2012 Northeast Ohio Year-End Regional Economic Development Report

NORTHEAST OHIO

2012

YEAR-END REGIONAL ECONOMIC DEVELOPMENT REPORT

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DRIVING GROWTH

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TA B L E O F C O N T E N T S Executive Summary 1 Unique Culture of Collaboration and Teamwork

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How Northeast Ohio Grew in 2012

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2012: Capitalizing on Assets and Opportunities

Manufacturing Rebound 4

Oil and Gas Boom

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2012 was a pivotal year for Northeast Ohio. National and international attention during the presidential

Healthcare/Biotech Momentum 7

Development and Revitalization Investment

election campaign underscored the significance of this region to not just Ohio but the entire nation, as

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well as the rest of the world. “As the Economy Booms in Northeast Ohio, Which Candidate Will Reap

Entrepreneurial Growth 9

the Benefit?” asked PBS, just one of many media outlets that focused on the resurgence of our regional

Emerging Clusters 10

economy. By summer, the national media had shifted from talking about Northeast Ohio’s struggling

2012 Overview: Strengthening Our Economic Resilience

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Performance Across the Region

West: Erie, Huron and Lorain Counties

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North: Cuyahoga, Geauga and Lake Counties

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Central: Medina, Portage and Summit Counties

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South and East: Ashland, Ashtabula, Columbiana, Mahoning, Richland, Stark, Trumbull, Tuscarawas and Wayne Counties 17

Initiatives Powering the Progress

economy to applauding its rebound.

Our future as a home for new technology was emphasized by President Obama in his 2013 State of the Union address when he cited the strategic placement of the nation’s pilot manufacturing innovation institute, the National Additive Manufacturing Innovation Institute (NAMII), in Youngstown in 2012.

“A once-shuttered warehouse is now a state-of-the-art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything,” the President shared. With our rich history of manufacturing excellence, Northeast Ohio is well-equipped to take the lead on this advance.

Throughout our 18-county region, strategic investments in existing industries, emerging clusters,

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entrepreneurs, companies and communities sustained and fueled growth in 2012. Preparation met

Business Attraction 18

Business Growth and Development 22

opportunity as the region successfully leveraged the booming oil and gas industry, the growing healthcare/biotechnology market and the reemergent demand for manufacturing excellence. Positive

Entrepreneurship 24

indicators included an unemployment rate that was consistently lower than the national average and

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projections that our manufacturing output would outpace that of the nation for the rest of the decade,

Regional Marketing: Building our Brand

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reversing a 20-year trend.

Moving Forward: Imperatives for Northeast Ohio

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The resilience of Northeast Ohio’s economy is attributable, in part, to its unique economic development

Technology, Innovation and Commercialization

ecosystem – a network of partners including private-sector economic development organizations, the public sector, investors, lenders, incubators, accelerators, educators, mentors, philanthropic organizations and others dedicated to fostering economic health. For practical purposes, this report does not enumerate the results of the countless organizations that are engaged in economic development in Northeast Ohio. However, we recognize the integral role that each of these entities has played, and continues to play, in the region’s revival.

This report provides an overview of the combined impact of the development activities and achievements of 10 private-sector economic development organizations that are part of the larger ecosystem.

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H IGHLI GHTS

Total Impact Jobs: 36,383 Payroll: $1.7 billion Capital Investment: $1.8 billion

Business Attraction Jobs: 2,407 Payroll: $94 million Capital Investment: $501 million

Though their capabilities are diverse and they each fulfill a specialized role, these organizations work

OF REGIONAL ECONOMIC DEVELOPMENT IMPACT

synergistically toward common goals and demonstrate the positive impact that can be achieved

Business Growth and Development

Technology, Innovation and Commercialization

Jobs: 33,577

Jobs: 717

organizations have produced profound results that continue to bolster the strength and resilience of

Payroll: $1.5 billion

Payroll: $46.7 million

the Northeast Ohio economy.

Capital Investment: $943 million

Capital Investment: $277.5 million

While much has been accomplished, we recognize that much remains to be done. With an eye toward

when organizations work together. The focused collaboration and teamwork among these diverse

the vast spectrum of opportunities on the horizon, this report also looks at imperatives for the region

Entrepreneurship

going forward.

Jobs: 293 Payroll: $17.6 million Capital Attracted: $112 million

Sources: The Fund for Our Economic Future analysis of data reported by grantees for the calendar year 2012. Additional data submitted by JobsOhio, Team NEO and economic development organizations in 18 counties across Northeast Ohio. In certain cases in which multiple organizations worked on the same project, data may be included in more than one section of this report.

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U N I Q U E C U LT U R E O F C O L L A B O R AT I O N A N D T E A M W O R K

Unique Culture of Collaboration and Teamwork Economic development is a broad and multifaceted discipline encompassing public and private sectors. Northeast Ohio is

Optimize Regional Marketing

Our extensive economic development ecosystem ensures that necessary resources are available for cluster building, research and development efforts, business creation, attraction, expansion, acceleration and much more. Various partners within the ecosystem collaborate on a case-by-case basis to create the most effective solutions. Working in concert, these entities help to create and nurture a healthy, thriving economy.

While many development activities are best addressed regionally, others are better managed locally. Almost every project involves the teamwork of the economic development organizations featured in this report, local communities and governments, as well as programs of the state such as JobsOhio and Ohio Third Frontier. Every example reflects the skill of these organizations in creating collaborative relationships that yield significant results.

Develop Business Statewide

Retain/Grow our Largest Industry (Manufacturing)

Geauga Trumbull

GOAL: Accelerate NEO Economic Growth

Improve NEO’s Assets Expand/Retain Businesses Chambers of Commerce, Local Government, Economic Development Organizations

FOR EXAMPLE: AGNET partnered with the NASA Glenn Research Center, M the City of Cleveland and Cuyahoga County on a program providing small- and medium-sized manufacturers with 40 hours of no-cost access to the subject-matter experts at NASA Glenn. The scientists helped to resolve technical issues with new and existing products.

· T he Greater Cleveland Partnership, Team Lorain County, Youngstown/Warren Regional Chamber, Stark Development Board and Greater Akron Chamber joined forces to create Northeast Ohio’s first collaborative, region-wide retention and expansion program through a grant awarded by Team NEO.

Portage

Summit Medina

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Connect Biomed Companies to Growth Resources and Funding

Accelerate Entrepreneurial Success

Richland

Ashland

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Primary Funding: Businesses, Foundations, State of Ohio

the Northeast Ohio Hispanic Chamber of Commerce and the Urban League of Greater Cleveland, helped launch the Goldman Sachs 10,000 Small Businesses program at Cuyahoga Community College. This nationwide initiative is dedicated to helping companies create jobs and generate revenue by providing education, resources and funding.

· NorTech worked with JumpStart, Lorain County Community College and MAGNET to launch the Speed to Market Accelerator, a federally funded regional collaboration providing services to accelerate the commercialization of products and services for companies in the advanced energy and flexible electronics industry clusters.

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· Jumpstart, along with the Council of Smaller Enterprises, ·

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economic development ecosystem sustained by equally robust level of philanthropic support for economic development.

Attract New Businesses Advance Regional Strategy

Lorain

both fortunate and unique in that we have an unusually strong philanthropic support. Few, if any, regions in the US enjoy this

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Accelerate Growth of Innovation Clusters

Wayne

Mahoning

CANTON N Stark

Columbiana

Tuscarawas

· BioEnterprise joined The America21 Project to launch the country’s first Minority Biomedical Entrepreneurship Conference, an event dedicated to promoting and accelerating underrepresented minority healthcare innovation and entrepreneurship.

Efforts such as these illustrate the depth and breadth of what can be accomplished when organizations and individuals come together for a common purpose. By leveraging each partner’s unique capabilities, expertise and networks, the economic development ecosystem consistently provides the resources and environment necessary for sustainable growth throughout the region.

ORGANIZATIONS CONTRIBUTING TO THIS REPORT BIOENTERPRISE

JUMPSTART

STARK DEVELOPMENT BOARD

TEAM NEO

BioEnterprise is a business formation, recruitment and acceleration initiative designed to grow healthcare companies and commercialize bioscience technologies. bioenterprise.com

JumpStart Inc. accelerates the successes of diverse entrepreneurs, their high-growth companies and the ecosystems supporting them. jumpstartinc.org Twitter: @JumpStartInc

The Stark Development Board retains, expands and attracts business investment in Stark County. The Board provides financing through federal and state programs, location and building searches, government relations coordination, economic development incentive packaging and infrastructure planning. starkcoohio.com

Team NEO advances Northeast Ohio’s economy by marketing the region’s assets, attracting new businesses, building collaboration among economic development organizations and linking the region to the state’s JobsOhio program. clevelandplusbusiness.com Twitter: @TeamNEO

TEAM LORAIN COUNTY

YOUNGSTOWN/WARREN REGIONAL CHAMBER

Team Lorain County (TLC) is a private/public economic development partnership dedicated to increasing business investment in Lorain County. TLC works to recruit new employers and facilitate the expansion of its existing employment base. teamloraincounty.com

The Youngstown/Warren Regional Chamber is the single point of contact for business-related services. It assists companies by providing strategic information, identifying available buildings or land sites and securing state and local incentives. regionalchamber.com

GREATER AKRON CHAMBER The Greater Akron Chamber attracts, retains and creates jobs by promoting the assets of Greater Akron. Its economic development team works directly with companies to increase business investment in the area. greaterakronchamber.org

GREATER CLEVELAND PARTNERSHIP The Greater Cleveland Partnership mobilizes private-sector leadership, expertise and resources to create attractive business conditions that create jobs, grow investment and improve the region’s economic prosperity. gcpartnership.com

MAGNET

(Manufacturing Advocacy & Growth Network) The mission of MAGNET is to support, educate and champion manufacturing in Northeast Ohio with the goal of transforming the region’s economy into a powerful, global player. manufacturingsuccess.org

NORTECH NorTech advances the revitalization of Northeast Ohio by accelerating the growth of regional innovation clusters in targeted emerging industries, which currently are advanced energy, flexible electronics and water technologies. nortech.org Twitter: @NorTech 2 3

HOW NORTHEAST OHIO GREW IN 2012

How Northeast Ohio Grew in 2012 The collaborative efforts of the economic development organizations featured in this report resulted in 36,383 jobs, $1.652 billion in payroll and $1.757 billion in capital investment in 2012. In terms of equity capital attraction, the region bucked the national trend, drawing healthy commitments from angel and venture capital investors alike: 108 Northeast Ohio companies attracted $212 million in equity throughout 2012.

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Manufacturing Rebound

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Manufacturing has historically been the driving force of Northeast Ohio’s economy. Though the manufacturing segment was hit hard by the 2007 recession both regionally and nationally, that same base is playing a vital role in Northeast Ohio’s recovery. We continue to make things here, but our manufacturing capabilities have evolved to include the fabrication of a much

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more diverse array of products. There has been a fundamental shift from traditional manufacturing – primary metals, coal and minerals – to advanced manufacturing in areas such as specialty chemicals and medical devices. In total, Northeast Ohio manufacturing output is outpacing that of the nation, with projected growth of 39 percent from 2010 to 2020 compared with 33 percent for the US as a whole.

Examples of manufacturing growth supported by regional economic development organizations in 2012:

· With support from MAGNET and the Akron Global Business Accelerator, Cleveland-based Sterionics Inc. is moving forward with the development and commercialization of a pen-shaped cold-plasma device with the potential to change the way healthcare providers treat wounds. Sterionics’ research efforts have been backed by grants from organizations including Great Lakes Innovation and Development Enterprise (GLIDE), the Akron BioInnovation Fund, the Lorain County Community College Foundation’s Innovation Fund and the National Science Foundation. The company is collaborating with Akron General Health System and Kent State University on product testing.

· Newell Rubbermaid plans to invest $25 million to expand manufacturing capacity at its injection molding plant in the village of Mogadore in Summit County, and $25 million to construct an 800,000 square-foot distribution center in the Tallmadge/Brimfield Township Joint Economic Development District in Portage County. The million-square-foot Mogadore facility will add 140 jobs to its current 700, while the Tallmadge/Brimfield plant will create 79 new jobs.

· General Motors committed to investing $200 million in its Lordstown assembly plant and $20 million in its Parma metal center. This investment will support tooling and equipment to manufacture the next-generation Chevrolet Cruze, retaining 5,000 jobs.

investment Businesses believe in the strength and spirit of Northeast Ohio.

EXAMPLES OF THE MORE THAN $12 BILLION IN MAJOR CAPITAL INVESTMENTS (2009-2014) Bridgestone Technology Center (Akron) | $100 million creative space housing 450 engineers and technicians Chesapeake Consortium (Columbiana County) | $900 million natural gas processing facility Eaton Corporation (Cleveland) | $170 million headquarters campus for 700 employees General Motors (Lordstown/Parma) | $220 million upgrades to Chevy Cruze assembly plant and metal center Global Center for Health Innovation (Cleveland) | $465 million medical mart – the nation’s first University Hospitals (Northeast Ohio) | $1.02 billion expansion to hospital plus research and rehab, cancer care and diagnostics facilities Cleveland Horseshoe Casino (Cleveland) | $450 million entertainment venue opened May 2012 in Cleveland’s Public Square Portage Crossing (Cuyahoga Falls) | $60 million retail development slated for 2013 completion Alcoa (Cleveland) | $100 million rebuilding of a 50,000-ton, sevenstory forging press Timken (Canton) | $310 million plant expansions to capitalize on company’s specialty steel production and demand from Marcellus and Utica Shale drilling

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Just as significantly, the oil and gas boom occurring in other parts of the US is driving growth among our legacy manufacturers – big players in the steel industry that serve vital roles in the supply chain. Republic Steel, U.S. Steel, Timken Co. and V&M Star are among the myriad companies investing in their operations to support oil and gas companies as activity increases.

Examples of oil and gas industry growth supported by economic development organizations in 2012:

· I n Lorain, Republic Steel moved forward with its plans to invest $85.2 million in an electric arc furnace and related equipment, just three years after shutting its blast furnace.

This investment is expected to bring 450 new jobs and more than $1 billion in annual economic activity to Ohio. In addition, U.S. Steel spent $100 million expanding its plant to make seamless pipes for oil and gas production. The company’s investment added 150 jobs to the mill.

· T he Timken Company, headquartered in Canton, moved forward with a $225 million investment in its Faircrest Steel Plant to improve productivity, expand its product range and increase capacity to serve growing demand for specialty

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As the significance of the Utica Shale deposits continues to grow, Northeast Ohio is becoming a location of choice for companies seeking to capitalize on natural and liquid gas.

Investments of more than $5 billion already have been pledged to shale-related projects within 40 miles of Youngstown and Canton. Supporting businesses are flocking to Northeast Ohio as well, further bolstering the job creation efforts, revenue and overall economic health of the region.

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reported by grantee intermediaries for the calendar year

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2012, representing a sample 384 companies. Additional data

eliminate duplication which may result from two or

submitted by JobsOhio, Team NEO and economic development

more economic development organizations reporting on

organizations in 18 counties across Northeast Ohio.

the same company.

steel alloy bars. The company is also building a $42 million, *Data for MAGNET not yet available for 4th quarter. two-story office complex adjacent to its existing facility near the Akron-Canton Airport. The new 160,000-square-foot building will accommodate nearly 1,000 employees when it is completed in the fourth quarter of 2013.

· T he $1.1 billion investment by Paris-based Vallourec in its Youngstown steel rolling mill, V&M Star, began to pay off for the Mahoning Valley in 2012 as its first steel pipe came off the line in the fourth quarter. The mill, which employs 350 workers, has begun production to support shale oil and gas operations.

· C hesapeake Energy Corporation purchased 284 acres at the Beck Industrial Commerce Center in Louisville, to accommodate its expanding workforce and growing operations in the state. Chesapeake also joined M3 Midstream LLC (“Momentum”) and EV Energy Partners LP in making a $900 million investment to build the largest integrated midstream service complex in eastern Ohio. Columbiana County will house the state-of-the-art cryogenic natural gas-processing facility of this complex.

· E xterran, a global leader in oil and gas services, is investing $13.2 million in the construction of a 65,000-square-foot manufacturing facility in Youngstown. This project brings 100 new jobs representing $4.9 million in payroll to the region and is expected to benefit the regional economy by nearly $500 million and the Youngstown economy by $335 million.

· V alerus, a world leader in providing oil and gas handling and processing solutions, is partnering with Brilex Industries to manufacture oil and gas production equipment to build surface facilities for customers operating in the Marcellus and Utica shale plays. The partnership will create more than 30 local jobs as it increases manufacturing at a Brilex facility in Youngstown.

Healthcare/Biotech Momentum The healthcare/biotechnology sector is growing at an amazing pace, and Northeast Ohio is becoming the location of choice for biomedical businesses from around the globe. With more than 700 biomedical facilities, 60 hospitals, 230,000 healthcare and bioscience workers, extraordinary manufacturing capabilities, and billions of dollars in private and public investment, the region offers an ideal environment for firms specializing in healthcare, medical device manufacturing, biotechnology and pharmaceuticals.

Central to Northeast Ohio’s strength in the biomedical sector are the Cleveland Health-Tech Corridor, home to renowned healthcare institutions including the Cleveland Clinic and University Hospitals Case Medical Center, as well as biomed and technology firms, incubators and higher-education institutions; the Akron Biomedical Corridor, which connects three world-class hospitals with nationally recognized education, research and development institutions and biomedical companies; and the Global Center for Health Innovation (GCHI), formerly the Cleveland Medical Mart, the world’s first marketplace for medical industry buyers and sellers.

Work continued throughout the year on the GCHI, which is part of the $465 million taxpayer-financed convention complex. The facility is slated to open two months ahead of schedule, during the summer of 2013. Tenants of the GCHI to date include Philips Healthcare, GE Healthcare, Johnson Controls, the Healthcare Information and Management Systems Society, the Cleveland Clinic and University Hospitals.

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The Global Center for Health Innovation represents the region’s ongoing commitment to growing our already thriving biomedical sector.

Other examples of healthcare/biotech industry growth supported by economic development organizations in 2012:

· B ioEnterprise added 22 new companies to its portfolio, which raised $235 million from venture capital, grant funding and private equity sources.

· The Greater Akron Chamber partnered with the city of Akron and venture partners Akron General Medical Center, Summa Health Systems, Akron Children’s Medical Center, Northeast Ohio Medical University (NEOMED) and the University of Akron in the founding of the Austen BioInnovation Institute in Akron (ABIA). An Ohio Center of Excellence for Biomedicine and Healthcare, ABIA focuses on patient-centered innovation and commercialization. The ABIA moved into its $13.3 million headquarters, located in downtown Akron, in 2012.

· Multi-national Philips Medical Systems relocated a portion of its Nuclear Medicine division from California to Cleveland, bringing 100 jobs, $7.9 million in payroll and $2.6 million in capital investment.

· The biomedical sector flourished as many companies advanced the commercialization of their products. Among them: Cervilenz Inc., Neuros Medical, Cryothermic Systems, Milo Biotechnology and Checkpoint Surgical.

· Potentially life-saving clinical trials were launched throughout the region by companies including Juventas Therapeutics, SironRX, TheraVasc, SPR Therapeutics and Great Lakes Pharmaceuticals.

Entrepreneurial Growth Entrepreneurial enterprises are truly the heart and soul of Northeast Ohio. Our region’s rich legacy of innovation and entrepreneurship has been changing landscapes and lifestyles since the 1800s, led by visionaries such as Henry Sherwin and Edward Williams, who in 1866 founded not only a business but an industry as they identified a market need for ready-to-use paint, and Dr. Benjamin Franklin (B.F.) Goodrich, who brought his small rubber company to Akron in 1870 to lay the foundation for the global giant that introduced the world’s first automobile tire, aircraft tire and spacesuit.

excitement Impressive new ventures keep Northeast Ohio moving forward.

Development and Revitalization Investment From bustling downtown districts to suburbs and industrial parks, development projects are breathing new life into Northeast Ohio’s residential and business communities. Spurred by the palpable momentum of business and economic growth, investors and developers have joined forces to rejuvenate cities and build new corporate headquarters; increasing consumer demand is driving aggressive residential construction; and recent legislation loosening restrictions on gaming is bringing new entertainment venues to the area.

Cleveland’s Public Square is bustling with activity again, thanks in large part to the new $450 million Horseshoe Casino.

renovation of the Market Block Building and the transformation of the Kresge Building into a facility for the Tech Belt Energy Innovation Center.

· Y oungstown’s downtown revitalization continued with developments such as Erie Terminal Place, a $9 million conversion project that created residential and commercial space, and restaurant expansions to accommodate growing clientele.

· T he $450 million Horseshoe Casino Cleveland, Ohio’s first casino, opened in May on Public Square in downtown Cleveland.

· S ite work began for Penn National’s Hollywood Slots at Examples of development and revitalization investment supported by economic development organizations in 2012:

·

G oodyear Tire & Rubber Co. completed construction of its new global headquarters in Akron, which opened in early 2013. About 2,000 employees are working in the seven-story, 639,000-square-foot facility.

· T he city of Kent has announced public and private investment exceeding $100 million in the redevelopment of downtown Kent. The project has created more than 950 construction jobs and 700 new jobs in the city’s downtown district.

·

An influx of new businesses, retail shops and dining establishments signaled the revitalization of downtown Warren, where development projects include the $2.5 million historic

Modern-day entrepreneurs demonstrate similar vision: With support from regional investors and the state, Dr. Raymond Kralovic turned his innovative ideas for sterilization into a $1 billion global company – STERIS Corporation – and helped establish Northeast Ohio as a center for medical technologies and devices.

Inventors such as Lew Urry, designer of the first commercially viable alkaline battery, and GOJO Industries founders Goldie and Jerry Lippman, creators of Purell® hand sanitizer, reflect our region’s spirit of innovation as well.

How does Northeast Ohio nurture promising, high-potential enterprises? The region’s economic development ecosystem provides resources and support throughout every stage of their development. From investors and micro-lenders to incubators, accelerators and economic development organizations, the network of eager collaborators runs deep, as the ecosystem pulls together to help young businesses thrive.

The ecosystem also includes a growing bank of angel investors, who provide startups with seed and early-stage funding to fill the gap between investments from family and friends and those of venture capitalists. In 2012, more than half of the companies that received equity investments were funded in part by angel investors – some who are independent investors and others members of organized angel funds, which have the bandwidth to consider a larger number of proposals across a broader diversity of industries.

Mahoning Valley Race Course in Austintown Township, a 150,000-square-foot facility slated to open in spring 2014.

This $125 million investment will create 1,000 direct and indirect employment opportunities and nearly 1,000 construction jobs.

· E aton Corporation completed construction of the new $170 million, 600,000-square-foot Eaton Center campus on a 53-acre site in Beachwood in February 2013. The site houses 700 employees.

· B ridgestone Americas opened its new $100 million technology center in Akron in April. Four years in the making, the tech center provides nontraditional working space designed to inspire creativity among the 450 mechanical and chemical engineers and technicians who work there on proprietary advanced technology projects.

Mr. Beams™ ReadyBright™ Power Outage Lighting System.

Both brands became consistent top sellers on the site as they earned national media attention. ReadyBright, for example, was named one of Good Housekeeping’s Very Innovative Products of 2013 and was heralded as particularly useful for those who had lost power during Hurricane Sandy. Wired’s GeekDad blog gave a nod to the innovative young company as well.

Examples of entrepreneurial growth:

·

Deloitte named direct digital marketing firm Knotice one of the fastest-growing technology companies in America (#182 on Deloitte’s 2012 Technology Fast 500™). The Akron-based company, which also has offices in Seattle, grew to $7.8 billion in revenue (from $3.2 billion in 2007) and hired its 100th employee in 2012.

· Solon-based Wireless Environment LLC, maker of environmentally friendly LED lighting systems, took Amazon.com by storm with its Mr. Beams™ line of wireless lights and 8 9

Shining stars Entrepreneur/co-founder David Levine’s (above) risk paid off.

Wireless Environment’s products are outselling big-name competitors online and earning national attention.

· The Innovation Fund, founded by the Lorain County Community College Foundation, is a regional fund focused on supporting technology-based entrepreneurial endeavors and emerging technology-based businesses. In 2012, grants totaling more than $1.5 million were awarded to 27 companies.

The Innovation Fund is supported and administered through a regional and state network of higher education, government and economic development partners to nurture a technologybased entrepreneurial environment for wealth creation and job growth in Northeast Ohio.

· Work continued on the Richard Desich SMART (Sensor/ Microsystems Advanced packaging and Reliability Testing) Commercialization Center for Microsystems at Lorain County Community College. The facility, funded by an Ohio Third Frontier grant, supports entrepreneurs in the $100 billion sensor technology industry by providing commercialization support for MEMS (Micro Electronic Mechanical Systems) products. Upon its opening in 2013, the SMART Center will serve as a collaboration facility for university and industry partners to access the complex set of modeling, testing and verification tools critical to MEMS production.

RECOGNITION OF REGIONAL PROGRESS With so much investment, development and progress going on in the region, it was easy to write the story of Northeast Ohio’s resurgence in 2012. The presidential election provided the ideal opportunity to capitalize on a growing swell of publicity surrounding Ohio, as journalists focused on the sway of the swing state and the influence its economy would have on voters.

The Regional Marketing Alliance of Northeast Ohio (Cleveland Plus) continued its national media relations campaign, resulting in approximately 100 media placements in 2012. Thirdparty research revealed that Northeast Ohio received the most favorable coverage of six Midwest regions. The team’s national media relations strategy touted the more than $12

new horizons Northeast Ohio looks toward the future with drive, determination and unwavering optimism.

EMERGING CLUSTERS Emerging clusters – groups of high-potential businesses in up-and-coming industries – play a strong role in Northeast Ohio’s economic revitalization as they enhance the potential for accelerated and sustained growth by diversifying our industry base. Among Northeast Ohio’s emerging clusters are advanced energy, water technologies and flexible electronics. Partners within the regional economic development ecosystem support the growth of these clusters through a variety of efforts.

Notably, NorTech has developed a nationally recognized model to support and strengthen emerging clusters. The Cluster Acceleration Model identifies emerging industries likely to evolve into regional innovation clusters, develops industry-driven roadmaps that position the region to capture significant economic growth within seven years, accelerates the growth of regional innovation clusters and provides metrics to guide the evolution of these services.

billion in public and private investment projects taking place in the region through 2014.

Leveraging an in-depth knowledge of manufacturing, healthcare, entrepreneurism, and oil and gas, the team sent information to more than 200 economic and political reporters. In

The $5 million Project Icebreaker aims to bring North America its first offshore freshwater wind project.

Examples of emerging cluster growth supported by economic development organizations in 2012:

· N ortheast Ohio is home to more than 500 companies in the advanced energy industry. Promising sectors include energy efficiency, energy storage, fuel cells, smart grid, and waste and biomass to energy. The potential of these five sectors alone is $50 billion in market opportunities and 9,560 new jobs over the next seven years.

- Korean industrial and electronic conglomerate LG invested $45 million to acquire a 51 percent share of North Cantonbased Rolls-Royce Fuel Cell Systems (US) Inc., renaming the company LG Fuel Cell Systems. The company continues the research and development, testing and commercialization of solid oxide fuel cell technology for industrial, commercial and utility power generation applications.

addition, the alliance led teams of executives and political scientists on media trips to New York and Washington. They also repeatedly used social media to link followers with articles evaluating Ohio’s economy.

Regional Marketing Alliance of Northeast Ohio

- Lake Erie Energy Development Corporation (LEEDCo) has launched Project Icebreaker, its initiative to build and install the first offshore freshwater wind project in North America, thanks to a $4 million grant awarded by the US Department of Energy in December and $1 million in funding from LEEDCo’s partners. Icebreaker is one of only seven projects to earn federal funding.

· Water technologies – a new focus cluster – now includes 54 organizations within the automation and controls, sorbents and corrosion protection sectors. This cluster accounts for approximately 338 employees and $72 million in revenue. These three sectors could grow to 3,510 new jobs by 2019.

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· Flexible electronics is a new science and manufacturing opportunity to print or deposit ultra-thin electronic components and devices on materials that flex, bend, fold or stretch.

Northeast Ohio has the only innovation cluster in flexible electronics recognized and funded by the federal government.

Kent Displays and its Boogie Board, the breakthrough work of the Liquid Crystal Institute at Kent State – which spawned Kent Displays ­– and the globally recognized advances in polymer science at The University of Akron and Case Western Reserve University are just a few examples of Northeast Ohio’s assets in this cluster. By 2019, flexible electronics could be a $42 billion global market with 3,020 jobs.

2012 OVERVIEW: STRENGTHENING OUR ECONOMIC RESILIENCE

BRAND CAMPAIGN SPURS REINVESTMENT BY LAKE ERIE SHORES & ISLANDS PROPERTIES

2012 Overview: Strengthening Our Economic Resilience

A targeted 2012 advertising campaign touting Lake Erie Shores & Islands as a year-round destination helped the area draw 7.5 million visitors throughout the year. The steady influx of tourists is fueling upgrades and expansions, including the recent completion of Cedar Point’s new $30 million roller coaster, GateKeeper (opening May 2013), as well as the park’s commitment to invest $45 $60 million more over the next three years for resort hotel upgrades; Kalahari Resorts’ $25 million convention center expansion and $5 million upgrade of onsite amenities; and the $4 million reopening of Maui Sands Waterpark.

The promise of a growing, thriving economy powers the ongoing efforts of economic development organizations throughout Northeast Ohio.

Our robust economic development ecosystem proactively supports every kind of business – large and small, established and startup, domestic and international – through investment, incubation, acceleration, education, mentorship and other development initiatives.

Performance Across the Region

Cities, counties and communities across Northeast Ohio bustled with economic activity in 2012. Collaboration ran deep, as economic development organizations, with support from the state of Ohio and its programs – JobsOhio and Ohio Third Frontier – embraced opportunities to work together toward collective goals, whether to help a single business, a cluster, a community or the region as a whole.

The following pages offer a composite view of the combined impact of the economic development organizations featured in this report, as well as a glimpse into some of the notable results achieved by individual initiatives and organizations. These stories and statistics reflect the spirit of collaboration that is permeating Northeast Ohio and ramping up the region’s resolve to rebuild and reinvigorate the economy.

Following is a snapshot of the forces that drove attraction, expansion and development activities across Northeast Ohio in 2012, along with stories illustrating exceptional successes.

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In our western counties, healthcare, manufacturing and tourism showed strong growth in 2012. Several hospitals expanded in response to growing patient demand, both advanced and traditional manufacturing gained momentum (see details about Republic Steel’s $85.2 million investment and U.S. Steel’s $100 million expansion on page 6), and Lake Erie Shores & Islands tourism flourished among locals and visitors alike.

· The Cleveland Clinic’s $97.9 million Richard E. Jacobs Health

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PLASTICS INNOVATOR EXPANDS WORKFORCE AND FACILITY Ohio’s Job Creation Tax Credit provided the impetus for Thogus Products to begin expansion of its Avon Lake operation. This $6 million expansion project will create 30 new jobs and $1.6 million in additional payroll over the next three years and enable Thogus to retain its existing 96 jobs and $4.8 million in payroll at the Avon Lake operation.

AUTOMOTIVE EXPANSION BRINGS NEW JOBS TO HURON International Automotive Components (IAC) has committed to investing $5 million into its Huron facility, with plans to add 143 new jobs to its existing 593. IAC’s investment represents the state’s third-largest automotive expansion of 2012.

2012 OVERVIEW: STRENGTHENING OUR ECONOMIC RESILIENCE

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When vision and resources meet, a whole new world can emerge.

NORTHERN HIGHLIGHTS: CUYAHOGA, LAKE AND GEAUGA COUNTIES Collaboration reached a new high in Northeast Ohio’s northern counties in 2012, as the Greater Cleveland Partnership (GCP) and other area partners rallied around community issues with great success. Cleveland set the bar for education reform by engaging an impressive collaboration of organizations, individuals and communities to pass legislation needed to support The Cleveland Plan, a game-changer that captured the attention of education reformers across the country. Education efforts also included successful passage of a 15-mill school levy, which is expected to generate $64 - $70 million per year for the Cleveland Metropolitan School District.

Business potential got a shot in the arm as well, as another collaboration of concerned business executives made significant strides toward maintaining and growing the United Airlines hub at Cleveland Hopkins International Airport (CLE). The GCP spearheaded “United for Cleveland’s Hub,” engaging the region’s largest corporations, middle-market firms and small businesses in the push to ensure Cleveland’s ongoing hub status. The GCP led efforts to help grow United’s market share at CLE, increase traffic and local demand, and provide advocacy support on key United/CLE issues.

In downtown Cleveland, multitudes of building cranes are just one indicator of the extensive physical developments that are changing the landscape of the city. Development investments

soared in 2012, from construction of the Global Center for Health Innovation (formerly knows as the Cleveland Medical Mart & Convention Center) and the Flats East Bank project to residential development projects trying to keep pace with the demand for downtown living space.

CLEVELAND ROCKS WITH DEVELOPMENT ACTIVITY Downtown Cleveland was a hotbed of development activity in 2012. The $465 million complex housing the Global Center for Health Innovation (GCHI) and Convention Center progressed ahead of schedule, as did the $60 million transformation of the former Crowne Plaza Hotel next door into Cleveland’s first Westin Hotel.

Phase I of the $500 million Flats East Bank project, designed to revitalize Cleveland’s riverfront, moved forward toward its spring 2013 completion goal as development efforts continued on a 23-story, 500,000-square-foot office tower, a 150-room Aloft Hotel by Starwood, a variety of restaurants and entertainment venues, a 16,000-square-foot health club, a 1,200-foot boardwalk and an urban beach. Phase II will include development of a 140-unit residential complex along the water, plus additional restaurants and retail and entertainment space.

The Flats East Bank project is breathing new life into downtown Cleveland, as residential space, offices, restaurants and entertainment venues make the city an amazing place to live, work and play.

hit 95 percent in 2012, developers stepped up efforts to meet demand. Those under construction or in the planning stages in 2012 included 318 units at The Langston near Cleveland State University, 232 units in the former Embassy Suites on East 12th Street and 36 units in the Chester Commons Building adjacent to Perk Plaza.

· Transformation of the nearly vacant building at 800 Superior

Many more units are in the works. For example, the 21-story office tower at 1717 East 9th Street recently received $5 million in tax credits for the conversion of the former headquarters of East Ohio Gas into 223 apartments; and renovations of both the Schofield Building and Truman Building could add 75 units along the Euclid Corridor.

· Lutheran Metropolitan Ministry’s creation of the Richard Sear­

Additionally, Cleveland Development Advisors (CDA), the real estate investment affiliate of the Greater Cleveland Partnership, provided financing to repurpose the Hanna Annex office building in Playhouse Square into the district’s first housing project, which will result in 102 apartments and supportive retail space.

The Rosetta Building, at 629 Euclid Avenue, is using CDA financing to transition office space into 102 new apartment units.

In total, CDA invested more than $33 million in real estate and business development projects throughout Cleveland in 2012, including:

This is just the beginning of the residential development under way in downtown Cleveland. As the residential occupancy rate 14 15

Avenue into office space to house more than 1,000 employ­ ees of AmTrust Financial Services and its affiliates.

· Completion of the Public Square headquarters for Global Cleveland, an organization focused on attracting talented newcomers to Cleveland. ing Center, where job training and placement, and innovative social enterprise programs are taking place.

SPARKS CONTINUE TO FLY IN EUCLID Upon acquiring a Baltimore company, Lincoln Electric faced the decision of whether to invest in the expansion of its Euclid world headquarters or move its consumables division to Baltimore, Houston or an overseas location. At risk in the short term were 1,000 Northeast Ohio jobs; in the long term, 2,200.

Local, county and state incentives helped convince the welding giant to stay and invest $40 million in its Northeast Ohio facili­ ties, retaining 2,200 jobs and adding 200.

2012 OVERVIEW: STRENGTHENING OUR ECONOMIC RESILIENCE

Counties throughout the region are leveraging our unique natural and human resources.

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CENTRAL THEMES: SUMMIT, MEDINA AND PORTAGE COUNTIES All eyes were on Kent in 2012, as the city made substantial progress on the redevelopment of the downtown district, earning the Ohio Economic Development Association’s 2012 Best Project Award. Completion of the $13.3 million headquarters of the Austen BioInnovation Institute in Akron (ABIA) energized the biomedical community (see more on ABIA on page 7) and Bridgestone’s new $100 million technology center (see page 8) gave Akron’s technology community a boost. Additionally, the strength of flexible electronics assets positioned this part of the region as the only flexible electronics cluster recognized and funded by the federal government (see page 11).

Sizable public and private investments reflected renewed confidence driven by the shale boom and related manufacturing resurgence. Drawn by the increasing strength of the polymer community, both domestic and international manufacturing companies – automotive, biomedical and more – chose to expand their operations in the Greater Akron area.

RÖCHLING AUTOMOTIVE COMMITS TO AKRON When Germany-based Röchling Group selected Akron as its second Northeast Ohio manufacturing site in 2011, the city looked forward to the addition of more than 100 area jobs. The company, which makes parts for the Chevy Cruze and other vehicles, cut the ribbon on its $20 million, 75,000-square-foot injection-molded-parts factory in January 2012. Shortly after production began, Röchling launched Phase 2: construction of a

second building – also 75,000 square feet and representing an additional $24 million investment. Ultimately, Röchling expects these two plants to employ 150 or more workers.

MOVE SIGNALS SUCCESS Finnish manufacturer 7signal Solutions was recruited by the city of Akron in 2011 as part of the BioFinland Technology Bridge Program, a collaborative effort that also includes the Akron Global Business Accelerator and the Helsinki Business and Science Park, Finland’s premier business incubator focused on life sciences. The business found great success at Akron General Medical Center and Akron Children’s Hospital, and announced plans in 2012 to move its headquarters to a new location in downtown Akron.

ALLSTATE INVESTS $20 MILLION IN DATA CENTER UPGRADES After reviewing options for relocating its Hudson operations facility to Illinois, Wisconsin or Idaho, Allstate Insurance invested $20 million to upgrade its data center here and committed to a minimal 13-year stay in Northeast Ohio. Key factors in Allstate’s decision included the tremendous support it received from the city of Hudson and the city’s central location in Northeast Ohio, which gives Allstate access to a large, high-quality workforce. A financial package in­cluding a 10-year Job Retention Tax Credit helped put Northeast Ohio over the top.

IN THE SOUTH AND EAST: STARK, ASHLAND, RICHLAND, TUSCARAWAS, WAYNE, COLUMBIANA, MAHONING, TRUMBULL AND ASHTABULA COUNTIES The big story in Northeast Ohio’s southern and eastern counties was oil and gas, as the industry rushed to leverage the Utica Shale play. The oil and gas explosion spurred manufacturing and infrastructure growth, the downtown revitalizations of Youngstown and Warren, and education initiatives to enhance workforce training. Oil and gas leaders including Chesapeake Energy Corporation, the nation’s second-largest producer of natural gas, and Exterran, a global provider of natural gas and petroleum solutions, made sizable investments throughout the region (see page 6). In a strategic move to position the area as a rich source of opportunity, the city of Canton branded itself “The Utica Capital.”

BP BEGINS UTICA SHALE DRILLING BP leased the mineral rights for 84,000 acres in Trumbull County – 20 percent of the county’s land – as part of a $331 million agreement with the Associated Landowners of the Ohio Valley.

The lease will allow BP to drill 10 appraisal wells to measure levels of liquid and dry gas. BP committed to working with local contractors and hiring Ohioans for this appraisal program. The company will run its shale development activities throughout eastern Ohio from its Utica Operations Center, established in North Jackson (Mahoning County) in December.

16 17

SCHLUMBERGER INVESTMENT DRAWS BUSINESSES TO STRASBURG One of the world’s largest oilfield service providers, Schlumberger Limited invested $2.89 million in the purchase of 140 acres in Strasburg in Tuscarawas County, where it is constructing facilities that will ultimately house 200 to 250 new employees.

At least three additional companies have committed to opening operations in or near Strasburg, as suppliers look to support the global giant.

STARK STATE TRAINS OIL AND GAS WORKFORCE Thanks to a $10 million Workforce Development Grant from the state of Ohio, Stark State College is building a Downtown Campus and Energy Center in Canton to serve the education and training needs of the emerging oil and gas industry’s workforce.

The college already has several industry-related programs in place, including welding, hydraulics and pneumatics, blueprint reading, surveying, water and wastewater treatment, pipefitting and mechanical maintenance.

Stark State is known for its leadership in the energy field, having for many years been proactive in programming, training and research partnerships. The university is currently partnering with Timken on the $11.8 million Wind Energy Research and Development Center at Stark State’s Emerging Technologies Airport Campus.

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entrepreneurship; technology, innovation and commercialization; and opportunities for collaboration and proactively reached out to help businesses become established, growing, profitable organizations.

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Domestic 43

Advanced Manufacturing

Business Attraction Business attraction has been vital to Northeast Ohio’s ongoing economic recovery, creating jobs and providing new opportunities for companies throughout the supply chain. Team NEO takes a leading role in attracting businesses from around the globe to the region and marketing Northeast Ohio’s assets through a broad range of channels. In partnership with the state (JobsOhio)

Biohealth

and local economic development organizations – notably, the Greater Akron Chamber, Greater Cleveland Partnership, Stark Development Board, Team Lorain County and the Youngstown/ Warren Regional Chamber – Team NEO set a record in 2012 by recruiting 15 new company operations to Northeast Ohio. These new companies brought more than 1,000 jobs and more than $46 million in annual payroll to the region.

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BUSINESS ATTRACTION PIPELINE

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The majority of businesses moving into Northeast Ohio represented the advanced manufacturing, biohealth, automotive and energy sectors.

Advanced manufacturing attraction trended upward due to the growing strength of Northeast Ohio’s polymer community, the emerging needs of oil and gas companies pursuing Utica Shale opportunities, and business growth driving expansions. Advanced energy and biomedical companies chose the region for its strong cluster support, while automotive companies moved here to support the Big 3 rebound as well as foreign-owned companies’ renewed interest in US operations.

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2012 OVERVIEW: STRENGTHENING OUR ECONOMIC RESILIENCE

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NORTHEAST OHIO WORK ETHIC CLINCHES ALEXANDER MANN SOLUTIONS When Alexander Mann Solutions (AMS) – an international recruitment, staffing and HR management company providing services to 60 countries – sought to establish a Global Client Service Center in the Americas, the company first focused on Raleigh, North Carolina. A Cleveland executive with ties to the company contacted Team NEO about hosting a visit.

With only 10 days’ notice, Team NEO led a collaboration including JobsOhio, the Greater Cleveland Partnership and the city of Cleveland to orchestrate a site visit and networking event that introduced AMS to some of Cleveland’s top business leaders, young professionals, HR directors, universities and economic development organizations. Citing our region’s collaborative business environment and unparalleled work ethic, AMS committed to establishing its North American headquarters in downtown Cleveland, creating 300 jobs with a $12.9 million payroll.

teamwork Collaboration is the foundation of our region’s strength.

PARTICIPATING ECONOMIC DEVELOPMENT ORGANIZATIONS Data included in the Business Attraction and Business Growth and Development sections of this report were submitted by JobsOhio, Team NEO, MAGNET and the following economic development organizations: Ashland Area Council for Economic Development Columbiana County Port Authority Erie County Economic Development Corporation Geauga Growth Partnership, Inc. Greater Akron Chamber Greater Cleveland Partnership Growth Partnership for Ashtabula Huron County Development Council Lake County Port Authority

WISECO BRINGS 100 NEW JOBS TO MENTOR Wiseco Piston Company, a manufacturer of performance automotive products headquartered in Mentor, wanted to relocate its JE Pistons division from California to lower shipping costs and expand capabilities. Mentor and Mexico were the top two location contenders.

A team including Team NEO, JobsOhio and the city of Mentor addressed the company’s concerns regarding local labor

resources, providing a workforce guarantee grant, creating a compelling financial package with state- and city-level incentives, and helping Wiseco relocate select members of its California team. Bilingual workforce development agency El Barrio also assisted by providing culturally relevant employment and relocation services to the company’s large Hispanic population. Wiseco committed to relocating JE Pistons to Northeast Ohio, creating 100 jobs for the region and stabilizing 200 jobs at its Mentor corporate headquarters.

Additional business attraction stories appear on pages 5-17.

Medina County Economic Development Corporation Portage Development Board Richland County Community Development Group Stark Development Board, Inc. Team Lorain County Tuscarawas Community Improvement Corporation Youngstown/Warren Regional Chamber Wayne Economic Development Council

20 21

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Polymers and Chemicals

With a common agenda and an understanding of each partner’s strengths, these organizations integrated their efforts to build a solid support network that ensured businesses’ access to local and regional resources. Critical state assets were pulled into the mix by Team NEO, the region’s link to the state’s JobsOhio program, putting these initiatives on the fast track to success.

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2012 OVERVIEW: STRENGTHENING OUR ECONOMIC RESILIENCE

BUSINESS GROWTH AND DEVELOPMENT continued

ENTREPRENEURSHIP IMPACT* JOBS 293

SYNAPSE RELIES ON REGION’S MEDICAL EXPERTISE Oberlin-based Synapse Biomedical Inc. was founded in 2002 to commercialize the NeuRx Diaphragm Pacing System (DPS)®, which helps individuals with spinal cord injuries and Lou Gehrig’s disease. BioEnterprise and JumpStart supported Synapse throughout its funding and commer­cialization strategy.

Although Synapse received several offers from private investors outside of Ohio to move the company, the founders recognized Northeast Ohio’s leadership in neurostimulation and the support provided by local advanced medical institutions. BioEnterprise, Team NEO and Team Lorain County designed a plan to help Synapse maintain and grow its operations in Oberlin. Synapse committed to a $2 million investment in its Oberlin headquarters, which will create an additional 60 jobs..

MAINES COMMITS TO $14 MILLION EXPANSION PROJECT A national leader among independent food service distributors, Maines Paper & Food Service was exploring the possibility of expanding in either Cleveland or Maryland. A Northeast Ohio team including the Greater Cleveland Partnership, Cuyahoga County, the village of Oakwood, Ohio Rail Development Commission, Team NEO and JobsOhio organized assistance to help Maines identify state and local financing and funding programs that helped convince the firm to make its investment in Cleveland. Maines committed to a $14 million expansion of its Oakwood Village facility, which is expected to retain 99 jobs, create 100 jobs and add 50,000 square feet of real estate and $8.6 million of fixed assets.

YOUNGSTOWN BECOMES HOME TO MANUFACTURING INNOVATION INSTITUTE The Youngstown/Warren Regional Chamber, MAGNET, NorTech and JumpStart are among the key partners and conveners of the TechBelt Initiative, which was instrumental in convincing the federal government to select Youngstown as the launching pad for the National Additive Manufacturing Innovation Institute (NAMII), a consortium of manufacturing firms, universities, community colleges and nonprofit organizations located in the Cleveland-Pittsburgh TechBelt region. NAMII opened its $69 million research laboratory adjacent to the Youngstown Business Incubator in September. The lab offers companies in the additive manufacturing industry firsthand access to next generation manufacturing technologies.

Additional business growth and development stories appear

Entrepreneurship They’re risk-takers. Innovators. Leaders. Believers. Entrepreneurs personify the spirit of enterprise, and the businesses they are building in Northeast Ohio are setting the bar for ingenuity and innovation, creating jobs and encouraging investment across the region.

Fortunately for these ambitious individuals, Northeast Ohio offers a robust support system of resources, tools and contacts to accelerate their success. One example is the JumpStart Entrepreneurial Network (the Network). Its members include pre-seed and seed funds, incubators, business accelerators, experienced advisors and specialized support organizations. They work together to help guide Northeast Ohio tech-based companies through the growth process. In addition to JumpStart, the list of organizations is extensive, including entities such as:

· · · · · ·

T he Innovation Fund, a regional fund founded by Lorain County Community College to back technology-based entrepreneurial endeavors and emerging technology-based businesses.

T he Canton Entrepreneur Launch, which provides grants to entrepreneurs who plan to locate new, high-growth business ventures in the city of Canton.

T he longest-running business incubator program in Ohio, Akron Global Business Accelerator, whose state-of-the-art center provides the foundation and infrastructure highgrowth companies need to realize their true profit potential. reat Lakes Innovation and Development Enterprise (GLIDE), G a comprehensive regional innovation center, resource hub and business incubator that supports all facets of the growth of enterprises.

T he Incubator at MAGNET, which provides a comprehensive package of business assistance services to support the growth of tech-oriented companies. oungstown Business Incubator, which helps accelerate emergY ing businesses by providing an array of resources – facilities, equipment, entrepreneurial counseling, networking opportunities and more – critical to successful business development.

The Network achieved these results in 2012:

· · ·

05 companies expressed interest in receiving business 6 support or resources from the Network Network clients generated $228.5 million in revenue etwork clients created or retained 5,471 jobs N (2,867 direct jobs)

PAYROLL

$17.6 MILLION

CAPITAL ATTRACTED

$112 MILLION

*JumpStart numbers

Sources: The Fund for Our Economic Future analysis of data reporte d by grantees for the calendar year 2012. Additional data submitted by JobsOhio, Team NEO and economic development organizations in 18 counties across Northeast Ohio. In certain cases in which multiple organizations worked on the same project, data may be included in more than one section of this report.

The client and portfolio companies JumpStart has worked with from its 2004 inception through 2012 made the following contributions in 2012:

· ·

Generated $114 million in revenue Created/Retained 2,931 jobs (1,536 direct jobs)

ABSMATERIALS BRINGS CLEANTECH INTO THE SPOTLIGHT Founded in 2008 by Dr. Paul L. Edmiston and Stephen Spoonamore, and backed by a 2008 Innovation Fund Award and a 2009 investment from JumpStart, Wooster-based ABSMaterials (ABS) has the nation talking cleantech. The firm’s patented Osorb®, absorbent glass that pulls toxins from water, has been hailed as a game-changer in treating the world’s polluted water.

Media coverage has been far too extensive to mention an inclusive list, but here’s a sample: Forbes, Fast Company, The New York Times, The Huffington Post, Popular Mechanics, Bloomberg TV and NPR. ABS is marketing its technology to government agencies as well as private firms charged with cleaning toxic groundwater sites.

It will soon be selling Osorb in South Korea in addition to the US, thanks to a partnership established with South Korean environmental services company DaeBaek Co. in 2012. The firm’s rapid growth necessitated its move to a larger facility in Wooster in 2012.

MESOCOAT RAMPS UP FOR DEMAND The oil and gas industry is about to see just how fast – and inexpensive – protecting pipes from corrosion can be. After its 2008 spinoff from Powdermet, a Euclid-based global manufacturer of nanoengineered metallic composites, MesoCoat got a financial boost from JumpStart to help it gain momentum. In the past

on pages 4-17.

24 25

Sharing insight In February, JumpStart launched the tech entrepreneur-focused JumpStart Mentoring Program, modeled after the well-regarded MIT Venture Mentoring Service. Mentors serve as role models for younger entrepreneurs. Since March 2012, 33 of the most accomplished business minds in the region have shared their experience, expertise and connections by donating 836 hours to help 23 startups. The companies went on to collectively generate $336,000 in revenue and raise $1.24 million in capital.

two years, both the Ohio Third Frontier and the Innovation Ohio Loan Fund offered assistance, as MesoCoat continued to perfect its metal cladding processes.

MesoCoat’s CermaClad™ metal coating process, which is 40 times faster and 20 percent cheaper than other cladding processes, took top honors in The Wall Street Journal’s 2012 Technology Innovation Awards. This recognition coincided with MesoCoat’s plans to set up a large plant in Euclid, which will enable the company to test its technology on larger pipes and start selling them.

Healthcare/Biomedical Highlights ·

·

ingenuity Talent and technology bring new ideas to emerging industries.

Technology, Innovation and Commercialization Technological advances put new products into consumers’ hands. They help businesses boost their efficiency, productivity and profitability. They connect people faster. They help patients heal more quickly. They keep us moving forward at an unprecedented pace. For all of these reasons plus the employment and investment opportunities they bring, Northeast Ohio embraces technology companies and other businesses committed to innovation.

Northeast Ohio demonstrates support by providing a variety of resources and organizations that dedicate themselves to supporting and accelerating high-tech businesses, innovations and the commercialization that brings them to market. BioEnterprise, for example, supports healthcare and biomedical firms. NorTech fuels the success of companies in advanced energy, flexible electronics and water technologies. And in 2012, MAGNET orchestrated a new program, Partnership for Regional Innovation Services to Manufacturers (PRISM), to support innovation in

ioEnterprise reviewed 160 companies/technologies and added B 22 client companies to its portfolio. In total, BioEnterprise’s portfolio companies raised $235 million from venture capital, private equity and grant funding sources. This funding is used to hire employees, commercialize products and otherwise grow businesses.

Northeast Ohio biomedical companies attracted $226.5 million in equity capital in 2012, the largest amount raised by Northeast Ohio biomedical companies in the past five years.

This funding was raised by 43 companies, the largest number of companies attracting capital since 2003. In addition, 16 regional startups were awarded $11 million in SBIR/STTR (Small Business Innovation Research/Small Business Technology Transfer) grants, and local tech transfer offices raised over $14 million in licensing and other deals.

INVESTOR BACKS SMARTHEART WITH $30 MILLION

small- to mid-size manufacturers. The successes of the businesses supported by these organizations and others within the economic development ecosystem led to the creation of 717 jobs representing $46,681,462 in payroll in 2012. Capital investments into these innovative firms reached $277,522,177.

TECHNOLOGY, INNOVATION AND COMMERCIALIZATION IMPACT JOBS 717 PAYROLL

$46.7 MILLION

CAPITAL INVESTMENT

$277.5 MILLION

Sources: The Fund for Our Economic Future analysis of data reported by grantees for the calendar year 2012. Additional data submitted by

Cleveland Heart, a Cleveland Clinic Innovations spin-out and developer of the SmartHeart artificial heart, raised $30 million from Power Heart Consortium, a Korean private equity firm.

The investment – the largest a Cleveland Clinic spin-off has ever received from a lone investor – enables Cleveland Heart to continue its international clinical trials, expand its laboratory research and refine the design of the artificial heart.

ALLTECH INTERNATIONAL ENTERS US MRI MARKET In 2009, Solon-based AllTech International Group received regulatory approval to sell MRI scanners in China. By 2011, AllTech was a true contender, selling more MRI scanners in China that year than any other manufacturer save Siemens and GE. In 2012, AllTech set its sights on the US. The US launch required space for manufacturing and testing operations. With ongoing support from BioEnterprise and a Job Creation Tax Credit from the state, AllTech moved from its 13,000-square-foot headquarters into a new 50,000-square-foot building in June and is adding 70 employees to its domestic team, which previously numbered 40.

JobsOhio, Team NEO and economic development organizations in 18 counties across Northeast Ohio. In certain cases in which multiple organizations worked on the same project, data may be included in more than one section of this report.

26 27

Record investment The $30 million infusion into the SmartHeart artificial heart

by Power Heart Consortium represents the largest investment a Cleveland Clinic spin-off has ever received from a single investor.

ACQUISITION ENABLES GLOBAL BRAND GROWTH Medina-based OrthoHelix Surgical Designs Inc. was acquired

by Tornier NV, a Dutch medical device company, for $135 million.

OrthoHelix maintains its name, its brand names, its 80 employees and its central operations center in Medina. Tornier plans to leverage its international distribution channel to accelerate OrthoHelix’s geographic expansion beyond its current US sales base.

·

·

·

Partnership for Regional Innovation Services to Manufacturers (PRISM) established agreements with Case Western Reserve University, the University of Akron, Cleveland State University (CSU) and Lorain County Community College (LCCC) for the institutions to provide intellectual and hard physical assets to small and mid-size manufacturers.

Recognized nationally as a cutting-edge program (featured in June at the annual Clinton Global Initiative conference in Chicago and named a State and Local Innovation to Watch in 2012 by the Brookings Institution), PRISM created more than 50 engagement opportunities among manufacturers and advanced technology resources to spur innovation and growth.

By year-end, the PRISM portfolio included 12 firms targeting development of 12 to 14 new products, $275 million in new revenue and the creation of 450 new jobs by the end of 2014, and 3,500 new jobs by 2017.

MAGNET partnered with CSU and LCCC on a program to grow internships for smaller manufacturers to assure a stronger workforce pipeline.

28 29

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LorkTech’s progress was accelerated by relationships Lorkowski built with companies in NorTech’s FlexMatters® cluster through the organization’s STMA program. Kent Displays, a leader in the manufacture of self-powered liquid crystal displays, for example, assisted LorkTech in developing the prototype, getting it ready in a remarkably short timeframe and at no charge.

1 44

Mark Lorkowski was a 20-year-old engineering student at Case Western Reserve University when he came up with his idea for an electronic shelf label system to replace traditional paper pricing tags at grocery stores and mass merchandisers in 2010. This year, Lorkowski Technologies (LorkTech) began sharing solar-powered liquid crystal display prototypes with potential anchor customers.

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In addition to accelerating commercialization, the STMA program’s step-by-step process increases the global competitiveness of cluster companies; attracts additional private capital to the region; and connects students, incumbent workers and the unemployed to educational and training programs. JumpStart, MAGNET and NorTech provide one-on-one assistance to help cluster members assess markets, engage with commercialization partners and customers, increase export revenue and access capital. Lorain County Community College is involved as well, leading an extensive network of Northeast Ohio universities in assessing cluster workforce needs to develop and implement education/training programs.

LORKTECH TAGGED FOR SUCCESS

CAP

NorTech, JumpStart, Lorain County Community College and MAGNET launched the federally funded Speed to Market Accelerator (STMA) to support the commercialization efforts of advanced energy and flexible electronics cluster members.

The program is designed to accelerate the market entry process for high-potential products by drawing on the region’s existing support, training and research resources.

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STMA PUTS ENERGY AND TECH COMPANIES ON THE FAST TRACK

CAP

N orTech applied its nationally recognized InSeven® roadmapping process to assess growth opportunities in Northeast Ohio’s water technologies, flexible electronics and energy efficiency industries. It projects that, by 2020, the three industries will create a combined 9,230 jobs.

Quasar Energy Group, a company that turns organic waste – food waste, crop residuals, manure, fats and oils, for example – into clean, affordable energy to power homes and fuel vehicles, grew to 60 employees (from 10 in 2010) in 2012 and generates more than 1-megawatt per day at all eight of its Ohio facilities.

The six-year-old company, which uses an anaerobic digestion process to generate electricity, heat and compressed natural gas (CNG), has benefited from the support of NorTech throughout its early years. NorTech directed funds through its STMA program to MAGNET to facilitate design of Quasar’s CNG dispensers, and connected the firm with fellow energy enterprise cluster member South Shore Controls, which manufactures the dispensers in Northeast Ohio. NorTech also helped Quasar secure the Renewable Identification Number required by the EPA to register an acceptable biofuel under its Renewable Fuel Standard.

6,631, 75

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BACKING INGENUITY FOR SUSTAINABLE RESULTS

8

·

T he US Small Business Administration (SBA) awarded NorTech one of seven Regional Innovation Cluster contracts to support FlexMatters®, an initiative designed to accelerate the growth of the flexible electronics cluster in Northeast Ohio.

1,895, 65

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·

T he 116 companies supported by NorTech (advanced energy and flexible electronics industry clusters) attracted $19.7 million in capital, created 307 jobs and generated $20.9 million in payroll.

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Emerging Clusters Highlights

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Advanced energy company Quasar is taking new ideas to market faster thanks to ongoing support from NorTech and MAGNET.

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Source: The Fund for Our Economic Future analysis of data

**Data are a reflection of unique company performance.

reported by grantee intermediaries for the calendar year

The Fund and Team NEO have made every effort to

2012, representing a sample 384 companies. Additional data

eliminate duplication which may result from two or

submitted by JobsOhio, Team NEO and economic development

more economic development organizations reporting on

organizations in 18 counties across Northeast Ohio.

the same company.

*Data for MAGNET not yet available for 4th quarter.

CLEVELAND WHISKEY TAPS INTO A $20 BILLION MARKET Micro-distilleries are all the rage these days, but entrepreneur Tom Lix isn’t thinking micro at all. He has his sights set on huge, hoping he’ll hit the 7,000-barrel mark on his new bourbon, Cleveland Whiskey, this year, and take that number to 20,000 next year.

Lix came to MAGNET in 2009 looking for the financing, space and expertise he needed to bring his idea to market. He found all of that and more. With help from the engineers at MAGNET, his brand hit shelves in early 2013. Why does that math sound wrong? Because Lix developed an aging process that cuts the usual eight to 12 years bourbon requires to only six months. The color is deep, the flavor is smooth, and Tom Lix is eager for the next round.

REGIONAL MARKETING: BUILDING OUR BRAND

Regional Marketing: Building Our Brand Marketing efforts played a strong role in Northeast Ohio’s development picture in 2012 as the region’s partners kept the good news about our economic progress in the public eye.

Regional Marketing Alliance of Northeast Ohio

THE FOUR COMPONENTS OF REGIONAL MARKETING Since 2006, the Regional Marketing Alliance (RMA) has raised more than $11 million to support Northeast Ohio’s first and only regional marketing campaign. In addition to providing direct financial support to Team NEO’s business attraction marketing, which is described on this page, the RMA uses these funds for three other components of the campaign – national media relations (see page 11), talent attraction and in-region communications.

The third component is Northeast Ohio’s only regional, comprehensive talent attraction website, located at LivingInThePlus.com. To date, more than 700 organizations link to this online portal, making it the go-to resource for our region’s executive recruiters, human resource professionals and others working to bring top talent here.

The fourth component of the campaign is focused on creating thousands of spokespeople to help tell the story of the great things happening in Northeast Ohio. RMA’s in-region communications program was designed to inform and enlighten Northeast Ohio residents so they can become ambassadors for our “brand” and play an important, ongoing role in our economic health. Through a variety of in-region communication channels, the message of our region’s revitalization is being read and shared every day: ThePlus.us website; Facebook.com/ThePlus.

NortheastOhio; Twitter.com/ BeThePlus; and the Pass the Plus e-Newsletter.

Research conducted among resident community influencers from 2010 to 2012 found a 36 percent jump (from 33 to 69 percent) in optimism about our region’s economic development future. The campaign’s social media following increased by 158 percent from 2011 to 2012, and continued to grow in 2013.

And the folks who Tweet shared 72 percent of the original messages they received from @BeThePlus in 2012.

SHOWCASING NORTHEAST OHIO’S UNIQUE ASSETS

STEPPING UP REGIONAL MARKETING EFFORTS FOR 2013 Recognizing the recent success and long-term value of marketing to business attraction and development efforts, members of the economic development ecosystem closed the year by agreeing to establish a regional marketing Alliance Governing Council. Housed under the Team NEO board of directors, the Council will oversee and govern the regional marketing campaign going forward, as it builds on its 2012 momentum.

The campaign will continue to position Northeast Ohio as an exceptional place to build and grow businesses.

Team NEO led a variety of projects and initiatives designed to encourage attraction, retention, expansion and investment in the region. Among these efforts:

· Q ERs - Designed to attract new businesses and jobs, the Quarterly Economic Reviews provide economic activity updates, including industry sector growth, for the 18-county region. Data was picked up by more than 30 key regional media vehicles.

· F AM Tours - Team NEO conducted familiarization tours (FAMs) with top oil and gas executives and members of the economic development community. These efforts netted additional business attraction leads as well: 19 contacts and seven companies.

promotion

· B usiness Attraction Microsite and Fact Sheets - Leveraging the

Great news travels fast.

momentum of our business attraction campaign (We Make Things Here: Ideas+Products+Profits), Team NEO developed a targeted content site – clevelandplusmakesthings.com – and nine fact sheets to promote the region to businesses and site selectors.

30 31

M O V I N G F O R W A R D : I M P E R AT I V E S F O R N O R T H E A S T O H I O

Moving Forward: Imperatives for Northeast Ohio 1,895, 65

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private, civic, public and philanthropic sectors to address a set of clearly defined regional priorities.

3. Economic competitiveness priorities will be addressed at several levels, from the neighborhood up to the regional.

The role of the regional strategy is to align, strengthen and connect; it does not supplant or replace local efforts.

4. The strategy, and all of its components, will be economically inclusive of the region’s diverse populations.

of the region’s residents.

· I mprove Quality of Place to appeal to growing companies and

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assets to connect people, products and information to US and global markets.

· S trengthen the region’s innovation, research and commercialization capacity and effectiveness.

· F oster efficient and effective public policies, infrastructure investments, and governmental services and structures.

· D evelop the coalition(s) of business, philanthropic, education

Source: The Fund for Our Economic Future analysis of data

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This task force is creating a regional economic competitiveness strategy to address the economic priorities that will accelerate the region’s economic growth, increase residents’ prosperity and create more equitable access to economic opportunities across Northeast Ohio’s diverse populations.

The task force has identified 10 priorities as essential to achieving results that will outperform the national economy:

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business and philanthropic leaders from across the region recognized the

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Mahoning

**Data are a reflection of unique company performance.

The Fund and Team NEO have made every effort to eliminate duplication which may result from two or

CANTON N

more economic development organizations reporting on the same company.

Stark

Columbiana

*Data for MAGNET not yet available for 4th quarter.

and government leaders to monitor, refine and deliver on the strategy.

global influence

For more detail about the information presented in this report, please contact any of the organization representatives listed on the back cover.

Tuscarawas

Our products, people and intellectual capital make the world a better place.

32 33

NORTHEAST OHIO

2012

YEAR-END REGIONAL ECONOMIC DEVELOPMENT REPORT

For more information about the organizations featured in this report, please contact the representatives listed below.

BioEnterprise

Team Lorain County

Aram Nerpouni

Chris Kish

216-658-3975

440-328-2562

anerpouni@bioenterprise.com

ckish@teamloraincounty.com

bioenterprise.com

Pam Fechter 440-328-2561

Greater Akron Chamber Daniel C. Colantone

pfechter@teamloraincounty.com teamloraincounty.com

330-237-1212 colantone@greaterakronchamber.org greaterakronchamber.org

Team NEO Thomas A. Waltermire 216-363-5425

Greater Cleveland Partnership Joseph D. Roman

twaltermire@teamneo.org clevelandplusbusiness.com

216-592-2341 jroman@gcpartnership.com gcpartnership.com

Youngstown/Warren Regional Chamber Thomas M. Humphries 330-744-2131

JumpStart Ray Leach

tom@regionalchamber.com regionalchamber.com

216-363-3400 ray.leach@jumpstartinc.org jumpstartinc.org

Special thanks to the Fund for Our Economic Future (the Fund) for supplying data for this report. The Fund is a philanthropic collabora-

MAGNET Daniel E. Berry 216-432-5301 dan.berry@magnetwork.org manufacturingsuccess.org

tion committed to advancing and sustaining a long-term economic competitiveness strategy for the people of Northeast Ohio. As part of its work, the Fund coordinates, collects and compiles data pertaining to jobs added, payroll added and capital attracted by many

NorTech Rebecca O. Bagley 216-363-6877 rbagley@nortech.org nortech.org

Stark Development Board Stephen L. Paquette 330-453-5900 steve@starkcoohio.com starkcoohio.com

of the economic development organizations in this report. Questions and comments should be directed to Emily Garr, 216-456-9803 or egarr@futurefundneo.org.