Crain's Cleveland Business

SPORTS BUSINESS

VOL. 38, NO. 14

APRIL 3 - 9, 2017

Indians feeling fans’ love, by way of ticket sales PAGE 11

Source Lunch

Quite an endeavor Cleveland Clinic launches new venture arm. Page 4

The List

CLEVELAND BUSINESS

Lisa King, executive director of Summit Metro Parks Page 23

NEO’s largest commercial contractors Page 18

MUSIC

Rock Hall 2.0: It’s evolution, baby Under CEO Harris, Hall shows double-digit increases in paid attendance after relatively stagnant growth

By TIMOTHY MAGAW tmagaw@crain.com @timmagaw

“LONG LIVE ROCK.” The construction of that seven-foot high art installation that cries out the art form’s lasting legacy in bold, red typography on the Rock and Roll Hall

of Fame’s plaza is, in many ways, emblematic of the ongoing transformation work taking place at the almost 22-year-old institution, both physically and from an operations standpoint.

Since the Rock Hall opened in 1995, its plaza has sat in stark contrast to the iconic I.M. Pei-designed build-

ing on its brim. The concrete runway felt particularly dreary during Cleveland’s winter months, but the splash of color added some much-needed energy to the space, and more changes are on the way.

Since Greg Harris took over as CEO in 2013, the Rock Hall

has been quietly plotting how to move beyond what he described as a “comfortable flat mode.” And so far, the plan — pieced together after at least a year of intense audience segmentation work — appears to be working. In 2015 and 2016, for example, the Rock Hall saw double-digit increases in paid attendance after a few years of relatively stagnant growth.

Plus, its finances remain strong — 2016 was a stellar year — and confidence in the renewed strategic plan has resulted in significant philanthropic commitments, including a $9

$25M

Revenue

20M

SEE ROCK HALL, PAGE 21

$24 million 18% increase over 2015

Rock and Roll Hall of Fame operating revenue showing gains The Rock Hall has had double-digit attendance jumps in each of the last two years, which has sparked a boost in the iconic institution’s revenue.

million gift from retired Sherwin-Williams Co. chairman Chris Connor and his wife, Sara, who will be recognized with a new interactive theater bearing the family name that will showcase a short film from Academy Award winner Jonathan Demme highlighting 32 years of inductee performances. And with $13.3 million worth of upgrades slated to go live in the coming months and next year’s return of the induction ceremony to Cleveland — this year’s takes place Friday, April 7, in Brooklyn — Rock Hall leaders expect that momentum only to accelerate.

Expense

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Entire contents © 2017 by Crain Communications Inc.

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Patrons and passersby relax on the new “Long Live Rock” letters in front of the Rock and Roll Hall of Fame.

(Tim Harrison for Crain’s)

Akron << Lucky

Shoes is still sturdy after 98 years in business. Page 20

FirstEnergy is hoping state legislators will help it maintain or sell its power stations.

Page 19

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Business is flying high at Component Repair

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Component Repair Technologies Inc. in Mentor has grown significantly in recent years, hiring almost 100 employees since the start of 2015. And it shows no sign of slowing down.

Privately held Component Repair Technologies repairs turbine engine components, mainly for the commercial aircraft industry, but also for marine and industrial customers, said human resources manager John Gallagher. The company doesn’t make its own products, but uses processes like plating or welding to do that repair work for its customers, which include original equipment manufacturers and commercial air carriers. Much of what the company does involves building up portions of worn parts and then grinding or machining them to the correct dimensions. And those dimensions have to be exact — the company is often working in terms of 100,000ths of an inch, Gallagher said.

Gallagher declined to share sales figures, but noted the company has grown steadily in recent years. Repair business in aviation is up for the industry, not just for Component Repair Technologies, he said. Aviation is up, and more planes in the air means more engines need repaired.

Basically, as Component Repair Technologies’ customers grow, the company does, too, said president Rich Mears.

Component Repair Technologies growth can be attributed to a booming aviation industry. (Contributed photo)

Tom Wheeler, owner of the business and father-in-law to Mears, said the company has always been a “quality leader” and has been consistently adding capabilities. It’s one of the few that offer so many under one roof.

Gallagher said the number of companies willing to do the com-

plex repair work Component Repair Technologies does has been decreasing. It’s a business in which it’s hard to gain experience, and many larger companies focus on simpler repairs where they can get more volume.

“And that leaves us to focus on what we’re best at, which is handling

the most difficult repair work on these critical components,” Gallagher said.

Since the start of 2015, Component Repair Technologies has added 90 employees, bringing the total from 350 to 440. The majority — about 300 — are in the shop, Gallagher said. And Component Repair

Technologies has about 50 open positions that it’s looking to fill. Much of the growth has been on the skilled trades side: machinists, welders, thermal spray technicians. But the company is growing all areas of the business, from training to IT to supply chain.

The growth Component Repair Technologies has seen isn’t a “blip on the radar” that could be attributed to a big contract, Gallagher said. It’s been steady.

“With the amount of business that we have coming in, you know, we’re not only focused on the volume of today, but we’re really trying to grow the business for the future,” Gallagher said.

But there are challenges to hiring.

The skills gap is an issue, Gallagher said, especially with a low unemployment rate. Companies have to hire employees away from one another, and it’s even more difficult in the highly skilled roles.

“So we have to do a ton of development from within,” he said.

The majority of the roles at Component Repair Technologies are complex, Gallagher said, and the company knows employees may take a while to get completely up to speed.

For an engineer, it may take a year. A machinist may not feel comfortable in a role for five months, he said.

That means the company’s screening of applicants is more “stringent” than most, Gallagher said, and the company is willing to invest in a more detailed on-boarding process.

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Clinic venture arm hopes to assist innovation work

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Cleveland Clinic is creating a department to complement and, it hopes, enhance the work that the system’s Cleveland Clinic Innovations arm has been doing for years.

The new entity, Cleveland Clinic Ventures, will operate in tandem with Innovations, which works to turn medical breakthrough inventions into products and companies. Leaders say that through the realigned structure, Ventures will offer a renewed and added focus to efforts to spin off companies and to raise funds that help get ideas up and running all the way to market.

“Ventures has always been a part of Cleveland Clinic Innovations,” said Dr. Brian Donley, chief of staff at the Clinic. “As we have now grown, and as we continue to foster and enhance innovation in our organization, we need to bring ventures up to another level.”

Ventures’ strategy will be to maximize the results of spinoffs, focusing on their success and sustainability.

Also, the new team plans to be able to look at opportunities outside the Clinic in the next six to 18 months.

The Clinic announced new leaders for both entities. Peter O’Neill will be executive director of Cleveland Clinic Innovations, which he had been on an interim basis. And Jack Miner is joining the Clinic from the University of Michigan to serve as managing director of Cleveland Clinic Ventures.

O’Neill has worked with Innovations for more than a decade. He replaces Gary Fingerhut, who left in mid-2015.

O’Neill

Miner

As Innovations looks to have more of an impact, elevating the work of Ventures to a parallel level can help the Clinic focus on identifying and accelerating early stage companies, O’Neill said.

Since it began in 2000, Innovations has helped launch 77 companies, which have raised more than $1 billion in follow-on funding and created more than 1,200 jobs. It has issued more than 850 patents and executed more than 500 licenses on medical technology and devices.

“I think we’re ready to do more and better,” O’Neill said.

The hope is that the new structure will push forward the Clinic’s business development efforts.

Prior to joining the Clinic, Miner was director of the Venture Center at the University of Michigan, where he helped to launch more than 50 startups and to create a business formation infrastructure around intellectual property for the Office of Technology Transfer.

Miner said Ventures will work with technology and focus on a roadmap for it, which includes creating a funding strategy and business model.

“Our focus around that is to create not only high-quality startup companies, but also those companies that have potential high-value realization

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Gallagher said the company has no unskilled roles, but it’s willing to hire people without the needed skill sets and then develop them. Component Repair Technologies has an onsite training center, as well as stations that allow employees to practice onthe-job training outside of a production environment.

The company also stays involved in workforce development efforts in the region and the state, including advisory boards for Lakeland Community College and the AWT Foundation.

Alice Cable, executive director at the AWT Foundation, said Component Repair Technologies is an active member of its organization. It has representation on the board and has often participated in the RoboBots competition. Manufacturers are facing a skills gap and a potential shortage in workers as employees retire.

It’s important for them to be involved in programs that expose the next generation to the industry and to their companies, she said.

Component Repair Technologies

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Finding skilled labor is an issue for the company. (Contributed photo)

also turns to veterans for help filling the skills gap. The military is a large employer of aviation mechanics, which Gallagher said makes it a “natural fit” for some people. The work may be slightly different, but they understand the components of an engine and how it works. Currently, about 15% of Component Repair Technologies’ workforce are veterans, he said.

Overall, the company works hard at recruiting potential employees loVolume 38, Number 14 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2017 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00.

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as well to the Clinic,” he said.

O’Neill will report to Donley, as the Innovations executive director has historically done. Miner and Ventures will report to Steven Glass, the Clinic’s chief financial officer.

The organization's focus has always been on bringing technologies from bench to bedside, Miner said, but there’s a third piece: to bank. And that cannot be forgotten when one of the stakeholders is an investor. He said reporting to the financial office ensures that the last piece is a focus.

Despite separate leaders reporting to different departments, leaders say there will be constant collaboration.

“Being embedded in the same building, having a lot of the same shared resources, seeing each other every day — I mean, it’s impossible for us to not be in lockstep,” Miner said.

One of the Clinic’s most notable successful spinoffs is Explorys, a data firm purchased by IBM in 2015.

“You’re not going to hatch one of these every year,” O’Neill said. “But how do you do more and how do you put in place processes and expertise that helps give the best chance to replicate those kinds of successes?”

Successful technology must provide value to the patient, Donley said. The new structure will help to pair that tech with the other two pieces needed for successful companies: the right entrepreneur and appropriate venture capital backing.

“And so this — Innovations and Ventures — allows us to commercialize that and provide the opportunity not just internal to the Cleveland Clinic, but allows patients across the country and across the world to benefit from innovation here at the Cleveland Clinic,” Donley said. cally, as well as doing relocations, Gallagher said.

In addition to employment growth, Component Repair Technologies is in the midst of expanding its plant for the seventh time in its history. Its building at 8507 Tyler Blvd. is about 130,000 square feet, including shop space and offices, and the expansion will add about 18,000 square feet, plus an out-building attached at the end for chemical storage.

Overall, this will give the plant room to spread out and better stage parts, Gallagher said, as well as expand its clean line and non-destructive testing area. The company broke ground on the expansion in January, and Gallagher said the hope is it will be up and running by late August.

Gallagher said the company didn’t want to share the amount it was investing in the expansion.

Ronald Traub, director of economic and community development in Mentor, said Component Repair Technologies is a “significant player” in the area in terms of the size of its operation. He said the company uses the size of its space well and has a noteworthy impact on the city’s economy, between payroll taxes and the money employees spend in the city.

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PA G E 5

County judges to decide docket’s future

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

In the two-year-plus fight to restore a commercial docket in Cuyahoga County, the ball is back in Judge John Russo’s court.

Whether the commercial docket dedicated to expedited and consistent resolutions of corporate disputes and complex business-to-business cases will return remains unclear. However, the Ohio Supreme Court recently amended rules to how the docket operates, including clarifying how judges are appointed, what qualifications they need to have, terms lengths and education requirements.

The question is whether the new rules will satisfy local judges. Russo, Cuyahoga County Common Pleas Court’s administrative and presiding judge, declined to comment on that, noting only that judges will discuss the issue at their April meeting and that to speak ahead of that meeting would be premature.

“We recognize that the concerns of judges and attorneys statewide have been taken into consideration,” Russo said in a statement. “We will be discussing the amendments at the next Cuyahoga County Common Pleas Court General Division judge’s meeting. After that meeting, we will decide on the next step regarding commercial dockets in Cuyahoga County.”

The process for those rule changes being made at the Ohio Supreme Court effectively began in Cleveland.

A group of Cleveland attorneys and judges lobbied the state for the changes after Cuyahoga County Common Pleas Court judges voted to disband their docket in January 2015. That happened because of the high court’s rejection of Judge Cassandra Collier-Williams from the docket at the time, which deemed her unqualified for the position.

That move miffed local judges.

“My bench is very adamant that the way our judges are being vetted with the new Supreme Court was not how we envisioned it,” Russo told Crain’s in 2015. “And if there is any chance of the docket continuing, that

“We recognize that the concerns of judges and attorneys statewide have been taken into consideration.”

— John Russo, Cuyahoga County Common Pleas Court’s administrative and presiding judge

vetting process would be something we would want to get rid of.”

Previously, a common pleas court had to ask Ohio’s chief justice to affirm local judges to a commercial docket, which did that based on suggestions by a nominating subcommittee.

The high court changed that so now, judges are simply approved by a majority vote of judges in the general division of the local court.

Among other things, the new rules require local courts to appoint those judges to a minimum three-year term, in addition to requiring potential candidates to have served in the general division for at least three

consecutive years within the prior six years, or at least have seven years of substantial practice as a commercial or business-related litigator.

“The impetus for the changes was to respond to the concerns of the courts,” said Ohio Supreme Court Chief Justice Maureen O’Connor in a statement. “It is an evolving matter. If the original standards/requirements were proven over time to impede rather enhance a county’s ability to have a commercial docket, the Supreme Court responded with the modifications, after a careful vetting of the concerns.”

Those changes have local attorneys who never wanted the docket to go away very optimistic.

“We are very happy with what the Supreme Court has set forth and we are hopeful that whatever concerns the various judges had who opposed the docket that this addresses those so we can reinstitute the docket in Cuyahoga County,” said Phil Ciano, principal at Ciano & Goldwasser and a leader of the local team of lawyers who’ve championed for the docket’s

restoration by suggesting rule changes to Ohio’s chief justice. “I think this is very promising. But it’s not over yet.”

Lucas and Hamilton counties still have commercial dockets today, adding them alongside Cuyahoga County in 2013 following a three-year pilot program (Franklin County also participated in that program, but didn’t formally adopt a docket afterward).

The Supreme Court last year accepted public commentary on proposed rule changes. That commentary showed that judges and attorneys generally supported most of the proposed changes, particularly those tweaking the way judges are selected for the docket to give more autonomy to the local courts.

“The proposal to allow the local court to make the selection of the commercial docket judges is the biggest, and most welcomed, change to the rules,” wrote Lucas County administrative judge Gary Cook. “The judges on the local court are in a better position to assess the qualities and abilities of the judges to take on the challenge of the commercial docket.”

SplashLink raises $1 million from investors

By CHUCK SODER csoder@crain.com @ChuckSoder

SplashLink, a Beachwood company that provides an online platform for the water industry, has raised $1 million in convertible debt from six individual investors.

Most of them were existing investors, including the lead investor, Chuck Fowler. He’s the former CEO of Fairmount Minerals (now called Fairmount Santrol) in Chesterland.

SplashLink already is using the money to hire new employees and develop new products for the water industry, according to SplashLink’s co-founders, CEO Ebie Holst and vice president Jason Wuliger.

It has hired three people since the start of the year and has 20 employees total, they said. That's up from 13 when Crain's wrote about SplashLink in July 2015.

SplashLink.com helps players in the water industry bid on projects, find grants and form connections with one another. Among the organi-

zations that use the site are utilities, cities, engineering firms and product suppliers.

And lately, the company has been focusing more on harnessing the data it collects from the many projects and grants that flow through its website.

For instance, SplashLink already has provided an industry intelligence report for one client, and it eventually wants to offer online tools that allow its subscribers to conduct similar research on their own, Holst and Wuliger told Crain’s.

Today, the water industry uses market intelligence “based on snapshots and surveys that are instantly out of date,” Wuliger stated in a news release about the new funding.

“Through the natural activity that occurs on the SplashLink platform, we have a constantly updated resource that can help Wall Street, government planners, and decision-makers of all kinds better position themselves in this ever-changing environment,” Wuliger said in the release.

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Holst and Wuliger would not provide revenue figures or subscription numbers for SplashLink, which was incorporated in 2014.

They noted that SplashLink for the most part markets its website by forming paid partnerships with government agencies and water-related industry organizations, who then promote the site to their members (who in some cases are then able to access it for free or for reduced rates).

The company has nearly 20 such partnerships today.

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Van Aken District snags law firm as a major tenant

By STAN BULLARD sbullard@crain.com @CrainRltywriter

Landing the McGlinchey Stafford law firm with a 10-year lease has pushed the office element of Van Aken District to 80% leased as the mixed-use project rises in Shaker Heights.

McGlinchey Stafford plans to move to Van Aken as the project opens in summer 2018, said David Thompson, managing member of the firm’s Beachwood office, in a phone interview.

“We focused on new buildings because it would not be easy to put together the amount of space we need in an existing East Side building,” Thompson said.

“The mixed-use aspect of Van Aken is attractive to us because walking to nearby restaurants and retail space is appealing,” he said. “It also has the appearance the firm wants to project, the efficiency of the space and the ability to meet security requirements of our materials that our (banking) clients require.”

McGlinchey Stafford leased 18,000 square feet at Van Aken, a 29% increase from its 14,000-square-foot home at Chagrin Richmond Plaza, 25550 Chagrin Blvd.

McGlinchey plans to add more attorneys over the next few years to diversify its Cleveland-area practice outside finance. Thompson said the Shaker location should help the firm meet that goal. The location may help attract young attorneys because it is near the Greater Cleveland Regional Transit Authority’s train line, he said.

The firm has been a growth story in the region. Thompson and two colleagues launched the McGlinchey Stafford office here in 2001. Today, the firm has 19 attorneys in a total

staff of 31 locally. McGlinchey Stafford is a national firm with a total of 200 lawyers in 13 offices in eight states and Washington, D.C. Although attorneys here practice in the areas of consumer financial services and banking regulatory compliance and litigation, Thompson said the firm offers local clients the expertise of real estate and other areas at its other offices. The Cleveland office is the firm’s third-largest.

McGlinchey Stafford traces its roots to a legacy office in New Orleans, and its managing partner is in Baton Rouge, La. “It’s never been our firm’s approach to focus on geography,” Thompson said.

The move to Shaker will be aided by incentives from the city, he said. The city approved a $350,000 loan that will go toward building out the new office and other moving expenses.

Luke Palmisano, president of Van Aken developer RMS Investments Corp., said the lease and others the firm have signed “put our office in a good spot.”

The law firm will occupy the second floor of a 64,000-square-foot office building that is part of the office, retail and 110 rental apartment remake of the one-time site of the RMS-developed, and now razed, Van Aken Shopping Center. The project incorporates other properties and benefits from a massive redo of surrounding streets that created an 11acre site for the $97 million project in the suburb.

“We were fortunate to have a full floor for them,” Palmisano said of the office space, which will have retail space below it.

“It’s nice that our story is resonating with office tenants,” he said.

“We’re building a real downtown for Shaker Heights. It’s an urban environment in the suburbs, because not

K&D eyes preservation tax credits for Terminal Tower redo

By STAN BULLARD

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A key first step is underway in transforming Cleveland’s Terminal Tower for the live, work and play era of downtown development with the addition of apartments.

Willoughby-based K&D Group has filed to seek Ohio Historic Preservation Tax Credits for the $100 million project.

K&D CEO Doug Price said early Friday morning, March 31, that “our application just went in.” That was deadline day for one of two rounds of applications for the intensely competitive state program.

K&D’s plan calls for adding 308 residences to the low-rise portion of the 52-story tower.

“We’ve been able to add a few suites,” Price said of the design of the redo. Originally the plan called for 293 suites.

K&D seeks a state tax credit for $5 million of qualified rehabilitation work in adding apartments to the 52-story office building, which was the tallest office building outside

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all tenants can be, or want to be, downtown.”

Cyndie O’Bryon, an NAI Daus senior vice president who represented Van Aken in the McGlinchey Stafford lease and other office leases, said she found tenants were ready to embrace new offices, which have been scarce in the multitenant market for more than a decade.

McGlinchey Stafford is the latest of five tenants that have committed to the office portion of the Van Aken project.

Palmisano was relieved by the level of advance leasing, because the pool of prospective tenants for newly built offices is not vast.

“We’ve had a high batting average among the tenants we have pitched,” he said. “I wonder where we’d be if we had not gotten them.”

The office tenants will help build a sustainable downtown in Shaker Heights, said Tania Menesse, the city’s economic development director.

“This shows there remains an office market in Shaker and that employers want to be in a mixed-use district served by rail,” Menesse said.

RMS is a name less well known than the initials that form it. The real estate firm is owned, and takes its name from, the first initials of the founding families of Forest City Realty Trust Inc., the Ratners, Millers and Shafrans.

The Van Aken District also includes about 80,000 square feet of selling space. RMS has announced leases with more than a dozen restaurants and retailers. Palmisano said in an interview that more retailers are signing on to the project, but he declined to name them.

At the site, Palmisano said, contractors have excavated the property and concrete columns for a parking garage that is going up.

K&D Group hopes to get historic tax credits for renovation of the Terminal Tower. (David Kordalski)

New York City in 1930. It held that distinction for 40 years. Key Tower surpassed it as the city’s tallest building in 1990.

However, Terminal Tower likely

won’t be the only downtown Cleveland building going in for funds this round.

Tom Yablonsky, executive vice president of the Downtown Cleveland Alliance and executive director of the Warehouse and Gateway district development corporations, said, “We expect a robust amount of activity from multiple groups in terms of both quantity and quality.”

However, Yablonsky declined to identify other candidates because those consultations are private, and applications don’t become public record until they are filed with the state.

The Ohio Development Services Agency and Ohio History Connection jointly administer the state program. The state will identify the winners by June 30, according to its website.

Should K&D win an allocation, it could not begin work on the project until Forest City Realty Trust vacates its space in the building in 2018. Forest City sold Terminal Tower to K&D for $38.5 million on Sept. 15, 2016, and plans to move its headquarters to Key Tower.

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PA G E 7

Cutting legal aid is major concern in NEO

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Eliminating the Legal Services Corp., one of 19 agencies slated for federal defunding in President Donald Trump’s 2018 budget proposal, would cut budgets for Northeast Ohio’s legal aid groups by about 30% each.

But the financial impact would be even greater than the direct federal funding lost because those dollars are used to attract additional money.

That loss of federal funding could be devastating to these nonprofit groups, who exclusively serve low-income individuals who can’t otherwise afford legal representation when they’re evicted from their homes, sued by payday lenders or trying to divorce an abusive spouse, among other cases legal aid groups often help with.

“Primarily, this would affect our ability to carry out our mission,” said Steven McGarrity, executive director of Community Legal Aid, which serves eight counties in central Northeast Ohio, including Portage, Summit and Trumbull. “Everybody deserves justice. But there is no right to counsel in civil law cases. So we are the only way low-income people have access to the court system in many cases.”

The LSC, which appropriates funding to legal aid groups across the country, requested $502 million for the 2017 fiscal year and received $385 million in appropriations for the prior fiscal year.

Besides donations from a variety of sources, those dollars provide a significant portion of local legal aid group budgets.

Community Legal Aid handled 5,800 cases last year, closing about 5,100 of those, which impacted about 12,300 people. Those resolved cases featured a monetary outcome — an economic benefit metric representing money saved or awarded to clients — of more than $16.2 million.

Their current budget is $5.4 million, of which the LSC provided $1.78 million, or 33% of that.

“So that’s one-third of our funding stream, but it’s more than that because we use that to leverage other funding sources,” McGarrity said.

He referenced specific legal projects that could carry high costs. The

local group often matches dollars provided by another supporting group or donor, meaning $50,000 in LSC funding could effectively double alongside a donor’s financial commitment.

“So there’s a multiplier effect here,” he said. “I think we would be looking at a reduction in our overall budget closer to 40%-45% of funding when you take into account that leveraging effect.”

The Legal Aid Society of Cleveland, which serves five counties in and around Greater Cleveland, handled 7,400 cases last year, closing more than 6,100 of those and impacting 17,700 people. Its current budget is just over $7 million, with a little more than $2 million of that provided by the LSC, or about 28% of the budget.

“Every day I’m trying to figure out more efficient ways to work. But if we have less, we have to do less,” said Colleen Cotter, executive director of Cleveland’s legal aid group. “And that means, in the end, the low-wage workers trying to provide for their families who are taken advantage of by shady landlords or payday lenders … they have rights, but won’t be able to enforce those rights because they don’t have the law by their side.”

Legal aid budgets have fluctuated for years, but this is easily one of the larger budget cuts these local nonprofits have been potentially faced with.

Like McGarrity, Cotter also fears the compounding effect of losing federal fiscal support.

“We’re able to attract funding from a variety of sources because they see we are a stable organization with excellent attorneys and engaged volunteers who do impactful work in our client communities,” Cotter said.

“Having that sort of reliable federal funding to help service the foundation is critical to us being able to raise these other dollars.”

Cotter said her budget is larger today than when she became executive director 12 years ago, but it’s been falling in recent years. The budget was about $10 million in 2008. As the recession sank in, though, and the Fed dropped interest rates to nearly zero, that stymied the flow and buildup of money from lawyer trust accounts — another funding source for legal aid groups. In one year, that slashed Cleveland legal aid’s funding by about $3 million.

Crain’s is looking to feature emerging minds in legal field Know an up-and-comer in the legal industry?

Crain’s is looking for individuals to profile as part of its ongoing efforts to include more voices in its weekly special sections.

We are looking for people who might fly under the radar now but could disrupt the legal field — for the better — in the future.

Do you know someone who is carving out a niche that is setting him or her apart from others in the legal field? Is he or she climbing the ranks inside the firm or organization particularly quickly? Perhaps he or she has solved a particularly complex legal problem for a client.

And aside from solid résumés, do their personalities also set them apart?

If you know someone worth profiling in the April 24 Legal Industry Outlook section, let Sections Editor Timothy Magaw know by Wednesday, April 5. Just drop him an email at tmagaw@crain.com with “People to Watch” in the subject line.

This feature is part of a recurring feature in Crain’s weekly special sections. The most recent “People to Watch” feature is publishing in this week’s Sports Business section. Previous ones have focused on health care, entrepreneurship, finance, meetings and events.

“The low-wage workers trying to provide for their families who are taken advantage of by shady landlords or payday lenders … they have rights, but won’t be able to enforce those rights because they don’t have the law by their side.”

— Colleen Cotter, executive director of the Legal Aid Society of Cleveland

The issue: Budgets are already far and away short of what they need to be to serve people who need it, the group’s leaders say.

“Even with our current budget, we do not have enough resources to meet the need,” Cotter said. “We already turn away more than half of the people who need help because we don’t have the resources. There is no money to spare in terms of the need.”

Cotter referenced studies that

show that preventing homelessness is cheaper than supporting people who are homeless. Helping victims of domestic violence to separate from a spouse is cheaper than emergency room visits stemming from assault.

“If we lose this funding, we’ll have to turn other people away,” she said, “and that puts pressure on other parts of our system.”

According to the LSC itself, an estimated nearly one million people are turned away from legal aid nonprofits throughout the country annually, or about 50% of everyone who sought legal assistance.

That means for every person served, another is denied.

Numerous groups across the country — from the American Bar Association to groups of corporations, law firms and law school deans — have sent letters imploring Congress to continue supporting the LSC because of how it supports local communities and the overall access to justice.

Joseph Morford, managing partner at Cleveland-based Tucker Ellis LLP, is one of some 150 signatories to a letter sent directly to the nation’s budget director, John Mulvaney, by U.S. law firms.

“Eliminating the Legal Services Corporation will not only imperil the ability of civil legal aid organizations

to serve Americans in need, it will also vastly diminish the private bar’s capacity to help these individuals,” the letter reads. “The pro bono activity facilitated by LSC funding is exactly the kind of public-private partnership the government should encourage, not eliminate.”

Other similar letters have been signed by Cleveland law school deans, judges and corporate counsel for local businesses.

“Society overall only works if everyone feels like the law applies equally and fairly and all have access to justice,” Morford said. “This defunding of LSC impacts people having such access, and if we don’t do something, they will feel even more disenfranchised than they may already feel today — to the benefit of no one.”

There’s still plenty of time to tweak the budget as Trump’s budget is merely a proposal designed to show where the president’s priorities lie.

A silver lining to opponents of the cuts is a sentiment by LSC president Jim Sandman that Congress won’t go through with eliminating the agency.

“We represent a fundamental American value — equal justice,” Sandman told Bloomberg Law in mid-March. “That’s a value as old as the republic itself. Congress understands that.”

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PA G E 8

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Serious networker shares secrets

Editorial

Keep it going The party is over. But the after-party can still be pretty great.

Two organizations that play big roles in shaping the look and feel of downtown Cleveland — Downtown Cleveland Alliance and Destination Cleveland — recently outlined goals aimed at building on the momentum of 2016, a year featuring the Republican National Convention, the opening of a revamped Public Square, an NBA championship and a World Series. (It’s not greedy to ask for two out of four in 2017, especially if we could get a different outcome on the baseball field, is it?)

The infrastructure investments that came with the GOP convention and the new-look Public Square won’t be replicated anytime soon, and Destination Cleveland, the region’s convention and tourism bureau, can’t pencil in more title runs to bring visitors to town. Still, there’s reason for optimism that downtown can continue to make itself a more appealing place to live and for visitors to play.

Joseph Marinucci, the CEO of Downtown Cleveland Alliance, was refreshingly candid during a March 28 “State of Downtown” panel discussion.

As Crain's senior reporter Stan Bullard noted in a story on our website, Marinucci said during the session that “a lot of challenges remain” for downtown. “We have diverse, isolated districts that need to be connected better,” he said, citing, for instance, the difficulty in moving between the Warehouse District and the Flats East Bank without walking through poorly lit areas.

It might have been tempting to rest on the laurels of some of the positive developments in downtown living, including a 14% increase in rental rates last year, a 95%-plus occupancy rate for the past three years, and the scheduled addition of 1,100 apartments in 2017.

We're encouraged, though, that issues like the lighting of various downtown districts, and the addition of playgrounds downtown to make it more attractive to young families, are on DCA’s radar. Those aren’t sexy, but they make a big difference in

the day-to-day livability of downtown, which in turn will make it easier to reach another long-term DCA goal: convincing more real estate developers to add for-sale housing downtown.

Destination Cleveland is similarly focused on building tourism without “waiting for the next home run,” as president David Gilbert told Crain’s reporter Jay Miller after the group’s March 23 annual meeting.

“The teams that win are constantly hitting singles and doubles,” Gilbert said. “If we just wait for the next home run, we’re going to slide behind our competition.”

Much as we enjoyed having politicians and lobbyists roaming (and spending) downtown last summer, we’ll take many more repeats of gatherings like the American Bus Association convention, which brought 800 bus-tour operators to the Huntington Convention Center of Cleveland in January and left an influential group — people who decide which places thousands of U.S. travelers will visit in the next couple of years — with a favorable view of the city.

It’s those kind of events that helped Destination Cleveland post a 2.8% increase in the number of hotel rooms booked last year, topping the U.S. average of 1.7%. And more of those events will be needed to sustain the strength of a downtown hotel market that added about 1,000 rooms last year — huge by the city’s standards.

Gilbert has set a big goal: 20 million visitors to Northeast Ohio by 2020, up 14% from 17.5 million in 2015. Getting there, he said, involves making Destination Cleveland a “DMMO” — a destination marketing and management organization that builds broader community support for the travel and tourism industry and works more closely with the business community.

It will require that kind of concerted effort to “fill the pipeline of events,” according to Destination Cleveland board chairman Dan Walsh, the CEO of Citymark Capital.

The challenges for 2017 and beyond have been set. For both DCA and Destination Cleveland, it’s sweating the small details that will lead to the big rewards.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Sections Editor:

Timothy Magaw (tmagaw@crain.com)

Contact Crain’s:

216-522-1383

Kim Riley has been in Cleveland less than two years, and her network already is bigger than most business executives. That’s because she works at it with a focus that forges relationships.

She walks the networking walk in shoes that get her noticed.

Riley took over as president of Hylant’s Cleveland office in 2015. She’d worked in the insurance industry for more than three decades and had built an impressive network in Nashville when she headed the insurance brokerage’s office there.

Still, Cleveland was new. She didn’t know many players. Could this Springfield, Ohio, native who has spent most of her career south of the Mason-Dixon line build that type of network, not only in a new city but a northern one?

With nearly 4,000 LinkedIn contacts, Elizabeth most of whom she knows personally, and a McIntyre daily commitment to meet new people and build relationships, the answer is evident.

She credits a mentor in Nashville, Joe Scarlett, a retired businessman, with putting her on the networking path.

“Joe told me that the No. 1 thing I needed to do every day, if I could, was to have a breakfast and a lunch with someone I didn’t know,” Riley said.

“I found really quickly through the process that it had nothing to do with me,” she said. “It was always about the person on the other side of the table, and how I can help them and what they were trying to accomplish in their career and in their community,” she told me.

“So, for every breakfast or lunch I’ve had, I always ask what can I do to help you? And I try to connect them with at least two or three people in my network. Then I ask them to help me to do the same thing.”

Sure enough, when Riley and I met for breakfast recently, she asked at the end of our conversation what she could do to help me. She’d already done it, inspiring me with advice I’m happy to share with Crain’s readers.

When I showed up 10 minutes early at that breakfast, Riley was already there, working on notes for a panel discussion she was leading three weeks later. She was quick to smile and laugh, and she has a way of focusing so that you know she is really listening.

Riley sees one-on-one conversations like the one we had as a type of networking that allows you to take a relationship deeper than at a group networking event, which she approaches differently. Those she embarks on with a three-part plan: Prepare, stand out and be strategic.

After identifying the type of networking events that will help build her brand, she hones her 30-second elevator speech and then researches the attendee list, identifying the five people she needs to meet. “I can be more strategic that way and go directly to that person to start a conversation,” she explained.

First impressions are important: “When I walk in the room, I make eye contact with every single person because I want people to know I’m here and that you want to meet me.”

And even those she doesn’t meet will remember her because of her colorful shoes.

“Shoes are my thing. Gold shoes, silver shoes, red shoes. I wear shoes that pop so when I’m at a networking event, that’s what will make me stand out,” she told me. For others, she recommends, be bold with scarves, jewelry, ties, socks.

Once back at her office, she reviews the business cards she’s gathered and strategizes on how to take the relationship deeper.

“Networking to me is so rewarding because it’s about relationships,” she said.

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

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

Please include a telephone number for verification purposes.

CRAIN’S CLEVELAND BUSINESS

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PA G E 9

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Personal View

Key driver in housing gains is income, not individuals

By PAUL GABRAIL

Whenever I read or hear people talk about President Donald Trump’s effect on housing or stocks, I chuckle because so many “financial minds” don’t understand what really drives markets.

Can there be a short-term bump or drop because of someone or some policy? Absolutely. Look back early in President Barack Obama’s first term, when he instituted the $8,000 homebuyer tax credit. Many houses sold within a week because the tax credit was going to expire and house prices took a nice bump up. But guess what happened after that? Things stabilized.

The reason for this is that in the short run, asset prices are affected by emotion. As Benjamin Graham, the father of value investing, said, “Stock prices are voting machines in the short run and weighing machines in the long run.” Obviously, we are talking about housing prices, but it’s the same idea.

In the short run, what people love or hate will be affected in the same way — up or down. But in the long run, their weight matters. Their fundamentals are their “weight.” What are they made of? What is their foundation?

In housing prices, the things that matter are the supply of homes as well as income levels, which determine demand. Income increases over time because of inflation, mostly, which will cause people to be able to pay more for housing because their incomes have gone up.

Most everyone doesn’t understand that a struggling

population, like Cleveland for example, can have home prices increase over time. The reason for that is fundamentals of income growth. Income grows in Cleveland just like it grows in Los Angeles or other booming markets. And the growth is pretty much in line with inflation wherever you go. Is it spot on? No. But is it within a percent or so? Yes. So, unless President Trump does some major longterm changes to cause a shift in supply or demand of housing prices, the only thing we may see is a shortterm change in prices.

Even if he enacts some legislation to change the demand, prices are still going to fundamentally rely on income to drive values long term. And the fortunate and unfortunate thing about the presidency is that it’s all about re-election and doing the things that will put you in a positive light to the average American. Unfortunately, there are many things we need to do today for the long-term income growth of the country that would be very unpopular, so we won’t be seeing them anytime soon.

So, if your house pricing jumps or drops, don’t praise or berate President Trump. Just hope for a stronger economic plan that will give more people good-paying jobs that have growth potential. That’s how we will really get home prices going in the long term.

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Web Talk Re: Flats East Bank Turnover is normal and culls the herd of the weaker operators. The strong ones will stay open. There should still be a higher residential component to the area. That would provide a captive market for the restaurant operators. Not everything has to just be a destination for exurbanites and tourists.

— Charles Brockhurst Actually, I think the next phase with housing and a theater will help during the winter months. Younger people just like to go out and get out. Having more locals living down there will help.

— James Shellenburger

Re: Kasich and taxes Columbus has a spending problem, plain and simple.

Just wait until the sales tax rate in Cuyahoga County goes over 10%. Then you will see people screaming. — Big_Ring I'm not a big fan of Gov. John Kasich. I'm a registered Republican who did NOT support him in the 2016 presidential primary. However, I think he might be onto something regarding Ohio's tax structure. Ohio is extremely dependent upon income taxes, and this tends to have a jolting effect upon revenues, services, etc., when the economy hits a rough spot.

In Ohio, the same income can be subject to four different income taxes — state income tax, city income tax in work city, city income tax in residence city, and school district income tax. These taxes are applied very inconsistently, and the way they are structured creates a compliance nightmare. A sales tax is truly the one tax that is paid by everyone from homeless persons to very wealthy individuals.

By contrast, Ohio's income taxes massacre certain

pockets of taxpayers and let other taxpayers off the hook entirely. This is one Kasich idea that's worth taking a closer look at. — Mark J. Slutz

Re: Trump and coal The Crain's website on March 28 ran a Bloomberg story with the headline “Analysis: Trump’s order won't resurrect jobs of miners key to his campaign.”

When I read the headline to this article, it sounds like President Donald Trump’s executive order is meaningless. Many of the sources cited in the article described coal as an antiquated source of electrical generation and state that coal is a thing of the past.

Really? Also included in the article are other regulations that have been levied (e.g., carbon emission requirements) against coal as a means of producing electricity that have made coal a less economic option than alternatives such as natural gas. Somewhere in the middle of the article is this quote from Robert Murray, who knows a thing or two about coal: “We have to stop the destruction before we can go forward in the coal industry.” A better headline would have been: “Trump’s order will stop the decimation of coal industry jobs and position the industry for a rebound.” Please, please, please focus on what is important. The coal industry has been decimated by a long series of environmental regulations. EPA regulations have strangled the development of new power plants, at the same time that the push toward electric cars and other green initiatives designed to lessen our dependence on oil will increase our dependence on electricity. ...

President Trump is taking a first step to reverse the coal industry's decline, and taking on regulations imposed by the Obama administration that resulted in the closing of more than 1,000 power plants. For God’s sake, it’s a start. Give the executive order (and the executive) its due. — David Akers

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CRAIN’S CLEVELAND BUSINESS

The Dish: Susan Condon Love

Two new bakeries sweeten up Larchmere Boulevard Avon Verduyn finds it funny that on April Fool’s Day his hard work of the past four years or so — and especially the past 18 months — came to fruition at the building he owns at East 122nd Street and Larchmere Boulevard in Cleveland.

And it’s not just his accomplishment. Saturday, April 1, was also a day dreams came true for Jennifer and Jon Regan, owners of Poison Berry Bakery and Cafe, and for Joe Schlott, owner of Gray House Pies.

They opened their businesses on the same day in Verduyn’s building.

The grand opening of the shops, in a building that also houses a bedand-breakfast owned by Verduyn, means that he is two steps closer to adding the depth he thinks the Larchmere shopping and restaurant district needs.

“It’s a great location, and it is becoming even better — a logical place to and from downtown,” Verduyn said. “We were laughing that the opening day (for both bakeries) is on April Fool’s Day. It was purely an accident.”

After years of improvements — a $2.8 million Larchmere Boulevard Streetscape Improvement Project started in 2011 and completed in late 2014, and road work between East 121st Street and North Moreland Boulevard — “traffic is getting back to normal,” said Verduyn, an entrepreneur, former pilot and businessman originally from Holland.

“I fell in love with this area and bought the building about 10 years ago from a woman who was from Belgium.

It felt like it was meant to be,” he said.

For many years, the building (which apparently was home to a “numbers operation” decades ago based on the amount of telephone wires coming into the basement) was occupied by such businesses as a

The new Poison Berry Bakery and Cafe is located at East 122nd Street and Larchmere Boulevard in Cleveland. (Susan Condon Love for Crain’s) Susan Condon Love is a freelance writer covering the restaurant scene in Northeast Ohio.

clothing store and an antique shop.

“Slowly, I developed a dream for the building,” said Verduyn, who has slowly renovated the connected retail spaces in the building. “With so many travelers, coffee shops and bakeries would be perfect.”

Verduyn began talking with Schlott, owner of Gray House Pies in Westlake, about five years ago. As their talks progressed, the two decided to become partners for the new Larchmere location. In addition, Verduyn was in conversation to rent to the Regans, owners of the homebased vegan bakery Poison Berry since 2010, who wanted the stability

of a “brick-and-mortar” location.

The Regans have invested about $180,000 in their 900-square-foot cafe with seating for 20. Schlott estimates he has spent about $150,000 on the new space, not including the $35,000 that Verduyn has invested in kitchen equipment for Gray House.

The pie shop, slightly smaller than the Poison Berry space and with limited seating, will offer a selection of kitchen items, including mugs, a variety of tea and Rising Star coffee, but “is not intended to be a grocery store,” Verduyn said.

Gray House Pies is a sleek space with gleaming glass display cases, a chalk drawing on the wall, floor-level chalkboards for children and bags of coffee on the shelves. Poison Berry is colorful with pink and playful decor, including cupcake-shaped cushions placed strategically on benches.

“We wanted a business model that was bakery-focused — a varied menu that can catch people who want a treat all throughout the day,” Jon Re-

Avon Verduyn is a partner in the new Gray House Pies location and owns the building that houses it and Poison Berry Bakery.

gan said. “Muffins, breakfast breads, doughnuts, cupcakes and cookies for the dessert-time crowd. After years of being successful at festivals and other events, we wanted this brick-andmortar bakery.”

Schlott said he’d like to open about 100 Gray House Pie stores nationally, but the first step is the new Larchmere location. “(Verduyn) approached me,” Schlott said. “We basically have complementary skills. But the bigger point is that he’s the ‘pope of Larchmere.’ He is a huge fan of the area and is constantly promoting and believes in it. He convinced me.”

Gray House Pies, which Schlott started in 2003, is known for using only organic ingredients. In addition to the Westlake and Larchmere stores, the pies are available at many summer farmers markets in the area, including the North Union Farmers Market at Crocker Park in Westlake.

There is one storefront space still open in Verduyn’s building — be-

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tween the two bakeries. Verduyn already is working on what he considers to be the perfect tenant for the space.

“I want a craft brewery and a basement wine cellar in that space,” he said. “It’s absolutely a perfect fit.”

Christine Kozak — vice president of Scratch Off Works, a maker of scratch-off promotional cards (think of those mystery coupons you get at Kohl’s), and a friend of Verduyn — calls the openings “a neighborhood being reborn.”

“The street already is home to Batuqui, Ipanema Market and Felice, so it’s on the verge of becoming a real foodie (destination),” Kozak said in an email.

She continued, “Both bakeries bring so much to the area. We’re hoping they draw customers from Shaker Square, since it’s so close, and all around Cleveland. There isn’t anything like this in the city, where you have your choice of going vegan or sugary, side by side.”

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Finally feeling fan love World Series run, Encarnación signing put Indians on pace to reach biz targets

CRAIN’S CLEVELAND BUSINESS

By KEVIN KLEPS kkleps@crain.com @KevinKleps

Brian Barren, who had spent the previous 24 years at Procter & Gamble, said he asked “a million questions” after he was hired by the Cleveland Indians in January 2014.

During his initial foray into the sports industry, Barren, then the Indians’ executive vice president of sales and marketing, did a 100-day assessment of the franchise. Despite the Tribe making an American League Wild Card appearance the previous fall, Barren’s review wasn’t the most optimistic report he had ever put together.

The former Princeton University football teammate of then-Tribe president Mark Shapiro looked at three key business metrics — paid attendance, revenue and revenue per capita (the club’s revenue divided by its paid attendance).

During the 1990s, Barren said the Tribe “was in the top third of the third in Major League Baseball.” By 2014, though, the Indians had plummeted to “the bottom third of the bottom third,” which would put them among the three or four worst-performing clubs.

SEE INDIANS, PAGE 13

Illustration by Daniel Zakroczemski for Crain’s

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PA G E 11

TRIBE TICKETS,

BY THE NUMBERS 12,400: Full-season-ticket equivalents the Indians have sold. That’s a 55% year-overyear increase.

8,000: Season-ticket accounts — a 140% YOY jump.

1.3 million: Tickets the Indians have sold — a 65% YOY increase.

July 22: The date at which the Tribe reached the 1.3 million mark in 2016.

45%: Year-over-year increase in group ticket sales.

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The Cleveland Indians have added almost 4,000 season-ticket holders since the end of the 2016 season.

The Tribe says none of that growth has come from ticket brokers, who have been eager to scoop up seats in an effort of capitalize on the increased demand caused by the clubâ&#x20AC;&#x2122;s first World Series trip in 19 years.

Thatâ&#x20AC;&#x2122;s by design, as the Indians have stopped selling full and partial season-ticket packages to brokers â&#x20AC;&#x201D; and in some cases, revoked their seats and offered them to other longtime season-ticket holders.

The Indians arenâ&#x20AC;&#x2122;t the first team to take such a stand, and industry experts say such moves typically come during good times. But, they ask, what happens when the club is struggling? Are brokers again valued customers?

Tim Salcer, the Tribeâ&#x20AC;&#x2122;s vice president of sales and service, said this isnâ&#x20AC;&#x2122;t a practice the Indians began in full force after their memorable postseason run last fall.

The Tribe â&#x20AC;&#x153;started looking deeper into the secondary marketâ&#x20AC;? in 2015, Salcer said. And prior to last season, the club notified season-ticket holders that if they attempted to sell or transfer more than 50% of their tickets to â&#x20AC;&#x153;persons or entities that are not Registered Share Partners,â&#x20AC;? they would be classified as a broker. â&#x20AC;&#x153;We want to sell to fans that want to come and enjoy the games, but do understand that 81 games for some people is a lot of games, and they do have the flexibility to sell at times,â&#x20AC;?

Salcer said. â&#x20AC;&#x153;We just donâ&#x20AC;&#x2122;t want to have people come in and buy season tickets, and get the deep discounts for the sole purpose of reselling.â&#x20AC;?

The Indians believe limiting the number of tickets on the secondary market increases the value of the seats. Ideally, doing so would then reward, and incentivize, season-ticket holders, who can purchase full and partial packages at prices that are well below the single-game rates. â&#x20AC;&#x153;We price them in a way thatâ&#x20AC;&#x2122;s best for our fans,â&#x20AC;? Salcer said. â&#x20AC;&#x153;Whenever you give the power of how theyâ&#x20AC;&#x2122;re priced to somebody else, it could distort the fan, confuse the fan and create issues for your business.â&#x20AC;?

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Patrick Rishe, the director of the sports business program at Washington University in St. Louis, moderated a ticketing panel at the MIT Sloan Sports Analytics Conference last month. He said the possibility of cutting off brokers â&#x20AC;&#x153;is an area thatâ&#x20AC;&#x2122;s being addressed by teams.â&#x20AC;?

Rishe said itâ&#x20AC;&#x2122;s a move thatâ&#x20AC;&#x2122;s much easier for successful teams and/or clubs that thrive at the gate. â&#x20AC;&#x153;If you have a harder time selling tickets, any business can be looked at as good business,â&#x20AC;? Rishe said. â&#x20AC;&#x153;If itâ&#x20AC;&#x2122;s a mediocre team or below, youâ&#x20AC;&#x2122;re not leaving too much money on the table (by selling to brokers), because the markups (on the secondary market) wonâ&#x20AC;&#x2122;t be as high.â&#x20AC;?

And while itâ&#x20AC;&#x2122;s true that the Indians are coming off their best season since

The Indiansâ&#x20AC;&#x2122; 2016 success has sparked large increases in the value of the clubâ&#x20AC;&#x2122;s seats on the secondary market. (Elsa/Getty Images)

the â&#x20AC;&#x2122;90s and they enter 2017 as heavy favorites to win their division, itâ&#x20AC;&#x2122;s not as if the clubâ&#x20AC;&#x2122;s attendance woes ended when its World Series drought did.

The Tribe finished 28th in MLB with an average attendance of 19,650 last season â&#x20AC;&#x201D; marking the fifth straight year in which Cleveland was in the bottom three in MLB. The Indiansâ&#x20AC;&#x2122; gate numbers should improve significantly this season,

13% Increase in the average resale price for Indians regular-season games, to $79, this season, according to ticket broker SeatGeek.

53% Year-over-year average sales price increase for tickets to the Tribeâ&#x20AC;&#x2122;s home opener, to $176.

though, thanks to the franchiseâ&#x20AC;&#x2122;s best season-ticket total in nine years and a steady demand for all of the clubâ&#x20AC;&#x2122;s weekend series in June, July and August.

Salcer, the clubâ&#x20AC;&#x2122;s vice president of sales and service, admits that struggling teams â&#x20AC;&#x153;typically will turn to ticket resellersâ&#x20AC;? to boost their sales.

Still, he said the Tribe is intent on keeping its revenue growth â&#x20AC;&#x153;organic,â&#x20AC;? and focusing on giving its season-ticket holders the best possible service.

The Indians have â&#x20AC;&#x153;quadrupledâ&#x20AC;? their number of service representatives, and theyâ&#x20AC;&#x2122;ve added to their events and experience department, which they believe will help their efforts to retain their expanding customer base. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s really what we focus on, and we feel that gives us the best chance to have a long-term sustainable business,â&#x20AC;? Salcer said.

Name that caller Scott Merk, the owner of Merks Tickets in Brook Park, said he isnâ&#x20AC;&#x2122;t interested in buying an 81-game ticket package. â&#x20AC;&#x153;You lose money in April and May, and make money in June, July and August if the team is good,â&#x20AC;? the broker said of the MLB resale business.

Brokers who do want to invest in full-season packages have a common method of acquiring seats: They donâ&#x20AC;&#x2122;t put them in their name, Merk said.

Ken Troupe, the senior director of

business development for SportsDesk Media, a Dallas-based sports marketing firm, has worked in ticket sales for the Houston Astros and Texas Rangers. He said the Rangers, as far back as 2005 and â&#x20AC;&#x2122;06, were focusing on broker relations. â&#x20AC;&#x153;You can be sure in an effort to keep their inventory, brokers are calling in with fake names to set up new tickets,â&#x20AC;? Troupe said.

Salcer is well aware of those tactics. The Tribeâ&#x20AC;&#x2122;s ticket sales and service department, plus its strategy and analytics staffers, monitor the secondary market, he said. â&#x20AC;&#x153;Through the course of that process, we obviously identify some have the intention to resell, and weâ&#x20AC;&#x2122;re not in the business of increasing our ticket broker business,â&#x20AC;? Salcer said.

The Indians also have revoked season-ticket packages from some brokers who have seats in coveted spots at Progressive Field, such as the bleachers. The seats are then offered to the clubâ&#x20AC;&#x2122;s longest-tenured season-ticket holders.

The methods are unpopular with brokers and have cut into the Tribeâ&#x20AC;&#x2122;s ability to further pad its season-ticket base. â&#x20AC;&#x153;We have large ticket broker companies that come to us and have proposals to get access to a large number of seats,â&#x20AC;? Salcer said. â&#x20AC;&#x153;They know that we have limited the number of tickets on the secondary market, which makes our tickets more valuable.â&#x20AC;?

One major broker, SeatGeek, says the average resale price for Indians regular-season games has increased 13%, to $79, this season. The average sales price for tickets to the Tribe's home opener has jumped 53%, to $176.

In theory, that is good for season-ticket holders who bought in at a discounted rate and might not be able to attend every game, and for those who purchased season tickets with the intention of selling a few of the more valuable contests.

But is it risky to tick off brokers, who have long been a part of the ticket-buying process? â&#x20AC;&#x153;We have ticket resellers. They do run a business â&#x20AC;&#x201D; we understand that,â&#x20AC;? Salcer said. â&#x20AC;&#x153;Our goal is to run a business in a way that we are putting ourselves in the best position to give more flexibility financially to our baseball operations team, and give them the ability to invest in the Cleveland Indians and bring in players like an Andrew Miller, like an Edwin Encarnacion.â&#x20AC;?

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INDIANS

CONTINUED FROM PAGE 11

In his third-floor office at Progressive Field, Barren — who was promoted to president of business operations in February — has the objectives that spun from that organizational study spread out on a wall.

It’s what he calls his “15 and 5” battle cry, with the Tribe’s performance in each metric highlighted in red, yellow and green — making what could be a complicated read as easy as looking at a traffic light.

The 15 is a ranking — the Indians hope to be Barren in the middle of the pack among the 30 MLB teams in the three revenue segments. The five represents the number of years they have to achieve their objectives.

By the end of that stretch, which runs from 2015 to ’19, the Indians also want to lead the six other clubs they believe are in their peer group — the Baltimore Orioles, Cincinnati Reds, Kansas City Royals, Milwaukee Brewers, Pittsburgh Pirates and Tampa Bay Rays — in what Barren calls the “revenue-generating product segments.” Those consist of four ticket sales metrics (premium, group, season and single game), plus corporate partnerships.

“If we led our peer group, we’d be better than 15th (overall), but it’s the whole idea of put something out there that’s achievable,” said Barren, who was in charge of Procter & Gamble’s $9 billion Kroger Business prior to joining the Tribe.

Those goals, as lofty, or even unrealistic, as they might have seemed at the time, got a 1990s-style jolt from the 2016 Indians.

It turned out that a fun, likable team making a World Series run could produce the type of gate numbers and sales surges — albeit belatedly — the club had been seeking.

The Encarnacion factor The Indians entered the final few days of spring training with 12,400 full-season equivalents, which marked a 55% year-over-year increase and was the club’s largest season-ticket total in nine years.

In addition, as of March 29, season-ticket accounts were up 140% year-over-year (to 8,000), and group sales had increased 45%. The Tribe had sold 1.3 million tickets — a number they didn’t reach until July 22 last year.

That progress, Barren said, has put the club on pace to get to 15th in the key revenue categories by 2019.

The head of the Tribe’s business team admits the 2016 surge was “largely driven” by single-game sales during the Indians’ playoff run. It could be argued, though, that the club is in position to continue to contend for the next few seasons, which would keep the biz side on track to go from the cellar to hitting above its weight class. A bulked-up season-ticket base also gives the organization more of a cushion during the spring months, when weeknight home games often draw crowds of fewer than 10,000.

The Indians’ first extended postseason run in nine years started the sales boom, but it was the largest free-agent signing in club history — a three-year, $60 million deal for slugger Edwin Encarnacion — that took it to another level. The Tribe added 150 full-season equivalents and 250 new

On Aug. 19, when the Indians launched their Playoff Payoff, outfielder Tyler Naquin hit an inside-the-park home run. (Ken Blaze for Crain’s)

season-ticket accounts in the first four days after news broke in December that the club and Encarnacion had agreed to a deal.

“The best Christmas present we could ever get was finding out about Encarnacion,” said Tim Salcer, the Tribe’s vice president of sales and service.

In the months since, the Indians have added more than 2,000 FSEs. “That obviously has led to a substantive change in our business,” said Barren, who termed the Encarnacion contract “a leap of faith from ownership.”

Office scorecards The on-field product “needs to be competitive” for the Indians to have a chance to thrive on the business side, Barren said.

As luck would have it, two key dates for Barren’s biz team coincided with memorable moments from the baseball club.

The Indians sold more than 200,000 tickets during their franchise-record 14-game winning streak. That 15-day stretch, from mid-June to July 1, occurred shortly before the Tribe started its season-ticket renewals.

And when the club launched its Playoff Payoff, which ensures postseason access for fans who place a season-ticket deposit, outfielder Tyler Naquin capped a 3-2 win over the Toronto Blue Jays on Aug. 19 with an inside-the-park, walkoff home run.

“Talk about a perfect storm,” Barren said.

Now, entering a season in which the oddsmakers believe the Indians are one of the top two teams in the American League, the Tribe’s revenue-counters aren’t going to assume everything is great.

Working at a consumer goods giant such as P&G, figuring out where you stand isn’t much different than looking at the MLB standings on your phone.

“You walk out of your office and you see a stock ticker every day,” Barren said. “You have to report your earnings every 90 days. You can’t say, ‘I pulled my hamstring. I’m not going to make it for earnings.’ You need to stand and be accountable for that, and it’s very public.”

The Tribe’s revenue numbers are anything but, which is the norm in Barren’s new industry. But there are still plenty of ways for the business team to gauge how it’s performing.

Barren believes three tenets — business (starting with “clear plans”), process (how you execute such plans) and people (whom you hire and how you develop them) — will determine how the Tribe fares.

“Because there’s no salary cap in baseball, it’s incumbent upon the business team to create as much flexibility for baseball operations as possible,” Barren said.

Of the 10 teams that advanced to the 2016 postseason, the Indians were the only club that was below the major-league average in revenue and payroll.

That’s why something as basic as being average — a No. 15 revenue ranking — is so enticing.

“We like our chances if we can put ourselves competitively from a business standpoint in the middle of the pack,” Barren said.

Getting there will require the Indians to “be pushing north of 15,000” full-season-ticket equivalents, a milestone the organization last reached in 2008. The Indians have long said that group is the most important aspect of their business, and the response to a season that came this close to the organization’s first championship since 1948 has been as encouraging as any of the green marks on Barren’s office scorecard.

“It just hasn’t stopped,” he said.

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SPORTS BUSINESS

Five to watch in sports business LeBron James, Corey Kluber, Stipe Miocic, Joe Thomas — those are just a few of the superstars we can claim as our own in Northeast Ohio. But beyond the spotlight is a talented array of professionals who make the business of sports possible in our region. Here are five of those pros you should know about. Do you know someone — in any industry — who has a story worth telling in a future section? Let Sections Editor Timothy Magaw know at tmagaw@crain.com.

Shelly Cayette

David Freeman

Matt Forman

Carter Hawkins

Jen Yorko

Vice president of partnership marketing and strategy Cleveland Cavaliers Details: The Cavs say Cayette has brought an “agency” approach to managing the organization’s relationships with its sponsors — a role the Louisiana native started in 2012. Cayette and her team attempt to use the Cavs’ platform as a marketing vehicle that can allow companies to bring creative ideas to life, which, ideally, can help them meet their business goals. She said the 2015-16 season, which was capped by the Cavs breaking the city’s title drought, “was one of the most memorable times that I will ever have, personally or professionally.”

She serves on the advisory board of the Downtown Cleveland Alliance, and is avid about initiatives that focus on the economic growth of the area.

“There are so many things to do in Cleveland, and it just keeps getting better and better,” Cayette said.

Senior vice president of marketing and media Cleveland Browns Details: Leaving Toronto, where he served as the head of brand strategy for Maple Leaf Sports & Entertainment, brought a set of challenges Freeman hadn’t faced in “many years” — such as getting a social security number, and a new bank account and credit card. But the change allowed Freeman to focus on one team instead of six. His Toronto role was a big one, as Freeman oversaw marketing for the Toronto Raptors, Maple Leafs, Marlies, Toronto FC, Toronto FC II and Raptors 905.

Freeman called the transition “refreshing,” and said the job was “impossible to turn down.” He oversees the Browns’ fan and brand development team, which includes the organization’s extensive in-house media operation. “Our goal is to provide more content that fans can’t get anywhere else,” Freeman said.

Assistant general manager Cleveland Indians Details: In a five-year span, Forman went from a Northwestern University graduate, to Indians intern, to assistant GM. He, along with Carter Hawkins, was promoted to the latter role following the Indians’ run to the 2016 World Series. At Northwestern, Forman interned and later freelanced for Baseball America, which makes him one of many former writers in the Tribe’s front office. Coordinator of amateur scouting Clint Longenecker is a Baseball America alum, and senior director of baseball research and development Sky Andrecheck (BaseballAnalysts.com), director of pro scouting Victor Wang (The Hardball Times) and principal data scientist Keith Woolner (Baseball Prospectus) all made names for themselves in the field. “I’ve been very fortunate to work with an incredibly talented, motivated, passionate and curious group,” Forman said.

Assistant general manager Cleveland Indians Details: The Tribe’s other assistant GM is also a former intern. Hawkins joined the organization in 2008, not long after he graduated from Vanderbilt University. The former college baseball player said he had “countless calls and interviews” with teams in an effort to get a job in Major League Baseball, and he found a willing taker in the Indians. And like Forman, he quickly worked his way up the organizational ladder — Hawkins spent the 2014 and ’15 seasons as the Tribe’s director of player development. “Great teammates invest in each other, and that’s what the guys in the office have done for me and others,” Hawkins said. He compared the minor leagues to a “large baseball school,” for which he served as the Tribe’s principal. In his new role, Hawkins said, “I still get to have a hand in that school, but help connect it to our other departments as well.”

Assistant general manager Lake County Captains Details: The 2017 season will be Yorko’s second as assistant GM of the Indians’ Class A affiliate in Eastlake.

She started her baseball career as an intern in the Captains’ ticketing office, and 15 months later, she became the club’s director of ticket operations and merchandise. Yorko said she “had been transitioning and waiting” for her current job “for some time.” Now, she’s “a leader, a coach, an idea person,” for the minor-league club.

Yorko said she’s been encouraged by the number of female students who have reached out to her and asked about her job. “I’ve talked to a few high school and college classes, and there are more females in those classes than I ever remember attending with me,” she said. “That’s a great sign. I think it’s important in all businesses to be diverse when it comes to putting the best team together.”

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SPORTS BUSINESS

Cavs gather fans, ban ‘trolls’ on network

By KEVIN KLEPS kkleps@crain.com @KevinKleps

There is no shortage of social networks with content on the Cleveland Cavaliers.

But the Cavs believe theirs — Wine & Gold Nation, which launched last month — can be a “troll-free environment,” which is about as common in social media as a down season by LeBron James.

The network allows fans, via the internet or a new Wine & Gold Nation mobile app, to connect and interact.

There’s a free membership option, which includes Facebook-like interactions, announcements, events and check-ins. For $35, fans can join one of four groups — the Cavalittles (ages 5 and under), Kids Club (6-12), Cavalry (13-17) and Wine & Gold Nation (18 and up) — each of which is offered exclusive experiences and content.

“As you sign up, you get a value that’s worth more than the monetary value you’re putting in,” said Mike Conley, the Cavs’ vice president of digital and web services.

The expansive endeavor — the Cavs say WGN is the first of its kind in pro sports — requires constant monitoring, since the comments, forums, file sharing and other types of engagement could draw some of the negativity that often dominates social media.

“With great flexibility also comes great responsibility to create a trollfree environment,” Conley said.

“We’re on the platform 24/7.”

On March 22, nine days after the Cavs formally announced a network that Conley said they spent almost two years developing, WGN had

For $35, fans can join one of four groups geared toward different age groups on the Cavs’ Wine & Gold Nation network.

more than 38,000 total members and more than 13,000 active logins.

The platform uses software produced by Drund, a Boardman company that initially built its technology as a hub for teacher-parent interactions.

WGN takes the place of CavsFanatic.com, a social network the organization launched in 2008, and whose members were given the first look at the new platform. CavsFanatic users had the chance to sample WGN “months ago,” Conley said, which allowed the organization to get feedback and “make sure we were adding value and still delivering tools they were used to.”

Those users enjoyed the former site’s forums, which are now labeled as “topics” on WGN. Criticizing the team on the message boards is OK, Conley said — as long as the discussion is civil.

“If they critique their game, we have no problem with that,” the Cavs’ VP of digital said.

“We’re not blind to what happens on the floor. It’s part of being a fan. When they cross the line to criticizing the individual person, that’s where we draw the line. If somebody starts to go after the personal character of the players, we absolutely won’t tolerate that.”

What the Cavs want is to create a social space in which fans gather, whether it’s in support of a team led

by James, or the 19-63 club that was coached by Byron Scott in 2010-11, when James was spending the first of his four seasons in Miami.

“The group you’re aligned with, it’s the cradle-to-grave concept of building fan loyalty,” Conley said. “We want people to fall in love with the brands. By the time they get older, they are entrenched in all things Cavs — from the good to the bad, and back to the good again.”

The paid groups are pushed content first, and will be key parts of the Cavs’ crowdsourcing efforts. They will also receive such perks as digital

instruction from the Cavs’ training and dance crews.

Conley also envisions the network creating “more of a backers club that pops up in certain cities and countries around the world that are looking for places to watch a game.”

And once fans use Wine & Gold Nation’s event tool, “Now we have the pulse of where they are and we can deliver experiences to them,” Conley said.

A lot of this might sound similar to Facebook. But it’s really not, Conley said, because of the way in which the social networks use algorithms that can decide which content gets seen by which people.

“This is kind of my soapbox moment,” the Cavs’ digital boss said. “As important as social media is to us, and it truly is, we spend so much time, so much equity, to bring our fans to those platforms for free and allow those social networks to build these networks of individuals.

“On the flip side,” Conley said, “the social organizations in general have allowed us to build these huge followings, but completely throttled us by allowing us to only hit maybe 10% of that audience with a post. We can’t hit them natively unless we pay to boost it. If we want to hit our own audience on social, we have to pay to boost it. It becomes a real challenge.”

The Cavs, instead, chose to create what Conley calls “a cleaner, engaging network that is free of all the other noise of social.”

There are no recipes. No political discourse. No ugly rants.

Just Cavs chatter — whether it’s centered on James, or from fans who are concerned, as recent message-board participants were, that the team had become too reliant on the 3-pointer.

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SPORTS BUSINESS

When asked about his son, Dan Gilbert gushes about a kid who beat the odds

By RON FOURNIER

If you want to truly understand Dan Gilbert, ask him about fatherhood.

“I did not have a close relationship with my dad,” the titan of finance and Detroit real estate told me. “My dad was a World War II military guy, and then he owned a bar in Detroit.” Gilbert’s rat-a-tat cadence made it hard for me to keep up with his hot flurry of thoughts and images.

Including this chilling story: “My dad is 12 years old, and his brother is 10. (He) was born and raised in Detroit, a very poor neighborhood. He is delivering newspapers with his brother, and it’s a foggy day, and his 10-year-old brother gets run over, and it’s a priest who runs him over and kills him. It wasn’t the priest’s fault, and the priest is doing last rites over the body …”

Gilbert looked up from the table in his office at Quicken Loans, the mortgage company that launched his business empire and has driven a resurgence in downtown Detroit. He stared me in the eyes and continued.

“The worst part of the story: His immigrant father from Russia. He put his finger in his face and said, ‘You killed your brother. You should have watched your brother.’ ” Gilbert shook his head in sympathy for his long-deceased dad, who would have

Fournier is publisher and editor of Crain’s Detroit Business.

turned 100 years old this year.

“You can imagine what my grandfather did to my father,” Gilbert said.

“So you can understand how anybody who experiences that kind of trauma would have a hard time getting close to anybody, including his kids.”

In our hourlong conversation, Gilbert never did connect the dots. He never did tell me (nor has he told any journalist, as far as I can tell) how his Russian grandfather warped his father, or how his father, the owner of a bar at Seven Mile Road and Woodward, treated Gilbert’s two half-siblings and brother.

He did say he was determined to be closer to his own five children: “It’s almost like correcting course, and it’s like correcting nature — getting back to equilibrium.” Gilbert also suggested his upbringing played an indirect role in his business success.

“When you talk to successful entrepreneurs,” he said, “95% of them come from a messed-up childhood.”

Nick Gilbert

The oldest child of Dan and Jennifer Gilbert is 20-year-old Nick, who was born with neurofibromatosis, a nerve disorder that causes tumors to grow anywhere in the body. Nick’s tumors grow in his head. Diagnosed at 15 months, Nick has been on and off chemotherapy for 15 years or so.

He had life-saving brain surgery at age 10. He is nearly blind.

I visited Nick at Michigan State University, where he is a junior studying business.

“He’s the best dad ever,” he said of his father, Dan. “He’s my best friend.”

Such words seem trite unless you’ve spent time with Nick, a smart, witty, perpetually happy young man who found some measure of fame representing his father’s Cleveland Cavaliers at the 2011 and 2013 NBA drafts, where the team won the lottery to pick first.

After the 2011 draft, a reporter asked Nick to explain why his father considered him a hero. “I mean,” the 14-year-old said, “what’s not to like?”

Nick told me there’s nothing not to like about his father, who made it home for bedtime most nights and found time to coach his kids’ sports teams. “He had my back,” Nick told me. “He’d get crazy with the refs.”

At MSU, Nick gets help navigating his course load from school disabili-

ties specialist Angela Sebald. She told me Nick constantly texts and talks with his father about sports and school.

Recently, Nick called Dan for advice on a sports management exam involving the salary cap system. After 45 minutes, Dan ended the conversation with a joke aimed at curbing his son’s high expectations by acknowledging them. “No pressure,” the father said, according to Angela and Nick, both of whom were on speaker phone with Dan. “But you better ace this.”

“You represent the Cavs and Detroit and the Gilbert family,” Dan continued. Nick and Angela laughed.

“You could almost hear Dan smile,” she said.

Gilbert still can’t get over his son’s composure.

“I mean this, and I know I’m his father, but he is the single-most happy human being I know.”

Dan Gilbert

When Nick was diagnosed with the rare disease, Dan Gilbert’s first reaction was typical of most parents: “Why me? I mean, I feel blessed otherwise, but you go through that.”

Then came the hard reality of the work ahead. “I talked to a lot of people whose kids have cancer, and you really focus on the process of how-to and the next steps,” he said.

Gilbert interviewed doctors around the country, read everything he could about the condition, poured millions of dollars into research and

support for those with the disease, and joined the Children’s Tumor Foundation board.

In other words, he treated it like a business problem — throwing everything he had at it. “Yeah, maybe part

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SPORTS BUSINESS Nick Gilbert

Nick says he got his optimism from his father. “He says he fails every day, but he finds success in every failure.”

At age 10, Nick underwent eight hours of life-saving surgery to remove a tumor from the base of his brain. His father told him about the need for emergency surgery on, of all days, his birthday.

“When I had brain surgery, all I could think about was, ‘When I wake up, I’ll get whatever I want.’ ” Did you?

He laughed. “Basically, yes.”

I asked the 20-year-old what he hopes to do with his MSU degree. “A lot,” he replied. I pressed the question until he narrowed it down: marketing, he said, ideally in the areas of sports, casinos, commercial real estate and music. “Maybe take over everything my dad has built.”

I raised a fatherly eyebrow. Nick quickly added, “(My dad) says I’m going to have to work for it. He’ll put me in the mailroom.”

There is one thing Nick definitely inherited from his father: passion and persistence. “When I want something,” he said, “I annoy the shit out of people until I get it.”

Dan Gilbert

of that is an escape because you don’t want to feel all the bad stuff,” he said.

For Gilbert, a master of his universe, Nick’s condition was a reminder of life’s limits. “What does money really mean? All the money in the world can’t fix this thing he’s got.

Maybe one day, but it can’t now.”

Later, he told me Nick’s genetic disease “served as a gut check. I never understood when people were arrogant, because there is always an ultimate equalizer that everyone is going to die. Why are you better than

him? You’re all going to be dirt, so when things like this happen, it reminds you to keep your head up — there are things you don’t control.”

Nick Gilbert

Nick holds his head high. “This shit’s serious, but I’ve got the right people behind me,” he told me. “My family and my doctors are terrific.”

His father calls him the most resilient and optimistic person he knows — and Nick takes pride in that impression. “My dad always says I look

Cavaliers owner Dan Gilbert enjoys a private moment with his son Nick after his team won the 2011 NBA draft lottery. The Cavs later selected Kyrie Irving.

(David Dow/Getty Images)

at chemo as being no big deal.”

Even when he speaks in clichés, Nick is sincere and serious. “You live the life you’re given,” he shrugged.

“That’s just the attitude I was born with. You gotta do what you gotta do.

Gotta get shit done and move on.”

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I asked Dan what Nick wants to do when he grows up. He nodded to a sea of Quicken cubicles outside the glass walls of his office and said, “He just got into the MSU business school, so I think he wants to be a part of this in some way, shape or form.”

But the father said he won’t let his kids be treated special at home or at work, because he knows entitlement has ruined any number of rich children. Humility awaits Nick and his siblings should they choose to join the family company. “They have to start at the bottom,” Gilbert said.

Which is not a scary thing at the Gilbert household, because the father preaches to his kids that success cannot be measured in dollars or promotions. “For a lot of people, when they do all these things — when they do this or that, when they say, ‘If I get to here or there, then I will be happy.’ That is just not true.”

A truly happy person is blessed with the innocence to never fear failure and the resilience to never lose hope, according to Dan Gilbert. By those measures, Nick Gilbert is already an extraordinary success.

“Oh man, he is truly my hero,” father said of son. “He is so fricking happy.”

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Nick’s father will never forget that day a decade ago. The watery growth was not easy to remove. “The surgeon told me it was like taking out the inside of a grapefruit with tweezers,” Gilbert said.

A few minutes later, the father choked up telling me about his son’s reaction to the surgery. “Let me give you this crazy story, and I don’t want to start crying but ...” And then he told me about the flight home after the Washington, D.C., operation, and how Nick refused to feel sorry for himself. Unlike his father, the son never asked, “Why me?”

Still, Dan wanted to help Nick make sense of his rare condition. So he told his son, “You drew a card, and it was just an unlucky card. You can’t really have a say in the cards you get.

You just get a say in how you play them.”

Nick didn’t need to hear that. At 10, he already knew life’s game is best played with a confident smile. “There is only one card I could draw where I have a dad who owns an NBA team,” Nick joked to Dan. “So I’m pretty good overall.”

Gilbert still can’t get over his son’s composure. “I mean this, and I know I’m his father, but he is the single-most happy human being I know.”

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PA G E 18

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A P R I L 3 - 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

THE LIST

Commercial Contractors Ranked by 2016 Local Revenue COMPANY THIS ADDRESS YEAR PHONE/WEBSITE

LOCAL REVENUE (MILLIONS) 2016/2015

TOTAL REVENUE (MILLIONS) 2016

NEW CONTRACTS 2016 (MILLIONS) LOCAL TOTAL (1)

EMPLOYEES LOCAL PRIMARY INDUSTRIES TOTAL (2) SERVED

PRIMARY SERVICES OFFERED

PROJECTS UNDER CONSTRUCTION IN 2016

TOP LOCAL EXECUTIVE

1

Gilbane Building Co. 950 Main Ave., Suite 1410, Cleveland (216) 535-3000/gilbaneco.com

$376.8 $283.7

$4,800.0

$371.3 $6,078.8

65 2,742

Corporate, health care, K-12, higher education, sports/entertainment

International construction management firm

Cleveland Clinic Roseann Park tower, KSU College of Architecture & Environmental Design

Scott Orr vice president

2

Turner Construction Co. 1422 Euclid Ave., Suite 1400, Cleveland (216) 522-1180 turnerconstruction.com/cleveland

$240.4 $348.5

$11,128.0

$92.5 $13,500.0

163 7,209

Commercial, education, health care, industrial

Construction management, general contracting services

Hilton Cleveland Downtown, Kent State Science Center, Cleveland Clinic Taussig Cancer Center

Jason Jones vice president, general manager

3

Donley's Inc. 5430 Warner Road, Cleveland (216) 524-6800/donleyinc.com

$173.0 $268.0

$269.0

$177.0 $371.5

207 502

Higher education, health care, commercial, institutional

Construction management, concrete services, restoration

Cleveland Public Square, CCF/ CWRU Health Education Campus, CCF 105th St. garage, Oatey HQ

Malcolm M. Donley president, CEO

4

Kokosing Inc. 13700 McCracken Road, Garfield Heights (216) 587-4900/kokosing.biz

$133.8 $86.5

$889.4

$494.3 $749.7

533 2,257

Water, power, industrial, transportation, marine, commercial

General contractor: design-build; construction management atrisk; aggregate, asphalt supplier

City of Euclid water pollution improvements

Brett Burgett owner, vice president

5

The Ruhlin Co. 6931 Ridge Road, Sharon Center (330) 239-2800/ruhlin.com

$120.6 $175.5

$145.5

NA NA

160 255

Transportation, commercial, institutional, health care, industrial

General contracting, construction management services

ODOT I-90 Innerbelt Bridge

James L. Ruhlin president, CEO

Independence Excavating 5720 E. Schaaf Road, Independence (216) 524-1700/indexc.com

$105.0 $100.0

$205.0

$85.0 $202.0

350 650

Power, automotive, health care, transportation, entertainment, federal

Site development: demolition, earthwork, utilities, environmental remediation, concrete crushing

Pinecrest, NEORSD Superior Stones, Lake Shore plant demolition, CCF/CWRU Health Education Campus

Victor DiGeronimo Jr. president, CEO

7

Infinity Construction Co. 18440 Cranwood Pkwy., Warrensville Heights (216) 663-3777/infinityconstruction.com

$70.9 $43.5

$72.3

$81.9 $88.5

55 58

Commercial, health care, education, sports/ recreation, retail

General contracting, construction management design-build

Parker Hannifin YMCA, Ruth's Chris Steakhouse, Fresenius Medical Center, NY Life-200 Public Square

Charles A. Izzo president

8

Rudolph Libbe Group 5505 Valley Belt Road, Suite F, Independence (216) 369-0198/rlgbuilds.com

$53.0 $44.0

$502.0

$47.0 NA

90 1,000

Automotive, metals, chemical, industrial

New construction, manufacturing improvements, site selection

Lubrizol Painesville Vision Project, Ford Walton Hills plant decommissioning

David L. Boyer GM, NE Ohio

9

Shook Construction Co. 10245 Brecksville Road, Brecksville (440) 838-5400/shookconstruction.com

$46.8 $53.5

$166.4

$31.7 $97.3

95 277

Education, health care, industrial, mission critical, water resources

General contracting, construction management, design-build

Verizon Twinsburg data center, Bridgestone Akron data center, Massillon Wastewater plant

Chris Halapy executive vice president

Independence Construction

$43.0 $21.0

$43.0

$130.0 $130.0

15 15

Retail, entertainment, automotive, higher education

Development through preconstruction, construction and commissioning

Pinecrest, The Country Club, Case Western Reserve University Lucia Nash Walkway

Kevin DiGeronimo president

6

E. Schaaf Road, Independence 10 5720 446-3700/ind-con.com THE(216) LIST

Commercial Contractors Kohler Generator Distributor in Ohio & Indianana Ranked by 2016 Local RevenueB BUCKEYE CKEYE YE POWER SALES CO C CO., INC INC. C..

C

COMPANY THIS ADDRESS YEAR PHONE/WEBSITE

Providing gLOCAL Reliable le e Power for Your Customer’s Projects for Over 70 Years rs NEW CONTRACTS TOTAL

2016 (MILLIONS) EMPLOYEES 330 33 303 0 0--REVENUE 422 42 222 2-4520 2 4520 45 0REVENUE ● b buckeyepowersales.com uckeyepowersales ● 84 8465 465 Tower Dr. Dr Twinsburg Twinsburg, O OH H PROJECTS UNDER LOCAL (MILLIONS) (MILLIONS) LOCAL comPRIMARY INDUSTRIES 2016/2015 2016

TOTAL (1)

TOTAL (2)

SERVED

PRIMARY SERVICES OFFERED

CONSTRUCTION IN 2016

TOP LOCAL EXECUTIVE

11

Cleveland Construction Inc. 8620 Tyler Blvd., Mentor (440) 255-8000/clevelandconstruction.com

$38.6 $41.8

$338.1

$0.1 $202.0

86 793

Retail, hospitality, hospitals, historic renovations

General contractor, interior contractor

Leader Building, Schofield Building, Cleveland-Hopkins International Airport (all renovations)

Jon D. Small president

12

Precision Environmental Co. 5500 Old Brecksville Road, Independence (216) 642-6040/precision-env.com

$37.2 $38.3

$43.7

$24.0 $27.5

189 194

Industrial, commercial, government, health care, education, historical

Asbestos/lead abatement, selective demolition, concrete sawing/drilling, GPR

Kent State renovation, Tri-C Metro Campus renovation, Lake Shore plant, Cleveland Athletic Club

Tony DiGeronimo president

13

Continental Building Co. 23240 Chagrin Blvd., Suite 400, Beachwood (216) 454-2500/builtbycontinental.com

$25.5 $28.2

$311.6

$35.1 $261.7

16 141

Commercial

Construction management, general contractor

University Edge student housing, Barnes & Noble, (both in Youngstown); Giant Eagle projects

Rick Adante project executive

14

Drake Construction Co. 1545 E. 18th St., Cleveland (216) 664-6500/drakeconstructionco.com

$15.0 $33.0

$22.0

$15.0 $22.0

40 45

Medical, retail, housing

General contractor

Yorkview Apartments

Steven J. Ciuni president

15

Fortney & Weygandt Inc. 31269 Bradley Road, North Olmsted (440) 716-4000/fortneyweygandt.com

$13.7 $9.5

$84.1

$13.7 $84.1

101 101

Senior living, hotel, retail, restaurant, commercial

General contractor

Mabel's BBQ, Petco, Regus, CVS, Christian Brothers Automotive, Outback Steakhouse.

Greg Freeh president

16

B&B Contractors & Developers Inc. 2781 Salt Springs Road, Youngstown (330) 270-5020/bbcdonline.com

$8.7 $18.7

$8.7

$8.7 $8.7

10 10

Commercial and industrial

General contracting

Cafaro headquarters, Champion memory care facility, Tamarkin warehouse

Geno Leshnack president

17

The Krueger Group Inc. 12600 Triskett Road, Cleveland (216) 252-0222/buildwithkrueger.com

$6.4 $5.9

NA

NA NA

17 17

Commercial, residential, nonprofit, educational, industrial, historic

General contracting, construction management, design-build

Neighborhood Family Practice, Magnolia Clubhouse, The Lantern, West Side Catholic Center

Robert E Krueger II president

18

The Austin Co. 6095 Parkland Blvd., Cleveland (440) 544-2600/theaustin.com

$0.9 $3.6

$152.7

$3.8 $114.2

68 169

Manufacturing, food processing, aerospace, automotive, pharma

Location consulting, design and engineering, design-build, construction, contracting

MilliporeSigma

Michael G. Pierce president

RESEARCHED BY CHUCK SODER Information is supplied by the companies. Crain's does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all feedback and will include omitted information or clarifications in coming issues. All lists and the book of Lists are available to purchase at www.crainscleveland.com.(1) Total value of all contracts won in 2016. (2) Full-time equivalent employees as of March 1, 2017.

CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 | www.crainscleveland.com | @CrainsCleveland Publisher/editor Managing editor Sections editor Creative director Web editor Associate editor/Akron Assistant editor Senior reporter

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CRAIN’S CLEVELAND BUSINESS

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A P R I L 3 - 9 , 2 017

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PA G E 19

AKRON

FirstEnergy makes big push for ‘zero emission credits’

By DAN SHINGLER dshinger@crain.com @DanShingler

The cost of supporting some of the region’s aging nuclear power plants might be about to land on the bills of Ohio ratepayers, and that might include the cost of subsidizing a nuclear plant in Pennsylvania owed by Akron-based FirstEnergy Corp.

The firm is desperately hoping that Ohio legislators will take action this year to help it either maintain or sell off its nuclear fleet, which includes the Perry Nuclear Power Plant and the Davis-Besse Nuclear Power Station near Toledo, and a facility in Beaver County, Pennsylvania.

“We’ve been engaged with legislators talking about the potential for some type of legislation in Ohio, to recognize the unique value that nuclear brings to the state,” said FirstEnergy spokeswoman Jennifer Young, who counted jobs, low pollution output and diversity of the state’s energy portfolio among the benefits her company is touting.

What FirstEnergy wants, she said, is some form of what’s known as zero emission credits, which would give money to the operators of nuclear plants as a sort of bonus for producing electricity with little to no carbon or other pollution.

It’s a bit like a carbon tax in reverse: Instead of levying a tax on electricity producers that emit carbon, the credits reward competing sources of power that do not produce sig-

“You have certainly a lot of recent upward pressure on the FirstEnergy distribution side of energy bills, and this would be one more thing added to ratepayers’ bills.”

— Matt Brakey, consultant at Brakey Energy

nificant amounts of carbon.

Many of the same folks opposed to a carbon tax — developers of new gas-fired powered plants and some environmentalists — are decrying FirstEnergy’s attempt to get a nuclear bailout. They say such a bailout would artificially increase electricity cost for the benefit of one company over others, or promote what they see as an unsafe form of power instead of renewables like wind and solar.

Matt Brakey, a consultant for industrial power users and other ratepayers at Shaker Heights-based

Brakey Energy, said he has not taken a position on any potential bailout of FirstEnergy’s nukes, because he hasn’t seen a formal proposal yet.

But he said he has concerns no matter how the matter works out.

If legislators give FirstEnergy the credits, it will almost certainly have an impact on ratepayers and will be just the latest in add-on charges ratepayers have been asked to bear.

“FirstEnergy has recently had a distribution modernization rider passed, and it’s also had a significant increase in transmission prices … So you have certainly a lot of recent upward pressure on the FirstEnergy distribution side of energy bills, and this would be one more thing added to ratepayers’ bills,” Brakey said.

But FirstEnergy has said recently that it “urgently” needs legislative action to keep its plants afloat.

Young said if the plants close that, too, would mean higher costs for local ratepayers — logic with which Brakey agrees.

“If the nuclear plants are closed, the short answer is we’ll have to import more power from out of state,” Young said. “And if you look at the states that have to import power, they have higher costs.”

But if the legislature does pass zero emissions credits for the plants, FirstEnergy says it still might sell the facilities. The credits, in that case, would essentially facilitate such a sale by making the plants profitable for any potential buyer, just as they would have done for FirstEnergy.

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A P R I L 3 - 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

AKRON

Lucky Shoes’ business model still a good fit

By BETH THOMAS HERTZ clbfreelancer@crain.com

Longtime local independent retailer Lucky Shoes has built its reputation on mixing unique products with strong customer service, and it’s a philosophy the family-owned business is using to still move itself forward after 98 years in the business.

Lucky recently opened the first standalone retail Vionic store in the United States in Fairlawn Town Centre.

The Australian brand, developed by a podiatrist yet stylish, is not well known in the United States, said John Luck, president of Lucky Shoes.

“It only has about 13% name recognition,” Luck said of the brand.

“But people who know about them love them. They are the hottest brand on the planet right now.”

Vionics are not inexpensive, with prices ranging from about $70 to nearly $200, but customers who find relief from foot pain see the value, he said.

It’s that formula — identifying products that customers want but can’t find elsewhere and being nimble enough to provide them — that has helped Lucky Shoes avoid the failures experienced by many larger shoe sellers over the years, such as Payless, which recently announced it is filing for bankruptcy and closing 500 stores.

Luck’s great-grandfather started the company in Akron’s Firestone Park area in 1919. As the population of the Akron area shifted, and shoppers spent more of their money at malls, the business followed them and now has 15 locations. It operates Lucky Shoes stores, which offer mul-

the company’s chief executive officer, approached Vionic about opening a standalone store at a shoe show in Las Vegas in August after seeing the success they had selling the brand in their Lucky Shoes store.

Steve Mabb, executive vice president and general manager with the Vionic Group LLC in San Rafael, Calif., said Vionic was pleased to work with Lucky Shoes.

“They are very good footwear retailers and have had a lot success doing branded stores. We had a lot of confidence in their ability to do this well,” he said. “They also had a great location available in Fairlawn, all of which made it too good of an opportunity to turn down.”

tiple brands, in Fairlawn, Belden Commons in Canton, South Park Mall in Strongsville and Easton Town Center in Columbus. It runs New Balance stores in South Park, Crocker Park in Westlake, Shaker Plaza in Shaker Heights, Fairlawn, Canton, Mason (near Cincinnati) and two in Columbus. It has Stride Rite stores in Fairlawn and South Park.

The company had an SAS store until last year, when it decided to convert the location to Vionic. Deciding what brands merit their own stores is a delicate balance, Luck said. For SAS, he found that about 75% of SAS shoes sold in Fairlawn were being sold at the Lucky store, not the nearby SAS store.

“Our customers were telling us they preferred to shop at Lucky Shoes,” he said.

Competitive advantages While many other shoe retailers compete based solely on price, the Luck family has never followed that path. Its philosophy is that consumers are willing to pay for a product that delivers comfort, especially people who have foot problems. The company says it then delivers value to customers in the form of well-curated product lines and well-trained staff.

The company looks at shoes from 1,000 vendors at trade shows each year and chooses to sell only 50 to 75 brands at any time.

Lucky Shoes employs about 110 people, about 70 of them full time.

About 40 employees have been there more than five years, with a few having a tenure of 40-plus years, including some who were hired by Luck’s grandfather. Finding people with the

Looking forward

John Luck, president of Lucky Shoes, worked with Australian brand Vionic to open its first stand-alone store in North America.

(Shane Wynn for Crain’s)

right mindset is crucial to that kind of employee retention, he said.

“It’s an us-against-the-world mentality, and people who enjoy that are attracted to work here and stay with us a very long time,” he said.

Chuck Schuyler, president of the National Shoe Retailers Association is well acquainted with Lucky Shoes.

He said the ability to combine distinctive products with good service is key to what helps independent shoe sellers survive today.

“Independent companies have so many attributes that big box stores don’t,” he said. “They run their own business, recognize trends early and offer a great in-store experience that is second to none. They are the ones

who build brands today.”

He said the problems that lead discounters like Payless to struggle are multifaceted. Some are burdened with unfavorable decisions by parent companies, such as overpriced leases or lack of flexibility on merchandise. Also, products can only be discounted so much before all profit vanishes, he said.

Luck agrees, comparing his family’s ability to hold a steady bottom line through economic downturns to that of a value stock.

“We are never really up a lot or down a lot,” he said, declining to talk more specifically about the company’s financials. “We are a very steady company. People always need shoes and people who want good shoes won’t settle for less.”

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No one is calling Vionic a bad pair of shoes, to be sure. And traffic at the new Fairlawn store, which quietly opened March 17, proves it.

“We just unlocked the door and people came. We sold out of one popular fashion sandal over that first weekend alone, and there was still snow on the ground,” Luck said.

Luck said he and his father, Tom,

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

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

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

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MEMBER FDIC

That brings up the question of FirstEnergy’s Pennsylvania plant in Shippingport, about 20 miles northwest of Pittsburgh. Newspapers there have been citing FirstEnergy officials when reporting that an Ohio zero emissions credit program could result in Buckeye ratepayers subsidizing the Pennsylvania plant.

That would likely not be palatable to at least some Ohio legislators, particularly free-market Republicans, but Young would not rule it out.

“That would depend on how Ohio drafted its legislation,” she said.

But, she noted, other states have written their laws around zero emissions credits in a way that does not benefit out-of-state plants, and Ohio could do the same.

But FirstEnergy insists it needs some sort of help to keep the plants open. Whether it gets it, will be up to Ohio’s lawmakers.

Looking to the future of his family’s 98-year-old business, Luck is definitely interested in pursuing more Vionic locations. He’s less certain about how to accommodate customers who want to buy their shoes on the internet. He doesn’t want to do it until he’s sure he can deliver some of the uniqueness for which his business is known.

“The world doesn’t need another place to buy shoes on the internet. If we’re going to do it, we are going to do it in a special way that provides our internet customers with extra value, or they won’t need us,” he said.

Another question mark is who’ll be running the business in 20 years.

Luck, now 50, has two sons in high school but he doesn’t know if any of them will be interested in joining the family business. He received a degree in education from Ohio State University and, at one time, wasn’t sure if he wanted to join the business either.

But he said he’ll gladly mentor any of the next generation if they want, much like his father did for him.

“I don’t say thank you enough to my father because the education that I have received, both from what he’s actively taught me and what I’ve learned from watching him operate, isn’t something you can get at a business school or at a non-family business,” he said. “If one of the kids expresses an interest, we’ll figure out a way to transition from the fourth generation to the fifth but if not, we’ll have to see what happens.”

Brakey said that’s one reason he’s less concerned: He sees the state’s Republican Legislature as less likely to give the company the credits, or to be as generous as the Public Utilities Commission of Ohio if it does. The PUCO has tried to assist FirstEnergy in the past, but some of its efforts have been thwarted by federal regulators as being anti-competitive.

“If this were coming out of the commission, I would say it definitely would probably happen,” Brakey said.

“But the fact that it’s coming through the legislature — and a Republican-controlled legislature at that — seems to make for a steeper climb.”

In the meantime, FirstEnergy’s lobbyists will try to convince lawmakers that the zero emissions credits make sense because they protect Ohio jobs, guarantee diversity in the state’s energy portfolio and secure important in-state generation, Young said.

“Our hope is that something will get introduced well before the summer break,” she said.

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ROCK HALL CONTINUED FROM PAGE 1

Or, as 2017 inductee Eddie Vedder howled on Pearl Jam’s 1998 album Yield, “It’s evolution, baby.”

“We’ve long known that this is an iconic nameplate for our city, and people come from all over the world because we have this thing,” said Chris Connor, now the Rock Hall’s board chairman, in an interview with Crain’s. “For some people, that would be fine and we could sit back and rest on our laurels. But this is a 20-yearold institution, and it’s time to give it a good kick in the backside and take it to the next level.”

The deep dive The foundation of the Rock Hall’s new strategic plan is rooted in some rigorous audience work it undertook shortly after Harris was promoted to CEO after serving as the museum’s vice president of development and government affairs under Terry Stewart. Some of the new positions under Harris underscore that analytical approach: a strategy and analytics manager, vice president of technology and vice president of strategy and culture.

“We found that visitors were saying the museum was kind of cool, but they weren’t being blown away in the way we thought they could be,” Harris said. “In a business where word of mouth brings in the majority of your customers, you really need to deliver great experiences.”

The museum had been under the belief that “aging boomer rockers” made up the museum’s core audience, Harris said, though through his team’s analytic work it was discovered that segment only made up about 20% of the museum’s audience — not the 60% to 80% it believed to be the case.

According to the research, the Rock Hall should be targeting the socalled “music enthusiast” — a younger set than their boomer counterparts. Those enthusiasts tend to spend more in-house and interact with museums in a much different way. For them, it’s not so much about old guitars, but hearing the stories about and from the people who played those guitars.

“If you create things that just relate to the aging boomer rocker, that enthusiast is less interested,” said Harris, adding that casual travelers, too, remain a key demographic because they, like the enthusiasts, tend to serve as natural ambassadors for the museum. “These enthusiasts want the inside story, to go behind the music, to be engaged. They like tactile interactives. In all our survey work, they pinged higher on hearing the story or seeing a video of an artist than just seeing an artifact. The power is when you combine those.”

Operationally, that shift necessitated some changes in the Rock Hall’s administration. The museum hired Karen Herman as its vice president of collections and curatorial affairs — a recast position — to focus less on the encyclopedic nature of rock but more so on telling the story. Herman previously worked at the Academy of Television Arts & Science as its vice president of the Archive of American Television, where she filmed interviews, oral histories and other stories for the Academy.

Herman’s influence is already being felt. Take the ongoing John Mellencamp exhibit running through Sept. 4, which along with handwritten lyrics and other artifacts includes selections from a multihour interview with the songwriter produced specifically for the exhibit.

Jason Meyer, of Cleveland’s Slavic Village neighborhood, installs a coming soon sign on the barriers around the new cafe in the atrium of the Rock Hall. The cafe will serve dishes from Michael Symon, Jonathon Sawyer, Rocco Whalen and Fabio Salerno. (Photos by Tim Harrison for Crain’s)

Paid attendance Attendance has started to inch upward after remaining relatively flat.

500,000

400,000

441,513 10.1% increase

300,000

200,000

Shoring up the future

100,000

0

The makeup kit of Kiss drummer Peter Criss on display in the Backstage Stories exhibit, one of the new displays on the museum’s first floor.

John Mellencamp’s 1966 silver Honda Scrambler 305 motorcycle.

A setlist from the British heavy metal act Iron Maiden.

Even the store has evolved. In addition to changes of the store’s layout and merchandise mix, it’s no longer simply peddling Rock Hall snowglobes and shot glasses but also items co-branded with artists — Green Day or Pink Floyd T-shirts, for instance, that also carry Rock Hall logos. The museum has also slimmed down its CD collection and boosted its vinyl offerings to capitalize on that medium's growing popularity. And visitors are responding: For the first two months of the year, the average in-store spend is up nearly 20% over the like period last year.

Meaningful connections While much of the construction is ongoing, a quick stroll through the museum already feels noticeably different than it did a few years ago. Fading is the almost clinical feel of the museum’s atrium in favor of more deep reds and blacks and striking photos of artists — pillars of the museum’s new branding. At the same time, Harris said there’s a delicate balance of respecting the internationally renowned architecture but remaining true to the artform it honors.

“We can’t treat the building as be-

example — to the education division.

The Rock Hall, like many museums, previously forbade visitors from taking pictures. Now, that frontline staff encourages visitors to take photos.

“We also let them know we want them to be authentic and share their stories,” Harris said about the staff. “If they’re a metal fan, they should wear it proudly. That’s important for people who are in our space for our visitors to sense everyone here is natural and open.”

2012 2013 2014 2015 2016

ing too precious. This is rock ‘n’ roll,” Harris said. “We can’t be a slick shrine. We need to inject some grit and some attitude into what we do.

These modernist spaces are terrific, but blank white walls after 20 years is not in the DNA of rock ‘n’ roll. That’s where the color comes in.”

Todd Mesek, the Rock Hall’s vice president of marketing and communications, added, “This is not a museum in a traditional sense. There’s a vibrancy. It’s a communal space where people can come together — not where we say be quiet, be respectful and behave. Let’s rock out.”

That sense of community is driving much of the redesign at the museum.

Last year, as part of a $1.8 million investment, the Rock Hall unveiled the redesigned atrium, a live outdoor music experience with food trucks and a beer garden — the idea being to create an almost festival-like environment at the museum’s front-end. Over the last few years, the Rock Hall has put an emphasis on bringing in more live acts — particularly up-and-coming bands — to connect with younger audiences, but more importantly, the local community, which in the past had only made up a sliver of its overall attendance.

“We don’t want a quick cursory touch, but a meaningful connection,” Harris said.

As for the experience inside the museum, the Rock Hall is slowly altering the way visitors interact with the space in addition to the changing nature of its exhibits. One has included moving its frontline staff — those who staff exhibits and welcome areas, for

In many ways, the Rock Hall has been a startup over the last two decades. The shift in its mission under Harris was reflective of as much. Previously, the Rock Hall was positioning itself as the “foremost authority on the history of rock ‘n’ roll” — almost “justifying the artform as worthy of a museum,” Mesek said. Today, the museum simply aims to “engage, teach and inspire through the power of rock ‘n’ roll.”

Still, the Rock Hall hasn’t stomached a loss in over decade, though its profitability has waned over the years, according to financial data provided by the museum. Last year, though, proved to be a particularly good year for the organization, as the Rock Hall earned $2.85 million in operating income on just north of $24 million in operating revenue. Those profits are up a staggering 163.9% over the previous year.

That said, the Rock Hall still will turn to the philanthropic community for more support over the coming years to assist its continued evolution and support the costs of hosting the inductions in Cleveland, which already are buoyed by a portion of the Cuyahoga County hotel bed tax. In addition to the Connors’ gift, about $5 million from anonymous donors is already slated to go toward the Rock Hall’s ongoing transformation efforts.

“We’ve earned the right to ask the community to support us,” Chris Connor said about the ongoing fundraising efforts. “We’ve been taking care of business through our own hard effort and good management of the facility and attracting paying visitors. Now is the time to say go out and ask people to be a part of it. We are the only place globally that celebrates and honors this terrific artform.”

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Romney Cullers has been chosen to succeed Michael Becker as Managing Partner of the Becker Law Firm, one of Ohio’s most successful advocates for victims of medical malpractice and catastrophic injuries. Cullers’ recent representation of a 12-year old girl who was severely injured by a fallen power line resulted in Ohio’s largest-ever settlement for injuries to an individual plaintiff. Cullers joins Becker as an equity owner of the firm and will gradually assume responsibility for its operations.

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John “Rusty” Deane has been named Director of Business Development at MCPc. He was previously President of Onelink Technical Services. A resident of Rocky River, he has 20 years of sales and management experience across a range of businesses, including non-profits. A collegiate sailor at Boston University, he is a trustee of the Station, an MCPc-supported scholastic sailing program on Lake Erie at the former Coast Guard station.

Seamus Carr joins MCPc as an Account Development Manager. He has 16 years of experience in the sports marketing and advertising industries and is a graduate of St. Ignatius High School and Xavier University. He resides in Rocky River with his wife and three children.

Tricia Reddy joins MCPc as Partner Manager, working with the company’s OEM partners. She was previously with Parker Hannifin and is also Founding Owner of Coastline Bowls, which won Best of Cleveland Award and is predicted to be Top 9 Cleveland Food Startups to Watch in 2017. She is a graduate of John Carroll University.

Courtney J. Trimacco Shareholder Winter Trimacco Co., LPA Co-founder Courtney Trimacco announced this month the opening of Winter Trimacco Co., LPA. Ms. Trimacco, whose legal practice throughout the last decade has included a wide range of professional liability, employment practices, securities, and catastrophic injury matters, will continue the provision of legal services in these and related areas for institutional and individual clients throughout the Eastern United States.

Crain’s People on the Move promotional feature showcases Northeast Ohio job changes, promotions and board appointments.

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CRAIN’S CLEVELAND BUSINESS

Source Lunch Lisa King

Executive director, Summit Metro Parks It took Lisa King awhile to figure out why her job is such a good fit, until one day she thought back to her childhood.

“I was always outside with my parents, with my grandma.”

King, a Canton native, studied landscape architecture at Ohio State University and worked in the private sector before landing with the parks in 1998. She later became the district’s chief of planning and development and in September 2015 took over as executive director. She comes at a time when the Metro Parks are enjoying great community support, with an uptick in usership in recent years and new folks discovering them, she said. Creating the next generation of land stewards is important to King, and she takes seriously her role as custodian of these lands for future nature lovers. We planned to eat our to-go lunch outdoors, but a soggy day drove us into the Mingo Lodge in the Sand Run area. — Sue Walton

Five things Favorite of the parks “All of them (of course)! I have a personal connection to Sand Run because that’s where my dad taught my kids how to skip stones in the stream. And I take great pride in the Nature Realm and Liberty Park because of my design work on them while in the planning department.”

Last book you read “Quiet” by Susan Cain

Guilty pleasure “Grey’s Anatomy” and “Reign”

Hidden talent Making just about anything with her hands, such as jewelry, crocheting, sketching/painting, drywall finishing

Best places to go for fun (other than the parks) Any local antique store, Akron’s art scene, Blu Jazz+, Lock 3 concerts, the Shoe (Ohio Stadium — Go Bucks!)

Lunch spot Iacomini’s Papa Joe’s Italian Market and Wine Shop 1561 Akron Peninsula Road

The meal Two orders of kielbasa and roasted potatoes, a tortellini salad to share, a water and a Diet Coke.

The vibe Papa Joe’s cozy, upscale-casual dining room is well-known, but its

attached carry-out business offers the same Italian favorites and then some. It’s perfect for an on-the-go lunch or to grab picnic supplies before a concert at Blossom.

The bill

$24.62 plus tip

How do you feel about being part of a new guard of leadership in Akron?

It is truly an exciting time in Akron, and I’m honored to be a part of the new guard. I’m finding that many new leaders are fearless to try new things and thinking outside the box, outside the norm. I love that! Park professionals regularly collaborate with other districts, so it’s been natural to take that attitude out into our community. Recently, unique collaborations have really energized Summit Metro Parks. The Akron Art Museum’s Inside|Out program gave us a great excuse to try something new. We partnered with them to install temporary art in the parks, and we benefited by having some non-park users visit to see the art.

The park users loved it, too, because it was unexpected and fun.

notification weeks ahead of construction. It was a process necessary to keep them safe.

A group has proposed building a new train depot in Merriman Valley on what is now Metro Parks land. What do you think of that?

I understand and support their idea that a depot would be another way to bring visitors into the heart of the Merriman Valley, though the area of interest has several utility easements crossing it and is wet. Those impediments to development are the reasons that we have not expanded our own operations in that area.

There is already a train stop 1,000 feet south at Big Bend Metro Park along the Towpath Trail. The Cuyahoga Valley Scenic Railroad stops there with its Bike Aboard program during the warm months.

The parks released its 2017-19 strategic plan last year. Among one of the objectives is attracting more non-users to the parks. How does the system hope to accomplish that?

We have always excelled at offering programs at our parks, more than 50 a month. However, we had few offerings off park property. I decided to turn that on its head. Without reducing our standard programming, we now take nature programs to groups in our community. From June to November 2016, our outreach efforts focused on three areas: urban youth, preschool and senior citizens. Within those groups, we offered 76 programs out in our communities and reached 4,398 participants. Our The Outside Is In and Pathways To Parks programs brought over 800 school kids to the parks. This is what it’s all about for me, getting kids outside, playing in the fresh air and discovering that there is a lot to love in nature.

Give us an update on construction of Phase 3 of the Freedom Trail?

Construction of the Freedom Trail Phase 3 is underway. This stretch runs from Eastwood Avenue to the University of Akron at a new Mill Street trailhead. The trail crosses over train tracks and this week a new bridge was installed. The trail will open later this summer.

The park system in January notified homeless people camping near the trail extension that they had to vacate the area. Why did the parks system do that?

The people camping within the trail corridor needed to be relocated from the construction zone for their own safety. The contractor was scheduled to begin work so our Ranger Department coordinated with the Akron Police Department on the accepted protocol and began

What’s the status of the former Valley View Golf Club, which the park system purchased last year?

The Valley View Area of Cascade Valley Metro Parks is in transition. We have a restoration plan in place for bringing back the natural character of the land. The Phase 1 restoration includes some stream tributary daylighting and restoration, wetlands restoration and reforestation. If you pass by along the Towpath Trail, you may notice that there are brownedout areas. This is where we will be removing the lawn monoculture and restoring natural drainage corridors and native plantings. The next step will be to create a master plan of uses and amenities with public input.

How do you give the Metro Parks system its own identity with the Cuyahoga Valley National Park right in your backyard?

Summit Metro Parks has a very strong brand, as does the CVNP. Our philosophy is that if visitors confuse the two systems, that’s OK. Because if they love one park, they’ll love the other. It’s not a competition, because we both benefit. We are so blessed to have a national park within a short drive and combined with the 14,300 acres and 16 parks that we have.

There is no shortage of nature and recreation to enjoy.

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sider intel

MARKETING, ADVERTISING & EVENTS INSIGHTS.

Today’s Tip: Engage your workforce through employee recognition.

According to a 2016 Gallup poll and analysis, “only one in three workers in the U.S. strongly agree that they received recognition or praise for doing good work in the past seven days.” Yet, according to the same analysis, “employees who do not feel adequately recognized are twice as likely to say they’ll quit in the next year.”

Ashley Ramsey

Events Manager Crain’s Cleveland Business aeramsey@crain.com

How Crain’s can work for you: Stand out as a Northeast Ohio company that recognizes its employees.

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