20150504-NEWS--1-NAT-CCI-CL_-- 5/1/2015 4:08 PM Page 1
$2.00/MAY 4 - 10, 2015
Team NEO has poor showing in JobsOhio report, says it’s ‘looking for ways to get better’ — P. 4 A trio of residential developers envisions big things for former elementary school sites — P. 5
Nonprofits are making it work by collaborating Magnet and Wire-Net have different approaches, but similar goals for region
By DAN SHINGLER and RACHEL ABBEY McCAFFERTY [email protected]/[email protected]
In manufacturing, competition is often a good thing, but so is collaboration. It’s mostly the latter that’s been bolstering the fortunes of Cleveland’s two manufactur- ing-oriented non-profits, Magnet and Wire- Net. Today, as Magnet prepares for a change in leadership and Wire-Net works to bring on GETTY IMAGES (3). LAKE ERIE MONSTERS (1) LeBron James and the Cavaliers are the marquee attraction at Quicken Loans Arena, which also hosts such events as an Usher concert (top right), the new members, the two are cooperating more Gay Games opening ceremony (bottom left) and hockey games featuring the Lake Erie Monsters. than ever and their supporters say it’s benefit- ting them both. “Our region’s economy will be more com- petitive the more those two organizations and others can collaborate to create value for manufacturers,” said Chris Thompson, direc- tor of regional engagement at Cleveland’s Fund for Our Economic Future, which sup- Q GETS ‘A’ FOR EFFORT ports Magnet’s Prism program. Also known as the Partnership for Regional Innovation Services to Manufacturers, Prism 21-year-old arena has favorable place in world rankings and a stacked calendar works with local manufacturers as a consul- tant on issues from funding to product design By KEVIN KLEPS arena was being readied for a Cavs watch par- More than 60% of that total is from the and development. [email protected] ty that would include all of the typical game- three sports teams that call the arena home — day bells and whistles (minus basketball be- the Cavs, Monsters and Cleveland Gladiators Different approaches About six hours before the tipoff of Game 3 ing played on the court, since the game was in — but The Q’s calendar usually is more of a first-round playoff series between the Boston). packed than a professional sports club’s pri- Magnet pays its bills, in part, by selling its Cleveland Cavaliers and Boston Celtics on In other words, it was a typical day at The Q. vate jet. consulting services, while Wire-Net is mostly April 23, an enthusiastic group of youth hock- Playoff hoops is back at the 21-year-old are- According to numbers provided by the funded by member support. ey players from Northeast Ohio entered na after a four-season absence, but the rest of Cavs, The Q in 2014 hosted 16 concerts, 43 They both want to see manufacturing grow Quicken Loans Arena. the craziness — the concerts, family shows, family shows, 12 other sporting events (in- and thrive in the region, but one is selling a As the group was being led to the Cavs’ college basketball, banquets, meetings, and cluding the Mid-American Conference men’s menu of services and the other is a member- practice floor, where a partnership between even 600 men and women doing yoga on a and women’s basketball tournaments), three driven trade group. the Lake Erie Monsters and Columbus Blue late-November night — never left. conferences and events that weren’t open to That also might be why they work well to- Jackets was being celebrated in typical Cavs In a typical year, The Q hosts more than 200 the public and more than 1,300 banquets and gether. Wire-Net has begun to use its contacts style (with an introductory video, music, bal- ticketed events and has more than 2 million meetings. Once the home games of the Cavs, See NONPROFITS, page 12 loons and speakers holding water bottles), the people walk through its doors. See THE Q, page 6 18
7 ALSO INSIDE: HIGHER EDUCATION
NEWSPAPER University of Akron president and wife are major Entire contents © 2015
74470 83781 players in education, health care ■ Pages 15-22 by Crain Communications Inc. Vol. 36, No. 18
0 PLUS: SCIENCE OF BEER ■ CAMPUS CONSTRUCTION ■ & MORE 20150504-NEWS--2-NAT-CCI-CL_-- 5/1/2015 12:02 PM Page 1 Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters. PRESENTED BY All Hail Small Business National Small Business Week 2015 (YHU\\HDUVLQFHWKH86KDVGHVLJQDWHGDVSHFLðFZHHN Who Will Walk Away With $20,000? WRRτFLDOO\UHFRJQL]HWKHFULWLFDOFRQWULEXWLRQVRI$PHULFDâVHQWUH *6:,^PSSOVZ[[OLÄUHSYV\UKVMQ\KNPUNMVYP[Z)\ZPULZZ7P[JO SUHQHXUVDQGVPDOOEXVLQHVVRZQHUV$FFRUGLQJWRWKH866PDOO May 4 *VTWL[P[PVUVU-YPKH`4H` -P]LÄUHSPZ[Z^PSSWYLZLU[HTPU\[L %XVLQHVV$GPLQLVWUDWLRQPRUHWKDQKDOIRI$PHULFDQVHLWKHURZQ pitch to a live audience and a panel of judges in pursuit of the RU ZRUN IRU D VPDOO EXVLQHVV DQG WKH\ FUHDWH DERXW WZR RXW RI $20,000 top prize. The additional four winners will walk away with a HYHU\WKUHHQHZMREVLQWKH86HDFK\HDU,QKRQRURI6PDOO%XVL JVTIPULK PUJHZOWYPaLZ;OLÄUHSPZ[ZHYL! By The Numbers QHVV:HHN0D\&26(HQFRXUDJHV\RXWRWDNHWKHWLPH WRVXSSRUWWKHORFDOVPDOOEXVLQHVVFRPPXQLW\LQ1RUWKHDVW2KLR Douglas Katz, Fire Spice Company:7YVWYPL[HY`ZWPJLISLUKZ Small Business: premeasured and packaged together, to create ethnic-inspired Employing Ohioans dishes at home. Take COSE’s Small Business Week Five Point Challenge: Christopher Wentz, EveryKey: “Universal” bluetooth wristband and wallet insert allowing immediate password access to Dine at a locally owned and operated restaurant. smartphone, tablet, computer and other controlled-access 2.1 Make a purchase at a neighborhood retail devices such as car doors and home locks. establishment. Million + Tell a friend or family member about your favorite Jessica Davis, ReBuilder’s XChange: Consignment model Workers Employed by Small Businesses local business. connecting contractors with extra construction and demolition materials to a customer base looking for reclaimed items. in Ohio. Share your appreciation for a local business on social media. Mauri Artz and Cassidy Artz, The Public Tutoring Initiative: Hire a local service provider to complete an item Online tutoring program that makes ACT preparation more 100-499 on your to-do list. accessible to students and helps them to raise their scores. 20-99 Special thanks to our sponsors: Ethan Holmes, Holmes Mouthwatering Applesauce: All- natural, homemade applesauce from Ohio-grown apples. 1-19
Join us on May 8th for an inspiring evening in support of SOURCE: SBA OHIO SMALL BUSINESS PROFILE, entrepreneurship! Visit www.cose.org/pitch for details. PUBLISHED IN 2015 52 TIPS FOR YOUR BUSINESS Connection Calendar #18: What Goes Around Comes Around: Support Small Businesses ART 101 TOUR AND COCKTAIL RECEPTION AT THE BONFOEY The old saying “What goes around comes TOP FIVE REASONS TO SHOP LOCAL GALLERY around” can certainly apply to entrepreneurs. 1 Locally owned businesses are the Support small business and the local arts scene :THSS I\ZPULZZ V^ULYZ RUV^ ÄYZ[OHUK OV^ foundation of strong communities. at this one-of-a-kind Art Tour and Cocktail Reception exclusively for business owners. important it is for people to choose local, in- 2 Locally owned businesses create jobs We loved this dependently owned businesses like theirs, and opportunity. Facebook post TUESDAY, MAY 5 that’s why it’s important for those same own- by Jessilyn Local entrepreneurs are invested in the 5:30 – 8 PM ers to walk the walk when it comes to patron- 3 Park Art community. The Bonfoey Gallery, Cleveland izing other local businesses in the community. Studio’s photo Small Business Week is the perfect time for us 4 Shopping local keeps dollars in the in Orlando so Cost: $20 COSE Members, all to remember the impact of small business- community. much that we $25 Non-Members es on our economy and show our support not 5 Locally owned businesses generate a just had to Reserve your seat at www.cose.org/events. just this week, but throughout the year. huge economic impact and tax base. share! SMALL BUSINESS BOOTCAMP ASK THE EXPERT SERIES – MARKETING AND BRANDING Cheryl & Co. Founder Shares Her Entrepreneurial Story and Advice You’re not going to want to miss national marketing standout Sage Lewis of SageRock as he shares his online marketing passion Cheryl Krueger, cookie, gourmet dessert, ture of the business. Should it be and expertise. and gift basket retailer extraordinaire, will share retail only, corporate sales, whole- WEDNESDAY, MAY 6 her entrepreneurial insights as the featured sale, catalog sales, should I sell to speaker at COSE’s next think spot keynote QVC? Should we outsource, cen- 5:30 – 8 PM series. We recently had the opportunity to ask tralize production, etc.? It’s impor- Skylight Financial Group, Cleveland Krueger a few questions about how she got her tant to understand that opportunity Thursday, May 21, 2015 Cost: $25 COSE Members, start, her advice for entrepreneurs starting out often brings more challenges. You 5 - 8:30 pm $40 Non-Members think today and what to expect at her upcoming have to decide how many areas Windows on the River Reserve your seat at www.cose.org/events. spot appearance. you can be an expert at. I will also talk about vision. Register at Why should a small business owner attend 4`KLÄUP[PVUVM]PZPVUPZ[OLHIPS www.cose.org/thinkspot TECH GROWTH: LEVERAGING Cheryl Krueger your keynote presentation? ity to see the invisible and do the LINKEDIN: PROSPECTING, My talk will cover several topics and I have impossible. The invisible is the CONNECTIONS AND MORE some great stories to share with the COSE au- ability to see the potential of a product. Entre- tomer retention rate at Cheryl & Co. Because Get the inside scoop from Jamie Nikosey, dience. I’ll talk about the journey of Cheryl & preneurs get it – they see the world a little bit really there is no sense of taking all the time and relationship manager at LinkedIn Sales Solutions, Co., how I got started and the obstacles I over- KPɈLYLU[S` 6M[LU [PTLZ [OL JH[LNVY` HSYLHK` LULYN`[VÄUKHUL^J\Z[VTLYQ\Z[[VSL[[OLT on how tech companies are growing revenues came. In the beginning, I was undercapitalized L_PZ[ [OL` Q\Z[ ÄUK H ^H` [V KLSP]LY H WYVK slip out the back door. I always say if you don’t by unlocking the value of LinkedIn. like most entrepreneurs. I was also a single fe- \J[VYZLY]PJLP[PUHKPɈLYLU[^H`¶H^H`[OH[ take care of your customers someone else will. THURSDAY, MAY 7 male in the ‘80s looking for capital for a cookie saves the customer time, solves a problem, or i Read more of our interview with Cheryl as 7:30 – 10 AM I\ZPULZZ0[^HZOHYK[VNL[ÄUHUJPUN VɈLYZHJVU]LUPLUJL she discusses the best business advice Indiana Wesleyan University, Seven Hills I’ll talk about the structure of a business. Customer service is also one of my favorite ZOLL]LYYLJLP]LKHUKVќLYZOLYV^U Owners often just think about taking their prod- topics. I’m a great believer in customer service advice for entrepreneurs starting out at uct to market without thinking about the struc- and I was a fanatic about looking at our cus- www.cose.org/news. Check out www.cose.org/events CONTENT PROVIDED AND PAID FOR BY THE COUNCIL OF SMALLER ENTERPRISES for all the latest happenings. 20150504-NEWS--3-NAT-CCI-CL_-- 5/1/2015 2:19 PM Page 1
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4 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY 4 - 10, 2015
FOR SALE Team NEO’s job-creation 7950 BAVARIA ROAD, TWINSBURG efforts lag behind state Region gained 3,794 jobs in 2014 — a 21.3% decline from ’13
By JAY MILLER nizations rely on the JobsOhio and Team NEO network [email protected] for financial assistance. These observers uniformly say 6)LQGXVWULDOEXLOGLQJ the system in Northeast Ohio lacks cohesion and makes 6)RI¿FHODE Visit While Team NEO gets solid marks for marketing decisions about state financial incentives too slowly, not Northeast Ohio to the outside business world through fulfilling the goal that Gov. John Kasich set when he cre- GRFNVGULYHLQGRRU¶FOHDU TerryCoyne.com what’s called the Cleveland Plus campaign — its work ated JobsOhio of having the economic development ([SDQGHGLQ certainly helped build the favorable impression that system “move at the speed of business.” Or call Terry at won over the Republican National Committee — the re- Asked about how JobsOhio looks at the Team NEO re- DFUHV²EXLOGLQJLVH[SDQGDEOH 216.453.3001 gional business development effort it leads in Northeast sults, spokesman Matt Englehart said, “The numbers :HOOPDLQWDLQHGEXLOGLQJ Ohio is lagging the other regions of the state in creating are what they are, and yes, we want the numbers to be jobs. up. But to be fair to Team NEO, 2013 was an extraordi- JobsOhio, the nonprofit that sets the state’s econom- nary year.” 1350 Euclid Ave., Suite 300 Cleveland, Ohio 44115 ic development agenda, carves the state into six sections Northeast Ohio’s 4,820 jobs created in 2013 still and reported each region’s success at creating jobs in its ranked second to Central Ohio’s 5,055 in 2013. recently released annual report. And, according to Job- sOhio’s tally, no region struggled more to win jobs in 2014 than Northeast Ohio. Turf wars The region’s 3,794 new jobs created as a result of busi- Some observers say Kasich helped bog the system 50K SQ. FT. LED LIGHTING UPGRADE ness attraction and expansion efforts was 21.3% below down when he created JobsOhio to be the go-to state or- the 2013 tally of 4,820 jobs created. ganization for businesses looking to grow and then en- Given the size of the Northeast Ohio economy, that listed six existing regional economic development “We consider our experience outstanding number may be less impressive than it looks. The 18 groups, including Team NEO, to be the point of contact and we are delighted to recommend ROI counties of Northeast Ohio generally are considered to within their regions for companies seeking to expand. comprise at least one-third of the state’s economy, but Until that time, Team NEO worked only to woo busi- Energy to help you with your lighting.” the region’s business development efforts accounted for nesses with no existing operations in the region to add only 16.2% of the jobs the state’s economic develop- a Northeast Ohio operation — that was business devel- Charlene Usrey, ment system takes credit for helping create in 2014. The opment beyond the reach of a local mayor. Administrative Services Manager Columbus region recorded 6,508 new jobs in 2014, up That created tensions within the economic develop- 28.7% from 2013’s 5,055. ment ecosystem. Mayors and county commissioners Cleveland Custom Pallets & Crate, inc. and their economic development directors were accus- TEAM NEO IS FORECASTING A BRIGHT tomed to working more directly with the state on busi- ness expansions. When the former state department of FUTURE FOR MANUFACTURING — PAGE 7 development was directing state financial assistance CALL programs, it had a dozen regional economic develop- That poor showing by Northeast Ohio in part led to ment officers who were a phone call away from a may- Bob Taussig the announcement last November that Team NEO or or economic development director. Now, those pub- ROI Energy would merge with NorTech, a nonprofit created in 1999 lic officials chafe at having to deal with Team NEO and to accelerate the pace of innovation in Northeast Ohio chamber of commerce intermediaries. Today! in rapidly growing, high-tech industries. As one former public agency economic development Team NEO and organizations like Columbus 2020 official now working in the nonprofit sector put it: and the Regional Economic Development Initiative “From the very outset, the chambers of commerce said, 330-931-3905 Cincinnati are the nominal heads of efforts to promote ‘It’s our job to do retention and expansion. We should www.ROI-Energy.com their regions as good places to plunk down a new, job- be the lead on that because those businesses are our Serving NE Ohio creating factory, warehouse or office and to identify the members and we are supposed to deliver (public finan- publicly funded financial incentives available to sway cial incentives) to them.’” site selection decisions. And so a mayor may have to wait as a request for a The Team NEO-NorTech merger is part of a strategy workforce development grant or a tax credit moves up by the Regional Competitiveness Council, a 15-member the economic development supply chain to Team NEO committee created in 2013 by Northeast Ohio’s business and then on to JobsOhio, which has the biggest bag of and philanthropy leaders to strengthen the region’s incentives. 2015 economy. The RCC identified three areas of economic LEADERSHIP development that needed improvement: job creation, DEEP DIVE gross regional product and per capita income. Job cre- Work to be done ation, though, generally is considered the key metric. These economic development observers acknowl- As our company continues to edge, though, that Northeast Ohio is unique. expand, Leadership Deep Dive Except for the Appalachian Partnership for Econom- They are what they are ic Growth, which serves 28 counties in Southeast Ohio, has been a major instrument Grant Goodrich, the interim president and CEO of the other four regional development groups radiate in helping our executive team Team NEO, argued that some of the poor showing was from a single metropolitan area — Cincinnati, Colum- because other regions had big wins in 2014 — a single bus, Dayton and Toledo — forcing the regional JobsO- align around a core philosophy, company coming in and or expanding and adding sev- hio partner to pay close attention to the needs of the define the culture and engage eral hundred jobs — that Northeast Ohio didn’t have. mayors of those cities. The Team NEO region, though, But Goodrich, who took over leadership of Team NEO includes Cleveland, Akron, Youngstown-Warren and a our growing workforce. We will on an interim basis after long-time head Tom Walter- handful of other significant economic centers. mire retired at the end of 2014, conceded that changes As a result, more than in other regions, one observer continue to send our executives are needed. noted, “In Northeast Ohio, no one is in charge.” to this program. “We’re certainly looking at our performance last year Brad Whitehead, a member of the Regional Compet- and looking for ways to get better,” he said. itiveness Council, said the council is working to remedy BILL DOWNEY The Team NEO-NorTech merger alone, though, the situation. Whitehead also is president of the Fund won’t turn the region’s business development results for Our Economic Future, an organization that directs Executive Vice President, Corporate Affairs around. It’s expected that more reorganization of the re- the economic development grantmaking of about 50 The Kenan Advantage Group, Inc. gion’s nonprofit economic development programs is to foundations and philanthropies. come. “There is a lot of work to be done in the coming Visit weatherhead.case.edu/deepdive for more registration, pricing and The problems run deep, say a handful of economic months to move from the recognition of this reality to discount information. development leaders around the state, though none having an effective way of working together that really would speak critically on the record because their orga- leverages all of our regional strengths,” Whitehead said.
Volume 36, Number 18Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to CORRECTION Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824- 9373. REPRINT INFORMATION: 212-210-0750. 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. A Page 5 article in the April 27 issue of Crain’s contained incorrect information concerning the affiliation of hote- For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot lier Brenda Goodnight. Goodnight is the director of sales and marketing at the DoubleTree by Hilton/Cleveland East Avenue, Detroit, Michigan, 48207-9911, or email to [email protected], or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Beachwood Hotel. 20150504-NEWS--5-NAT-CCI-CL_-- 5/1/2015 3:07 PM Page 1
MAY 4 - 10, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5 AT HOME ON FORMER SCHOOL SITES Three regional developers see great potential in budding projects in Lakewood, Fairview Park and Seven Hills
By STAN BULLARD age children and the need to up- [email protected] date or replace older schools. They also benefit from well-established Real estate developer Tom Ku- housing markets, neighborhoods luris exudes excitement as he talks and nearby services — a big change about his latest project: 40 town- from far-flung farms that became houses on the site of the former home subdivisions in the last McKinley Elementary School, 1381 decade before the housing bust. W. Clifton Blvd. in Lakewood. It’s not just enthusiasm about the brick, stone and design of the Lots to think about townhouses, which Kuluris plans to Kuluris points to the Lakewood start constructing this summer. context for his project with a na- “I went to McKinley. I’ve spent a tive’s affection. big part of my life near this proper- “In this neighborhood you can ty,” said the president of Westlake- walk to Rocky River Reservation (of based Liberty Development Co. Cleveland Metroparks), to the lake “My parents and grandmother live or to Heinen’s and bars and restau- nearby, and I live in Lakewood, rants. It’s easy to get downtown or too.” anywhere from here,” Kuluris said. Liberty’s Lakewood residential “I didn’t create this. It’s all here. As project is one of three that different a developer, you sense what people real estate developers are planning want and provide it in a manner
to erect on former elementary RDL ARCHITECTS INC. that works for people. There is a school sites in Cleveland suburbs. The former McKinley Elementary School building in Lakewood is the future site of 40 townhouses. large population but few places to Garland New Homes of Westlake move to new housing.” is starting to seek city approvals to Technically, this is Landsong’s sec- Fairview Park city and schools residential development are being For Garland, going after the build 18 single-family homes in ond go at the site. Seven Hills vot- launched a decade ago to build a written on former elementary Fairview Park land was a straight- Fairview Park as it prepares to buy ers last November rejected its first recreation center and target various school sites with these plans for forward decision. With subdivi- the grounds once occupied by proposal to rezone the site to allow sites for reuse. The McKinley plan ranches, colonials and townhouses. sions in North Ridgeville, Olmsted Coffinberry Elementary School, a senior citizens housing develop- in Lakewood resulted from a pact The sites are in land-constrained, Falls and Westlake, he counts him- 19020 Coffinberry Blvd., which was ment instead of the single-family between the city and schools to re- heavily developed suburbs. They’re self lucky to have multiple lots in demolished in 2008. zoning it currently has. develop the site which was pro- small, ranging from three acres in inventory but constantly seeks In Seven Hills, Hinckley-based The proposed developments duced by the inner-ring district’s Lakewood to less than eight in Sev- more. As land development dried Landsong Development Co. has stand to realize the benefits of long- massive plan to replace, rehabili- en Hills and Fairview Park. up during the downturn and is re- filed an application to seek city ap- term planning by municipalities tate or raze aging schools. And in All three use the same land turning slowly, builders are using provals to construct 22 houses on that may have little available land Seven Hills, the city’s current zon- source: sites of primary schools up lots left fallow in the housing land occupied by John Glenn Ele- but want something desirable done ing and master plan call for single- shed in consolidation plans by bust. mentary School, 1300 E. Dartmoor with it. family homes on the John Glenn public school districts because of “There are few lots going in,” Ave., which it bought last June from The Coffinberry deal was engi- site. shifting demographic patterns with Garland said. National builders the Parma City School District. neered by the Gemini Project that Taken together, the new ABCs of aging populations, fewer school- See SITES, page 26 Acquisitions aren’t always a hit for local companies
By CHUCK SODER local job creation — especially If the buyer is trying to break into for the company. After the deal But the region might have trou- [email protected] when the buyer is a corporation as a totally new market where it has closed in June 1998, DePuy told ble building another large medical opposed to a private equity firm. relatively little expertise, they may Crain’s it would expand AcroMed’s technology company like Steris, a Explorys says it will remain in Of course, the company doing keep investing in the acquired Cleveland headquarters. A month publicly traded medical equipment Cleveland — and keep growing in the buying usually won’t come company’s headquarters, several later, Johnson & Johnson struck a company in Mentor. Cleveland — now that the fast- right out and say “by the way, we’re people said. deal to buy DePuy. The local office “Had they been swallowed up by growing health data analytics soft- moving in six months,” Theken That actually was Integra’s plan closed the following year. J&J, they’d have a much smaller ware company is owned by IBM. said. Even if it’s already in their when it bought the Theken family Pharmaceutical companies often presence here,” Ellis said. Will that happen? Maybe. plans. of companies in 2008. At the time, will buy startups, take the drugs But it doesn’t always play out Several people who pay attention Integra had no expertise related to they’ve developed and close their that way. to mergers and acquisitions echoed spinal implants and fully intended offices, according to attorney Relationship advice In Northeast Ohio, it’s not hard Theken’s comments. to expand in Northeast Ohio, Stephen Ellis, a partner at Tucker Nineteen local health care com- to find examples of fast-growing Theken said. However, three years Ellis LLP who has spent 35 years panies have been bought by larger tech companies that stopped hir- later, it bought another spine tech- working on mergers and acquisi- corporations since BioEnterprise ing, shrunk or closed their local of- Teams work nology company called SeaSpine. tions. Getting a new drug through started keeping track in 2010. “The fice after getting acquired by a larg- When a private equity firm buys Now it had spine expertise in two the development and testing phase vast majority … are still here,” said er corporation. a young, fast-growing tech compa- places. Plus, that company’s south- is “such a grind” that startups often Aram Nerpouni, CEO of the non- Randy Theken has watched it ny, its main goal is to help that ern California headquarters was need to find a buyer before a drug profit, which works with local happen to three different spine company grow — and that rarely close to another office owned by reaches the market, Ellis said. health care companies. technology companies: AcroMed involves moving it. Hyland Soft- Integra. And in general, companies that A few factors should help the re- left town. So did Integra Spine. And ware is a good example. Hyland has Thus, it only made sense for In- don’t have much in the way of sales gion hold onto those companies: OrthoHelix’s local hiring spree lost hired hundreds of people at its tegra to move the Medina opera- are hard to hold on to: They tend to For one, many of them have rela- its momentum. Westlake headquarters since 2007. tion, which at one point employed employ fewer people, and they tionships with local research insti- But don’t get him wrong: Theken That year, a private equity firm roughly 120 people, Theken said. don’t already have customer rela- tutions, Nerpouni said. And some — who founded three spine tech- called Thoma Bravo bought a ma- “The cohesiveness of a team tionships, which are hard to repli- of them are capable of generating nology companies that were ac- jority stake in the company, which comes from bouncing ideas off of cate, Ellis said. revenue quickly. quired by Integra for $200 million makes an enterprise content man- an entire team,” he said. Medical device companies easily Explorys meets both criteria: The in 2008 — is glad that major corpo- agement software product called can end up in a similar position, es- 6-year-old company’s data analyt- rations have been paying hundreds OnBase. pecially if they face high regulatory ics platform was invented at the of millions of dollars to acquire lo- Corporate buyers want to grow, Another Steris? It’s not easy hurdles that make it hard for them Cleveland Clinic, which also is an cal tech companies, such as Explo- too. But will they keep hiring peo- The buyer might also close the to quickly generate revenue, he Explorys customer. rys, OverDrive and TOA Technolo- ple in the acquired company’s smaller company’s headquarters if said. And as an information technolo- gies. Investors and entrepreneurs hometown? Will they even pay it is just buying the firm for its Even so, Ellis is a big fan of re- gy company, Explorys doesn’t have make money on those deals. They much attention to the local office? products. gional efforts to convert research to worry about the heavy regula- often use it to fund new companies, Or will they go a step further and That was the case with AcroMed: being done at local hospitals and tions that prevent other medical according to Theken, who has move those jobs to another loca- DePuy bought the prominent universities into medical technolo- technology companies from quick- started three new companies since tion? spinal implant maker mainly for its gy companies. He said that “an aw- ly generating revenue. the Integra deal closed in 2008. If you want to answer those ques- products and its distribution net- ful lot of people can enjoy wonder- A few local software companies But he knows that there can be a tions, start by asking this question: work, according to Theken, who ful careers” creating and working have continued to add new downside. Acquisitions can disrupt Why did they buy the company? used to conduct mechanical testing for medical startups. See ACQUISITIONS, page 26 20150504-NEWS--6-NAT-CCI-CL_-- 5/1/2015 4:09 PM Page 1
6 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY 4 - 10, 2015
SOLD - Retail Building THE Q 19950 Rockside Rd., Bedford, OH 44146 continued from page 1 Monsters and Gladiators are factored in, The Q’s 12- month attendance is slight- ly above 2.1 million — and that doesn’t include any postseason contests. “It’s crazy, but this is what you live for in this business,” said Len Komoroski, CEO of the Cavs and The Q. “We’re at a point where you have to have a passion for whatever you’re do- ing in whatever walk of life. And fortunate- ly, a lot of people have a passion for what we do here.” For all your commerical real estate needs, please contact: Powerful platform Andy Chess Gregory B. West 216.861.5061 216.861.5379 HannaCRE.com The Q’s marquee attrac- tion, the Cavs, were pretty well- supported even during LeBron James’ four-year tenure with the Miami Heat. Once James announced his homecoming in July, the Cavs’ business, predictably, flourished. From July 2014 through March, the Cavs’ website had almost 50 mil- Does your asphalt surface lion page views — a 167% year-over- look like this? year increase and a per-day norm of more than 182,000. The site’s unique Then it’s time to make a call to: visitors jumped 306%, to 10 million, in the nine-month span, and video views were up 500% to 8 million. Since the end of the 2013-14 sea- 800.PAVE.NOW son, the Cavs’ followers on Twitter, Facebook and Instagram have near- ly tripled to a combined total of more than 5.1 million. And of the five main digital metrics that the NBA tracks, the Cavs lead the league in four categories — unique visitors, time spent on their site, video The facilities are ranked by the opened in 1994, and the group is streams and page views. number of tickets sold. “every bit as good, if not better” Quality and Excellence in Factor in the team’s spot in NBA In 2011, The Q was 31st in the than the other venues with which Asphalt Paving Since 1939 merchandise sales (second to the world and 12th in the U.S. with Live Nation does business. Chicago Bulls), James (first) and Kyrie 344,783 concert tickets sold, accord- “Aside from the fact that they • Asphalt Paving • Pavement Milling Irving (sixth) having two of the most ing to Pollstar. Last year, The Q was have a professional staff, they con- popular jerseys, and robust television • Pavement Marking • Hot Mix Production Facility No. 53 in the world and No. 24 in tinue to upgrade the building, the ratings on Fox Sports Ohio (No. 2 in the country with 302,764 tickets scoreboard, the amenities, the con- Concrete and Excavating Services • the league), and the off-court produc- sold, an improvement of 12 spots in cessions,” Belkin said. “They take tion has been every bit as good as the the world rankings and an increase nothing for granted. They’re always Cavs’ 38-9 record since Jan. 15. www.RonyakPaving.com of more than 61,000 tickets from striving to improve the customer After the April 23 news confer- 2013. experience.” ence/party for the Monsters and Cavs vice president of communi- Barry Gabel, a Live Nation senior Blue Jackets partnership, Kerry cations Tad Carper said early this vice president of marketing and Bubolz, the Cavs’ president of busi- summer the arena should hit the sponsorship sales, said The Q has a ness operations and the president of $100 million mark in admissions “tremendous reputation” with the organization’s three minor taxes paid to the city. Those num- artists and promoters. league teams (the Monsters, Gladia- bers are obviously bolstered by a But hosting concerts is just a tors and Canton Charge), said the Cavs playoff run that could result in small part of The Q’s heavy traffic Cavs’ platform “gives us the oppor- as many as 13 postseason games load. tunity to tell the story of our other being played at The Q in 2015. The 16 concerts at the arena in sports brands, which is an important (Crain’s asked the city to confirm 2014 brought in more than 208,000 part of why we’re even in the (minor the Cavs’ admissions tax numbers, fans, which accounts for about 10% league) business.” but spokesman Daniel Ball said of- of the facility’s annual visitors. The Having the Cavs’ well-regarded ficials “are unable to discuss confi- 43 family shows at The Q last year production and marketing teams be- dential tax information.”) generated about 215,000 in atten- hind those smaller brands has been a “The latter years are comprising dance, and the most up-to-date at- successful formula. The Monsters an even larger share of that,” Ko- tendance averages for the Cavs, have ranked third in the 30-team moroski said of the admissions tax Monsters and Gladiators would re- American Hockey League in atten- that is being paid to the city, “and sult in a 12-month total of more dance in each of the last two years, we’re only evolving in one direction. than 1.3 million visitors, not count- the Gladiators were third in the Arena We’re proud of that. ing the postseason. Football League with an average of “I think what that means is we’ve Should the Cavs overcome Kevin 10,610 at the gate in 2014, and the had an incredible run at The Q in Love’s injury and advance to the Charge, the Cavs’ NBA Development total.” NBA Finals, the 2015 postseason League affiliate, were in the top five in Michael Belkin, the president of could bring another 260,000-plus attendance in the 2014-15 campaign. the Cleveland branch of Live Nation through the turnstiles. That brings “We’re pretty fortunate,” Bubolz and son of Belkin Productions co- obvious benefits to downtown, and said. founder Mike Belkin, said the Poll- it’s why Komoroski calls The Q star arena rankings shouldn’t be “Cleveland’s living room.” viewed as “gospel” because not ‘Tremendous reputation’ “You can be in here one night and every artist submits his or her infor- there’s a Cavs event, and a few Pollstar, a trade publication that mation. hours later it’s being set up for covers the concert industry, publish- But the veteran music industry hockey or a concert or a truck pull,” es an annual list of the world’s top executive said he’s been working the arena’s CEO said. arenas. with the team at The Q since it Don’t forget yoga. 20150504-NEWS--7-NAT-CCI-CL_-- 5/1/2015 3:24 PM Page 1
MAY 4 - 10, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 7 Manufacturing’s importance is expected to amp up Team NEO forecast predicts that the industry’s share of the local economy will grow to 22% in the next decade
By JAY MILLER specialty inks and to make them so we’re seeing some rebuilding of While the number of jobs in the a job.” [email protected] magnetic or pressure sensitive. the base.” heavy industries won’t grow, the re- So the long-time economic de- “Manufacturing is really the core Regionally, the key subsectors of tirement of a large number of older velopment official said part of his It’s finally sunk in that manufac- of the economic base here. It’s been the manufacturing economy that workers in these fields will create job in the next few years will be turing won’t be dying in the United one-third of the economy for some will grow the most are transporta- 49,000 vacancies that will have to putting together a workforce al- States anytime soon. time,” said Don Iannone, executive tion equipment, principally the be filled to keep the businesses liance, including the Ashtabula Indeed, a regional economic de- director of the Growth Partnership auto industry; computer and elec- here. The trick to sustaining the Technical School, the Auburn Ca- velopment group is saying that, at for Ashtabula County. tronic products, which includes the growth will be training workers for reer Center in Painesville and Lake- least in Northeast Ohio, manufactur- Manufacturing employment in manufacture of magnetic and opti- the manufacturing jobs of the fu- land Community College in neigh- ing actually will grow over the next Ashtabula County dipped during cal media, such as software; and ture, both Duritsky and Iannone boring Lake County, to attract and decade, though automation and oth- the recession but has rebounded. nonmetallic mineral products such said. train workers of the future. er improvements in productivity will “We have just under 7,000 man- as sand, clay and refractory materi- Iannone said that while the offi- “We’re going to draw on every foil any significant growth in jobs. ufacturing jobs,” Iannone said. als that are turned into glass and cial unemployment numbers for possible workforce resource that However, a new forecast from Team “That’s up from 2009 (when manu- the materials that line blast and Ashtabula County are about 3,100, can help and bring it to the compa- Northeast Ohio predicts that the re- facturing employment was 6,100), glass furnaces. “Most people who want a job have nies,” Iannone said. gion will need to produce 49,000 qualified laborers, welders and the like to keep manufacturing produc- tion robust in Northeast Ohio. As part of its April 2015 review of economic indicators, Team NEO sees manufacturing becoming an even larger part of the regional econ- omy a decade from now than it is to- day. TOP FIVE SIGNS YOUR EMPLOYEES MIGHT HAVE INFERIOR DENTAL COVERAGE: In its latest quarterly economic review, Team NEO reports that while manufacturing businesses in 2015 make up 19.5% of the econo- my of the 18 counties of Northeast Ohio, its share of that economy, re- flected in the gross regional prod- THEY ONLY GET ONE CLEANING PER DECADE, PER HOUSEHOLD. uct, will grow to 22% over the next decade.
“The last time you saw manufacturing that vital in THE DENTAL PLAN’S CUSTOMER SERVICE IS A 900 NUMBER. Northeast Ohio was 30 years ago.” – Jacob Duritsky vice president for strategy and research, Team NEO THEIR DENTIST THINKS ROOT CANAL IS LOCATED IN VENICE.
“The last time you saw manufac- turing that vital in Northeast Ohio was 30 years ago,” said Jacob Durit- sky, Team NEO’s vice president for strategy and research. In Ashtabula County, for example, MOLARS ARE CLASSIFIED AS “OPTIONAL.” Mohawk Fine Papers Inc. of Cohoes, N.Y., last year extended its lease on its 1 million-square-foot center and warehouse in Saybrook Township and spent $2 million on new equip- ment, believing its business will grow significantly. The operation converts bulk pa- per in rolls to envelopes and printing papers. “Mohawk has an envelope divi- sion and we have greatly increased our offerings,” said Bob Scammell, senior vice president of strategy and business operations. “As a result of THEY DON’T HAVE DELTA DENTAL. expanding that offering, it required us to add a significant amount of manufacturing capacity and human resources.” The plant added 100 last year and expects to add another 10 or 20 this year. Give your employees access to two large networks of Scammell said Mohawk also moved what it calls its digital sub- contracted dentists and award-winning customer service. strate operation into the Saybrook plant. deltadentaloh.com/dentaldonebetter Digital substrates, a growing sec- Learn more at . tor of the paper business, are the coatings applied to paper to accept
ON THE WEB For more of Crain’s Cleveland’s manufacturing coverage, go to: crainscleveland.com/ topic/1003/manufacturing 20150504-NEWS--8-NAT-CCI-CL_-- 4/30/2015 3:37 PM Page 1
8 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY 4 - 10, 2015
Jerry Fiume, SIOR, CCIM Cummins cell 330 416 0501 tel 330 535 2661 Rebranding could help Cit i Commercial Real Estate Services, Worldwide. www.naicummins.com
For Sale - Self Storage Investment Property By JEREMY NOBILE [email protected]
In Cleveland, Charter One banks are out, and Citizens Banks are in. Providence, R.I.-based Citizens Financial Group Inc. last week fin- ished rebranding all 148 Charter One branches between Ohio and Michigan, finally unifying all its banks in its 11-state footprint under one name. Charter One was acquired by Cit- izens in 2004, so the change had 5010 Gateway Dr., Medina, OH 44256 been a long time coming. A sale of 94 Charter One branches in the Pristine Property - Very Well Maintained Chicago area to U.S. Bancorp last #HUDQRHÚDCØ(MBNLDØ2SQD@LR year helped push the timing of the recent transition that the company 10 Years of Continuous Income Growth announced last June. Located at Interstate 71 & Route 18 Interchange But behind the rebranding cam- paign driven by new signs, commer- cials and promotions in this region is a growth strategy underscored by a focus on consumer and commer- cial banking. Citizens wants to double the size of its mortgage bank, capture new business through more sophisticat- RECOVERY RESOURCES ed money management services and lend more within both small ANNUAL MEETING business and commercial lines, among various goals for the Ohio AWARDS AND RECOGNITION market. It’s hiring and reconfiguring LUNCHEON staff, offering new services to retail CELEBRATING customers and setting sights on JUNE 18, 2015 market share by other large banks here. “The timing is interesting be- YEARS Tickets cause it makes it sound like this is a www.recres.org/AnnualMeeting fresh start,” said Citizens chairman 216-431-4131, ext. 1106 and CEO Bruce Van Saun not long after unveiling new signage last week at a former Charter One
2015 branch in Lakewood. “We’re making the statement this is an integral region for us,” he said.
“We’re playing offense, and we CONTRIBUTED PHOTO think we’re on the right track.” Bruce Van Saun (green tie), chairman and CEO for Citizens Financial Group Inc., unveils a new Citizens sign at a former Charter One Bank branch Monday, April Historic IPO 27, in Lakewood. In the bigger picture, the name to break into the U.S. market. It’s ing the recession-era years resulting Keynote Speaker 2015 Helen K. Jones Exemplar Award change comes as Citizens, which now retreating from it. in struggles and scrutiny at RBS. Pamela Gill Woman of Strength Recipient has $136.5 billion in assets as of Citizens is positioning itself for “The impact on Citizens and its President and CEO, Award Recipient Steven M. Dettelbach March 31, prepares to separate from organic growth, said Charlie Crow- customers is that with the woes of ley, a Cleveland managing director RBS, for a number of years, the Recovery Resources Margaret G. Weitzel The Royal Bank of Scotland. RBS took over the bank in the late-1980s at Boenning & Scattergood, follow- company wasn’t necessarily looking 1955
McDonald Hopkins BUSINESS HOUR UNPARALLELED LUXURY HOME MARKETING OSHA leader vi s By DAN SHINGLER EEOC activism [email protected] Selling Your $500,000+ in 2015 The nation’s top workplace safety of- ficial was in town last week and said the NE OHIO Home? Insights for employer compliance U.S. Occupational Safety and Health Ad- ministration soon will make public re- Thursday, May 14, 2015 ports of workplace accidents — and al- ready this year has begun to implement COLDWELL BANKER Noon to 1:15 p.m. EDT This program has been approved new reporting requirements for serious WORLDWIDE LEADER in McDonald Hopkins for 1.25 recertification accidents. LUXURY HOME MARKETING 600 Superior Ave., Suite 2100 credit hours But he is far from satisfied that em- Downtown Cleveland through the ployers are alerting OSHA to all of the Over 21,000 sales over $1 Million HR Certification Register at mcdonaldhopkins.com Institute. accidents they are required to report un- Dollars closed last year. Average sales or call: 216.348.5400. der new federal regulations that went price $1.93 Million Dollars. into effect Jan. 1. “We think we’re only getting a very small portion of the accidents that Call 800-777-0793 for a FREE MARKET should be reported,” said Dr. David EVALUATION Michaels, the U.S. Assistant Secretary of with No Obligation. McDonald Hopkins LLC Labor for Occupational Safety and Email: [email protected] 4VQFSJPS"WF &BTU 4VJUF $MFWFMBOE 0)t Health who is in charge of OSHA. Carl J. Grassi, Shawn M. Riley, President Cleveland Managing Member That’s despite the fact that, across the The New $IJDBHPt$MFWFMBOEt$PMVNCVTt%FUSPJUt.JBNJt8FTU1BMN#FBDI country, employers already reported HUNTERNTTERR REALTYREAAL mcdonaldhopkins.com more than 3,800 accidents, in which a worker was seriously injured, between 20150504-NEWS--9-NAT-CCI-CL_-- 4/30/2015 4:15 PM Page 1
MAY 4 - 10, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 9 t izens Bank cash in locally Upcoming Editorial Feature twist, saw even more with $3.7 bil- Expenses are expected to remain Investing Guide WHAT’S IN A NAME? lion worth of shares sold at $23.75 a flat while revenues grow. The mon- Charter One had a long history in share. Van Saun said two quarters of ey for new employees is coming It’s time to cash in on a great advertising opportunity. Cleveland and the Midwest, and that solid business between the first and from the reduction of costs, like presence and familiarity is partly why second round likely drove up in- consolidating vendors, which the bank didn’t rush to change the vestor interest. achieved “some big savings,” Van name. On April 30, Citizens stock was Saun said, and even reconfiguring At least one bank in Northeast Ohio trading at $26.14, just shy of its 52- office space. In all operating loca- This annual section includes an analysis has distanced itself from the Citizens week high of $26.29. tions, vacancy rates have been of the past year’s top market performers. moniker because of brand confusion. RBS is required to divest all own- trimmed from 22% to 7%. The holding company of Sandusky’s ership by the end of 2016. It owns But there are no plans to reduce former The Citizens Banking Co. about 41% today. the footprint in the Midwest. Like- announced in January it was changing wise, while Citizens could be posi- to Civista Bank because the Citizens Shooting for market share tioning itself to possibly make ac- Issue Date: May 25 • Ad Close: May 14 name was too common, said quisitions down the line, Van Saun chairman and CEO James Miller. Charter One was predominantly a said there aren’t any deals in the The retail bank was rebranded consumer bank when acquired in pipeline. earlier this year, and the corporate 2004, adding $41.3 billion in assets May 18 List: Investment Advisers to Citizens. Today, there’s a focus to name was just recently changed from Ad Close: May 7 First Citizens Banc Corp to Civista grow the commercial end. End of the lines That’s a goal for Ohio market Bancshares. Customers will notice some president Joseph DiRocco, who took Miller said the former name created changes at branches, like more pri- the helm for this region just 18 rampant brand confusion, which was vate meeting spaces and new tech- months ago. The Detroit market also more of a hassle than anything as the nology. Van Saun notes about 80% received a new president, Richard bank received calls and mailings for of Citizens’ branches are leased over Hampson. other citizens-branded companies. 10 years, so those improvement will He said there are 16 bank brands The growth of companies here means more lending opportunities, be spread out over time. with citizens in the name across Ohio “You don’t need these big teller and 316 in the country. noted Van Saun, emphasizing this region is “very attractive to us” with lines anymore,” Van Saun said. “You “When our bank was formed in strides being made in both small can put smart machines out here 1884, people didn’t travel more than business and the greater manufac- that can do 90% of what a teller is 30 miles from home at the most (for turing and health care industries. able to do.” (He wouldn’t comment banking), so it really didn’t make a DiRocco has added nine business on how much will be spent on difference,” Miller said. “Now you have bankers since he came on board, branch redesigns.) banks reaching across areas, you and he’s planning at least one or two The greater goal is to steal market have the Internet … the identity in more this year. share from fellow large banks here, setting oneself apart is just more But with a loan to deposit ratio at like Wells Fargo, PNC Bank, Key- important.” 98%, the bank also is pushing for de- Bank and JPMorgan Chase Bank. “We think it’s a good move for us posits and looking for additional According to SEC filings, Citizens re- because it differentiates us from the business opportunities from current ported controlling 9.2% of the rest of the ‘citizens’ brands,” he retail customers. Some of that has Cleveland market as of December added. Book your ad today. materialized with campaigns like 2014. But for Citizens Financial Group, Citizens’ “Bank Better” initiative, “We built the team. We have the rebranding 148 branch names in Ohio Contact Nicole Mastrangelo at 216-771-5158 which, among other things, includes people. We have the capabilities,” and Michigan under Citizens is likely unlimited overdraft protection for DiRocco said. “Now it’s time for ex- easier than changing some 730 other or [email protected]. anything less than $5. ecution.” branches across the country to “But you can’t just rely on con- Charter One. — Jeremy Nobile sumers to fund commercial growth,” Van Saun said. “We’re telling bankers you have to go after to grow organically or through acquisi- their cash, too.” tion,” Crowley said. Companywide, Citizens has been “That may change for the new Citi- achieving growth between 7%-9% zens Financial Group.” and the same targets are reflected in Last September, Citizens became a this region. Citizens’ commercial publicly traded company in the largest business is growing at a clip of about traditional bank IPO in U.S. history, 8%-9% annually, and “we’re defi- selling $3.5 billion of stock at $21.50 a nitely doing better than that,” share. The second round, in a rare DiRocco asserts for his region. vi sits, stresses transparency Jan. 1 and about April 24, Michaels “We’re getting a small percentage, said. well less than half. … We know that He was in Cleveland last Tuesday, from numerous studies that have April 28, to speak to both a City Club been done,” Michaels said. audience and to members of work- For now, employers have a chance place safety training classes being held to play catch up and report accidents in Middleburg Heights at Safety Con- that fall under the new rules before trols Technology. That organization, OSHA finds out and comes to them, more commonly known as SCT, is one possibly with a fine. of only 25 across the nation approved “We will eventually issue fines to teach OSHA’s safety courses. against employers who have failed to The new rules require employers to report, but we’re not there yet,” report any injury that requires an em- Michaels said. ployee to be hospitalized (beyond a Later this year, OSHA also will do simple visit to the emergency room), something else new — making acci- or that results in the loss of a limb or dent reports public. Michaels said his eye. Michaels told workers that if they agency will begin making the reports knew their employer was not report- public, both as a way to nudge em- ing such accidents, they should not ployers with safety issues toward ad- hesitate to call OSHA themselves. dressing them and as a way to recog- While nearly 4,000 such accidents nize employers who take steps to in about four months sounds like a lot, provide a safe workplace. Michaels says that by looking at things OSHA is finalizing how it will format like past history, workers’ compensa- and release the information, but will tion claims and other data, OSHA begin the practice “soon” — sometime knows there are many more. later this year, Michaels said. 20150504-NEWS--10-NAT-CCI-CL_-- 4/30/2015 4:05 PM Page 1
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PUBLISHER: John Campanelli ([email protected]) EDITOR: Elizabeth McIntyre ([email protected]) MANAGING EDITOR: Scott Suttell ([email protected]) OPINION Fits the bill To be successful, you need to know when to take smart risks, weighing when to jump into the deep end, when to wade in more cautiously and when to walk away. The Cleveland-Cuyahoga County Port Authority is proving it knows how to do all three. As Crain’s Jay Miller reported last week, this year’s shipping season is off to a successful start, with nine vessels already having docked at the Port of Cleve- land in the first few weeks, which is a better start than we’ve seen in the past two years. “Business at the port is as strong as we have seen FROM THE PUBLISHER in many years, and we expect it to keep growing,” port authority president and CEO Will Friedman re- cently told the port board. Sometimes a walk can be work This is in stark contrast to when Friedman took the helm of the port authority in 2010. The joint city- Back in the early 1990s when I was a to not do his job. But I’m learning that’s not what the county agency was adrift after wasting several years struggling student cartoonist at Ohio At the time I thought Borgman was best leaders do. pursuing a flawed — and prohibitively expensive — State (struggling mostly because I could crazy, leaving work at the worst moment. The best ones find time to let the fires plan to build a multimillion-dollar megaport at East hardly draw), I got to sit in on a talk by But now I am starting to believe that he burn, the small ones, at least. 55th Street to relocate port operations and to attract Cincinnati Enquirer political cartoonist wasn’t crazy at all. Instead, they stand up, step away and international container ships. Jim Borgman. He was right. do something akin to Borgman’s walk. Ending that experiment was a good example of Borgman had just won a A few weeks back, local PR They find, stake out and carve away Pulitzer Prize and was at the firm Dix & Eaton released a time from their schedules to think cre- knowing when to walk away. height of his creative powers, survey of senior communica- atively, study their industry, get into the The recent shipping success is proof that Fried- churning out powerful and tions executives. Among the head of the competition, set broad goals, man’s vision to maximize the Port of Cleveland’s po- brilliant cartoons daily and, it major themes? They are strug- craft vision, plan, innovate and work on tential by bringing more tonnage over its existing seemed, effortlessly. gling to do more with less and ideas for the future. docks is paying off. It was 23 years ago, so most feeling overwhelmed and un- In Borgman’s case, it was a creative re- Take, for example, the port authority’s gamble on of the discussion has fallen be- derstaffed. (Sound familiar?) treat disguised as a walk. For business the Cleveland-Europe Express, a container service hind the file cabinet of my “Constant triage has be- leaders, it’s called strategic thinking. operated by the Spliethoff Group of Amsterdam. Last memory. come a way of life,” the report One CEO I know occasionally blocks a year, the port board agreed to fully subsidize — for But not everything. JOHN concluded. day off his calendar, holes up at a local $5 million — the one roundtrip a month the cargo Borgman discussed his cre- I believe it’s become a way coffee shop to plan and strategize with- ative process, how he appar- CAMPANELLI of life in virtually every sector out distraction. I’ve heard of executives service was making between Cleveland and Antwerp, ently plucked great cartoons and every office. forcing themselves to fill journals with Belgium. out of the ether. He told us that there The post-recession economy has left strategic writings. Some set up weekly This year, a second sailing has been added, with were times when he would be struggling us with lean workforces. To-do lists fat-chewing sessions. Others use yoga Spliethoff covering the additional costs and agreeing with an idea, pushing too hard, trying might as well be written on scrolls. There classes. to share some revenue with the port authority. too hard and getting stuck in the weeds. isn’t a business leader out there who The point is to figure out a way to get To handle the anticipated additional cargo, the With his deadline looming and the couldn’t spend 80 hours a week merely out of the weeds and into the sky. port board recently approved $7.9 million in funding pressure mounting, he said he had dis- attending meetings, returning calls and I’d love to hear how you do your to build a warehouse and buy new cranes. covered a last-result solution to free the plowing through email. strategic thinking, how you schedule and Success is not just displayed by what comes and gummed-up gears in his brain. There is always a crisis, an urgency, a structure it and your tricks to maximize He’d stand up, step away from his fire burning, and it is so tempting to put the results. Shoot me an email at jcam- goes by ship. It’s also shown by leadership. And the drawing table and go for a walk. on the helmet, grab a hose and fight fires [email protected]. I’ll share the best tips port, under Friedman, showed plenty of that by He realized that to do his job, he had … all day, every day. in an upcoming column. claiming stewardship of the Cuyahoga River to keep it clean and in good working order for commerce. That benefits ArcelorMittal and other employers that rely on ships to deliver their goods, and it benefits the whole region, which is beginning to fully realize LETTERS TO THE EDITOR the river’s potential as an industrial and recreational treasure. The port also continues, appropriately, to provide On the issue of earning people’s trust a critical role in securing development financing for The headline on Elizabeth McIntyre’s that serving the needs of others ultimate- The “Earning people’s trust is pretty major developments — close to $2 billion in private April 20 column “Earning people’s trust ly serves their needs (including financial simple” column hits the bull’s-eye investments for projects such as the Flats East Bank is pretty simple” is right on target. It isn’t needs) as well. when it states, “the best response any and the Rock Hall. complicated. Trust is built when leaders create a organization can have when mistakes Voters in 2012 said no to an ambitious tax increase As one who has decades of experience culture that stands for something. It re- happen is to own, correct and learn for the port to fund new projects, despite a strong as a public relations counselor, I can say ally is true that organizations that don’t from them.” case made for them by port leaders. The port then with confidence that trust is the ultimate stand for something will be seen as This sensible message is lost on our tiebreaker when business decisions are standing for nothing. political leaders and specifically on the asked for a renewal of its modest tax in 2013, which made. Trust is built when trust building is Obama administration. voters approved. It costs homeowners $3.50 per year Trust begins when actions are con- central to an organization’s priorities. Cowardice and corruption is thriving for every $100,000 of appraised property value. sistent with words. Trust is a competitive advantage to in the political morgue known as Wash- With success like this, the port continues to make Trust is built when there is a higher pursue. ington, D.C. it a rare taxpayer bargain. motive than simply making money — — Davis Young — Jeff Longo when organizations embrace the idea Solon North Royalton 20150504-NEWS--11-NAT-CCI-CL_-- 4/30/2015 1:31 PM Page 1
MAY 4 - 10, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11 PERSONAL VIEW Summer jobs can be critical
By BETH ROSENBERG How successful are the youth we Rosenberg is chair of the board place? In 2014, 94% of Y.O.U.’s of trustees of Youth A summer job is a rite of passage summer jobs participants success- Opportunities Unlimited. For for a teen lucky enough to find one. fully completed their job assign- more information about Y.O.U. For youth living in poverty, sum- ment, 85% made a savings goal and or to provide summer job mer jobs are so much more. were able to save money they opportunities from your They can mean the difference be- earned, 88% of employers said the organization, visit tween a life of crime and a life of youth had the skills they expected www.youthopportunities.org. productivity. of an entry-level employee, and A recent summer jobs program 87% would recommend program for 1,600 Chicago teens from low- ties Unlimited comes in. Y.O.U. participants to other employers. income families showed a 43% re- provides the training teens need to Of course, behind every statistic duction in violent crime (3.95 fewer qualify for these critical jobs: un- is a young person with his or her violent crime arrests per 100 youth) derstanding and meeting work- own story to tell. PROUD SPONSOR OF RACE FOR THE PLACE over 16 months. place expectations, preparing for Delores A. Stephens, 17, worked Northeastern University’s Center job interviews, and even social and for the city of Bedford Heights last for Labor Market Studies has also emotional learning to help teens summer. Her responsibilities in- shown that summer jobs can be the develop resiliency and persever- creased when a city employee un- Sunday, June 7 vehicle to put youth on a path to- ance. Then Y.O.U. finds and places expectedly took extended sick BEACHWOOD PLACE ward economic self-sufficiency. teens in jobs. leave. Her supervisors were im- REGISTRATION AT 7:30AM Their findings show that teens There is nothing like the real pressed by her initiative and her who work during their high school world to put training to the test. ability to learn new tasks. Bedford years are far less likely to drop out Y.O.U. wants to create as many Heights offered Delores full-time elkandelk.com/racefortheplace before graduation and have a employment opportunities as pos- work through the winter. greater lifelong earning potential sible for Cuyahoga County’s youth. Employability skills and employ- than those who don’t. That’s why we’re asking the private ment opportunities are two ingre- But finding summer employ- sector to get involved. dients at-risk teens need to find ment today is not so easy for young Area teens hold the future of our success. people. community in their hands, and em- There is a third ingredient that is It’s even harder for minorities. A ployers can play a crucial role in just as important: a belief in them- 2015 JPMorgan Chase study found providing them a pathway into a selves. Having the confidence to get that summer youth employment career and self-sufficiency. ahead in the world. has declined by 40% over the past How do we know the area’s teens The staff at Y.O.U. and the busi- 12 years. are searching for jobs? As of this ness volunteers who help coach the The report further found that writing, more than 10,000 already kids believe in these youth. They youth from low-income families have registered online for Y.O.U.’s tell them, “You can do this.” And and African-Americans are dispro- 2015 summer jobs program. then the day comes when they portionally impacted. In the sum- Last year, we found private and know they have what it takes to get mer of 2013 for instance, 39% of public sector jobs for 3,189 young a job. To succeed. To say, “I can do white teens were employed, com- people. Each year, we have funding this.” pared to only 19% of African-Amer- for only a fraction of the youth who Let’s make this a reality for more ican teens. register. You can help us do more Cuyahoga County youth in 2015. That’s where Youth Opportuni- this year. Together, we can do this.
TALK ON THE WEB Re: Opening up mistaken a tone, misinterpret Barons nameplate. — aamern79 words or only hear what they want about OpenTable to hear. Well, like they had said, “It is I am a heavy local and national I’m in no way suggesting this was about time.” OpenTable user as well as a fairly your scenario, either, and I will This makes good sense, as a frequent Momocho customer. bring this up with the staff. hockey fan, I am just glad that the Momocho chef/owner Eric My point is, all of us rely too Monsters and the Blue Jackets are Williams’ statement in Crain’s, “We heavily on technology. Why is it so partnering together. love to talk to our customers,” does- hard to pick up a phone, ask a ques- It will be a good reason to really n’t match reality. tion, listen to the response and then look forward to the next upcoming On several occasions, the people make a decision? hockey season, when now I can answering the phone at Momocho That is my point to why Momo- cheer them both on and for the for same-day reservations have cho only takes calls from people. I same reason!! LAUGHED at our query about re- could go on about costs or the fact SMART!! Maybe a Calder Cup for maining reservations. How insult- that people just lie and say they Lake Erie and a Lord Stanley Cup ing! I have not been shy in relating made an online reservation. for Columbus!! — Kyotosun this arrogance to others. It’s very difficult, and sometimes Momocho can choose not to of- a no-win situation. Re: Athersys after a dis- fer online reservations. But it is Anyway, sorry again. I do appre- appointing clinical trial deeply underestimating the mar- ciate the honesty and open discus- It was very disturbing as a long- keting and hassle-free value of this sion. — Eric Williams term shareholder to see the massive service to consumers. Few mean- drop the stock took ahead of the ingful restaurants in most major Re: Rise of local data release. markets do without online reserva- I want to believe otherwise, but it tion services, no matter how busy craft brewers sure has the appearance of selective they are. One of the great things about the disclosure. Very hard to retain any My multiple weekly restaurant west side of the river is the cleaned- faith in the company or its manage- choices are made almost exclusive- up view of the Flats East Bank and ment at this juncture, sadly. ly via OpenTable, due to the ease of all the activity over there. — Peter Jensen seeing what’s available. No 1900s It adds to the big-city feel and phone technology needed. benefits the west side of the river. Investing in startup biotech com- — Eye Hrt Food They play off one another. — James Shellenburger bines the worst features of slow tor- ture and Russian roulette. (In response to Eye Hrt Food), — Robert Salmon my apologies if you or others have Re: Monsters team up had that experience. However, I find it hard to believe with Blue Jackets Re: Cabela’s anyone would “laugh” at you when This absolutely makes sense. coming to Avon inquiring about a reservation. I never got why this never hap- Awesome, more retail crap in This may also go to my point pened before. Since the OKC Avon! — soccer about the art of communicating Barons are now relocating to Bak- with people directly. One may per- ersfield as the Condors, the city of I’m excited for 225 jobs to be ceive what someone else is saying, Cleveland could easily retain the created for the area. — Rick Dawson 20150504-NEWS--12-NAT-CCI-CL_-- 4/30/2015 3:12 PM Page 1
12 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM MAY 4 - 10, 2015 NONPROFITS continued from page 1 similar non-profits have merged. to bring new clients to Magnet, Mag- The Fund for Our Economic Future’s net provides them with discounted Thompson sees each filling a neces- services, and both organizations sary role. grow and receive new revenues. “Based on our work across the re- “They’re able to get in the door a gion, there is a distinct role for man- lot more quickly when we do the in- ufacturing networks like Wire-Net troductions,” Colm said. and innovation service providers like “We’re working a lot more closely Magnet. Together they make our re- now, and we’re really leveraging gion more competitive,” Thompson Wire-Net’s long-term relationship said. with our members and introducing A merger of Wire-Net and Magnet them to new expertise at Magnet.” isn’t being discussed at this point, When president and CEO Dan Ethan said, but it’s “not out of the Berry joined Magnet about five years realm of possibility.” ago, one of his assignments was to The two groups share some con- build partnerships with groups like nections between the companies Wire-Net, NorTech, Team NEO and represented on their boards and, for JumpStart Inc. now, the two are getting as close as “This has been an evolving possible without combining, Karp process,” Berry said, noting that co- said. operative efforts have spiked in re- Colm said he thinks the two enti- cent months. ties can work better separately, as Magnet’s vice president of client they are now. Putting them together services and marketing, Ethan Karp, likely would weaken each one’s said that about 10 Wire-Net mem- strengths, including Wire-Net’s abil- bers have hired Magnet to help them ity to work as a member-driven ad- with new products, marketing initia- CONTRIBUTED PHOTO vocacy group, he said. tives and other challenges. Magnet senior growth and innovation adviser Mike O’Donnell (left) and Vitamix lean manager Eric DiMalanta review the “We certainly see value in what Another 10 to 15 are taking part company’s Strongsville plant as part of a lean implementation project. Vitamix is one of Magnet’s Prism companies. Magnet does and the resources they in a learners’ group with Magnet bring to the region, but we would and Wire-Net, where the members prefer to remain independent and gotten low-interest credit from a with supporters of both organiza- Satisfied supporters partner with them whenever we meet monthly and share best prac- consortium of the Cleveland Foun- tions. can,” Colm said. tices. As Magnet has moved from a dation, the George Gund Founda- “On the whole, I would say we Overall, about 25% of Magnet’s project-consulting model to the tion, the Fred A. Lennon Charitable are pretty happy with what we’re new company interactions in the last more long-term and holistic ap- Trust, the Community Foundation seeing in terms of performance Paying their way seven to nine months have come proach of Prism, there have been of Lorain County, the Burton D. from both organizations,” said from Wire-Net, Karp said. challenges. It has meant some peo- Morgan Foundation and the GAR Shilpa Kedar, program director for Of course, a major issue for orga- The synergy between the two ple have been let go from Magnet, Foundation. economic development at the nizations like Magnet and Wire-Net, groups is “huge,” Karp said, as Wire- while others were brought on. The Fund for Our Economic Fu- Cleveland Foundation. and their independence, is funding. Net offers connections to many busi- It also caused at least a short- ture has also assisted with grant “The organizations are very dif- On that front, both organizations ap- nesses that Magnet does not already term hit to profitability, Karp said, funding. ferent in many ways. They bring pear stable. Magnet is the larger en- touch, while Magnet brings techni- but the organization’s board is sup- Wire-Net receives funding from strengths to the table that are very tity, with revenues of more than $7 cal, financial and other business ex- portive and understands that, some of these same sources, in- complementary.” million, compared with Wire-Net’s pertise to companies that might not though necessary, “change hurts.” cluding the Cleveland Foundation, Such support could help the two revenue of about $2.5 million, otherwise be able to afford such To help it continue to transition and the increased collaboration be- organizations to survive indepen- according to their most recent tax help. to the Prism model, Magnet has tween it and Magnet has been a hit dently, even in an era where other filings.
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MAY 4 - 10, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 13
They’ve each had challenges but have also addressed them. Wire-Net lost about $200,000 a Magnifying the focus on Prism year in federal grant funding it had Magnet has been going through also with chambers, politicians and been receiving for work on renew- an internal and external evolution banks — basically, anyone with a able energy initiatives. But it has the past two years as the connection to manufacturers, Karp been able to both cut its expenses Cleveland-based manufacturing said. and bring in new members and rev- consultancy program put a Ultimately, there are six relevant enues to make up for the lost rev- stronger focus on building positions within Magnet playing enue, Colm said. long-term relationships. critical roles in this approach, in- “We added 95 members last year, In July 2013, Magnet’s board cluding its new vice president of and we’re planning to do the same made the decision to turn the external affairs, Matthew Fieldman. this year. And our retention is really organization’s focus to its Prism Fieldman will work to build rela- high — above 90%,” Colm said. His program and how it could use that tionships with legislators, the peo- group now has more than 360 mem- program to help companies “grow ple who fund Magnet, Karp said, in bers that employ more than 20,000 through innovation,” said president addition to handling marketing. The people in Northeast Ohio, including and CEO Dan Berry. five other employees in this area major companies such as Arcelor- While the program had been focus on making connections by, Mittal, Lincoln Electric and underway prior to that strategic for instance, talking to chambers Swagelok. shift, making it the organization’s and getting to know the manufac- As it has turned its full focus to main approach meant bringing in turing coalitions in the region. Prism, Magnet has seen at least a some employees whose skills were The board knew this strategic temporary negative impact on its more in line with that model, Berry change would be “painful,” bottom line. said. That included hiring Ethan especially in terms of staff That’s because its Prism work en- Karp, vice president of client turnover, said chairman Felix tails a long-term payoff, but it is re- services and marketing, to oversee Brueck, but that it’s what the group placing short-term work that was the Prism program. had to do in order to serve the providing more immediate rev- When Karp took on the Prism regional economy effectively. Mag- enues. initiative, the focus was on net now focuses on helping compa- Though it has not yet reported the “bringing everyone on board,” he nies grow and on workforce devel- figures on its tax returns, Karp said said. The Prism approach requires opment, and Brueck said he’s Magnet will report an operating loss more of a business development “extremely bullish” on both efforts. of about $150,000 for 2014. It focus than Magnet may have need- Berry, who has announced his brought in $7.75 million in revenue ed in the past, as Magnet represen- plans to retire once a successor is last year, but also had one-time costs tatives now are building relation- announced, said he feels confident due to restructuring that impacted ships with companies, instead of in Magnet’s place in Northeast its results, Karp said. selling a particular growth method. Ohio’s ecosystem. The group has However, it has decreased its an- There’s a big difference between re-established relationships with nual expenses by about $400,000 per knocking on someone’s door and major funders and built new MAKE YOUR GOLF OUTING year, beginning this year, and should asking if they need help implement- partnerships. Karp gave him credit break even in 2015, Karp added. ing lean practices versus asking for laying the path the organization them to share their long-term is currently on, calling him a ONE THEY REMEMBER dreams, Karp said. The success of “shepherd and builder.” Prism will rely not just on how well “And we’re on track to do even The road ahead Magnet can collaborate with more when my successor comes The two organizations appear to groups like Wire-Net that can offer on,” Berry said. • Event Center Seating Up to 150 have their marching orders for the introductions to companies, but — Rachel Abbey McCafferty foreseeable future. • 2 Flat Screen TV’s & Podium for Presentations Questions remain, not the least of which is who will replace Berry at • Breakfast, Lunch and Dinner Options Magnet. He has announced he will retire once a replacement is found • Custom Bar Packaging and the new leader for the organi- zation is expected to be named • Event Coordination and More! soon. Mention this ad and we will waive the 15% service fee. But there’s no sign that Magnet’s mission will change. It will remain focused on working with manufac- Meet GET MORE INFORMATION TODAY! turers on growth issues and trying to build more and longer-term rela- tionships with its clients. 330-626-2828 Similarly, Wire-Net plans to con- tinue to expand both its member Brett! services and its membership roll, Colm said. The Wizard of Magical Supporters like Kedar at the Cleve- land Foundation say they’re happy Custom Network Solutions Are you ready with what they’ve seen happen at & our President for April and between both organizations in recent years, and will continue to showers and support their collaboration. May flowers? “The funding we provided was for joint efforts,” Kedar said. Ethernet Internet Data Center Fiber Engineering & “We are funding a collaborative Consulting CALL TODAY FOR YOUR COMPLIMENTARY ANALYSIS! effort by the two organizations. 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