLVH WR DOZD\V 7DNH WKH WLPH WR JHW WR NQRZ \RX SHUVRQDOO\ DQG SURIHVVLRQDOO\ :RUN ZLWK \RX WR XQGHUVWDQG ORQJ DQG VKRUW WHUP QHHGV 'LVFXVV \RXU JRDOV DQG GHYHORS D SODQ WR KHOS \RX DFKLHYH WKHP %XLOG DQ RQJRLQJ UHODWLRQVKLS WKDW SURYLGHV WKH RSSRUWXQLW\ IRU JUHDWHU VXFFHVV RYHU WLPH WKURXJK UHJXODU FRQYHUVDWLRQV WR HQVXUH À QDQFLDO QHHGV DUH EHLQJ PHW ,I \RX¡UH ORRNLQJ IRU D FRPSOHWH À QDQFLDO SDUWQHU IRU \RXU EXVLQHVV JLYH RXU WHDP D FDOO WRGD\ DW

EQUAL HOUSING

OPPORTUNITY

fcbanking.com

Member FDIC

PA G E 6

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

AUCTION

APRIL 4, 2017 BUSINESS, COMMERCIAL & DEVELOPMENT OPPORTUNITIES ATTENTION BUSINESS OWNERS, BUILDERS AND INVESTORS!

GHOST ALLEY LANES & MEMORIES EVENT CENTER 20,000 SF, fully restored 10-Lane Bowling Alley, Bar, Restaurant, Party/Event Center and Museum. Parking for over 150 vehicles, 1.35+/- acre lot. Full-service catering kitchen. 10,000 square foot event center. New pins, electronic scoring systems, flat screen televisions and monitors and bowling systems. D5 and D6 liquor license. Annual Net Operating Income is over $55,000!

ON-SITE INSPECTION DATES & TIMES: Thursdays, March 16, 23 & 30 from 10:00 AM to 11:30 AM OFFERED WITH THE PUBLISHED RESERVE PRICE OF ONLY:

456 COLLEGE ST., WADSWORTH, OH 44281

$150,000

ALSO OFFERED IN THIS AUCTION +/-12.33 ACRES OF PRIME COMMERCIAL LAND WITH FREESTANDING BANK BUILDING

+/-116 ACRES IN PORTAGE COUNTY, JUST SOUTH OF GEAUGA & WEST OF TRUMBULL CO.

4-UNIT MIXED-USE INCOME PRODUCING BUILDING. CURRENTLY 50% OCCUPIED @ $1,075/MONTH

INTERSECTION OF NORTHFIELD & ROCKSIDE RD BEDFORD, OH 44146

25 MUMFORD ROAD HIRAM TOWNSHIP (GARRETTSVILLE), OH 44281

337 E. GARFIELD ROAD AURORA, OH 44202

OFFERED WITH THE PUBLISHED RESERVE PRICE OF ONLY:

OFFERED WITH THE PUBLISHED RESERVE PRICE OF ONLY:

OFFERED WITH THE PUBLISHED RESERVE PRICE OF ONLY:

$200,400

$370,000 FOR ADDITIONAL INFORMATION ON THIS AUCTION OR UPCOMING AUCTIONS, CALL:

$75,000 216.861.7200

“Risk management is at the forefront of every organization’s strategy today, including ours.

That’s why Armada is our trusted advisor.”

RANDY MYEROFF CEO, Cohen & Company

LEARN MORE J

www.armadarisk.us/Cohen

We Protect. You Grow. www.armadarisk.us

X

216-350-5050

New OHTec leader aims to connect the tech community

By CHUCK SODER

in the room, they’d probably keep themselves busy for an hour or two talking about the things they’re working on,” Millard said.

COSE, which is part of the Greater Cleveland Partnership, wasn’t sure exactly what direction OHTec might go after Nellis stepped down. So last summer it organized a retreat for the tech executives and entrepreneurs who make up OHTec’s advisory board. During those conversations, a theme emerged: The board members wanted OHTec to focus primarily on its role as a convener, Millard said.

And that’s when COSE started to get the sense of the type of person who should be in charge of OHTec. They wanted someone who could both build relationships and understand the needs of OHTec members, large and small, Millard said.

Brainard’s eclectic background made him a good fit, Millard added.

First off, he had corporate tech experience. After earning a bachelor’s in business management from Case Western Reserve University in 1998, Brainard spent the next four years working as a tech consultant helping major corporations set up their IT systems.

But he can relate to entrepreneurs as well. He and his wife Susan own Blind Perch, a Vermilion restaurant that serves Lake Erie walleye and perch, as well as other locally grown food. He also has worked as an independent consultant.

He has experience in the nonprofit world, too. Brainard, who graduated from Midview High School in Grafton, has worked for both the Ohio Aerospace Institute and the CWRU School of Medicine, helping them raise funding and build relationships in Congress.

And to top it all off, he’s a pilot, his plane of choice being the Beechcraft Bonanza. He enjoys testing out all kinds of iPhone and iPad apps to plan his flights, monitor the weather and otherwise ensure that he has a safe trip.

He also has an affinity for PowerPoint presentations, pointing to a slide he created to quickly show off OHTec’s top three goals: Connecting members with each other, forming partnerships with other tech organizations doing work in areas like workforce development and raising the visibility of the local tech community.

Today, there are 550 companies who are considered part of OHTec, which includes all tech companies that are part of COSE and the Greater Cleveland Partnership. That’s far below the 930 members it had seven years ago. The Affordable Care Act helped cause that decline: The health reform law gave individuals and small businesses more ways to buy health insurance, which reduced demand for COSE’s insurance program.

For years, that program had been the organization’s most popular benefit, because it allowed small businesses to buy insurance through a larger group.

Even so, Brainard sees opportunity for OHTec to appeal to a broader range of companies.

“Historically, OHTec has been a group of smaller companies,” Brainard said. “What we’d really like to focus on is getting more middle market and larger companies involved.”

2016. The company relies on customer relationships.

“Everything I preach to these guys is relationship and quality of the equipment and quality of the deal,” Kruschke said. And he wants to bring that business model to Loveman Steel. Plastics Machinery Group is in “constant communication” with its customers, Kruschke said. The company also makes strong use of data, keeping track of its plastics customers’ lines of business, their preferred brands of machinery, the type of material they run and more. That means the company has a “finger on the heartbeat, on the pulse” of its customers, Kruschke said, and knows just when its customers will need something. He thinks that model can apply to Loveman Steel, too.

Plus, he already has seen new opportunities arise as he has brought the plastics-related customers through Loveman Steel’s plant, lead-

ing to quotes for products like platforms.

“And I wasn’t even expecting that,” Kruschke said.

Kruschke said he also plans to run Loveman Steel more efficiently, which will allow Plastics Machinery Group to do some of the additional warehousing it needed at that location. And he’s upgrading the building from top to bottom.

Long-term employee Campbell, who Kruschke made Loveman’s chief operating officer, said the upgrades to the plant — new lighting, new paint, soon-to-be-new floors — make for a better environment for the employees.

The company also is investing in a completely renovated office on the Loveman site, where both Loveman and Plastic Machinery Group will be located. In total, Kruschke said he’s investing more than $1 million in the plant and office renovations.

csoder@crain.com @ChuckSoder

The guy tasked with leading OHTec into a new era has an unusual résumé — which is a big reason why he got the job.

On Oct. 31, Dean Brainard became the tech-focused economic development group’s executive director, a position that had been empty since Brad Nellis stepped down in February 2016.

Since joining OHTec, Brainard — who has experience designing computer networks, building relationships with politicians and running a restaurant — has been working to implement a new vision for the organization.

OHTec, for one, aims to put more emphasis on helping members of the local tech community make connections with their peers and anyone else who can help them solve specific problems, according to Brainard and Steve Millard, executive director of the Council of Smaller Enterprises.

OHTec is run by COSE, a membership organization for small businesses throughout the region.

Granted, OHTec isn’t making an enormous departure from the past: The group has been organizing networking events since it was founded in 1998 as the Northeast Ohio Software Association. It’ll still organize its best-known events: TechWeek and the CIO Symposium. And it’ll still work to address tech workforce challenges and raise the profile of the region’s information technology industry.

But in the future, OHTec aims to organize more events like its CEO Roundtable. That small, invitation-only gathering brings together CEOs of local software companies and gives them a chance to hash out their problems with peers who may have faced similar challenges.

Similar gatherings could be organized for chief information officers, chief information security officers or even tech-focused human resources directors, who face much different hiring challenges than their peers in other industries, Millard said. Events like those could help OHTec better serve the small members it has worked with for years and the larger ones it has been working to recruit.

“Just put cocktails and appetizers

STEEL

CONTINUED FROM PAGE 5

Plastics Machinery Group grew out of Stopol, which was started by Kruschke, his brother and his father in the ’90s. The recession was tough on Stopol, though, and in 2009, Kruschke ended up buying two of the company’s four divisions from his brother: thermoforming and blow-molding. The other divisions were sold, and Kruschke decided to rename his portion. Since then, Plastics Machinery Group has added other equipment segments, like injection molding.

Today, Plastics Machinery Group has 13 employees, plus one in England (which technically counts as a separate business).

Kruschke wouldn’t get specific on sales for Plastics Machinery Group, but he said they were above $20 million in

“Historically, OHTec has been a group of smaller companies.

What we’d really like to focus on is getting more middle market and larger companies involved.”

— Dean Brainard, OHTec executive director

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 7

Clinic study focuses on non-clinical leadership

By LYDIA COUTRE lcoutre@crain.com @LydiaCoutre

While a growing body of research supports the importance of teambased care for clinical outcomes, less is known about the effect of physician-led teams in administration, according to a case study examining leadership training at the Cleveland Clinic.

Physicians may clearly understand their role within an operating room, for example, where they clearly are in charge, said Tracy Porter, assistant professor in Cleveland State University’s Monte Ahuja College of Business and an author of the study.

“If it’s interdisciplinary or something outside of that medical scope, a lot of them have a hard time with

that,” Porter said.

Porter worked with co-authors Dr. James K. Stoller, chairman of the education institute at the Cleveland Clinic, and Scott J. Allen, associate professor of management at John Carroll University’s Boler School of Business.

Many studies have explored the importance of this teamwork and collaboration in a clinical context.

“The kind of outcomes that we all aspire to for our patients’ wellbeing are directly proportional to how well teams of not just doctors, but doctors, nurses, allied health providers of various sorts — how well they all interact,” Stoller said.

The study instead focused on the importance of clinicians working together in administrative roles or non-clinical spaces. The Cleveland Clinic has had leadership training in various forms for years. Recognizing

the importance of teamwork, Stoller built team-building into the leadership development course he began working on about 15 years ago: Leading in Health Care.

The case study, which was submitted to the Academy of Management conference, looked at this course with a specific focus on its team training.

Leadership development is especially important in organizations like the Clinic where physicians take on leadership roles, Allen said. Often, organizations promote experts or good workers into a leadership role, but don’t necessarily train them for that job. Leading a department and conducting surgery are “two totally different worlds,” he said.

Stoller said the importance of teams in non-clinical spaces is very much recognized in the Clinic.

“The mantra of the Cleveland Clin-

ic is to act as a unit, and that’s not confined to physicians, I can assure you,” Stoller said.

As a physician-led organization, he said, the Clinic needs to have a pipeline of physicians who can take on leadership roles.

In the 1990s, physicians developed a program called the Executive Program in Practice Management at the Clinic. Prior to that, physicians were encouraged to attend outside or university-based programming to learn the business of health care. In the early 2000s, Leading in Health Care took shape. It built upon its predecessor, which focused on business concepts rather than leadership development.

And so teams and leadership became a core part of the program, which ran for 13 years and has since been rolled into other leadership development programs.

Leadership development is not a new concept, Stoller notes. It has been an important activity in sectors outside of health care for decades. In his view, health care has been “relatively slow” in the uptake of these tactics, but the Clinic is among the head of the class, he said.

Allen agreed that the Clinic is a leader in the industry for physician leadership training.

“The Clinic’s serious about tapping these groups of very smart people to think in new ways,” he said.

Although the small qualitative sample means that the authors can’t infer general applications to other organizations, the hope is that the report will spur further studies to examine the full impact of team development among physician leaders.

“Other sectors have been doing this for a long time,” Stoller said.

Indie bookstores want to kick corporate chains off campus The ranks of independent bookstores in the United States have grown steadily over the past decade, as small shop owners regained their footing in a publishing industry transformed by the rise (and fall) of the big-box stores and the emergence of Amazon. Now the indie movement is heading back to school.

The Oberlin-based National Association of College Stores (NACS) on March 4 announced the launch of a consortium of university-owned stores during an industry conference.

The goal is to push the two corporate giants in college bookstores, Follett Corp. and Barnes & Noble Education Inc., off campus. The group would pool buying power and management expertise in a bid to boost profits and lower costs for students.

“Every five years, $1 billion in profit that used to stay in higher education is now going to private companies,” said

Robert Walton, CEO of NACS. A spokeswoman for Barnes & Noble Education, which operates 770 campus stores and spun out of the big-box bookseller in 2015, declined to comment. Follett, which manages 1,200 campus stores, didn't respond to an email seeking comment.

Walton has argued that the campus bookstore has failed to adapt to the modern marketplace.

In the 1980s, when colleges began to outsource store management, leasing out a campus bookstore in return for a share of profits allowed university administrators to eliminate day-to-day headaches, like hiring staff and managing inventory.

The ability of these corporate stores to negotiate better deals with publishers and other vendors often meant more profits, and leasing revenue gave schools extra money to spend on core functions.

Now the corporations take “too much money out of the system” in

profits, Walton said. But the same technology that upended the book business in the past may help an independent bookstore compete with its larger rivals. Better software has also made running a retail business easier, Walton said, decreasing the need for universities to rely on pri-

2017

BLOOMBERG

vate-sector partners.

Walton’s solution is a two-pronged plan to take stores back from the corporate chains. Schools that want to operate their own stores can pay for a la carte services, including software, store design, wholesale pricing on textbooks, and deals with e-book compa-

nies. Schools can also outsource store management to the NACS consortium, much in the way that they would lease a store to a corporate chain.

Attracting members to the new consortium will be a tall order. About 90 university-owned stores turn operations over to big chains every year.

NOMINATIONS NOW OPEN TWENTY IN THEIR 20s Crain’s will single out 20 up-and-coming professionals who haven’t turned 30 yet, but are already making a mark on Northeast Ohio.

NOMINATION DEADLINE: MARCH 13 - LAST CALL!

ARCHER AWARDS CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 | www.crainscleveland.com | @CrainsCleveland Elizabeth McIntyre Scott Suttell Tim Magaw David Kordalski Damon Sims Sue Walton Kevin Kleps Stan Bullard Real estate/ construction Reporters Jay Miller, Government Dan Shingler Energy/steel/auto Rachel McCafferty Manufacturing/ energy Jeremy Nobile, Finance Lydia Coutré, Health care Data editor Chuck Soder Cartoonist Rich Williams

Publisher/editor Managing editor Sections editor Creative director Web editor Associate editor/Akron Assistant editor Senior reporter

*** Events manager Ashley Ramsey Events coordinator Megan Lemke Integrated marketing manager Michelle Sustar Managing editor custom/special projects Amy Ann Stoessel Advertising director Nicole Mastrangelo Senior account exec. Dawn Donegan Account executives Lindsie Bowman John Banks Laura Kulber Mintz Office coordinator Denise Donaldson

Keith E. Crain Rance Crain Mary Kay Crain Anthony DiPonio Bob Recchia Mary Kramer William A. Morrow Chris Crain KC Crain

FORTY UNDER 40 A tribute to the next generation of rising stars who have taken a leading role in our business community.

NOMINATION DEADLINE: JUNE 27

*** Digital strategy/ audience development director Nancy Hanus Production director Craig L. Mackey Billing Peter Iseppi Credit Rod Warmsby

CRAIN COMMUNICATIONS INC. Chairman President Treasurer CIO CFO Group publisher Senior Executive VP Exec. VP/director of strategic operations Exec. VP/director of corporate operations

A tribute to Northeast Ohio’s leading human resources professionals who are building companies with the best people, talent, development and culture.

NOMINATION DEADLINE: APRIL 1

VP of production and manufacturing Dave Kamis

C-SUITE GALA - NEW FOR 2017!

Northeast Ohio’s top executives are honored for their contributions, community commitments and outstanding professional performances.

NOMINATION DEADLINE: JULY 8

*** G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) *** Reprints: 212-210-0750 Krista Bora kbora@crain.com Customer service and subscriptions 877-824-9373

NOMINATE TODAY:

CRAINSCLEVELAND.COM/NOMINATIONS

PA G E 8

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Stand tall, dream big

Editorial

Akronites wanted Akron mayor Dan Horrigan is bold. Perhaps not in the same fashion as his fire-breathing predecessor, Don Plusquellic — and thankfully so. But only a year into his term, Horrigan has already put forth how he’d like his legacy to be perceived.

And it won’t be easy.

“I want to be the mayor that grows Akron’s population again,” Horrigan said last month when he outlined his vision for reversing the population decline that has hamstrung many Midwestern cities amid the seismic shift in the manufacturing industry. In Akron, the drop has been especially steep, as the city has gone from more than 290,000 residents in the early 1960s to fewer than 200,000 today.

Growing the population, of course, isn’t necessarily a bold idea, but Horrigan staking his legacy on that very difficult task is. At the core of that plan is revitalizing Akron’s poor housing stock — and not just in the Rubber City’s downtown area but many of its neighborhoods as well. For the last several years, Horrigan said the city has been tearing down more houses than it builds.

Akron’s downtown revitalization seems to be going smoothly. As we reported recently, residential demand is far outpacing the supply downtown, and developers like Tony Troppe are seizing on the opportunity. That said, a city’s success should not only be pinned on that of its downtown.

The citywide approach that Horrigan’s administration has put forth to reinvigorate the city’s housing stock is a sound one.

Some of the immediate recommendations include developing a citywide property tax abatement program to spur development; developing neighborhood-based plans to create nodes of activity and increased walkability; increasing the city’s use of the Summit County Land Bank to acquire property; and streamlining zoning and permitting processes.

Despite the championship glow and convention high, Cleveland, of course, still has its blemishes, but one thing it’s proven is that there is a demand for urban living, particularly among the younger subsets. And not just downtown, but in many of its

once-forgotten neighborhoods. Just look to Tremont or Ohio City, for example.

The sheen of the suburbs doesn’t quite have the appeal it once did, and Akron — and particularly Horrigan — are right to seize on that opportunity. It’s time to get to work.

None of your biz

Strengthening the bonds between the business community and our public schools is something we whole heartedly support, but an approach simmering in the Ohio Legislature is terribly misguided.

In particular, Gov. John Kasich’s administration has proposed a requirement that teachers take part in some sort of “on-site work experience” with a business or chamber of commerce before renewing their teaching licenses. More facetime with the local business community is something worth exploring, but this proposal simply adds another unnecessary layer in the already-cumbersome teacher certification process.

Instead, the state should be working to encourage partnerships like many of those already taking place in Cleveland. More importantly, the focus should be on getting more students on-site work experience, not the teachers. We should be opening the eyes of our young people about what is possible if they work hard.

Take the Lincoln-West School of Science & Health that combines a traditional high school curriculum with hands-on, interactive learning with professionals at MetroHealth. Or the MC2 STEM High School where classes are held at locations like the Great Lakes Science Center in the ninth grade or General Electric’s Nela Park campus. On the private school front, Saint Martin de Porres High School has deep ties with organizations like Sherwin-Williams Co., Jones Day and the Cleveland Clinic.

At the same time, especially if the state isn’t offering any help, we as a business community should develop more opportunities for our region’s students within our walls.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Sections Editor:

Timothy Magaw (tmagaw@crain.com)

Contact Crain’s :

216-522-1383

She’s all of 8 years old, I’d guess.

Her hands are planted firmly on her hips, high-top heels dug in and chin pointed upward as the wind whips back her hair and skirt.

On the receiving end of that defiant stare? A 7,100-pound bull charging directly at this little wisp of can-do spirit.

“I got this,” her expression says. “Bring it.”

This half-pint heroine happens to be a bronze statue temporarily installed last week in front of the iconic Wall Street bull in downtown Manhattan. State Street Global Advisors, a $2.5 trillion asset manager, commissioned the piece to bring attention to the lack of women in corporate boardrooms.

“A key contributor to effective independent board leadership is diversity of thought, which requires directors with different skills, Elizabeth backgrounds and expertise,” State Street McIntyre president and CEO Ron O’Hanley said in a news release. “Today, we are calling on companies to take concrete steps to increase gender diversity on their boards and have issued clear guidance to help them begin to take action.”

About a quarter of companies that make up the Russell 3000 index have no female representation, according to State Street.

The inscription at the base of “The Fearless Girl” statue reads: “Know the power of women in leadership. She makes a difference.”

Seeing news coverage last week of the statue’s installation on the eve of International Women’s Day, I was reminded of a recent event involving female entrepreneurs that I attended at Laurel School in Shaker Heights.

The young women at Laurel know the power of female leadership because it’s front and center in the school’s mission to inspire girls to fulfill their promise and better the world. To be living, breathing “Fearless Girls.”

It’s what prompted the school to launch its Capstone Experience program last year, which gives students the chance to explore real-world issues while further developing their leadership skills in one of four areas: civic engagement, entrepreneurship, global studies and STEAM (a twist on STEM, “science, technology, engineering and mathematics”, that adds “arts” to the mix.)

Inspired by a documentary called “Dream, Girl,” which showcases female entrepreneurs, students in the school’s entrepreneurship Capstone Experience hosted a panel discussion last month featuring local female business trailblazers.

Panelists Heather Ettinger, managing partner at Fairport Asset Management; Stephanie Silverman, publisher and owner of Your Teen Media; Nichelle McCall, CEO of Bold Startups; and Laura Bennett, COO and co-founder of Embrace Pet Insurance shared their experiences in creating and running their own businesses.

The messages shared that evening were inspiring: “Persistence is one of the most valuable things.”

“Shatter stereotypes whenever you can.”

“Who you are at your core is where you will find the most meaning and relevance in your life.”

“Don’t think of choices you make now as your destiny … just get started and you’ll find the place you ought to be.”

“Surround yourself with other people who’ve been down that road.”

When I saw “The Fearless Girl,” she reminded me of those students at Laurel and those panelists who have been down that road, circling back to make sure more are coming, and in greater numbers.

I thought of all those young women, stronger than a bronze casting, filled with confidence, inspired by mentors, armed with education.

And I thought of the symbolism of the statue’s placement on Wall Street, of the bull these young women are likely to face as they make their way to the top. And I came away thinking I’d put my money on those young woman any day.

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

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

Please include a telephone number for verification purposes.

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 9

Transforming Environmental Liabilities into Thriving Assets

Web Talk Re: Payday lending problems Short-term lending satisfies an unfortunate but very real need. It used to be provided by small credit unions or even less-formal organizations, centered around churches, fraternal organizations or unions, where social pressure got the loans repaid. Now that support is gone, and the successor lenders charge usurious rates because of their high percentage of bad loans. If you want to eliminate the realistic but high rates, you need to invent a better way of filling the need.

— Robert Salmon They either have to create or incentivize better credit options, or they have to help raise wages.

People aren’t making enough income if they need payday advances. There are some fundamental issues in play here.

Payday loans are a cosmetic fix.

— I Byrne

Re: FirstEnergy’s challenges What is it about nuclear power that causes people (including Crain's) to all the sudden lose their ability to think, objectively and rationally? The fifth paragraph from the bottom of your March 6 editorial, "Power play," is a beauty.

Subsidies to non-polluting nuclear are not serving Ohio residents, whereas much larger subsidies and/or outright mandates for (also non-polluting) renewables are? Since when was it a matter of "old" generation vs. "new?" I thought it was about clean vs. dirty, and how all non-polluting sources get appropriate credit for their benefit, and get to compete on a level playing field. — jimhopf The generation business in Ohio is very much unregulated and not a monopoly. The problem isn’t with FirstEnergy’s management. It is with the competitive system in place to bid for and secure energy generation. There is zero consideration given to the importance of fuel diversity. The massive growth of the natural gas industry in the U.S. making the fuel very cheap, combined with the lower complexity of running a gas plant, has bottomed out prices in the market making coal and nuclear uncompetitive. If these plants shut down and we are relying solely on gas and renewables, then gas will truly be a monopoly and customers’ bills have a much higher risk of going up in the long run. ... Also, have you looked at the short-term bond yields for FirstEnergy’s competitive segment? There are very clear warnings there that this part of their business will very likely go bankrupt, so that is most definitely not a bluff. — G

Personal View

Don’t dim a good source of city’s economic power

By JOE ROMAN

Renewable energy is an appropriately much-discussed topic in various circles today. Often, the sources of this amazing kind of energy are harder to realize than they are to theorize.

One definition explains it this way: Renewable energy comes from a source that is not depleted when used, such as wind or solar power. If that is indeed the case, then Cleveland has realized and enjoyed a successful and powerful form of renewable economic energy for 23 years through Quicken Loans Arena (The Q) and the broader Gateway project.

The Q is a steady and dependable economic driver that enhances our fiscal resources and improves our business environment.

It’s a fact that The Q is an economic powerhouse that benefits everybody in Cuyahoga County — including those who never attended any of the more than 200 annual events held at the facility.

The venue creates a wide array of positive economic conditions.

Last year alone, The Q was responsible for producing $44 million in taxes. And since it opened in 1994, it has generated a total of $500 million in taxes. Much of those revenues go directly to Cuyahoga County and the city of Cleveland to provide public services for all of us who live, work and play in Greater Cleveland.

The proposed $140 million upgrade of the publicly owned Q would come from the Cavaliers, Cuyahoga County, the city of Cleveland and Destination Cleveland’s public funds. It requires no new taxes.

Utilizing admissions taxes and bed taxes for the public portion of this project is — to a significant degree — a renewable source of funding. If The Q wasn’t here, those sources of revenue simply would not exist in the same capacity. Many of the patrons who attend events at The Q do not live in Cuyahoga County, yet they are paying taxes here. Due to provisions in Ohio law, it’s very difficult to gain tax support from residents of neighboring counties who enjoy The Q except through these kinds of consumption taxes.

Failing to properly invest in The Q would result in a net decrease of these taxes and would negatively impact the other institutions and businesses that thrive based on all of the events that are held at this well-utilized venue.

There are many businesses and jobs that depend on The Q’s source of economic power: hotels, restaurants, taxi and valet companies, caterers, construction workers and much more.

The Q and the nearby ballpark were two of the catalysts that triggered downtown Cleveland’s ongoing multibillion-dollar renaissance. That stunning revitalization has attracted private investment and resulted in job creation. The resulting tax revenues and jobs have provided economic juice for our county’s neighborhoods.

Owning an arena, as the public does, is a competitive business.

Staying current and ahead of the competition — like any business — is vital. When the RNC was looking for a location for its 2016 convention, it had originally considered Cincinnati. But that good city was ruled out because its arena was deemed to be inadequate.

The average life of any NBA arena is 22 years. The Q, which opened in 1994, is one of the oldest arenas in the NBA. Today, it would cost $500 million or more to build a new arena.

This arrangement with The Q will also extend the lease with the Cavaliers through 2034, thus making it one of the longest tenures of any professional sports team in the same facility. By investing $70 million now — with another $70 million coming from the Cavaliers (who, by the way, have already spent more than $400 million on operating, maintaining and improving The Q) — we will make the arena more fan-friendly and competitive. We can prolong the building’s life by many years, thus negating the need for a new arena.

An old but reliable business maxim holds that “You have to spend money to make money.”

That indeed is the case here. We’re already “making money” for our entire community from The Q in terms of job creation, tax generation and so much more. By investing in this unique public asset, we will assure that our entire community will continue to realize these economic benefits.

The Q helps to light Cleveland up, literally and figuratively. It boosts our city’s marketability and image, and it feeds our economic “energy grid” with jobs, tax revenues and so much more. We need to approve this proposal for the future of Cleveland and all of Cuyahoga County.

Roman is president and CEO of the Greater Cleveland Partnership, the region’s metro chamber of commerce.

After Before

330.854.5300 www.bjaam.com Email us at

info@bjaam.com for more information

REGISTER NOW!

FAMILY BUSINESS FORUM

CRAIN’S

FAMILY BUSINESS FORUM TITLE SPONSOR

MAY 3, 2017

Cleveland Metroparks Zoo MAJOR SPONSORS

JUST ADDED!

Keynote speaker: Jane Grote Abell, chairwoman of the board, founding family member, Donatos Pizza.

Keep checking www.crainscleveland.com/FamilyBiz for more details and to register!

SUPPORTING SPONSORS

Sponsorship Opportunities: Nicole Mastrangelo at 216-771-5158 or nmastrangelo@crain.com Event/Registration Questions: Megan Lemke at 216-771-5182 or mlemke@crain.com CRAIN CONTENT STUDIO C l eve l a n d

#CrainsFamBiz

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 11

Focus SMALL BUSINESS

CROSS-COUNTRY JOURNEY - Page 12 | TAX TIPS - Page 14 | ADVISER - Page 15

Striking a pose is what KP does best KP Photo’s sunlight-soaked front studio — part of a 100-year-old, 18,000-square-foot space — offers perfect lighting for commercial shoots. (Contributed photos)

Thirty years later, business is brighter than ever at Kalman & Pabst Photo Group’s sprawling studio

By MARK OPREA clbfreelancer@crain.com

KP Photo’s studio also boasts a commercial kitchen.

It was James Popovic’s 53rd birthday at Kalman & Pabst, and all 14 staff members sat around their copper long table dead center of the warehouse. Most if not everyone was giddy, ready to sing. Others had heads turned. Someone was missing.

But it had been a smooth Thursday, so far, at the two-story studio on East 40th and Perkins, in Midtown’s photography mecca. Blazer-wearing reps from Smuckers and General Electric, two weathered KP clients, have stopped in to oversee eventual print ads, chat with food stylists reorganizing faux kitchen sets, talk peanut butter spread recipes with in-house bakers.

In the front, a photographer in a panama hat named Clarissa Westmeyer prepped the lens on her Canon 5DS, as

A sample of the studio’s work for Nestlé Toll House.

set stylist Sharon Hynes reviews the White Lily Yeast Rolls they’ve shot that morning. In one of three kitchens close by sits the actual prop, half-gone.

“Food is definitely not the easiest thing to photograph,” said Westmeyer, nodding to a photoshopped image of the now 13-by-9 pan. “Every subject has its own challenge. Lettuce wilts. And this?” She nodded to a layered cream pastry inches from two DSLRs with macro lenses. “Not your regular cupcake.”

Upstairs, on the gallery floor, designers and CGI artists touched-up digital pizzas and onion rings in a wholly dark office space, as an on-site culinary intern cut pork tenderloins in a four-cooler kitchen below their feet.

A voice over the PA called for lunch, and everyone, including shop-Terrier Nina, convened for plates of baked salmon and sliced grapefruit.

SEE KP, PAGE 16

PA G E 12

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

SMALL BUSINESS

SmartShape’s founder just felt like walking

By TIMOTHY MAGAW tmagaw@crain.com @timmagaw

Mike Maczuzak’s reason for walking across the country was quite simple. There wasn’t a deeper reason like finding religion, rediscovering himself or weathering a mid-life crisis. The now 54-year-old just felt like walking, and the confidence he had in his staff at SmartShape Design made it possible for him to step away, at least physically, for a few months.

“There’s a common desire to move your business forward so that it is self-sustaining and doesn’t depend on any one person,” said Maczuzak, an industrial designer whose company focuses on product development and innovation for clients. “My personal life and business are so intertwined, but I realized that with the team I have now, I could actually do this.”

Maczuzak’s reasoning sounds a little like Forrest Gump when he describes why he took the four-month journey on foot from Coney Island, through the industrial Midwest, the Appalachians, the Rocky Mountains, the Mojave Desert and ultimately the Santa Monica Pier where he dove into the Pacific Ocean 25-plus pounds lighter than when he started his journey.

“I tend to like to walk more than most people,” Maczuzak said quite matter-of-factly. “I like to walk around and think, so I figured this

Mike Maczuzak started his journey across the country at the shore at Coney Island. (Contributed photos)

was perfect for me.”

Along the way, he was snowed in while climbing over the Continental Divide, camped under the stars in remote areas of Colorado and Utah and recharged in nearly 100 hotels and motels of varying quality.

Some days, Maczuzak walked as many as 75 miles, going through four pairs of New Balance Fresh Foam 1080s (at about 900 miles per pair) even wearing holes into the bottom.

All the while, during the journey that touched 15 states March 17 through July 20 of last year, Maczuzak continued to fulfill his role as SmartShape’s top executive and stayed in contact with his colleagues and family.

He even donned an arsenal of wearable technology — fitness trackers, smart watches, health monitors — some of which his company was working on for clients.

Of note, he was particularly wor-

ried about walking through the desert where temperatures stretched well above 100 degrees. Using some patches and their corresponding smartphone app — developed by a Cleveland-area company, TempTraq — Maczuzak was able to monitor his body heat. Also, ever the engineer and problem solver, he fashioned Thule Chariot stroller to carry up to six gallons of water to keep him hydrated through the desert. He donated the stroller to the St. John’s Health Center Child and Family Development Center in Santa Monica at the end of his journey.

“I was seriously worried about the desert,” Maczuzak said. “It was something that intimidated me. I ran into a woman walking through Utah who asked me where I was going. I told her from Las Vegas to Los Angeles, and she told me I would die. I was worried about overheating, so wearing those patches really helped me out.”

He added, “Most of my fear is unwarranted. I can’t let that deter me from doing things.”

Along the way, he met several characters — some even offered the road-weary businessman cash, assuming he was homeless.

As he was nearing the Mississippi River in Illinois, he saw a man running the opposite direction. It was Jason Romero, a legally blind endurance runner. His mother was following him in a van with food and water and drove him to hotels at night.

The pair kept in touch, and as Maczuzak was walking through Den-

Top: Maczuzak crossed into Arizona through the Mojave Desert after walking all night from St. George, Utah.

Middle: Maczuzak reports countless spectacular views like this near Escalante, Utah. He walked for four hours to reach this view.

Far right: He crossed the Mason Dixon line twice during his four-month journey across the United States.

SALT • SALT • SALT • Water Softener • Industrial • Food • Ice Melt • Sea Salt

Corporate Training and Performance Solutions

Call For Pricing!!

Minimum Delivery:1Pallet

Corporate College® provides professional training and development customized for your organization.

ORGANIZATIONAL DEVELOPMENT TRAINING SOLUTIONS • Business Communication • Change Management • Customer/Patient Experience

• Management/Leadership • Professional Services and Consulting

• Sales • Supervisor Development • Teambuilding

corporatecollege.com

1-800-547-1538 Salt Distributors Since 1966

216-987-0234 17-0035

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 13

SMALL BUSINESS ver, where Romero lives, he was treated to a pasta dinner. “I looked like a homeless guy, but there were some people who were curious about me,� Maczuzak said. “I admired the people who were curious about my trip. I wanted to be like those people. I wanted to learn more about people.�

In many ways, Maczuzak said the trip made him a better communicator because it forced him to schedule times to talk with his colleagues.

Even when you’re in the office, he said, it’s easy to get distracted and not set aside time to talk with those you work alongside.

Mark Cartellone, SmartShape’s director of engineering, was one of those. “He’s a very driven guy,� Carterllone said about Maczuzak. “There were times when I would talk to him while he was still walking, and it’d be late at night. He pretty much lives his work in some ways.�

As a bachelor, Maczuzak didn’t have any family holding him back from taking the trip. His mother, of course, was terrified, and she didn’t learn of the journey until a few weeks before he left.

Maczuzak, meanwhile, will be sharing details of his trip during a March 14 presentation at the South

by Southwest in Austin.

One night during his trip, he had a dream he would continue his journey up through Alaska. At the time, he thought his cross-country journey satisfied his itch. “When I finished, I felt like I could do anything,� he said.

But later this month, Maczuzak is packing his bags for another walk — a much less ambitious one, though, a least by his standards.

He plans to fly into Tokyo, and walk across Japan through Kyoto — a journey that will take about a week through the peak of cherry blossom season.

Top: He met plenty along the way, including Jason Romero.

Middle: He encountered some snow in Pennsylvania.

Bottom: He completed his trek at the Santa Monica Pier.

Are you an individual with $10 million or more seeking advice?

Advice and insight across generations 5PEBZ CBDLFE CZ UIF FYQBOTJWF HMPCBM SFTPVSDFT PG 6#4 BOE JUT ZFBS USBEJUJPO PG TFSWJOH TPNF PG UIF XPSMEà T XFBMUIJFTU GBNJMJFT PVS UFBN IBT OFWFS CFFO CFUUFS QPTJUJPOFE UP TFSWF PVS BGGMVFOU DMJFOUT BOE UIFJS GBNJMJFT 'SPN DPNQMFY NVMUJHFOFSBUJPOBM QMBOOJOH UP XFBMUI QSFTFSWBUJPO TUSBUFHJFT BOE USBOTGFS XF BSF ZPVS USVTUFE TPVSDF PG GJOBODJBM TUFXBSETIJQ BOE BEWJDF Cleveland Wealth Management Team William G. Murphy, CIMAŽ 4FOJPS 7JDF 1SFTJEFOUž 8FBMUI .BOBHFNFOU 1SJWBUF 8FBMUI "EWJTPS

Owen C. McBride, CFPŽ, CLU 4FOJPS 7JDF 1SFTJEFOUž 8FBMUI .BOBHFNFOU 1SJWBUF 8FBMUI "EWJTPS

Chad Arthur Hartup, CFPÂŽ, CRPCÂŽ, CLU 4FOJPS 8FBMUI 4USBUFHZ "TTPDJBUF

UBS Financial Services Inc. 4VQFSJPS "WF &BTU UI 'M $MFWFMBOE 0)

ubs.com/team/cwmt $FSUJĹ–FE 'JOBODJBM 1MBOOFS #PBSE PG 4UBOEBSET *OD PXOT UIF DFSUJĹ–DBUJPO NBSLT $'1ÂŽ and CERTIFIED FINANCIAL PLANNERĂ? JO UIF 6 4 $*."ÂŽ JT B SFHJTUFSFE DFSUJGJDBUJPO NBSL PG UIF *OWFTUNFOU .BOBHFNFOU $POTVMUBOUT "TTPDJBUJPOÂŽ JO UIF 6OJUFE 4UBUFT PG "NFSJDB BOE XPSMEXJEF $IBSUFSFE 3FUJSFNFOU 1MBOOJOH $PVOTFMPS4. BOE $31$ÂŽ BSF SFHJTUFSFE TFSWJDF NBSLT PG UIF $PMMFHF GPS 'JOBODJBM 1MBOOJOHÂŽ "T B GJSN QSPWJEJOH XFBMUI NBOBHFNFOU TFSWJDFT UP DMJFOUT XF PGGFS CPUI JOWFTUNFOU BEWJTPSZ BOE CSPLFSBHF TFSWJDFT 5IFTF TFSWJDFT BSF TFQBSBUF BOE EJTUJODU EJGGFS JO NBUFSJBM XBZT BOE BSF HPWFSOFE CZ EJGGFSFOU MBXT BOE TFQBSBUF DPOUSBDUT 'PS NPSF JOGPSNBUJPO PO UIF EJTUJODUJPOT CFUXFFO PVS CSPLFSBHF BOE JOWFTUNFOU BEWJTPSZ TFSWJDFT QMFBTF TQFBL XJUI ZPVS 'JOBODJBM "EWJTPS PS WJTJU PVS XFCTJUF BU ubs.com/workingwithus h6#4 "MM`SJHIUT SFTFSWFE 6#4 'JOBODJBM 4FSWJDFT *OD JT B TVCTJEJBSZ PG 6#4 "( .FNCFS '*/3" 4*1$ @"E@ Y @-% @.D#0 *4 &YQ

LET’S GO CRAZY! ALL OF YOUR FAVORITE ROCKSINO PRIZES ROLLED UP INTO ONE MONTH! SWIPE & WIN every Thursday, Friday & Saturday through 3/25 from 9AM - 11PM to win GUARANTEED FREE PLAY! $100,000 GOLDEN TICKET PRIZE DRAWINGS at 3PM and 6PM every Sunday to win loads of Free Play and a 2017 HONDA ACCORD! Receive a FREE Golden Ticket EVERY DAY from February 27th through March 26th at 5pm!

DOUBLE POINT PALOOZA! Your Rock Star Rewards Points are worth double the value at the Rock Shop and every restaurant all day, every day during March!

With so much to win, why play anywhere else!

VEGAS EXPERIENCE. OHIO ADDRESS.

HRRNP.COM • 330.908.7625

Must be 21 years of age or older. Non-transferable and non-negotiable. Hard Rock Rocksino Northfield Park Management reserves the right to void any entry, and/or alter, cancel or modify this promotion at any time with prior notice and Ohio Lottery Approval. Other restrictions may apply. See Players Club for details. For free, confidential help 24/7, call the Ohio Responsible Gaming Helpline at 1.800.589.9966. Š2016 Hard Rock International (USA), Inc. All rights reserved.

PA G E 14

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

SMALL BUSINESS

Wedding vendors Assessed penalties by the IRS? tie their own knots Tax Tips: Peter A. DeMarco

Ask for a first-time waiver Despite our best efforts to stay organized and timely in managing business and personal tasks, sometimes things fall through the cracks.

Whether it’s missing a payment by a due date or failing to file an important document on time, sometimes life just gets in the way. It happens to the best of us. It’s especially true for harried business owners who are juggling many commitments and obligations on a daily basis.

Historically, the Internal Revenue Service has given no leeway for those little moments of absent-mindedness when it comes to meeting tax obligations. Penalties for tardiness are often assessed automatically.

Deadlines and due dates are firm, right down to the time stamp on the postmark.

Or so it seems to most taxpayers.

In truth, the IRS has had a provision in place for waiving certain firsttime penalties, but taxpayers rarely take advantage of it. Maybe that’s because they don’t know it was available to them, or maybe because the IRS hasn’t gone out of its way to offer it.

Now the IRS is becoming a little more forthright, making information on its “first-time penalty abatement” waiver more widely available. The administrative waiver allows the IRS to grant penalty relief to taxpayers who fail to file, pay, or deposit on time, of course only if they meet some specific criteria.

To qualify for the waiver, a taxpay-

Peter A. DeMarco is vice president and director of tax services at Meaden & Moore.

er must have filed all required returns, or have filed valid extensions.

There can be no outstanding request for a return from the IRS involving the taxpayer.

All tax due must be paid up, or arrangements must be in place to pay all tax due. If taxes are being paid under an installment agreement, payments must be current. As the name of the abatement waiver suggests, relief will only be considered for firsttime penalties for the preceding three years, except in the case of an estimated tax penalty.

If a taxpayer has been granted relief in the past due to “reasonable cause,” they can still qualify for the first-time penalty waiver. Reasonable cause for missing a filing or payment deadline might include a fire or other natural disaster, a death or serious illness, or some reasonable inability to obtain records.

Taxpayers who find themselves in the occasional “uh oh!” moment where they realize they failed to drop an item in the mail on time can request a waiver in a few different ways.

First, they can contact their tax preparer or tax practitioner, who can

contact the IRS through its “practitioner priority service” line to request the waiver. An IRS agent might be able to grant the waiver over the phone.

If the penalty is high, it may not be so simple for an agent to settle over the phone. In that case, the tax preparer would have to submit the request in writing. And even when it’s settled over the phone, it’s wise to document the phone call in a letter to the IRS to assure the conversation is reflected in the tax obligation.

Tax preparers can forego phone calls and the long wait times they normally entail by writing to the IRS directly. The letter will need to be highly specific in order for the IRS to act on it, with the taxpayer’s identification number, details of the penalty type and amount as well as the tax year and form for which the penalty was assessed.

The letter will also need to explain all the ways in which the taxpayer qualifies under the criteria for the first-time waiver, and it doesn’t hurt to include relevant documentation to show all of that compliance.

Business owners caught up in the day-to-day complexities of running a business might inadvertently find themselves on the wrong side of a tax deadline. It should be comforting to know those slip-ups can be corrected with a little effort in applying for a first-time penalty abatement waiver.

By MICHELLE PARK LAZETTE clbfreelancer@crain.com

The Northeast Ohio vendors who make weddings happen soon will have the option of entering into a union of their own.

In the works — thanks to a wedding gown shop owner and a photographer — is a wedding vendor collective offering networking opportunities, business development training, and bridal shows and conferences to industry businesspeople. It’s set to kick off in a few months.

Such a joining of minds is particularly useful for the wedding industry, said one co-creator, Christen Schneider. For one, the industry has its share of young businesses, in many cases started by a bride or groom who couldn’t find a product or service they wanted for their big day.

“It’s an industry, too, where couples are trying to shop local; that opens the gates for a lot of small business owners to make a living,” said Schneider, who owns Moon and Back, a bridal gown boutique in Lakewood. “The service-based industry in Cleveland is growing (and those businesses) need resources.

“It’s far easier to start a small business now than it was 10 years ago because of social media and the web,” Schneider continued. “And weddings in particular tend to be a good place to start; with weddings, a lot of times there’s not as much overhead. You get booked and paid before you do something so you can afford to start up.”

Schneider has done something like

this before, only for a smaller slice of the industry: Her business, Wed/Altered, offers free and paid consulting via webinars and individual coaching sessions to independent bridal gown designers. Moon and Back opened three years ago as a showroom for those designers, but it has since expanded to show and sell the gowns of non-Wed/Altered clients, too.

(Schneider started as a wedding dress designer, and knowing firsthand the need to sell gowns and to show at large shows, she started the collective.

As it turned out, Wed/Altered took off faster than her dresses did.)

Vanessa Zangardi, who owns Zangardi Photo with her husband, is helping to launch the as-yet-unnamed collective. She envisions programming on financial and legal issues, among other topics.

“We kind of muddled through that,” she said of her husband’s and her launch of the photography business. “It would have been great to have a resource.”

Given how frequently wedding vendors find prospective clients on social media, informational sessions about using Instagram and running successful Facebook ad campaigns make sense, too, Zangardi said.

“We don’t always have time to meet brides face to face, so knowing how to meet them via social media tools is very important,” she added.

Increased referrals are a top benefit the collective should afford vendors, noted both Zangardi and Cora Mercer of SewCora, which sells luxury alterations and redesign of bridal gowns through two locations in

NETWORKING LUNCHEON LAKEFRONT COLLABORATION: EXCITING PROJECTS THAT ARE UNDER DEVELOPMENT MONDAY, MARCH 20, 2017 Jon Stahl, LeanDog • An overall update on the lakefront development • Lakefront Collaborative, Barge 225/LeanDog, Cleveland Skylift • Why developing the lakefront is good for Cleveland

Windows on the River 2000 Sycamore, Cleveland, Ohio, 44113 11:30 a.m. Networking • 12 Noon Luncheon • 1:15 p.m. Adjourn SME Cleveland members $30, Guests $45 R.S.V.P. at 216-767-5951 or online at www.smecleveland.com SPONSORED BY:

RIDE RTA TO TOWER CITY

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 15

SMALL BUSINESS Adviser: Joe Mosbrook

Small businesses shouldn’t try to hide who they are

Moon and Back’s Christen Schneider is partnering with a photographer to launch a wedding vendor collective. (Michelle Park Lazette for Crain’s)

Cleveland and Columbus.

“Photographers, marketing people, sometimes they see the brides before we do,” said Mercer, who has been coached by Schneider through Wed/Altered. “They could say, ‘Hey, check out this designer. Check out this bridal shop.’ ” A coworking space for vendors is also an aim, though less of a certainty until the right space is found. Schneider said the collective creators would like it to be between Lakewood and downtown Cleveland.

“Wedding business owners, a lot of those businesses (lend) to working from home,” she said. “(But owners) still need to meet with prospective clients.”

A coworking space would afford vendors a professional and dedicated place for meeting clients and also networking with fellow vendors at the lower cost of shared overhead,

she said. It’d pack quite the marketing power, too.

“If I have an appointment meeting me,” Schneider begins, “that bride is going to see others. Everybody’s marketing works for the whole group. The co-working space allows people to multiply their reach, have a mailing address, not sit in Starbucks for four hours to meet with people.”

Helping other small business owners make a living and create jobs is one motivation for launching the collective. Helping the community via philanthropy is another.

“Being involved in the small business sector allows you to make those differences; a lot of them do really cool stuff,” Schneider said, citing one local jeweler, Bombay Taxi, that donates 10% of its net revenue to charity.

“It’s building that community base that allows a lot of people to serve a lot of causes that I couldn’t do by myself.”

Overdose takes more lives than traffic accidents, suicide, and HIV combined.

OVERDOSE IS IMMINENT UNLESS YOU STOP “Luna Living’s treatment program for addiction combines evidence based standards of care with the added novel approach of NAD infusion therapy, which effectively neutralizes withdrawal symptoms to such a dramatic extent that most clients can be successfully managed as outpatients from Day 1 of their enrollment in the program.”

Dariush Saghafi, MD Chief Neurologist - Parma Neurology Director - Headache Clinic - VA Medical Center

A Comforting Ambience Non-judgmental Acceptance A Sustainable Lifestyle

/XQD/LYLQJ Alcohol and Drug Recovery Center

440-703-0940 www.lunaliving.org

“Fake it ‘til you make it.”

That’s the working mantra for many small businesses overwhelmed by larger, more established competitors. It’s a mindset that spawns bombastic marketing claims of all things to all people. But to a skeptical consumer, it never quite adds up.

There was a time when universal marketing worked. The problem now is that prospects are blinded by a blizzard of messaging they rarely believe. Fake news, post-truth politics and marketing hype have eroded the public’s trust in small businesses struggling to be known.

But many customers don’t always want the biggest and best. They often just want a vendor that fits — fits their needs, their culture and their service expectations. They want a hardworking company that’s honest about who they are and what they do.

Some prospects even seek out smaller vendors hoping they’ll work harder for the business.

A few years ago, a handful of successful attorneys in Toronto split off from their large-firm jobs to start their own. Most worked from home on cell phones and laptops. Their web site highlighted denim-clad employees in a communal office that better resembled a Starbucks than a law firm.

Their web site resisted superlative headlines. Instead, they focused on the proposition of reducing fees by stripping out the pomp and circumstance. Their web site said: “Our fees are lower because we don’t wear $1,500 suits.” Another image held the

Joe Mosbrook is managing partner of Acclaim Communications LLC, a full-service marketing agency in Cleveland that employs only senior-level account executives, designers and web developers.

caption that read “our work is just as good at home as it was in a high-rise office.”

It’s a big step for a small firm to narrow its focus and communicate unique value in excruciatingly blunt language. They not only admitted who they were, they owned it. They tapered a pompous elevator speech right down to an uncomfortable pair of skinny jeans.

Billings doubled in the second year. The next year they tripled. A few years later the firm was acquired in an eight-digit deal that made the equity employees rich. Throughout their rise, they remained confident in their abilities. Their marketing resisted tired accolades that lull readers into a coma. For their clients, those things were understood. Overstating them would appear desperate.

It’s difficult to look past catchall marketing when every garage-band startup claims to be the next great thing. A good business needs an au-

thentic voice that resonates with its audience. It should be honest and sincere — something prospects don’t feel compelled to question.

Focusing on a niche can take the same shape. Bruce Hennes of Hennes Communications decided years ago that his PR firm would focus only on crisis communications, and the strategy continues to resonate throughout the region.

As an unintended consequence, the crisis firm receives countless requests for traditional marketing — a service Hennes does not promote.

This is an important point because many small businesses fear that narrowing their marketing message prevents other revenue opportunities.

Ironically, the opposite often occurs. Companies well known for a specialty unintentionally invite additional lines of business. The thought is that if the company is perceived as an expert in one area, they must be great in others. This is how Porsche inexplicably completes with Range Rover in the luxury SUV market.

The challenge is first becoming known in an area and controlling that market. Once a company establishes a leadership role, opportunities emerge beyond the specialty and become far more attainable.

If you don’t think your company has a unique and believable value proposition, create one. Yes, that’s easier said than done, but it doesn’t require retooling the company. It just changes the way you take your existing business to market.

PA G E 16

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

You’ve got better things to do with your time.

SMALL BUSINESS

Avoid the fuss and expense of batteries!

Phonak Audeo B-R

Rechargeable Hearing Aid.

Cleveland Hearing & Speech Center is the premier provider of audiology products and services.

We help you connect to the people and activities most important to you!

Call for an appointment today!

www.chsc.org/hearing

University Circle 216-231-8787 South Euclid 216-382-4520 Broadview Heights 440-838-1477 MS049400

success IS easy to find...

This image won a National ADDY Award in the digitally enhanced photography category. (Contributed photos)

KP

CONTINUED FROM PAGE 11

we know where to look.

Call 216-302-4769 or visit manchesterrbg.com/crains

FOR SALE

Office/Warehouse Building 2241 Pinnacle Parkway, Twinsburg, OH 44087 OWNER USER OR INVESTMENT OPPORTUNITY

$1,200,000

16,800 SQ FT

SVN SUMMIT COMMERCIAL REAL ESTATE GROUP, LLC CONTACT Jerry Fiume, SIOR, CCIM

Managing Director 330-416 0501 Jerry.Fiume@svn.com

3045 Smith Road, Suite 200 Akron, OH 44333 (234) 231-0200

Afterward, they sang for artist Popovic, save for art director Craig Brown, who was busy tinkering with the right lighting for a “real” pineapple. He rushed over in his sneakers. “I thought it sounded pretty good from back here,” he said, and at last everyone was together.

Thirty years after Kalman & Pabst snapped its first shot, business inside the 18,000-square-foot studio seems to be brighter than ever. In the last three years, KP has continued to grow into one of the most profitable award-winning photo studios in Northeast Ohio, with nine ongoing commercial clients and even more advertising agencies, a showmanship awarded last February with six ADDYs from the American Advertising Foundation. Work not just from newbies or greenhorns. The average KP employee has been with the studio for, on average, nearly a decade.

Although the studio’s vast array of work speaks volumes for its livelihood — a lightly-edited shot of an knife-wielding octopus, for one — it’s not KP’s top-notch artistry, said its staff, that’s solely responsible for their praise.

Before co-owners Mike Wasserman and Craig Brown, who took over the studio in 2014, hire their next commercial-style Man Ray, they prefer to skip resumé-obsessing in place of scouting new “personalities” who fit well in the KP Photo matrix. Not just beer buddies, but staff deemed indispensable. Or, as they say, those with unmatched “emotional intelligence.”

“It’s never, ‘Oh hurry up before we get this person, or we’re gonna lose them,’” Brown said calmly, rushing on set to make an end-of-day deadline for GE. In his loose button-down, he appears rather on a beach vacation. “But have we learned who that person is? I mean, if everybody’s not working together, it’s frustrating for somebody.”

Wasserman, a curly haired busi-

A sample of KP’s work for Da Vinci Wines. One of KP’s specialties is food and beverage styling.

ness guru with a jogger’s build, butted in.

“You see how some corporations are treating their employees,” he said.

“And you see how much cash — literally cash they have on hand at the bank. And that phrase, ‘It’s just business?’ It’s just a choice. They use that as an excuse. They choose to run a business that way. Choose to put profits above everything else. We have a very small group, but in this little universe we can at least treat people ethically. To us, that’s what it comes down to. We don’t want to run a business any other way.”

Started in 1987 by two former American Greetings employees named Bob Pabst and Jan Kalman, KP Photo — as says a four-foot sign in the dining space — began as a team-driven enterprise in retaliation to a cutthroat age of loud-mouthed art directors and ego-driven camera artistes.

Pabst, a former Vietnam-era military photographer, said that though KP’s team-driven ethos was rooted in his experience at Irving Stone-era American Greetings, it blossomed

fully when he and Kalman added assistants like Brown in 1992. And all work trickled down from this DIY mentality. Rental equipment was eschewed for brand new equipment. If a shower scene needed to be constructed, they’d do it in-house.

The same goes for Kalman’s prop room — a sizable space with two-thousand pieces of kitchen ware, all color-sorted — which could be the largest in the Midwest, save for like studios in Chicago. Pabst and Kalman’s relaxed, familial schtick, depicted in their very own American Gothic simulacrum hanging by the fireplace, has birthed what many veteran KP workers still call today a “utopic experience.” And for a fitting reason. They’ve won national awards annually since Brown and Wasserman took over.

“The thing is we could teach just about anyone what we needed to do,” Pabst, now 69, and living in Wakeman, Ohio, recalled. “But the most important thing to me was a person’s character. I think we hired more folks just because they were solid people. I mean, when someone feels a part of a team, or family, they will work harder for a goal. Absolutely. It’s just common sense.”

Although Pabst no longer photographs professionally at the Studio on Perkins, his name, along with Kalman’s, is still spoken of in sweet regard by their inheritors, mostly owed to Pabst’s retirement-era skill set — knife collecting, landscape painting — that has earned him, somewhat jocularly, the title “Most Interesting Man in the World” from KP’s current employees. A legend, of sorts.

Minding that Pabst initially aimed to run KP well into his 70s, the founder now happily looks upon his “wake up call” decision to hand his business off not so long after Kalman passed away from breast cancer in 2012. Of course, Pabst isn’t a stranger.

No one at KP, even distant freelancers from Michigan, ever seems to be.

“I go back once a mouth to just get lunch and hugs from everyone,” he said. “I couldn’t be more pleased with what they’re doing.”

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 17

TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. Liens reported here are $5,000 and higher.

LIENS FILED Lifeline Home Health Services LLC 12200 Fairhill Road, Suite C 438/440, Cleveland Date filed: Jan. 3, 2017 Type: NA Amount: $3,436,876 Blink Marketing Inc. 1925 St. Clair Ave. NE, Cleveland Date filed: Feb. 9, 2017 Type: Corporate income, employer’s withholding Amount: $390,784

Biskind Contract Cleaning LLC 6777 Engle Road, Suite 1, Cleveland Date filed: Jan. 6, 2017 Type: Employer’s withholding, partnership Amount: $114,721 Intriex Inc. 5650 Mayfield Road, Lyndhurst Date filed: Jan. 6, 2017 Type: Corporate income Amount: $38,506 Litwin Paints & Supplies LLC 845 South Ave., Youngstown Date filed: Feb. 9, 2017 Type: Employer’s withholding Amount: $26,535

Date filed: Feb. 9, 2017 Type: Employer’s withholding Amount: $13,659

Avon Pizza LLC (Coleone’s Pizza and Subs) 375 Lear Road, Avon Lake Date filed: Jan. 6, 2017 Type: Employer’s withholding, partnership Amount: $16,314

Type: Employer’s withholding Amount: $5,757

LIENS RELEASED

Mathews Appliance Service LLC 5539 Ridge Road, Parma Date filed: Feb. 9, 2017 Type: Employer’s withholding Amount: $13,533

Foiltek Inc. 1700 London Road, Suite 2A, Cleveland Date filed: Jan. 6, 2017 Type: Failure to file complete return, corporate income Amount: $15,691

Elite Custom Contractors 1672 Algeris Drive, Mayfield Heights Date filed: Nov. 12, 2015 Date released: Feb. 9, 2017 Type: Employer’s withholding, unemployment Amount: $10,391

Extasis Salon & Spa LLC 11277 State Road, Suite B, North Royalton Date filed: Jan. 6, 2017 Type: Employer’s withholding Amount: $12,837

Global Management & Consulting Services 9885 Rockside Road, Suite 160, Valley View

Accurate Instrument Service Co. 4228 W. 130th St., Cleveland Date filed: Jan. 6, 2017

Parma Pre-School Inc. 5280 Broadview Road, Parma Date filed: May 11, 2010 (oldest of four liens) Date released: Jan. 6, 2017 Type: Employer’s withholding Amount: $40,066 (four liens released)

ADVERTISING

Weatherhead Executive MBA Develop transformational leadership skills for immediate growth in your career and life. Now offering a healthcare track in affiliation with the Cleveland Clinic.

The space you need to learn.

The power you need to lead.

Learn more at weatherhead.case.edu/emba.

ENGINEERING & CONSULTING

HEALTH CARE

Robert D. MacArthur

Giovanni Spadaro

Executive Vice President of

Chief Financial Officer

Strategic Initiatives

NOMS Healthcare

Predictive Service Robert D. MacArthur has been named Executive Vice President of Strategic Initiatives for all of Predictive Services enterprise asset management operations. MacArthur is responsible for developing overall business relationships with key account and strategic initiatives for business growth. Prior to joining Predictive Service, MacArthur was a senior executive with ABS Group serving as Vice President of Asset Optimization Services and later as Senior Vice President.

FINANCIAL SERVICES

NOMS Healthcare promotes Giovanni Spadaro, BSBA, MBA, to CFO. Known for savvy budgeting, cash flow analysis and asset management, Spadaro is deeply committed to NOMS’ focus on providing the region with top quality healthcare at lowest possible patient costs. With his expertise, NOMS is setting the standard for fiscal efficiency in healthcare. Spadaro is a member of the Cleveland Chapter of The Association of Accountants and Financial Professionals in Business. Visit NomsHealthCare.com.

FINANCIAL SERVICES

ENGINEERING & CONSULTING Jim Rowell

Adam Wolinetz

Chief Operations Officer

Vice President

Nook Industries

JLL

In this position, Rowell will be responsible for overseeing Nook’s leadership initiatives, driving operational strategy and supporting employee development. Rowell has more than 25 years of industry experience. Prior to joining Nook, he held roles in Parker Hannifin’s Fluid Connectors and Automations groups as territory manager, product manager, business unit manager, manufacturing manager, general manager and vice president of operations.

TECHNOLOGY EVP, Sales

Principal

OEC

Ciano & Goldwasser L.L.P.

Terry Cummins has joined OEC as EVP, Sales. Terry will manage the Direct Sales team and is responsible for driving increased sales through automotive dealers and dealer groups. Previously, Terry served as VP, Sales for Dealer-FX Group, spent 17 years with Reynolds & Reynolds and led numerous product launches around the globe.

MANUFACTURING

Wealth Planner

Certified Private Wealth Advisor

Diane Popovich

RSM US Wealth Management

Morgan Stanley

VP Operations

Jill Branthoover has joined the RSM Wealth Management team in Cleveland. Having earned the respected Certified Financial Planner designation and broad industry experience with prior roles over the last 2 decades at Merrill Lynch, Fifth Third Bank and most recently UBS, Jill’s knowledge of wealth planning and investments will enhance the delivery of RSM’s Wealth Management strategy. Jill will develop personalized financial plans for clients while helping deliver “The power of being understood.”

LAW Brent S. Silverman

Patrick J. Rollins

Morgan Stanley announces that Patrick Rollins, a First Vice President and Financial Advisor in the Firm’s Wealth Management office in Cleveland, has earned the Certified Private Wealth Advisor designation awarded by the IMCA, intended for Financial Advisors who work with high-net-worth clients. In 2015, Patrick earned Morgan Stanley’s Family Wealth Director designation following a rigorous accreditation program. He has been a member of the financial services industry for 22 years.

Adam Wolinetz joins JLL as Vice President, Integrated Portfolio Solutions. He comes to JLL after more than five years as a Manager with Allegro Realty Advisors. Adam is an accomplished international portfolio manager with extensive experience managing diverse assets throughout five continents. He has managed large portfolios for mid-cap and Fortune 1000 companies with a combined portfolio of more than 200 locations.

Adam is a graduate of The University of Kansas.

Terry Cummins

Jill A. Branthoover

LLC

REAL ESTATE

Ciano & Goldwasser L.L.P. is pleased to announce that Brent S. Silverman has joined the firm as a principal. He focuses his practice on high stakes business litigation matters including shareholder/ partnership disputes, business tort liability, trade secret and non-competition agreement disputes, professional and fiduciary liability, real estate litigation, and investor claims. He has significant experience in all aspects of litigation in federal and state courts throughout the country.

Solon Manufacturing Company Solon Manufacturing Co., located in Chardon, is pleased to announce Diane Popovich as VP of Operations and the first female executive in company history.

Popovich joined Solon in 2015 as the Sales & Marketing Director and has over 20 years of experience serving the manufacturing industry. As VP of Operations, Popovich will oversee all operational processes within the organization with a key focus on identifying and developing best practices for process improvements.

Crain’s People on the Move promotional feature showcases Northeast Ohio job changes, promotions and board appointments. Guaranteed placement in print, online and in a weekly e-newsletter can be purchased at www.crainscleveland.com/peopleonthemove.

PA G E 18

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

2514<++ +3+,/8 +6:/)+7 /627 '30+* (< 8.+ 392(+6 4, '6+' 564,+77/43'17

%

#

%

! !

"

$ ! "

7;'1* 47

'@;0=4:= A0 70A07,9/

BBB :>B,7/.:8;,940> .:8

00> .:884>>4:9>

8;7:D00 -09014?> >?=,?024. .:9>@7?492 2=:@; -09014?> -=:60=,20 49?02=,?0/ 30,7?3 ,9/ B07790>> 8,9,20809? =0?4=0809? ;7,9 .:9>@7?492

&:-0=? 7:96 $

#/11/7 4;+67 #'8743

!,60>4/0 A0 '@4?0

70A07,9/

BBB B4774>?:B0=>B,?>:9 .:8

#

#

09014?> >?=,?02D /0>429 ,9/ ;=4.492 ;3,=8,.D -09014?

8,9,20809? .:9>@7?492 -09014?> ,/8494>?=,?4:9 ,9/ 0C.3,920 .:88@94.,?4:9 ,9/ .3,920 8,9,20809?

49, ,>3@6 8,9,2492 .:9>@7?,9?

+12'3 4

%,=67,9/ 7A/ ",D1407/ 0423?>

BBB >078,9.: .:8

00> ,9/ .:884>>4:9>

/8494>?=,?4:9 :1 7410 ,9/ 30,7?3 49>@=,9.0 ;=:2=,8> 1:= 08;7:D0=> 149,9.4,7 49>?4?@?4:9> ,11494?D 2=:@;> ,9/ 49>@=,9.0 .:8;,9D ;,=?90=>

,A4/ ! '078,9 ;=0>4/09? $

& 3)

$,6 (=00 7A/ ':@?3 '@4?0

9/0;09/09.0

BBB .-4E .:8

4C0/ 100> .:884>>4:9>

=:@; 30,7?3 -09014?> .:9>@7?492 ,9/ ,/8494>?=,?4:9 =0?4=0809? ;7,9 >:7@?4:9> ;,D=:77 $ & 170C ;=:;0=?D ,9/ .,>@,7?D 7410 49>@=,9.0 ,9/ & .:9>@7?492

"4.3,07 % :@E07:> ;=0>4/09? 09014?> 9>@=,9.0

+6)+6

%@-74. '<@,=0 '@4?0

70A07,9/

BBB 80=.0= .:8

#

D ;=:50.? .:884>>4:9> 14C0/ 100> 3:@=7D =,?0>

&0?4=0809? ,9/ =4>6 8,9,20809? 30,7?3 ,9/ B071,=0 -09014?> 49A0>?809? .:9>@7?492 ,9/ 8,9,20809? ?,709? >?=,?0240> ,9/ 8,9,20809?

'.:?? 4;0= 70A07,9/ %4??>-@=23 :114.0 70,/0= !,==D '.30=0= =0?4=0809? :114.0 70,/0=

'11'-.+6 +3+,/8 +6:/)+7 3) '@;0=4:= A0 '@4?0 70A07,9/

BBB ,52 .:8

00> ,9/ .:884>>4:9>

=:60=,20 ,9/ .:9>@7?492 49 30,7?3 ,9/ B071,=0 =0?4=0809? B07790>> 3@8,9 =0>:@=.0> .:8;09>,?4:9 30,7?3 .,=0 ,9,7D?4.> -09014?> .:8;74,9.0

",=6 7/0= ,=0, ;=0>4/09?

/3*1+< ':/+7 3)

?3 '? '@4?0 70A07,9/

BBB 149/70D/,A40> .:8

00 1:= >0=A4.0 -,>0/ :9 3:@=7D =,?0>

0,7?3 ,9/ 2=:@; -09014?> =0?4=0809? .:9>@7?492 ,.?@,=4,7 >0=A4.0> /01490/ .:9?=4-@?4:9 ;7,9 =0.:=/600;492 /01490/ -09014? ;7,9 ,/8494>?=,?4:9

&:- &:20=> ;=49.4;,7

7796+* '683+67 4 ';743

49=:>> !,60> %,=6B,D &4.31407/

BBB /,B>:9.:8;,940> .:8

:884>>4:9> 14C0/ 100>

9/@>?=D >;0.414. >:7@?4:9> ?3,? 09,-70 -@>490>> :B90=> ?: ,??=,.? ,9/ =0?,49 08;7:D00> B3470 2=:B492 ?304= -@>490>>

D; ! &:>> =024:9,7 ;=0>4/09?

.+ +*+1/ 6495

&:.6>4/0 &:,/ 141?3 17::= 9/0;09/09.0

BBB ?3010/0742=:@; .:8

D >0=A4.0 .:884>>4:9> 14C0/ 100>

8;7:D00 -09014? ;7,9 /0>429 49.7@/492 .:9>@7?492 .:8;74,9.0 B07790>> >071 1@9/492 ,9/ /,?, ,9,7D?4.> A:7@9?,=D ,9/ 0C0.@?4A0 -09014?> 2=:@; ;@=.3,>492

)8-0=?: % 0/074 $

15.' 6495 -+3)< 3)

&:.6>4/0 &:,/ 9/0;09/09.0

BBB ?30,7;3,2, .:8

:884>>4:9>

& ' ,9/ $! .:8;74,9.0 ,/A4>:=D B07790>> >?,?0240> :97490 ,/8494>?=,?4:9 ,9/ 09=:77809? & >@;;:=?

:39 +,49 8,9,2492 ;,=?90= 48 '.3,/0 /=40990 *4.3477 0A49 ",.6,D =4,9 ';0,= ;=49.4;,7>

6/3/8< +37/43 437918'387

":9?=:>0 +0>? A0 '@4?0

:;70D

BBB ?=494?D;09>4:9 .:8

&0?,490= 14C0/ 100> -D ;=:50.?

.?@,=4,7 .:9>@7?492 ,/8494>?=,?4:9 ;7,9 /0>429 ;7,9 /:.@809?>

9?3:9D +,==09 ;=49.4;,7

:9>@7?492 100> .:884>>4:9> ,/8494>?=,?4:9 100>

@8,9 .,;4?,7 8,9,20809? 14=8 .:8-49492 .:9>@7?492 -=:60=,20 ,9/ ,/8494>?=,?4:9 1:= @94<@0 .7409? :@?.:80>

48 :;649> ;=0>4/09?

:.3=,9 &:,/ ':7:9

3??; .;43= .:8

4736@-- -5-.1; "-9=1+-: 194: !)52-, *@ ;0- 5<4*-9 6. )9-) 796.-::165)3:

# " ( !

! ! "" & " #

YOUR BUSINESS IS OUR BUSINESS

#" ! "" " # #

( "

Ä´  ¢ Ƹ ¢È&#x201C; ¢ ¢ǯ Ƹ Å&#x2DC;Å&#x2014;Å&#x153;ǯÅ&#x2122;Å&#x153;Å&#x2122;ǯÅ&#x2013;Å&#x2014;Å&#x2013;Å&#x2013; #"

" # "#!$ #$!

" !% "

# ' $# %

65 ->1;;

%9-5=3./ %9+. &?3>/

8./:/8./8-/

AAA +982/A3>> -97

"

"

/+6>2 +8. ,/8/03>= </>3</7/8> +8. 38@/=>7/8> >+6/8> +8. </A+<.= % 9:/<+>398= =/<@3-/=

%C+8 6+-5 :+<>8/< 7+<5/> 6/+./< </1 ?,,/66 =/839< @ : /+6>2 /8/03>= $<+->3-/ /+./<

%9-5=3./ %9+. &?3>/ 8./:/8./8-/

AAA 80: -97

//= -9773==398=

/+6>2 -+</ -98=?6>381 -9<:9<+>/ A/668/== 5 +8. </>3</7/8> :6+88381 A9<5=3>/ 7+<5/>381 +8. :<9:/<>C +8.

-+=?+6>C

37 ?=>38 <3+8 3<=-2 7+8+1381 .3</->9<=

"26,) 156;;1 />+ <3@/ !+C03/6. )366+1/

AAA =59.+7389>>3 -97

C :<94/-> -9773==398= 03B/.

0//= 29?<6C </>+38/<

/8/03>= -97:/8=+>398 5 009<.+,6/ +</ -> :6+88381 +8. -97:63+8-/ ,/8/03> :6+8 +?.3>= </>3</7/8> :6+8 ./=318 +8. +.7383=><+>398 A/60+</ :6+8 -98=?6>381

</19<C &59.+ -2+3<7+8

91;;65 )33)/0-9 >2 &> 6/@/6+8.

AAA ,<3>>981+66+12/< -97

9773==398= 0//=

&><+>/13- ,/8/03>= :6+8 2/+6>2 -+</ 38=?<+8-/ 7/.3-+6 ./8>+6 +8. 630/ 2/+6>2 </09<7 -97:63+8-/ A/668/== :<91<+7= +8. /7:69C// 38-/8>3@/ :<91<+7= >/6/7/.3-38/

$ 8=+8+ :+<>8/< :</=3./8> 7:69C// /8/03>=

0)74)5 0)74)5 5+

?<9<+ %9+. &?3>/ 'A38=,?<1

AAA -2+:7+8+8.-2+:7+8 -97

9773==398= 0//=

7:69C// ,/8/03>= =><+>/13- -98=?6>381 ,/8/03>= ,<95/<+1/ 38-6?.381 @96?8>+<C +8. A9<5=3>/ </>3</7/8> :6+8 -98=?6>381 /B/-?>3@/ ,/8/03>=

*+6>/< 2+:7+8 #

#6,, ::6+1);-: 5+

977/<-/ $+<5 &?3>/ /+-2A99.

AAA >9..+==9-3+>/= -97

9773==398= 03B/.

0//= :<94/-> ,+=/.

/+6>2 38=?<+8-/ .3=+,363>C 38=?<+8-/ ./8>+6 38=?<+8-/ @3=398 38=?<+8-/ 630/ 38=?<+8-/ /B/-?>3@/ -97:/8=+>398 +8. ,/8/03>= =/->398 :6+8= A/668/== :<91<+7=

.A+<. C6+8. < :</=3./8>

65,<-5;

<//.97 &;?+</ &?3>/

8./:/8./8-/

AAA -98.?/8> -97

C :<94/-> -9773==398= 03B/.

0//= 29?<6C <+>/=

/+6>2 +8. :<9.?->3@3>C </>3</7/8> -977?83-+>398= -97:/8=+>398 ,/8/03> +?.3>= ,/8/03> 9?>=9?<-381

?.</C /<@+= -98=?6>381 +->?+<C

&9698 %9+. &9698

AAA ,.9 -97

3B/. 0//=

%/-9<.5//:381 '$ +.7383=><+>398 </>3</7/8> :6+8 0?8.381 7/.3-+6 :6+8 ./=318 -98=?6>381 .3=-<3738+>398 >/=>381 19@/<87/8> 036381= % & -97:63+8-/

%9,/<> ! 3>>7+8 #239 7+8+1381 :+<>8/<

3;0)5: 5:<9)5+- /-5+@ 5+ *+=2381>98 &> 2+1<38 +66=

AAA +6>2+8=38=?<+8-/ -97

9773==398= 0//=

%3=5 -98=?6>381 +8. 7+8+1/7/8> :6+8 ./=318 +8.

-97:63+8-/ 1<9?: 7/.3-+6 .3=+,363>C ./8>+6 630/ +8. @3=398 38=?<+8-/

+7/= 6>2+8= :</=3./8> #

15)5+1)3 96<7 5+

%+@/88+ %9+. (83> 'A38=,?<1

AAA :5038+8-3+61<9?: -97

//= :/<-/8> 90 +==/>= 7+8+1/.

-9773==398=

$<9@3./ </>3</7/8> :6+8 -98=?6>381 =/<@3-/= 38 >2/ 09< :<903> +8. 89> 09< :<903> =:+-/

$/>/ +:6+8 :</=3./8> <3+8 $/><9= #

$" 5:<9)5+ #+5 '<// 6@. &?3>/

8./:/8./8-/

AAA ?=3 -97

9773==398= 9< 03B/. 0//=

7:69C// ,/8/03>= =><+>/13- -98=?6>381 1<9?: ,/8/03>= ,<95/<+1/ :9:?6+>398 2/+6>2 7+8+1/7/8> </>3</7/8> :6+8 -98=?6>381

+>/ ! +81 :</=3./8> 7:69C// /8/03>=

9->:;-9 9->:;-9 5+

6+-5,<995 %9+. $+38/=@366/

AAA ,</A=>/<+8.,</A=>/< -97

3B/. 0//=

$6+8 ./=318 +8. +.738=><+>398 09< 5 +8. -+=2 ,+6+8-/ ./038/. ,/8/03> :6+8= </>3</7/8> :6+8 </:+3< =29:

988+ </A=>/< +8/ </A=>/< 9A8/<=

! " ! ( $ " !

'2/ 0?66 63=> -98>+38= -97:+83/= +8. 3= +@+36+,6/ 09< :?<-2+=/ +> AAA -<+38=-6/@/6+8. -97 809<7+>398 3= =?::63/. ,C >2/ -97:+83/= <+38 = .9/= 89> 38./:/8./8>6C @/<30C >2/ 3809<7+>398 +8. >2/</ 3= 89 1?+<+8>// >2/=/ 63=>381= +</ -97:6/>/ 9< +--?<+>/ */ A/6-97/ +66 0//.,+-5 +8. A366 38-6?./ 973>>/. 3809<7+>398 9< -6+<303-+>398= 38 -97381 3==?/= &0-5 ;1-: 6++<9 .194: )9- 9)52-, *@ ;6;)3 36+)3 -4736@--: )+8<19-, 4736@-- -5-.1;:

5;-95);165)3 15 <3@ 1; ),67;-, ;0- 5)4- 15 </<:;

65,<-5; >): 256>5 ): <+2 65:<3;)5;: ) '-96? 647)5@ <5;13 '-96? :731; 1;:-3. 15;6 ;>6 :-7)9);- +647)51-: 15 )5<)9@

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 19

CBRE

Retail realty’s hits and misses

CONTINUED FROM PAGE 1

CBRE Group Inc. surveyed about 400 shopping centers and 1.9 million square feet of selling space for its annual retail report. The brokerage localizes the data by reporting it as trade areas. The trade areas are typically based either on the largest center in each or the city with the most retail space in a given area.

Brandon Isner, CBRE research analyst, and two other staffers had to physically canvass the storefronts to produce the figure. The national brokerage also had to report street retail for the first time, a big switch from its traditional way of surveying about 400 shopping centers above 50,000 square feet in size in eight Northeast Ohio counties. Isner said additional downtown retail data is a natural response to increasing urbanization in the U.S. Keith Hamulak, CBRE vice president, said the firm is getting increased queries about downtown retail space as well as neighborhoods such as Tremont and Ohio City.

“This is so we can drill down our data properly,” Hamulak said. “In the past, there was little demand from national retailers about downtown space. Now, national retailers want to know about downtown and Main Street retail locations.”

Moreover, the market is changing between proposed downtown developments such as Stark Enterprises of Cleveland’s 48-floor nuCLEus project in the Gateway District, which has 150,000 square feet of proposed retail space, and developers converting office buildings to apartments also want to revitalize their first-floor spaces with new retailers. All told, CBRE estimates 550,000 square feet of retail is proposed downtown.

Michael Deemer, executive vice president of business development at Downtown Cleveland Alliance, said having a national brokerage firm produce such information will be helpful as he is getting increasing requests for it.

Deemer said he personally estimated the figure at about 10%, but he believes many building and business owners he works with peg it at a much higher level.

“For a lot of folks in the marketplace, that will be a real surprise,” Deemer said. “In a lot of ways, I wish we had an earlier benchmark. As the downtown residential market has taken off, we could show how much the market has improved.”

The report is also useful given the leading role that chefs and quickserve restaurants are playing in the retail sector.

Stephen Taylor, a CBRE vice president who focuses on restaurants, said that when he works with chefs in Cleveland or other parts of the state, they actively seek sites in revitalizing neighborhoods.

“It’s the walkability of the environment that is drawing them.

Breweries are also serving as a catalyst for neighborhoods,” Taylor said.

“It’s the attraction of storefront retail that was popular from the 1920s to the 1940s.”

Trade area

Changing fortunes Ironically, the 1950 and 1960-vintage shopping centers and some of the early enclosed malls that devastated downtown retail are suffering now.

For example, the highest vacancy rate in the region is 38.8% in an area that CBRE defines as the Willoughby area, which includes everything from Shoregate shopping center in Wickliffe to the much newer Shoppes at Willoughby Hills.

Also ailing is the Bedford trade area, which includes Meadowbrook Market Square in Bedford and Southland USA in Maple Heights.

Meantime, areas with strong malls

Akron South

Vacancy rate (%) 2015 2016 6.0 4.3

Asking rate ($/SF) 2015 2016 $11.30 $11.30

Trade area Independence–Rockside

Vacancy rate (%) 2015 2016 3.9 3.9

Asking rate ($/SF) 2015 2016 $19.18 $21.00

17.2

10.3

$11.00

$10.53

Lake County East

15.6

15.6

$3.00

$5.91

Aurora-Streetsboro

5.8

5.8

$15.27

$15.69

Lorain–Amherst

10.9

11.3

$11.61

$11.55

Beachwood

3.2

3.4

$24.77

$25.88

Macedonia

2.8

3.6

$12.96

$12.54

33.0

33.2

$12.67

$13.06

Massillon–Canton Center

13.3

12.3

$7.00

$10.27

Belden Village–The Strip

5.4

5.9

$10.42

$11.92

Mayfield Heights

3.4

3.4

$18.03

$18.03

Boston Heights–Hudson

1.1

1.1

$10.50

$10.50

Middleburg Heights

11.3

14.8

$10.45

$9.91

18.0

26.1

$8.46

$7.74

Alliance

Bedford

2.4

4.7

$14.18

$14.30

MidwayMall–Elyria/Sheffield

Brooklyn–Brook Park

12.7

13.5

$13.15

$13.26

Parma

16.2

17.1

$11.71

$11.00

Brunswick–Medina

18.6

22.3

$12.67

$12.83

Richmond Town Square

22.4

18.6

$17.41

$14.55

Canton–City

11.1

25.4

$7.27

$5.59

3.8

5.3

$17.84

$17.48

Chapel Hill

14.3

14.9

$16.06

$15.21

Severance–South Euclid

33.4

33.4

$9.85

$10.72

Cleveland–Downtown

10.4

10.4

$16.12

$16.04

Solon–Bainbridge

17.4

14.0

$15.86

$14.89

Cleveland East–Euclid

12.0

10.2

$10.82

$10.40

South Park Mall–Strongsville

2.1

1.8

$16.46

$13.97

5.4

7.4

$11.60

$10.69

Stow–Kent

10.2

9.6

$10.02

$9.76

11.0

10.1

$15.07

$15.73

Summit Mall–Fairlawn

0.7

1.2

$18.78

$22.45

6.5

4.4

$18.66

$16.39

Tallmadge–Brimfield

5.8

4.7

N/A

N/A

Tallmadge–Mogadore

9.6

11.2

$12.01

$12.21

Broadview Heights–Brecksville

Cleveland West–Lakewood Cleveland South Crocker Park–Westlake/Avon

Rocky River–Fairview

Geauga

7.8

7.8

$7.49

$7.49

Great Lakes Mall–Mentor

5.4

5.3

$11.57

$11.97

Wadsworth

6.2

6.2

$18.56

$18.56

Great Northern–North Olmsted

2.6

1.8

$15.66

$14.43

Willoughby

32.5

38.8

$11.75

$11.68

Green–South Arlington Road

3.8

4.1

$9.91

$9.71

Market total

11.1

11.7

$12.47

$12.12

and demographics are only getting better. The Summit Mall-Fairlawn area has a vacancy rate of just 1.2%.

The area surrounding Great Northern Mall in North Olmsted and South Park Mall in Strongsville both have 1.8% vacancy.

The Beachwood area near Beachwood Place has 3.4% vacancy.

At the other end of the spectrum, business prospects in some long-suffering mall-dominated areas are worsening as retailers launch a big round of store closings.

Richmond Town Square in Richmond Heights has 18.6% vacancy now, but CBRE estimates availability in that area at 24.5%, a figure that takes into account planned store closings such as Sears and LaSalle furniture at the mall.

Likewise, at the Chapel Hill Mall area in Akron, CBRE estimates availability at 23% after the Sears store closes, while it is currently 14.9% vacant.

Weak areas also are a drag on the area’s average asking rents.

Asking rates in the Beachwood and Summit Mall-Fairlawn area are $25.88 and $22.45, respectively.

Meantime, space near Midway Mall in Elyria carries just a $7.74 asking rate per square foot, reflecting its 26% vacancy rate.

That rent pattern also shows demand for the best locations is increasing while lesser ones cascade in terms of rent and occupancy.

Thomas Flynn, a senior vice president in CBRE’s Akron office, said retailers are responding to their challenges by insisting on the best locations in the best markets.

“In the past, they would take a (lesser) location in an A market, but now they want the A location in the A market,” Flynn said. “It’s just getting harder.”

David Browning, managing director of CBRE’s Cleveland office, expects more of the same bifurcated retail market in the coming year, especially with legacy retailers shutting stores.

“The best located centers in the best markets will do well,” he said.

“Those that are not well-located will do worse.”

PA G E 2 0

|

M A R C H 13 - 19 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

AKRON

Prisons to plastics: Finding ex-inmates manufacturing jobs

Southwest Orthopaedics

By DAN SHINGLER

Truly physician-led.

Truly physician-owned.

dshingler@crain.com @DanShingler

35th Anniversary

PROMOTE.

35th Anniversary

CLEVELAND BUSINESS VOL. 36, NO. 47

NOVEMBER 23 - NOVEMBER 29, 2015

35th Anniversary ALLYSON O’KEEFE, 37 Partner; Porter Wright

CLEVELAND BUSINESS

VOL. 36, NO. 47

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

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

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

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

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

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

HOW WOULD YOU DESCRIBE YOUR STYLE?

CLEVELAND BUSINESS

Why not?

Let the Custom Reprint Department help you leverage this great press.

For more information contact Krista Bora, Reprint Account Executive kbora@crain.com • tel 212.210.0750

O’KeefeI expect is not working or spending timeI work, with her husband and two children, she can I definitely believe in leadingWhen by example. the people with whom MANY OF THE PROJECTS YOU WORKED ON ARE MIXED-USE URBAN PROJECTS. IS be found volunteering on the very boards of nonprofit and watching college football. my associates, to work hard, and they see me working hard.

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

Yes, definitely. Real estate is extremely interesting because every deal is differWHAT INSPIRES YOU ABOUT YOUR WORK? ent. You can never get bored because there’s so much variety there, from tax Just WHAT seeingWAS whatITCleveland has gone the time that I’ve been here, there’s obviousWHAT OTHERS ARE SAYING: LIKE TO WORK WITHthrough O’KEEFEinON credits to historic renovations, from ground-up development to rehab, from ly a lot of excitement around real estate development. I started in 2004 when we were crazy THE FLATS EAST BANK PROJECT? mixed-use to residential. busy with development. sort of the boom from ’04 through ’08. I saw it go through “Allyson is extremely bright and quick witted, butThat whatwas truly distinguishes her the downturn, then I saw itpeople rise again, even from most successful attorneys is her exceptional skills.

Shestronger has an than before locally.

HOW WOULD YOU DESCRIBE YOUR LEADERSHIP STYLE? uncanny ability to encourage the ‘adversaries’ in her negotiations to work in I definitely believe in leading by example. I expect the people with whom I work, OF THE PROJECTS YOU WORKED concert with her to achieve win/winMANY solutions to difficult problems,” said ON ARE MIXED-USE UR my associates, to work hard, and they see me working very hard. For me, it’s all THAT AN AREA EXPERTISE?of the Scott Wolstein, CEO of Starwood Retail Partners andOF co-developer about working hard and doing good work.

Yes, definitely. Real estate is extremely interesting because every deal is differFlats East Bank project. ent. You can never get bored because there’s so much variety there, from tax — Lee Chilcote WHAT OTHERS ARE SAYING: WHAT WAS IT LIKE TO WORK WITH O’KEEFE ON credits to historic renovations, from ground-up development to rehab, from THE FLATS EAST BANK PROJECT? mixed-use to residential.

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

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

Flats East Bank project.

— Lee Chilcote WHAT OTHERS ARE SAYING: WHAT WAS IT LIKE TO WORK W THE FLATS EAST BANK PROJECT? “Allyson is extremely bright and quick witted, but what truly distinguishes her

successfulInc. attorneys her exceptional people skills. She has an Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications All Rightsisreserved. ability to encourage the ‘adversaries’ in her negotiations to work in Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040 concert with her to achieve win/win solutions to difficult problems,” said Scott Wolstein, CEO of Starwood Retail Partners and co-developer of the Flats East Bank project.

Reprinted with permission from the Crain's Cleveland Business. © 2015 Crain Communications Inc. All Rights reserved. ww crainscleveland.com. #CC15040 www.

Further duplication without permission is prohibited. Visit www.crainscleveland.com.

At any given time in recent years, Ohio has had about 50,000 citizens locked in its prisons. Each year, it releases about 20,000, but too often they find no jobs and little support on the outside and end up back behind bars after reoffending.

Meanwhile, the state has over 1,000 companies in the plastics and polymers industry, including seven Global 500 companies. The industry has a particularly strong presence Miller in Northeast Ohio, anchored by companies in Greater Akron, but the segment routinely complains that it can’t find and keep the dedicated workers it needs.

“You can see the potential,” Vickie Miller said.

Miller is not a plastics expert; she’s a corrections and rehabilitations expert. She spent 17 years teaching inmates at the Ohio Reformatory for Women in Marysville before striking on a new venture in 2015.

Miller joined other reform-minded people familiar with the challenge of finding jobs for former inmates to form the Training Assessment Placement Project, or TAPP, which she now heads up as project director.

The Ohio Department of Rehabilitation and Corrections and the manufacturing services arm of trade group PolymerOhio partners with Miller in the endeavor.

So far, she’s been working in central Ohio, mostly with plastics companies in and around Columbus.

Now, she said, she’s spreading the program to Northeast Ohio as well.

“We currently have 21 companies under contract, and we beat our goal of placing 20 folks last year. Our goal this year is to place between 75 and 100,” Miller said.

If that sounds like a slow pace relative to the number of prisoners released each year, it is — and that’s by design, Miller said. It takes time to prescreen and conduct extensive background checks on applicants.

Then more time is needed to coach them so that they are successful in their new jobs. But it’s important, because even a single failure could hurt her program with an employer or with industry in general, she said.

“The program is not something that’s quick. A lot of people think that once you get a restored citizen to work, everything’s OK. That’s a myth.

That’s actually when things often go wrong in their world,” Miller said.

“That first month or month and a half is just a very crucial time in their life.”

Former prisoners often have a short honeymoon period, where they stay with family and friends, with all their needs taken care of. After that, they often have to quickly take on challenges such as housing, child care, transportation and other critical needs. Add to that the fact that many of them have not held jobs be-

fore, and it’s a significant challenge, Miller said.

Nonetheless, Miller said the employers she works with usually return to her for more workers, because they’re happy with the reformed citizens they’ve already hired.

“They’re humble, gung-ho and they want to work,” Miller said.

“We’ve seen several moved into supervisory roles already.”

While Miller is all about getting former inmates back to work, helping area manufacturers and reducing the state’s recidivism rate, it’s still a business, she said. TAPP is a for-profit company, and employers pay to use it — $4,200 for each employee they hire. Employers pay half that amount at the time of the hire, and the rest after the employee has completed their job coaching and become established in their new job.

However, Miller said, the employers don’t have to bear the cost themselves. They can get federal tax credits and help from the state to offset the cost of the program and even some of the wages they initially pay to the reformed citizens they hire.

She said TAPP does the paperwork necessary for the employer to claim between $2,400 and $9,600 in federal tax credits, and up to $8,000 in wage reimbursement from Ohio’s “You Hire, You Train, We Pay” program.

“So, in the end, the employers make money,” Miller said.

Ohio taxpayers might benefit, too.

Since about 2000, Ohio’s three-year recidivism rate has fallen from almost 40% to below 30%, a trend Miller and others credit to proactive efforts to employ former inmates and help them adjust to life on the outside. TAPP is just one part of a larger effort in that regard, Miller said.

But every success means that a prisoner goes from costing the state tens of thousands of dollars a year for incarceration costs to becoming a taxpayer themselves, Miller said.

And the jobs are good, she said.

“None of my positions are for less than $12.50 an hour, and some are more than $30,” she said.

Industry supports her efforts as well, which is why PolymerOhio says it began promoting TAPP in Northeast Ohio this year.

“I’ve been here three years, and every time we would go see a manufacturer we would not escape the room without talking about workplace challenges,” said PolymerOhio executive director Bruce Fawcett. “So we started to think about what novel approaches could we take? Because the standard approaches weren’t working out for folks.”

Fawcett said he’s already found at least three Northeast Ohio plastics companies interested in learning about the program. Because of the nature of it, participating companies usually remain anonymous, he said.

Miller said she hopes TAPP does well enough for her to hire a full-time associate to manage it in Northeast Ohio. In the meantime, she said she’s more confident than ever that the program is gaining traction and will meet its goals for 2017.

“I think we’ll place a lot more than 25 people this year. I just signed five last week,” she said.

CRAIN’S CLEVELAND BUSINESS

|

M A R C H 13 - 19 , 2 017

|

PA G E 21

AKRON

Former Kent courthouse to get new life

By RICHARD WEINER clbfreelancer@crain.com

Kent attorney John Flynn, who helped save the old Kent train station in the early 1980s, has purchased another landmark building in the city.

The old Portage County Municipal Courthouse on South Water Street, which was originally the Kent post office building, will be converted into office space, Flynn said.

“This is a beautiful, iconic building, the centerpiece of Kent, and I didn’t want to see it torn down or turned into something it shouldn’t be,” he said.

The city of Kent had called for development proposals for the building after it was abandoned two years ago, when the new courthouse, housing the Kent branch of the Portage County Municipal Court, opened on Main Street.

The city acquired the Water Street building as a part of a land swap with Portage County in a deal for the new site.

Another proposal for the site came from Fairmount Properties, according to Kent economic development director Tom Wilke.

That proposal involved purchasing the courthouse for Flynn’s firm in exchange for land Flynn owned on the same block, where Fairmount wanted to construct a mixed-use building.

Council turned down that proposal, Wilke said, because of a lower purchase price for the courthouse and concerns over parking at the proposed mixed-use site.

Several others also expressed interest in the site to the city but stopped short of making a formal offer, he added.

Then Flynn decided a couple of months ago to put in an offer and plan for the property.

The purchase price of the building was $435,000, Flynn said, and he estimates that he will put in upward of $700,000 to renovate it into an office building.

While a contractor has yet to be chosen, Flynn said DS Architecture will be working on the project, which he hopes to begin sometime this summer.

“It’s very good news for downtown Kent that we’ve got a path forward to get the historic court property back in business,” said Kent city manager David Ruller.

“Mr. Flynn has the kind of track record for quality redevelopment that (city) council was hoping for when they asked us to put the property up for sale, so it should be a great fit.”

Flynn said that about half of the new space — the courthouse has about 6,000 square feet on the main level and 5,000 square feet on the basement level — will go to his firm, Flynn, Keith & Flynn, currently located down the street at 250 S. Water Street in a building built and owned by the firm.

Flynn and his partner will keep that building, where other tenants will remain. The rest of the restored courthouse building will be open for office rental.

“We believe that John’s plans to redevelop the building as Class A office space is the highest and best use for the building,” said Wilke, “and we will welcome the additional professionals that will be attracted to our downtown.”

Flynn said that he will seek state and federal historic tax credits to help pay for the restoration of the building.

Kent attorney John Flynn purchased the courthouse and will move his firm’s offices to the building after it’s renovated.

Built in the 1930s, the old courthouse building in Kent initially was a post office. (Shane Wynn for Crain’s)

“It’s very good news for downtown Kent that we’ve got a path forward to get the historic court property back in business.”

— David Ruller, Kent city manager

The city will clean out the building, then the walls that were put up when the post office was converted to the courthouse will come down, leaving whatever original interior is left. This includes a secret catwalk that the postmaster used to walk along to watch his workers, Flynn said.

After that, Flynn said that he will have to see what needs to be done to make the building into office space.

This is the third development project in downtown Kent for Flynn. A Kent native whose father owned a gas station on South Water Street, Flynn has been dedicated to the preservation of downtown Kent.

He built his current building in 1980, saying that it was the “first new building built in downtown Kent in 25 years.”

The following year, Flynn helped with the old Kent train station, which had fallen into disrepair. Then a board member of the Kent Historical Society, Flynn and several other investors worked to attract a developer and then purchased the former station for the historical society for $24,000.

It was converted into the Pufferbelly Restaurant in 1981. (The Pufferbelly closed at the start of the year and the building was just sold, but a new restaurant is coming in).

Flynn’s history with the city was certainly a part of his winning bid for the old courthouse.

“John’s prior experience with the Kent Historical Society in obtaining and preserving the train station that became the Pufferbelly Restaurant will serve him well as he begins to plan the rehabilitation and restoration of the building that was originally constructed in the 1930s as a post office,” said Wilke.

And as a long time “city father,” having served on both the school board and as a trustee of the Robin-

The interior of the courthouse will be made into offices.

son Memorial Hospital Foundation for over two decades, Flynn is happy to play his part in the current revitalization of downtown Kent.

“Downtown Kent prides itself on smaller ‘mom and pop’ business owners who are chasing their dreams, which is exactly how Mr. Flynn built his law business,” said Ruller.

“We’re delighted to see that he’s not done yet and is looking to make yet another contribution to the economic vitality of his hometown.”

As Kent continues to transform, Flynn likes what he sees in his old hometown.

“Kent always had potential, but very few people recognized what to do about it,” he said. “From the 1980s on, gradually, people started to realize the potential and now they are running with it.”

Find a bank you feel good about

&

switch for the right reasons.

$

*

200

Get when you open a new checking account.

Visit your local Akron branch or call 330.664.2911 to learn more. *This offer is available to new checking account households opened in person at our Akron S&T Bank office located at 491 North Cleveland Massillon Road Akron, OH 44333 and limited to one per household. Offer applies to new consumer checking accounts (Checking & Simple, Checking & More, Checking & More with Interest and Checking & Four Stars only). Offer cannot be combined with any other checking offer and is subject to change or termination without notice.

To qualify for the offer, the new checking account must be opened with a minimum opening balance of $50 between 2/1/2017 and 4/28/2017 and the following conditions must be met by June 30, 2017: (a) qualifying Direct Deposit(s) must be received and (b) at least 10 S&T Bank Visa Debit card purchases (posted and cleared) must be made. Your checking account must remain open and in good standing (balance greater than $5) in order to receive the incentive, which will be credited to the eligible account 7/15/2017. Once all conditions have been met the credit will be identified as "$200" on your monthly statement.

A qualifying Direct Deposit is defined as a recurring Direct Deposit of a paycheck, pension, Social Security or other regular monthly income electronically deposited by an employer or an outside agency into the specific account you opened between 2/1-4/28/2017. The total amount of all qualifying Direct Deposits credited to your checking account must be at least $500. Credit card cash advance transfers, transfers from one account to another or deposits made at a branch or ATM do not qualify as Qualifying Direct Deposits.

A qualifying debit card purchase is defined as any debit card purchase made at point of sale using your signature or PIN, or a purchase made electronically or online using your debit card number, including recurring payments.

New account will not be eligible for offer if any signer has signing authority on an existing S&T Bank consumer checking account or has closed an account within the past 12 months, or has been paid a promotional premium in the past 12 months. If multiple accounts are opened with the same signers, only one account will be eligible for the premium. For this offer, signing authority will be defined by the customer name(s) and social security number(s) registered on the account. Offer may be extended, modified or discontinued at any time and may vary by market. The value of the reward may be reported on Internal Revenue Service (IRS) Form 1099, and may be considered taxable income to you. Please consult your tax advisor regarding your specific situation.

Checking & More with Interest account rate is accurate as of 2/1/2017. Annual Percentage Yield (APY) for this interest bearing account is 0.15% APY. Rates and APYs may vary and may change after account opening. Fees could reduce earnings. To determine if these rates have changed, call 800.325.2265. Rates on variable rate accounts may change after account opening. Refer to S&T’s Deposit Account & Agreement Disclosures for other important terms and conditions.

MEMBER FDIC

PA G E 2 2

|

M A R C H 13 - 19 , 2 017 |

CRAIN'S CLEVELAND BUSINESS

CRAIN’S CLEVELAND BUSINESS

BOXCAST CONTINUED FROM PAGE 1

“Their purpose was to monetize the onsite experience,” Daily said of Veritix, a digital ticketing company that got its start as the Dan Gilbert-owned Flash Seats in 2006.

“What is it that BoxCast does? We monetize the offsite experience.

There are so many interconnects.”

Gerace said when he talks to entrepreneurs such as Daily, he gives them a couple options.

“I say, ‘You have a choice. If I’m not an investor, but a mentor, I can advise you on anything. But if I’m an investor, you can’t come to me for advice on how to deal with the board and investors, because I have the rights and obligations of an investor,’ ” Gerace said.

So for now, he’s an adviser with “incentive equity” as part of his board membership. But Gerace said he’ll look to invest in BoxCast’s next financing round.

Steve Biegacki — the president and CEO of Kramer Electronics USA, and a longtime former Rockwell Automation executive — is another intriguing addition to BoxCast’s board of directors.

The prominent executives are lending a hand as BoxCast continues to own a chunk of the church market, a segment that was the site of the company’s first online broadcast in 2008. BoxCast also is strengthening its position in sports, especially with colleges and universities, and sees a huge opportunity in selling its streaming services to municipalities and businesses.

BoxCast, in the words of Daily, its president, is “legit, bringing in real money and real customers.”

‘Easy to use’ Late next month, BoxCast will unveil its latest product at the National Association of Broadcasters’ fourday show in Las Vegas. Daily said he can’t yet reveal what the new technology will be, though he hints to a visitor that it will be significantly more powerful than the company’s current collection of plug-and-play devices, streaming platforms and apps.

“It’s a nice coming-out party for us,” Daily said.

BoxCast’s plug-and-play device can hook up to video cameras and iOS devices. (Contributed photo)

“Everyone has this idea that (Facebook Live is) going to eat BoxCast’s lunch because that’s a free product, but it’s just the opposite.”

— Gordon Daily, BoxCast president and co-founder

In a way, the company has already arrived.

Daily estimates that BoxCast’s equipment is used in about 13% of the college athletics market, and that the company’s technology is used for “10 times as many” live broadcasts as ESPN. Those, of course, are on a much smaller scale, though the dollars still add up. Daily said more than 1,000 fans signed up — at $9.95 a pop — for recent live broadcasts of the East Coast Athletic Conference hockey tournament.

BoxCast has deals with Baldwin Wallace, Case Western Reserve (the alma mater of Daily and co-founders Justin Hartman, Ron Harper and Joel Helbling) and John Carroll universities, plus Ursuline College, seven of the 10 members of the Ohio Athletic Conference and Kent State.

The latter’s TeleProductions department used BoxCast’s platform to stream last fall’s Mid-American Conference field hockey tournament, and engineer Jason Forbes said the athletic department will join the rest of the university in using BoxCast’s equipment in full force this fall.

REAL ESTATE

Phone: (216) 771-5276 Contact: Lynn Calcaterra E-mail: CLBClassified@crain.com

List your commercial,

AUCTIONS

‘Accelerating’ interest Daily says the college sports market is getting “largely saturated,” and that his company was “actually late to the game” in that area.

Still, BoxCast has done well in the field.

The company has fared even better with churches, a business segment that — nine years after Daily and his buddies provided the equipment for a live broadcast of a Westlake funeral home service — is “in the middle of the growth stage,” the company president said.

THE LIST

Employee Benefit Firm

PAGE 17

Copy Deadline: Wednesdays @ 2:00 p.m.

All Ads Pre-Paid: Check or Credit Card BUSINESS SERVICES

INVESTMENT OPPORTUNITIES

Crain’s Cleveland Business’ classifieds will help you fill that space.

μ

CLASSIFIED

Construction • Acquisitions Exporting • Financing (855) 707-1944

industrial or retail space here!

MARCH 13, 2017

As it was with churches, Daily believes BoxCast is ahead of the curve when it comes to working with municipalities. Local governments such as Avon Lake and Brook Park use BoxCast for their live streams. Brook Park, Daily said, draws an audience of more than 1,000.

“We have literally thousands of those little boxes out there in the marketplace,” he added.

One is at MRI Software, a real estate software company in Solon.

Terry Keller, MRI Software’s senior director of information technology, said the company started using BoxCast’s services in 2016, when it streamed its annual international user convention. The broadcast was available on MRI’s company intranet, where its 700plus employees could watch it live or see it on demand after it concluded.

And when a client couldn’t make it to a big product management meeting, MRI Software streamed the gathering so everyone was included.

“They took something that’s complicated, broadcasting live events, and made it extremely easy to do,” Keller said. “I love them. I keep trying to find more ways to utilize them.”

Live broadcasts — thanks to Facebook Live, Periscope and other platforms — have never been easier, and cheaper. That’s a good thing, believe it or not, Daily said.

“Everyone has this idea that (Facebook Live is) just gonna eat BoxCast’s lunch because that’s a free product, but it’s just the opposite.

It’s created such a market for what we do. It’s just accelerating people’s interest in really thinking this is possible, and these brands can’t leave it to Facebook.”

Daily said BoxCast has better equipment and enhanced support, which has helped it raise more than $4 million since its start. And more funding is on the way — a substantial amount, he said.

“I still contend that 90% of the population isn’t streaming anything,” Daily said.

“These are brands that have the most to gain from it, and they’re not even doing it. But once they get a load of how easy this is, how possible it is and how much they get from it, it’s a foregone conclusion they’ll try it.”

C.W. JENNINGS INDUSTRIAL EXCHANGE Global Industrial Consulting

executive property,

Contact Lynn Calcaterra at 216-771-5276

The TeleProductions department’s most popular BoxCast broadcast is graduation, which Forbes says draws a live audience in the hundreds. The Kent State School of Podiatry even broadcasts its lectures on the platform.

“It’s very, very easy to use,” Forbes said of the BoxCaster, a box about the size of smart phone that hooks up to a video camera and allows users to stream big games — or in the case of a reporter’s midweek visit to BoxCast, a Kent State lecture on feet.

μ

FLYNN

INVESTMENT OPPORTUNITY

ENVIRONMENTAL

An exciting new web site for Baby Boomers providing pertinent information on a wide range of Boomer interests. $20-25K range.

UST REMOVALS • REMEDIATION DUE DILIGENCE INVESTIGATIONS (800) 690-9409

For more information Please call 330-536-1470

BUSINESSES FOR SALE THINKING OF SELLING? FREE MARKET ANALYSIS No Upfront Fees See our listings at: www.empirebusinesses.com mike@empirebusinesses.com 440-461-2202

For daily on-line updates, sign up at CrainsCleveland.com/Daily

Send us your ad via e-mail... LCalcaterra@Crain.com

CRAIN’S CLEVELAND BUSINESS

Source Lunch Yvette Ittu

President, Cleveland Development Advisors Yvette Ittu is the long-serving president of Cleveland Development Advisors, a small organization with a big mission and nimble checkbook that is a key enabler of Cleveland’s rebirth. CDA, as Cleveland Development Advisors shortens its name, was launched in 1989 to raise funds from corporate sources to invest in catalytic economic real estate development projects that traditional lenders eschewed, like pioneering in downtown housing. The projects this affiliate of Greater Cleveland Partnership helps have grown in size along with CDA, as has its mission to embrace education and job creation. CDA has invested more than $320 million in 120 projects, resulting in 6 million square feet of commercial space and 5,300 new housing units. Its efforts have leveraged $2.9 billion in development. — Stan Bullard

Five things How do you kick back?

Last year, I started rowing with the Western Reserve Rowing Association in the Flats. It’s a great way to get outdoors and enjoy the Cuyahoga River.

What is your favorite place in Northeast Ohio?

The Cleveland Metroparks — any part of it.

What was the destination of your last trip?

The United Arab Emirates. We visited a friend who lives in Abu Dhabi.

What are you reading?

I like to read about things associated with what I’m doing. There’s Rags to Riches about Abu Dhabi, and The Boys in the Boat about the American crew team at the 1936 Berlin Olympics.

What is your favorite movie?

“It’s a Wonderful Life”

Lunch spot Yours Truly Cleveland Playhouse Square Halle Building, 1228 Euclid Avenue

The meal One had The Envelope, a pita filled with spinach, tomato, cucumber, muenster and hummus. The other: Buffalo chicken wrap with sweet potato fries. Drinks: one soda and one cranberry juice.

The vibe Comfort food for downtown workers dining with colleagues. Relics of the old department store give it authenticity.

The bill $ 26.57 with tip

What is your elevator speech for CDA? CDA provides a capital source that is really unique around the country. CDA has been able to capitalize local private sector funds and combine them with other private and public sector funds to fill the gap in groundbreaking real estate projects that might otherwise not be completed with traditional financial sources.

For CDA, a catalytic project is one that, upon completion, is likely to attract additional development and/or improve the general character and vitality of Greater Cleveland. CDA can’t do anything alone. But the sources of funding it brings to the table can sometimes make the difference between a project being done and not done. These projects can include developer initiated projects, business development projects as well as nonprofitsponsored real estate projects.

Where does CDA invest its funds?

Our original charge was to create an investment fund with support from Greater Cleveland corporations to serve as patient capital to help spur catalytic real estate developments in the city of Cleveland. No other community has done it quite this way. With the advent of allocations of Federal New Markets Tax Credits, we have been able to expand our scope beyond the City of Cleveland to qualified areas of Cuyahoga County. For example, CDA recently invested in the Lincoln Electric Welding Technology Center under construction in Euclid. The center will focus on training welding educators.

What are a few of the more recognizable projects that CDA has invested in over the past year?

CDA has made investments in two of the largest new construction housing developments in recent history — the One University Circle project, which will bring a 20-story, 280-unit high rise apartment building to University Circle; and the Edison at Gordon Square, which will bring over 300 units of housing to the Detroit Shoreway neighborhood. CDA also made a significant investment in the project known as W25D, the mixed-use project currently under construction on 25th and Detroit Avenue that will bring not only

housing but retail and other community amenities, including a new home for the Music Settlement.

What do you see as the next challenge in Cleveland’s economic development?

Our community has embraced the notion of the public-private partnership to get a lot of real estate development done in Cleveland. Cleveland projects often use multiple layers of funding, including federal and state tax credits, local financing programs, as well as CDA direct lending, to close the gap. We can’t take those financing tools for granted. It’s not easy to do real estate development in a legacy community like Cleveland. We need to make sure these sources continue to be made available to communities like Cleveland.

How have you seen real estate development change here while you have been at CDA? What’s excited me is that we are starting to see some real estate development without all these layers of financing. We’re starting to see some downtown office building renovations and conversion to apartments and housing in Tremont and Ohio City get completed with financing solely from traditional sources. We still need to work on funding for larger scale projects, as well as neighborhood projects, but we are starting to see the benefits from working on catalytic development projects.

What career path positions you for a job running a nonprofit that is a funder of last resort for challenging realty projects?

After graduating from college and becoming a certified public accountant, my goal was to be bond counsel. I was working on bond transactions at Calfee, Halter & Griswold when this opportunity came up. How can you refuse a chance to make an impact like this on your hometown? This position incorporates several aspects of my background. My public sector experience in finance and accounting at the city of Cleveland, as well as serving as finance director for the city of Lakewood, also helped me understand the public sector perspective relative to economic development.

in

|

M A R C H 13 - 19 , 2 017

|

PA G E 2 3

sider intel

MARKETING, ADVERTISING & EVENTS INSIGHTS.

Today’s Tip: A webinar is the perfect way to get your voice heard, share your knowledge and network, without leaving the comfort of your office.

Do you have the desire to reach a large audience, but don’t necessarily want to put together an event? A webinar is the perfect solution. The online vehicle also can serve as a great form of lead generation since attendees register and share contact information.

Michelle Sustar

Integrated Marketing Manager Crain’s Cleveland Business

How Crain’s can work for you: CRAIN’S WEBINAR PARTNERSHIP Crain’s not only will work with your company to develop topics and promotions that attract your desired audience, but it will moderate the presentation and Q&A. Through this opportunity, Crain’s will provide a high-impact package, including print and online advertising and email blasts.

Interested in booking your webinar today?

Email advertising director Nicole Mastrangelo at nmastrangelo@crain.com.

watch more here e agin BDBLAW.COM/reim