Crain's Cleveland Business, January 13, 2025

Warehouse District preps for Sherwin-Williams HQ

By Alexandra Golden

With the new year just started, the opening of Sherwin-Williams’ 36-story global headquarters is creeping closer. Once more workers begin moving into the gleaming high-rise at 409 W. St. Clair Ave., more people will begin wandering the blocks of the Warehouse District look-

ing for food options throughout the day.  e new headquarters will house more than 3,500 employees, but there is not “speci c data on how many employees will be in the building on any given day,” Julie S. Young, vice president of global corporate communications for the Sherwin-Williams Company, wrote in an email to Crain’s.

Geauga Lake site retains connections to the past

By Stan Bullard

Baseball fans are not the only ones attuned to Opening Day; amusement park fans are also eager for seasonal parks to reopen.

But an opening of a di erent sort looms for the former Geauga Lake Amusement Park in Bainbridge Township and Aurora.

By summer, the rst apartments will

open at VC Park on state Route 43, just east of the former amusement park's entrance in Bainbridge. Construction workers are laboring indoors to nish four-story apartment buildings that already stand near the lake shoreline.

VC Park will be the rst part of an area near the lake controlled by Industrial Commercial Properties of May eld

It's expected that the mixed-use development aspects of the new HQ will have a “combination of retail, dining, hotel, residential and other amenities that support our employees,” but no speci cs are being given, according to an FAQ page from the company.

And while there are several chain locations in the area ready to churn out lunch

orders, there are several locally based eateries that are preparing for the in ux of potential customers and foot tra c. Crain's spoke to those behind a few of these restaurants, all within a 10-minute walk of the new HQ, about how they're preparing.

‘It was a roller coaster we couldn’t continue to ride’

By Jeremy Nobile

Matt Fish said he pulled every lever he possibly could, but amid a pile of debt, a challenging economy and shifting consumer habits, none proved enough to keep Melt Bar & Grilled going.

After nearly two decades in business, Fish announced at the start of this year that he has shuttered the once- ourishing Melt enterprise — which had been win-

nowed down to just its original Lakewood location — for good.

“To not see it work and to see all of our e orts just fall short, it’s disappointing for sure,” Fish said.

“I do feel that we put out a really good product, especially over the last four months after we re-did the (Lakewood) restaurant,” he added. “It was one of the

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Browns’ owners take step toward new stadium

By Kim Palmer

The Cleveland Browns’ owners moved closer to owning land in the city of Brook Park on which they hope to build the football team’s new home for opening in 2029.

The Haslam Sports Group (HSG) announced Thursday, Jan. 2, that the team moved into “the next part in the process” toward leaving Cleveland after the current lease at Huntington Bank Field expires in 2028.

“We have executed the clause and taken the necessary steps in our land purchase agreement with the current owners to solidify our future purchase of the 176-acre site in Brook Park for a new Huntington Bank Field enclosed stadium, along with an adjacent mixeduse development,” Dave Jenkins, HSG’s chief operating officer, said in a statement.

Team owners Dee and Jimmy Haslam in October told Cleveland Mayor Justin Bibb that they planned to focus on efforts to build an enclosed stadium outside the city.

The Jan. 2 announcement is in line with a Dec. 31, 2025, deadline set to execute the Brook Park land purchase agreement with three

companies — Weston Inc., DeGeronimo Cos. and Scannell Properties, the joint owners of the property — and the HSG-affiliated Primacy Development LLC.

In recent months, HSG released detailed plans for the design of the $2.4 billion domed stadium and multi-phase mixed-use en-

tertainment district surrounding it.

HSG says the proximity of the former Ford Motor Co. plant property to Cleveland Hopkins International Airport and three highways makes Brook Park a prime location for the development of 450 hotel rooms, 575 apartments

Monsters, Charge driving fans and big biz amid Cavs’ success

By Joe Scalzo

Forget Jacksons, Abes or Benjamins. When it comes to measuring the business impact of a big Cleveland Monsters game, there’s a different currency: teddys.

(As in bears, not dead Presidents.)

On Dec. 22, the Monsters welcomed 15,303 fans — their secondbiggest crowd of the season — and watched those fans rain down a record 21,859 stuffed animals onto the ice at their annual Teddy Bear Toss game. It took about 15 minutes to clear the stuffed toys, which were donated to local charities.

“We broke the previous record (16,112 stuffies) by five or six thousand, which was pretty cool,” Monsters president Mike Ostrowski said. “It was a pretty cool moment.”

Bears aside, it’s a bullish time for Rock Entertainment Group right now — and not just because the Cleveland Cavaliers own the best record in the NBA. REG’s two other winter properties, the American Hockey League Monsters and the NBA G League Cleveland Charge, both finished 2024 on a strong note.

The Monsters drew 16,151 fans for their Dec. 28 home game against Grand Rapids, which was the sixth-largest regular-season crowd in franchise history.

“Those (late December) games were two of our highest-revenue games in franchise history,” Os-

trowski said. “They were significant gates, and we had huge numbers from a group standpoint and a singles standpoint. It was just awesome. It was NHL-like. We had really, really great crowds and the fans keep stepping up.”

The Monsters, who have led the AHL in attendance three of the last four years, are averaging a leaguebest 10,556 fans per game this season, which is ahead of last year’s franchise-record average (10,347).

“It’s certainly great to say we’ve led the league in attendance three out of the last four seasons, but it’s all about taking care of who we are,” Ostrowski said. “There are a lot of great teams in the league doing great things.

“We like to be pushed and challenged, but I think it’s really about what we’re doing each and every year, which is augmenting great play on the ice with fun promotions and themes.”

As for the Charge, the move to Public Auditorium is already paying off as the franchise set single-game attendance records on back-to-back nights in late December. The Charge drew a franchise-best 5,153 fans for a Dec. 27 game against Bronny James and the South Bay Lakers, then drew a crowd of 5,322 the following night.

Both games were above Public Hall’s listed capacity of 5,100 and both benefited from fun promotions: a Luke Travers mullet giveaway on the 27th and a 1990s Cavs Night on the 28th, which featured

throwback jerseys and a Sherpa bucket hat giveaway.

“We dialed up our promotions early on (for those games) and, obviously, we turned on our marketing juice even more as we found out we’d be welcoming home one of Northeast Ohio’s own in Bronny James,” said Rocco Maragas, the Charge’s senior vice president and chief operating officer. “It really struck a chord with our fans.”

The Charge, who spent the previous three seasons at the Wolstein Center, played their first five games at Rocket Mortgage FieldHouse (RMFH) as the organization finalized the Public Auditorium renovations. The Charge averaged just under 3,000 fans for those RMFH games and have averaged nearly 4,400 fans in four games at the new site. For the season, the Charge are averaging 3,590 fans, putting them on pace to break last year’s record of 3,383 fans.

“Public Hall was built for major showcase events,” said Maragas, who believes the Charge could squeeze in as many as 7,000 fans for a G League Finals game. “To actually experience that, it’s a different level. It’s been so much fun to be able to hear the screams and the way the sounds bounce off the walls. We’ve had team members and even fans text me saying, ‘It was so loud!’”

More impressive? REG is accomplishing all this while the Cavs are in the midst of a multi-year

voke the “Modell Law” to stop the team’s move to the suburb.

In his statement, Jenkins refers to the conflict but continues to assert that the Brook Park plan is a plus for the region.

“While work remains with our public partners on the project, this is a key step in our efforts to create a responsible long-term stadium solution that delivers a worldclass experience for our fans, attracts more large-scale events for our region and positively impacts our local economy,” his statement read.

Since the news that the Browns’ owners were officially pursuing the Brook Park option, a number of city and county officials have pushed back on the plan and offered other locations to accommodate an enclosed stadium.

and more than 200,000 square feet of retail.

But despite an economic study released in December by HSG that estimates a stadium with yearround availability would bring an increase of more than 1 million visitors to the region, Cleveland officials have said the city will in-

A team move from the downtown lakefront stadium would leave an estimated $30 million hole in the city’s economy, according to a study commissioned by City Hall.

HSG responded with claims that the cost of a domed stadium constructed on the former Burke Lakefront Airport site would cost hundreds of millions more than the plan proposed in Brook Park due to site and time constraints.

sellout streak, posting record revenue and engagement across a variety of business metrics.

That overall success explains why REG believes there’s room for even more professional sports in this market — like, say, an expansion WNBA team.

“That’s just a testament to REG and our structure,” Ostrowski said. “(REG CEO) Nic (Barlage) talks

about that a lot. We have our focus areas, but we’re all contributing to our larger organization and enterprise. We want to make sure that we deliver a great experience, regardless of the event — and that includes our FieldHouse business. Our concert and event business.

“I think it just shows our depth and versatility and diversity from an organizational standpoint.”

Cleveland Browns’ owners move closer toward purchasing a Brook Park property slated to become the team’s new home. | HKS

Cleveland Charge forward Emoni Bates wears a throwback uniform during the team’s ‘90s Cavs Night against the South Bay Lakers on Dec. 28 at Public Hall.

Cavs’ broadcaster exits bankruptcy

Diamond Sports Group to continue to operate regional networks under FanDuel Sports Network name

By Jay Davis, Crain’s Detroit Business

The regional sports group that partners with the Cleveland Cavaliers got a big win earlier this month.

Diamond Sports Group announced on Jan. 2 that it was out of Chapter 11 bankruptcy protection nearly two years after it had been filed in March 2023 — and rebranded as Main Street Sports Group.

The company will continue to operate 16 regional sports networks under the FanDuel Sports Network name. That includes its current deal with the Cavs.

Main Street Sports also completed a financial restructuring, cutting about $9 billion of debt down to $200 million, according to a news release.

Officials with the Cavs did not immediately respond to Crain’s requests for comment.

Last year, the company reached a series of agreements to stay in business, including deals to continue broadcasting NBA and NHL games.

Lawyers on Nov. 14 said the company also had deals to keep broadcasting a half-dozen Major League Baseball teams, though that no longer includes the Guardians as MLB took over broadcasting rights for Cleveland in October.

Diamond Sports used Chapter 11 protection to end broadcast deals with other MLB teams, including the Arizona Diamondbacks, San Diego Padres and Texas Rangers.

Diamond Sports Group in No-

vember also reached a multiyear deal to stream games on Amazon Prime.

Main Street Sports CEO David Preschlack said the news is a culmination of more than 20 months of hard work to transform its business.

“I am deeply grateful to everyone who made this restructuring possible — our new owners, partners, advisors, and especially our dedicated employees,” Preschlack said in a news release. “With a stronger balance sheet, key partnerships, and supportive new owners, we are modernizing our business to thrive in a changing media landscape.”

Main Street Sports Group is the broadcast partner of 13 NBA teams, eight NHL teams and eight MLB teams, including the:

◗ NBA: Detroit Pistons, Atlanta Hawks, Charlotte Hornets, Cleveland Cavaliers, Indiana Pacers, Los Angeles Clippers, Memphis Grizzlies, Miami Heat, Milwaukee Bucks, Minnesota Timberwolves, Oklahoma City under, Orlando Magic and San Antonio Spurs.

◗ NHL: Detroit Red Wings, Carolina Hurricanes, Columbus Blue Jackets, Los Angeles Kings, Minnesota Wild, Nashville Predators, St. Louis Blues and Tampa Bay Lightning.

◗ MLB: Detroit Tigers, Atlanta Braves, Los Angeles Angels, Miami Marlins, St. Louis Cardinals, Tampa Bay Rays, Kansas City Royals and Milwaukee Brewers.

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Wolstein Center set to host pro indoor soccer's biggest weekend

By Joe Scalzo

e Wolstein Center is at the center of a plan to boost indoor soccer in Cleveland — and throughout the Midwest.

Major League Indoor Soccer (MLIS) and the reigning league champion Cleveland Crunch are partnering on a plan to bring the MLIS men’s and women’s playo weekend to the Wolstein Center from April 11-13, 2025.

If all goes well, the 33-year-old arena could again be the home site for Crunch games as early as the 2026 season. e Crunch currently plays games at the Soccer Sportsplex in North Olmsted, which has a capacity of about 700 fans.

e Wolstein Center’s typical capacity is about 8,500 fans for Cleveland State men’s and women’s basketball games. e arena previously served as the home of the Crunch from 1992-2005.

“A big goal of ours is to put on a successful nals weekend at the Wolstein Center and have that become home base for the (2026) regular season next year,” Crunch public relations director Andriana Ruscitto said. “If we can play there full time, that would be ideal for us. e Sportsplex has been great to us. It's a good venue and we've been able to work well with it and do what we can, but there’s a limited capacity and a limited number of seats.”

e Crunch brie y experimented with playing a handful of games at the I-X Center during the 2023 season but went back to the Sportsplex full time, in large part because the team had to set up the entire eld and the stands ahead of games. Still, those I-X games drew nearly 2,000 fans.

e Crunch believe they could draw at least 2,500 fans for games at the Wolstein Center, which wasn’t available in previous years because so many key dates were taken by the G League Cleveland

Charge. e Charge now play games at Cleveland’s Public Auditorium.

“We get fans from all over greater Cleveland, so I think a centralized location is ideal,” said Crunch co-founder Luciano Ruscitto, who said the team draws fans from as far away as Ashtabula. “We see it especially with our online demographics, like social media and email marketing. Our fan base is spread out all over Cleveland.”

Last year’s MLIS nals were played at the 8,000-seat Baxter Arena in Omaha, Nebraska. After the nals, the league approached the Crunch about playing this year’s championship in Cleveland as a way to capitalize on the Crunch’s historic connection with the Wolstein Center and the city’s growing interest in soccer.

“It seemed like a great t for all parties,” Luciano Ruscitto said.

e six-team MLIS absorbed the six-team National Indoor Soccer League last March, although only nine teams will compete this season: the Crunch; the Chicago Mustangs; the (Denver) Colorado Bucks; Panathinaikos Chicago; Red Cedar FC (Lansing, Michigan), the Omaha (Nebraska) Kings; the Amarillo (Texas) Bombers; the Canadian Crusaders (Toronto) and Summit City United (Fort Wayne, Indiana).

Each men’s team will play a 12game regular season, with six home and six away games.

ere are also three teams, in Orlando, Las Vegas and Utah, that will be inactive this season but are aiming to play in 2026.

“It’s really great to have that international expansion this year and I know the (MLIS) hopes to broaden that into the next year,” Andriana Ruscitto said. “I feel like this year we kind of got our footing and now next year, even into 2025, you'll start seeing more teams from the West and South to ll in that Orlando gap. Right now

there's a really strong Midwest presence, but over the next few years, there’s a goal to expand to those di erent parts of the U.S.”         e inaugural MLIS women’s division will have four teams: the Chicago Mustangs, Zoo City FC (Kalamazoo, Michigan), Panathinaikos Chicago and Summit City United (Fort Wayne). e women's teams will play a six-game regular season.

e top ve men’s teams in the league standings at the conclusion of the regular season will qualify for the 2025 MLIS playo s. Championship weekend will kick o in Cleveland with a wild card match April 10 between the No. 4 and No. 5 seeds at a site to be determined.  at winner will face the No. 1 seed in one of two semi nal matches April 11 at the Wolstein Center. e No. 2 and No. 3 seeds will compete in the other seminal that night. e semi nal winners will then meet in the men’s championship match on April 13.

For the WMLIS, the top two teams at the conclusion of the regular season will advance to the championship match, which will be held on April 12.

e championship weekend comes one week before the Columbus Crew will play a regular season MLS match at Huntington Bank Field against Inter Miami, which has Lionel Messi on its roster. Cleveland also nished as one of three nalists for an expansion NWSL team — it eventually went to Denver — and has an MLS Next Pro team scheduled to begin play in 2025.

“It’s upsetting they didn’t get it (the NWSL team) because I felt like they deserved to get that bid, but I think the noise it made is only going to bene t us,” Luciano Ruscitto said. “And, really, the indoor side of it is more unique. It’s more entertaining than an outdoor game, so there’s really an opportunity here.”

The Cleveland Crunch are hoping to play home regular-season games at the Wolstein Center as soon as 2026. JOE SCALZO

Karpinski Engineering appoints Jeremy Bowers as president, CEO

By Stan Bullard ronment

Karpinski Engineering, a consulting engineering concern based in MidTown Cleveland, named Jeremy Bowers president and CEO as of Jan. 1, following Jim Cicero's 21-year tenure. Cicero remains a principal at Karpinski and chairperson of the board.

Bowers joined Karpinski in 2000 after graduating from Grove City College in Pennsylvania after studying mechanical engineering. In 2006 ,he launched Karpinski’s office in Uniontown serving the Akron and Canton area, which Karpinski describes today as a “robust office and revenue stream” for the company.

That opportunity to open the Akron-Canton office also allowed Bowers to move back to his hometown of Hartville from the Cleveland area. Previously Karpinski’s chief technical officer, Bowers said he will continue traveling regularly to its six offices as well as where he is needed. He said that, at its core, engineering is a people business.

As Bowers takes the reigns at Karpinski, he will head a company that ranks as the sixth largest in the 2024 Crain’s Cleveland Business list of largest engineering rms. e ranking is based on the number of local registered engineers with a sta of 33 engineers and more than 100 sta ers in Cleveland. All told, it has a total of 117 engineers throughout all its locations.

Karpinski was launched by two engineers in 1983, including namesake Jim Karpinski, who continues to serve on its board of directors as chairperson emeritus. The firm’s main Cleveland office has been located since 1989 in its own three-story building at 3135 Euclid Ave.

Bowers is the product of a leadership training program Karpinski put in place five years ago that it said added depth to its leadership and fostered a collaborative environment with shared cultural values.

For his part, Bowers said in an interview with Crain's that he has performed every engineering job at the company and, as he moved up the ranks, he saw his role as serving more members of his team.

“My advice to everyone here is to find something to lead,” Bowers said. And that is in addition to performing engineering work for its clients and continually seeking technical excellence.

The challenge Bowers foresees for himself and others at Karpinski is to continue to control the cost of construction in an inflationary envi-

and for the company to cope with increasing demands for speedy delivery.

Both those concerns grew out of the pandemic, which Bowers said provided some lasting changes to the way the firm does business.

“One of the great takeaways,” Bowers said, “is that people got more out of a meeting making notations on a screen if they were not in a giant conference room looking at drawings on a table.

Even after we went back to inperson meetings, some clients said they could see and hear better sitting at a computer than in a room. We never would have thought of that even though it’s such a collaborative industry. There’s more time spent on client work than spent in drivetime. But it’s not a case of preferring to meet virtually, it depends on the client and the task at hand.”

According to a Karpinski news release, Bowers will prioritize

customer service, continue staff training initiatives and leverage emerging technologies such as AI to allow staffers to focus on critical tasks and elevate client satisfaction.

Bowers declined to discuss specific revenues. However, he noted that the past three years have been the best three years in the company's history.

Consulting engineers play various roles in construction projects and are typically responsible for a specific part of a building project. The firm is currently engaged in the renovations at Progressive Field, is working on the new neurology building rising at Cleveland Clinic’s main campus and worked on the new headquarters

of the Cleveland Foundation. It also performs more than 500 assignments for municipalities each year.

Karpinski provides services in health care, education, corporate, hospitality, community and public safety markets, as well as what it calls “signature projects” such as the Cleveland Museum of Art’s vast 2013 expansion.

Aside from Cleveland and Akron, Karpinski has offices in Columbus, Cincinnati, Pittsburgh and Jamestown, New York.

In an email, outgoing CEO Jim Cicero said Bowers is suited to the job because he’s honest and trustworthy and willing to make decisions that “are the best for the company.”

The Modern Law Firm.

Building new Browns stadium in Brook Park would undermine Cleveland’s progress

This is a pivotal moment for Cleveland. The Cleveland Browns are considering a move to Brook Park, where developers envision a domed stadium and entertainment district promising $1.2 billion in economic impact and 1.5 million annual visitors.

While these numbers may sound impressive, they mask a crucial reality: The relocation would severely damage Cleveland's urban core and the entire region's economic future.

We are writing today because this issue is simply too important for the downtown business community to stand on the sidelines.

The facts paint a clear picture. Downtown Cleveland currently attracts 4.5 million visitors monthly — more than triple the annual visitors projected for the Brook Park development. Our downtown serves as the economic engine of Northeast Ohio, housing the region's largest job hub, a growing residential population, and premier cultural and entertainment assets. The Browns aren't just a football team; they're an essential thread in this urban fabric.

Downtown Cleveland's renaissance is gaining national recognition. We rank #1 in office conversions and among the top 10 cities for workforce and visitor recovery. Major investments are transforming our skyline and economic landscape: the new Sherwin-Williams headquarters, Progressive Field renovations, Bedrock's ambitious Riverfront Plan and the North Coast Master Plan. The International Downtown Association (IDA) has recognized Cleveland as an "emerging downtown" with extraordinary post-pandemic potential.

The proposed relocation threatens this momentum. According to economic experts at Econsult Solutions LLC, moving the Browns would strip at least $30 million annually from Cleveland's economy and reduce tax revenue by $11 million. This loss would affect everything from public safety to

basic city services. On game days, the ripple effect of tens of thousands of fans patronizing downtown businesses creates an economic surge that would be lost if the Browns move to Brook Park. And frankly, it’s unlikely that this level of economic activity can be replicated in a suburban location.

Suburban stadiums face inherent challenges that urban locations typically avoid. Isolated sports complexes often require extensive new parking infrastructure and can create traffic congestion in areas not designed for large crowds. More importantly, they lack the built-in advantages of downtown locations: the existing network of restaurants, bars, hotels, and public transit that creates economic activity beyond just game days.

Downtown Cleveland, by contrast, already has the transit systems, parking solutions, and hospitality venues needed to handle large crowds efficiently and sustainably.

Proponents of relocation argue that moving the stadium would "unlock" the lakefront. This misrepresents reality. The city's comprehensive lakefront plan, including the land bridge project backed by $80 million in state and federal funding, is already

advancing. Moving the Browns wouldn't unlock potential — it would disconnect the team from Cleveland's broader vision for a vibrant downtown core.

Downtown Cleveland offers unique advantages that Brook Park cannot match. Our urban core's blend of office spaces, residential developments, and cultural venues creates an ecosystem that attracts businesses, residents, and visitors. We're one of the few cities our size to host three major professional sports teams downtown — a significant advantage in attracting corporate investment and major events.

Downtown Cleveland Inc. recognizes what's at stake. Supporting a downtown stadium means investing in a stronger, more competitive city — one that attracts businesses, corporate investment and talent while generating the tax revenue needed for essential services. It means building on the momentum these investments have helped create over the past 20 years.

To continue this progress, we unveiled the Greater Downtown Vision at our annual meeting in November. This initiative will unite planned projects into one cohesive strategy, aligning private development opportunities, business attraction, public realm connectivity and public policy. The bottom line is this: The progress we've made is remarkable but fragile. Moving the Browns to Brook Park risks unraveling years of careful urban development and investment. The Browns belong downtown — not just for tradition's sake, but for the economic vitality of our entire region. We invite like-minded business leaders to be downtown champions and make your voice heard. Demonstrate your commitment to Cleveland and the region by joining Downtown Cleveland Inc., Mayor Justin Bibb, and County Executive Chris Ronayne in fighting for our future and ensuring Downtown Cleveland continues to be the region's economic powerhouse.

Burke Lakefront Airport can play a critical role in city’s revival

There has been much chatter lately about closing Burke Lakefront Airport. But it makes no sense to destroy a functioning economic asset that, if leveraged properly, could be used to grow the city’s economy and population.

The Bibb administration, unfortunately, does not do this. To remove an irreplaceable asset for “lakefront development” when the land north of Huntington Bank Stadium remains vacant, and countless plans and attempts to develop it have failed, is mindboggling.

Zannoni is board president of The Center for Cleveland.

Moreover, if the stadium where the Browns now play is dismantled after their

lease expires, there will be even more space to develop. A convenient downtown airport of Burke’s caliber makes the city stand apart among competitor markets and can be used to truly grow and transform Cleveland.

Cleveland is at a turning point. The last 60 years need not be the same trend line for the next 60.

From 1900 to 1940, the city’s population grew by more than 130%. Burke opened in 1947, and the city reached its population peak in 1950. In more recent decades, we have seen the city’s decline — major population and economic losses in the city, and loss of global prestige.

The population of Greater Cleveland, defined as Cuyahoga and the six outer counties, has decreased by 8% since its 1970 peak, while the U.S. as a whole has grown 62% in that time. The city’s last census count in 2020 was lower than that of the 1900 census.

But the recent past should not be used to guide the future.

The Cleveland of the coming years is in a far different America than the one of recent decades. Climate change is creating profound weather systems, with storms more frequent and more devastating than before particularly affecting the eastern seaboard. If this trend continues, as expected, insurance companies will raise rates so high that living in many coastal areas will be unaf-

fordable. COVID, technology innovations and new post-pandemic worker demands have given rise to work-from-home, where it is possible to be in Cleveland yet work for firms based elsewhere.

The combination of Cleveland’s lower cost of living while also having world-class, big-city amenities makes it an ideal place to move to from more expensive cities and climate-impacted places. As these trends intensify, Cleveland can be a direct beneficiary of such migrations. In other words, Cleveland — if the city plays its cards right — can thrive once again. As Cleveland Hopkins International Airport becomes more congested than ever, a secondary airport is critical to this emerging era of renewal. Burke is not well understood, which may

Mark

Michael Deemer is president and CEO of Downtown Cleveland Inc.

Karen Fanger is the chair of Downtown Cleveland Inc. and president and COO of K&D Group.

A rendering of the inside of the Browns’ proposed dome in Brook Park CLEVELAND BROWNS

explain some of the current anti-Burke sentiment.

No other nearby airport has the capacity and capabilities of Burke. Its main runway, at 6,604 feet, is longer than either runway at Chicago Midway and is only 388 feet shorter than New York LaGuardia’s two runways.

Burke can, and does, handle large planes such as the Boeing 757. It also has customs landing rights and international arrivals capabilities, and it’s the hub of Cleveland Clinic’s fleet of jets, which is crucial given that health care is a leading economic sector for the city. Travel time to the Clinic from Hopkins or Cuyahoga County Airport is 62% and 80% longer, respectively, than from Burke.

Cuyahoga County Airport is not a replacement for Burke, as cited by some, though it could be on the capacity front if the communities around it agree to major expansion, 24-hour operations, more leaded fuel impacts on nearby children, and increased traffic and noise. But given its location near the Lake County line, it would never provide the economic benefits of Burke with its location downtown, the region’s largest employment and activity hub.

Burke can be an economic driver for a city that sorely needs jobs and must compete with booming cities across the country. But by minimizing infrastructure improvements and creating a hostile environment for private-sector investment, the city is not acting in the best long-term interests of the residents and businesses of Cleveland.

The argument that the airport prevents lakefront development is false. The western runway protection zone at Burke certainly does not preclude development at the scale that would be, and has been, planned for the area around the stadium. The stadium, and Municipal Stadium before it, is evidence that development with height can occur.

In addition to providing better air service making Cleveland a stronger city for global business, Burke can inspire “airportcentric” ideas. For example, a French company just selected Daytona Beach Airport for a factory site to build its new hybrid-electric regional airplanes. Something similar could be pursued for Burke.

How about being a test airport for new, non-leaded aviation fuel for general aviation?

How about a new seaplane service to Put-in-Bay and Canada?

LaGuardia had its famous Marine Terminal for PanAm’s Clippers, in addition to the regular terminals for planes using runways. Now, right in Midtown, NYC’s seaplane terminal is on the East River at E. 23 St. The possibilities for Burke are endless.

Additionally, the important type of traffic at Burke is increasing, not decreasing.

The traffic segment that matters most to growing the city’s economy is itinerant flight activity, mostly by air carriers and what the Federal Aviation Administration calls “air taxis,” which are planes for hire carrying 60 or fewer passengers. Comparing January-to-October 2024 to the like period in 2019 (the last full similar period before COVID), flights are up 16%. And business traffic from Januaryto-October 2023 to the like period in 2024 is up 10% in only one year. It’s clearly not the time to close an airport while business traffic is trending up strongly, feeding and growing the economy of the city.

And while Burke adds significant benefit to the city, it operates at no cost to taxpayers, as the city’s two airports comprise an enterprise fund and function as an “airport system.” Any operating deficits are covered by revenues at Hopkins, given the benefits of Burke to passengers at Hopkins. Burke enables the separation of traffic, giving smaller, general aviation aircraft an alternative to Hopkins. That need, thoughtfully envisioned by the planners of Burke, is still true today. Moreover, Burke supports on-time performance for scheduled airliners by minimizing Hopkins congestion and making for safer skies over Cleveland.

Another example of Burke’s potential can be seen by looking at Southwest Airlines. When Southwest was seeking to enter the Cleveland market in the early 1990s, the airline initially selected Burke over Hopkins, as Burke fit Southwest’s market strategy of serving less-congested airports in major U.S. markets. However, at around the same time, two market changes occurred. Midway Airlines dissolved in bankruptcy, and USAir acquired Piedmont. As a result, four contiguous gates suddenly opened at Hopkins, an unusual event, and Southwest ultimately went there.

People often cite Chicago’s now-closed Meigs field and its short, 3,900-foot runway as a parallel airport for Burke. However, the real secondary airport in Chicago is Midway (whose runways also are shorter than Burke’s), which is, of course, still open. The only similarity between Burke and Meigs is that they were both airports and both on the water. By that logic, Burke also is like New York JFK, as they are both airports and on the water. Hence, Meigs-Burke is a false parallel.

Since Burke opened, air travel has expanded profoundly and continues to grow. Population and employment in Cleveland can return to growth as well. It’s in our power if we make the right decisions with proper leadership. External events and trends

such as severe weather, rising living and business costs in other cities, and the need for Great Lakes water are in our favor, but we must recognize these and seize the current opportunity, not close a critical economic asset that could facilitate our growth.

Closing Burke for any reason including for a football stadium would demonstrate a clear lack of vision on

global trends and would undermine Cleveland’s future and potential. (Land for a new stadium could be found elsewhere in the city.)

Accordingly, we should be investing in Burke and therefore Cleveland’s future. The odds are in our favor as they were 100 years ago. In 1920, we were the fifthlargest city in America. We’re now 54th. Let’s not squander this new

opportunity with short-sightedness, defeatism and a deep lack of understanding of the value, capabilities and role of Burke. Let’s return to growth and prosperity.

The Center for Cleveland is a nonprofit focused on economic and population growth of the city of Cleveland and the region. Zannoni is not a pilot and has no financial interests at Burke

Pictured from Left to Right: Keith Morris (TRG), Richard Hamlin (TRG), Marc Merklin (Roetzel), Thomas Dugan (TRG), Tim Rosengarten (President & CEO of East End Welding), and John Klehm (Spectrum).

Burke Lakefront Airport sits on about 445 acres of waterfront property north of downtown Cleveland. | COnTrIBuTED

Wilson's Ada facility gives a big boost — and

a

bounce — to the NBA

By Dan Shingler

Modern baseballs tend to go into play when they are bright white and brand-new. But a basketball goes through a lot before it hits the oor in an NBA game.

e rst thing it goes through is Ada, a small town about 100 miles southwest of Cleveland, where Wilson Sporting Goods tests each and every NBA ball at its national testing facility.

“We test all of the NBA game balls that we send to the teams there,” said Wilson Global Product & Innovation Executive Kevin Krysiak.

At the facility, where Wilson employs about 120 people, the balls are measured and tested for their ability to hold precise amounts of air and to ensure they bounce exactly the way and as much as NBA players expect.

en they are bounced, at least a thousand times by a machine that dribbles them on a piece of wood like an NBA court.

Balls that get to the dribbling machine have already gone through their initial testing, though they’ll be checked out again before being shipped.

can give an indication a ball is good to go.

“The only real way to break in a ball is to dribble it and sweat on it.”

Kevin Krysiak, Wilson global product and innovation executive

But that extra dribbling is equally important and done for another reason: It begins the break-in process that will be continued by the players themselves.

Only once a ball is su ciently broken in, will it be used in an actual game. When it’s ready is something the players themselves decide, but there are some telltale signs that a ball is broken in and the sweaty hands of the players

on a ball then the players want. It can be a ne balance between worn-in enough and worn too much.

“Some teams take their allotment and order several more because they just have players that beat them up,” Krysiak said.

If a ball is damaged or deemed unplayable, Wilson investigates to see if there was any issue with the ball itself or the material it was made from.

Every NBA ball has a special number on it so Wilson knows exactly when and where that ball was made, where its leather came from and how it fared in testing.

Being made of leather, every ball is slightly di erent. After all, 'no two cows are alike,' ” notes Krysiak.  ere’s also another (happier) reason a ball might get retired early: being a milestone ball for a player.

“You know the leather is good when you can see a handprint on it,” Krysiak said. “ ey know if it’s that bright orange like it looks coming out of the box, it’s not ready yet.”

e home

team picks three balls to use per game, but the visiting team gets veto power, though it’s not often a ball is turned down. Fans who watch closely before tipo might see this process, as the teams meet at center court with a referee, check out the balls to be used and, assuming no one objects, agree to use the designated balls.

To get a ball to that stage, it takes thousands of bounces, shots and

passes. Not usually by stars like Donovan Mitchell or LeBron James, though. ey tend to play and even practice with worn-in, game-ready balls.  Rookies usually practice with newer balls before the star players use them regularly, Krysiak said.

“ e only real way to break in a ball is to dribble it and sweat on it,” he said. “So, the best way to break in a ball is to play basketball with it.”

Each team orders its balls before the beginning of the season for regular play. ey get additional balls with special logos for things like the Emirates In-Season Cup and other events that the league has.

Teams also get balls for the Finals that need to be tested, pre-dribbled and played with before they’re used in a game.

“ e balls for the Finals in June are already out to the teams so they can break them in, too,” said Kevin Murphy, Wilson’s vice president and general manager for team sports.

ose Finals balls can be heartbreakers, though, because only the two teams that advance to the nals get to keep them.

“As teams are eliminated, they send balls back,” Murphy said. Finals balls also don’t have team names on them like regularseason balls.

If a ball ever gives a player or team problems, it gets sent back to Wilson. at’s rare, Krysiak said, but some teams use shooting machines that kick them back to players as they shoot in practice, which is often rougher on a ball than normal play. And, occasionally, rough play might put more wear and tear

“If a player eclipses a scoring record, that ball gets taken out of circulation and is signed,” Krysiak said. ose balls often end up in team trophy cases or occasionally are given away to a lucky seasonticket holder.

Finally, at the end of the season, the balls are semiretired. ey still get used, just not as part of o cial team practices or games. “ e equipment managers will give a player up to six balls to play with when they go into the o -season,” Krysiak said.

As for the NBA balls that aren’t used in the league, those are sold to the public. If you buy a ball at your local sporting goods store with the Wilson and NBA logos on it, it’s made the same way and from the same types of leather — di erent cows, of course — that the players use themselves.

Just plan on doing a lot of dribbling before it gets to be like the balls you see on TV or at a live game.

Cleveland Cavaliers star Donovan Mitchell drives to the basket in a Dec. 8 game against the Miami Heat. GETTY IMAGES

Development of $90M Shoreway Tower was as notable as design

By Stan Bullard

When the proposed 13-story Shoreway Tower opens in early 2027 on Cleveland’s West Side, it will cause a lot of chatter because of its resort-style amenities, from a lap pool to multiple roof decks overlooking Lake Erie and Edgewater Beach.

However, the Dec. 16 closing of the financing package for the $90 million project is worthy of note — and not just for getting done in the wake of higher interest rates the past two years.

Aside from the sheer size of the $54 million construction loan, the financing is significant for the relative simplicity compared to many-layered capital stacks required to get marketrate urban projects aloft in Northeast Ohio just five years ago.

In an interview with Crain's, J Roc of Cleveland principal Nick Catanzarite and development manager Adam Comer discussed how their team put it together when higher interest rates and construction costs — and a tough lending environment — have sidelined many projects.

make the point that if you combine the Cleveland and Akron (metropolitan statistical areas), we are one of the top 25 MSAs in the U.S.,” DePompei said.

“We had to show them the demand drivers, that professional people are moving to Cleveland. That we have three major sports teams, which not everyone has. And Playhouse Square, the largest performing center outside of New York City, so we have a strong entertainment scene. Construction of the new headquarters of Sherwin-Williams Co. downtown also didn’t hurt. It all painted a pretty good picture.”

Neither Catanzarite nor DePompei, however, would disclose the interest rate the project secured.

While the tall building’s capital stack is shot, it still required some other incentives to make the project a go, including a grandfathered former property tax abatement and going through the Cleveland Cuyahoga County Port Authority for the borrowing, which spares the project sales tax on materials. It also got a $2 million state brownfield cleanup grant.

“I think this is evidence the multifamily market has matured in Cleveland.”

Steve Strnisha, founding head of Cleveland Development Advisors

“Financing this was not easy, to be honest,” Catanzarite said. “It took longer than anyone wanted. It was a milestone for us because we went into the project with the idea of not having to receive gap financing.”

A key part was attracting Arbor Realty Trust (NYSE: ABR) of New York City, a non-bank lender, to provide the $54 million loan. Several local lenders might do a $20-million loan under the right conditions, though not currently; the sheer size of the borrowing meant the developers had to find a big player.

The developers not only had to sell the lender on their record and the feasibility of the 161-suite luxury apartment project, but on Cleveland itself.

“A lender like Arbor does not do a lot of deals in Cleveland and had only done one suburban deal here,” Catanzarite said. “When they came in, we had to show them what Cleveland is all about.”

Art DePompei, managing director of Terra Real Estate Capital, a Cleveland investment banking concern, worked with J Roc on securing the loan as he had a relationship with Arbor.

“Usually, they are dealing with New York City or Boston,” DePompei said. “We had to

the low end) here. That has changed. Rents have moved up. But it’s also problematic: That’s why we have a housing crisis.”

The dollars behind the building project also allow J Roc to continue building on its history of projects that have a commitment to design excellence, what it calls high-quality, authentic spaces that resonate with residents and enhance urban communities.

The other factor was that the J Roc team raised $30 million in equity for the project, primarily from backers of past projects.

The upshot of all that was that there was no need for a mezzanine, or additional, lender besides the construction loan, or providing preferred equity positions to some investors. The final financing figure of $90 million also includes soft costs such as architectural design the developers handled themselves.

All the recent apartment buildings, from Lumen and The Beacon downtown to Intro and Church Square in Ohio City, also helped make the case for building another luxury project here.

The shift in project financing over the years is clear to Steve Strnisha, a former City of Cleveland finance director and founding head of the corporate and foundation-backed Cleveland Development Advisors, which aids catalytic economic development projects with patient capital. He is now CEO of the Cleveland International Fund.

“I think this is evidence the multifamily market has matured in Cleveland,” Strnisha said in a phone interview. “It’s clearly a stronger multifamily market in terms of development because the appeal of city and downtown housing has been proven. For many years, apartment rents were stuck (on

Shoreway Tower is also picking up where J Roc began a decade ago. The site is next to its The

Shoreway, a historic preservation project that repurposed a former warehouse and factory as apartments on West 76th Street next to the Battery Park neighborhood.

The design is by Evident Architecture Office of Portland, Oregon, which has a Cleveland office.

The builder is John G. Johnson Co. of Cleveland.

While the building will have 11-foot-tall windows, a modern design and a prominent site, Catanzarite said Shoreway Tower goes beyond that.

“This project is about more than building a tower — it’s about reimagining what lakefront living can be in Cleveland," he said.

“We’ve looked toward worldclass waterfront cities for inspiration to create a product that this region hasn’t yet seen. With resort-quality amenities and an authentic design approach, Shoreway Tower will deliver the type of high-quality urban living that the market is seeking. This is a bold step forward for Cleveland’s waterfront.”

A rendering shows the apartment tower that will be added to J Roc’s first apartment project, The Shoreway (left).

2025 will be the year of Bibb, the Browns and Bedrock

By Kim Palmer

The subjects of some of the biggest headlines in 2024 are poised to make more news in 2025.

Cleveland Mayor Justin Bibb has said he will run for a second mayoral term — with or without a challenger.

If the timeline proposed by the owners of the Cleveland Browns stays on schedule, the questions around the team’s move to Brook Park will be answered.

And Clevelanders will see the beginnings of what the massive Bedrock project will look like — and know more about how the scheme to pay for it will work out.

Here’s what we’re expecting — along with plenty of twists and turns — in the new year.

Bibb’s

re-election run

The new year will bring with it an active election cycle for city leaders.

There will be a special election in May in which voters statewide will be asked to weigh in on a measure to issue $2.5 billion in public works bonds to be paid for by state tax revenue over the next decade.

But the real beginning of Cleveland’s election season will come before the June 11 candidate filing deadline for a Sept. 9 primary election — when the city’s mayoral and newly mapped 15 city council seats will be up for grabs.

Bibb announced he would run again for his seat and to date no one else has publicly emerged as a challenger. That doesn’t necessarily mean it will be smooth sailing for the first-time mayor.

ment over public services as a problem.

In 2025, Bibb will have to contend with a possible opponent, a much less friendly administration in D.C. and sports. How more conflict over the Cleveland Browns stadium move and another hefty Gateway bill will affect voters is yet to be seen.

Recently, an anonymous Bibb detractor set up an “Anyone but Bibb” website claiming the mayor’s term is an example of “failed leadership,” and “advocates for change in Cleveland’s leadership and, unsurprisingly, strongly opposes the re-election of Justin M. Bibb in 2025.”

The site, hosted on Square Space, has one other social media account and a whistleblower form “to empower employees of the City of Cleveland and other concerned individuals to report instances of abuse, misconduct, corruption, hate, discrimination, bullying, money laundering, bribery, or other violations of public trust.”

In the less than four years he has been in office, Bibb has shown an impressive ability to bring in federal and state funding for campaign-promised projects, including West Side Market capital repairs, Public Square improvements and public safety enhancements.

The mayor leads a downtown that is growing, passed a critical operational and capital school levy and has the support of progressive residents. Detractors criticize the administration’s staffing and cabinet turnover and prioritizing incentives for private invest-

One possible opponent, current Cleveland City Council President Blaine Griffin, has recently said he has not made a decision about what office he would run for in 2025 and will take more time “to look in the mirror and reflect,” a source close to Griffin said.

Griffin, along with the remaining members of council, will need to file by the summer deadline for a spot in their new ward after census data required Cleveland’s 17 wards be whittled to 15.

The new ward map does not pit Griffin against another sitting council member but a grassroots group of progressive residents, formed to back a failed ballot initiative, is regrouping and could run a full slate of candidates to run against incumbents.

Browns move forward — to

Brook Park

On the subject of the Browns, 2025 promises to bring into better focus where the team will be playing in 2029 — and where all the funds for the new development will come from.

The announcement this fall that Browns owners Dee and Jimmy Haslam of the Haslam Sports Group (HSG) were looking to the city of Brook Park to build a new stadium for the team is forcing some of the region’s most steadfast allies to either take a side or stay silent.

The Haslams see their plan as a way to grow the regional economy. They would be following in the footsteps of around 40 other pro team owners across the country who have augmented team and game day profits with stadiumadjacent developments.

Civic leaders, like Bibb and Cuyahoga County executive Chris Ronayne, see the move to build a $2.4 billion domed stadium 20 minutes outside the city as a siphon set to draw $30 million in direct and indirect economic activity away from downtown.

A secondary volley in the stadium war came as the city offered up hundreds of acres of free and developable land at Burke Lakefront Airport.

HSG countered with a $3.3 billion estimate for the cost of a Burke stadium and a study that proposed the Brook Park plan will bring in more than 11 million in additional visits to the region along with an additional billion dollars in new economic activity.

What is best for the city and the region is at the heart of the ongoing debate — as is a plan by the team for the state and county to fund $1.2 billion in costs for the new stadium build.

The Haslams have put forth a capital stack that included the issuance of $600 million from the

But with organizations normally supportive of Bibb and Ronayne — Destination Cleveland, the Greater Cleveland Partnership — not publicly pushing back against a Browns move and a statehouse keen on backing more professional sports in the state, Brook Park is in play.

The Haslams could commit most of the upfront cost of the stadium and recoup it later through a tax revenue agreement with Brook Park or find investment partners willing to invest in the build-out of the stadium with the idea that it is a necessary anchor for the $800 million adjacent mixed-use development.

Whatever happens on the field, the end of the Browns’ lease at their current lakefront home looms, making 2025 a decisive year for the Browns off the field.

Bedrock’s waterfront plan takes shape

As the owners of one Cleveland team look outward, Cleveland Cavaliers owner Dan Gilbert is putting shovels in the ground downtown.

Bedrock, Gilbert’s real estate development firm, put the first shovels in the ground shortly after the City Council approved the creation of a tax-increment financing (TIF) district.

The 30-year plan to use a portion of tax revenue increases to finance massive infrastructure work — the majority of which will be used as public green space — is a bet on the continued growth of Cleveland’s downtown.

Whether the TIF will yield the estimated $3.5 billion to $7 billion in revenue to help fund the multi-phase development — which includes 12 acres of outdoor public land, 2,000 residential units and 1.4 million square feet of commercial space — has been questioned by critics.

state and $600 million from the county. Ohio has no set program that grants or issues bonds for sports facilities. The state’s private nonprofit economic development organization, JobsOhio has granted millions but those funds may be needed for road and other infrastructure projects.

However, as one of the last acts of 2024, state lawmakers passed a measure to expand a sales tax exemption for building and construction materials used in the original construction of a professional sports facility to apply to subsequent construction — a win for the Brook Park plan.

Getting money from the county, headed by Ronayne, a former Cleveland planning director, is perhaps the bigger lift.

The suggestion from the team that $300 million in cash and $300 million in bonds issued by the county be used for the new stadium has Ronayne, Bibb and Downtown Cleveland holding out hope that a “no” means the Browns stay put.

In 2025, look for the first financing bonds based on that TIF district promise (bonds) to begin to take shape.

How City Hall looks to leverage future revenue to bring in matching federal funds for infrastructure redevelopment — abundant under President Joe Biden’s administration but very likely to be a casualty of spending cuts under the Trump administration — is another unanswered question.

Whatever changes the riverfront plan undergoes in the 15-20 years it will take to develop, $50 million in bonds have been issued for the Cleveland Clinic Global Peak Performance Center set to be completed in 2028.

The project also received state brownfield dollars and one-time strategic funds in 2024. Bedrock’s riverfront development plan is also mirrored by the Metroparks’ IrishTown Bend on the other riverbank which includes a 23-acre public park also set to begin initial infrastructure work in 2025.

The city’s lakefront will still be at the center of the buzz around Cleveland in 2025. | DAN SHINGLER

A rendering shows the Cleveland Browns’ proposed dome in Brook Park. CLEVELAND BROWNS

A rendering shows the Cleveland Clinic Global Peak Performance Center. | CLEVELAND CAVALIERS

Bibb

For 2025, Matt Kaulig eyes NASCAR Cup playoffs and hopes Tiger plays Firestone

By Joe Scalzo

Kaulig Racing owner Matt Kaulig doesn’t consider this NASCAR season a frustrating one.

But he understands why it might have seemed frustrating.

“We took (driver) A.J. Allmendinger from the Cup Series down to the Xfinity Series with the anticipation, and the expectation, of him going and winning a bunch of races and dominating those kids, so to speak,” said Kaulig, the founder of LeafFilter and the executive chairman of Hudson-based Kaulig Cos.

Allmendinger did finish third in the Xfinity driver standings, and Kaulig Racing piled up four wins in the series, but the team took a step back at the Cup level, with the No. 16 car finishing 28th (down from 21st last year) and the No. 31 car placing 30th (down from 25th last year).

“It was just one of those seasons that sports teams have that just everything wasn't aligning; we were just struggling a little bit,” he said. “But we actually got a bunch of trophies and we were in the (Xfinity) championship race, so we don’t look at the season as a failure. It’s extremely, extremely positive.”

Kaulig founded Kaulig Racing in 2016, entering NASCAR first as an Xfinity Series team and eventually adding two Cup Series charters.

Over the years, the team has made no secret of its lofty ambitions — its motto is “Trophy Hunting” — and that won’t change in 2025, when Allmendinger returns to the Cup level and Ty Dillon moves into the No. 10 car for the team.

“There’s a different feeling going into next year with A.J. coming up,” he said. “A.J. is in the top half of the field as far as driver talent. Our anticipation and expectations are to get into the (Cup) playoffs, either by winning a race or with A.J. being in the top 16 in points.

“I think the talent level of the team, and the talent level of A.J., are good enough to have that as a realistic goal in the highest level of NASCAR.”

Kaulig also expects to continue to grow the business side of the racing team, which is why Kaulig Racing hired Ty Norris as its new chief business officer after his surprising departure from Trackhouse Racing.

“He is one of the sharper, smarter guys in the industry,” Kaulig said of Norris. “He’s in charge of all of our business development, meaning sponsorships and just helping (presi -

dent) Chris Rice out in a number of different areas as we get bigger and keep growing as a team. He’s a really great addition for Kaulig Racing.”

Although NASCAR’s popularity isn’t quite what it was in 2005, the sport is on solid footing, with TV viewership up about 1% over last year. In 2025, NASCAR will enter the first year of a sevenyear, $7.7 billion media rights deal with FOX Sports, NBC Sports, Amazon Prime Video and TNT Sports.

Things aren’t perfect — 23XI Racing, owned by Michael Jordan, and Front Row Motorsports filed a suit against NASCAR on Oct. 2, accusing it of violating U.S. antitrust law by imposing restrictive conditions on teams — but Kaulig said the owners “are very happy with the state of where we are.”

“I think NASCAR is in a really, really strong position,” he said. “But NASCAR is not a situation where you’re trying to make as much money as you can. The LeafFilter business that I own, you’re trying to be as profitable as you can. NASCAR is not like that.”

Kaulig is also a part owner in the Cleveland Guardians, coming aboard as a local investor in the David Blitzer-led group that bought a minority stake in the team in 2022. And Kaulig Cos. has served as the title sponsor of the PGA Tour Champions event at Firestone Country Club since 2023.

This year’s golf tournament, along with the Ambassador of Golf event, raised a record $1.3 million for Northeast Ohio charities.

Kaulig Cos.’ sponsorship deal expires in 2026, but Kaulig said he hopes the company can continue to be part of the tournament “for years to come.”

“That tournament might’ve gone away if we didn’t step in a couple years ago,” Kaulig said. “Bridgestone stepped away (as the title sponsor) and they didn’t have anybody to really run it, so that was a situation where maybe Akron would have lost it. It’s really important for the community.”

Still, that 2026 deadline is key since it's the first year Tiger Woods would be eligible for the event. Woods has eight victories at Firestone — tied for his most at any course — and if he were to play the Kaulig Companies Championship, Kaulig said, “that definitely changes the whole game, right?”

“That’s a whole different situation for the Champions Tour,” he said. “We would love that. That’s really good for the community.”

Advice for the life you lead

I moved to UBS following 14 years as a financial advisor at JPMorgan Private Bank and Key Family Wealth, where I focused on multi-generational families, institutions, and entrepreneurs. I deeply appreciate that understanding each client’s unique circumstances and personality, and advising according to their own unique goals, is paramount to their long-term success. Whether you are just beginning your investment career or a seasoned member of the board, together we can pursue that success at a global firm truly dedicated to wealth management.

Daniel Moore Senior Vice President–Wealth Management 216-292-1217 daniel.moore@ubs.com UBS Financial Services Inc. 30050 Chagrin Boulevard, Suite 200 Pepper Pike, OH 44124 216-910-1001 800-828-3538

ubs.com/fs

Matt Kaulig sits next to the trophy for the 2024 Pacific Office Automation 147, an Xfinity Series race in Portland on June 1. Kaulig Racing driver Shane van Gisbergen won the race for his first victory in the series. | COnTrIBuTED

UH doc’s kidney stone treatment clears hurdle with FDA’s approval

By Paige Bennett

Promising technology developed by a University Hospitals doctor that looks to decrease discomfort in kidney stone patients achieved a major milestone in the path toward mass commercialization with its latest FDA clearance.

The RELIEF ureteral stent, the brainchild of Dr. Lee Ponsky, chairman of UH’s Urology Institute, has been cleared by the U.S. Food and Drug Administration for preventing vesicoureteral reflux, a major source of patient discomfort.

The achievement makes the RELIEF stent the first and only of its kind to prevent vesicoureteral reflux, a condition in which urine flows backward from the bladder, Ponsky said.

He described it as a “real major differentiator" in the market.

“If you look at all the stents since the initial development of the initial stent, they look exactly the same, and there’s really been no differentiation,” he said. “This is the first time that there’s been a stent that actually has a label claim that it is non-refluxing.”

Ponsky’s technology received 510(k) clearance from the FDA in 2022 to begin marketing the product for patients battling kidney stones or other problems that cause difficulties with the drainage of the kidney.

A ureteral stent is a thin tube inserted in the ureter to enable urine to pass from the kidney to the bladder when it is blocked by a kidney stone or other obstruction. Many patients, however, experience complications, such as pain, discomfort and bladder spasms. It’s a problem Ponsky, a urologist, is all too familiar with, not only through his interactions with patients but also personal experience.

“I’ve also had stents,” he said. “And I’ve recognized that, wow, the patient complaints that we get that there’s pain with these stents is very real. We’re excited to be able to develop an idea and a con-

cept and a product that actually addresses it and works.”

Unlike existing Double J stent designs, which have a coil that sits on the floor of the bladder, the RELIEF stent’s coil floats in the bladder, which eliminates bladder irritation, Ponsky said. And a clinical study showed that stents do not cause reflux, which causes discomfort in patients with stents.

“When patients have that pain, they’re often going to the emergency room, calling the doctor’s office,” Ponsky said. “(They) have to often have some additional procedures or get admitted to the hospital to address the discomfort.”

The Ureteral Stent Company, the company developing the product, launched in 2015 as a subsidiary of Walden Medical Companies. Early investments came from UH Ventures, the health system’s commercialization arm, and ProMedica Innovations. UH Ventures also helped Ponsky net funding from Ohio Third Frontier’s Technology Validation and Start Fund in the early stages.

Presently, the company has one full-time employee, a medical advisory board and consultants in manufacturing, product development and other areas. Ponsky said the company has been extremely capital efficient and is in the midst of a limited market release at 10 sites across the country to gather feedback from opinion leaders. Early response has been “unbelievable,” he said, and the company is in discussions with other companies to determine the best course for further commercialization.

“We’re open to all options,” Ponsky said of the company’s plans for commercialization, including acquisitions, partnerships, licensing deals or bringing the product to the market themselves.

He said the company hopes to make a determination about its plans in the next six to nine months.

Ursuline, Gannon boards approve ‘definitive agreement’ to join forces

By Joe Scalzo

Ursuline College and Gannon University are set to join forces — definitively.

The boards of trustees for both schools approved a definitive agreement to join their institutions by Dec. 15, 2026, subject to all required approvals, the schools announced on Thursday, Jan. 2.

Gannon’s board approved the agreement on Dec. 17, while Ursuline’s board approved it on Dec. 19.

The strategic partnership, which was first announced in September, will create the largest Catholic system of higher education along Lake Erie. Gannon is located in Erie, Pennsylvania.

Once the definitive agreement is approved by accreditors in June 2025, the change of control will take effect, followed by an 18month transition period for completing the remaining regulatory and accreditor approvals, the schools said.

At the end of that transition period, the institutions will be combined under Gannon University. Ursuline will be renamed the Ursuline College Campus of Gannon University "with distinct programs, athletics and facilities," the school said. The agreement will not affect Ursuline students’ tuition, financial aid or scholarships.

Gannon already has a campus in Ruskin, Florida. By adding Ursuline, the institution ultimately expects to have 6,000 students and

1,300 employees across the three campuses.

“This is truly a day to celebrate as we move forward in our partnership with Gannon University,” Ursuline president David King said in a news release. “Because of our strengths, we had choices. We chose this pathway because it preserves our mission and will offer new and expanded opportunities for our students. There is a deep reservoir of alignment between our two institutions that is remarkable.”

Thirteen integration teams from the schools, covering everything from academics to technology, are working on integration plans. That process is expected to continue throughout 2025.

The schools recently received a $100,000 grant from the Transformational Partnerships Fund to help cover the costs of creating the partnership.

“As the landscape of higher education experiences turbulent times, particularly with smaller Catholic institutions, our vision is focused on a successful collaboration that will offer a model of academic excellence and mutual respect of our individual identities, all while creating a new shared culture and combined strength,” said King, who became Ursuline’s 18th president on July 1, 2024. The former Malone University president is the first layperson and first male to preside over the historically women’s co-ed Catholic college.

Ursuline College is a sponsored ministry of the Ursuline Sisters of

Cleveland. The Sisters’ leadership board also approved the definitive agreement on Jan. 2.

“The Ursuline Sisters are delighted that Ursuline College and Gannon University have taken the next step in creating a partnership that enhances the excellence of both institutions of higher learning,” said Sister Laura Bregar, president of the Ursuline Sisters of Cleveland. “Participating in this endeavor extends the legacy of the Ursuline Sisters and the gospel mission of incarnating the Word of God through education and the promise of a bright future.”

Ursuline and Gannon will continue to operate as separate entities between now and July, Gannon president Walter Iwanenko said. “But we will certainly be getting to know each other in deeper ways and learning best practices from each other,” he said. “We believe it is important to retain the school’s identity even as we move — collectively — in a new direction. Ursuline’s legacy will continue, just as Gannon’s legacy will continue. The goal is to preserve and strengthen our institutions to build a better future for both.”

Ursuline’s fall enrollment was 970 students, 70% of which were undergraduates. Ursuline has enrolled male students since 1969 but its student body this fall was 91% female.

In October, Ursuline announced plans to add three men’s athletic teams beginning with the 2025-26 school year: cross-country and indoor and outdoor track and field.

Cleveland Hopkins passenger numbers declined in November

By Kim Palmer

Cleveland Hopkins International Airport (CLE) will not reach the 10,250,000 passenger total that airport officials predicted in early 2024.

According to statistics released at the end of December, the airport saw a total of 764,763 passengers in November 2024, an 8.4% decrease compared with November 2023.

According to the airport's director, Bryant Francis, the dip is due to airline capacity reductions which meant that there were 11% (121,062) fewer seats available compared to November 2023.

“Select airlines have reduced ca-

pacity at CLE which makes it extremely difficult to maintain passenger levels year over year. We are engaging with airline partners to reverse this recent trend in the New Year,” Francis said.

Delta Airlines added nearly 8,700 seats (a 6% increase) and Frontier Airlines added 22,500 seats (an 11% increase), both compared to November 2023. But those numbers "were not enough to overcome the losses experienced by other airlines in November,” according to the CLE statement.

Spirit Airlines was responsible for much of CLE’s capacity loss, with an 88% (93,894 seats) year-

over-year decline in November.

Larger carriers also decreased CLE capacity by nearly 10%. United Airlines decreased seats by 9.7% (or 25,394 seats), while American Airlines saw a 9.9% decline (19,141 seats).

Route suspensions, including an Air Canada nonstop route to Toronto which started in October 2024, also will affect the year-end totals. That flight and an additional Aer Lingus direct flight to Dublin will start in spring 2025.

Through November, the 2024 passenger total for Hopkins was at 9,367,757, with the final total, according to a statement from CLE,

expected “to exceed the 10,040,817 passengers it welcomed in 2019.”

Airport officials, including Francis, made the 10,250,000 million passenger forecast after the first two months of 2024 were busier than January and February of 2019.

Even with capacity cuts, airline efficiency — known as the load factor — has continued to increase year over year. In October and November 2024, the percentage of available seating capacity filled with passengers was at 86%, an increase of 9 percentage points over the same two-month span in 2023.

Hopkins is in the beginning stages of a multibillion-dollar Terminal

Modernization Development Program (TMDP) and was recently awarded $8 million in grant funding from a $5 billion federal program. The TMDP won critical approval for about $175 million revenuebased lease agreements with airline carriers in 2024. The remainder of the work will be funded with nonaviation-related concessions and parking fees as well as federal grants. No taxpayer dollars are used to fund the airport.

In October, one of the first steps in the airport’s master plan to create more parking space for travelers began with the demolition of the shuttered Sheraton Cleveland hotel.

The campus of Ursuline College in Pepper Pike. | URSULINE COLLEGE

PRESIDENT’S LETTER

CORPORATE GROWTH & M&A

ACG Cleveland: Driving opportunity, one connection at a time

By Beth Haas

The start of a new year is always energizing! After the year-end sprint to close the deal, close the books or simply close up shop to enjoy some downtime with friends and family, it feels great to start working on a fresh set of goals. If those 2025 goals include expanding your professional network, finding new business opportunities or building genuine friendships, there is no better place to start than ACG Cleveland. Our 500 members represent a diverse array of firms throughout Northeast Ohio, and include investors, lenders, corporate leaders and many of the region’s top professional advisers in areas such as investment banking, accounting, law, insurance and wealth management.

Thanks to our vibrant board and committee members, we offer more than 25 events per year, ranging from large-scale networking events such as the Summer Social at the Shoreby Club to smaller contentfocused events and informal member meet-ups. Our mission of connecting, educating and supporting deal makers at all stages of their careers

underpins our programming.

Nothing highlights this better than two signature events being held this month. Our 28th annual Deal Makers Award event honors regional firms and individuals for notable transactions or inspiring professional legacies. These awards represent the culmination of years of work and the support of many of our exceptional Cleveland-based professional service providers. At the other end of the spectrum, January is also when we hold the annual ACG Cup. This case competition enables Ohio-based college students to explore the world of investment banking and private equity with the support of ACG mentors before making their best “pitch” to a panel of local deal experts. In recent years, an attendant career fair has led to successful placements for internships at several of our member firms.

For those in between seeking their first job and reflecting on the

highlights of a long career, we offer numerous ways to build valuable connections in highly accessible ways. For instance, the Women in Transactions (WiT) network’s summer golf series welcomes female golfers of all abilities to hone their skills and comfort level on the course. Other specialized networks focus on the Akron region, young professionals and corporate development professionals, offering engaging content to appeal to specific members of our community.

My ACG membership has been a key factor in my own professional development, and it has been a joy to lead the chapter this year. Join us for an event in 2025, and you’ll be reminded of just how many talented deal makers we have here in Northeast Ohio. I can promise you’ll have some fun as well!

Beth Haas is a partner at Cyprium Partners, a private equity firm focused on non-controlling investments in family- and founder-owned businesses. Reach her at 216-906-1347 or bhaas@ cyprium.com.

Contents

S2 Key considerations for family offices before acquisitions

S3 Crafting the optimal tech stack for private equity marketing

S4 Advice on how to compete in the competitive M&A marketplace

S5 M&A private equity and deal flow outlook for 2025

S6 “Best” deal structure to minimize taxes for private company sale

S7 Key legal issues impacting private equity transactions

S8 Avoid distress: These failures are not an option

S9 Mastering net working capital: Key factors that shape the deal

S10 A legal perspective on the art of the Letter of Intent

S11 I want to sell my business. How do I prepare, and where do I start?

S12 Top five concerns in M&A in 2025: What buyers need to know

S13 How to handle private equity interest in your business

S14 Timing the exit process

S15 Preparation is the cornerstone to a successful exit

S16 2025 M&A boom: Key sectors primed for enhanced growth

S17 Real estate valuation challenges in M&A deals

S17 What’s next — planning for business succession

S18 Key considerations in raising debt or equity capital

S18 ESOPs:The business succession solution

S19 Northeast Ohio’s top deal makers to be honored

S19 2024-25 Officers and Board of Directors

S19 2025 events calendar

HAAS

Key considerations for family of ces before acquisitions

By Kip Irle and Warren Philipp

Following the sale of a family business, where most of their wealth was tied up in a single asset, many family of ces were created to make passive investments in private equity funds and public securities. As a new generation of investment managers takes over, many now counsel a more active strategy of directly acquiring and operating individual companies, which was the original wealth driver of the family.

This signi cant growth in direct acquisition activity among family of ces frequently leads to surprises because the buyers lack a comprehensive understanding of the risks they are acquiring along with the companies and an active plan to manage and integrate those risks into the family’s overall pro le.

Risks impact results

While assets typically receive the greatest attention during due diligence for an acquisition, family of ces need to examine just as closely the most pressing risks that may impact the business in the foreseeable future. How will those risks affect the family’s overall risk-bearing capacity? What will it cost to reduce those risks to a comfortable level?

Critical to any acquisition is ensuring the family of ce and its other assets are protected from risks associated with the new company. After all, when a family of ce invests with a fund manager, they may be one of dozens of passive investors, with layers of protection limiting any negative direct impacts. But when making a direct acquisition of a company they’ll operate or in uence, they’re likely to face potential exposures they may not have experienced. Strategies such as D&O insurance and executive liability coverage are key elements of a protective wall between the new company and the family’s assets.

In new territory

If a family of ce’s existence results from having sold a previous business, there may be a danger associated with unfamiliarity, especially when a serial entrepreneur leads the family. Success in one business is rarely a guarantee they’ll do as well with another, especially

if it’s in a different industry or the family had little involvement in day-to-day operations.

In addition, as new owners of a smaller company, they may nd themselves handling issues in which they lack personal experience. They may not even be familiar with the types of coverage they need or aware that having more liquid assets may make them a more attractive target for lawsuits.

Not always obvious

These issues underscore the value of working with a risk management consultant with a formal process for identifying and prioritizing the top ve to eight risks that deserve the greatest time, attention and nancing.

An excellent illustration involved a family of ce’s $300 million purchase of a noncore unit of a Fortune 500 company. An analysis revealed high-value risks that weren’t insured adequately. This arose from the differences in risk, culture and appetite inherent in the larger, more complex corporate entity. It created unhealthy nancial risk for the family of ce that would manifest as a P&L impact from single or multiple losses that the larger seller considered a cost of doing business and inconsequential. One of the key examples involved the quality of receivables being acquired, which were

subsequently credit-enhanced through the use of trade credit insurance.

Engineering the balance sheet

Another element of the process involves what we refer to as engineering the balance sheet. Developing a postclosing plan for what the buyer wants to accomplish and how the balance sheet should look once the acquisition is complete addresses postclosing integration and cost-saving opportunities.

Risk management consultants can model both entities individually and then combine the forward-looking exposure base, unit rate averages and volatility to arrive at an actuarial forecast. They can then identify options for insurance coverage or other transfer tools to limit risks. When combined with the family’s other holdings and personal assets, this provides a uni ed approach to transferring risk across the enterprise.

Decapitalizing risks

Ultimately, an analysis allows family of ces to consider their insurance spending in a different light. Can they increase their deductibles to take on more risk — and if so, how much can they safely absorb? Should they purchase insurance through a third-party provider? Or does forming a captive or using

another risk nancing method make more sense?

These are critical questions because being able to decapitalize their insurance spend allows them to redeploy that capital into strategic projects, making risk management an investment decision rather than an expense.

Expertise matters

Insurance brokers and others associated with risk management don’t always have specialized experience assessing the unique risks facing family of ces that choose to enter the acquisition marketplace. Achieving the family’s objectives depends largely on working with professionals who understand the intersection of acquisition risks and the types of coverage high-net-worth families need.

Kip Irle is senior vice president, Global Mergers & Acquisitions and Transaction Solutions leader at Hylant. Contact him at kip.irle@hylant.com. Warren Philipp is managing director of Transactional Risk at Hylant. Contact him at warren. philipp@hylant.com.

For more information, contact Hylant.com

Insuring Investments. Enhancing Returns.

What you don’t know can hurt you in small or large business transactions like mergers and acquisitions—especially when it comes to insuring risks before, during and after a transaction takes place.

That’s why Hylant offers clients the expertise of our dedicated M&A and Transaction Solutions team. Let us help you reduce the uncertainty of complex transactions, protect your investments and make the best use of your capital.

Learn more at hylant.com/mats

IRLE PHILIPP

Crafting the optimal tech stack for private equity marketing

By Brad Kostka

Having the right tech stack can be a game-changer in private equity marketing, giving firms the tools they need to raise funds, generate qualified deal flow and accelerate portfolio company growth. It allows marketers to automate repetitive tasks and streamline workflows, freeing up their time to focus on big-picture strategies and leverage data to create targeted campaigns.

These tools bring real, measurable value to private equity marketing:

CRM & marketing automation.

A CRM system is foundational to private equity marketing, serving as a hub for contact management, campaign automation and pipeline visualization.

HubSpot and Salesforce are popular for their scalable, user-friendly solutions and streamlined workflows. For private equity-specific applications, DealCloud offers tailored CRM capabilities, combining deal tracking and investor relationship insights. With these systems, firms can organize contacts, nurture leads and maintain investor relationships with data-driven strategies.

AI-generated content. AI has become integral to marketing over this past year, especially for generating content quickly and at scale. ChatGPT is an accessible and

versatile tool, aiding in the creation of reports, social media posts and thought leadership content. Claude and Perplexity offer advanced natural language capabilities, supporting marketers in producing highquality content based on industry data. By integrating AI, private equity marketers can save significant time, establish thought leadership and engage investors with targeted, high-quality information.

Email marketing. For lead nurturing and investor communications, email remains an essential channel.

MailChimp and ActiveCampaign offer user-friendly platforms with advanced segmentation and automation features, allowing marketers to send personalized messages to distinct target audiences — from investors to referral sources.

ActiveCampaign, which combines CRM functions with email marketing, also integrates well into broader marketing workflows. With these tools, firms can keep stakeholders informed, strengthen relationships and maintain visibility through consistent, targeted outreach.

Social media management

Social media platforms help private equity

marketers build thought leadership, promote portfolio companies and engage investors. Hootsuite and Sprout Social offer scheduling, engagement tracking and social listening features that simplify managing multiple channels. For firms with large social media needs, Sprinklr provides deeper audience insights and performance metrics, helping teams analyze and optimize campaigns. A strong social media presence allows firms to reach a broader audience and build brand credibility.

SEO & content marketing. To drive visibility and attract relevant traffic, private equity marketers should prioritize SEO tools. SEMrush and Ahrefs offer keyword research, backlink analysis and competitor tracking, allowing marketers to optimize content and improve search rankings. Establishing a strong approach to SEO supports a more targeted content strategy, ultimately helping firms enhance brand visibility, engage key decisionmakers and capture high-quality leads.

Project management. Project management tools are essential for coordinating complex campaigns and managing content development for private equity firms and their portfolio companies. Monday.com and Trello are intuitive platforms that allow teams to assign tasks, set deadlines and monitor progress in real time. For more advanced needs, Wrike provides additional tracking

and collaboration capabilities, enabling detailed project oversight. These tools help marketing teams stay organized and aligned, keeping campaigns on track and ensuring smooth execution.

Analytics & reporting. Analytics tools allow firms to evaluate marketing performance, measure impact and adjust strategies. Google Analytics provides indepth insights into website traffic, audience behavior and engagement trends. For those tracking customer journeys and conversions, Kissmetrics offers a granular view of user interactions across multiple touchpoints. These tools allow firms to make informed, data-driven decisions, measure ROI and refine their approach in real time.

Research & market intelligence.

Private equity marketers need up-todate market intelligence to inform decisions, track industry trends and assess competitors. PitchBook and Capital IQ are leading tools for financial data, competitor analysis and deal tracking, enabling firms to make strategic decisions. These platforms help marketers and investment teams stay competitive, position their firms as thought leaders and support portfolio management with comprehensive research capabilities.

Deal sourcing. Deal sourcing tools are crucial for firms seeking new investment opportunities. Platforms like 4Degrees

and Sourcescrub streamline the process by tracking relationships, identifying prospective investments and highlighting emerging opportunities. Deal sourcing tools allow firms to proactively search for high-potential leads and build valuable industry connections.

Building and integrating your tech stack. To maximize the value of a tech stack in practice, it’s absolutely vital to align tools with your firm’s specific needs and objectives. Start by identifying your marketing goals — whether its enhancing lead generation, improving investor engagement or boosting brand visibility — and then select tools that address those goals directly. Integration is key, so opt for platforms that work well together to avoid data silos and support streamlined workflows. Finally, ensure proper onboarding and training so your team can fully utilize each tool’s capabilities, maximizing both efficiency and ROI.

For more private equity marketing resources, visit roopco.com/pe.

Brad Kostka is president of Roopco, a strategic marketing agency with expertise in accelerating growth for private equity firms and their portfolio companies. Contact him at 216-902-3800 or bkostka@roopco.com.

GROWTH MARKETING FOR PRIVATE EQUITY

KOSTKA

Advice on how to compete in the competitive M&A marketplace

By Sydney Stroia

Prospective buyers and sellers are facing signi cant challenges in successfully negotiating deals in today’s M&A marketplace. The best way to minimize those challenges is by having a well-rounded and skilled deal team on both the buy-side and the sell-side. A successful deal team should consist of M&A attorneys, investment bankers, tax advisers and quality of earnings providers, along with other professionals as needed, depending on the transaction’s size and intricacy.

Establishing a sophisticated team is invaluable in managing the risks and complexities inherent to a transaction, and also gives each party an edge in the negotiation, speed, compliance and execution of these deals.

Engaging these professionals early in the deal process is key. Signi cant

consideration should be given to the deal type (i.e., an asset vs. stock purchase or a merger, all of which may involve different tax implications and potential risks or bene ts). The parties’ deal teams can help identify the best structure for the contemplated transaction. Structuring a deal in the most favorable way is especially bene cial to sellers, as the proper deal structure can optimize transaction value and mitigate risk. An experienced M&A attorney can also assist in negotiating the letter of intent, which outlines speci c deal

terms that the parties may, at times, be legally bound to. If the parties cannot agree on the terms in the LOI, the deal will not move forward. In M&A deals, there are several standard practices and terms that are typically considered “market” for both buyers and sellers. If an inexperienced attorney is on either side of the deal and is attempting to over-negotiate a term that is considered “market,” this can lead to frustration by the other party and can stall the negotiation process. Experienced deal teams on both sides of the transaction

can help prevent a potential impasse by ensuring all parties are on the same page regarding the legal, nancial and strategic aspects of the transaction.

Putting together a deal team of professionals who are familiar with the typical M&A deal cadence is critical to avoid unnecessary delays in the transaction. At the outset, the parties should set a realistic closing date and set milestones for each party to achieve at different points throughout the transaction timeline. The parties should also coordinate weekly check-ins for the buy-side and sell-side deal teams to attend so the parties can ensure that these milestones are being met, while also addressing issues as they arise so a solution can quickly be identi ed and put into action.

FROM IDEA TO ENTERPRISE

“Buckingham has been a valued partner to Society Brands since our inception. I remember the day Lucas Murray came into my office to draw up the original contracts. They’ve been with us from the beginning, through thick and thin, and I’m confident they’ll continue to be there for us in the future.

Not only have they done incredible work for us, but they also truly care about the company and our success. It’s rare to find a legal team that not only provides top-notch counsel but also genuinely believes in the people and vision behind the business. We’re honored to work with Buckingham and proud to call them our trusted legal advisors.”

- Michael Sirpilla, CEO and Co-Founder of Society Brands

At Buckingham, we take pride in forging meaningful, long-term relationships. From the earliest stages of an idea to every milestone of growth, we stand by our clients with exceptional legal counsel and unwavering support.

Because when our clients succeed, so do we. bdblaw.com

Akron | Canton | Cleveland

Putting together a deal team of professionals who are familiar with the typical M&A deal cadence is critical to avoid unnecessary delays in the transaction.

Although each deal is unique, every transaction can be generally broken down into the following phases: pretransaction, due diligence, closing and post-closing. It is vital for the deal teams to work together to drive and support the various phases in an ef cient manner. Experienced M&A attorneys can often anticipate potential industry-speci c issues before they arise and creatively craft solutions to address these issues and prevent delays in closing the transaction. If the chosen counsel does not specialize in M&A or is unfamiliar with the industry involved in the deal, it can be dif cult to prevent and/or solve common issues that may arise during any one of the deal phases. This can quickly lead to frustration in both the buyer and the seller, as both parties typically prioritize deal speed and want to close as quickly and ef ciently as possible.

With today’s ever-changing technological advancements, the more successful M&A attorneys have chosen to “levelup” their practice by incorporating new technology into their transaction management processes. Technology can help to streamline a transaction, most notably through due diligence review and assisting with the closing mechanics. For example, cloud-based transaction management software can help simplify the closing process. If buyer’s counsel prepares a closing checklist that seller’s counsel has access to on such a platform, both parties can work together to update the closing checklist with the most up-todate transaction documents in real time. This process avoids error and ensures both parties have access to and are signing the nal agreed-upon documents, thereby reducing the time needed to coordinate the closing.

Many sophisticated M&A attorneys also utilize arti cial intelligence to aide in due diligence review by using AI

STROIA

Lucas Murray | Partner | M&A | Buckingham

Michael Sirpilla | CEO & Co-Founder | Society Brands

Justin Sirpilla | President & Co-Founder | Society Brands

contract review software. This software enables attorneys to more efficiently review contracts and better identify issues that may be material. Working with a legal team that has a reputation of streamlining diligence review and achieving a seamless closing process is not only appealing to sellers but can also benefit strategic buyers by helping them to close deals at a quicker pace, allowing them to more efficiently shift focus and target other potential deals in this competitive space.

Choosing a skilled team of professionals is one of the most important decisions that buyers and sellers make during a transaction. A knowledgeable deal team can have a positive effect on the transaction outcome on both sides, and ultimately can help successfully negotiate and close a deal in today’s competitive marketplace. As such, it is vital that this decision is given proper attention and be made as early as possible in the deal process.

M&A private equity and deal flow outlook for 2025

By Andrew Petryk

A year in review 2024 started as a “wait and see” market as it began its recovery from a slump in 2023, when total deal value came in at the $3 trillion mark, a 15.8% decrease from 2022, according to Pitchbook. The first half of 2024 was softer than expected due to elevated interest rates, inflationary concerns and geopolitical risks, among others. Interest rates in particular impacted buyers’ willingness to borrow and the availability of debt, resulting in pressure on valuations.

The weight of a threatening recession loomed large throughout much of 2024, yet the U.S. defied the alarm and sustained solid growth. Total global M&A deal value, encompassing buyers of all types, tracked 27.6% ahead, and deal count was up 13.3% year over year, according to Pitchbook’s Q3 2024 Global M&A report.

warehouse network and delivery fleet to better serve its “pro customers,” such as professional builders and contractors, to drive sales.

Large private equity firms also participated in the deployment of megadeal investments. Apollo Global Management Inc. agreed to buy a 49% stake in a joint venture related to Intel Corp.’s factory in Ireland for $11.23 billion, while KKR & Co. Inc. and The Carlyle Group Inc. agreed to buy about $10.1 billion of prime student loans from Discover Financial Services, according to S&P Global.

of uncommitted capital at the end of the first half of 2024. Perhaps more importantly, PE firms have held a surplus of assets longer than they anticipated, and many of those firms will need to sell those assets to return funds to their investors.

Outlook

Sydney Stroia is an associate attorney at Buckingham. Contact Sydney at 330-491-5213 or SStroia@bdblaw.com.

While corporate-led M&A came out of the gates early in the year, private equity activity lagged as investors looked for signs that the operational improvements of 2023 were sustainable and that capital markets supported deal activity. The Federal Reserve’s decision to lower interest rates by 50 basis points in September and 25 basis points in November — the first rate cuts in four years — served as a much-needed jolt to the M&A markets. The presidential election sorted out concerns about increased taxes and energy policy but also raised questions about potential tariffs and their impact on the overall U.S. economy and M&A activity. We believe the election results will have a favorable impact on M&A.

Megadeals fueling corporate confidence

A string of megadeals in the first half of 2024 reflected resilience within the M&A space as well as growing corporate confidence and strengthening balance sheets. Megadeals targeted companies across a range of sectors, including Consumer and Technology. Mars acquired Kellanova, a global manufacturer of snack and packaged foods, including brands like Pringles, Cheez-It, Pop-Tarts and Eggo, for $35.9 billion. Verizon acquired Frontier Communications, the largest pure-play fiber provider in the U.S., for $20 billion. In its largest acquisition ever, Home Depot announced in March that it acquired building materials supplier SRS Distribution in an $18.25 billion deal. The deal will help Home Depot leverage SRS’

TRUSTED ADVISORS

ANDREW K. PETRYK

Head of Industrials

216.920.6613

apetryk@bglco.com

Learn more at bglco.com.

Private equity (PE)

Data suggests that private equity deal activity is emerging from a two-year slump that began in 2023, improving the odds that dry powder will be deployed. Private equity has reemerged hungry for new investments with support from lenders showing an increased willingness to fund acquisitions. PE investors continue to place a greater emphasis on operational improvements and add-on acquisitions rather than solely relying on financial leverage to generate returns. Chances for firms to chip away at the mountain of dry powder are improving. According to S&P Global, the PE firms with the largest amount of dry powder collectively reported $556.19 billion

As companies seek acquisitions to expand their product portfolios and service offerings and enter new markets, M&A becomes a key avenue to achieve those goals. Sectors such as Aerospace & Defense, General Industrials, Technology, Digital Infrastructure, Building Products, Environmental and Industrial Services are all poised for strong showing in M&A in 2025. The groundwork laid in 2024 offers promising signs of steadier growth and more consistent deal flow. We expect both strategic and private equity buyers to look for ways to aggressively deploy capital.

Andrew K. Petryk is a managing director and leads the Industrials practice at Brown Gibbons Lang & Company (BGL). Contact him at 216-920-6613 or apetryk@bglco.com.

PETRYK

“Best” deal structure to minimize taxes for private company sale

By Samantha Smudz and Robert Venables

One of the most dreaded replies from a professional services provider is, “it depends.”

Unfortunately, that’s truly the case when determining the most optimal tax structure for your transaction.

There are many variables — tax and non-tax — that go into assessing whether a particular transaction structure “works.” From the sale price you’re willing to accept, to the value of your company’s tax attributes and the tax rates in effect at the time of the transaction, every scenario is inherently different.

Below are three common tax structuring options for sellers to consider. Keep in mind while these structuring options are generally available, to realize the most tax bene t there will be key nuances and distinctions you and your tax adviser will need to assess based on what type of entity you are selling.

1. Structuring your deal as an equity sale

From a seller’s perspective, a sale of equity is the holy grail of transaction structures, particularly when there is opportunity to fully or partially defer gain. Assuming you will realize a

gain, for tax purposes the biggest draw is that this structure allows you to maximize capital gain treatment, i.e., you will be taxed at a lower rate, and basis will be used to lower the taxable portion of the gain. From a non-tax perspective, structuring your deal as an equity sale is often ideal because it transfers your entity’s liabilities (known and unknown) to the buyer. Valuing and negotiating the sale of your entire company, as opposed to individual assets in an asset sale, is also generally much less cumbersome for owners to navigate.

While this structure is often ideal, it’s not always perfect. With an equity transaction you may receive a lower sale price, since buyers may feel the need to make up for fewer tax bene ts as compared to bene ts they would receive in an asset sale. Additionally, a buyer may request certain indemnities or protections, nancial or otherwise,

for assuming all your company’s liabilities.

2. Structuring your deal as an asset sale

For some of the same reasons sellers tend to favor equity transactions, buyers tend to favor asset deals. In an asset purchase, the buyer is simply acquiring the discrete assets of the target, not the actual company, which may leave them with some undesirable assets and attributes. However, there are bene ts for sellers. In an asset sale, a seller can be selective about which assets, and even strategic liabilities, it may want to retain for various reasons. An asset sale may

and the potential for a second layer of tax. Additionally, asset sales can be more complex, as they require the identi cation of which assets will be included in and excluded from the transaction. Asset sales also require the retitling of assets, if necessary, which can add costs to the transactions for the seller and/or buyer.

3. Structuring your deal as a legal equity/deemed asset sale

A legal equity/deemed asset sale is a transaction used to conduct an equity sale for legal purposes and an asset sale for tax purposes. From a tax perspective, the buyer typically requests this structure

From a seller’s perspective, a sale of equity is the holy grail of transaction structures, particularly when there is opportunity to fully or partially defer gain.

allow sellers to negotiate premium prices for and navigate various tax treatments of higher-value items.

On the downside, asset sales can result in higher taxes for a seller, particularly C corporations. An asset sale can lead to more items taxed at ordinary income rates than in an equity sale

to obtain stepped-up basis in the assets; from a legal perspective, this structure does not require transferring titles to assets and contracts. Generally, this structure is simpler for both parties to implement.

This structure could come at a cost to you as the seller, however, resulting in

either two layers of tax or incrementally higher tax rates, as alluded to above in the considerations for an asset sale. Careful planning and evaluations of basis may ease this burden if a buyer can make an owner “whole” for the additional tax costs and still receive a net economic bene t due to the basis step-up the buyer will receive.

Whether a corporate or non-corporate entity, nding the right structure is key. The good news is you have choices; take the time to consider them all, holistically, to nd the right t.

Samantha Smudz, CPA, JD, is a transaction services tax partner at Cohen & Co Advisory, LLC. Reach her at 216-649-5546 or ssmudz@cohenco.com. Robert Venables is a tax partner at Cohen & Co Advisory, LLC. Reach him at 330-255-2135 or rvenables@cohenco.com.

Cohen & Co Advisory, LLC is not rendering legal, accounting or other professional advice. Information contained in this article is considered accurate as of the date of publishing. Any action taken based on information in this article should be taken only after a detailed review of the speci c facts, circumstances and current law with your professional advisers.

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Key legal issues impacting private equity transactions

By Anthony J. Cox

As the devilish lawyer John Milton in the 1997 lm “The Devil’s Advocate,” Al Pacino famously explained to his protégé why he chose to incarnate as an attorney: “Because the law, my boy, puts us into everything.” Anyone who has played a role as a buyer, seller, lender or advisor on a private equity acquisition undoubtedly will agree that legal considerations impact nearly every aspect of a deal.

Experienced professionals are familiar with many important legal concepts involved in a deal, so this article homes in on a few critical legal concepts that could disrupt, delay or derail a transaction if not given proper attention from the start.

Securities regulation

As a general matter, the Securities Act of 1933 requires the registration of every issuance, offer or sale of securities with the Securities and Exchange Commission (SEC), unless an exemption from registration applies. Since registration is not practical in most private equity transactions, identifying an available exemption is important. Private placements of securities may be eligible for various exemptions from this general requirement, including those placements that are limited to “accredited investors” and otherwise meet the requirements of

Section 4(a)(2) of the Securities Act and the related “safe-harbor” in Rule 506 of Regulation D under the Securities Act. Identifying and con rming the availability of an exemption to the registration requirements is a highly fact-speci c exercise that should be undertaken at the outset of a transaction. In addition to federal securities regulation, rms also should be aware that compliance with various state securities laws (or so-called “blue sky” laws), regulations and ling requirements may be necessary. The various burdens imposed by federal and state securities laws should be considered at the earliest stages of a transaction with the assistance of experienced securities counsel.

Antitrust scrutiny

Antitrust scrutiny will occur in transactions that might result in a signi cant reduction in market competition. Regulatory bodies, such as the U.S. Federal Trade Commission (FTC) or the European Commission, assess whether a deal could create a monopoly or harm consumer welfare. In some cases, deals may be delayed or require divestitures to meet regulatory approval.

In the acquisition context, one of the more commonly encountered regulatory hurdles concerns the requirements of the Hart-Scott-Rodino Antitrust Improvements Act, commonly referred to as “HSR,” which requires parties in certain deals to le pre-transaction noti cations with the FTC and the U.S. Department of Justice (DOJ) for antitrust review. The HSR ling requirement is

investors are involved. The Committee on Foreign Investment in the United States (CFIUS) and similar agencies in other countries are regulatory bodies tasked with scrutinizing transactions that may impact critical industries, such as defense, telecommunications, energy and technology. CFIUS focuses on preventing foreign entities from gaining access to sensitive information, infrastructure or

Antitrust scrutiny will occur in transactions that might result in a signi cant reduction in market competition.

triggered when the transaction meets speci c size thresholds, which are adjusted annually for in ation. The ling includes details on the companies involved, such as nancials and market share data, allowing the FTC and DOJ to assess whether the deal could substantially reduce competition in any relevant market. Firms should consider whether HSR is likely to impact a transaction as early as possible in the process and stay aware of any changes to the enforcement environment driven by the incoming presidential administration.

National security considerations

National security concerns are increasingly important in private equity transactions, particularly when foreign

technologies that could threaten national security interests. Private equity rms must consider that cross-border deals may be subject to extensive review, including security clearances and the possible imposition of conditions on ownership or control. Transactions may also be delayed or blocked if deemed to pose signi cant risks. Even if no foreign control is involved, minority stakes in companies tied to national security could still attract regulatory scrutiny.

The International Traf c in Arms Regulations (ITAR) is a U.S. federal regulation administered by the U.S. Department of State designed to protect U.S. national security interests by restricting the transfer of sensitive

military and dual-use technologies to foreign entities or governments. Companies involved in defense contracting or manufacturing products with military applications must comply with ITAR requirements. ITAR can have signi cant implications, particularly when a target company is involved in defense contracting or deals with sensitive technologies. During due diligence, private equity rms must assess whether the target company is subject to ITAR and whether any of its assets, products or services fall under its jurisdiction. If so, the acquirer may need to obtain speci c approvals from the U.S. government before completing the transaction, especially if the acquirer is a foreign entity. ITAR compliance can affect deal timelines, costs and structure. Failure to comply with ITAR could result in severe penalties, including nes and loss of export privileges, making ITAR a crucial consideration in any transaction involving defense-related assets.

Private equity transactions that may involve substantial complexities like HSR, CFIUS or ITAR require signi cant legal expertise to ensure early issue identi cation and ef cient deal management.

Anthony J. Cox is a Corporate and Finance attorney with Calfee, Halter & Griswold. Contact Tony at 216-622-8596 or acox@calfee.com.

Avoid distress: These failures are not an option

By Christopher J. Hewitt and Jayne E. Juvan

Those who closely follow economic policy understand that pinpointing exactly where we are in any given economic cycle is challenging even for the most experienced economists. Most recently, U.S. GDP grew at a relatively strong clip of 2.8% in Q3 2024, bolstered by consumer spending. In 2024, The Federal Reserve cut interest rates twice, and the Trump market rally began in earnest the day after the election, posting impressive gains on both the Dow and

the Nasdaq. In a potentially deregulated environment created by a Republican administration, happy days may be here again.

But whether these are happy days is no matter for companies that are distressed or on the brink of becoming so. In fact, distress is often created when times are good, not when headwinds are ever-

present. Warren Buffett famously quipped, “Only when the tide goes out do you discover who has been swimming naked.” Indeed, dif cult times reveal which companies were careless in better times.

In our experience, the reason good companies with valuable assets go bankrupt is because of mismanagement.

Yes, some businesses are doomed. Take, for example, VHS rentals. But even there, Blockbuster could have transformed into Net ix before that competitor was ever formed. Net ix’s most likely path should have been that it would start as a edgling and fall away given its lack of customers, brand recognition, and brick and mortar locations, or be acquired. Blockbuster should have had an advantage given its knowledge of the industry and the war chest it had the opportunity to build. But instead, Blockbuster eschewed a partnership offer from Net ix, only to subsequently nd

itself in bankruptcy. By contrast, Net ix became the real blockbuster, not needing the legacy brand at all. Reed Hastings, its founder, has been celebrated for his brilliance, while far fewer remember Blockbuster’s executive team.

Most properly-run companies will adapt to survive. In that regard, we’ve seen some common themes in companies that have gone into distress. Identifying these failures early could potentially save companies from that fate.

Failure of governance

The U.S. government is based on a philosophy of checks and balances. No branch of the government is more important than another. Similarly, we have found that the highest-functioning companies have strong boards of directors or managers or some other

In our experience, the reason good companies with valuable assets go bankrupt is because of mismanagement.

We navigate deals in all markets.

Located in strategic cities nationwide, our trusted M&A advisers keep our clients protected in today’s everchanging and volatile climate.

Jayne E. Juvan, Partner Co-Chair, M&A and Securities & Capital Markets

Jayne.Juvan@TuckerEllis.com

Kristen Baracy, Partner | Los Angeles Kristen.Baracy@tuckerellis.com

Ashley Brandt, Partner | Chicago Ashley.Brandt@tuckerellis.com

Peter Jones, Partner | Columbus Peter.jones@tuckerellis.com

Robert M. Loesch, Partner Robert.Loesch@tuckerellis.com

Art Mertes, Partner | Chicago Arthur.Mertes@tuckerellis.com

Christopher J. Hewitt, Partner Co-Chair, M&A and Securities & Capital Markets Christopher.Hewitt@TuckerEllis.com

Tod Northman, Partner Tod.Northman@tuckerellis.com

Brian O’Neill, Partner Brian.O’Neill@tuckerellis.com

Tom Peppard, Jr., Partner Thomas.Peppard@tuckerellis.com

Peter Rome, Partner Peter.Rome@tuckerellis.com

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governing body that acts a check or governor on executive authority. While it has been said that “power corrupts, but absolute power corrupts absolutely,” a trustworthy organization with a strong governance framework attracts and retains investors, customers and talented employees, enhancing both their brand and pro tability. It’s no coincidence that Jack Welch built a strong board with diverse skillsets and ultimately took GE’s market value from $14 billion to over $400 billion. A properly functioning CEO should surround herself with people whose opinions she values and should actively seek their views, even when they are dissenting views.

Failure to properly set strategy

As Jim Rohn once said, “Don’t major in minor things.” If the CEO is focused on being the chief cook and bottle washer, she will inevitably lose focus of strategic direction. The highest and best use of a CEO’s time is to re ect on the business, study industry trends, analyze competitors and otherwise think strategically. Once set, the vision and strategy need to be communicated broadly across the organization so that everyone understands and aligns behind the “why” driving the company’s purpose and the goals it aspires to achieve.

Failure to innovate

Clayton Christensen once said, “If you don’t disrupt yourself, someone else will.” There perhaps is no better example of why innovation is critical than Blockbuster. Had Blockbuster have thought ahead and developed new product and service offerings, it would have been in a better position to ght off the competitive threat that Net ix posed.

Failure to control expenses

Expenses should be tied to the organization’s strategic vision. Otherwise, resources are spent on non-core activities and hinder growth opportunities. Properly focusing on spending frees up capital for strategic investment and innovation.

JUVAN

HEWITT

Failure to delegate and encourage

Every company has many moving parts that need to function together properly — research and development; marketing; manufacturing; operations management; human resources; facilities management; and accounting and nance, to name a few. Each of these areas requires its own skillsets, perspectives and resources. No one person has those skills and perspectives. Executives who oversee these divisions should have decisionmaking authority and be empowered to lead and not be micromanaged by the CEO.

When the Dow was created in 1896, it consisted of American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding,

General Electric, Laclede Gas, National Lead, North American, Tennessee Coal and Iron, U.S. Leather and U.S. Rubber. While not still part of the Dow, only GE still is publicly traded with an enormous market capitalization today. With leaders like Jack Welch in the recent past, that is no coincidence. Jayne E. Juvan is co-chair, M&A and Securities & Capital Markets, at Tucker Ellis. Contact her at Jayne.Juvan@ TuckerEllis.com. Christopher J. Hewitt is co-chair, M&A and Securities & Capital Markets, at Tucker Ellis. Contact him at Christopher.Hewitt@TuckerEllis.com.

Mastering net working capital: Key factors that shape the deal

By Mindy S. Marsden, CFE

Net working capital (“NWC”) is often a highly scrutinized component in M&A deals and can signi cantly impact the purchase price. NWC represents the liquidity a company needs to run its day-to-day operations and ensures the business can continue functioning smoothly after the deal closes.

The calculation for NWC is current assets less current liabilities and is commonly presented on a cash-free and debt-free basis in M&A deals; however, it is not that simple. The inclusion or exclusion of the following items can complicate the calculation and function of the NWC mechanism in an M&A transaction:

Clear negotiation on subjective items is vital to ensure both parties agree on a fair NWC target.

Deferred revenue

This represents payments a company has received in advance for goods or services it has not yet delivered. This is often viewed as debt-like and excluded from NWC, but that is not always the case as it depends on the company’s industry. This is a highly debatable component of NWC in subscription-based or SAAS businesses.

Gift certi cates

Similar to deferred revenue, this liability represents pre-payment for goods or services. Depending on the industry of the business and if it’s viewed as part of the day-to-day operations or debt-like, it could be negotiated to be included or excluded in NWC.

Unbilled receivables

These represent revenue that has been earned for goods delivered or services

rendered, but for which an invoice has not yet been issued to the customer. This is generally seen in industries where billing happens on a milestone or time-based basis, like construction or consulting services. It can be included or excluded depending on many factors such as the cadence of the activity, veri cation and reliability, and the overall consistency of the company’s billing practices.

Accounts receivable and/or accounts payable that are aged beyond a certain period of time (i.e., outside of normal trade terms).

Inventory valuation

Depending on demand, there could be an argument that a higher valuation is needed to meet future demand or that there should be a discount on the valuation for slow-moving stock.

Proper negotiation and clarity around these subjective items are vital to ensure both parties agree on a fair NWC target, preventing post-closing disputes. It is recommended that the methodology for calculating the NWC target is agreed upon during the LOI stage, and clear de nitions are outlined in the purchase agreement.

If you are involved in a transaction and need assistance in calculating or negotiating a methodology for NWC, we have experts that can help.

Mindy S. Marsden, CFE, is partner of Transaction Advisory Services at Bober Markey Fedorovich. Contact her at 330-255-2439 or mmarsden@bmf.cpa.

Tax

MARSDEN

A legal perspective on the art of the Letter of Intent

By Josh Bass

In the high-stakes realm of mergers and acquisitions, the Letter of Intent (LOI) is far more than a preliminary formality — it’s the strategic linchpin that charts the course for a successful transaction. At Taft, the firm’s corporate attorneys are skilled at guiding clients through the intricate nuances of this pivotal document. Below is a high-level exploration of some of the essential components of a LOI, along with insights on how to craft and negotiate each element with strategic acumen.

1. Preamble: Setting the scene

The preamble frames the deal and aligns both parties’ expectations. It introduces the key players, outlines the nature of the transaction and delineates the parties’ overarching objectives. Though seemingly straightforward, this section is critical in establishing a coherent framework and aligning expectations early.

When representing the buyer, it’s imperative that the preamble unequivocally defines the type of acquisition: asset purchase, stock acquisition or a merger. Are you buying an entire company, or is this a carve-out of a specific business line or entity?

2. Purchase price: De ning the value

The purchase price is often the focal point of discussions as it encapsulates the deal’s economic essence. It’s often advisable to articulate the price and provide a transparent rationale for its determination. Is the valuation based on multiple EBITDA, a recent fundraise or otherwise?

The LOI should clarify whether the price is xed or subject to adjustments contingent on due diligence ndings or closing working capital adjustments. There are also concepts like earn-outs or contingent payments that come into play, offering the seller the potential for additional compensation based on post-transaction performance metrics over a de ned period of time. Achieving a balance between speci city and exibility is crucial — securing a fair price while retaining room for necessary adjustments.

3. Payment terms: The how and when

Payment terms, closely related to the purchase price, deserve their own distinct discussion due to their inherent

materiality and complexity. Will the payment be structured as a lump sum, series of installments, promissory note (subordinated or not) or a mixture of cash and equity?

For sellers, negotiating a larger upfront payment can mitigate risk exposure, while buyers might favor a staggered or deferred payment structure linked to achieving speci c post-closing milestones. This section also encompasses provisions for escrow accounts or holdbacks to ensure adherence to deal terms and company representations. The art of negotiating payment terms lies in aligning nancial strategies with both parties’ risk tolerances.

4. Due diligence: Unearthing the details

The due diligence clause is the investigative component of the LOI, detailing the buyer’s right to conduct a comprehensive examination of the seller’s business. This encompasses a buyer review of nancial statements, legal contracts, intellectual property, physical assets, real estate and other critical elements. The scope and timeline for due diligence must be meticulously de ned to avoid any future ambiguities and give both sides proper time to procure and review all items.

The Modern Law Firm.

Discovering hidden liabilities or underperforming assets might necessitate a renegotiation of the purchase price or even an exit strategy. Crafting a thorough and precise due diligence clause is essential for safeguarding against unforeseen risks.

5. Con dentiality and exclusivity:

Protecting the process

Con dentiality clauses are indispensable in protecting sensitive information exchanged during negotiations. Without these safeguards, a seller risks disclosing critical business insights to a prospective buyer who may ultimately withdraw (and who could even be a competitor).

Exclusivity clauses, or “no-shop” provisions, prevent the seller from pursuing alternative offers while the buyer undertakes due diligence and spends time and money. These clauses are designed to protect the buyer’s investment in time and resources. It’s crucial to negotiate the duration of exclusivity carefully — long enough to complete due diligence, but not so protracted as to disadvantage the seller.

6. Binding and non-binding provisions: Knowing the limits

A LOI typically encompasses both binding and non-binding provisions. While the broader transaction terms are usually non-binding, certain elements — such

as con dentiality, exclusivity, payment of expenses and governing law — are generally binding. Clearly delineating which provisions are binding is critical to avoid potential disputes.

7. Termination clauses: Planning the exit Termination clauses delineate the circumstances under which the LOI (and exclusivity) can be dissolved, such as unsatisfactory due diligence results, regulatory scrutiny or failure to secure nancing. Think of this section as a contingency plan — a safety net that, while not always utilized, is crucial for managing deal complexities.

Conclusion: The starting line, not the nish

A LOI is a foundational framework that sets the stage for all subsequent negotiations and agreements. By meticulously crafting and negotiating each section with strategic foresight, you can facilitate a smoother transaction process and robustly protect your interests.

Josh Bass is a corporate attorney in Taft’s Cleveland of ce. Contact Josh at 216-706-3985 or jgbass@taftlaw.com. For more information, visit taftlaw.com/ people/joshua-g-bass/.

BASS

I want to sell my business. How do I prepare, and where do I start?

By Patricia Gajda and Caroline Smith

If you are a business owner, there may come a time when you decide to sell your business and enjoy retirement. Maybe you don’t have someone to take over, or maybe you are interested in a new project. Regardless of your situation, you need a plan so that you can successfully sell your business. What should you do to prepare for a sale?

First, find and assemble your team. Do you have a lawyer, accountant or financial planner that you know and trust, and are they well-versed in transactional work? Selling your business is a significant move, and you must have an experienced, knowledgeable team to help you navigate it.

Next, determine the value of your business. In most cases, this involves engaging an appraiser or valuation expert. You may have already received inquiries or heard numbers regarding the worth of your business, but it is impossible to identify a fair offer unless

would clean it out, organize its contents, prepare your title and registration, and collect your insurance documents. The same approach applies to the sale of your business. You must get your business in order.

Once you get past the niceties with a potential buyer and there is an interest to proceed with a purchase, the buyer is going to present you with a due diligence request list. Take a breath, because the list is usually long and very detailed. You might wonder why a buyer would need all of this information about your business. Buyers require a diligence list because they do not know your business as well as you; buyers have no idea how you manage your business or whether you comply with laws and regulations. Buyers might ask you for information through a formal, written request, email or an oral recitation. They might only ask for a few items, or they might ask for almost all of the information you have.

Due diligence requests typically cover all the following major areas:

Ownership

Make sure your company is in good standing. Confirm online with the Secretary of State’s office that all the necessary forms have been filed. Check in with any co-owners: is everyone in agreement to sell? Have the Articles of Incorporation/Organization, bylaws/code of regulations or operating agreement, voting agreements and any buy/sell or similar restrictions, all as amended.

Selling your business is a significant move, and you must have an experienced, knowledgeable team to help you navigate it.

Real estate and environmental

Do you own or lease your properties, or some combination of both? Do you have any easements or share agreements with a neighbor? Is the business entity the proper owner of record? For leased property, make sure you have the executed lease and any amendments, and that you know of any assignment rights. Find any environmental reports you have

The Roetzel Corporate and Transactional group provides strategic and commercial guidance to a broad range of middle-market participants, including privately held and emerging growth companies, debt/equity participants, traditional/ alternative lenders, financial advisors, as well as private investors, entrepreneurs and executives.

WHAT WE DO

on the property. If the property is subject to any orders, be sure to provide copies of them.

Cybersecurity

Have you had any cyber assessments done? Compile the reports. Have you had any cyberattacks? If so, what did you do to remedy them? Gather any information relevant to your business’s cybersecurity.

Labor and employment

Chart all active employees with title, whether they are part time or full time, salary or hourly, whether they receive bonuses and their years of service. Check that you have all relevant employee forms, including I-9s. Find your executed current labor agreement if your business has unionized labor. Provide any employment agreements, consultant agreements, severance or termination agreements, and stay put bonuses. Check whether you have non-competes or confidentiality agreements with your employees and consultants.

Litigation; compliance with laws

Work with your legal team to summarize the status of any current litigation or settlements. Be prepared to answer questions and bring copies of licenses, permits, approvals, certifications or any citations and warnings.

Contracts

Contracts are difficult to compile but very important to a buyer. Do you have contracts, agreements, blanket purchase orders or other written agreements? You need to provide a buyer with copies of all these documents. It is a best practice for your legal team to review your contracts for assignability, term, non-competes, confidentiality provisions and any licenses of intellectual property.

Miscellaneous

Some other documents typically sought during the diligence period include: your insurance policies, loss runs, fixed asset lists, an intellectual property list, bank loan documents, tax returns, your marketing materials and any social media information.

Remember, it may seem like a lot to do, but preparing in advance makes the process smoother, faster and cleaner when you are in the midst of the sale.

Patricia Gajda is a shareholder in Roetzel’s Corporate, Tax & Transactional Group. She can be reached at PGajda@ ralaw.com. Caroline Smith is an associate in the Corporate, Tax & Transactional Group. She can be reached at CRSmith@ralaw.com.

Chris Reuscher creuscher@ralaw.com

Daniel Silfani dsilfani@ralaw.com

• Asset, Stock, and Equity Purchase and Sales

• Commercial Contract and General Business Negotiations

• Corporate Governance and Shareholder/Board Management

• Cybersecurity and Data Privacy Guidance

• Labor/Employment, HR Compliance, Wage/Hour, and Exec. Comp.

• Mergers & Acquisitions, Joint Ventures and Exits

• Real Estate Acquisition, Disposition, Development and Leasing

• Succession and Estate Planning

• Tax Planning and Entity Formation/Structuring

• Traditional, PE, VC and Asset Financing Transactions

Albert Salvatore asalvatore@ralaw.com

Patricia Gajda pgajda@ralaw.com

GAJDA

SMITH

Top ve concerns in M&A in 2025: What buyers need to know

By Jeff Schwab

As anyone who has been involved in a merger or acquisition knows, they aren’t easy to navigate. On top of the typical amount of due diligence and paperwork, terms and concerns are always changing and evolving in Northeast Ohio and beyond.

Here are the top ve things to consider as companies work through a merger or acquisition in 2025.

1. PFAS (per and poly uoroalkyl substances)

Dubbed forever chemicals because they do not break down, PFAS has become the fastest-rising concern in insurance over the past two years. The reasoning is simple.

These chemicals are found in drinking water, soil and many common household items such as carpet, non-stick cookware and food packaging. They have even been found in fruits, vegetables and meats.

Research has linked the presence of PFAS to a host of health issues, such as cancer, high blood pressure and problems experienced during pregnancy, according to the Centers for Disease Control and Prevention.

As such, PFAS have become a huge liability for businesses, and insurers no

longer cover it. However, some of the legacy insurance policies may apply, so we suggest taking a close look at whether they currently or have used these chemicals, as it could change the worth of the business and increase costs.

2. Cybersecurity and liability

Cyberattacks are becoming increasingly prevalent through internal and external threats, and they target organizations in all industries, of all sizes, public or private.

When vetting an M&A transaction, take a close look at safety mechanisms used within the business to protect against cybercrimes such as malware, phishing and ransomware.

Does the business being acquired have a cybersecurity plan in place? This should include items such as mandatory cyber training for employees to ensure they know how to spot a scam through a fake email, phone call or video.

Every business should have a vendor authentication process in place for new and existing vendors. They should have

steps to verify the vendor before any requests by the vendor are ful lled.

3. Property catastrophic events Climate change is impacting weather patterns, resulting in more severe weather in places that historically didn’t worry about problems such as ooding, wild res or hurricanes.

In Northeast Ohio, the U.S. Environmental Protection Agency warns that oods are becoming more frequent and temperatures are rising, which leads to a longer growing season and less ice cover on Lake Erie. In 2024, there were 24 insured events topping a billion dollars in damages. The Southern Indiana/Northern Kentucky region was recently deemed by insurers as a high hazard zone for wind and hail. Many in the mountain town of Asheville, N.C., likely thought they would not have to worry about massive oods until the town experienced deadly ooding due to Hurricane Helene last September.

During due diligence, consider if the company you’re interested in is prone to catastrophic weather. It could make insurance tougher to obtain and more expensive.

4. Supply chain

We live in a global economy in which we procure goods from around the world. It is convenient most of the time, but

a disruption in the supply chain could bring business to a halt.

For example, the bridge collapse in Baltimore in March 2024 signi cantly impacted the global shipping industry for months as the waterway was blocked. As the closest seaport to Northeast Ohio, logistics for many businesses had to be changed. This can cost money and valuable time.

As anyone who has been involved in a merger or acquisition knows, they aren’t easy to navigate.

When considering buying a company, determine how the supply chain could be disrupted. Are the proper precautions and plans in place to minimize the impact?

5. Workplace violence/active assailant

Workplace violence has been on the rise in recent years, with workers being injured by a colleague. Such violence can be triggered in many ways.

When vetting a business to acquire or become a partner, look at ownership beliefs. Does the owner support radical ideas or groups? Do they foster employee health and wellness by providing good bene ts or practicing work-life balance? Does the business have a zero-tolerance policy for workplace violence? According to the U.S. Department of Labor’s Occupational Safety and Health Administration, such a policy combined with training and controls can help reduce the likelihood of workplace violence.

These factors should weigh heavily on any M&A decision, as they can be the difference between affordable insurance portfolios or obtaining insurance at all.

One of the most popular policies in M&A deals is Representation and Warranty. It is designed to enhance or replace the indemni cation from the seller to the buyer. As M&A activity rebounds, we may see an uptick in pricing, but for now the coverage remains very competitive. The Oswald team can help you navigate a merger or acquisition, determine the risks your business faces and mitigate the impact.

Jeff Schwab is senior vice president of Private Equity Services at Oswald Companies. Contact him at 216-658-5208 or jschwab@ oswaldcompanies.com.

SCHWAB

How to handle private equity interest in your business

By Lizabeth Roth

With private equity’s everincreasing interest in the lower middle market, there has been an inevitable rise in the frequency in which business owners receive phone calls asking if they are interested in considering the sale of their business. Suppose you are on the receiving end of correspondence from private equity. In that case, it can be helpful to know what to expect and to understand better the questions to ask to qualify the opportunity presented.

Why is there an increase in interest from private equity?

An increase in new private equity rms and uninvested capital has caused substantially more competition for quality investment opportunities. A crowded marketplace leads to an overabundance of buyers all vying for the same banked M&A deals. As a result, more rms emphasize increasing deal ow through channels outside traditional sell-side investment banking relationships.

This process, known as proprietary deal origination, involves rms prioritizing direct outreach to business owners and leadership teams focusing on relationship building in preparation for a future sale. Proprietary origination is attractive

because it can provide an exclusive opportunity for a rm to talk directly to a business owner as the only potential buyer or allow the rm to develop a rapport, hopefully providing a competitive advantage when the business enters a formal process

To get started, most rms will develop an investment thesis specifying the qualifying pro le of companies they want to target as potential investment opportunities. From there, private equity professionals will assemble a list of companies the rm believes best t the search criteria. Next, most rms will focus on direct outreach to the business owners and leadership teams on the list of target companies. Direct outreach may include letters, emails, phone calls and messages on LinkedIn.

You said yes to an introductory call. Now what?

Most introductory calls between business owners and private equity rms follow a similar cadence. After exchanging pleasantries and a round of introductions, the rm will typically take the lead and

present a general overview. Your goal should be to ask the right questions to assess whether this opportunity aligns with your personal goals and objectives for the business. The following are questions that could be helpful to ask:

• What is the rm’s investment strategy and structure?

• Why is there interest in your company?

• How did the rm nd your company?

• Does the rm envision your company as a new platform investment or as an addon acquisition?

• Does the rm have a successful track record and relevant industry experience?

Most introductory calls between business owners and private equity rms follow a similar cadence.

• What is the rm’s preferred deal structure? Does it involve cash at close, rollover equity or an earn-out?

• How does the rm envision ownership or leadership’s involvement postacquisition?

• What is the rm’s management style?

Similarly, the private equity rm you are

speaking with is trying to determine if your company matches its investment thesis as quickly and professionally as possible. It would help if you prepared to answer the following;

• Can you provide a general business overview highlighting core product/ service offerings?

• What industries and end-markets does your company serve?

• What is the company’s geographic focus?

• Can you describe the company’s facilities, including location, square footage and capacity?

• What is the nancial pro le of the company?

• What is the makeup of the company’s workforce?

• Does the company have a leadership team in place?

• Can you discuss the customer base?

• Does the company have any customer concentration in its top 10 customers?

• What are ownership’s goals postacquisition?

What happens when you decide to move forward with the next step?

Let’s assume that both parties want to continue the discussion; this will lead to the execution of a non-disclosure agreement (NDA) and an exchange of

additional data. An NDA is a legally binding document that protects con dential information exchanged between parties. After executing the NDA, the private equity rm will share a followup Request for Information (RFI). Most commonly, an RFI will include questions about historical nancials, employee makeup, customer data, product/ service breakout and general organizational information. This next step kicks off the private equity’s diligence process.

Once you have determined that you have a genuine interest in the opportunity presented, it is also important to start assembling your advisory team — including, but not limited to, legal, accounting, wealth management and business advisory. When putting together your team, it is essential to recognize that some of the advisers who have helped you get to where you are today may not be the best equipped to get you where you want to go. Ensuring that the team around you has experience working in and around transactions must be stressed.

If you are receiving interest from private equity or want to learn more about how Copper Run can support your deal origination efforts, please contact Lizabeth Roth at lroth@copperruncap.com.

ROTH

Timing the exit process

By Jeff Johnston and Arindam Basu

Experts across financial, academic and business fields agree that it is futile to try to time the market when making individual investment decisions. However, when contemplating the sale of a business, there are various internal and external considerations about timing the exit process that can help improve the chances of a successful outcome.

Assemble a team of experts

Once a decision has been reached to sell a business, timing the exit starts with fundamental preparation and strategic planning. This is where engaging with experienced financial and legal advisers early can help enhance the likelihood of a successful outcome. Notwithstanding macroeconomic factors, the business must be seen as a sound investment for the next buyer. In making initial investment decisions, buyers usually focus on recent financial performance, future capital requirements and the

management team’s quality.

Irrespective of a type of transaction or eventual buyer, a strong management team with experienced people in all key positions will be essential in driving the exit process and ensuring value maximization. If there is a significant open position in the executive management or commercial leadership teams, it is prudent to fill that position and allow the individual six to 12 months in the seat ahead of an exit process.

Position the company for a strong financial performance With respect to financial performance, the best time to exit is when the business is firing on all cylinders, exceeding budgets and demonstrating continued growth. Much of the buyer’s financial due diligence focus will be on the trailing 12 months of earnings before interest, taxes, depreciation and amortization (“EBITDA”). This cash flow metric and the company’s capital expenditure profile

are critical when determining the level of indebtedness a business can support and can directly impact valuation. However, equally important are the company’s future prospects, which include demonstrating sustainable growth by accessing new markets, introducing new products / services or taking advantage of industry trends. If for example, nearterm growth prospects require a capital investment, it may be prudent to make the investment and allow some time to demonstrate a ramp-up in financial performance ahead of a sale. Buyers are often reluctant to increase value related to new or unproven growth initiatives, which can lead to a discount on its implied value or a change in structure (earnout or future payments tied to the initiative’s performance).

Prepare for due diligence

Any sale process requires significant effort from all parties to facilitate comprehensive due diligence. This involves all aspects of the business, including operations, customer and supplier relations, HR, IT, health and safety, environmental, legal, risk management, financial, etc. The best advisers help business owners anticipate and prepare for such due diligence well ahead of starting the exit process. Due diligence creates significant demands on management’s time; being well-organized and prepared minimizes surprises during the exit process.

Strategically plan for impact of key external factors

Savvy business owners are generally cognizant of macroeconomic, geopolitical and other extraneous elements that impact their performance. For instance, timing an exit during a U.S. presidential election cycle is always complicated — not because buyers prefer one party or the other, but mostly due to the uncertainty of potential policy directions

Any sale process requires significant effort from all parties to facilitate comprehensive due diligence.

until the results are clear. While stock market performance might dominate the airwaves before and immediately after elections, near-term economic indicators, cost of financing and tax policies are significantly more important to sellers and buyers.

Geopolitical issues are increasingly impacting businesses across most sectors of the economy, particularly those exposed to tariffs, supply chain complications, labor issues (think port strikes), etc. One business might directly benefit from new or existing tariffs, while another might experience significant impacts in end-user demand due to prevailing tariffs. An industrial distribution business relying on a global supply chain may be severely disrupted by port strikes. While any single business owner cannot control these issues during a sale process, they should work with their advisers to be prepared to address business impacts and due diligence questions.

Thoughtfully time the exit Transactions that require antitrust, national security or other regulatory clearances may need several months from signing of definitive agreements to final closing. For example, a sizeable

specialty materials business with strong competitive position that sells critical minerals to the Department of Defense can expect multiple lengthy regulatory reviews before closing. If this business owner wants to close a transaction before a certain date, they should account for the regulatory approval process and start the exit process early.

Timing an exit process for a business requires introspection, strategic planning and thoughtful preparation, while accounting for a host of internal and external parameters. Control the controllables and have a plan for potential surprises that invariably arise.

Jeff Johnston is managing director and group head of Mergers & Acquisitions at KeyBanc Capital Markets. Contact him at 216-689-4115 or jjohnston@key. com. Arindam Basu is managing director of Mergers & Acquisitions at KeyBanc Capital Markets. Contact him at 216689-4262 or abasu@key.com.

KeyBanc Capital Markets is a trade name under which the corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., member FINRA/SIPC (“KBCMI”), and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and by its licensed securities representatives. Banking products and services are offered by KeyBank N.A.

Preparation is the cornerstone to a successful exit

By Amber J. Ferrie

Transitioning your business is much more than a financial transaction. It’s a major life change that can bring up a range of emotions, from excitement, to anxiety, to joy and even grief. While it may be the right decision for you, it’s important to be prepared for the process, and we can help.

No matter who the next owner of your business may be or when you plan to exit, transitioning is a significant process that requires time and effort. It’s a series of choices, assessments and reassessments that can influence how you run your business. And while emotions are inevitable during this process, there are actions you can take action to prepare:

1. Identify your “why” and your expectations for the sale.

The first crucial step to ensuring a smooth and successful transition — a step you should take well before starting the transition process — is establishing a clear understanding of why you are selling your business. Are you selling it for financial reasons? Health? Are you ready to retire? What is your top priority for the transaction? Is it making an impact on the community? Ensuring the company

culture you’ve built endures new ownership? Opening opportunities for loyal employees?

Clarifying your intentions and expectations early on can help you make informed decisions and reduce the risk of unexpected emotional reactions.

2. Build strong systems and processes.

Clear systems and process are essential for building a robust infrastructure and optimizing operations. By incorporating data analytics and bestin-class reporting, organizations can collect comprehensive information and understand their business in real-time. Such transparency can prove invaluable during a transition period. A business with sturdy systems and processes is viewed as more scalable and easier to integrate into a buyer’s existing operations. Therefore, having these systems in place can make a business more attractive to potential buyers.

Moreover, streamlining your business operations can increase efficiency and reduce costs. This might include implementing process improvements,

automation and technology solutions to enhance productivity and profitability. An operation with robust systems and processes can attract buyers seeking a well-organized business.

3. Seek professional help from trusted advisers.

You can’t complete a successful transition alone — and fortunately, you don’t have to. Seeking professional help can provide valuable insight and expertise to guide you through the complex process of selling a business.

Professional advisers can help you maximize the value of your business, ensuring that you receive the best possible return on your investment. They can assist you in determining the valuation of your business, assessing the marketability and strategizing a financial plan for after the sale.

Why start exit planning early?

Enhancing your business’s value takes time, effort, energy and strategy. There is no “perfect time” to start looking for a buyer. Rather, you must look at your long-term business and financial goals. Planning early and executing initiatives to position your business favorably in the marketplace will help attract potential buyers when the time comes.

To get in a selling state of mind, you

should:

• Be financially and psychologically prepared to handle the efforts required in a transaction.

• Set realistic expectations and gain knowledge of the transaction process.

• Have the fundamentals in place to respond to due diligence efforts.

• Prepare your team to continue business under new ownership.

• Make the necessary adjustments to optimize the value of your business.

Above all, being sell-ready means setting operational goals and positioning your company optimally to achieve those goals. Eide Bailly can help. Download our e-book to learn more about building a successful exit strategy.

Future Up to Chance

trusted advisor can help you

Amber J. Ferrie CPA, ABV, CFF, CM&AA is a partner/transaction advisory & private equity industry leader at Eide Bailly. Contact her at 701-239-8608 or aferrie@ eidebailly.com.

FERRIE

2025 M&A boom: Key sectors primed for enhanced growth

By Amy Willey

After a sluggish 2023, the mergers and acquisitions landscape improved in 2024, signaling the start of a promising recovery in deal activity. While deal volume increased and is approaching pre-pandemic levels, it has not reached the levels seen during the boom of 2021-22. This gradual rebound can be attributed to factors including higher interest rates, in ation and ongoing global geopolitical uncertainty, which have hindered

deal activity momentum. With consumer con dence in the economy growing, interest rates expected to ease, bottled-up interest from business owners

to monetize their assets, and the time-limited nature of private market investments, the stage is set for heightened M&A activity in 2025.

The following sectors appear particularly ripe for activity.

Arti cial intelligence & technology In 2023-24, industry leaders grappled with embracing AI for their operations. According to IDC, global AI market spending stands at nearly $235 billion, with projections indicating a rise to over $631 billion by 2028. With the potential need and appetite for AI in the future, AI companies experienced signi cant investment from venture

capital and limited partners for research and development in 2024. While investors are expected to continue their interest in AI companies, the large-scale investments made for R&D in 2024 are expected to decrease. We anticipate seeing deal activity by mid-2025 for the most successful AI companies coming out of these R&D activities. We also anticipate increased deal activity due to digital transformation as companies develop a greater need for cloud computing and cybersecurity.

Health care

While private equity deal making activity in health care decreased in Q3 2024 and has declined since 2021 highs, industry experts remain optimistic about an increase in health care M&A in 2025. The health care M&A market has seen a consolidation of providers resulting from efforts to improve ef ciency, combat labor shortages, and promote technology adoption and revenue cycle optimization. Medspa and aesthetics, outpatient mental health, cardiology, aesthetics, dermatology, oncology, specialty dental and veterinary will continue to see high demand and interest in 2025 for sponsorformed physician practice management companies.

Energy

The team that gets your deal done!

The energy sector is expected to experience a surge in M&A activity in 2025 due to an increased focus on transitioning to cleaner energy sources, renewable energy acquisitions, strategic partnerships to develop carbon capture technologies and consolidation within the sector.

Financial services

McDonald Hopkins’ full-service M&A practiceis committed to knowing the goals of its diverse client base servicing numerous industries. With a team of attorneys who understand the importance of balancing risk with a client’s focus on closing a transaction, we are the destination for businesses looking for an integrated approach to M&A. We work seamlessly with professionals in tax, executive compensation, finance, employee benefits, intellectual property, and restructuring to provide business-focused solutions to complex deal issues.

Traditional nancial institutions are experiencing increased competition from non-regulated and less-regulated nancial service startups and ntech companies. As a result, the nancial services sector is expected to see greater M&A activity in 2025. Traditional nancial institutions are focusing on cost ef ciencies and scalability, which may lead to additional acquisition activity. Financial institutions are looking to expand technology to provide new services to build and maintain strong customer relationships. This

In 2023-24, industry leaders grappled with embracing AI for their operations.

will continue for nancial services M&A activity in 2025, as acquirers need to make robust value-add offers based on new services and technologies, as well as compliance and regulatory solutions and cost ef ciencies. Some experts believe that M&A activity in this sector will increase in 2025 and 2026 due to an expectation that deal approval “will speed up markedly and the process will be more clearly delineated” under a Trump administration, according to Piper Sandler analyst Mark Fitzgibbon.

Industrial and manufacturing

The industrial and manufacturing sectors are expected to see moderate growth in 2025 as digital transformation and automation technologies put pressure on companies to stay competitive in an evolving market. With sustainable transportation gaining momentum, increased investments in battery technology, electric vehicle infrastructure and autonomous vehicle development will likely drive additional deals.

While we do not anticipate M&A activity rising to the unprecedented levels of 2021-22, the number of transactions in 2024 approached pre-pandemic levels of activity, setting the stage for an exciting 2025. The pent-up demand for deals,

combined with renewed optimism in the market, means 2025 could see an in ux of high-stakes transactions driven by a powerful mix of buyer appetite and seller readiness. This environment could spark bidding wars, pushing deal values higher and accelerating the pace of activity.

Start planning now if you are considering an acquisition or divestiture in 2025. Consulting with your advisers early is crucial to navigating shifting market dynamics and capitalizing on this exciting M&A environment. With an optimistic deal horizon on the way, the 2025 M&A market promises opportunity and strategic advantage.

Amy Willey is a member in the Mergers and Acquisitions Practice Group at McDonald Hopkins. Contact Amy at awilley@mcdonaldhopkins.com. To learn more, visit mcdonaldhopkins.com.

The foregoing discussion is general information rather than speci c legal advice. Always consult your legal adviser before using this discussion as a basis for a speci c action. This material is not intended to create, and your receipt of it does not constitute, an attorney-client relationship with McDonald Hopkins.

Real estate valuation challenges in M&A deals

By Charbel M. Najm

Real estate valuation plays a crucial role in many mergers and acquisitions (“M&A”), especially when real estate assets may represent a signi cant portion of a target company’s value. However, accurately assessing real estate value in M&A deals comes with unique challenges. Key obstacles include diverse valuation methods, complex ownership structures

and strategic tax planning.

The rst challenge, evaluating the real estate assets, requires the calculated decision on which valuation method is best suited for the deal. There are three main valuation methods:

What’s next — planning for business succession

By Michael D. Makofsky and Ryan M. Palko

Lower-middle market businesses are the runaway for the American dream. After years of growth (and success), many family-owned businesses reach a pivotal moment when it’s time to plan for the future. Whether the decision is to sell, hold or transition the business to the next generation, these closely-held businesses are often the cornerstone of family wealth. Thoughtful planning ensures the business legacy and value are preserved for years ahead.

Succession planning for the family business takes one of three main forms — selling, holding or transitioning the business.

The classic example of family business planning is going to market. On one hand, sales of closely-held businesses are in uenced by latent issues of valuation, nancing and other potential pitfalls. On the other hand, a sale provides a direct injection of liquidity, unlocking wealth and helping owners transition into another phase of life. A sale may be best for those who want to get out of a business and pursue new endeavors.

The business could also continue operating in the family — even without the daily operations of legacy owners. The power of restructuring allows legacy owners to step back from the day-today, remain involved and add exibility. Restructuring is an option for businesses with a strong management team that can continue pro table operations.

Transitioning the family business takes many forms. Advisers have multiple tools to tailor transitioning options with an eye toward tax, business and corporate considerations. Transitioning could be from legacy owners to current management, intra-family or even a hybrid — all bearing unique considerations.

Transitioning the business may be best for those owners looking to pass an incomeproducing asset onto future generations.

Succession planning for the family business takes one of three main forms — selling, holding or transitioning the business. In all circumstances, legacy owners can guard their visions with creative, yet comprehensive planning to keep their asset running in tip-top shape.

Michael D. Makofsky is principal at McCarthy, Lebit, Crystal & Liffman Co. Contact him at 216-696-1422 or mdm@ mccarthylebit.com. Ryan M. Palko is an associate at McCarthy, Lebit, Crystal & Liffman Co. Contact him at 216-696-1422 or rmp@mccarthylebit.com.

Ultimately, navigating the dif culties of real estate valuation in M&A deals requires expert knowledge, thorough due diligence and a exible approach to account for these varied challenges.

(i) the income approach which utilizes the current pro tability of a property; (ii) the replacement cost approach which utilizes the current reconstruction cost of a property; and (iii) the comparable sales approach which utilizes recent similar real estate transactions. Further, companies may own a mix of properties, from of ce buildings to retail spaces, each of which may warrant the use a particular valuation method. Land, for example, may be valued based upon zoning potential or other factors that may not be relevant in evaluating an of ce building.

The second challenge, strategic tax planning, is vital. There can be many intricacies depending upon the length of ownership of the real estate, the current ownership structure and the sales price. Often, real estate owners may elect to complete what is known as a 1031 like-kind property exchange to defer any capital gains tax liability. A 1031 like-kind property exchange requires that the selling property owner(s) purchase another replacement property utilizing the sale proceeds to defer any capital gains tax liability.

Ultimately, navigating the dif culties of real estate valuation in M&A deals requires expert knowledge, thorough due diligence and a exible approach to account for these varied challenges.

Charbel M. Najm, Esq., is an associate at Schneider Smeltz Spieth Bell LLP. Contact him at 216-696-4200 or cnajm@sssb-law.com.

NAJM

MAKOFSKY

PALKO

TRUSTED RESULTS WHERE CRITICAL INSIGHT MEETS

Avoid surprises. Our national experts provide thorough buy and sell-side due diligence and quality of earnings assessments so you can make informed transaction decisions.

Mark B. Bober mbober@bmf.cpa

Steve C. Swann sswann@bmf.cpa

Mindy S. Marsden mmarsden@bmf.cpa

Key considerations in raising debt or equity capital

By Edward Hopson

Entrepreneurs, business owners and senior executives have been engaged in raising capital for centuries. Whether the capital was nanced as debt or equity, the “best practices” to raise the capital have changed over the years. But one thing has remained constant — providing evidence the debt can be repaid or that the return on investment justi es the equity investment and risk. Lenders and investors employ many methods to evaluate the inherent risks and returns of business loans or equity investments. We explore some key methods utilized in today’s lending and private equity industries.

The most common form of raising capital is debt, which is usually obtained as either a bank loan, equipment, real estate nancing from specialty lenders or capital leases from leasing companies with options to purchase the equipment at the end of the lease term. These lenders usually adhere to commercial credit policies and underwriting guidelines rooted in “The 5 Cs of Commercial Credit:”

• Character: professional background and credit worthiness

• Collateral: pledged assets

• Capacity: the borrower’s ability to repay the loan.

• Capital: The business’ net worth or equity, and potentially the personal net worth of any loan guarantor associated

with a startup

• Conditions: the current and projected economic climate.

The focus of raising equity shifts to future potential. Characteristics such as product/service marketing potential, sales projections and the enterprise’s future valuation are important to equity investors. Less emphasis is placed on the owners’ net worth since equity investors usually have the option to impact the management or direction. The business plan should be well-developed, and sales projections must include potential market and industry elements that can affect business growth.

Raising capital through debt or equity requires your business model and nancials to justify the nancing or equity investment. Lenders or investors want to verify the enterprise can service the debt and/or provide an adequate ROI regardless of the normal ebbs and ows of business operations.

Edward C. Hopson is a certi ed business advisor by the Ohio Department of Development’s SBDC Program, a former commercial banker at two major banks, and he has nearly 30 years of experience in entrepreneurship, business banking and real estate nance. Contact him at 234-274-6185 or edward@hopsoncc.com.

ESOPs: The business succession solution

By Jake Derenthal and Sebastian Pascu

An employee stock ownership plan (ESOP) may be the best way to secure your business legacy. Transitioning a closely-held business to an ESOP-owned structure provides current owners with nancial liquidity together with tax bene ts to the sellers and the company alike. In most circumstances, owners continue to guide the culture that has bene ted employees and customers over the years.

Selling all or a portion of a company to an ESOP allows legacy owners of family businesses to guide future management and determine their post-transaction role in the company they have nurtured for years. There is no need to walk away and watch from the sidelines unless you choose to do so.

Through creation of an ESOP, selling company owners lead the transformation of the business while generating favorable after-tax sale proceeds in a structure designed to bene t the owner’s family, employees and customers for years to come. ESOP bene ts include:

• Creation of perpetual tax-exempt market maker for company stock.

• Minimizing estate taxes and preserving family wealth.

• Assuring management continuity and company culture.

• Eliminating federal income taxes on company pro ts.

• Assuring continued care for company employees and customers.

After the ESOP transaction, most sellers continue to manage the business and build an “ownership culture” which is the driving force for ESOP companies out-performance of non-ESOP counterparts. Employees get a “piece of the action” that allows family businesses to grow and thrive, bene ting generations of future ESOP stakeholders.

Jake Derenthal is a partner and chair of Walter Haver eld’s Business Services Group. He is experienced in corporate transactions including business succession planning, ESOPs, mergers, acquisitions, divestitures and corporate restructurings. He can be reached at 216928-2933 or jderenthal@walterhav.com.

Sebastian Pascu is a partner and chair of Walter Haver eld’s Tax & Wealth Management Group. He counsels domestic and international highnet-worth individuals, families and closely-held businesses in a wide range of personal, charitable, business succession (ESOP) and estate planning matters. He can be reached at 216-619-7870 or spascu@walterhav.com.

HOPSON

CORPORATE GROWTH & M&A

Northeast Ohio’s top deal makers to be honored

ACG Cleveland will recognize the winners of its 28th Annual Deal Maker Awards. The event is scheduled for Jan. 29 at the Huntington Convention Center of Cleveland’s Atrium Ballroom.

The Deal Maker Awards honor Northeast Ohio’s leading corporate deal makers for their accomplishments in using acquisitions, divestitures, financings and other transactions to fuel sustainable growth. Here are this year’s winners:

Deal of the Year Winner: CBIZ, Inc.

CBIZ, Inc. (NYSE: CBZ) is a leading professional services adviser to middlemarket businesses and organizations nationwide. With unmatched industry knowledge and expertise in accounting, tax, advisory, benefits, insurance and technology, CBIZ delivers forwardthinking insights and actionable solutions to help clients anticipate what’s next and discover new ways to accelerate growth. CBIZ has more than 10,000 team members across more than 160 locations in 21 major markets coast to coast. For more information, visit cbiz.com.

Corporate Deal Maker Winner: NexaMotion Group

NexaMotion Group (NMG), the parent company of Transtar, is at the forefront of innovation, tackling critical challenges in the automotive repair industry and serving both transmission and general automotive repair shops. With over 50 years of leadership in the aftermarket, NMG is dedicated to simplifying complex vehicle repairs to keep the world moving. Supported by a team of more than 1,500 dedicated members and a robust network of over 125 locations, NMG provides access to industry-leading brands and delivers forward-thinking solutions. Through unparalleled customer service, efficient distribution of cutting-edge OE and aftermarket products, and its industry-leading e-commerce platform, Transend Auto Tech, NMG simplifies the process of ordering complex parts, setting

a new benchmark in the aftermarket space.

Over the past 18 months, NMG has achieved remarkable growth through strategic acquisitions and divestitures.

By adding C&M Auto Parts, Arch Auto Parts, PPi Automotive, 4M Parts Warehouse and City Auto Supply to its portfolio, NMG has expanded its footprint by 47 locations, welcomed 470 new team members and driven significant revenue growth. These acquisitions have enhanced the company’s ability to serve customers by broadening its reach and expanding product offerings.

In parallel, NMG successfully divested CoverFlexx Group to Axalta Coating Systems for $285 million, a strategic decision that enables a focused investment in its core business.

NexaMotion Group continues to redefine the automotive aftermarket by leveraging innovation, strategic growth and strong customer partnerships, confidently shaping the future of the industry.

Buyout Deal Maker Winner:

Bridge Industries

Bridge Industries is a private holding company focused on acquiring and advancing companies within the industrial manufacturing and energy sectors. The firm collaborates with management teams to drive growth and operational excellence, creating longterm value for all stakeholders. Bridge Industries’ strategic approach emphasizes hands-on operational involvement and the integration of complementary businesses to maximize value.

Women in Transactions: Megan Mehalko, Co-chair, Corporate & Securities Practice Group; Member, Executive Committee

Megan is a seasoned attorney and trusted adviser to both public and private companies, providing strategic counsel

2025 CALENDAR OF EVENTS

in executing complex domestic and international mergers, acquisitions, divestitures and joint ventures. With a deep expertise spanning critical industries such as performance materials, metal forging, chemicals, health care devices and consumer products, Megan has consistently delivered exceptional outcomes for her clients.

Her leadership extends beyond deal execution. Megan is an authority on corporate governance, securities law, ESG strategy and compliance, ensuring that her clients not only achieve their strategic objectives but do so with integrity and foresight. Her role in the firm’s Public Company Practice, Private Equity Group and Polymer Industry Team underscores her versatile expertise and ability to navigate diverse business landscapes.

Megan’s influence is further highlighted by her roles on the firm’s executive, professional development and finance committees, where she demonstrates a commitment to shaping the next generation of legal professionals and ensuring the firm’s operational excellence. Known for her ability to handle high-stakes, complex transactions, Megan exemplifies the spirit of a top dealmaker. Her innovative thinking, coupled with her dedication to her clients’ success, makes her a standout leader in the business and legal community.

Megan earned her J.D. from Case Western University School of Law. Her commitment to the community is reflected in her roles as chair of the Board of Trustees of Laurel School, long-serving board member of College Now Greater Cleveland, board member of Business Volunteers Unlimited, membership in In Counsel With Women and The 50 Club of Cleveland.

Megan’s exceptional track record and unwavering commitment to excellence make her a deserving recipient of ACG Cleveland’s Top Dealmaker’s Award.

2024-25 Officers and Board of Directors

EXECUTIVE OFFICERS

President Beth Haas, Cyprium Investment Partners

Past President Jay Moroscak, Aon

President Elect Tom Libeg, Grant Thornton

Executive Vice President, Annual Events Terry Doyle, Calfee

Executive Vice President, Branding

Peter Cavrell, Fortress Security Risk Management

Executive Vice President, Governance (Co-Chair) Charles Aquino, Edgepoint

Executive Vice President, Governance (Co-Chair) Mitch Gecht, Benesch

Executive Vice President, Innovation Ryan McGovern, Star Mountain Capital

Executive Vice President, Membership Dawn Southard, Team NEO

Executive Vice President, Programming (Co-Chair) John Allotta, BakerHostetler

Executive Vice President, Programming (Co-Chair) Nick House, Vorys

Executive Vice President Sponsorship

Ann Seger, Calfee

Treasurer Don Stanovcak, Plante Moran

At-Large

Tricia Balser, CIBC

Corrie Menary, Kirtland Capital Partners

Mark Heinrich, Plante Moran

BOARD OF DIRECTORS

Rob Cheffins, CIBC

Steve Danford, KeyBanc Capital Markets

Michael Fanous, PwC

Dave Fechter, Acchroma

Sarita Gavhane-Ritz, Edgewater Capital Partners

Matt Koleman, Deloitte

Mindy Marsden, Bober Markey Fedorovich

Craig Panzica, CIBC

William Parker, Parker Revenue Growth Strategies

Brandon Patton, Aon

Lizabeth Roth, Copper Run

Kevin Rozsa, Transtar Industries

Larissa Rozycki, Harris Williams

David Schindelheim, Jones Day

8 a.m. to 9 a.m. New Member Meet Up Panera Rockside Road

About this project

This section was produced by Crain’s Content Studio, the marketing storytelling division of Crain’s Cleveland Business, in collaboration with ACG Cleveland. For questions about this project or to participate in the future, please contact Crain’s Cleveland Business Sales Director John White at John.white@crain.com.

MAY 8 4:30 p.m. to 6:30 p.m. New Member Happy Hour Alley Cat

MAY 22

8:30 a.m. to 10 a.m.

ACG Akron: Spring Panel Event Buckingham, Doolittle & Burroughs

MAY 29

12 p.m. to 1:30 p.m.

WIT: Poppy’s Empowerment Luncheon: Celebrating Local Female Founders Poppy’s Shaker Heights

JUNE 4

8 a.m. to 9 a.m. New Member Meet Up Panera Rockside Road

JUNE 12

3 p.m. to 6 p.m. WIT: Canterbury Kick-Off Golf Clinic Canterbury Country Club

JUNE 24

5:30 p.m. to 7:30 p.m.

Dealsource® & Summer Social The Shoreby Club

SEPT. 29

11 a.m. to 7 p.m.

ACG Annual Golf Outing Firestone Country Club

NOV. 6

9 a.m. to 1 p.m. Hill n’ Dale Clay Shooting

MEHALKO

Luna Bakery & Cafe

1468 W. 9th St., Suite 110

When Bridget ibeault was deciding where to open a downtown location for Luna Bakery & Cafe in 2023, she chose the space on West 9th, just o Superior Avenue, for two reasons: recruitment by Joe Kubic, co-founder and CEO of the Adcom Group, and Sherwin-Williams.

Kubic, who is part-owner of the building, wanted a breakfast and lunch place in the building for his employees and for them to bring clients, she said. So, the former insurance space was transformed into a cafe.

But the under-construction HQ was also a big reason. “One of the deciding factors for coming here was that building,” she said.

While there's a Starbucks on West 6th across the street from the new Sherwin-Williams building, Luna is the closest local bakery & cafe to the new headquarters. (Machine Gun Kelly’s co ee shop, 27 Club Co ee, is about a 12-minute walk down St. Clair Avenue from the new HQ.)

Luna already does catering for Sherwin-Williams, but for smaller groups, around 20 to 30 people, ibeault said.

e focus of the downtown location, she says, is on catering for o ces, as there are not many places to get breakfast and lunch delivered for a meeting. But while catering is the focus — and that part of the business is growing — Luna still needs walk-in customers, too. (Luna has seating for 75 people at a time.)

While the amenities SherwinWilliams will have at the new building are still unknown, ibeault wants to build a better

MELT

From Page 1

best incarnations of Melt that there ever was. But the economy sucks. ere is a lot of competition out there. And the robust sales that we needed just never showed up.”

It's been quite a roller coaster for Melt, which quickly made a name for itself following the debut of its agship restaurant in Lakewood in 2006. In 2010, Melt’s growing popularity skyrocketed after being featured on the Food Network’s “Diners, Drive-Ins and Dives” and e Travel Channel’s “Man v. Food.” By this point, Melt had secured a strong local following and became a sought-after destination for Cleveland visitors. e company capitalized on its popularity through the 2010s and opened several new restaurants, fueling its expansion with debt.

By 2019, the Melt network had ballooned to some 350 employees across 10 company-owned shops plus prominent franchises at Cedar Point — which closed last year following the expiration of its lease — and Progressive Field. It was easily among the fastest-growing restaurant groups in the state at the time. But as the COVID outbreak

relationship with the company, whether that's catering to a larger group or possibly selling pastries in the new space.

Luna also hopes to see a “big bump” in walk-in foot tra c and

struck in 2020, Melt became a victim of its own success.

While Fish acknowledges that quality was taking a hit as expansion ramped up, sales plunged amid business lockdowns and a shift away from in-person dining that has been slow to reverse.

Like many restaurants, Melt has longed for a return to prepandemic normal that has never come. As sales stagnated and costs increased in the years following the COVID outbreak, Melt began consolidating stores.

When Melt announced the closure of its Avon location at this time last year, its footprint had been reduced to ve shops.

Closures continued from there. And come June, Melt led for Chapter 11 bankruptcy protection in a bid to reorganize and rebuild the company.

By mid-August, Fish was back to running just his original Lakewood location, where he was now working seven days a week. In a last-ditch e ort, he closed brie y to renovate his original space, refresh the menu and hoped to recapture the buzz of the public that enabled its success.

While there were many good days, the slow days were too much to overcome.

the amount of tra c that comes in once the HQ opens, there may be a need for additional sta , ibeault said.

Luna Bakery & Cafe is open Monday through Friday from 7 a.m. to 3 p.m. It's closed on weekends.

Camino

1300 W. 9th St.

When EJ Kunath took over as general manager in June, she knew she wanted to update the Mexican restaurant’s menu to provide more options and cater to more dietary needs. While the timing of the new HQ was “mostly coincidental” it “encouraged me to move quicker on some decisions,” she said.

Along with updating the menu, Kunath said Camino is working on a loyalty program to encourage repeat customers.

“We do hope to see an increase in business, particularly during lunchtime and happy hour,” she said.

e number of patrons at Camino for lunch depends on the weather, Kunath said. In the summer, it ranges from half full to a short wait for a table. But during winter, they can usually get by with just one server working.

Happy hour has been more sparse, but Kunath attributes that to revamping the specials and “moving things around,” she said. She is currently nishing up a new happy hour food menu with new items and returning favorites.

Camino is open Monday through Friday from noon to 10 p.m., and Saturday from 11:30 a.m. to 10 p.m. It's closed on Sundays.

deliveries with companies such as DoorDash and UberEats to workers at the new building.

For sta ng, Luna currently has ve to seven employees on duty on any given day. Depending on

“It was a roller coaster we couldn’t continue to ride,” Fish said.

According to bankruptcy lings, Melt reported a negative cash ow for August of nearly $1,100. And Fish said that these last few months amid the holiday season weren’t as fruitful as had been hoped.

“We started OK in September, but then November and December were poor across the industry,” Fish said. “I’ve talked with a bunch of people who are saying this is one of their worst holiday seasons ever.”

If there were at least some positive trends, Fish — who also is working through a personal bankruptcy — said he would’ve tried to keep going. After all, he’s already come this far. Fish said he’s tried to put every cent he could toward keeping Melt operational. He said that he hasn’t paid himself since late summer.

But the path Melt has been on has simply been unsustainable. ere was “no glimmer of hope,” Fish said, that 2025 would be better than 2024. at’s how he came to reluctantly decide to throw in the towel.

“We needed the sale to be better than they were from the start, but it just never showed up,” Fish said. “ ere is only so much you can do. At some point, you have to admit this is not working.”

build its global HQ downtown sends a necessary signal with the Cleveland Browns planning to move to Brook Park. “ em coming into the city and spending the gazillion dollars that they have spent on that building sends the right kind of signal,” Torres said. “It says, ‘We believe in our urban center. We believe in Cleveland.' ”

When it comes to Mallorca speci cally, the opening of the headquarters has made Torres rethink closing the Spanish and Portuguese sit-down restaurant for lunch. Years ago, you would have to make a reservation for lunch but now, there may only be two other people in the restaurant, she said.

While she did consider changing her hours, the new HQ not only made her want to stay open for lunch but also forced her to think about creating a di erent type of lunch menu and other catering options.

Torres already sees SherwinWilliams employees frequent her restaurant for business lunches along with hosting business dinners for them.

Just like ibeault, Torres hopes to expand her existing relationship with Sherwin-Williams and to see more employees frequent the restaurant.

While it's still just an idea at the moment, she mentioned that she may create a special reward system for employees due to the loyalty that has been shared between the two companies. She also is contemplating the option of adding a happy hour to the establishment, as there is currently not one, to draw in the after-work crowd.

Mallorca

1390 W. 9th St.

To Mallorca owner, Laurie Torres, Sherwin-Williams' decision to

Melt’s last day of business was Sunday, Dec. 29. Fish is now working on winding down operations and clearing out the space.

“ ere is a bit of relief (in making the decision to close), but it is a far second compared to the grief and that massive sense of like, what do I do next? e road ahead is very unknown,” Fish said. “I haven’t had another plan in place. I’ve not been looking for a new job or scoping out what’s next. It’s almost 20 years of my life that I’ve put into this. Saving the business was all-encompassing. It consumed me.”

ough mourning the loss of his business, Fish said he will always remember the good times and the impact Melt has had on the community. Despite the dour circumstances, he has enjoyed outreach from well-wishers sharing fond memories of good times, rst dates, rst jobs and friends made at Melt Lakewood and elsewhere. Around 1,000 people have had the Melt logo tattooed on their skin — a phenomenon that began with a wild promotion for discounted food in the company's early days.

“I accomplished way more than I ever thought I would with Melt,” Fish said. “It grew well beyond my experience. I employed thousands of people in Ohio, and we served

Mallorca is open Tuesday through ursday from noon to 9 p.m., Friday from noon to 10 p.m., Saturday from 2:30 p.m. to 10 p.m. and Sunday from 1 p.m. to 9 p.m.

food to literally millions of people in 18 years. We created this community, like a little subculture, within itself.”

"I would like to thank Matt Fish and Melt for being an active and supportive member of the Lakewood community over the last eighteen years,” said Lakewood Mayor Meghan George. “Melt has been a staple of the downtown Lakewood neighborhood and has sponsored many local events in collaboration with LakewoodAlive. While we are sad to see the restaurant close, we wish Matt all the best in his future endeavors."While Melt is ending on a down note, Fish is optimistic for what the future holds, whether that’s in the restaurant space or something else.

“Hopefully someone is out there that sees me or what I’ve accomplished and says we need someone like that. at is what I’m hoping for, but I’m not putting my eggs all in that basket,” he said.

“I think I have the talents and work ethic to really help somebody else who was in the same position I was in 10 years ago,” he added. “But I want to do something ful lling and that I can really rally behind and sink my teeth into because that is what I did for almost 20 years.”

Camino at 1300 W. 9th St. | ALEXANDRA GOLDEN

GEAUGA LAKE

Heights to open. Meantime, Pulte Group is far along in townhouse and single-family home communities on the east side of the lake, primarily centered at the old Geauga Lake campground. And the City of Aurora has acquired the lake property itself and much of the former Sea World frontage for a public park.

The past few years at the park have become a tale of two projects. Pulte bought 240 acres on the Aurora side of the park in August 2020 for $2 million. ICP snagged the heart of the park with roller coasters, other rides and concession stands when it bought 377 acres in November 2020 for $4 million, according to public records.

Those sales ended an odyssey for the site since Cedar Fair LP of Sandusky (now Six Flags, based in Charlotte) shut Geauga Lake in 2007 and Wildwater Kingdom in 2016. The properties sat idle through the Great Recession and housing collapse until buyers came forward more than a decade later. A court case, Bainbridge and Aurora planning efforts and the formation of a Joint Economic Development District all have been part of the wind-up as 2025 begins.

Festive past

The spring-fed Geauga Lake is what geologists call a kettle lake, which was carved out by glaciers. (Most accounts term its original name as Gile’s Pond.) The park’s beginnings as a recreation area date from the 1870s as a place for swimming, fishing and picnicking, much the way Cedar Point began in Sandusky.

The opening of a resort in 1888 signaled the park’s emergence as a destination for pleasure seekers, according to the Aurora Historical Society's website. Its amusement park era dates to 1920.

Until the 1970s, the Erie Railroad and its forebears connected the area to downtown Cleveland, which included commuters and, on the weekends, a train ride for those from densely populated Cleveland. Geauga Lake had its own train depot, which was demolished in 2003. The name of Depot Street, which surrounds much of the lake, is a reminder of that era.

When Sea World of Ohio opened on 50 acres in 1970, the lake began drawing tourists from throughout the Midwest. After Sea World closed in 2000, hotels as far away as Beachwood felt the sting of the loss, a premonition of what was to come more broadly for the lake when Cedar Fair shut it down.

Park for the public

will this time provide public access to the water itself. And

Mayor Ann Womer Benjamin hopes at least one of the buildings such as the aquarium may be repurposed as a restaurant.

The park plan solidified earlier in December when Aurora closed on the $5.3 million purchase of 48 acres of property for a public park as well as the lake itself. Planning for hiking trails and other steps to create a park are underway.

Womer Benjamin sees the city’s success in gaining the lake and park site as continuing the history of public use of Geauga Lake as a public playground.

"This is a legacy purchase for the people of Aurora," she said in a phone interview. "It is the opportunity of a lifetime to guarantee our residents lake access and a destination that is going to be one of the gems of Northeast Ohio."

Tall task of repurposing land

Repurposing an amusement park has its own challenges, from brownfields to removing the remnants of rides, including hulking concrete foundations. ICP received a $4 million state grant to help with some of that cost.

itself rather than rely on local land developers for lots.

Spenthoff is excited about Aurora’s plans for the city park.

“That will complete the vision of green space with hiking trails and lake access for the residents,” Spenthoff said.

Retail picks its spots

In the meantime, movement may begin within this year or next on big-box stores planned for the ICP land.

Meijer of Grand Rapids, Michigan, in October 2023 shelled out $4.9 million for almost 17 acres in the area west of VC Park, also facing State Route 43. The grocer is in the planning stages for the site, but a construction date has not been set, according to an email from Meijer spokesperson Erin Cataldo.

And further west than Meijer, Menards owns a 25-acre site it bought for $7.5 million in 2020. Menards did not reply to an email for comment. However, Menards' interest in the site was critical. Chris Semarjian, the owner of ICP, said the ability to sell the site to the Eau Claire, Wisconsin-based retailer played a role in ICP undertaking the massive land deal.

Austin Semarjian, an executive vice president of the family owned business, said in a phone interview he is happy the apartments are going in and the company’s belief in the value of the site remains unchanged. However, he declined to discuss what is ahead in detail.

“Land development is timeconsuming,” Austin Semarjian said.

the required utility services.

“We’ve faced a similar situation in Nashville, so Pulte has had experience dealing with rocky sites,” said Paul Spenthoff, Pulte Cleveland division president. “Our excavating partner, Fechko Excavating (of Medina) also had such experience. We had to use dynamite to install voids for water and utilities.”

The basement and foundations of homesites themselves also had to be dynamited to open spots for the final ground clearing for the houses and townhouses.

In 2025, Pulte will finish land preparation for the final phases of its Geauga Lake properties. A single-family community with colonials is sold out, which Spenthoff credited to the strength of Aurora’s school system. Pulte is still selling townhouses and ranch homes.

About 25 sites were ready for sale in 2024, and in early December, just two were left. Pulte expects to sell about 45 units annually. All told, Pulte will build and sell 308 homes by the time it closes out its Geauga Lake inventory.

For its part, ICP is buying additional properties at a rapid clip, both here and in other parts of the country. And ICP’s initial statement that it views its Geauga Lake investment as a legacy project by the company for the region may breed added caution.

“We’re looking for the right deals, not the fastest deals,” Austin Semarjian said.

An ICP plan to restore the Geauga Lake dance hall by converting it to retail use also is in the works, he noted.

Jeff Markley, a Bainbridge Town-

ship trustee, said he expects developments soon on a proposed 55and-over community on some ICP land in the township as well as a single-family home development. An arterial road needs to be installed north of State Route 43 to open those parcels to development, Markley said.

ICP’s map of the proposed redevelopment of its part of Geauga Lake shows nine sites are still available. And Pulte has a commercial site available near Liberty Ford on State Route 43 at Squire Road, which provides access to its Renaissance Park project.

Keeping the past alive

Although the parkland and commercial plans are marching forward, there also is a profound loss associated with the demise of the amusement park.

Efforts to find a new home for the Big Dipper roller-coaster ride at Geauga Lake came to naught. And Big Dipper was just the last name for the huge coaster that dated from 1925. American Coaster Enthusiasts, a nonprofit formed by roller coaster fans with members from 16 countries, in 2009 named the Big Dipper an ACE Roller Coaster Landmark due to its historic significance. The group notes on its website the Big Dipper is the only designated landmark to be demolished.

The rides may be gone, but the real estate developers have retained connections to what was.

ICP calls its project the Geauga Lake District in a way similar to the way residential land developers recall the region's settlers, using the names of local settlers for streets in their projects.

Pulte has named streets in its project Penny Lane, Memory Lane and Dipper Lane in memory of the old park.

Some participants in the redevelopment also keep the size of the effort in mind as they discuss the redevelopment of the park.

“If you think of redeveloping the park like the running of the Kentucky Derby, the horses are about 20% around the racetrack,” Markley said.

EXECUTIVE RECRUITER

The planned city park for Aurora will restore the lake to public use in about 2026 when the city finishes those plans. The beach where Sea World skiers once coasted toward shore and watched popular Sea World acts

However, the former campground and Sea World parking lot presented an overlooked challenge.

Some of Pulte’s land adjoins a former limestone and sandstone quarry in what had become the campground. With rock near the surface, dynamite had to be used to ready sites for residences and

“We’ve found some seasonality in terms of sales of ranches,” Spenthoff said. "When the existing sales market picks up, so do sales to empty nesters who have sold their homes. We’ve had six homes sell that we built on speculation this year."

Townhouses start at $409,000, while ranches start at $475,000.

“This has gone as expected,” Spenthoff said. The pace of sales has validated Pulte’s efforts to develop large residential parcels for

Construction crews hired by Vision Development of Columbus are finishing up suites at the company’s VC Park in Bainbridge Township. Local governments required the shoreline be preserved as a public promenade, but the suites will nestle near the 55-acre lake. | PHOTOS By STan BuLLarD

Townhouses costing upwards of $400,000 are selling steadily at Pulte’s townhouse project on part of the Geauga Lake Amusement Park site in Aurora.

Bober Markey Fedorovich

Section

PEOPLE ON THE MOVE

Hahn Loeser & Parks

LAW

McCarthy, Lebit, Crystal & Liffman Co., LPA

Ciaccio

Nick Ciaccio joined BMF as Managing Director of the firm’s Business Advisory Services (BAS) practice. With a robust background in finance and accounting, Nick brings a wealth of experience and expertise that will further enhance BMF’s commitment to providing exceptional service to its clients. Nick has developed a strong skill set in financial analysis, strategic planning and client relationship management.

Miller

Stephanie Miller joined BMF as Controller for the BAS practice. She works with client management and its accounting teams to identify best practices and implement solutions and plans for the future. Stephanie has spent more than 20 years in corporate accounting, and has focused her practice on accounting and advisory services.

ACCOUNTING

HW&Co. CPAs & Advisors

BANKING

Fifth Third Private Bank

Fifth Third Private Bank

BANKING

Westfield Bank

named Chris Keller as Senior Vice President and Senior Portfolio Manager. In this role, he is responsible for developing and managing investment plans designed to achieve client objectives. Chris has more than 30 years of financial services experience that includes various wealth management leadership roles such as area director, market manager and director of portfolio management. He earned a bachelor’s degree in mathematics and business administration from Adrian College. He currently serves on the boards of the Cleveland Lutheran High School Association and Lutheran West High School.

BANKING

Fifth Third Private Bank

Susan Kornatowski, CPA, JD, has been promoted to Principal at HW&Co, CPAs & Advisors. She has expertise in tax planning and preparation, financial reporting and analysis, and business consulting. As a member of the Private Business Advisory Group, Susan serves businesses and organizations of various sizes and stages of development. She has degrees from Cleveland State University (BA in Business Administration: Accounting) and Case Western Reserve University (BA in Psychology and Juris Doctor).

ACCOUNTING

Maloney + Novotny LLC

Mark Crawford. CPA has been appointed Partner in Charge of the Canton office. With 32 years of public accounting experience, Mark brings a wealth of expertise to the role. He became a shareholder in 2004 and provides assurance, tax, and business advisory services to clients in both the commercial/industrial and not-for-profit sectors. Mark has been an active member of the firm’s Accounting & Auditing Committee and currently serves on its Management Committee.

Westfield Bank’s commercial banking team welcomes Colby Chamberlin into the role of VP, commercial loan officer. Colby is an advocate of Wayne County, and a highly experienced commercial lender with more than two decades of experience. Based at Westfield Bank’s Wooster branch, Colby will continue to partner with and support the financial needs and growth of businesses within our Wayne County and surrounding communities.

BANKING

Westfield Bank

Fifth Third Private Bank named Stephanie Kormanec, JD, CEPA® as Senior Vice President and Wealth Management Advisor. In this role, she will deliver customized solutions to individuals, business owners and multi-generational families to protect and grow their assets. Stephanie has more than 10 years wealth management experience working with high-net-worth individuals. She also has 14 years’ experience in private practice, where she specialized in trust, estate planning, charitable gifting strategies and business succession planning. She earned a bachelor’s degree in political science and a law degree from The University of Akron. Stephanie serves on the board of Embracing Futures.

BANKING

Fifth Third Private Bank

Fifth Third Private Bank named Andrew Rothermel as Vice President and Senior Portfolio Manager. In this role, he is responsible for developing and managing investment plans designed to achieve client objectives. Andrew has more than nine years banking experience working within the Private Bank with a focus on investments and portfolio management. His prior leadership roles include analyst team lead and team leader of a large market. He earned a bachelor’s degree in finance and management from the University of Mount Union. Andrew serves as Treasurer on the board of Family Promise of Summit County. He also serves and was a founding member of the Business Advisory Council for the University of Mount Union.

To place your listing, visit www.crainscleveland.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com PROMOTE. Why not?

Andrew Ryzner is a welcomed addition to Westfield Bank’s commercial banking team, where he serves in the role of VP, commercial loan officer. Andrew has nearly 20 years of branch management and business banking experience. Throughout his career, Andrew has built and managed relationships with hundreds of clients and will continue to partner with and provide strategic financial solutions to help the businesses in our Northeast Ohio communities achieve their goals.

CONSTRUCTION

Marous Brothers Construction, the award-winning, multigenerational construction company, is pleased to announce that Brad Buescher has been hired as Director of Human Resources. With 15+ years of experience in HR, IT, and operations management, Buescher brings a modern skillset with an operations perspective. His businessminded approach and team focus allow him to offer valuable insights, aligning the needs of employees, operations, and corporate functions to ensure value for all stakeholders.

HLP’s Cleveland office promoted Litigation attorneys Bryan Evans and Jacqueline MeeseMartinez to partner. Both volunteer for the Cleveland Legal Aid Society.  Evans, a Captain in the U.S. Army JAG Corps reserves, is active with Malachi House and St. Ignatius Alumni. He’s earned Best Lawyers Ones to Watch recognition three times. He earned a J.D. from Notre Dame Law, an M.A. from John Carroll and a B.A. from Ohio University.   Meese-Martinez serves as an adjunct professor at Case Western Reserve and represents clients in technology and software, construction, manufacturing and distribution, consumer goods and healthcare. She’s been named to Ohio Super Lawyers Rising Stars twice. She earned a J.D. from CUNY Law and a B.A. from Miami University.

LEGAL

Calfee, Halter & Griswold LLP

Josh Berggrun, a Partner with Calfee’s commercial real estate and real estate finance groups, advises business clients that are buying, selling, leasing, financing, and developing commercial real estate and with the real estate components of private equity and corporate transactions. His clients include lenders, real estate developers and investors, private equity funds, independent sponsors, lower-middle-market companies, shopping centers, manufacturing, distribution and retail companies.

LEGAL

Calfee, Halter & Griswold LLP

Calfee, Halter & Griswold LLP is pleased to announce the promotion of Brad Pulfer to Partner within the firm’s Intellectual Property practice group. Brad brings extensive expertise in advising clients on sophisticated intellectual property and technology-related issues. As a registered patent attorney, Brad’s practice is focused on emerging technologies, including artificial intelligence and machine learning, fintech, telecommunications, computer networking, digital streaming, and cybersecurity.

McCarthy, Lebit, Crystal & Liffman Co., LPA is pleased to announce that Mark Norris has joined the firm’s Litigation group as a Principal attorney. Mark has extensive experience in commercial litigation, handling complex disputes for both institutional and individual clients. His legal practice spans product liability, personal injury, breach of contract, class action defense, and multidistrict litigation, with a results-driven approach to effectively advocating for client success.

STAFFING & SERVICES

Direct Recruiters, Inc.

Stephen Benson, Partner at Direct Recruiters, joined the firm in 2017 and has grown from Project Manager to Recruiting Director - HIT. Stephen specializes in placing top talent across sales, product management, engineering, and operations for high-growth, PE- and VC-backed healthcare IT companies nationwide. His expertise and leadership have made him a trusted advisor within the HIT team.   Bradley Morrison Partner at Direct Recruiters, began in 2019 and advanced to Principal Recruiter in 2023. Bradley’s ability to understand client and candidate needs has allowed him to build lasting relationships and deliver high-performing talent across the healthcare IT sector.   We’re proud to call you both Partner. Congratulations Bradley and Stephen!

Direct Recruiters, Inc.

Since joining DRI in 2022, Jess Marino has made a tremendous impact in the Material Handling, Packaging, and Food Processing sectors. With a strong background in recruiting and consulting, she leverages her expertise and emotional intelligence to build meaningful relationships, delivering outstanding career matches. Her dedication, grit, and results-driven approach have been key to her success, while her ability to understand industry needs and connect top-tier talent has set her apart.

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Benson

Meese-Martinez Evans

Marous Brothers Construction

CrainsCleveland.com

on the Move manager Debora Stein (917) 226-5470, dstein@crain.com

Classified sales Suzanne Janik (313) 446-0455 or sjanik@crain.com

Inside sales Tawni Sharp CRAIN’S CONTENT STUDIO

Senior