VOL. 38, NO. 2 JANUARY 9 - 15, 2017

Source Lunch Akron City hopes Trump keeps infrastructure campaign promises. Page 16

Nurete Brenner, director The List of business programs at CLEVELAND BUSINESS Northeast Ohio’s top Ursuline College Page 15 SBA lenders Page 19

REAL ESTATE Survey: Rent rates are on rise downtown

By STAN BULLARD [email protected] @CrainRltywriter

Slowly, almost imperceptibly, the downtown Cleveland oce market is undergoing one of its biggest chang- es in more than two decade: Rents are inching up. Taking a new spin on the tradition- al year-end oce market survey, An- OUTLOOK drew Batson, director of research in the Great Lakes Region of the JLL re- alty brokerage, reported average ask- Will Trump’s ing rents in the city center climbed 2.5% this past year and promise to keep climbing through 2020 if no policies help new oce buildings go up. Look for Class A asking rents downtown, which currently average manufacturing $24.69 per square foot, to rise $1 per square foot by 2020 if rents appreci- gears turn? ate as expected for the next few years. Crain’s photo illustration by David Kordalski, iStock Older, less well-located oce buildings downtown, known as Class B, could bene t from rents rising to By RACHEL ABBEY McCAFFERTY Manufacturers are waiting to see policy, he wants to reduce signi - Schulman Inc. in Fairlawn. ere’s op- $18.81 a square foot by 2020 from what impact President-elect Donald cantly the tax rate on businesses, tax timism surrounding the year, especial- $18.07 now. rmcca [email protected] Trump will have on their businesses. repatriation and eliminate “needless ly regarding the changes that could “Landlords are going to have some @ramcca erty Particular factors to watch include job-killing regulations.” come to the tax system for corpora- additional leverage going into this the implementation — or not — of But what companies are expecting tions and individuals, he said, but he year,” Batson said in an interview. One of the most signi cant players new tax policies and federal regula- and what’s actually occurring haven’t hasn’t seen it lead to a surge in orders. Scott Pick, JLL Cleveland manag- in manufacturing this year isn’t actu- tions. It’s tough to say just what matched up yet, said Joseph M. Gingo, “e optimism has not turned into ing director, said, “e fact we’re ally in the industry: He’ll be in the Trump will aim to enact, but accord- chairman, president and CEO of plas- results,” Gingo said. speaking about rents increasing White House. ing to a fact sheet on his economic tic compounds and resins supplier A. SEE OUTLOOK, PAGE 17 speaks to the overall tightening of the market. We’re already seeing oce tenants start looking earlier for new DEVELOPMENT oces than in the past.” A few years ago, oce tenants tended to look for oces a year in Campus District is getting at-home feel advance, but he estimates they now begin looking 18 to 24 months ahead By JAY MILLER It’s gotten to the point where com- ing to improve working conditions by of their lease expiration. at’s the munity development planners have demanding things such as a 50-hour result of little construction in the of- [email protected] set in motion a plan to create a busi- work week. ce market generally during and af- @millerjh ness improvement district to turn an Now, the demand for downtown ter the Great Recession, which area once home mostly to machine living is spurring the activity. Devel- means tenants did not have new It’s been a while coming for Karen shops, electrical supply rms and the opers see the Campus District as an places to consider like they did in the Perkowski, but it’s looking like big like into a real residential neighbor- opportunity to meet some of that de- 1980s and 1990s. A new group of things will be happening in the Cam- hood. mand at a lower rent level than downtown oce owners from pus District, the area east of down- “We’re very excited to see the downtown. At the same time, the SEE SURVEY, PAGE 18 town Cleveland. changes,” said Perkowski, who with successful conversion of older oce her husband Doug and their rm buildings downtown to apartments Entire contents © 2017 by Crain Communications Inc. Tower Press Development, devel- and condominiums has created a oped the Tower Press building at class of oce tenants expelled from 1900 Superior Ave. 15 years ago and those downtown buildings who want have added several additional build- aordable oce space. ings along Superior to their portfolio Campus District Inc., the nonprof- more recently. it community development corpora- e building, like others along Eu- tion, has tallied a list of in progress clid, was a part of a turn-of-the-20th- development that totals $249.8 mil- century garment district. In 1911, lion, with additional properties ei- more than 2,000 members of the In- Global X purchased the building at ther currently on the market or with ternational Ladies’ Garment Work- 2101 Superior from Da y Dan’s development potential. ers’ Union staged a strike here, seek- owner Daniel Gray. (David Kordalski) SEE DISTRICT, PAGE 9 PAGE 2 | JANUARY 9 - 15, 2017 | CRAIN’S CLEVELAND BUSINESS Fusion will put best foot forward in 2017 By KEVIN KLEPS e players’ fees take some of the burden o trips the Fusion take to [email protected] such cities as Boston, Columbus, @KevinKleps Pittsburgh and Detroit. e players also help with fundraising, partici- When T.J. Monachino, the new pating in such events as guest bar- owner of the Cleveland Fusion, want- tending and selling squares for big ed to get the “best times” he could for sporting events. Riley and her team- three recent tryouts the women’s mates also appear at schools and professional football team held, he boys and girls clubs to raise some wound up with a trio of 9 p.m. slots at much-needed awareness. MultiPlex, an indoor facility in War- e WFA plays an April-to-June rensville Heights. schedule, and the Fusion sells tickets Welcome to the not-so-glamorous that cost $5 for students and seniors, world of the Women’s Football Alli- and $15 for adults. ance, a 65-team, full-contact league “If we ll the stands (at Maple in which the players pay to partici- Heights High School, where the Fu- pate, their health care isn’t covered sion play), the upside is huge. Eight and games are usually hosted at local thousand at 15 bucks a ticket — you high schools. do the math,” Monachino said. “But Monachino, a 28-year-old who the chance of that happening imme- also owns the rapidly growing Speedy diately in three months is pretty low. O ce Supply in Warrensville In anything I do, making money isn’t Heights, hopes to change some of The Cleveland Fusion were 4-4 in the 2016 regular season and lost to Boston in the first round of the my highest reason for doing it.” that — though he admits his pro Women’s Football Alliance playos. (Contributed photo) But he guarantees he won’t lose sports experience is a bit lacking. money on the Fusion, whose players “I have zero background in any of son, you don’t have a product to sell,’ ” Ohio in 2014, estimates that almost He’s served as Speedy O ce Sup- have told him the 15-year-old fran- this and I’m younger than most of Riley said. half of the Fusion’s players have chil- ply’s president since February 2012, chise would draw 2,500 fans a game the players,” said Monachino, who e owner agreed to let the team dren, and some even have grandkids. and he’s said the company has grown during really productive seasons. purchased the Fusion in October. keep the name and logo, and the play- “It’s denitely a challenge,” she “like crazy” in the last two years. In a 2015 story by e Nation, the “e rst team meeting was de- ers formed a nonprot to run the fran- said of a weekly in-season schedule Speedy has made ve acquisitions in WFA estimated the annual per-player nitely an event. ey were probably chise during a season in which the Fu- in which players often have “some the last 18 months, and its owner said cost at $2,200 to $2,500, which ac- thinking, ‘Who is this kid standing in sion nished 4-4 before losing to sort of team commitment” on ve of the company’s revenue has increased counted for such expenses as eld front of us?’ ” Boston in the rst round of the playos. the seven days. by “hundreds of percent” in the last rentals, equipment, uniforms, mar- Valerie Riley, a tight end and four- “We were spread pretty thin,” Riley Riley insists, however, that the three years. keting and travel. Riley said the Fu- year Women’s Football Alliance vet- said. “To get the word out, get sales, players don’t expect to be compen- His simple formula for the Fusion: sion will have “a minimum” of 35 to eran, said she was just happy that the get it out to the media — we were all sated, but it would be nice if at some Invest in the sta and organization, 40 players, and the ideal range is 45 organization seems to have an owner kind of going at it for the rst time.” point the team generated enough and promote the team as much as to 60. who is able and willing to invest time A time crunch is something with money to at least waive or reduce the possible. e WFA veteran is also hoping to and resources into a team that she which the players are accustomed. $500 fee. Monachino will pay the Fusion’s get young girls more interested in a said drew about 100 to 200 fans per Each member of the Fusion pays Monachino has looked into cut- coaches in 2017 — an unusual prac- sport they might not think they have game in 2016. $500 to compete in the league — a ting that cost, which Riley says will tice for the WFA — and he’ll have two a chance of playing. And the more Riley said the Fusion’s former “necessary evil,” Riley calls it — and the help the team in its recruiting eorts. full-time employees (a general man- who are aware of the Fusion, the bet- owner, because of an illness in his players squeeze in practices, workouts ager and a director of marketing and ter the chance the team’s games are family, told the team prior to the start and games while juggling full-time Low costs, large upside community outreach), plus three more than friends-and-family gath- of the 2016 season that the Fusion jobs and family commitments. part-time volunteers. erings. were for sale and the club wouldn’t Riley, an assistant product manag- Monachino might not know how “e reason we think this will “Whatever we do this year, it will play that year unless he found a buy- er at Sherwin-Williams who played to run a football team, but he does make sense is because our costs are be tenfold next year because of the er. e players had a dierent idea. two seasons for the WFA’s Pittsburgh seem to be beyond his years when it so low,” he said. “We don’t have the energy and commitment we’re put- “We said, ‘If you don’t have a sea- Passion before moving to Northeast comes to growing a business. overhead.” ting into it,” Riley said.

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SPONSORED BY: VEGAS EXPERIENCE. OHIO ADDRESS. 10777 Northfield Road | Northfield, Ohio 44067 | hrrnp.com CRAIN’S CLEVELAND BUSINESS | JANUARY 9 - 15, 2017 | PAGE 3 Surgical startup poised to enter market By LYDIA COUTRE through e ciency, Goel said re- vide the physician with an improved Key components of the IOPS duced radiation is certainly import- image quality that they can manipu- [email protected] Centerline’s Intra-Operative Positioning System (IOPS) combines its device and ant. late during the procedure to see ex- @LydiaCoutre software analytics to allow surgeons to navigate a patient’s arteries. For Goel, the research has been actly what they’re treating, where personal. His mentor of more than 10 they are within that treatment eld Cleveland-based surgical naviga- 1 Consumable 2 Consumable years, Cleveland Clinic innovator and to replace devices ... more accu- tion startup Centerline Biomedical tracking pad is sensor-equipped and endovascular surgeon Roy rately, which will allow for better Inc. is gearing up to enter the market placed on patient guidewires and Greenberg, died in 2013 following a long-term outcomes,” said Eagleton, in 2017 with its GPS-like system that at beginning of catheters are battle with cancer. Goel said the eld who has also been involved in provides 3-D guidance during endo- procedure used to navigate is seeing many of its pioneers devel- pre-clinical studies. vascular surgery. during surgery. op cancer or health conditions likely Once able to demonstrate the Centerline closed a Series A fund- connected to their work. technology’s e ectiveness and po- ing round in December, a milestone “So I have a really strong personal tential, Goel said the team worked following several pre-clinical trials 1 motivation to try to develop our tech- with Cleveland Clinic Innovations to and building upon other nancing nology that protects people,” Goel nd a path forward. A spino compa- and outreach. said. ny became the best approach.  e company’s Intra-Operative His research with this technology When G2 group invested in Cen- Positioning System (IOPS) combines 5 began about 12 years ago out of his terline, it brought new leadership, at its device and software analytics to 3 4 graduate thesis work at the program which point the employment agree- allow surgeons in real time to navi- of computer graphics at Cornell Uni- ment for former CEO William Fuller gate a patient’s arteries. versity. was not renewed.  is prompted a Centerline is a joint venture of the Goel initially thought it would be civil suit in December 2015 from Cleveland Clinic, where the technol- used to have a computer design im- Fuller and a counter suit in April 2016 ogy was originally developed, and G2 3 Computerized 4 Electromagnetic fi eld 5 Interface unit plants. During the process of devel- from Centerline.  e dispute is ongo- Group Ventures, a private investment cart is placed next generator clips to attaches to rail on oping the idea, he realized that the ing, but Gupta said even if the court group in the Washington, D.C., area. to OR table underside of OR table side of OR table bigger problem was in navigating were to rule against Centerline, “the Since beginning operations in No- Source: Centerline Biomedical Inc. and implanting devices. liability to the company is immateri- vember 2014, the company has Dr. Matthew Eagleton, chair of al.” raised $6.7 million. About $200,000 grabbed his attention. what a surgeon is trying to do,” when Centerline’s scienti c advisory board Gupta said Centerline’s plan is to from state grants and $500,000 from Centerline’s software supports its navigating the complexity of arteries, and associate professor of surgery at le for FDA approval in early sum- the Clinic provided a foundation for physical device, which is transported said Vikash Goel, Centerline’s chief Cleveland Clinic, got involved with mer. fundraising once G2 got involved in on a cart with a computer screen. technology o cer and one of the in- the work shortly after Greenberg’s “At that time we basically think August 2015 and accelerated that IOPS has catheters and guide wires ventors of the IOPS technology. death. Eagleton performs much of that it will be ready for commercial- pace, said Jai Gupta, Centerline that operate just as those surgeons “But it also gives this hugely better the same procedures that Greenberg ization, selling our product to various chairman and CEO. In 2016 alone, already use, but Centerline’s are aug- visualization, which is actually had and was asked to get more in- hospitals and medical facilities,” he Centerline garnered $4.3 million in mented with tracking technology. where we think our customers will volved in the research. said. investor support, he said. IOPS brings better visualization see the bigger value rst, because IOPS has the potential to help treat  e fundraising goal for next year is Gupta, who came to the startup and limits radiation exposure for sur- immediately they’ll start doing these disease more precisely, replace de- between $5 million and $7 million, through G2, said he was looking to geons and patients. Currently, endo- procedures faster and saving mon- vices more accurately, and, though which Goel said will hopefully be all invest in innovative technologies that vascular surgery uses X-ray  uorosco- ey,” Goel said. it’s not the primary goal, do so with the funding Centerline needs to raise. improve lives. With a background in py, which delivers a 2-D image, which Although he expects the primary less radiation exposure, he said. After that, he expects the company to imaging processing, IOPS quickly is a “really limited way to visualize selling point to be the cost savings “I think the bigger part is to pro- be operating on its own revenue.

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1350 Euclid Ave., Suite 300 Cleveland, Ohio 44115 Real estate developer Je Jacobs’ Nautica Entertainment LLC has acquired the building at 2320 Center Street in Cleveland. (Stan Bullard) Nautica expansion picks up steam with building buy By STAN BULLARD In a Jan. 5 telephone interview, Ja- tiple multistory apartment buildings cobs said his company bought the to its holdings on the west bank of the [email protected] structure so it could, at an undeter- Cuyahoga River. @CrainRltywriter mined time, demolish the building Jacobs said he is reviewing con- to provide more surface parking to cepts for the rst additional structure FUND YOUR Continuing to demonstrate a re- accommodate visitors to summer in that master plan, a small hotel that newed appetite for expanding its concerts at the entertainment com- would border the FirstEnergy Power- Nautica Waterfront District in Cleve- plex. house, which contains the Greater land’s Flats, the Nautica Entertain- “With the kind of development Cleveland Aquarium. ment LLC of Je Jacobs has bought we’re planning, we’ll have to replace Jacobs said he is negotiating with NEXT BIG the four-story Downtown Self Stor- the parking they currently use,” Ja- ve brands of boutique hotel chains age building. cobs said. interested in the site. Nautica Entertainment on Dec. 19 e building covers about one- Downtown Self Storage had room REAL ESTATE INVESTMENT paid $1.15 million for the structure at third of an acre and is a block south to accommodate most of its custom- 2320 Center Street, according to of another, larger parcel Nautica ers at Cleveland Self Storage at anoth- Call Northeast Ohio’s #1 Credit Union Cuyahoga County land records. e owns. Jacobs was referring to a mas- er building he owns nearby, said John brick-and-timber building dates from ter plan Nautica shared publicly in Deluca, the owner of both operations, Commercial Lender. 1910, according to county tax records. May 2016 that envisions adding mul- in a voicemail last Friday Jan. 6.

Contact Jonathan A. Mokri Edwins buys former butcher shop

440.526.8700 • [email protected] • www.cbscuso.com By STAN BULLARD open the butcher shop and deli. Of- “Working in France, I learned fering 25 seats, carryout and delivery butchery is something you have to The Power of Collaboration SM [email protected] services, the deli at Edwins Butcher have in a restaurant. Life skills of @CrainRltywriter Shop will also sell barbecue, sand- (chefs) in our restaurant means they wiches and prepared foods, as well as also have the background,” Chro- To add more culinary training and healthy meats to the surrounding stowski said. “We can sharpen our a shop to its agenda, Edwins restau- community. knives and our skills — pun intended rant has acquired a former butcher About 40% of the meats processed — with this program.” shop building next to its Cleveland at the shop will be sold to the group’s By sourcing some such provisions HERE campus. restaurant at lower cost than its ven- itself, the restaurant can lower costs e nonprot that operates a dors can provide, Chrostowski said. to improve its margins to help oper- French restaurant at Shaker Square “To learn the ins and outs of butch- ate the program, which does not WE GO that helps formerly incarcerated peo- ering,” he said, “you have to have charge its participants. e partici- ple gain job skills and re-enter soci- product moving in and out so stu- pants gain skills to feed the labor ety, just shelled out $50,000 to ac- dents can practice on it. Margins on needs of the region’s growing food AGAIN. quire a one-time butcher shop butchering are so slim it would re- scene. building at 13024 Buckeye Road. quire too much volume to run a shop Edwins serves 48 men and women The health Empty since 2000, the shop ad- alone, so we have the deli to serve the at a time. joins its just-completed Edwins Sec- community.” “We have a list of 40 jobs that insurance ond Chance Life Skills Center, which Men and women going through (restaurants) are waiting to hire,” provides housing and added services the restaurant training program Chrostowski said. tides are for its students. will cycle through the shop so they So, what’s next? changing Brandon Chrostowski, founder of have a hyper focus on butchering. “I can look through a stack of in- the Edwins Leadership & Restaurant They will learn meat cutting from voices (at the restaurant) to see once more. Institute, said the nonprot plans to making chops to smoking meats what’s next,” Chrostowski said. “Fish, invest more than $800,000 improving and similar skills valuable to then breads and pastries. All the and outtting the property to this fall restaurants. things that make you a stronger chef.” PROTECTED? CALL US. 216 350 5052

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PAGE 6 | JANUARY 9 - 15, 2017 | CRAIN’S CLEVELAND BUSINESS High deductibles cause headaches for some By LYDIA COUTRÉ costs. e idea is to minimize over- hospitals have seen a slight hit to dent of business development. cost, he said, noting that the Clinic use of health care by driving con- their nances, but the impact hasn’t Medical Mutual’s membership en- works to set up ways it can get paid [email protected] sumers to make more informed, cost been quite as dramatic as what was rolled in qualied high-deductible and patients can manage that cost. @LydiaCoutre conscious decisions. But nding the expected. Cost-sharing subsidies, for health plans has been growing at an “As you can imagine, there’s a high sweet spot between encouraging be- example, helped blunt some of the annual rate of about 10% for the past number of our patients that don’t For the past several years, high-de- havior and remaining aordable is a impact, according to J.B. Silvers, a several years. Patients are strongly have $2,000 in discretionary cash in ductible health plans have forced in- balancing act the industry is still health care nance professor at Case encouraged to combine high-de- their bank account,” Glass said. sured patients to dig deeper into working to gure out. Western Reserve University. Also ductible plans with health savings Southwest General has seen a their pockets for health care expens- “You don’t want to have it tip to the helping those numbers, he said, is accounts, tax-advantaged funds that year-over-year increase in its bad es. other (side) where patients aren’t the fact that many formerly unin- can be used to pay medical expenses. debt expense of about 17%, said CFO e plans can be cheaper for em- coming in for the things that they sured patients now have coverage for Initially, high-deductible plans Mary Ann Freas. And as a percent of ployers — and initially, for patients should quickly see a health care pro- care that had been uncompensated. were most popular among those in its net revenue, bad debt grew from through lower premiums. But they vider for,” Cleveland Clinic CFO Steve Still, the increasing emphasis on higher tax brackets, who stood to 5% to 6%. carry high deductibles that force Glass said. having patients be more nancially save more by contributing to their While the number of uninsured consumers to pay thousands of dol- Because these high-deductible responsible for their care is a trend HSAs, Silvers said. But now that the has changed signicantly in recent lars out of pocket before insurance plans have left many patients with that is likely to continue regardless of majority of companies in the United years, UH is also seeing higher out- plans start picking up the remaining hefty medical bills, Cleveland-area the political headwinds in Washing- States oer a high-deductible plan, of-pocket balances due by patients, ton, D.C., and the likely repeal or the growth in recent years has been LeBrew said. About 40% of balances overhaul of the Aordable Care Act. with those in more moderate or low- due by patients were for more than 81,800 SF Corporate Headquarters “Regardless of what the govern- er income brackets, for whom the in- $5,000 in 2015. Another 40% of the ment does, the economic forces driv- centive of tax-free contributions is balances contributing to bad debt Property is Available for Sale or Lease ing the growth in high-deductible less of a subsidy. were between $1,000 and $5,000. e plans are still there,” Silvers said. “I It’s hard to argue with the logic that remainder fell below that. think what we’ve seen now is what making people pay will make them Hospital ocials say they have we’re going to get and probably more more conscious of costs, he said. programs to educate patients, help of it.” “I think we don’t know how low on them understand their nancial re- In 2010, about 25% of individuals the income scale that can go before it sponsibility ahead of time, nd pay- under the age of 65 with private gets to be damaging, and we don’t ment plans or nancial assistance health insurance were enrolled in a know how high deductibles can be and get insured if they’re not already. high-deductible health plan. Be- before they can’t be taken care of,” At the Clinic, Glass said they’ve tween January and June 2016, nearly Silvers said. seen enough growth in patient re- 39% were, according to the latest As growth in these plans has accel- sponsibility that they’ve had to dedi- available National Health Interview erated, the concern has been that cate more resources to existing nan- Survey from the Centers for Disease people don’t understand their bene- cial counseling programs, including Control and Prevention. ts, said Kathy (Euthemy) LeBrew, having more people able to interact Ohio is among the top ve states University Hospitals’ vice president of with patients on the front end. with the largest reported health sav- revenue cycle. en, by the time they e plan design of high deduct- 6680 Parkland Boulevard, Solon, OH ings account/high-deductible health need services during the year, they’ve ibles and HSAs is not the ultimate plan enrollment levels in January lost track of what they’re nancially way for anybody to look at controlling • 81,800 SF Total Area - Divisible • 6 Docks & 2 Drive-In Doors 2015, according to the most recent responsible for until they get a bill. costs, Steiner said. Simply passing • 8 Acres • 480V/1600AMP/3-Phase Power data available from a census from at can leave patients with crippling higher costs along through plan de- • 31,680 O ce Area • 100% Sprinkler (Wet) America’s Health Insurance Plans’ bills they can’t pay, and in turn, leave sign doesn’t address the problem. • 50,120 SF Warehouse Area • Located in an Upscale Industrial Center for Policy And Research. hospitals with growing bad debt. Carriers and providers need to work • Built 1988 / Renovated 2007 • Easy Access to Rt 422, I-271, Since the passage of the Aordable closely in disease management pro- • 22’ Clear Height & I-480 Care Act, high-deductible plans have The bottom line grams, population health manage- been growing on the individual mar- ment and prevention eorts, he said. David R. Stover, SIOR ketplace, following the already grow- ough hospitals have largely Cost-estimation tools, prescription 216.839.2012 ing popularity of the plans among been adjusting or course correcting drug comparisons and employee [email protected] HannaCRE.com employers, said Norman Steiner, in response to the nancial implica- wellness programs can all help with Medical Mutual of Ohio’s vice presi- tions of high-deductible plans, o- these eorts and, Steiner said, need cials know that patients insured by to work in tandem with plan designs such plans are feeling the pinch. to help control costs. For instance, 6.3% of Cleveland At some point, cost sharing could Clinic’s total revenue year to date in become a barrier. December were dollars that patients “If my barrier before the insurance were responsible for, up from around company pays anything is $50,000, of 4.5% just a few years ago, Glass said. what value is this to me?” he said. ough seemingly a small shift, it “We as an industry have to be very shows a signicant responsibility aware of when do you cross over and that patients face. It’s becoming more make it to the point where health common for a patient seeking care to care is not aordable to that individ- have a required $2,000 out-of-pocket ual?” 2017 Business Executive of the Year Fred DiSanto &KDLUPDQDQG&KLHI([HFXWLYH2IÀFHU Ancora

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www.ManchesterRBG.com/crains | 216-302-4769 Sponsorships for the 2017 DMSA are available. For more information/registration go to SMECleveland.com or call 216-767-5951 CRAIN’S CLEVELAND BUSINESS | JANUARY 9 - 15, 2017 | PAGE 7 Huntington has gigantic lead in SBA loans JEREMY NOBILE Goldberg said. spite fewer loans made. ey were Huntington is NEO leader in small-biz loans When comparing individual bested in that business in the local [email protected] HUNTINGTON SBA LOANS EVERYONE ELSE — SBA LOANS banks, SBA growth for Huntington district by U.S. Bank N.A., which @JeremyNobile IN NORTHEAST OHIO IN NORTHEAST OHIO does show a greater propensity to made 87 loans for a total of $21 mil- support smaller loans. But in general, lion. Year Value of Number Year Value of Number In the eld of government-backed the bank lends across the spectrum Nationally, Key, which has $135 approved loans of loans approved loans of loans small business loans, Huntington better than others, Goldberg noted, billion in total assets, ranked 14th in Bank is leaps and bounds ahead of FY2016 $134,278,100 1,091 FY2016 $233,565,600 679 as they still make large loans. terms of total SBA 7(a) loans, making Nonetheless, nearly 80% of all SBA 538 of them for a total of $222.2 mil competitors in the Cleveland market. FY2015 $136,272,400 1,201 FY2015 $204,123,100 621 - And with plans to expand that loans at or less than $25,000 in the lion. business even more, it’s a position FY2014 $141,264,400 1,275 FY2014 $196,383,200 560 Cleveland district — 375, to be exact, at’s an increase of 44%, the larg- Huntington could retain a tight grip out of 473 — came from Huntington est gain among the top-20 SBA lend- on, even as other banks ramp up ef- FY2013 $91,987,400 844 FY2013 $204,989,600 517 in 2016. ers with $15 billion or more in assets. forts on that front. “If you look at loans $1 million and e bank, like others, has been a FY2012 $101,713,800 735 FY2012 $185,049,400 564 But it's not just Northeast Ohio over in 2016, we did 81,” Goldberg long-active player in the SBA space. where Huntington is crushing the FY2011 $82,357,400 681 FY2011 $216,424,400 638 said (Huntington did 37 of those). But that’s still a signi cant increase. scene for U.S. Small Business Admin- “at shows the market here is really Jim Fliss, senior vice president and istration 7(a) loans, the SBA’s agship FY2010 $54,599,300 352 FY2010 $119,593,803 579 for those smaller loans.” national SBA manager for Key, said and largest program. the bank intends to do even more in e Columbus-based regional FY2009 $24,282,600 195 FY2009 $102,401,300 566 Expect more in 2017 the coming year. Part of that will bank, with just about $100 billion in SOURCE: Cleveland District o ce of the U.S. Small Business Administration surely come from the expanded foot- total assets and a nine-state foot- Huntington's 2016 activity marks print provided to them through its print, is the second-largest provider ence, senior vice president and SBA in 2014 with 71% of loans, but an increase of more than 450% in recent acquisition of Bualo’s First of SBA 7(a) loans in the country in group manager for Huntington. dropped to 64% in 2016. both loans made and dollars lent Niagara Financial Group. terms of loans made (3,905) and fth “And we are willing to lend to these ere was actually a small dip in since 2009, a period when the bank Similarly, Huntington intends to in terms of dollars lent out ($633.5 businesses when no one else is,” she overall SBA lending for Huntington began investing in the business, grow its SBA lending. Besides an on- million), according to SBA data for said. “We have tried to build a sus- between 2015 and 2016. e recent which included accelerated support going commitment to the program, the 2016 scal year. tainable, scalable model, keeping in gures show a drop of about $1.9 mil- of SBA loans. new markets courtesy of the acquisi- at puts it in the company of mind that it still needs to make sense lion in total dollars and 110 fewer “We wanted to invest here,” Fer- tion of Akron's FirstMerit Corp. in- some of America’s largest national for us as well to make something like loans made compared with the prior ence said. “We believed the economy herently grows lending prospects. banks. a $50,000 loan. Some banks won’t go year. would recover faster than even some “In lock step with the FirstMerit Comparatively, Wells Fargo Bank that low.” In the Cleveland district speci cal- of the experts put out there. So we merger, we are growing dramatically N.A., the most active SBA lender in Loans between $25,000 and ly, SBA lending grew by 8% to top ramped up sta and took time to pre- in Akron and Canton and Cleveland. the country at 8,737 loans made (to- $50,000 fall into the lower end of the $367.8 million in 2016. But that was pare, expecting an increase in de- We have increased salespeople and taling nearly $2 billion), has more SBA 7(a) spectrum. e upper end is on 1,770 loans, which is 52 fewer mand.” credit and operational sta here as a than $1.8 trillion in total assets and between $1 million and $5 million. than 2015. Granted, the SBA program has result,” Ference said. “We do certain- oces in more than 40 states. While it’s a bit of a generalization “For Huntington, this still signi es grown consistently since then as ly see demand on the rise.” In the SBA’s Cleveland district, to say no other banks are participat- a huge commitment,” Goldberg said. well, with demand gradually increas- One line of thinking is that the Huntington made 1,091 7(a) loans in ing, the SBA gures show that Hun- “But the gures show that other ing as businesses sought growth in need for SBA loans might dwindle as the past year, or about $134 million tington is taking on a larger number banks are really participating in the the wake of the economic downturn. the economy continues to improve, worth, according to data from the of the smaller loans. SBA market. ey want to make a As a whole, the SBA 7(a) program businesses do better and banks feel SBA’s Cleveland district. mark and have been chipping away hit record levels in 2016, supporting more comfortable making loans at means more than 20% of its Demand for smaller loans at Huntington’s dominance.” $24.1 billion across 64,073 loans. without that government support. total SBA 7(a) dollars was lent in this Some of the overall increases in And other banks have certainly “But we believe there’s still a lot of district, which covers 28 Northern rough the last ve years, Hun- SBA lending are coming from more participated in that, including Key- demand for these products,” Fliss Ohio counties between the Pennsyl- tington has provided somewhere be- community bank participation. Bank N.A. said. “Regardless of the economy, vania and Indiana borders and is an- tween 60% and 70% of all SBA 7(a) While some smaller banks might e Cleveland-based bank ranked what never goes out of style is that chored by the Cleveland market. loans in the Cleveland district, said make a couple SBA loans in a year, as third in the Cleveland district in 2016, many business experience cash “Everything with us is growing Gil Goldberg, director of the Cleve- a group, those smaller banks are making 54 loans for a total of $14.6 crunches. ese products help com- right now, really,” said Margaret Fer- land SBA district. e gure peaked “playing a more signi cant role,” million, a 34% increase over 2015 de- panies conserve cash and cash ow.” SALT • SALT • SALT • Water Softener • Industrial • Food Need a customized • Ice Melt • Sea Salt solution for your Call For Pricing!! Minimum Delivery:1Pallet business financing?

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Call your local lender today. Thomas R. Poe, Market President 216.496.2530 | [email protected] HomeSavings.com 1-800-547-1538 Salt Distributors Since 1966 PAGE 8 | JANUARY 9 - 15, 2017 | CRAIN’S CLEVELAND BUSINESS Opinion

Web Talk Re: Browns’ sad season

Good for ESPN Cleveland analyst Tony Grossi for his highly critical analysis of the 2016 Browns. It’s about time someone stood up and told the Browns to get their (act) together! The front o ce can talk all they want, but the bottom line in the NFL is “results!” — John Rawl

I’m a Browns fan to the bitter end (irrationally so), but calling out the local sports media, as some fans have done, for simply doing their job of exposing the ineptitude in Berea is a bit much. Like Bill Belichick used to say, they (and we) can only go by what they see. — Scott Tennant

I, too, am a diehard Browns fan and agree that consistency of leadership leads to success. We cannot and will not be successful unless the front o ce and coaching sta are allowed to build a team. I fully expected the Browns to have a very poor season this year and I was not surprised at a 1-15 season. But I am surprised that some people actually believed they would be better than 1-15 and then bitter when they weren’t. Give this coaching sta TIME to build a team! We will never be successful if we continue to change coaches every other year and expect to have a winning season. — Donna Flynt

The most overwhelming piece of data that came across the television broadcast of the Steelers-Browns game on Jan. 1 was the fact that the (hated) Steelers have had three head coaches since 1969 and the Browns have had 18 in the same period — nine since coming back in 1999. Editorial There cannot be any coincidence that consistency of leadership leads to success. ... Fans have it right on this one. Hold our breath and let the coaches do what they need to do. — Boro Rules

The Steelers have had only three coaches because they Up to standard have had a front o ce that can judge talent. When a Steeler leaves or retires, they plug in another talented If Ohio goes on to develop a vibrant clean-energy industry, Greg Lawson, a senior policy analyst at the free market-ori- player. The most important people in any sports Dec. 27, 2016, will go down as a landmark date. ented Buckeye Institute in Columbus, said in a statement that organization are the talent evaluators, and the Browns at was the day Gov. John Kasich vetoed House Bill 554, the organization “ultimately want(s) an outright elimination of have been terrible at it. — Donald Sinko which would have weakened the state’s clean-energy stan- these burdensome energy mandates that are of dubious envi- dards. e bill had passed the Republican-controlled state ronmental value.” Re: Trump’s threat of a ‘border tax’ House and Senate in December, but its majorities were not Bill Seitz, a Cincinnati Republican and a leading supporter of large enough to override the governor’s veto. the bill who has moved to the House from the Senate due to If we make it more expensive for companies to make their In essence, the veto puts Ohio back on a path requiring elec- term limits, wants to pass a bill in 2017 that would fully repeal products, won’t the cost we will pay for the products also tric utilities to meet annual portfolio standards for investing in the energy standards. go up? — William Thompson renewable energy, as well as helping their customers reduce “We will do our part by launching a full-scale eort next ses- energy use. Such standards were enacted in 2008, although a sion to totally repeal these Strickland-era mandates,” Seitz said Yes, the costs to us consumers will go up. But the man on freeze (signed by Kasich) has been in place for the past two in a statement issued after the Kasich veto. the street wants a paycheck, notices if he doesn’t get years. HB 554 would have made the standards optional for two at could be easier to do, as Republicans have added to one, and doesn’t notice if the prices of goods go up. more years, which essentially would have frozen further renew- their majorities in both chambers of the state Legislature. — James Anderson able energy development in Ohio. e onus, then, will be on supporters of renewable-energy Utilities in the state will be required to procure 12.5% of their standards to make the case that building ever-stronger wind Re: Future of GE Lighting here energy from renewable sources by 2025. at doesn’t sound and solar industries in Ohio makes good economic sense via like much, but it would represent a big jump, as data from the the promise of opening new avenues for manufacturing jobs in Keep your eyes on GE Lighting in 2017. It might not abandon U.S. Energy Information Administration show renewable ener- the state. consumer lighting, but it is putting more emphasis on gy supplies only around 2% of Ohio’s net electricity generation “ e potential for growth in wind energy is signicant, and commercial and municipal. And not just lighting. It plans entire at present. (Indeed, supporters of the bill opposed the stan- we see the demands of the industry as a natural t with our core communication and safety networks installed with street dards, citing high compliance costs.) skills and capabilities,” said Joe Starck, president of Great Lakes lights, tra c lights and other technologies — a complete As important as the veto itself were the words Kasich used to Towing Co., in a Personal View column we ran last week that makeover and redefinition of lighting as one element of a explain his action. He said, for instance, that the bill amounted was written by John Colm, the president and executive director communications network. The company wants to participate to “self-inicted damage to both our state’s near- and long-term of WIRE-Net, an economic development organization serving in the smart-city evolution. — Robert E. Chalfant economic competitiveness.” e governor added that the bill manufacturing businesses on Cleveland’s West Side. would take away energy options “most prized by the companies Great Lakes Towing operates a eet of tugboats and a full-ser- Re: David Gilbert, a Crain’s newsmaker of 2016 poised to create many jobs in Ohio in the coming years, such as vice shipyard. It has been pursuing multiple market opportuni- high-technology rms.” ties in oshore wind. Who could deny that this humble and hardworking guy, Although Kasich did not identify any companies by name, it’s “We look at Europe, with its 4,000 oshore turbines, being president and CEO of the Cleveland 2016 Host Committee, is not hard to see that as a reference to outts such as Amazon, the serviced by a large number of shipyards with great success and deserving of every bit of recognition? Yes, there were web retail giant that has built three large data centers in Ohio impressive results,” Starck added. “ e support we can provide hundreds, and even thousands of people involved in our that are powered by wind. Forward-thinking companies want in Lake Erie is a natural extension of our existing business.” spectacular civic success from the Republican National to do business in forward-thinking states. Kasich’s action keeps We look forward to an era in Ohio that oers such hope for Convention and other events, but Gilbert has definitely been Ohio on the right side of progress. new and existing businesses as a result of more fully embracing one of the main flagbearers. Well done, sir! — Peter Corrigan Not surprisingly, not everyone agrees. renewable energy.

Publisher and Editor: Elizabeth McIntyre ([email protected]) Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Managing Editor: Scott Suttell ([email protected]) Cleveland, OH 44113, or by emailing [email protected]. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes. Sections Editor: Timothy Magaw ([email protected]) CLEVELAND BUSINESS Sound o : Send a Personal View for the opinion page to [email protected]. CLEVELAND BUSINESS Contact Crain’s: 216-522-1383 Please include a telephone number for verification purposes. CRAIN’S CLEVELAND BUSINESS | JANUARY 9 - 15, 2017 | PAGE 9

Cleveland will o er the former Third District police station on Payne Avenue for redevelopment. (Jay Miller) Every shot blocked by the Cavs earns a $100 donation from Elk & Elk to the Cleveland Clinic Children’s transform this corridor into a jewel in that, in addition to creating a park the crown on Cleveland’s East Side and improved lighting, this neigh- 1.800.ELK.OHIO | elkandelk.com/weakstuff DISTRICT with upscale loft-style apartments, borhood really needs to have a busi- CONTINUED FROM PAGE 1 student housing, retail businesses, ness improvement district,” Reichtell oce and commercial space, restau- said. Bobbi Reichtell, the group’s execu- rants and entertainment.” e concern about a lack of street tive director, said her group is fore- Baker also said that global X will lighting and open space is a conse- casting that the resident population continue to support the artistic com- quence of the area’s industrial past in the neighborhood, now about munity that has thrived in the wide- and the presence in the neighbor- 5,200, will grow by 1,000, or 19%, in open, and low-cost, spaces in the hood of three homeless shelters. Em- three years. outmoded multi-story clothing fac- ployers and their employees were “Five years ago, no one could have tories along Superior that will likely only around during the daylight, predicted the demand that exists see rent increases as spaces are reno- working, making it easy for the city to now,” Reichtell said. “It’s the success vated. bypass it when other nearby lighting of downtown that has driven us and “We highly value the strong Cleve- was upgraded. given developers the con dence to land arts community,” Baker said. It’s Reichtell’s hope that the street sink money into a neighborhood that lighting can be upgraded and that, as was on the edge.” Out of the shadows Cleveland empties out the former A trigger for Perkowski’s and Re- ird District police station on Payne ichtell’s optimism is the commitment Reichtell said that with support Avenue in the coming months and of a local investment rm that is as- from developers like the Perkowskis oers it for redevelopment, the city sembling a handful of properties and global X, her organization is will hold on to part of that land for a along Superior Avenue. e rm, public park. global X, has been investing for the “It’s the success of Since the homeless shelters are long term, with the intent of develop- downtown that has there to stay — moving them would ing its properties as both residential require another neighborhood ac- and commercial space. Global X is a driven us and given cepting them — Reichtell is buoyed 16-year-old investment rm and tax developers the by the results of several focus groups credit adviser specializing in historic with residents of 2320 Lofts, a Tower preservation. confidence to sink Press-owned residential building on It rst invested in the Superior Av- money into a Superior. enue corridor in 2013, when it bought neighborhood that was “It wasn’t surprising that they said the building at 2498 Superior. It add- the neighborhood needs green ed ve more the next year. on the edge.” space, but they also said they State and federal tax credits that wouldn’t mind sharing it with home- encourage the preservation of signif- — Bobbi Reichtell, Campus District less folks as long as it was a safe icant older buildings are a key to the Inc. executive director space,” she said. “at was surprising renaissance of the area. to me and encouraging.” Late last year, global X was award- working to create a business im- Reichtell believes the diversity of ed tax abatement by the city of Cleve- provement district in the northern the residents of 2320 Lofts — the land and historic tax credits by the part of the area her group serves. kinds of residents she believes will state of Ohio to assist in the $10.5 e Campus District umbrella cov- continue to be interested in the Su- million purchase and redevelopment ers Cuyahoga Community College’s perior corridor — was a factor in the of 2101 Superior into the rm’s head- Metro Campus, public housing and acceptance. She said many said they quarters. St. Vincent Charity Medical Center were from parts of the country where Two years ago, the rm entered a on its southern end; Cleveland State the homeless lived in larger numbers joint venture to rehabilitate the Art- University in the middle and a mixed than in Cleveland. Perkowski said Craft Building at 2530 Superior with bag of low-rise oce/warehouse 70% of the residents of 2320 Lofts are longtime building owner Roy Group. buildings and former multi-story Cleveland State students and 30% are At the time, Crain’s Cleveland Busi- clothing and printing plants to the young professionals. ness reported global X was consider- north reaching to the Shoreway. Campus District is also hoping a ing moving its oce from 1301 Pros- In a business improvement district plan being developed by the three in- pect Ave. to the ArtCraft Building. property, owners agree to tax them- stitutions in the southern end of the Regina Baker, the rm’s associate selves to improve the services in their neighborhood will spur even more vice president of marketing and busi- neighborhood beyond what the city residential development. ness development, said it’s too early provides. Downtown Cleveland Wendy Hoke, St. Vincent’s vice to get into speci cs of redevelopment property owners created a so-called president for marketing and com- of the ArtCraft or other properties. BID in 2005 and property owners in munications, said Cleveland State, She oered Crain’s a statement from neighborhoods including Ohio City Tri-C and St. Vincent are looking at the rm’s CEO and founder, who was and Detroit-Shoreway approved ways to both hire more neighbor- traveling at the time of the interview, BIDs since then. hood residents and encourage em- that said global X sees its properties As large institutions, the hospital, ployees to live nearby. Hoke said the developing as a mix of residential Tri-C and CSU already provide up- plan is to oer employees assistance and commercial space. graded services — security and on the order of providing a security “We are delighted to play a role in cleanup — on their own. It’s to the deposit or rst month’s rent on an the redevelopment of the Superior north, where no property owner or apartment. corridor and our employees are ex- institution covers a lot of ground, “We’re in a position where each of cited to be part of this revitalized where a joint eort is needed. the anchor institutions will be happy area,” global X CEO Drew Sparacia “We as an organization are con- to welcome new neighbors into the said in the statement. “Our goal is to vinced that what needs to happen is neighborhood,” she said. PAGE 10 | JANUARY 9 - 15, 2017 | CRAIN’S CLEVELAND BUSINESS Focus SMALL BUSINESS

Allison Tinerello and Nick Sword founded Cleveland in a Box as an online-only enterprise but recently opened a storefront at the 5th Street Arcades. (Contributed photos) Success doesn’t always end in dot com Despite consumer trends, some former online-only shops find value from investing in bricks and mortar

By DOUGLAS J. GUTH nerello, who doubled her holiday search in a January 2016 study. sales over this time last year. A gap exists for smaller stores to [email protected] “I would say the store is the reason ll, but independent entities still face for our drastic increase in sales the digital dominance of Amazon. E-commerce has changed the way during the holidays,” Tinerello said. com, which is expected to capture we shop, giving consumers the com- “We wanted to have a footprint two-thirds of the U.S. online retail fortable option of purchasing prod- downtown to introduce people to market within the next ve years, ac- ucts from their smartphone or com- what we oer. ey’re seeing all these cording to a report from the nonprof- puter. Cleveland’s small retailers are Cleveland products they never would it Institute for Local Self-Reliance. ghting this development by oering have found out about otherwise. It’s Gordon Gough, president and CEO patrons a personalized brand experi- been a big marketing tool for us.” of advocacy organization e Ohio ence they can’t nd on Amazon or Council of Retail Merchants, said other online resource. Battling the big boys physical stores remain fundamental While an online component is still a to a community’s nancial fortunes. facet of the independent business mod- Online sales in the United States However, battling the Amazon behe- el, shop owners interviewed by Crain’s were expected to reach about $394 moth requires retailers to underline said a specialized level of customization billion in 2016, a gure representing the social and even educational com- is needed to attract the all-important less than 12% of total retail revenue, ponent of in-person shopping. brick-and-mortar customer. reported research rm Forrester Re- “It depends on the item the retailer Cleveland in a Box, which sells a va- is providing,” Gough said. “Buying riety of city-made food items and toothpaste doesn’t require a brick- sports memorabilia from its new 5th “I would say the store and-mortar store. But if you’re pick- Street Arcades storefront, was ing up a big-screen TV, you’re relying launched by founders Allison Tinerel- is the reason for our on the expertise of an owner who’s lo and Nick Sword as an online-only drastic increase in done it for years. People like forming enterprise. Today, the gift box compa- those relationships and getting a fair ny aims for a higher level of in-store sales during the deal. You may not get that type of in- service that Tinerello said is vital to stitutional knowledge online.” the business’s overall longevity. holidays. ... It’s been Direct-to-consumer boutique shops Having walk-ins handle a bottle of a big marketing tool selling locally manufactured clothes, Pope’s Kitchen Burning River hot jewelry or furniture are seeking to grab sauce or a guitar pick from e Rock for us.” attention beyond the basic transaction & Roll Hall of Fame provides an inter- by highlighting the “touchable” nature active experience that can’t be dupli- — Allison Tinerello, founder of of their unique products. Fount Leather’s physical sales have significantly outpaced its digital cated when browsing online, said Ti- Cleveland in a Box SEE STORE, PAGE 13 sales thanks to its Detroit Avenue studio. CRAIN’S CLEVELAND BUSINESS | JANUARY 9 - 15, 2017 | PAGE 11 SMALL BUSINESS Adviser: Tod Wagner High valuations don’t always mean it’s a good time to sell Company valuations today are at “The greater tirement at 50-70 years old and wants than is desired with alternative equity the highest levels we’ve seen in years. Tod Wagner is to take some risk o the table or per- investments. Back to work for another So if you’re a business owner think- a certified hesitation we’re haps build a portfolio that’s more di- 10 years? Regardless of what action ing about a liquidity event, now public versied than being tied just to one you decide is best, the greater hesita- would be a good time, right? accountant seeing today business. tion we’re seeing today underscores Not so fast. and managing underscores the need But when that owner meets to plan the need to plan for liquidity events in Even though the value of their partner of his or her future with a nancial advis- decades, not a few years. companies is at historically high lev- Bober Markey to plan for liquidity er, it becomes clear that it will be a Business owners who have been els, many business owners have sud- Fedorovich’s events in decades, struggle to generate the same amount following a plan for some time are denly become reluctant to pull the Cleveland oce. of cash ow and match pre-sale in- nearly always better insulated from trigger on a sale. What’s happening to not a few years.” come levels by investing the after-tax the short-term impact of any current cause a pause in their thinking? proceeds of sale. Today’s low yields market conditions. It’s a common, On a macro scale, there has indeed ness provided their incomes. giving many second thoughts with from xed-income investments are even tired piece of advice: true nan- been a slowdown in merger and ac- ese historically low interest rates their succession planning, even in making it harder for that portfolio to cial freedom and lasting legacies re- quisition activity. omson Reuters we’re seeing and recent post-election the face of currently high valuations. generate a sucient return post-li- quire long-term planning, not short- reported that as of the third quarter run-up in public equity markets are Here, the owner is on the cusp of re- quidity event without taking more risk term quick steps. of 2016, announced M&A values worldwide fell 27% compared to the prior year. ere are a lot of theories as to why this slowdown, from Brexit to political volatility in the US, but no one determining factor tips the scale Let’s peel that back a bit to see how this is aecting the small business owner. On the one hand, there are a vari- ety of factors that are leading many owners to conclude that now is the WHEN STOCKBROKERS ARE CROOKED, right time to sell or transition the business to the next generation: SOMETHING HAPPENS TO THEM. J Baby boomer business owners are at retirement age or giving serious thought to a second “encore career.” Many are truly grappling with the question of how they want to dene their legacies. J e introduction of new technolo- gy and overall pace of change is lead- ing many owners to conclude that it is a good time for a new, perhaps more adaptable generation of lead- ers to take their companies further. Or they often conclude they no lon- ger have the appetite to invest new levels of risk capital — or personal energy — needed to remain compet- itive. J e low unemployment rate is creating a war for truly outstanding talent which is becoming more and more dicult to manage. Some proposed regulations com- ing down from the IRS may also be creating a sense of urgency behind owners’ thinking. In early August the IRS issued proposed regulations for Section 2704 of the tax code that, if enacted, would signicantly limit some estate planning techniques and increase tax costs of intra-family transfers. In brief, the change would reduce discounts that are considered when valuing the transfer of a busi- ness interest to a family member. Some industry watchers feel the IRS has overstepped its bounds with these proposals, and given the out- come of the recent election, they may US. be altered signicantly or even shelved. However the regulations Most stockbrokers are honest. Some are not. At Meyer Wilson, we’ve been successfully representing investors eventually are nalized, the fact that against dishonest brokers for more than 15 years. We’ve done it locally. We’ve done it nationally. And we’ve they were introduced created some impetus among many business own- built our reputation on our success. So if you know of a stockbroker who is crooked, negligent, or just plain ers to get their succession plans mov- not smart enough to do the right thing, contact us. We can help. ing forward. Coupled with the high valuations many have for their companies, and perhaps even these IRS proposals, many factors are coming together to create a peak moment when the closely held business owner is step- ping back to consider long term fam- Get what’s coming to you. ily, nancial and philanthropic ob- jectives. ey’ve worked their entire lives with a simple plan in mind – grow the business, build long-term value in the enterprise, and sell at Meyer Wilson Co., LPA Cleveland Columbus Los Angeles 216.600.1355 investorclaims.com some point to create a nest egg that will continue to support their lifestyle at the same level as when the busi-

MW_CrainsCleve8.125x10_Crooked_FA.indd 1 2/2/16 11:07 AM PAGE 12 | JANUARY 9 - 15, 2017 | CRAIN’S CLEVELAND BUSINESS SMALL BUSINESS Cooling o isn’t part of Chill Pop’s plans By DOUGLAS J. GUTH [email protected]

Cleveland’s long winter has just begun, but Elizabeth and Maggie Pryor are busy expanding a avorful line of artisanal popsicles that may have their customer base dreaming toward summer. Chill Pop Shop, a Cleveland-based business producing frozen fruit pops made with real fruit and fresh ingre- dients, has grown from selling single pops from a push cart to 65 retail stores across the Mid-Atlantic and Eastern regions. Whole Foods and Mom’s Organic Market are among the outlets where the guilt-free treats are now available. Chill Pops are prepared with fresh fruit only — no syrups or additives. e co-owners, who sell their tasty wares in six avors, operate out of a nary Launch & Kitchen (CCLK), us- Eric Diamond, a partner with 3,500-square-foot manufacturing ing knowledge gleaned from the food CCLK, is condent the Pryors’ tire- and oce space in the Tyler Village business incubator to manage a cart less dedication to customer service redevelopment project downtown. at local farmers markets and e and marketing will lead to continued Wholesale distribution makes up the Cleveland Flea. e Pryors landed a triumphs even in an ultra-competi- majority of sales, but the icy fruit production space on East 185th tive food industry. pops are also obtainable through Street in 2014, moving to their larger “Anytime you have a healthy, local- mobile and catering means. location at Tyler Village after their ly sourced treat, you separate yourself “We’ve had compounded growth Elizabeth and Maggie Pryor operate Chill Pop Shop out of a pops hit Whole Foods’ freezer case in from national competitors,” Diamond of 50% the last few summers through 3,500-square-foot space in Tyler Village. (Contributed photo) September 2015. said. “e other thing is Maggie and mobile sales and catering, but we’ve e Whole Foods coup scaled up Elizabeth have spent a lot of time scaled that back some,” Elizabeth ditives or preservatives to be found. A trepreneurial background in holistic Chill Pop’s infrastructure and set the building their brand, which has said. “Wholesale is our main area of four-pack of Coco Mocha Fudge or health and Maggie working in tradi- owners’ sights on wide-range distri- helped them be successful.” growth now, and will continue to be Cucumber-Kiwi pops can be had at a tional health care after earning her bution. e complex minutiae of the If all goes well, 2017 will nd Chill over the next couple of years.” retail price of $7.49 to $7.99 per box. master’s in health education from grocery industry, including nding Pop in at least 500 additional stores While winter is technically Chill “Sourcing ingredients with integrity Ohio State University. the proper temperature to ship their with two new avors. Some of those Pop’s o-season, the Pryors are using is pivotal to our foundation,” Maggie As fans of locally produced Jeni’s product by refrigeration truck, is an stores may be in warmer climates, the cold months to increase their said. “at’s why our tagline is ‘Made Ice Cream, the Pryors saw an un- ongoing process, they said. which would only boost next year’s product’s retail footprint. eir cre- With Meaning.’ ere’s a meaning be- tapped market for gourmet popsicles “We put ourselves through grad sales gures. ative twist on popsicles is currently hind why we make what we make.” — a kind of “Jeni’s on a stick,” in Eliz- school learning about the grocery in- “It goes back to a passion for food,” found in seven states and regions — e Pryors’ “dessert without guilt” abeth’s words. dustry,” Elizabeth said. “It was like Elizabeth said. “Maggie and I are to- Kentucky, Maryland, New Jersey, was shaped by a love for local foods “at was our inspiration,” she said. learning Chinese at rst, then we tal grocery nerds. We love the stores, Ohio, Pennsylvania, Virginia and the the pair nurtured while living in Co- “We did additional research and saw made some critical contacts in the seeing new brands and trying new District of Columbia. lumbus. e Cleveland natives re- this ice pop trend hadn’t hit Cleveland.” industry. For both of us it’s more of a products. It’s amazing to have a re- Chill Pops are prepared with fresh turned to their hometown in spring After concocting a few test recipes, food education that’s translated into gional presence, but we want to grow fruit only — there are no syrups, ad- 2013, with Elizabeth carrying an en- the partners joined Cleveland Culi- creating a food product.” into a national brand.”

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A Comforting Ambience Let Nesco Work For You Non-judgmental Acceptance A Sustainable Lifestyle www.nescoresource.com/works /XQD/LYLQJ Alcohol and Drug 440-703-0940 A Nesco, Inc. Company Recovery Center www.lunaliving.org Nesco Resource is a wholly owned subsidiary of Nesco Inc., a privately held diversified holding company focused on sectors including manufacturing, human resource services, and real estate. CRAIN’S CLEVELAND BUSINESS | JANUARY 9 - 15, 2017 | PAGE 13 SMALL BUSINESS Q&A: Melanie Hershberger STORE Owner, Music Saves CONTINUED FROM PAGE 10 Though it may be seen by some Fount Leather deals in handmade mainstreamers as more of a leather purses and accessories de- fashion statement than a musical signed in Cleveland. From its perma- nent showroom in the Gordon resurgence, purchasing vinyl is a Square Arts District, the store carries verified trend that doesn’t appear bags, totes and clutches as well as a to be scrapped anytime soon. line of candles and luxurious soaps. According to the Recording Fount’s Detroit Avenue studio has Industry Association of America, far exceeded the expectations of owners Jackie and Phillip Wachter. vinyl sales were up 32% by the e couple’s wares are available on- start of 2016, amounting to $416 line at fountleather.com, but physical million, the highest percentages sales have outpaced digital buys sig- since George Michael’s Faith nicantly, noted Jackie Wachter. topped charts in 1988. About two-thirds of Fount’s buys are made in person, either at the store Nowadays, as CD sales drop or via venues like e Cleveland Flea. nationally by the millions, and e business’s successful transi- users of streaming services like tion to Gordon Square from a tiny Spotify and Apple Music contemplate starting a record collection, studio in the Artcraft Building on Su- Crain’s turned to Melanie Hershberger, the owner of one of Cleveland’s perior Avenue can be attributed in part to visitors experiencing the Cleveland in a Box owners say their specialized product oerings have beloved indie go-tos, to provide context on vinyl’s life in 2017, and shop’s lovingly produced goods for made competition with digital competitors moot. (Contributed photo) what this exactly has to do with ad-supported music streaming. — themselves, Wachter said. Fount was Mark Oprea recently featured on “Cleveland Hus- Making it their own ed by content that goes viral and tles,” a CNBC reality show created by then disappears,” Madalone said. A 2016 poll of vinyl buyers in the Even in Cleveland we see LeBron James and Maverick Carter’s Cleveland’s independent market is “Stay fresh and be true to what your UK reported that 45% of them companies like Wax Mage Records SpringHill Entertainment company showing signs of health, said Gough brand represents. at’s what cus- first heard an album they bought (of Gotta Groove) manufacturing “People can touch, feel and smell of the retail merchants group. His or- tomers are drawn to. Otherwise, it’s via avenues like YouTube or custom vinyl for local bands to our bags in person,” she said. “ ey’re ganization expected a 2.1% uptick in just noise.” SoundCloud. Do people buy more sell at shows, on their Bandcamps, excited about every bag being Amer- holiday sales for a region including Cleveland in a Box co-founder Ti- records when they stream more? and so on. I mean, wouldn’t be kind ican-made. It’s amazing how many Cuyahoga, Lake, Geauga, Medina nerello said being a niche company Is it sort of a gateway drug? of odd for a band to hand just out customers have shared our brand and Lorain counties. with a specialized product lineup has I definitely see a relationship. I know I a link to stream their EP? with others.” Continued vitality means promotion made competition with Amazon or do have quite a few customers who Of course. Because a lot of fans e Wachters’ strategy emphasizes of what makes a small business’s goods other digital competitor moot. Keep- have subscriptions to Spotify expect it. Even with us local bands. I designing the “ultimate storefront,” unique, said Tony Madalone, owner of ing her physical shelves stocked with especially. It’s very dierent from still have people come in occasional- one that serves as a compelling hang- Cleveland-centric apparel company cool local merchandise will always before I had Music Saves. Most of the ly, hear that so-and-so has put out a out for shoppers. Handcrafted black Fresh Brewed Tees. While Madalone be a priority, considering how well time when you went to the record new album and ask me if I have it in wooden shelving, chandeliers and conducts most of his sales online, fresh it’s worked out so far. store and bought music, you actually stock. When they find out it’s only a furnishings provided through a part- merchandise is always available be- “We’ve had a bigger response be- hadn’t heard the record yet. With CD, they inevitably ask me, ‘Do you nership with Arhaus Furniture create tween the company’s mobile t-shirt cause of the store than we ever Spotify, it eliminates the unknown in know if they have plans to put out expectations of an upscale retail trucks and an outlet at Cleveland Hop- would have had without it,” Tinerel- deciding between purchasing and vinyl?’ Unfortunately it’s really showroom. kins International Airport. lo said. “It’s easy to come in and take spending money on physical copies cost-prohibitive for some musicians, “People believe we’re carrying a “Whatever brand you have needs your time putting a box together. — CD or vinyl — and actually taking so they’re not always able to do it. high-quality bag, because they can see to be your own, especially in a digi- People want to see what they’re get- the initiative to do it. I have custom- it in the presentation,” Wachter said. tal age where everyone is bombard- ting.” ers that will tell me that they’ll wait You guys seem to stock as many until the vinyl comes out, and will say, CDs as records. Do you sell them ‘Oh, this record is so good. I’ve been equally? listening to it nonstop for the past We definitely sell more vinyl — I whatever weeks.’ would say about 70% to 80% more. But we still have people who’ve been I bought Sharon Van Etten’s Tramp shopping since they opened, as well (2012) after listening to her as new customers who prefer CDs. entire discography over and over For whatever reason. For some, it’s on Spotify. I bought the record easier to just pop a CD in in the car, despite having it right there and go. I do think that CDs are slowly online for free. What propels folks being phased out. We did cut back like me to go out and own a dramatically on them five years ago. physical piece of art? Since then, the prices of vinyl have I think it’s dierent reasons for gone up, and places like Best Buy cut certain people. I still have customers back, and some like Barnes & Noble that exclusively buy CDs. They’re not have stopped carrying CDs altogeth- interested in the cost, or the space, er. or the investment involved in buying vinyl. The collectibility is definitely a Could you see Music Saves part of it, and record labels are following the same suit, and being certainly making a solid eort CD-less and selling only vinyl? nowadays to enhance that experi- It’s kind of hard to say. Because what ence. A lot of records are on 180 people do in the mainstream does gram vinyl. A record may have bonus not always line up with what they do tracks if the CD doesn’t. Quite a few on the fringes. come with expanded booklets, posters or stickers. The big reason The genre always seems to fit the that vinyl is as popular as it is now format. — and continues to grow in populari- Hmm. You could say that. ty — has to do with the primarily visual world we live in now. That can’t Music Saves had a good year in be denied. 2016, and is planning to open its web store in January. Should we But how many of those buyers expect more vinyl addicts in actually sit down to listen a 2017? record? Is that still a practice? Definitely. I have friends in their 50s Uh, yeah! People surely still get that come here and say, ‘You know together in pairs or groups to listen what? I’ve been thinking about to records. It provides a really human bringing out my old turntable, contrast to, like, the distance and because I still have one!’ They’ve coldness of technology. Just to pull been thinking about transitioning — out a record from its sleeve, and put or buying certain bands on vinyl. it on a turntable, and see it spin. It’s a Really? I think this whole thing is just total visceral, intimate experience. going to continue. PAGE 14 | JANUARY 9 - 15, 2017 | CRAIN’S CLEVELAND BUSINESS SMALL BUSINESS Tax Tips: Peter A. DeMarco Borders can be tricky when it comes to tax compliance

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Nurete Brenner wants to teach aspiring businessmen and women to put society first. As executive director of the business programs at Ursuline College, Brenner oversees the Pepper Pike- based school’s socially conscious MBA program. Brenner takes the “four pillars” approach to a socially conscious economy. The first pillar is treating individuals like whole people, instead of just focusing on their function in a company. The second is community and the importance of investing locally. The third is the planet and sustainability. It’s not about companies mitigating harm, Brenner said, but about leaving society better o. And the fourth pillar focuses on the eect business has on future generations. Tangibly, this means that students may end up discussing the role that intuition plays in leadership, the balance of so-called feminine and masculine values and the importance of media literacy. “To attempt to put it in a nutshell: a traditional MBA Nurete Brenner emphasizes profit, growth, shareholder value. We HIGHER EDUCATION emphasize purpose, enoughness and stakeholder value,” Brenner said. — Rachel Abbey McCa erty

Tell me about your career. What Why is that? What changes in What do you think is the role brought you to Ursuline? business do you see on the between higher education and the Five Things: After I graduated with a PhD from horizon? business community? Have you Case, I returned to Israel, which is I think business is moving toward seen changes there throughout FAVORITE LOCAL SPOTS where I grew up. But a friend from a socially conscious approach. In your career? She’s a fan of restaurants like Cleveland told me that there was a recent years, we have seen the With regard to management Peppermint Thai Cuisine and job opening at Ursuline for a advent of corporate social education and the business Bowl of Pho. director of the business school and responsibility and the awareness community, I feel there should that it was a great fit for my skill of impact investing, and a nod to always be open channels of HOBBIES set. I was skeptical at first sustainability, but business is communication. Education is the Her son got her into running, because it meant another beginning to go beyond this to a intersection of a wide array of and she recently finished a 5K. overseas move. But then I had a full-spectrum-flourishing approach. interlocking forces: government, conversation with the dean of the David Cooperrider and Chris Laszlo corporate, community, families and TOP SPOT TO TRAVEL graduate studies and I realized of CWRU are some of the thought students — multiple stakeholders Israel. “Part of my heart is that Ursuline’s mission of social leaders in this area, so we in and generations collide in the always there,” she said. justice was so well aligned with my Northeast Ohio are on the forefront educational system. But all these own vision of socially conscious of disseminating the awareness various stakeholders have some- WHAT SHE LISTENS TO management education. It’s not of these changes. It is no longer thing in common: Everyone — from Sheila Chandra, Mercan Dede every day that you are offered a governments to bureaucrats to and Niyaz job that will allow you and even corporations looking to hire and encourage you to implement a “Net positive impact graduates looking to be hired WHAT INSPIRES HER vision. So, here I am. means putting more — wants the education system to “Learning new ideas about be preparing students to function how we can create a society Lunch Spot Why do you think this is a valuable into society and the successfully in society. However, that has respect for and lives approach for students? this doesn’t mean the same thing in harmony with the earth,” Anatolia Cafe I think this is a valuable approach for environment than to all stakeholders. And one of the Brenner said. 2270 Lee Road students because business school [businesses] are conversations that needs to be had Cleveland Heights is ground zero for preparing future between management education 216-321-4400 leaders of society. The students taking out.” and the business community is: who come through our program will Does MBA preparation mean simply be leaders in the organizations they giving students specific skills that The meal A meze platter to start work at. Businesses themselves are enough just for a business to try meet the demands of the current with two orders of changing and aligning with social to do no harm or mitigate the harm market? Do we prioritize preparing vegetarian stew and two consciousness. Through business, it does, but the businesses are students to succeed economically waters we can address some of the most embedding sustainability on every in the current marketplace? Or pressing world problems. ... A level of the organization, they are does this preparation mean giving socially conscious MBA is not just striving for net positive impact — in students specific skills that The vibe educating the future leaders but other words, businesses may be identify them to prospective A quiet lunch spot with also creating the future. And our filling the gap left by political employers as change agents ready lots of natural light, high alums will be much in demand in leadership in contributing to reshape the future? Do we ceilings and a warm, organizations that are now seeking to the benefit of society. Net develop visionaries for the future or welcoming color palette out this kind of thinking. positive impact means putting talent-for-hire for local businesses? more into society and the I would like to see a conversation The bill Do you think the way business is environment than they are taking like this develop between schools $49.68, plus tip done has changed in recent years? out. and industry. PAGE 16 | JANUARY 9 - 15, 2017 | CRAIN’S CLEVELAND BUSINESS AKRON City hopes Trump keeps infrastructure promises By DAN SHINGLER [email protected] @DanShingler

In at least one regard, Akron could nd it’s getting the right president at the right time in 2017 — if, that is, Donald Trump follows through on one of his biggest campaign promises. Specically, Akron ocials and area manufacturing companies hope Trump will make good on his prom- ise to ll what the president elect says is a $1 trillion gap in U.S. infrastruc- ture spending over the next 10 years. Akron could benet even more than most cities if the spending is on real infrastructure, such as streets and sewers, and not just pipelines, toll bridges and other for-prot ventures. “It’s long been on a lot of people’s wish list — for 10 years, maybe even One of the infrastructure projects on Akron’s plate is dismantling its Innerbelt (state Route 59). (Dan Shingler photos) longer,” said Akron Mayor Dan Horri- gan, when asked if he was pleased that electricity for area manufacturers. But Horrigan said there are other the incoming president planned to Increased federal infrastructure ways the federal government could dramatically increase infrastructure spending would help manufacturers help, some of which would not cost spending. For the record, the mayor in another way, too, he said. After all, federal taxpayers a dime. For example, says he’s “hopeful” but not yet count- someone has to make the materials he said, one thing Akron desperately ing on any new federal funds, which used in the improvements. wants is for the federal government to have not been budgeted by Congress. “Infrastructure investment also change the rules on how the city can While every American city has in- has a benet because it requires a lot nance its sewer improvements. Un- frastructure challenges, Akron is of material for construction, and der current rules, Akron can only - confronting a slew of expensive proj- those materials are made by manu- nance the project over a 30-year peri- ects at once. facturers,” Augsburger said. “So, you od. Horrigan would like longer. It’s tackling a massive, federally have steel pipe that is made in Lo- at would be a signicant savings in mandated $1.6 billion sewer improve- rain, Ohio, or Shelby, Ohio, that’s terms of the annual debt costs, he said. ment project, for one thing. It’s by far used in oil and gas production. e “ e life of this asset is probably the most expensive single item ever to crackers, these are installations that 100 years. All we’re asking for is the land on the city’s nancial plate. are going to have billions of dollars of ability to take a 50-year loan,” Horrig- Akron also is preparing to disman- hardware in them … We make a lot of an said. tle its downtown Innerbelt highway that stu here, too.” Another way the city might benet (state Route 59) and clean up the 30 Akron Mayor Dan Horrigan stands near a worksite in Merriman Valley for Of course, not everyone is going to under Trump would be if federal reg- acres of land the highway occupies. the Akron Waterways Renewed Project, a $1.6 billion sewer overhaul. get what they want. Trump has not ulators let Akron partially o the hook e project is expected to cost anoth- given a specic plan for infrastructure and not require as much investment er $12.5 million. While that seems Manufacturers want to see increased pipelines, especially ones that would investments or how to pay for them. as demanded by current ocials. like nothing compared to the sewer infrastructure investment because they bring more Utica shale gas to Canton One proposed plan is to use federal Trump, of course, is unpredictable, price tag, it’s about the same amount need safe and reliable roads, bridges, manufacturers like his company, which tax credits to spur increased infra- so it’s not out of the question that he of money that Cleveland is fretting electrical grids and other things to sus- is in an energy-intensive business. structure investment from the private would push for direct federal spending about with regard to the closing of tain and grow their businesses. “All our kilns run on natural gas,” sector into revenue-producing proj- on infrastructure, which could be a streets in its Public Square. “When I hear ‘infrastructure,’ a cou- Belden explained. ects. ose are things like toll roads godsend to Akron. Steve Bannon, seen And on top of that, Akron has mil- ple of things come to mind. No. 1 is Ryan Augsburger, managing director and pipelines — stu that is privately by many as Trump’s top adviser, has lions of dollars’ worth of regular road roads,” said Bradley Belden, director for public policy at the Ohio Manufac- owned but used by the public for a fee. said that with interest rates low, or even improvements it wants to make, in- of support services for Canton-based turers’ Association, is hoping for even Critics say, however, that for-prot negative, around the world, now is the cluding plans to make the city’s Belden Brick, which manufactures more. In addition to pipeline work, he’d projects should be nanced on their time to ignore the decit and borrow streets safer for bicyclists and pedes- decorative brick and paving stones at like to see investment to support the de- merits, and that the government risks big for things like infrastructure. trians to promote urban living. ve plants in the region. velopment of ethane crackers in eastern nancing projects that would be built In other words, Horrigan and oth- “We would welcome any infra- “A lot of our product used to go out Ohio and western Pennsylvania that anyway, just with lower prot mar- ers have reason to be hopeful, even structure spending that helps move by rail, but that’s dwindled over time. would convert ethane from Utica shale gins. at would mean the govern- while they work hard to temper any people around and makes for a smart It’s less than 10% now,” said Belden, into ethylene, polyethylene and other ment is spending money but not re- optimism. city,” Horrigan said. who said roads are the lifeline to feedstocks to support existing and new ally creating new jobs. “Obviously, more funding for (the e mayor and city planners are some rural communities where his manufacturing facilities. Such investments would do little, if sewer project) would be tops on our not alone in the hope, either. Manu- company operates and have become Augsburger said he’d also like to see anything, for projects like Akron’s list,” the mayor said. “But providing facturers in the Akron-Canton area more important to Belden Brick’s increased investment in the electrical sewer project, unless, possibly, the some regulatory relief on the ideas say infrastructure spending is one of success than ever over the years. system, a move that could help spur city sold its sewer system to a private and some interest-rate help … ere the things they want to see most out Next on Belden’s wish list is more in- the construction of more power plants entity that could recoup its invest- is a multiple of ways they can attack of Washington under Trump. vestment in the electrical system and in to convert Utica shale gas into low-cost ment with sewer fees. this and help.” Developer plans senior apartments for Mull Avenue

By DAN SHINGLER Pond Drive, for a senior living devel- cide to move forward, the concept ducted, Allison said. opment the company proposes to and design will be just like Brunswick “ e oors aren’t carpeted, be- [email protected] build. In order to do so, FFC needs a and Niles,” Branovan said. cause carpets are tougher for walkers @DanShingler zoning change to permit multi-unit at would mean Mull Avenue or chairs. All the doors are wider, residential development. at will be would see a 127-unit facility, which is too,” she said, noting just a few of the If you Google “senior living invest- discussed at a planning commission, what FFC has built in Brunswick and details that dierentiate the units ments,” you’ll get back a whopping probably next month, said city o- is constructing in Niles this year. FFC from traditional developments. 7.21 million results, perhaps more by cials, who have received an applica- declined to disclose what it is invest- e concept is simple: Give seniors the time this article goes to print. tion, including a full site plan, for the ing in each development. an alternative to maintaining large ere’s a reason for that: Ameri- development. e Brunswick facility has just homes and properties they no longer cans are aging and retiring at a record If the company goes ahead with its started leasing but already has taken need, while still enabling them to live rate. And a Pittsburgh development plans, the development would be in about half a dozen tenants, said completely independently. rm is following that reason right nearly identical to FFC’s Harbor Diane Allison, FFC’s vice president of at means the individual apart- into Northeast Ohio and, if the city Woods Living Center in Brunswick, operations and development for se- ments in the centers are relatively approves, probably Akron. which opened in mid-December, nior housing. small — a bit over 800 square feet for FFC Capital Corp. has asked the The Mull Avenue development will said FFC president Fred Branovan. e centers have been specically most of the units, which have two city to approve a zoning change for feature the same type of units as at development is planning its rst tailored to the needs and wants of bedrooms, and a little over 700 square an 8.8-acre parcel of now-vacant those at the Harbor Woods Living open house event on Jan. 19. area seniors, based largely on fo- feet for a few one-bedroom units. land on Mull Avenue, near White Center in Brunswick. (Dan Shingler) “If we were to get approval and de- cus-group research that the rm con- SEE MULL, PAGE 17 CRAIN’S CLEVELAND BUSINESS | JANUARY 9 - 15, 2017 | PAGE 17

AKRON currency will cause manufacturers to put big investments on hold this year. OUTLOOK At Moody’s Investors Service Inc., CONTINUED FROM PAGE 1 the credit ratings rm is expecting more of the same for 2017, said vice MULL But there are signs that manufac- president and senior analyst Paul CONTINUED FROM PAGE 16 turing is strengthening, or at least Aran. at means continued weak- that condence in the sector is. ness in the sector, but not necessarily Rents are $1,025 for the two-bed- e Manufacturing ISM report for a contraction. at’s due to a variety room units and $965 for the smaller December 2016 did show expansion of factors, including the strong U.S. residences. in the industry, with a sizable in- dollar, Aran said. e oil and gas sec- ings like formal living rooms crease in the “new orders index.” In- tor hasn’t recovered yet, he said, and and dining rooms have been elimi- dependence-based Precision Metal- mining and agricultural aren’t as nated and replaced with common forming Association’s most recent strong as he would like. dining areas, recreation rooms, t- survey on business conditions indi- Overall, the rm is expecting EBIT- ness centers and other common ar- cates that companies in that sector DA growth of less than 2%. In De- eas, Allison said. expect a “spike” in the next three cember, Moody’s issued a negative If the rm does move ahead with months. According to the report, 43% outlook for North American manu- the Akron development, it may pur- of respondents are expecting busi- facturing in 2017. sue the development of more senior ness conditions to improve and 7% e MAPI Foundation December living centers. expect them to decline, compared economic report tells a similar story, “We’re not sure how many of with 21% and 25%, respectively, in predicting that growth in U.S. manu- these we want to do yet,” Branovan November. facturing output would be less than said. “It depends on the success of T.J. Monico, who works in industri- 1% in 2017 and then at or a little more these projects.” al investment banking at KeyBanc than 1% through 2020. While the U.S. If FFC lls its developments, it Capital Markets, said he saw some economy has grown, industrial man- might not surprise some who have restocking of inventory, which usual- ufacturers have not seen many bene- been watching the demographics ly indicates near-term demand ts, the report stated. driving the development of senior growth, late in the third quarter and President-elect Donald Trump’s economic policy indicates that he wants to All in all, it’s a “bleak forecast,” said housing in the U.S. fourth quarter of last year. Monico significantly reduce the tax rate on businesses and eliminate “needless MAPI’s chief economist, Cli Wald- Kansas-based Senior Living said he’s not expecting big changes in job-killing regulations.” (Daniel Acker/Bloomberg) man. Manufacturing since the Great Fund, just one of many firms rais- company performance in the rst Recession has been “stressed, strug- ing money and investing it in senior quarter, but does expect to see some doing. But recent, businesses. But he said he’s bullish gling and slow,” Waldman said, not- housing, says that 10,000 Ameri- positive momentum. well-publicized on 2017, pointing to robust auto sales ing that the global recovery overall cans turn 65 every day and 60,000 Overall, the results of the election decisions by Ford in December, stabilizing oil prices has been historically slow. And that’s new specialized housing units are have given a “boost” to trends al- Motor Co. and and strong consumer condence. tough on manufacturing, which is ex- required each year to meet their ready in place, he said. ere have Carrier to keep And the new administration’s talk posed to international forces. Out- needs. been strong gains in the stock mar- work in the Unit- about lower taxes and regulations side of the United States, there has Faith in such trends is also driving ket, and an interest rate increase is ed States instead could lead to a better environment been a slowdown in China, Waldman other investments here as well. expected. And Monico said con- of Mexico, at a for business, he said. said, as well as declines in Brazil and For example, in Stow, city ocials dence is up in the industrial markets time when But 2017 won’t be all about Trump, Russia. And Europe is an area that are considering a zoning change he covers. e president-elect’s eect Goncalves Trump is heavily and not everyone’s sold on the suc- has consistently seen slow growth. that would allow an assisted-living on trade policy is an area with some encouraging that, cess of 2017. e economy is never Additionally, the strong dollar has facility to be built near the Akron concerns, but his policies on taxes, could lead to a wait-and-see ap- just in the hands of the president, re- been a drag on manufacturing, and General Medical Center on Allen regulation and infrastructure could proach. gardless of what he says or does. there’s been a long capital spending Road. be possible stimulants, Monico said. Lourenco Goncalves, chairman, Edward “Ned” Hill, a professor of lag, Waldman said, both of which af- at project, proposed by Beach- But it all comes down to whether president and CEO at Clis Natural public aairs at Ohio State University fect demand for U.S. manufacturers. wood-based Omni Senior Living, policies change and, if they do, how Resources Inc. in Cleveland, thinks who formerly taught at Cleveland He thinks the sector could be reach- reportedly would have up to 132 quickly those changes are enacted. manufacturing will have a strong State University, thinks uctuations ing a turning point, as the overseas beds. Condence could dissipate if those 2017 if Trump enacts “at least a por- in currency, not Trump’s promises, markets seem to be stabilizing. FFC’s developments are not as- proposed changes don’t come tion” of what he’s been saying, partic- will be one of the biggest issues fac- As always, outlook does vary by in- sisted-living centers, but designed through. ularly when it comes to keeping pro- ing local manufacturers in 2017. dustry. Nipper said 2016 was chal- for independent living, complete “Nothing’s really happened yet,” duction in the United States. Clis Ohio gets “pummeled” when the dol- lenging for companies in the metals with on-site parking for tenants, Al- Monico said. supplies iron ore to the steel industry lar is strong, he said, both because of or mining/extracting industries — as lison said. And that uncertainty is not great and could directly benet if more of the impact to exports and because well as those supplying those indus- But, she said, she may hire a well- for investments. the metal was made domestically. foreign competitors can then sell tries — but those companies are ness nurse, not to provide medical Matthew Nipper, commercial Richard Hipple, CEO of advanced their goods for less. But also, the peso more optimistic now. Automotive services but to consult with resi- team lead for Northeast Ohio at Key- materials company Materion Corp. is in trouble, and a cheap peso can be and building products companies dents on exercise, diet and other as- Bank, said local companies usually in Mayeld Heights, said his biggest enticing for manufacturers. had a strong 2016, but there’s a sense pects of maintaining a healthy life- decide where to invest in new plants concern is the strong dollar and the Overall, Hill said he believes un- of cautiousness now because it’s not style. based on what their customers are dampening eect it can have on certainty around federal policy and clear how long that strength can last. PAGE 18 μ JANUARY 9, 2017 μ CRAIN'S CLEVELAND BUSINESS REAL ESTATE CLASSIFIED Phone: (216) 771-5276 Copy Deadline: Wednesdays @ 2:00 p.m. Contact: Lynn Calcaterra E-mail: [email protected] All Ads Pre-Paid: Check or Credit Card

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moved downtown the past few years, She anticipates a 5% to 10% in-  e 200 Public Square building is a chase of the 57-story Key Center and which provides real growth in an of- crease in anticipated  rst-year rents bellwether for the market. move its sta downtown from Valley SURVEY  ce market that has had little for at the two skyscrapers, a di erent Hurtuk said 200 Public Square View. CONTINUED FROM PAGE 1 years.  e prime example of that is measure of o ce rents than the ask- owner Harbor Group International of By the numbers, downtown Cleve- New York Life, which took 107,000 ing rents in the JLL survey. Norfolk, Va., still wants to make deals, land, the region’s largest o ce mar- out of town also are starting to push square feet at 200 Public Square in Brian Hurtuk, managing director so its asking rents have been kept in ket, saw average o ce vacancy fell to rents more than local owners in the moving 350 workers last year from and principal of the Colliers Interna- check. 20.5% at the end of 2016 from 22.2% past. downtown Lakewood. tional Cleveland o ce, said the in- Likewise, JLL’s Pick said landlords the same time last year. Vacancy While some expansions by corpo- JLL is not alone in remarking on creases in rents by individual build- remain competitive in order to  ll va- among top-tier Class A properties fell rate tenants account for the decline the prospect for landlords  nally be- ings have been the largest he has cancies. Tenants have absorbed the to 13.5% at the end of 2016 from in vacancy, the biggest factor is that ing able to charge increasing rents seen since 2000, when he moved into rent increases because downtown is 17.9% in the last year’s like period. the volume of o ce space downtown across the board as well as at individ- downtown o ce brokerage from in- a better place to do business with its Among buildings more than 30 years is declining as older o ce buildings ual buildings. dustrial and investment properties. growth as a restaurant, entertain- old or in a less central location, va- get converted to apartments in his- Myrna Previte, the broker for the  e increases are the largest in JLL's ment and residential venue. He said cancy declined to 24.6% from 24.8%. toric restoration projects. Oswald Centre, 1100 Superior Ave., records, which date back to 2000. tenants also are coping with rent in- JLL’s survey also covers the subur- Batson said that conversion of por- and the 1111 Superior Building across “We’ve had good winds down- creases by reducing the size of their ban Cleveland o ce markets as of tions of the Standard and Leader the street, said economic growth, town,” Hurtuk said. “ ere’s not a lot o ces as sta ers seek  exible and the end of last year. Buildings to apartments is underway, tenant expansions and lack of quality of quality space left.” mobile working arrangements.  e south suburban o ce market, so it has removed the o ce space inventory in 2016 produced rent and  e New York Life lease took 200 As with any forecast, Batson had to which includes the Rockside Road of- from his survey.  at, along with two occupancy growth marketwide. Public Square to 90% occupancy. As a make some assumptions, such as  ce market near Interstate 77, has years since the Ernst & Young o ce “I expect 2017 to see additional result, the range of asking rents has that Forest City Realty Trust Inc. will 16.4% vacancy.  e eastern suburban building came on line, have stabi- rental growth,” Previte wrote in an climbed to $27 to $29 a square foot from remain downtown after it concludes vacancy rate is 13%.  e west suburbs lized the vacancy outlook. email, “especially for top-tier Class A $25 to $27, depending on the size of the its space search. He also assumed had 13.8% vacancy. Overall, vacancy Moreover, several businesses have properties.” space and location in the building. Millennia Cos. will conclude its pur- is 15.9% for Cleveland suburbs.

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CONSTRUCTION ARCHITECTURE LAW LAW Nick Dilisio, LEED AP BD+C Edward F. Caja Jennifer A. Heimlich Associate Associate Associate Bialosky Cleveland Walter & Haver eld LLP Walter & Haver eld LLP

Nick Dilisio, LEED AP BD+C of Walter & Haver eld LLP is pleased Walter & Haver eld LLP is pleased Bialosky Cleveland has been to announce that Edward F. Caja to announce that Jennifer A. promoted to Associate. As a Revit has joined the rm as an associate Heimlich has joined the rm as an Certi ed Professional, Dilisio advances the architec- in its Intellectual Property Group. His recent legal associate in its Corporate Transactions and Real ture rm’s BIM projects as a BIM Manager, and experience includes litigation assistance involving Estate Groups. She focuses her practice on internal Revit instructor. He recently completed an patents, trade secrets, business torts, and unfair corporate and real estate matters, including Gareth D. Vaughan expansion to the Mandel Jewish Day School, and the competition in numerous art elds. Patent commercial nance and lending transactions, new Chief Executive Of cer award-winning expansion/renovation at the Roberta prosecution experience includes U.S. and interna- business formation and development, mergers and A. Smith University Library at Muskingum University. tional application in multiple technology areas. For acquisitions, and stockholder arrangements. For The Albert M. Higley Co. Dilisio presently is the Designer and Job Captain for more information, visit www.walterhav.com more information, visit www.walterhav.com the parking garages at Van Aken District. The Albert M. Higley Co. is pleased to announce Brendan D. Healy Cary A. Zimmerman that Gareth Vaughan has been named Chief Mark Benton, LEED AP Associate Associate Executive Of cer. As President & CEO, Gareth Senior Associate Walter & Haver eld LLP Walter & Haver eld LLP will be responsible for the rm’s operations as Bialosky Cleveland well as provide strategic leadership. Gareth, who Walter & Haver eld LLP is pleased Walter & Haver eld LLP is pleased to is a graduate of Nottingham Trent University in Mark Benton, LEED AP of Bialosky to announce that Brendan D. Healy announce that Cary A. Zimmerman the United Kingdom and the University of Cleveland has been promoted to has joined the rm as an associate has joined the rm as an associate Cincinnati, joined AMHigley in 2001 and was Senior Associate. His construction in its Public Law Group. He has extensive experi- in its Corporate Transactions Group. Cary represents promoted to President in 2010. Bruce G. Higley, administration leadership on the American Greetings ence representing public entities throughout Ohio, public and private companies with their corporate the 3rd generation of the family to lead the World Headquarters in Westlake, OH contributed to including cities, villages, townships, and government and securities transactions, including mergers and company, will remain active as Chairman. its exceptional success and reception. Prior to agencies. He has advised various municipal boards acquisitions, debt and equity issuances, venture ARCHITECTURE joining Bialosky Cleveland, Benton served as the and commissions, including Boards of Zoning capital, angel investing, and corporate governance sole construction administration representative for Appeals, Planning Commissions, and Civil Service matters. In addition to her Juris Doctor, Cary has a Aaron Hill, AIA Rafael V’oly Architects on Phase II of the $125 Commissions. For more information, visit Master of Science in Management-Finance. For more million renovation and expansion of the historic Associate Principal www.walterhav.com information, visit www.walterhav.com Cleveland Museum of Art. Bialosky Cleveland LAW Aaron Hill, AIA joins Bialosky Jaime U. Kolligian Cleveland as an Associate Principal Crain’s People on the Move promotional feature showcases at a time of unprecedented rm Shareholder Northeast Ohio job changes, promotions and board growth in staff, services, project volume, and Kastner Westman & Wilkins recognition. Previously as a Partner at Richard appointments. Guaranteed placement in print, online and Fleischman + Partners Architects, he directed (Umerley) Kolligian has spent her in a weekly e-newsletter can be purchased at high-pro le institutional projects such as The A.J. entire legal career at KWW and has Celebrezze Federal Building Plaza. At Bialosky, Hill been involved in all aspects of the www.crainscleveland.com/peopleonthemove. will lead diverse project teams for government and rm’s employment defense practice. She routinely higher education work, and will adopt a strategic advises private and public sector employers on role in the rm’s trajectory. employee relations matters, including ADA and FMLA For more information or questions regarding advertising in leave management and assists employers in this section, please call Lynn Calcaterra at defending complex employment litigation. Kolligian spearheaded efforts to form KWW’s popular Rise & 216-771-5276 or email: [email protected] Learn HR management training series and is an OSBA certi ed specialist in labor and employment law. CRAIN’S CLEVELAND BUSINESS | JANUARY 9 - 15, 2017 | PAGE 19

THE LIST Northeast Ohio’s top SBA NORTHEASTlenders OHIO'S TOP SBA LENDERS TheRanked by dollar List value of 7(a) loans in fiscal 2016 Ranked by dollar value of 7(a) loans in fiscal 2016

THIS COMPANY NAME VALUE OF APPROVED LOANS VALUE OF APPROVED LOANS NUMBER OF LOANS NUMBER OF LOANS YEAR HEADQUARTERS FISCAL 2016 FISCAL 2015 % CHANGE FISCAL 2016 FISCAL 2015 % CHANGE

Huntington National Bank (1) $134,278,100 $136,272,400 -1.5% 1,091 1,201 -9.2% 1 Columbus

U.S. Bank $21,068,600 $12,763,100 65.1% 87 71 22.5% 2 Minneapolis, Minn.

KeyBank NA $14,693,900 $11,001,800 33.6% 54 62 -12.9% 3 Cleveland

RidgeStone Bank $14,322,000 $11,796,000 21.4% 10 7 42.9% 4 Brookfield, Wis.

Newtek Small Business Finance Inc. $13,855,000 $2,778,300 398.7% 12 6 100.0% 5 New York

Live Oak Banking Co. $12,219,000 $6,645,000 83.9% 14 11 27.3% 6 Wilmington, N.C.

Home Savings & Loan Co. $10,273,000 $2,007,000 411.9% 3 2 50.0% 7 Youngstown

FirstMerit Bank (1) $9,538,400 $8,181,900 16.6% 49 33 48.5% 8 Akron

United Midwest Savings Bank $9,077,000 ÑÑÑÑ ÑÑÑÑ 6 ÑÑÑÑ ÑÑÑÑ 9 De Graff

Fifth Third Bank $8,293,100 $17,494,000 -52.6% 40 27 48.1% 10 Cincinnati

The Bancorp Bank $7,455,000 ÑÑÑÑ ÑÑÑÑ 2 ÑÑÑÑ ÑÑÑÑ 11 Wilmington, Del.

First Western SBLC Inc. $6,958,000 $2,176,000 219.8% 4 2 100.0% 12 Dallas

West Town Bank & Trust $4,731,000 $4,405,000 7.4% 5 2 150.0% 13 North Riverside, Ill.

Consumers National Bank $4,569,700 $5,228,700 -12.6% 19 17 11.8% 14 Minerva

Citizens Bank $4,493,100 $3,814,300 17.8% 54 38 42.1% 15 Providence, R.I.

Growth Capital Corp. $4,273,000 $4,882,200 -12.5% 49 36 36.1% 16 Cleveland

State Bank and Trust Co. $3,858,900 $5,669,000 -31.9% 10 13 -23.1% 17 Defiance

Stearns Bank NA $3,740,200 $6,150,500 -39.2% 17 11 54.5% 18 St. Cloud, Minn.

JPMorgan Chase & Co. $3,702,600 $5,600,000 -33.9% 25 36 -30.6% 19 New York

First Savings Bank $3,702,000 ÑÑÑÑ ÑÑÑÑ 4 ÑÑÑÑ ÑÑÑÑ 20 Clarksville, Ind.

PNC Bank $3,369,000 $6,931,200 -51.4% 24 35 -31.4% 21 Pittsburgh

Compass Bank $3,280,000 ÑÑÑÑ ÑÑÑÑ 2 ÑÑÑÑ ÑÑÑÑ 22 Birmingham, Ala.

Liberty Bank NA $3,126,000 $2,105,000 48.5% 10 5 100.0% 23 Beachwood

Celtic Bank Corp. $2,886,800 $2,592,000 11.4% 14 16 -12.5% 24 Salt Lake City

CFBank NA $2,794,000 $3,150,000 -11.3% ÑÑÑÑ 1 -100.0% 25 Worthington (2)

Wells Fargo Bank NA $2,730,400 $4,679,500 -41.7% 8 14 -42.9% 26 Sioux Falls, S.D.

Commercial & Savings Bank $2,711,700 $80,000 3,289.6% 8 1 700.0% 27 Millersburg

Home Loan Investment Bank FSB $2,580,000 ÑÑÑÑ ÑÑÑÑ 2 ÑÑÑÑ ÑÑÑÑ 28 Warwick, R.I.

Westfield Bank FSB $2,567,200 $2,848,700 -9.9% 11 9 22.2% 29 Westfield Center

Civista Bank $2,507,500 $75,000 3,243.3% 2 1 100.0% 30 Sandusky

First Federal Lakewood $2,439,000 $1,286,000 89.7% 3 1 200.0% 31 Lakewood

First Financial Bank $2,150,000 $41,000 5,143.9% 3 1 200.0% 32 El Dorado, Ark.

American Business Lending Inc. $2,125,800 ÑÑÑÑ ÑÑÑÑ 1 ÑÑÑÑ ÑÑÑÑ 33 Dallas

Yadkin Bank $2,121,000 ÑÑÑÑ ÑÑÑÑ 2 ÑÑÑÑ ÑÑÑÑ 34 Statesville, N.C.

First Home Bank $1,950,000 $250,000 680.0% 9 1 800.0% 35 Seminole, Fla.

The First National Bank of Bellevue $1,741,300 $1,102,600 57.9% 8 5 60.0% 36 Bellevue

First Niagra Bank NA $1,664,000 $350,000 375.4% 3 1 200.0% 37 Buffalo, N.Y.

RESEARCHED BY CHUCK SODER

Source: Cleveland District office of the U.S. Small Business Administration. Numbers are for fiscal years ended 9/30/2016 and 9/30/2015. The Cleveland District covers 28 northern Ohio counties. Crain's does not independently verify the information and there is no guarantee these listings are complete or accurate. Individual lists and The Book of Lists are available for purchase at www.crainscleveland.com. (1) Huntington National Bank acquired FirstMerit in August 2016. (2) Headquarters moved from Fairlawn to Worthington, near Columbus, in mid 2016.