20160111-NEWS--1-NAT-CCI-CL_-- 1/8/2016 3:35 PM Page 1
VOL. 37, NO. 2 JANUARY 11-17, 2016
DOWNTOWN: Year-end data Business of Life Office vacancies rise slightly P. 4 City tales For local groups, ECONOMY: Shifting gears storytelling is an event Ashtabula partnership sharpens focus P. 18-19 P. 6 The List FOCUS: Small Business CLEVELAND BUSINESS Successful succession strategies The region’s top SBA lenders P. 13-17 P. 23
Port Authority is picking up steam
BY JAY MILLER equation. The Port Authority so far has bet [email protected] nearly $11 million to subsidize the @millerjh service. The goal is that, eventually, the service will be profitable for Will Friedman believes that the Spliethoff and the subsidy will end Port of Cleveland is on its way to be- and, maybe, turn into a profit. coming a growing international port The service cost the Port Au- of call. thority $5.9 million in 2014 and, “We are carving out our niche when the books are closed, almost here,” said Friedman, president of $3 million in 2015. The 2016 cost, the Cleveland-Cuyahoga County according to Brent Leslie, the Port Authority, which runs the lake- agency’s chief financial officer, is front docks. “(The service) is stand- expected to be $1.8 million. ing the test of time.” “It’s standing the test of Friedman was talking about the time, growing and picking 2-year-old cargo service, dubbed up momentum,” Friedman the Cleveland-Europe Express, that said. “It was initially met is making regularly scheduled trips with skepticism. Now peo- between Cleveland and Antwerp, ple understand it’s here for Belgium. the long haul and people are In a year-in-review interview at taking a hard look at how the Port Authority’s office at the they can use it.” foot of West Ninth Street, overlook- ing the docks it runs on the lake- ‘A ripple effect’ Scott Pollack front, Friedman spoke optimistical- ly about the future for the deal he Judging from the industry’s negotiated in 2013 to bring regular response, the service has made international cargo service to Cleve- the Port of Cleveland the envy of the land and the increased activity else- Great Lakes. where on the docks. “Cleveland-Antwerp container What started as nine, monthly service takes wing,” headlined a sto- round trips in 2014 between Cleve- ry in the respected Journal of Com- land and Antwerp by ships owned by merce in July. The article noted that the Dutch Spliethoff Group grew to the service carried 752 containers, 24 during the nine-month, 2015 most of it westbound, into Cleveland Great Lakes shipping season, with in the first half of 2015, compared greater frequency anticipated after with 178 on the six monthly sailings Browns flip the script the Great Lakes thaw out this spring. after the service was launched in This service marked the first time mid-2014. in years that container shipping — Betty Sutton, administrator of the which accounts for about 70% of all St. Lawrence Seaway Development Team’s ‘radical’ new front office look gets NFL’s attention international shipping tonnage, ac- Corp. (SLSDC), said the introduction cording to the United Nations Con- of cargo service in Cleveland is hav- BY KEVIN KLEPS ment to analytics. beat writer for The Buffalo News and ference on Trade and Development ing “a ripple effect” across the Great The Browns’ new organizational a former senior editor for the — entered the Great Lakes. Lakes and beyond. [email protected] flow chart — with vice president of Browns. “This is radical. To call it out As oceangoing freighters got big- “This liner service has certainly @KevinKleps football operations Sashi Brown, of the box is not giving it justice.” ger starting in the 1960s, shipping raised the profile of the Great Lakes chief strategy officer Paul DePodesta, Will it work? No one really knows. into the Great Lakes declined as the Seaway system,” she said. “Globally, The numbers are even less kind to team president Alec Scheiner and the Plenty of league insiders believe it biggest — and most cost-efficient — we’re seeing those not doing business the Cleveland Browns than an irate yet-to-be-hired head coach all report- won’t. The fact that no NFL team has ships grew too large to pass through on the Great Lakes taking a second fan base after another disappointing, ing directly to Haslam — is unique in ever gone “all in” on analytics con- the locks at the entrance to the lakes. look at the market and the system.” but expected, loss. the league. The three executives in tributes to the skepticism. It was cheaper to ship to Baltimore The SLSDC is the Washington, The Browns are looking for their place are big proponents of using But the Browns, with one playoff or another coastal port and finish the D.C.-based, federally owned compa- fourth head coach in Jimmy data to spot inefficiencies and make appearance and a .320 winning per- trip by rail or truck. ny that operates the locks and canals Haslam’s 39 months of ownership. better, more informed decisions. centage since 1999, also have yet to But delays at clogged East Coast that make up the U.S. portion of the Haslam is still paying millions to for- In a regular business, that’s often earn any benefit of the doubt. ports are changing the supply chain SEE PORT, PAGE 22 mer CEO Joe Banner, who didn’t welcomed. In the NFL, which has lead the latest regime to be shown been the most resistant of the three the door, but the one before that. major professional sports leagues ‘Capable’ leader steps in Entire contents © 2016 by Crain Communications Inc. Now, after a 3-13 season that was when it comes to embracing analyt- Brown, Haslam’s unconventional the franchise’s worst in 15 years, the ics, it’s an approach as wild as John- choice to lead his beleaguered foot- Browns are generating headlines not ny Manziel reportedly spending the ball operation, is a Harvard Law just because they’re starting over last weekend of the 2015 regular sea- School graduate whose most signifi- again. Their latest rebuild, which will son wearing a wig and a fake mus- cant gridiron experience is negotiat- be led by a former attorney with lit- tache at a Las Vegas nightspot. ing player contracts and managing tle football experience and a former “To go to the length of bringing in the salary cap. Major League Baseball executive a baseball guy (DePodesta) to give DePodesta, also a Harvard alum, best known for being portrayed by them an entirely different approach played football and baseball for the actor Jonah Hill in the 2011 movie to evaluating talent and picking Crimson, then spent the last 20 years “Moneyball,” is being described as players, this has never been done be- crunching numbers and helping to the NFL’s most significant commit- fore,” said Vic Carucci, a Buffalo Bills SEE BROWNS, PAGE 22 20160111-NEWS--2-NAT-CCI-CL_-- 1/8/2016 9:04 AM Page 1
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PAGE 4 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS SOLD Office vacancies go up; 323 LAKESIDE AVENUE, CLEVELAND, OHIO industrial outlook bright
BY STAN BULLARD
[email protected] @CrainRltywriter
Look to hear less this year about construction of another downtown Cleveland office building and more about the building of industrial properties. Newmark Grubb Knight Frank Those are two takeaways from the is pleased to announce the sale of Beachwood-based NAI Daus real es- 323 Lakeside Avenue, an 85,000 Visit TerryCoyne.com tate brokerage’s survey of office and VTXDUHIRRWKLVWRULFRIÀFHEXLOGLQJ industrial market conditions effec- Or call Terry at which sold for a 6.8% cap rate. 216.453.3001 tive at year-end 2015. Terry Coyne, Richard Sheehan and Thanks to mergers and acquisi- tion activity and the continued drive Mike Plaspohl brokered the deal. to downsize offices, the prime The decline in industrial vacancy Young Tower that the company downtown Class A office market va- was felt throughout each of the sev- made available for sublease. 1350 Euclid Ave., Suite 300 Cleveland, Ohio 44115 cancy jumped to 18.7% in 2015 from en submarkets in the region, ranging Another 11 floors were emptied at 15% a year earlier. from Lorain to Lake and Summit Key Tower as KeyCorp shrank its The setbacks offset expected gains counties. footprint at its namesake to 487,000 in occupancy of older office build- The largest industrial submarket square feet from 700,000 square feet ings, as the likes of Garfield and — the southeast market along the I- under a lease it signed in 2013. Standard get converted to apart- 480 and I-271 corridor from Solon to Meantime, the BakerHostetler law ments and force tenants to find new Streetsboro with 85 million square firm will not move into five floors of Complimentary offices in the same price range, often feet of properties — had vacancy of the former Key space it leased in In-flight WiFi in structures of comparable vintage. just 5% as 2015 ended, down from 2014 until later this year. The result: Overall downtown 5.43% a year ago. The moves are so large they in- Cleveland office vacancy climbed to Industrial activity was driven by clude as much as several much 23.4% in 2015 from 22.9% a year ear- manufacturers, Hexter said, espe- smaller suburban buildings and AIR CHARTER SERVICE lier. cially those who supply parts to the have a pronounced effect on the AIRCRAFT MANAGEMENT Alec Pacella, NAI Daus managing automotive industry, as well as dis- market, according to Deirdre partner, said the uptick will “defi- tributors who store products in McGuane, NAI Daus director of re- nitely stunt the conversation about warehouses. search and marketing. a new downtown office building.” Key’s drive for right-sized offices Meantime, David Hexter, an NAI — partially due to redesign and par- Daus principal, expects to see con- Big moves, big impact tially to staff cuts — reflects the dri- struction of at least one more spec- Although movement in downtown ve among office tenants to reduce ulative office/warehouse rental Cleveland’s trophy properties property costs by occupying less, building in the region. pushed up downtown office vacancy, but nicer, space. Likewise, the shut- That’s no small stretch, as four continued gains in the suburban of- tering of OM Group’s Cleveland huge office/warehouse buildings are fice market moderated the damage. headquarters reflects the fallout under construction in the region, Total suburban office vacancy fell from last year’s massive merger and three of them on a speculative basis. to 16.5% at the end of 2015 from 18% acquisition binge nationally. Northern Ohio's Premier Air Charter Service Industrial construction fell to 1.6 a year earlier. As a result, the re- million square feet as 2015 drew to a gion’s total office market eked out a Providing a unique private travel experience focused on close from almost 1.9 million square gain. Regional office vacancy fell to Back on the list feet at the same time last year. 20.4% at 2015’s end from 20.8% in Meantime, the substantial Leader Safety, Service and Professionalism Although a handful of manufac- 2014’s like period. and Standard buildings in down- 10, 25 and 50-hour Jet Cards available turing and distribution concerns The south suburbs along Inter- town Cleveland are scheduled for shut plants or announced plans to state 77, which includes the Rock- conversion to apartments but re- shut them, momentum in the indus- side Road office market in Indepen- main counted as office buildings be- www.FlySkyQuest.com • 216-362-9904 trial sector remained positive. dence and Seven Hills, notched the cause they still have office tenants in Vacancy dropped to 5.5% at the greatest improvement among sub- them, McGuane said. end of 2015 from 5.9% the like peri- urban markets. Vacancy fell to 12.5% Pacella pooh-poohed the poor od last year. The amount of vacant at the end of 2015 in the south sub- showing in downtown office space, industrial space in the region fell to urbs from 16.4% a year ago, NAI especially compared to the back- McDonald Hopkins Women’s Council Presents: 18.9 million square feet in 2015 from Daus reports. New owners of sever- drop of the Great Recession when 20.3 million square feet a year ago. al buildings in the area won tenant office vacancy shot up and took a That decline took place as the expansions to score the gains in oc- long time dribbling down to current Conversations amount of industrial space in the re- cupancy. levels. gion climbed to 343.6 million square However, the size of downtown “Long term,” Pacella said, “down- with Leaders feet from 342.6 million a year earlier, office buildings compared to their town will be fine.” thanks to construction of large of- suburban counterparts and the size Bob Brehmer, majority partner of Financial outlook 2016 fice/warehouse buildings in Euclid, of downtown’s office market — 20 NAI Daus, said the downtown office Stow and Twinsburg. million square feet downtown ver- market benefits from the gains Featuring Keynote speaker: Jeff Calig, an NAI Daus senior vice sus 15 million square feet in all the downtown is making as an exciting Sandra Pianalto president, said the shutting of mul- suburbs — created the office mar- place to live or go for entertainment. *-( -- .$ )/ ) #$ !3 0/$1 Ǽ - ' . -1 )&*!' 1 ' ) tiple small to modest factories or ket’s downdraft with a handful of “In the past, business owners plans to shut properties in the setbacks. seeking office space would say, ‘I’ll Thursday, January 21, 2016 20,000 to 75,000-square-foot range Two of the largest reflect bigger look in Beachwood on Chagrin 4:30 p.m. to 5:30 p.m. has actually aided industrial space trends in business as OM Group was Boulevard or Green Road.’ Down- *) ' *+&$).ǼǙǓǓ0+ -$*-1 ǻǼ0$/ ǕǔǓǓȗ*2)/*2)' 1 ' ) users looking to expand. acquired by affiliated funds of Apol- town Cleveland was not part of the Register at mcdonaldhopkins.com or call: 216.348.5400. “It’s a little bit softer, but the mar- lo Management Group, which conversation,” Brehmer said. ket is still tight,” Calig said. “It gives moved surviving staffers to St. Louis “Now downtown is very much on prospects a little more to consider.” and emptied a full floor at Ernst & the list.”
Correction Volume 37, Number 2 Crain’s Cleveland Business (ISSN 0197-2375) is published McDonald Hopkins LLC weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copy- 4VQFSJPS"WF &BTU 4VJUF $MFWFMBOE 0)t A story in the Jan. 4 edition of Crain’s Cleveland Busi- right © 2015 by Crain Communications Inc. Periodicals postage paid at Cleve- ness about the new Arhaus LLC headquarters in Boston land, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMAS- Shawn M. Riley Nicole J. Gray TER: Send address changes to Crain’s Cleveland Business, Circulation Cleveland Managing Member Chair, Women’s Council Heights contained some incorrect information. Arhaus, Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. which has 60 locations in the U.S., opened eight new 1-877-824-9373. REPRINT INFORMATION: 212-2210-00750 $IJDBHPt$MFWFMBOEt$PMVNCVTt%FUSPJUt.JBNJt8FTU1BMN#FBDI stores in 2014 and seven sites in 2015. It plans to open Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send cor- five to seven locations in 2016. About 350 to 400 em- respondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, De- mcdonaldhopkins.com Carl J. Grassi, President troit, Michigan, 48207-9911, or email to [email protected], or call 877-824-9373 (in ployees will relocate to the new headquarters in 2016. the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. 20160111-NEWS--5-NAT-CCI-CL_-- 1/8/2016 2:21 PM Page 1
CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 5 Reducing Real Property Tax The Week Assessments Throughout Ohio
THE BIG STORY Rubenstein Partners L.P. and Beachwood-based investor Mark And Across The United States The Cleveland Browns fired general Munsell. The transaction puts Group manager Ray Farmer and head coach RMC in Northeast Ohio’s three most Mike Pettine, and brought in former prominent suburban office markets. baseball executive Paul DePodesta Six of the just-sold buildings are in as chief strategy officer to work Fairlawn, and one is in North Canton, alongside Sashi Brown, a Harvard near the entrance to the Canton Law School grad who was named Akron Airport. Group RMC last year vice president of football operations. Sleggs, Danzinger & Gill, Co., LPA acquired Summit Office Park in Brown and DePodesta will lead an Independence and Corporate Place in unconventional front office that is Beachwood. The portfolio consists of light on football experience but 400,000 square feet of office space heavy on smarts, and with deep and is best known as the former backgrounds in analytics. portfolio of Fairlawn-based See analysis, Page One developer John Dellagnese. Five of the buildings are in Fairlawn’s THE FUTURE IS NOW Embassy Corporate Park. The Cleveland Clinic laid out details of the plan to close Lakewood END OF THE LINE Hospital and replace it with a $34 Macy’s Inc. announced it will close 36 million family health center. Inpatient Macy’s stores, including its stores at services will end Feb. 5. Lakewood Chapel Hill Mall in Akron and Midway Hospital’s emergency department Mall in Elyria, and will cut jobs in the will remain in operation until the wake of what the company opening of the family health center, characterized as “disappointing 2015 which will have its own emergency sales and earnings performance.” department. The Clinic said The Chapel Hill and Midway Mall construction of the 62,000-square- stores are the only ones in Ohio foot family health center will begin affected by the store closings. The during the fourth quarter at the Chapel Hill store, opened in 1967, southwest corner of Belle and measures 169,000 square feet and Detroit avenues, across the street has 91 workers. The Midway Mall from the hospital. The health center store, which opened in 1995, is is expected to open in mid-2018. 105,000 square feet and has 64 employees. Macy’s did not provide FRESH START an exact closing date for the stores. Global Cleveland named its new Final clearance sales will begin on president: Cleveland city councilman Monday, Jan. 11, and will run for Joe Cimperman. The economic eight to 12 weeks. development organization, which aims to attract and welcome people IN AILING HEALTH from across the world to Cleveland, HealthSpot appears to have has been without a permanent When you hire Sleggs, Danzinger & Gill, shut down much if not all of its president since April 2015, when operations. The company abruptly Joy Roller resigned. Cimperman, closed the futuristic kiosks that you work directly with who currently represents Ward 3, allowed patients to electronically said he doesn’t expect to dive into communicate with doctors from 25 his duties at the nonprofit until Sleggs, Danzinger and Gill. Rite Aid drug stores across Ohio. after budget hearings for council The kiosks also are gone from wrap up, likely by March. Cleveland Clinic facilities. HealthSpot CEO Steve Cashman didn’t respond Each client is directly represented at all levels by a principal of the firm with a THEY GET AROUND to a request for comment. The combined 75 years of experience. No pyramid, no associates, no on-the-job training. Group RMC, a New York-based Dublin, Ohio-based company private equity fund, acquired for $30 formed relationships with the Our clients deserve the very best representation, so we structured our firm to allow million a portfolio of seven suburban Clinic, MetroHealth and University each client, throughout the entire process, to work directly with Messrs. SLEGGS, Akron office buildings from Hospitals over the past few years. DANZINGER and/or GILL. Our philosophy is to work cooperatively with school district and County officials to ensure that our clients pay the lowest possible real property tax obligations. If a fair resolution requires litigation, SLEGGS, DANZINGER & GILL have the depth of trial and appellate experience to handle the most complex valuation issues.
REFINANCETODAY Whether the valuation relates to large industrial plants, apartments, shopping centers, warehouses, office buildings, vacant land or any other type of commercial property, the faces above will ensure that you receive the best counsel, legal advice and litigation expertise. 440.526.8700 Todd W. Sleggs, Esq. Robert K. Danzinger, Esq. Steven R. Gill, Esq. [email protected] [email protected] [email protected] [email protected] www.cbscuso.com WITH
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PAGE 6 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS
For Sale - 32,000 SF Offi ce/Warehouse Located near Chagrin Blvd. Offi ce & Retail Market Partnership seeks to pump up Ashtabula’s economy
BY JAY MILLER tors, the decline in the number of need to be attracting skilled people businesses in the county and the to Ashtabula.” [email protected] slow pace of new business formation. Iannone believes the county’s low @millerjh “We have a tremendous number cost of living and small-town quali- of organizations that support eco- ty of life near metropolitan areas like Business and civic leaders in nomic and community develop- Cleveland and Buffalo, as well as the Ashtabula County are charting a new, ment,” said Scott Becker, the presi- recreational opportunities along more focused effort to boost the dent of the board of directors of the Lake Erie, can be selling points. county’s economy and labor force. nonprofit economic development As important, Iannone said, was Through the Growth Partnership organization, after the presentation. building up the skills of kids coming 23330 Commerce Park Dr., Beachwood, OH for Ashtabula County, a group of 60 “What we don’t have is a county- out of the local high schools so that, business, public, educational and wide focus on a couple of key items if they aren’t going on to college, they • 32,000 SF Offi ce/Warehouse • Property can be converted into philanthropic partners, they have to move the needle in the right di- can meet the needs of local manufac- • 1.19 Acres (150’ x 346”) multiple uses identified the county’s most press- rection.” turers, some of whom are facing • Masonry Construction • One Drive-in Door ing economic dilemmas and are Becker is president and CEO of workforce shortages. But the Ashtab- • Built in 1969 & 1990 • Located near Chagrin Blvd Offi ce & rolling up their sleeves to plot a Chromaflo Technologies Corp., one ula workforce is slightly less educat- • 62 Parking Spaces Retail Market three-year course of action to make of the county’s largest manufactur- ed than the average Ohio workforce. • Former Audio/Video Recording Facility • Freeway Access to I-271 & I-480 some headway. ers, which makes colorants and pig- “The school systems have made While unemployment in this ment dispersal systems for the ar- progress, but we need more,” he county of 100,000 people has de- chitectural and industrial said. David R. Stover, SIOR clined, at 5.6% in November, it is still applications. 216.839.2012 well above Cuyahoga (3.9%), Geau- The county has a diversified eco- [email protected] HannaCRE.com ga (3.0%) and Lake (3.3%) counties nomic base. It’s led by manufactur- Temporary solution to the east, though typical of neigh- ing, which includes firms like Chro- Becker said his company is strug- bors to the south and east. maflo, Molded Fiber Glass Co. and gling to maintain its workforce. At a meeting Dec. 15 at the Spire Kennametal Inc. Manufacturing “We’ve managed to bring in some Institute in Geneva that was attend- represents about 31% of the coun- top talent,” he said. “But more fun- ed by more than 100 civic leaders, ty’s economic output. Government, damentally, we have a problem at- Don Iannone, the partnership’s ex- health care and other social services tracting just quality mid-level and DO WHAT ecutive director, and economist combined generate about 21% of lo- even operational people. James Trutko opened a campaign to cal output. Within manufacturing, “I have 30 temporaries in my kickstart a civic effort to bring that the chemical and plastics industries building right now,” he said. “I YOU rate down. provide the anchor. shouldn’t have any. All these other “You’re losing talent,” Trutko said Trutko said the county can build manufacturers who are here have as he started a data-heavy slideshow on its plastics and chemicals base, the same problem.” WANT on the state of the county economy. but it also needs to bolster its under- While it will continue to work to “I’m worried that the downward developed service sector. The focus, attract new businesses to the coun- TO DO lines will continue without an action though, should be on businesses ty, the strategic plan emphasizes plan.” with geographically diverse cus- helping existing businesses grow, The county’s economic problems tomer bases. since those companies typically ac- are not unique, but this leadership “You want (new) businesses that count for nearly 60% of new jobs. Let us help you get there. We help group is going the extra mile to ana- have a regional or national market Ken Johnson, general manager of business owners plan for and implement lyze them and plot a course forward. that will bring dollars into your Greatwave Communications, the lo- a successful exit strategy. The members of the growth partner- county,” he said. “And you have to cal telephone and Internet service ship have developed a strategic plan look at extending the reach” of local company, said in a later telephone Increase Value. Minimize Taxes. Protect Assets. and have created a dashboard — an businesses. interview that keeping businesses online, visual economic scoreboard Although the county unemploy- alive and local can be difficult. Many — to help leaders set goals and keep ment rate has declined, Trutko said businesses were started in the 20 an eye on their progress. the rebuilding of the workforce has- years after World War II, and those The planning work began in Au- n’t kept pace with the region or the entrepreneurs are ready for retire- gust 2014 with the hiring of Iannone, rest of the country. Data gathered by ment and can’t count on keeping a former director of the Economic the growth partnership show the them in the family and local. Development Center at Cleveland county has been losing between 350 “Kids grow up and look at the eco- State University and an economic and 500 people from the labor force nomic realities and go, ‘This isn’t Call our Certifi ed Exit Planning Advisor, Ray Lampner: 330.572.8014 development consultant with a na- annually. Some stopped looking for what I want to do,’ ” Johnson said. [email protected] • www.BCGLegacyAdvisors.com tional practice. work or couldn’t find a job, while “So the owner gets older and he does- The key issues, Iannone and some found work outside the county. n’t have anybody to hand the busi- Trutko explained, are the need to off- “The whole workforce/talent is- ness off to, and all too often those set a loss of employment in key sec- sue is critical,” Iannone said. “We businesses close.” Point A. DON’T YOU WISH YOU HAD A BEACHWOOD
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CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 7 Banks are open about private push KeyCorp, other large institutions are doubling down on client relationships to grow that segment of biz
BY JEREMY NOBILE Key chalks that change up to a re- Relationship management bankers and communication, which duced provision for loan and lease in turn is creating competition Yet, competition remains high as [email protected] losses and lower noninterest ex- among banks to attract top talent. other companies take a similar ap- @JeremyNobile pense. Jenkins, for instance, has quite a ré- proach. But Jenkins doesn’t talk so much sumé that most recently includes Bankers and money managers at about cutting costs today. serving as president and CEO at Terry Jenkins is no architect, but large companies say achieving Indeed, he’s investing heavily in Chicago-based BMO Private Bank he has spent the last year building growth comes down to managing new people and technology that U.S.A. infrastructure at Key Private Bank. combined are designed to draw cus- client relationships better than com- “Long gone” are the days of a pri- Like most large and super-region- tomers from other areas of the bank, petitors as fee costs and even histor- vate bank simply offering trust ad- al banks, Key wants its private bank like the business and corporate ical portfolio performances seem to ministration and bill payment ser- and wealth management segment to banking segments, to private bank take a lower priority for clients com- vices, said David Campanella, leader play a larger role in the company services. pared with feelings of trust and con- of the Cleveland and Columbus overall. KeyCorp tapped Jenkins to While still early in Jenkins tenure nectivity. markets for US Bank’s Private Client lead the charge in an increasingly with Key, he says those efforts are al- That’s a change from many years Reserve. competitive and challenging market ready starting to show client growth. ago, when interest rates were high. “If you’re simply attacking and that has been hindering growth in Notably, the company had al- “Early in my career when interest growing from a tactical approach, bank margins. ready logged 1.7% growth in rev- rates were very steep, returns were you may even lag in the private Jenkins became president of Key enues in 2015’s third quarter and steep, and it seemed like everyone Terry Jenkins banking space,” he said. “If you look Private Bank last February. Since nearly 4% growth in total income in was shopping based on return,” said to 2016 and beyond, those firms that then, Jenkins has placed a variety of the community bank. Ronald Ambrogio, Ohio regional can artfully navigate these very del- trimmed costs across their business new staff from sales leaders and a Of course, the bank’s expansion president for BNY Mellon Wealth icate conversations with family lines through the wake of the reces- new head of the private bank’s fam- in New York with its acquisition of Management, which also offers members, in my opinion, will have sion. ily wealth business segment to addi- First Niagara Financial Group of some private banking services. the competitive advantage that will In one example, since Jenkins tional bankers and relationship Buffalo, which will bring the bank to “I interview clients as they fire or lead to growth in the marketplace.” joined Key, the bank has added a managers with the goal of capturing $135 billion in total assets (a 40% in- hire us. And today, for clients, it’s Disruptors are few in the private team of more than a dozen bankers new market share across the entire- crease), offers a truly untapped cus- not about fees or performance, but banking sector, yet still not as signif- solely devoted to serving private ty of Key’s expanding footprint. tomer segment. usually responsiveness and quality icant to the value of premium rela- bank customers with retail ac- “We’re building this business for But drawing existing customers, of responsiveness,” Ambrogio said. tionships. The popularity of robo- counts. the future,” Jenkins said. like those with corporate and busi- “It’s much more relationship dri- advisers, for example, which is a “We’re putting less money into These aren’t exactly new strate- ness accounts, to the private bank ven.” general term applied to fully auto- gies. Yet, they underscore a way will remain the major focus, Jenkins For a large banking company like back-office operations and more mated investment services, aren’t a large banks today are looking to said, because that’s naturally the BNY, the goal is to create a boutique into tools for bankers, advisers and big concern to these large banks — grow revenues in a prolonged low- lowest hanging fruit. feel by keeping a money manager’s clients,” Jenkins said. “We’re spend- although you “ignore them at your interest rate environment by en- “We want to take market share number of relationships in check. ing a lot closer to the client and clos- peril,” Jenkins said. hancing their private banking and and continue to have clients do For Key Private Bank, which man- er to the adviser where, historically, “For us, the future is a fusion of wealth management services. more business with us than they ages more than $40 billion in totals technology spend has been further adviser and technology delivered Through the two years preceding currently do now,” Jenkins said. assets today, that’s why investments away from the client.” through community bank model 2015, Key saw revenue in its com- “I don’t think you’ll see us go into internally are bolstering client-fac- where we’re local and close to the munity bank — under which the pri- XYZ city where this is not a KeyBank ing personnel and services today A future of fusion client, yet backed by a large plat- vate bank operates — fall about 4%, presence. versus, say, improving software and form,” Jenkins said. although income grew 14%, accord- “We want to build around the back office functions that have al- The theme for private bankers to- “When we do that, we become a ing to company filings. community bank platform.” ready been streamlined as all banks day is that focus on premium bigger part of KeyBank.”
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PAGE 8 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS Richmond Park building is bought for $22.5M 2016 is likely to be a BY STAN BULLARD according to the listing for the prop- Smaller institutions expected to be major acquisition targets erty on ApartmentGuide.com. [email protected] Ralph McGreevy, executive vice @CrainRltywriter president of the Northeast Ohio BY JEREMY NOBILE National Bank, was bought out by Warren, Pa.-based Apartment Association trade group, Northwest Bancshares Inc. in a $183.3 million deal, Richmond Park Apartments in said BEK has the experience to suc- [email protected] marking the latter company’s entry into this market. Richmond Heights are neither new cessfully manage a complex of Rich- @JeremyNobile Talmer Bank and Trust of Troy, Mich., which has about nor glitzy, but the four-building mond Park’s size. McGreevy said he $6.4 billion in assets, entered the Northeast Ohio market complex is big and just changed recently ran into Risman, who men- Acquisitive growth is expected to top a lot of bankers’ in 2013 when it bought First Place Bank of Warren. hands for $22.5 million, according to tioned he wanted to up his firm’s ac- New Year’s resolutions for 2016. Most recently, CNB Financial Corp. of Clearfield, Pa., Cuyahoga County land records. tivity level in the “Northeast Ohio The banking sector continued to shrink this past year which operates CNB Bank, announced its acquisition of The sale also put the 736-suite apartment game.” as companies continued to be bought and sold in an on- Lake National Bank of Mentor for nearly $25 million. complex at 444 Richmond Park Drive The sale also marks the end of a going wave of consolidation. Experts and other data in- Lake’s $152 million in assets will bring CNB to more than in the hands of a Beachwood-based period of distress at the complex, dicate that activity should persist in Northeast Ohio and $2.5 billion in assets. CNB executives have said they’re investor, BEK Developers Inc. BEK on which includes a building with of- across the country in the coming year as banks look to focused on growing the Lake County market as the bank Dec. 15 bought the complex of four fices, a pool and other amenities bolster slowly growing margins and expand their foot- is rebranded under CNB’s ERIEBANK division. six-story buildings in the name of 444 connecting the four structures. prints. “There are a lot of banks outside our region today that Park Apartments LLC from Atlanta- The complex previously was “The banks need to grow to justify a healthy stock would love to come play,” said Frederick DiSanto, CEO based Tritex Real Estate Advisors, an owned by an affiliate of Fairview price for Wall Street,” said Bob Wagner, managing part- of Cleveland investment adviser The Ancora Group, “and Park-based Niederst Management. investor and broker that bought the ner at Shale Community BanFund LP, which invests in they may find some opportunities with some other com- Tritex acquired it at a Cuyahoga property at a sheriff’s sale in 2013. community banks, including several in Northeast Ohio. munity banks.” BEK is led by investor and develop- County sheriff’s sale in 2013, which “I would expect M&A will continue like this for years capped a foreclosure proceeding that er Bob Risman, part of the Risman to come.” family that has been a major player in began in 2010 on a $30 million mort- The activity in Ohio offers a good snapshot of all the Quest for growth Northeast Ohio real estate for gage guaranteed by Fannie Mae. Tri- deals happening across the country. This year, community banks — both large and small decades. An administrative assistant tex obtained the building at foreclose Take Farmers National Bank of Canfield, which made — could be increasingly hungry for acquisitions, experts at BEK’s offices declined to make ex- sale with a bid of $23 million to satis- two acquisitions of smaller community banks in 2015 — say. In particular, those closer to $1 billion in assets who ecutives available for an interview fy a mortgage outstanding on the haven’t made deals lately could find a good fit in the because they said they were “too property, which it had previously ac- after doing zero deals in the 21st century — for about $88 busy” to discuss the purchase and quired for an amount that local pub- million in total. smaller $100-$200 million asset banks and pull the trig- their plans for the property. lic records do not disclose. Those deals bring Farmers just shy of $2 billion in ger on a deal. The deal ranks as the largest Like other large older suburban banking assets, which is growth of more than 60% com- Banks of the size and scope of Ohio’s Middlefield apartment sale in 2015 in Northeast apartments, the complex suffered in pared with a year ago. Banking Co., which has about $708 million in assets, Ohio, according to research by the housing boom that preceded the In 2016, the strongest small banks will be likely acqui- might make those kinds of acquisitions, Wagner said. Michael Barron, a first vice president Great Recession in 2008 as would-be sition targets, while the larger community banks might Those are the banks likely to be motivated more by at Marcus & Millichap’s Cleveland renters qualified for homes and oc- seek out deals they hadn’t considered just a few years growing assets as opposed to expanding their reach as office. He should know: the Barron, cupancy plummeted. ago. On the other end of the spectrum, there’s banking corresponding market share for those groups tends to be Burkons & Wintermute team of Ironically, the housing bust that giant KeyCorp, which announced in October one of the rather small. which he is a part at Marcus & Mil- accompanied the recession led to biggest deals of the year in the industry with its plan to Meanwhile, The Cortland Savings and Banking Com- lichap represented Tritex in the sale weaker home sales that have only re- acquire First Niagara Financial Group of Buffalo, N.Y., pany in Ohio, with about $566 million in assets, is an ex- of the Richmond Heights complex, cently returned to normal. In the for $4.1 billion. ample of a strong community bank with a target on its which dates from 1968. BEK repre- meantime, renters barred from buy- Key was reportedly one of several regional banks who back. The bank is performing well, making it an attrac- sented itself in the transaction. ing homes and millennials hitting competed for that deal. tive acquisition even though it would likely draw a high Rents in the complex range from the prime renting age created a Meanwhile, banks in neighboring states like Pennsyl- multiple in a sale. one-bedroom suites for $500 strong apartment market marked by vania continue to hungrily eye the Northeast Ohio mar- Other large banks in Cleveland could make some monthly to three-bedroom suites construction of apartments and ris- ket, and analysts expect that will continue. moves — like PNC Bank, FirstMerit Bank and Hunting- going for more than $1,000 monthly, ing rents nationwide. For instance, LNB Bancorp Inc., the parent of Lorain ton Bank — all of which surely want to chip away at Key’s
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CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 9 e a year in which banks bulk up
dominant market share. stronger today, particularly as the recession and its fol- According to the Federal Deposit Insurance Corp., Key lowing recovery weeded out most of the strugglers, Wag- maintains about 28% of deposit market share in the ner said. “The banks need to grow to justify a healthy Cleveland MSA. That, coupled with a smaller overall pool of potential That’s well ahead of its closest follower PNC, which targets, is driving high valuations at the best banks — stock price for Wall Street. I would expect controls about 12% of the same market. which in turn is convincing some to sell when they might FirstMerit, notably, which has just about 6% market not have before. M&A will continue like this for years to come.” share in the same region, recently claimed naming rights “Banks with strong currency are clearly in the driver’s of what is now the FirstMerit Convention Center of Cleve- seat,” DiSanto said. — Bob Wagner, managing partner land — a move some analysts have said could signal the When Northwest bought LNB, it paid 195% of book val- Shale Community BanFund LP bank’s goal for growing its presence here. In that case, a ue. Key, meanwhile, is paying 168% of the book value for local acquisition could make sense. First Niagara. All the banks who made deals this past year say they’re “It’s simply supply and demand,” Wagner said. “I ex- open to additional acquisitions. Yet, it’s unlikely, al- pect M&A premiums to go higher as the world of poten- though still possible, that anyone who inked deals this tial acquisition targets shrinks.” past year will do so again in the coming months as they According to SNL Financial, there were 236 bank M&A wait for the dust to settle. deals completed in 2014 compared with 287 in 2015 — a Key has its hands full, for instance, and Farmers will 21% increase — so the pace is picking up despite fewer likely focus on integration of its two recent deals. banks overall and virtually no new charters forming. Wagner suggests outside banks will continue getting Meanwhile, according to November’s 2016 Bank M&A survey by Bank Director, a publication for bank execs, involved. Banks like Northwest could try to grow their po- 67% of 260 CEOs surveyed said they need more scale to sitions here. And then there’s F.N.B Corp. (First National survive, and 51% said they intend to purchase a healthy Bank) of Hermitage, Pa., which bought Park View Feder- bank in the next year. al Savings Bank in 2013. Of respondents who completed a merger in the past “It would not surprise me to see F.N.B. make another three years, 55% reported that shareholder returns were acquisition in the Northeast Ohio market area,” Wagner a primary driver of the deal. said. “I don’t think the Park View deal gives them as a big Today’s cost of doing business is also a general factor. a presence as they would like.” Bankers and analysts alike emphasize that improvement The Cleveland market is appealing because banks are of technology and regulatory expenses are squeezing doing comparatively well, credit quality is good, and the margins. “There are a lot regional economy bodes well for lending portfolios. However, despite those pressures bankers routinely “The potential number of quality commercial loan cus- mention as challenges to the business, it’s just one ele- of banks outside our tomers is a lot greater in the Cleveland/Akron area than ment of the M&A flurry. The consensus among surveys region today that would smaller communities,” said Charlie Crowley, a managing and analysts is that banks below $1 billion in assets aim director at Cleveland investment bank Boenning & Scat- to hit that threshold to operate comfortably. love to come play, and tergood. Only 27% of respondents in the Bank Director survey, though, cited regulatory burdens as a primary motivator they may find some A seller’s market for considering a sale. “The regulatory environment is just a piece of this,” opportunities with some There are a variety of factors at play. said Jenni Frazer, a bank examiner for the Federal Reserve On the buy side, the prolonged low-interest rate envi- Bank of Cleveland. other community banks.” ronment has made it tougher to grow margins organical- “We have low interest rates, which have been low for ly, while credit quality has improved during the econom- quite some time. There is an earnings and profitability — Frederick DiSanto, CEO ic recovery. Those both make acquisitive growth more component. The Ancora Group appealing, DiSanto said. “There’s also a lot of competition. So banks are really Meanwhile, community banks are generally much looking at acquisitions as a way to grow.”
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PAGE 10 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS Opinion
From the Managing Editor Custom and Special Projects Maintaining a clear division in a gray area
About three months ago, I moved over to the so-called dark side. I packed up 10 years’ worth of paper clips, file folders, pens and notebooks and moved out of Crain’s Cleveland Business’ newsroom, leaving behind the finest group of journalists with whom I’ve ever worked. Sound dramatic? It was. That’s because after nearly two decades of working as a re- porter and editor at Crain’s and several daily newspapers, I made the decision to become managing ed- itor of custom and special projects and move to the business side of our publica- tion. It’s a new position at Crain’s Cleveland Business, and one that is of increasing im- Editorial portance in the changing world of journal- ism, marketing and advertising. Amy Ann In this role, I am heading up Crain Con- Stoessel tent Studio – Cleveland, a subsidiary of Crain’s Cleveland Business that now is in place to provide custom content solutions This way up? for paying clients. This doesn’t mean we will just be publishing more paid ad- vertorials. Custom content can take the form of everything proach. Instead we’ll look at Haslam’s front office hires this “Once upon a time, Cleveland was a proud football city from a digital campaign and sponsored blog post in an email week from a business owner’s perspective. Yes, the choices where losing was the exception, not the rule. In the 49 years of newsletter to a special print supplement or customized event. are unconventional, but they are not different from those the original Browns, the team recorded only 12 seasons where (Go to www.crainscleveland.com/section/custom to see some many leaders make on a regular basis. it was under .500. of the work we already have done.) Think about it. How many of you hire and promote the “Now, the Browns are a league doormat, a franchise syn- As a result, Crain’s advertisers now have more control and smartest people you can find? They often bring a fresh ana- onymous with ineptitude. … You can enhance the fan experi- more methods through which to present their stories. lytical perspective to processes and strategies. As Kevin Kleps ence by installing big new scoreboards, improving the stadi- With custom content, clients can position themselves as reports in this week’s issue, new vice president of football op- um’s sound system and holding weiner dog races, but it all thought leaders to the Crain’s Cleveland Business audience by erations Sashi Brown has a reputation for not only his intel- means squat if the losing continues. taking advantage of our distribution avenues. ligence but for being a consensus builder. While Paul “As they say during the NFL Draft, you’re on the clock, gen- Just as important, however, is that this new role and initia- DePodesta isn’t a professional football guy, he comes with a tlemen.” tive — which has been replicated at several other Crain Com- proven track record of turning struggling sports enterprises munications properties — proves this publication’s commit- into success stories. It’s also essential that Haslam, who splits Those words of warning for Browns owner Jimmy Haslam ment to transparency and unbiased, non-influenced coverage his time between Northeast Ohio and his native Tennessee, and his then-CEO, Joe Banner, concluded a Crain’s editorial of the Northeast Ohio business community. is putting someone in charge of strategic thinking and is cre- in early January 2014, days after another losing Browns sea- Make no mistake: There is no such thing as “pay to play” on ating a structure of equals reporting to him. son ended with the firing of another Browns head coach. our editorial and news pages. While Haslam appears to be finally treating the Browns like Hard for many Browns fans to believe, but things some- Period. the business it needs to be, he needs to cut ties with Johnny how managed to get worse over the next two years. However, if the Crain Content Studio – Cleveland logo ap- Manziel and his immature antics. We’ve all hired an employ- New coach Mike Pettine racked up a record of 10-22, drop- pears, whether as part of a special supplement or within the ee with raw talent and high potential. You work with the per- pages of the issue itself, a sponsor or advertiser had some ping 18 of his final 21 games, and was shown the door last son, trying to get their best. They show flashes of greatness, input or influence on the corresponding content’s produc- week only hours after floundering general manager Ray but also make some boneheaded choices. You counsel them. tion. Farmer was let go. You push them. You’re patient when needed. Eventually, Our ultimate goal is to clearly mark and indicate all paid A sad ending to a season with more lows than highs. A first- though, the mistakes outweigh the benefits. Any HR person custom content in print and online, making it look as differ- round quarterback who treated playing in the NFL more like will tell you, sometimes you need to part ways. ent as possible as the weekly stories produced by Crain’s a distraction than a privilege. A general manager who was That time has more than come with Manziel. Cleveland Business journalists. suspended for four games for sending texts to the sideline. A He’s a distraction. We hope, for his own sake, that he ad- There should be no question from our readers as to the ori- wide receiver who sat out the season because of a substance- dresses the problems that lead to his behavior. But he can’t gin of the content, and whether an advertiser had a say in its abuse violation. do that as a Brown. creation. But, it doesn’t mean that paid content won’t be in- You can’t blame Browns fans for asking: Is this worth my The new front office has much work to do. Hire a general teresting or valuable to the reader — it’s my job now to make time, money and emotional investment? And as news devel- manager and a coach, identify a new quarterback of the fu- sure that it is. oped throughout the week — Sashi who? A baseball guy as ture through the draft or otherwise, and build the winner that chief strategy officer? — you could understand fans’ frustra- the city and its fans deserve. Stoessel is the managing editor of custom and special projects for Crain’s tion and anger. You may have heard this somewhere before, but it’s still Cleveland Business. She can be reached at [email protected] or We are trying, desperately, to take a more pragmatic ap- appropriate: “You’re on the clock, gentlemen.” 216-771-5155.
ACTING PUBLISHER AND EDITOR: WRITE US: Crain’s welcomes responses from readers. Letters should be as brief SOUND OFF: Send a Person- Elizabeth McIntyre ([email protected]) as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 al View for the opinion page to West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing [email protected]. Please MANAGING EDITOR: [email protected]. Please include your complete name and city from which include a telephone number CLEVELAND BUSINESS Scott Suttell ([email protected]) you are writing, and a telephone number for fact-checking purposes. for verification purposes. 20160111-NEWS--11-NAT-CCI-CL_-- 1/7/2016 1:12 PM Page 1
CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 11
Personal View Web Talk Re: Future of Hawthorne Valley Golf Club Stopping the With the proper marketing manager/ plan in place, the membership drive goal of 300 members is doable. — Jim Daniloff big power play
The problem is that many younger peo- ple are not playing golf and not joining BY TODD A. SNITCHLER clubs. You have to offer something else GET INVOLVED — workout rooms, restaurant, etc. A Dec. 13 Crain’s editorial, “Pull the Plug,” pointed out many — Verity Pendelton Every shot blocked by the Cavs earns a reasons why the Public Utilities Commission of Ohio (PUCO) $100 donation to Cleveland Clinic Children’s Hospital should reject FirstEnergy’s request for guaranteed profits for two Re: Browns’ outdated plants, the Sammis coal-fired plant along the Ohio Riv- 1.800.ELK.OHIO | elkandelk.com/weakstuff changes at the top er in Jefferson County and the Davis Besse nuclear plant on the shores of Lake Erie in Ottawa County. No offense to Sashi Brown, the new As you pointed out, this proposal — and a similar one submit- executive vice president of football ted to the PUCO by American Electric Power (AEP) of Columbus operations for the Cleveland Browns, — would force many of Ohio’s businesses and residential con- but if this was a prudent structure to sumers to pay billions of dollars more for their electricity, just to run a football franchise, why haven’t subsidize the utilities’ bad investments and reliance on old, inef- other teams utilized it? Obviously, only ficient and unprofitable power plants. In addition, these propos- time will tell if this works, but until then, als would turn the clock back to the old days when utilities were I’m extremely skeptical given Jimmy protected by monopolies. Haslam’s poor choices, lack of FirstEnergy clearly doesn’t like competition, even though elec- patience and quick trigger finger. tric choice is working to lower electric bills and increase power — Ted Grabowski reliability in Ohio. Thanks to deregulation, independent power producers are in- Instead of firing Mike Pettine and Ray vesting billions of dollars throughout the state to build new, Farmer, why didn’t we just get rid of cleaner and more efficient power plants. Haslam and Manziel? Collectively, they Two plants are being constructed in FirstEnergy’s backyard — could do the job if they did not have the an $899 million natural gas-fired plant in nearby Carroll County, THE DIRECT PATH interference of Jimmy and Dee. It is not just southeast of Canton, and a new $850 million plant near Tole- that difficult to recruit a good quarter- do. FROM YOUR GOALS back. Haslam makes it out to be al- Crain’s reported in August that energy company Dynegy, based most unobtainable, along with that of in Houston, has spent billions acquiring plants in Ohio, and mil- TO YOUR GROWTH. hiring a good head coach. Remember, lions more to make those plants more efficient. Weatherhead Executive Education Custom Programs a lot of this has to do with karma, and In addition, at least four other gas-fired plants are in the works let’s be honest, the karma of the Pilot — some new and some conversions from coal to natural gas. Flying J debacle has hardly been forgot- They represent significant investment that, once complete, will ten. You think I am kidding. Bring in a generate as much as 4,300 megawatts of electricity by 2019 — all good, honest, multibillion-dollar man Every element of our program is tailored to your organization: goals, challenges, from cleaner, more efficient natural gas. and then the proof will be in the champi- opportunities and projects. They’re developed by education specialists, taught In addition, they’re employing thousands of Ohioans, includ- onship team we will become. It is not by leaders in their field and proven to deliver results. ing construction workers, and pumping millions of dollars into going to happen on Haslam’s watch. local economies and schools. Good riddance, Jimmy. It has not been Give your leaders the Weatherhead edge. Contact Luigi Pecoraro, director of FirstEnergy ratepayers aren’t paying for these plants. Investors nice knowing you. Certainly, there is custom corporate solutions, 216.368.2066, [email protected]. are taking a risk to build these plants at no cost to ratepayers. truth in the adage about all that glitters They’re willing to invest in Ohio thanks largely to deregulation not being gold, because Jimmy Haslam and energy choice. tarnished fast. There is nothing he will Now, FirstEnergy and AEP want the PUCO to do away with ever be able to do in terms of having a choice and force households and businesses to pay more to sub- winning team except get out. Then we sidize their old, inefficient and unprofitable power plants. will have a chance to become a proud In effect, they’re demanding a return to the old days of mo- NFL franchise in Cleveland. Until the nopoly and higher bills for business and residential cus- Haslams are gone, we will remain the tomers. bottom-feeding joke of the NFL. FirstEnergy argues that it needs subsidies to ensure a reliable — Peter Angelone source of electricity for customers, but that’s a bogus argument. FirstEnergy has committed to run these plants until at least May We should petition the team to change 2019 and new, cleaner power plants coming online will produce their name from “Cleveland Browns” to enough power to fuel about six million homes with safe, reliable just “Browns,” in order to remove a energy. stain on our city. If the PUCO approves these bailouts, Ohio will be less attrac- — Robert Fritz tive as a business location. Why would competitive companies invest billions of dollars to Re: Looking to the future build new plants if a competitor is guaranteed profits on outdat- There were many great predictions ed, inefficient plants? In fact, why would any business consider from local leaders in the Jan. 4 issue of locating or expanding in Ohio? Crain’s, and hopefully, the vast majority Instead, smart business leaders will invest in states that sup- of them will happen. If we really want to port competition and lower energy costs. assure the right outcome, the city and Ohio has worked very hard over the past decades to attract in- community has to develop and empow- vestment, new businesses and expanded job opportunities. er strong leadership. Strong leadership We urge your readers to contact the PUCO, Gov. John Kasich will help all the separate entities work and their state legislators to say “no” to utility bailouts that will together to take better advantage of raise their electricity bills and discourage investment in Ohio. the often-limited resources and then Let’s pull the plug on utility bailouts. get real results. Strong leadership starts with political leadership that is Snitchler is a former Ohio PUCO chairman and a principal with Vorys Advisors committed to the community to create LLC. He serves as spokesman for the Alliance for Energy Choice, an Ohio non- the platform for all the other leaders to profit corporation whose members include Advanced Power, Calpine, Dynegy, really lead! — Neil Dick Energy Professionals of Ohio, NRG Energy, PSEG Energy Resources and Trade, Retail Energy Supply Association and Talen Energy. 20160111-NEWS--12-NAT-CCI-CL_-- 1/7/2016 1:21 PM Page 1
PAGE 12 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS TAX LIENS
The Internal Revenue Service filed BWELL-IINFORMED LLC PARMA PRE-SSCHOOL INC. TYLER DISPOSAL INC. Type: Employer’s withholding tax liens against the following 2012 Rossmoor Road, 17974 Potomac Drive, Strongsville P.O. Box 30141, Amount: $8,032 Cleveland Heights businesses in the Cuyahoga Date filed: Dec. 11, 2015 Middleburg Heights Date filed: Dec. 11, 2015 Type: Employer’s withholding Date filed: Nov. 12, 2015 BLUES TO YOU INC. County Recorder’s Office. The IRS Type: Partnership income Amount: $23,936 Type: Employer’s withholding 812 Huron Road E., files a tax lien to protect the Amount: $42,428 Amount: $8,964 Cleveland interests of the federal government. MEDICAL RESOURCE GROUP INC. Date filed: March 5, 2008 B TELECOM INC. The lien is a public notice to 26016 Detroit Road, MARS GROUP INC. Date released: Nov. 12, 2015 16462 Stone Ridge Road, Suite 5, Westlake creditors that the government has ACTION PEST CONTROL Type: Employer’s withholding, Chagrin Falls Date filed: Dec. 11, 2015 P.O. Box 18721, Cleveland unemployment a claim against a company’s Date filed: Dec. 11, 2015 Type: Employer’s withholding, Date filed: Nov. 12. 2015 Amount: $6,191 property. Liens reported here are Type: Employer’s withholding, failure to file complete return, Type: Employer’s withholding unemployment corporate income $5,000 and higher. Dates listed Amount: $8,782 IMPRESSION TOOL & MOLD CO. Amount: $37,717 Amount: $23,242 are the dates the documents were 1050 Brookpark Road, Cleveland OHIO MOBILE WIRELESS INC. Date filed: July 31, 1992 filed in the Recorder’s Office. SURGICAL IMPLANT ELITE CUSTOM CONTRACTORS th 1301 E. 9 St., Cleveland Date released: Nov. 25, 2015 INNOVATIONS INC. 1672 Algeris Drive, Date filed: Nov. 12, 2015 Type: Employer’s withholding, LIENS FILED 4538 Edmond Drive, South Euclid Mayfield Heights Type: Failure to file unemployment Date filed: Dec. 11, 2015 Date filed: Nov. 12, 2015 complete return Amount: $27,739 KSK HEALTH SERVICES OHIO CORP. Type: Corporate income Type: Employer’s withholding, Amount: $7,137 6929 W. 130 St., Amount: $35,908 unemployment Suite 503, Parma Heights Amount: $10,391 HUNTINGTON THEATRE INC. IMPRESSION TOOL & MOLD CO. Date filed: Dec. 11, 2015 RCA MANAGEMENT INC. P.O. Box 770056, Lakewood 1050 Brookpark Road, Cleveland Date filed: Type: Employer’s withholding, P.O. Box 512, Richfield MEDICAL CARE CENTER LLC Date filed: Nov. 12, 2015 Sept. 17, 1992 Date released: unemployment Date filed: Dec. 11, 2015 1250 Superior Ave. E, Cleveland Type: Employer’s withholding Nov. 25, 2015 Type: Amount: $58,903 Type: Employer’s withholding, Date filed: Nov. 12, 2015 Amount: $5,934 Employer’s withholding unemployment, Type: Employer’s withholding Amount: $11,172 BLUE ROOM LTD corporate income Amount: $10,300 3031 Monticello Blvd., Amount: $33,640 LIENS RELEASED PHILLIPS-CCRAWFORD CARPET CO. Cleveland Heights CHIROPRACTIC 23533 Mercantile Road, Date filed: Dec. 11, 2015 FAIRWEATHER FARM INC. CENTER OF SOLON INC. APPLE CONSTRUCTION Beachwood Type: Employer’s withholding, P.O. Box 23669, Chagrin Falls 633141 Bainbridge Road, Solon 2893 Euclid Heights Blvd., Date filed: Nov. 16, 2005 unemployment, return of Date filed: Dec. 11, 2016 Date filed: Nov. 12, 2015 Cleveland Heights Date released: Nov. 12, 2015 partnership income Type: Employer’s withholding Type: Employer’s withholding Date filed: May 17, 2011 Type: Employer’s withholding Amount: $42,967 Amount: $29,080 Amount: $9,425 Date released: Nov. 12, 2015 Amount: $33,875
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CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 13 Focus
SMALL BUSINESS ADVISER - P. 15 z Q&A - P. 16 z TAX TIPS - P. 17
“What I could not have anticipated was how much my involvement with the company has made me still feel connected to Mark. It turned out to be one of the best things that’s ever happened to this company.”
— Bettina “Tina” Katz ROGER MASTROIANNI Planning a successful succession See next page for the story 20160111-NEWS--14-NAT-CCI-CL_-- 1/7/2016 1:27 PM Page 1
PAGE 14 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS SMALL BUSINESS Unexpected tragedies can leave businesses in a bind
BY LEE CHILCOTE If they don’t, they may find it difficult to thrive or even continue. “The owner [email protected] “We use the phrase, ‘This is your business baby,’” Gaino said. probably cares as “The owner probably cares as much or al- When Nesnadny + Schwartz founder Mark most as much about the company as a family much or almost as Schwartz found out two years ago that he was member. Like a family, there are a lot of needs dying of cancer, he told his wife, Bettina “Tina” — the urgent items and the ones we’ll get to Katz, to sell the company. He didn’t have a tomorrow. When an owner dies, the conse- much about the succession plan in place and didn’t want her quences can be really drastic.” to be burdened with running the firm. For example, if there are multiple owners company as a family Yet today, the 10-person graphic design and deficiencies in the buy-sell agreements, company based in University Circle is stronger the company could wind up “in the hands of member. When an than ever. Katz became chair of the company the people least capable of maintaining it,” after he was gone, and key personnel stepped Gaino said. owner dies, the into leadership positions. The 30-year-old Additionally, family members could end up business has retained all of its staff and clients. in conflict with one another without a clear “As with many things in our marriage, I did- successor. Finally, employees, vendors and consequences can n’t listen to him,” said Katz with a laugh. customers could be left in a tough spot. “What I could not have anticipated was how Gaino recommends that every business be really drastic.” much my involvement with the company has complete a human resources assessment as made me still feel connected to Mark.” She well as a long-range succession plan and up- — Dave Gaino, chairman added, “It turned out to be one of the best date them regularly. That includes assessing Apple Growth Partners things that’s ever happened to this company.” whether key personnel are in the right positions Similarly, Happy Dog owner Sean Watter- and providing them with adequate training. son didn’t have a plan in place when his friend A succession plan must spell out how the and business partner, Sean Kilbane, died in a transfer would take place, and it should be tragic accident in 2014. Watterson was forced communicated to all employees. Succession plans should be reviewed on a pertise at times. to cope not only with grief but also with learn- “If there is at least a plan in place, and in regular basis to ensure they’re still sufficient, Because Schwartz thrived on collaboration, ing how to do all the things Kilbane used to do. year one or two of that plan there is an untime- said attorney James Spallino, a partner in the staff had good relationships with clients “Personnel changes so much around here, ly death, then we just have to go in and say, Thompson Hine’s personal and succession and were able to step in and take on increased it’s a pretty dynamic environment,” Watterson ‘Gee, is the next generation far enough along planning practice. responsibilities. said. “To me, a written succession plan was in development that we can put the plan in Spallino also recommends to clients that “It’s allowed our designers to find their own something that I’d read about in an article. If I place, or do we have to go back and look for in- they place their ownership interest in an irrev- voices,” she said. can find the time to do it once, how can I find terim leadership?’” Gaino said. ocable trust to avoid probate court, and put “This place is not just going to be about the the time to do it every six months?” one or more trust advisers in place. legacy of my husband’s vision.” Nonetheless, both businesses now have Meanwhile, a board of advisers proved es- Greg Oznowich, creative director with Nes- succession plans in place. Get talking sential to Nesnadny + Schwartz’s continuing nadny + Schwartz, said that while everyone Dave Gaino, chairman of the accounting Communication is also important. success, Katz said. That outside group of ad- still misses their beloved founder, they’re also firm Apple Growth Partners, said that it’s im- “The worst thing you can do is be silent,” visers, which was made up of people with excited about the future. portant for businesses to have a succession Gaino said. “Then employees assume you’re backgrounds in art or graphic design, helped “We’re working for ourselves,” he said. “I feel plan in place in the event of an owner’s un- going to sell the company and they might be Katz steer the ship after her husband’s pass- empowered to spring out of bed every morning timely death. out of a job.” ing. She still continues to tap the board for ex- and say, ‘Hey, I can run this company.’”
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CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 15
Commercial Banking ADVISER: John Dill Just Got Easier Personal bank accounts Meet John Solich. can be risky for business Whether you operate a commercial business or need financing for owner-occupied or investment real estate, John can help Small business owners are often so focused on their day-to-day oper- you accomplish your financial goals. He has 17 years banking ations that they struggle to keep up experience in Cuyahoga, Geauga and Lake Counties. His with other aspects of their operation. This can be especially true when it experience, education and local decision making capabilities comes to managing the finances of will prove to be the winning combination to meet your needs their business. In fact, a recent sur- vey from Citizens Bank found that a as your company moves into 2016. quarter of small business owners are using their personal bank accounts for their companies instead of open- Contact John directly in our Chardon office at 440-632-8142. ing a separate account dedicated to the business. But this practice creates risk — not See what a difference John can make to your bottom line! just for the business, but for the per- sonal finances of the owner. Dill is the business banking mar- Using a personal account for busi- ket manager for Northeast Ohio ness finances is an easy mistake to at Citizens Bank. make when starting out, but it can quickly become a liability. For exam- ple, paying personal expenses using need to run their business. The Middlefield business money or vice versa makes Finally, not having a separate ac- it far more difficult for a small busi- count can make it too easy for com- Banking Company ness owner to get their accounting panies to spend personal funds that right at tax time. may be needed for personal mort- middlefieldbank.com • 888.801.1666 Business owners also need a sep- gage payments and other important arate account for business so they household expenses. Northeast Ohio Region Offices in: Middlefield • Chardon • Newbury • Orwell • Mantua can build a financial history that Managing cash flow is one of the they can later use to apply for credit most important yet under-appreci- Garrettsville • Cortland Central Ohio Region Offices in: Dublin • Westerville and other products or services they SEE ADVISER, PAGE 16 20160111-NEWS--16-NAT-CCI-CL_-- 1/7/2016 1:15 PM Page 1
PAGE 16 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS SMALL BUSINESS
ADVISER Q & A: Josh Womack Co-founder, Laugh Staff CONTINUED FROM PAGE 15 Review your payroll process: If Josh Womack and his partner, Cameron Amigo, launched Laugh Staff in 2013 ated challenges faced by small busi- you pay your employees twice a with the mission of helping nervous best men and maids of honor. The process, nesses today. Business owners who month instead of every other they say, is simple. The customer buys a speech package ($124.99 for the basic), take a proactive and strategic ap- week, you will be managing 24 proach to managing cash are able to payroll periods instead of 26 dur- he or she fills out a detailed questionnaire and a comedian comes up with a speech. avoid problems and create new ing the course of a year, making So far, the local company has written more than 250 speeches — about 90% of your company more efficient. growth opportunities through rein- which were for clients outside of Ohio (“I guess the Midwest is a little stubborn vestment and making their capital Direct deposit of employees’ work better for them. Having a paychecks into their accounts when it comes to asking for speech help,” Womack said). Also, Laugh Staff recent- strategic approach to managing can also create efficiencies. ly partnered with a dating platform in New York City, called Sparkology, to help members write dating pro- cash flow is important, and the fol- Evaluate real-time wires: If your files. Crain’s sat down with Womack to talk a little bit about what it’s like to help people be, well, funny. lowing seven tips can be helpful: small business is buying or sell- ing overseas, real-time wires Understand your operating cy- What’s your background? Tell me about the process that am sure it’s happened. Funny enough, may be an option in lieu of visit- cle: Regardless of size, every goes into writing a speech. some of the best men and maids of ing a bank branch. Some banks I started doing stand-up back in business must deposit, monitor honor we write for tell us they don’t have the ability for customers to 2007, but my introduction into The beauty is in the questions. We and manage cash; make pay- care much for the person their best make ACH payments from their everyday humor came through my emphasize curiosity through sending ments; fund purchases; invest in friend is marrying! It’s our job to help desk or office, which saves time dad. Nobody works a room like him. each customer a questionnaire ask- their company and receive pay- them sound sincere. ments. Reviewing and under- and increases productivity. I watched how he greeted everyone ing everything imaginable. How did with enthusiasm and how warmly he you meet the bride or groom? What standing each step in this cash Manage outgoing payments in What’s the most bizarre request was received. Doing stand-up was does the bride love about the groom? flow cycle can help a company an advantageous manner: you’ve ever received? What does the groom find annoying work more efficiently. Banks can help establish rela- just an extension of the interactions about the bride? Through this, we This past year one of our comedians tionships with credit card com- we had and still have. This past year I Encourage faster payments: Can can also tell if they are leaning to- wrote a eulogy. The gentleman was so panies that can expedite pay- started as a copywriter at Progres- you provide an incentive or dis- ward a humorous or sentimental grateful that we were able to capture ments from customers while sive, which has been a great culture count to customers or vendors to speech. In the near future I hope to the spirit of a lifetime of memories. giving additional timing or flexi- fit. When I marry Flo someday, I’ll encourage them to pay faster? write Donald Trump’s inauguration Comedians speak to a universal audi- bility for repayment to settle write both sets of vows. The sooner a payment is re- speech. Goals, right? ence on stage every night so in my ceived, the sooner you can put your account. Where did you get the idea? opinion, a eulogy isn’t that far off from that revenue to work for your Have a Plan B: If you assume you Any idea how your speeches a stand-up set. We’re glad he killed. company. Collections services can borrow funds to cover a cash The co-founder of Laugh Staff, have gone over? like lockbox also can help post shortfall, be sure to have a loan Cameron Amigo, got the initial idea Have you ever faced any criti- We follow up with every client the payments to your accounts more or line of credit setup before the after he had to pinch-hit a best man cism for what you do? quickly. cash is actually needed. Waiting speech back in 2012. He called me Monday after the wedding to see how the next day, and I fell in love with their speech went and through the I think maybe a Facebook comment or Consider remote deposits: Some until the shortfall occurs leaves the idea. As with most startup ideas, 250-plus speeches we’ve written, I two when we first launched but I don’t banks offer customers the oppor- you in a ditch as most financial we asked ourselves if we could move would say less then a handful had a give it much thought. We are helping tunity to make remote check de- institutions will hesitate to lend people closer to pleasure or away negative experience. We know come- educated and proud people conquer a posits from their mobile device, money when your business is al- from pain. We thought the idea of dy is subjective so when one of our co- major fear: public speaking. A wedding sparing them trips to the branch. ready in financial straits. having stand-ups helping to write medians writes for a client we want it toast is the closest thing many people This allows companies to save It’s vital for business owners to wedding toasts was a great way to to sound natural. We encourage the will come to doing stand-up and we time and to keep their workforce take the time to understand their fi- move nervous best men and maid client to read over the speech, and if want to maximize their experience. focused on operations — a bene- nances and their entire cash man- of honors away from the pain percep- they want us to switch something out When a stand-up nails a punchline and fit of particular importance for agement process in order to make tion of delivering their speech. so it sounds more like them, we are the crowd roars in laughter, it’s a companies with only a few em- improvements that ultimately can happy to do so. In terms of something beautiful thing. Everyone deserves ployees. help their bottom line. that has perturbed a bride or groom, I that feeling, at least once.
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CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 17
Join the TAX TIPS: Peter A. DeMarco leadership Identity theft isn’t just a personal problem transforming Identity theft for individual tax- be apparent the information has healthcare. payers has received considerable at- been used for illicit purposes. tention in the past few years, but While in the past, business own- business owners face an extra layer ers might not have rushed to inves- of concern in protecting the identity tigate such indicators, the current of the business as well. environment makes it more critical The Internal Revenue Service for business owners to take action The challenges facing healthcare today can only be met by strong continues to regard taxpayer identi- when they receive such unexpected leadership, collaboration across disciplines and creative thinking. The ty theft as a serious problem heading or unexplained notices from the IRS. Cleveland Clinic-Weatherhead Executive MBA at Case Western Reserve into the 2016 filing season. If a tax- Business owners must take many payer’s information is used to file a of the same steps as individual tax- University combines Weatherhead’s breakthrough business concepts of fraudulent tax return, victims may payers when they notice something leadership in management with Cleveland Clinic’s innovative approach to face serious consequences. The dif- that suggests the business identity the business of healthcare to make this program the premier option for ficulty of unraveling identity theft has been stolen. They should file re- can include complications with em- ports with the police and the Feder- experienced healthcare professionals. ployers, bank loans, education, al Trade Commission. They should DeMarco is vice president and di- housing, transportation and even contact major credit bureaus and rector of tax services for Mead- Learn more and apply today other authorities beyond the IRS. close affected accounts. en & Moore in Cleveland. at: weatherhead.case.edu. The warning signs that an individ- Business owners need to monitor ual’s identity has been stolen are rel- credit reports for the business and known business associates or enti- atively easy to spot. The individual monitor online business registration ties employees might recognize. may have his or her own return re- information. They need to scrutinize Business owners also need to up- jected because someone else has al- all correspondence from the IRS and date their business filings with the ready filed a return using that name, other state agencies, even for busi- IRS and the secretary of state’s office or the individual might receive a no- nesses or units that are closed. when any contact information UNPARALLELED LUXURY HOME MARKETING tice from the IRS asking for more in- Whether a business has already changes. Where possible, business formation on a return when that in- been hacked by a cyber crook or not, owners should get their returns filed dividual has not yet filed a return. every business owner should review as early as possible, so their own re- ACTIVE For business owners, it can be and update his or her computer se- turn arrives at the IRS before any more difficult to spot the best indi- curity policies. Every office comput- fraudulent return, making it easier cators the business information has er should be protected with regular- for the IRS to flag it as suspicious. been used by a thief. Those indica- ly updated anti-virus software. The IRS also wants to see any Selling Your $500,000+ tors might include having an origi- Employees must be trained to rec- phishing emails disguised to look nal tax return for a particular year ognize and not fall prey to “phish- like correspondence from the IRS. NE OHIO Home? accepted by the IRS instead as an ing,” or attempts by fraudsters to get The IRS website provides instruc- /http://www.cbhunter.com/103874716 amended return, or getting a notice information electronically by posing tions for forwarding such emails. regarding fictitious employees. as a legitimate entity. Employees Just as individuals must be vigi- COLDWELL BANKER It might also include noticing ac- should never open attachments they lant in this era of cyber crime to pro- tivity related to a business that is in- do not recognize or were not expect- tect their personal identities, busi- WORLDWIDE LEADER in active. In the case of a small business, ing. Fraudsters have become in- ness owners need to take some LUXURY HOME MARKETING many of these events can occur as the creasingly sophisticated with phish- additional steps to assure the busi- result of clerical errors, so it may not ing ploys, sometimes even posing as ness identity is safe as well. Over 21,000 sales over $1 Million Dollars closed last year.
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PAGE 18 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS Business of Life
AROUND TOWN: Things to see and do Crain’s occasional look at events and happenings in the area. Submit suggestions to [email protected]
Story time for grownups
BY RACHEL ABBEY MCCAFFERTY REBECCA R. MARKOVITZ PHOTOS
Storytelling as an art is nothing new. Its founder, Dana Norris, started Story Club in Chicago about “Humans have been doing this for a long, long time,” said UPCOMING STORYTELLING EVENTS six-and-a-half years ago after failing to find a good venue to Dave Sabol, founder and producer of local storytelling event share the nonfiction stories she writes. STORY CLUB CLEVELAND: Told. As participants moved across the globe, they would start Jan. 12, at the BottleHouse Brewing Co. in Cleveland Heights But it’s a medium that has been gaining strength in the Story Clubs in other cities. Cleveland market. In addition to Told, which Sabol started in SORRY, PLEASE CONTINUE: Jan. 21, at Mahall’s in Lakewood So when Norris, who works for McMaster-Carr Supply Co., early 2014, there is Keep Talking: A Storytelling Show; Sorry, KEEP TALKING: Feb. 3, at Happy Dog in Cleveland moved to Cleveland about six months ago, she gave herself the Please Continue; and Story Club Cleveland. Keep Talking is en- same challenge. TOLD: Feb. 10, at Market Garden Brewery in Cleveland tering its third year in the storytelling business, while the lat- More than 50 people attended her first show in December, ter two are recent additions to the area that are based on es- which she said shows there’s a hunger for it. While there are tablished shows in other cities. people who may be nervous about sharing their story, because ways to keep tabs on the events outside of their regular venues There are a number of commonalities between the events the panelists can help out if they’re “flailing.” And it’s good for through show-based podcasts and a literary magazine from — the stories are true, the events are free or donation-based, the comedians, too, because people can get burnt out on the Story Club, the event founders tend to focus on the connec- and it’s easy to participate — but each has been carving out its sameness of standup, he said. tions the live events build. own niche. “It forces you to sort of write in the moment,” Wernowsky On Jan. 6, Keep Talking hosted its first event of the year to a “No two of these shows are exactly alike,” said Sabol, who is said. Wernowsky, the managing producer for crime at cleve- full room at the Happy Dog on Detroit Avenue. The stories all a math teacher at Saint Ignatius High School. land.com, began hosting shows locally about six months ago. related in some way to the theme of “Lessons Learned,” and Zachariah Durr, co-host of Keep Talking, helped start up the He said he was a bit hesitant to start the St. Louis-based those lessons elicited laughter, knowing nods and sponta- event a few years ago after realizing there were no such events show here because he didn’t want to step on toes, but he neous applause from the crowd. in the area. He and his co-host normally work in comedy, but breathed a sigh of relief when one of the hosts of another show Sabol contrasted storytelling with the experience of social he said that medium can be “limiting” if there’s a story he took part in his. Sabol said the local storytelling community is media, where you give and take little bits of information. In wants to tell that doesn’t spark laughter. a collaborative one. storytelling, the audience gives all of their time to someone Sorry, Please Continue, has its roots in comedy, as well. The The other Northeast Ohio newcomer, Story Club Cleveland, they don’t know — and they might learn something significant format invites potential storytellers to perform on that follows a more straightforward storytelling format, with open about them. Norris said that after a storytelling event, she of- month’s topic of choice, while a regular panel of comics inter- mic performers and featured performers, the latter of which ten sees strangers interacting and sharing their own stories. jects. Co-creator Kris Wernowsky said it’s a good approach for are paid with whatever donations the group collects that night. “It’s such an immediate experience,” Norris said.
We don’t just see people for who they are; we see 20160111-NEWS--19-NAT-CCI-CL_-- 1/8/2016 3:40 PM Page 1
CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 19
In the past nine months,
One of the longer-running storytelling shows in Cleveland is Keep Talking: A Storytelling Show. Its first event of 2016 98% at the Happy Dog on Detroit Avenue was full of guests who of kids participating in United listened to speakers share tales about lessons they had Way-funded literacy programs are learned, from the humorous to the serious. Above, Trish DiFranco discusses the “series now reading at grade level. of sterile waiting rooms” she experienced while trying to get a diagnosis for sudden, persistent dizziness. It turned out to be from texting.
them for who they can become. 20160111-NEWS--20-NAT-CCI-CL_-- 1/8/2016 2:23 PM Page 1
PAGE 20 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS BUSINESS OF LIFE Source Lunch He’s the regional president for BNY Melon Wealth Management in Ohio, but Ron Ambrogio is as native as they come in terms of his Northeast Ohio roots. Even if he works for a big New York-based bank, he still lives in the Highland Heights suburb where he grew up. He met his wife, Josie, at Mayfield High School and went on to graduate from John Carroll University, before earning an MBA from Baldwin Wallace. OK, he did go out of state to study securities at the Wharton Business School and to learn banking at the University of Vir- ginia, but he hurried back home to put his knowledge to work at some of the city’s most famous banks. Ronald S. Ambrogio He knows more than a fair bit about finance, the economy and, perhaps most importantly, how it all matters FINANCE to Northeast Ohioans. — Dan Shingler
So, you deal with people and Is the interest rate increase What’s your outlook for 2016, their asset management going to change people’s both for business generally FIVE THINGS: issues all the time. What’s the investment strategies? and your own business? mood out there among WHAT WAS YOUR It’s a small increase, so it won’t I think business is still going to investors? make one asset class more be strong this year, generally — FIRST JOB? What I’ve found is people are still attractive than another, but we’ll I’m very much an optimist in that My first job was very suspicious of the future. see what happens with further regard. … We’re expecting good at what you’d call a The increasing of the interest increases — it could eventually. growth. We’ve had 14% landscaping company, LUNCH SPOT rate has eliminated some of the (revenue) growth over the last when I was 14. Mitchell’s Fish Market uncertainty, and uncertainty is a Has BNY Melon changed its four years, compounded. 28601 Chagrin Blvd, very dirty word. investment outlook recently? Woodmere, OH 44122 Outside of work, what’s FAVORITE MOVIE? We haven’t changed (because of (216) 765-3474 We recently saw the first your favorite thing to do in I’m a big Monty Python the rate increase). We’re still interest rate hike by the Northeast Ohio during the fan; I’m just going to leave keeping our investments short — Federal Reserve since the winter? short would be defined as one to it at that. I like them all, Great Recession. Has that The meal three years. I’ll say sporting clays. Sporting from “Holy Grail” to “Life changed how people view the One had The Big Fish clays is my winter sport. of Brian.” My wife and I markets or the economy? Sandwich, with a cup of What has changed in terms went on our first date to clam chowder and an iced So now we’ve got our increase of investment strategies see “Life of Brian” and she tea, and the other had and we’ll see what happens. That recently? said, “You’re the only one Chilean sea bass prepared eliminated some of the There has been a 25 basis point Shanghai style, with broc- uncertainty, but people are still laughing, stop it!” jump, and our philosophy is still coli and a cup of gumbo, suspicious about the long term. the same. Nothing has changed. iced tea and coffee. Even though we’ve had some FAVORITE MUSIC? We stick with people’s goals and tremendous growth, they’re still objectives. ...Time horizons and Classic rock. Aerosmith waiting for the proverbial crash. risk talents are still the drivers in tends to be my go-to The vibe terms of how we invest your band. Though a chain, the feel portfolio. I like to ask people: is upscale, and it fits right “If the market was up, how much BEST CONCERT ? in at the Eton Chagrin would you expect to be up?” and That would have to be Boulevard lifestyle center. they say, “Maybe 22%?” Then I The place was busy over ask, “If the market is down 20%, Billy Joel and Elton John. the holiday season and how much do you expect to be (2009, Quicken Loans filled with a mix of down?” and they say “none” or Arena) professionals and shop- the really brave might say “10%.” pers. The staff is top- FAVORITE AREA notch and up to speed on RESTAURANTS? the current specials and I like Moxie, and also Del- catches of the day. monico’s. It’s a great place to meet people, and they The bill have parking. Also, Paladar. $73.08, plus tip 20160111-NEWS--21-NAT-CCI-CL_-- 1/8/2016 9:02 AM Page 1
CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 21
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PAGE 22 z JANUARY 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS BROWNS PORT CONTINUED FROM PAGE 1 business-like. I really never heard with the idea that analytics would CONTINUED FROM PAGE 1 “I’m very optimistic about the po- reconfigure baseball front offices anyone say a bad thing about Sashi.” help the football side make more in- St. Lawrence Seaway and markets tential,” said Bart Peters, the director and scouting departments. Squire Patton Boggs regional formed decisions. shipping on the Great Lakes. Sutton of the shipping firm’s Atlantic de- Brown will have control of the 53- managing partner Frederick R. “My impression was it wasn’t is a Barberton native and former partment. He told Crain’s that the man roster, and the top talent eval- Nance, whom Brown succeeded as used heavily, and the other impres- member of Congress representing company is building a broader ser- uator will report to him. The latter the Browns’ general counsel, said sion I had was there was a resistance parts of Akron and Youngstown. vice. The company’s ships now call hire, which likely won’t come with a Brown is one of the most “capable to it from the football people,” After taking over as president of on ports in Hamilton, Ont., Milwau- “general manager” designation, will leaders at this stage of his career” Carucci said. the Port Authority in 2010, Friedman kee and Duluth, Minn., and will add come after the head coach — anoth- that he’s ever encountered. Pettine and Farmer had more of a began to investigate ways to rebuild more when the opportunity arises. er against-the-grain move. “It’s becoming clear these days “traditional approach” to football cargo service. It’s also looking to add European In announcing the promotion of that raw analytical ability, while a evaluation, he added. Three years ago, Friedman negoti- stops in Germany and the United Brown following the team’s season critical asset, is not enough for lead- Carucci agrees that the next coach ated a deal to subsidize regular, Kingdom. finale Jan. 3, Haslam said the organi- ership,” Nance said. “You have to be must embrace the organization’s monthly cargo service between “We are building more than only zation was “marrying” the strategic, able to manage people. Sashi’s abil- forward-thinking, data-based mod- Cleveland and Antwerp, Belgium, Cleveland,” he said. “We are building analytically inclined Brown “with a ity in that regard wildly exceeds his els. But, looking over the list of pos- during the nine-month Great Lakes trade into the whole area with Cleve- football person” (the top talent eval- professional age.” sibilities linked to the Browns’ open- shipping season. land as the hub.” uator). Two days later, DePodesta, Brown’s people and management ing, he’s not sure there’s a match. Essentially, the Port Authority is International freight service is at who was one of the driving forces in skills sound impressive. DePodesta’s “Of the names you hear of likely chartering the 450-long Fortuna- the mercy of the international econ- making an analytical approach the analytical capabilities are without candidates, I don’t know anyone fits gracht from the Spliethoff Group, omy and its politics. At the moment, norm in baseball, was added to a reproach. that description,” he said. “Howev- making up the difference between that means that, because of the front office that is very high on IQ But, the Browns’ detractors point er, it wouldn’t shock me that to get the cost of operation and the revenue strong U.S. dollar, American goods and light on Xs and Os. out, that approach won’t work with- the job, you say and agree to pretty generated by cargo. The Fortuna- sell at a premium in Europe. So it’s Kevin Jones, a former Browns staff out top-notch football decision- much anything, then sign the con- gracht is part of a fleet of smaller ships harder to export. writer who left the organization in makers, and its effectiveness could tract and do your own thing. They’re Spliethoff operates that can carry a But that didn’t stop Lubrizol Corp. October, believes Brown “emerged be limited if the head coach and his smart people. They’ll have to be mix of containers and general cargo. from a pilot program last summer out of the fray” between fired head assistants aren’t on board. aware of that (possibility).” that put containers of the Wickliffe coach Mike Pettine and deposed GM Jones, the former Browns staff Mark Shapiro, who in October company’s premium specialty writer, said one of the biggest Upgrades on the way Ray Farmer as the voice of reason. was lured by a lucrative offer to be chemicals on ships leaving from the “From what I gather, he was lessons he took from working for an the Toronto Blue Jays’ president and To make shipping through the Port of Cleveland. against a lot of the bad moves that NFL team is that “assistant coaches CEO, worked with DePodesta in the Cleveland docks more attractive, the “We’ve really been pleased with happened,” Jones said, while con- run that building.” The coaches pre- Indians’ front office until the latter Port Authority is spending $8 million it,” said Matthew Joyce, the compa- ceding that he couldn’t give specific fer to concentrate on football and left to join the Oakland Athletics in to upgrade the infrastructure on the ny’s director of the Americas supply transactions that Brown fought. “I are sometimes reluctant to take ad- 1999. Shapiro has no idea if being a lakefront docks. chain. think Jimmy started looking at him vice from the front office on such baseball numbers wiz will translate The money, from a combination “Right now, we believe we’ve and thought, ‘Wow, why would I go matters, he said. to football success, but he’s confi- of a federal grant and two forgivable found an alternative (to East Coast outside the building when I can hire “It seems like there could be trou- dent that Brown and DePodesta can loans from the state of Ohio, will buy port shipping) that’s providing bet- this guy who is capable?’ ” ble brewing before you get started find innovative ways to bring need- a new warehouse to better shield in- ter shipping times, safe and secure Giving Brown the keys to a flawed here,” Jones said. ed change to the Browns. ternational cargo from the elements reliable service at cost-equivalent roster is easy to criticize. But the That’s the thing about NFL orga- “My experience,” Shapiro said, and two mobile harbor cranes that rates into Northern Europe. team’s former general counsel, who nizations and data: Each one em- “has been that good processes trans- will speed up the loading and un- “We’re looking at how and if we got his start working with Baltimore ploys an analytics team. How the late regardless of business, let alone loading of ships. can expand (the Cleveland service).” Ravens president Dick Cass at findings are used, however, can vary regardless of sports.” Anything that reduces the amount Shipments of general cargo — im- Washington, D.C.-based law firm appreciably. Haslam is banking on that being of time cargo and ships aren’t mov- ported steel, machinery and natural WilmerHale, is described by seem- Carucci, a plugged-in NFL writer true. Many others are eagerly await- ing reduces costs and should make gas pipeline pipe — also were up at ingly everyone who knows him as a who left the Browns in September ing the results. the operation more attractive to the Port of Cleveland. Traffic, mea- smart, effective leader. 2014 to return to his native Buffalo, “I think it’s fascinating,” Carucci shippers. sured by weight, grew from 515,000 “Sashi, the way he carries himself, said the initial Haslam setup of Ban- said. “I think the entire NFL is ex- The service appears to be working tons in 2014 to 545,000 tons in 2015, he is a boss,” Jones said, “but a ner as the CEO and Scheiner as team tremely interested in how this works for Spliethoff as well. a 5.8% increase. friendly, approachable boss. 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CRAIN’S CLEVELAND BUSINESS z JANUARY 11 - 17, 2016 z PAGE 23 NORTHEAST OHIO'S TOP SBA LENDERS The List ÃÁ ÄÂÂ ÂÄÂÄÃÃÿÂ
THIS COMPANY NAME DOLLAR VALUE OF APPROVED DOLLAR VALUE OF APPROVED NUMBER OF LOANS NUMBER OF LOANS YEAR HEADQUARTERS LOANS FISCAL 2015 LOANS FISCAL 2014 % CHANGE FISCAL 2015 FISCAL 2014 % CHANGE
Huntington National Bank 136,272,400 141,264,400 -3.5% 1,201 1,275 -5.8% 1 Columbus
Fifth Third Bank 17,494,000 15,177,000 15.3% 27 19 42.1% 2 Cincinnati
U.S. Bank 12,763,100 21,180,200 -39.7% 71 84 -15.5% 3 Minneapolis, Minn.
Northwest Savings Bank 11,962,600 ———— ———— 26 ———— ———— 4 Warren, Pa.
RidgeStone Bank 11,796,000 1,002,200 1,077.0% 7 2 250.0% 5 Brookfield, Wis.
KeyBank NA 11,001,800 15,048,500 -26.9% 62 48 29.2% 6 Cleveland
FirstMerit Bank NA 8,181,900 3,341,800 144.8% 33 35 -5.7% 7 Akron
PNC Bank 6,931,200 7,934,700 -12.6% 35 25 40.0% 8 Pittsburgh
Live Oak Banking Co. 6,645,000 ———— ———— 11 ———— ———— 9 Wilmington, N.C.
Stearns Bank NA 6,150,500 4,700,000 30.9% 11 2 450.0% 10 St. Cloud, Minn.
First Federal Bank of the Midwest 5,801,500 1,530,000 279.2% 13 4 225.0% 11 Defiance
State Bank and Trust Co. 5,669,000 1,705,000 232.5% 13 7 85.7% 12 Defiance
JPMorgan Chase & Co. 5,600,000 18,088,600 -69.0% 36 57 -36.8% 13 New York
Northwest Federal Credit Union 5,545,000 ———— ———— 2 ———— ———— 14 Herndon, Va.
Consumers National Bank 5,228,700 2,137,000 144.7% 17 11 54.5% 15 Minerva
Metro City Bank 5,000,000 ———— ———— 1 ———— ———— 16 Doraville, Ga.
Growth Capital Corp. 4,882,200 2,372,700 105.8% 36 26 38.5% 17 Cleveland
Wells Fargo Bank NA 4,679,500 8,761,600 -46.6% 14 7 100.0% 18 Sioux Falls, S.D.
West Town Bank & Trust 4,405,000 ———— ———— 2 ———— ———— 19 North Riverside, Ill.
Peoples Bank NA 3,855,000 3,485,000 10.6% 6 4 50.0% 20 Marietta
Citizens Bank 3,814,300 2,594,500 47.0% 38 23 65.2% 21 Providence, R.I.
Pacific Premier Bank 3,802,000 1,192,000 219.0% 2 1 100.0% 22 Irvine, Calif.
Resolute Bank (1) 3,737,500 165,000 2,165.2% 7 1 600.0% 23 Maumee
CFBank 3,150,000 1,738,000 81.2% 1 9 -88.9% 24 Fairlawn
Independence Bank 2,925,000 ———— ———— 3 ———— ———— 25 East Greenwich, R.I.
Westfield Bank FSB 2,848,700 1,787,200 59.4% 9 9 0.0% 26 Westfield Center
Newtek Small Business Finance Inc. 2,778,300 5,644,700 -50.8% 6 7 -14.3% 27 New York
Celtic Bank Corp. 2,592,000 4,065,000 -36.2% 16 16 0.0% 28 Salt Lake City
Grow America Fund Inc. 2,533,000 225,000 1,025.8% 3 1 200.0% 29 New York
Proficio Bank 2,500,000 ———— ———— 1 ———— ———— 30 Corronwood Heights, Utah
First Western SBLC Inc. 2,176,000 4,092,000 -46.8% 2 2 0.0% 31 Dallas
Liberty Bank NA 2,105,000 5,170,000 -59.3% 5 5 0.0% 32 Beachwood
Home Savings & Loan Co. 2,007,000 10,810,000 -81.4% 2 7 -71.4% 33 Youngstown
NOA Bank 1,770,000 ———— ———— 1 ———— ———— 34 Duluth, Ga.
Lake National Bank 1,735,200 1,058,800 63.9% 6 3 100.0% 35 Mentor
Buckeye Community Bank 1,733,000 ———— ———— 5 ———— ———— 36 Lorain
RESEARCHED BY DEBORAH W. HILLYER
This list was compiled from information provided by the Cleveland District office of the SBA for fiscal years ended 9/30/2015 and 9/30/2014. The Cleveland District covers 28 northern Ohio counties. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. (1) Formerly The Bank of Maumee. 20160111-NEWS--24-NAT-CCI-CL_-- 1/8/2016 9:02 AM Page 1
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