20150810-NEWS--1-NAT-CCI-CL_-- 8/7/2015 2:37 PM Page 1
$2.00/AUGUST 10 - 16, 2015
An old meat plant is now home to a tight-knit community of entrepreneurs and artists — P. 3 Slack, the ‘fastest-growing business app ever,’ replaces internal email at local tech companies — P. 6
Call it a comeback Mortgage businesses hitting highest peak since Great Recession By JEREMY NOBILE [email protected]
The housing market is truly recov- ering, and that’s translating into surging business for banks. Residential lending is a common cornerstone of business for commu- nity banks like Orrville’s legacy First National Bank, which merged in June with Canfield’s Farmers Na- tional Banc Corp. And it remains a main focus for Mark Witmer, former First National president and CEO turned chief banking officer and se- GETTY IMAGES nior executive vice president for Farmers. Witmer said mortgage closings are up 70% over this point last year. In- come from that business is growing at the same clip. Considering deals already in the pipeline, Witmer said AND SO IT BEGINS... he expects to exceed 2014’s total number of sales by the end of the month. Debate gives city taste of what to expect when convention comes to town It’s far and away the strongest ac- tivity they’ve seen since the econom- By JAY MILLER presidential candidates had until the debate, who attended Thursday’s main event. An ic downturn, Witmer said. [email protected] never been “face-to-face” with a large national under-construction downtown and whispered, And for Farmers, now with $1.6 audience before, and so it was important that off-the-record comments that convention plan- billion in total assets, the mortgage “I’m just so impressed with the city, especial- they make a good first impression. ning may be a little, but not seriously, behind business absorbed through First Na- ly with the police, really impressed,” said the He could have added that Cleveland was get- schedule make that clear. The city, for example, tional marks the bank’s second- man in the dark suit and tie, wearing a badge ting the same chance to make a first impression. is still waiting for Congressional approval of a largest bucket of non-interest in- around his neck that identified him “It’s going to bring tremendous interest in the security grant. come behind the trust and wealth as a Republican National Commit- city,” said former state Rep. Ed Jerse, a Democ- But, for now, those are minor concerns. management business. RNC tee “Guest.” rat and veteran of four of his party’s national Westfield Bank president and CEO It was 11:45 p.m. last Thursday, conventions, as he walked downtown streets Jon Park said the housing market is Aug. 6, and he was talking to a pair early Thursday. “It’s a dry run for the conven- ‘Buckle up’ for the ride “sizzling” right now — and it’s not CLE of police officers in front of the tion.” The pats on the city’s back last week were just a flash in the pan. The $1 billion Horseshoe Casino Cleveland on The early returns suggest it was a landslide bipartisan. As Democratic Party leaders were asset community bank logged 60% Public Square. win for Cleveland, and certainly for the restau- assembling for a news conference last Thursday growth at mid-year 2015 in its mort- “We’re always here; there’s just a few more of us rateurs and hoteliers who catered to packed afternoon at the Radisson Hotel Cleveland- gage business compared with the because of the debate,” said one of the officers. houses while the Republican National Commit- Gateway, just across the street from the Quick- like period last year. About 30% of “Well, I’m just so impressed,” the man said as tee, its 17 presidential hopefuls and their en- en Loans Arena debate site, Rep. Marcy Kaptur that business is for new residential he and his companion continued walking toward tourages and a media horde did their business. told Crain’s that she was hearing good things construction alone. the Renaissance Hotel. Of course, the city is not quite ready for next about the city from outside the political arena. And houses appear to be selling Earlier that day, on MSNBC’s “Morning Joe” summer’s Republican presidential nominating “We were just with some people from the faster. For Westfield, homes sold last broadcast, Chuck Todd, the host of NBC’s convention, when the number of people who British Embassy,” she said. “They’re here for the year were on the market between “Meet the Press,” pointed out that most of the come to town will grow to 10 times the 4,500 See DEBATE, page 22 See MORTGAGES, page 21 32
7 ALSO INSIDE: MIDDLE MARKET
NEWSPAPER Good help is hard to find, but growing Entire contents © 2015
74470 83781 companies have learned a few tricks ■ Page 13 by Crain Communications Inc. Vol. 36, No. 32 0 PLUS: ADVISER ■ TAX TIPS ■ & MORE 20150810-NEWS--2-NAT-CCI-CL_-- 8/7/2015 11:51 AM Page 1 Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters. PRESENTED BY
52 TIPS FOR YOUR BUSINESS ¶)LULÄ[ZVM*SV\K*VTW\[PUN
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AUGUST 10 - 16, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3 Retail clinic biz gets competitive
By TIMOTHY MAGAW operating officer Doug Boodjeh. [email protected] Across the country, there are 1,800-plus retail clinic locations, Northeast Ohio’s ballooning according to a recent report from health care infrastructure might be Manatt Health, a national health dominated by big-box bricks and care consulting firm. Still, according to mortar, but a less-assuming version the study, that represents only a sliver of care is unfolding in neighbor- — about 2% — of all primary care hood convenience stores. encounters. That said, local health Retail clinics — basically, small care officials stress that this isn’t a fad offices housed within drug stores like considering many of the patients CVS or Walgreens — are nothing that use retail clinics don’t have a new, but a handful of new players designated primary care physician. recently entered the fold and are MetroHealth CEO Dr. Akram promising to shake up an already- Boutros said the clinics are a “perma- competitive market for low-cost, on- nent part of the health care system.” demand services for non-emergency “This is a way of engaging these health care needs such as sinus and patients early on in their health care ear infections, sore throats or rashes. journey,” he said. HealthSpot, a Columbus-area company, recently rolled out its vir- tual walk-in health care kiosks at 25 It’s tough business Rite Aid stores throughout the state, While the retail clinic industry is including 18 in Northeast Ohio. a relatively young one, it’s not terri- HealthSpot’s kiosks allow patients to bly easy to break into. interact with physicians through CVS’ Minute Clinic, for instance, STARTUPS, ARTISTS videoconferencing software and is by far the largest provider of interactive medical devices. As part retail-based health care, with more of its statewide rollout, HealthSpot than 900 locations across the coun- connects patients with physicians try. The Cleveland Clinic, mean- from Cleveland Clinic, University while, has had an arrangement with Hospitals and Kettering Health Net- the drugstore chain since 2009, and work in the Dayton area. today its docs serve as the medical INVADE MEAT PLANT Also, last week in Parma Heights, directors for 26 of its clinics in The MetroHealth System opened its Northeast Ohio. first clinic staffed by a nurse practi- Giant Eagle made a concerted effort tioner within a Discount Drug Mart to get into the health care space Hildebrandt is home to woodworkers, bikers and beekeepers store. The health system plans to a few years back, but it has halted open four more in Cuyahoga County those efforts. The Pittsburgh-based By RACHEL ABBEY McCAFFERTY by year’s end, with the possibility for grocery chain had forged arrange- [email protected] even more beyond that. The parties ments with UH and Summa Health are in talks about extending the System in Akron to open so-called Between the walls of what once Medina-based retail chain’s rela- FastCare clinics in cities such as was a meat processing plant in tionship with the health system Lyndhurst, South Euclid and Cleveland now resides an eclectic beyond Cuyahoga County, accord- Wadsworth. All of those locations mix of entrepreneurs and artists, a ing to Discount Drug Mart chief See CLINICS, page 4 number of whom just moved in this year. Bill Hildebrandt, property manag- er and owner of Hildebrandt Build- ing LLC, has been deliberate about Finally: Builders plan attracting small businesses and artists to his family’s historic 120,000-square-foot building. After the Hildebrandts’ meat processing company closed its doors in 1970, new east side offices the building at 3619 Walton Ave. housed a number of industrial ten- By STAN BULLARD and residential space as well as ants before Hildebrandt shifted his [email protected] offices, means there is a new breed approach to small businesses. REBECCA R. MARKOVITZ of offerings to the traditional free- “Everybody who came in, they Dani Pajak runs Disowned Customs, a custom motorcycle shop, out of Skidmark The long drought in construction standing office building. The work had a vision and a dream,” Hilde- Garage, one of the small businesses helping to transform the Hildebrandt build- of multitenant office buildings in also takes place as the appetite for brandt said. ing. See page 12 for profiles on three of these companies. the east suburbs may soon end, per- office space diminished this past Construction of the building be- haps even giving way to a flash decade as open office designs and a gan in the early 1900s on Clark Av- shareholders and started renting it kitchen that food trucks, chefs and flood, as developers pursue plans to more mobile workforce continue to enue as a home for what Hilde- out for general warehousing and other businesses can use. The ma- add four projects in the region’s gain momentum. brandt said became Hildebrandt light industrial purposes. In the jority of the second floor is filled largest suburban office market. Steve Egar, the broker at Beach- Meat Products; his great grandfather ’90s, Hildebrandt convinced his with artists, and there’s a beekeep- Realty developers are putting wood-based Steve Egar Associates, originally worked for another meat mother that the time was right to er on the roof. their fingers to the wind to see if the reflects the handicapping among processor, becoming more and start weeding out the building’s time is right to build as the last commercial realty pros as he surveys more involved until he eventually most environmentally unfriendly properties added to the market, the situation and observes, “It’s not bought the other partner out. The tenants. ‘Home away from home’ DDR Corp.’s headquarters expan- about what’s proposed. It’s about German immigrant was hardwork- Today, the building is home to The draw of the building varies by sion at 3333 Richmond Road in who will put a building up.” There ing and inventive, Hildebrandt said, more than a dozen artists and small tenant. Beachwood and homebuilder Dino even is talk of construction on a and the maker of products like lunch businesses who keep the spirit of in- Some mentioned the community Palmieri’s Landerwood Crossing speculative basis, or building with- meats, hot dogs and sausages vention alive, from Soulcraft Wood- that’s been created there. Jamie building at 3350 Lander Road in out having a high percentage of thrived through the World Wars and shop to Wake Robin Fermented Doyle, vice president of Appropri- Pepper Pike, celebrate their sixth space leased to tenants in advance of the Depression. But as the company Foods to Rising Star Coffee Roast- ately Applied Technologies Inc., and seventh birthdays, respectively. breaking ground. That has been un- shifted to focus on supermarket ers. Rates on the first floor are com- said the small solar panel installer Those spotty offerings also are a heard of here since the late-1990s. chains and private label products in parable to other buildings, but the has made contacts at the building testament to how the rental office The most recent project to surface the ’60s, business started to suffer. second floor is more affordable, and has even been able to adapt market slowed after 2001 through is a new joint venture between two “We were literally shrinking our Hildebrandt said, noting that he some small solar-related projects to war and recession in an area that Beachwood-based real estate con- market,” Hildebrandt said. plans to offer nonprofit rates in the the other entrepreneurs’ needs. once spawned at least one new cerns, Goldberg Cos. and the King By 1970, the company had closed future. Michael Mikula of Mikula Glass and office building, and once as many as Group. The two quietly last month its doors, facing more intense na- Meat processing was such a seg- Katie Simmons, founder of the six, in a single year. began circulating among office leas- tional regulations. Hildebrandt’s mented business that no two rooms Hildebrandt Artist Collective, both However, the rise of mixed-use ing agents plans for a four-story of- parents — Joseph and Coletta — in the plant are alike, Hildebrandt said they liked being part of a com- projects, with combinations of retail See OFFICES, page 4 bought the building from the other said. The building also boasts a See BUILDING, page 12 20150810-NEWS--4-NAT-CCI-CL_-- 8/7/2015 2:09 PM Page 1
4 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015 CLINICS SOLD continued from page 3 Boutros said MetroHealth will be All of the Cleveland-based health have since closed, though Giant Ea- sidestepping what has become the systems have been piloting the 1331 KELLY AVENUE, AKRON, OHIO gle still operates one FastCare clin- largest criticism of the health care in- kiosks, but the Rite Aid deal facilitat- ic in the Columbus area. dustry — the fragmentation of health ed the first major push by “We continue to evaluate numer- care. Industry groups have chastised HealthSpot to get its technology in ous opportunities to deliver a strong the retail health care industry for front of consumers. Over the next overall health and wellness experi- working outside the parameters of six months, the company plans to ence for our customers,” said Dan local health care delivery systems. put 50 to 100 more of its kiosks at Donovan, Giant Eagle’s marketing Retail clinics might be convenient, Rite Aids in Ohio and beyond. manager, in an email. “While cus- but if that care isn’t coordinated or The goal, according to CEO Steve tomer acceptance of this clinic is communicated in some way with a Cashman, is to make HealthSpot as high, we do not currently have plans patient’s primary care physician, common as Redbox — the automat- for additional locations.” complications could occur. ed movie rental kiosks at grocery When asked about the relation- That’s part of the reason major re- stores and convenience stores. Newmark Grubb Knight Frank ship with Giant Eagle, a UH tail chains like CVS and Walgreens The biggest challenge to its is pleased to announce the $9.2 are collaborating with health sys- growth, he said, is customer aware- Visit spokesperson said those locations million sale of the 212,000 SF TerryCoyne.com closed due to low volume. A Summa tems as they open new clinics. Over ness. After all, walking into a giant manufacturing facility located at Or Call Terry at spokesperson said the model “didn’t the last five years or so, the Clinic’s box and chatting with a doc through 1331 Kelly Avenue in Akron. 216.453.3001 make sense for us any longer.” relationship with CVS has evolved to a monitor isn’t your average health MetroHealth’s Boutros, however, a point where they’re electronically care encounter. But don’t knock it Terry Coyne and Mike Plaspohl doesn’t seem fazed by the spirited sharing patient records. When it until you try, he said. “You didn’t use represented the seller. competition in the retail space. As he started, the Minute Clinic’s staff Uber until you tried Uber,” said sees it, the MetroHealth outposts at were faxing over patient notes. Cashman, referring to the popular 1350 Euclid Ave., Suite 300 Discount Drug Marts are a “way of “We know there’s a segment of ride-sharing app. “There’s definitely Cleveland, Ohio 44115 engaging these patients early on in the population that loves the conve- a customer-awareness issue.” their health care journey.” He said nience of Minute Clinics, but we Retailers have spent billions of the staff won’t just be working on an want to know what’s going on and dollars trying to get into the health episodic basis but also doing pro-ac- what’s exactly happening with these care space, but Cashman argues that tive follow-up to ensure the patients patients,” said Dr. Michael the traditional model — quaint of- visiting the clinics are recovering Rabovsky, chairman of the Clinic’s fices within drugstores — is too ex- and following care instructions. department of family medicine. He pensive. It costs significant dollars to They’ll also be part of the system’s added that the Clinic and CVS are in build out and staff a space whereas electronic medical record. “We have talks about how to expand the rela- the HealthSpot kiosks carry an up- been in a very deliberate way look- tionship even further, though he front cost of about $10,000 to ing at population health and the role couldn’t get into details. $15,000 apiece. of the retail market in managing the HealthSpot’s entrance into the “We’re shovel-ready with very low population,” Boutros said. market has been perhaps the most overhead,” Cashman said. “We’re By integrating its retail outposts intriguing development on the retail low-cost out of the gate and can with the rest of the health system, health care front. scale very quickly.”
Group managing director who weaken the appetite for new build- heads its tenant rep practice in ings. The lack of recently built prop- OFFICES Cleveland, believes the timing is erties attracts Adam Fishman, a continued from page 3 right for new rental office space. principal of Fairmount properties. fice building on the northwest cor- “There is a lack of high quality of- “I think there’s pent-up de- ner of Chagrin Boulevard and Rich- fice space in the eastern market,” mand,” Fishman said. He said Fair- mond Road next to Goldberg’s Sig- Converse said. “If you want 20,000 mount, at its mixed-use projects in nature Square I and II office square feet in the eastern suburbs, Hudson and with Iris and Scott buildings. Also nearing the starting there are basically no good op- Wolstein at the Flats East Bank, has gate after making plans for another tions.” New product comes at a found stronger demand for office building since 2008 is Palmieri, who price, probably above $30 a square space close to amenities such as sources say is close to signing a foot, but Converse said companies restaurants than in freestanding prospective anchor tenant for 3900 are in the hunt for efficient space suburban office buildings of old. Park Boulevard. The three-story of- that is designed for their use, which Another factor may tip the bal- fice building is located between the offsets higher costs. ance in favor of newly developed of- Chagrin Highlands Buildings I and II fice buildings, according to Donald King, CEO of King Group. in Beachwood. ‘There’s pent-up demand’ Going into the mix as well are of- “Frankly, a lot of what are consid- fice spaces at mixed-use projects in Brian Hurtuk, managing director ered Class A office buildings in the Orange Village and Shaker Heights. of Colliers International’s Cleveland east suburbs are 30 to 35 years old,” Fairmount Properties of Cleve- office, has experience as an office- King said. “We will have a building land and its partners plan to install a building developer as well as a bro- that is modern, more efficient, de- total of 150,000 square feet of office ker. He points to the most com- signed for today’s tenants who no KNOW-HOW space above storefronts in two build- pelling argument for new office longer have big (private offices) but ings at the proposed Pinecrest pro- buildings: There are a sizable num- want more collaborative space.” We have over 75 years of experience as a ject in Orange, which also includes ber of leases that will come up for The Signature Square III plan in- paving contractor. There isn’t much we haven’t restaurants, a movie theater and renewal by the end of 2016. cludes space for a building housing done. Can your paving contractor say that? apartments in a $225 million project. With office leases expiring, com- a restaurant on the corner. The Meantime, RMS Enterprises, a de- panies are more willing to consider building’s location and amenities velopment concern formed by the moving and, with few options for such as a fitness center at the exist- • Asphalt Paving • Pavement Milling • Pavement Marking founding families of Forest City En- new properties the past decade, ing Signature Square buildings will terprises Inc., plans to construct may be ready to do so. also attract tenants, he said. “We Hot Mix Production Facility • 60,000 square feet of offices in its “Basically, 10% of the market is absolutely believe the market is • Concrete and Excavating Services proposed remaking of the dated Van going to turn over the next 18 ready for new buildings,” King said. Aken Shopping Center, 20119 Van months,” he said. “That’s about Palmieri, CEO of Solon-based Aken Blvd., as a contemporary, 700,000 square feet of space. A third Palmieri Enterprises, said the mar- open-air retail, residential and office of those tenants will not hit the mar- ket is the strongest it has been since complex. Future phases could take ket; they’ll renew. However, some 2008 when he bought the land for the project to as much as 200,000 tenants will need new space to ex- his building at the Chagrin High- Quality and Excellence in pand. Or someone else may own lands office park. He hopes to start Asphalt Paving Since 1939 square feet of office space. At first blush, with 18% vacancy in the building they leased before.” construction before the fall. Al- the eastern suburbs according to the Hurtuk worries there may be one though he is negotiating for an an- 800.PAVE.NOW Newmark Grubb Knight Frank’s sec- office building too many in the chor tenant, his financing would al- ond quarter office market report, planning stages. In part, that’s be- low him to start building on www.RonyakPaving.com adding new buildings seems to be a cause so little has been built here speculation if he chooses to do so. reach. However, vacancy dropped for so long that it’s hard to project That may be the biggest other dif- from 19.7% just a year ago, accord- office demand. Moreover, many ference between now and the re- Volume 36, Number 32 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. ing to NGKF’s same-quarter 2014 re- east suburban and Rockside Road cent multitenant office-shy years, Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2015 by Crain Communications Inc. Periodi- port, and rents have climbed. office buildings have changed which were dominated by corpo- cals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, De- However, both brokers and devel- hands over the past year. He said rate build-to-suit headquarters pro- troit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-210-0750 opers say the opportunity for a new new owners deserve a chance to up- jects. “Every week I get calls from Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks building or buildings is hidden in the grade those properties and seek lenders wanting to loan money,” for change of address. For subscription information and delivery concerns send correspondence to Audience Development Depart- tenants. Such attractive offerings Palmieri said. “I used to be calling ment, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleve- details of the office market. land.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Chandler Converse, a CBRE from less pricey buildings also may them.” 20150810-NEWS--5-NAT-CCI-CL_-- 8/6/2015 3:43 PM Page 1
AUGUST 10 - 16, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 5 Auto bigwigs back Everykey prior to launch
By CHUCK SODER The new version is less expensive according to Mike Maczuzak, CEO [email protected] to manufacture. of SmartShape Design, which It also allows you to pull the elec- helped Everykey design the product Former Chrysler CEO Tom LaSorda tronic fob out of the wristband, in and work with suppliers and a few thinks Everykey “will change the way case you’d rather put it in your local manufacturers. we control our daily lives.” purse or your pocket. “Everything is accounted for at The Cleveland-based startup just There shouldn’t be more delays, this point, so it’s not just a guess,” raised $720,000 — and it landed a but Wentz noted that Everykey still he said. bunch of big-name allies in the has to pass a security audit being Maczuzak was one of the two process. conducted by a local company individuals who invested in Everykey. Many of them are tied to the auto- called SecureState. The other was Edward Cochran, an motive industry, which is not a coin- Everykey is almost ready to start attorney in Shaker Heights. cidence. manufacturing, so issues could crop Maczuzak said he immediately Everykey is about to release a up there, too. For instance, it’s buy- understood the value of the prod- wristband that lets you automatically ing parts from 25 different compa- uct. Plus, he was impressed by unlock your smartphone, your com- nies. Each part has a different lead Wentz. puter and almost all of your Internet time. Right now, however, those “Chris Wentz personally is an CONTRIBUTED PHOTO accounts, when it gets close to them. lead times appear manageable, impressive, bright guy,” he said. Everykey’s device was designed to unlock smartphones, doors — even cars. All it needs is your permission. No passwords required. But the company’s grand plan is bigger. It wants the device to unlock everything you own: Including your house and your car. That’s why Everykey wanted to raise capital from IncWell. The Michigan-based venture capital firm and two Cleveland-area investors have injected $520,000 into the com- pany, which raised another $195,000 in grants and loans from state and It pays to tend local economic development pro- grams. LaSorda founded IncWell. And a few of its investors have impressive resumes as well. To name a few: Roger Penske is to your fl ock. chairman of Penske Corp., a huge player in the world of automotive dealerships and transportation logis- tics. Dieter Zetsche is chairman of Daimler AG and head of its Mercedes-Benz car division. Wayne Over the past 5 years, employee Sales is a former CEO of two major retailers, Supervalu and Canadian out-of-pocket expenses have Tire Corp. 1 Everykey CEO Chris Wentz said risen nearly 40%. he’s met all of the investors listed on IncWell’s website and regularly gets advice from them. “They’re becoming pretty good Afl ac can help protect your employees with friends of mine,” said Wentz. The 24- cash to cover their bills in the event of a covered year-old had started multiple small companies before he and a few other sickness or injury. And now employees’ claims students at Case Western Reserve can get paid in a day with Afl ac’s One Day PaySM University came up with the idea for when they submit online.2 Everykey. The company’s 14 employees work out of a single conference Small businesses like how easy it is to add room on campus, though they’re voluntary coverage to their benefi ts at no looking for more permanent space direct cost. Especially when it is from Afl ac, nearby. In addition to advice, LaSorda the number one provider of worksite/voluntary also has given Everykey a glowing insurance sales for 13 consecutive years.3 Afl ac endorsement. may even be a pre-tax deduction, so when we “Everykey technology will change say it pays to tend to your fl ock, it just might. the way we control our daily lives,” LaSorda stated in a news release about the investment. “It’s one of the most exciting products we have Call your local agent and visit seen for some time.” The IncWell team eventually afl ac.com/smallbiz could help Everykey build partner- ships with major auto manufactur- ers — a step that will be necessary if the device is ever to work with their vehicles. First, however, Everykey has to focus on a more basic problem: Get- ting the product out the door. The company plans to release the device in late September. However, it was originally supposed to hit the market in March. The delay upset some of the 2,300 12014 Employer Health Benefi ts Survey, The Henry J. Kaiser Family Foundation, September 10, 2014. 2One Day PaySM is available for most properly documented, individual claims submitted online through Afl ac SmartClaim® by 3 PM ET. Afl ac SmartClaim® not available on the following: Short Term Disability (excluding Accident and Sickness Riders), Life, Vision, Dental, Medicare Supplement, Long Term Care/ people who pre-ordered the device Home Health Care, Afl ac Plus Rider and Group policies. Individual Company Statistic, 2015. 3Eastbridge Consulting Group, U.S. Worksite/Voluntary Sales Report. Carrier Results for 2002-2014. Avon, CT. through Kickstarter.com. A few of Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York. them even posted comments saying Z150001R Worldwide Headquarters | 1932 Wynnton Road | Columbus, GA 31999 3/15 they wanted refunds. So what happened? The company decided to redesign the product. 20150810-NEWS--6-NAT-CCI-CL_-- 8/6/2015 2:14 PM Page 1
6 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015
For Sale - 26,470 SF Industrial Bldg. Investor / User Opportunity Why send email? Instead, tech companies use Slack Popular app promotes free-flowing (often silly) office dialogue
By CHUCK SODER company, which has 240 employ- 10700 Broadway Avenue, Garfi eld Hts., OH [email protected] A young group of fans ees in Garfield Heights, started us- The Fighting Unicorns love Slack. ing Slack in September 2014. • 26,470 SF on 2.847 Acres • Buss Ducts Employees at University Tees So much so one member of the all- Today, there are conversation • Built in 1941/Addition 2000 • (2) 5 Ton Cranes don’t send all that many emails to girl robotics team sent the company “channels” for every department at • (2) 12’ x 14’ Drive-In Doors • Fenced-in Property each other these days. an email this past spring. Lauren the company, which specializes in • (1) 10’ x 10’ Drive-In Door • Clean Phase II Environmental They now use Slack, which is Egts — a sophomore at Hathaway distributing digital books and audio • 14’ - 16’ Ceiling Height Report June 2014 quickly becoming the main internal Brown School in Shaker Heights — books through libraries. • 200AMP/240V/3-Phase Electric • Off ered for Sale at: $625,000 communication tool for a long list asked Slack to sponsor the team. For instance, if you’re on the of local tech companies, as well as a Slack said yes. And they wrote a marketing team, you’ll probably Joseph J. Martanovic few other tech-savvy businesses. blog post about it. end up following conversations in 216.861.5434 Slack claims to be “the fastest One of the team’s mentors intro- the marketing “channel.” But if you growing business app ever,” and it end up working on a project with [email protected] HannaCRE.com duced them to Slack. At first, a few might be true. Launched in Febru- students used it to communicate the marketing team, you can jump ary 2014, the app had 1.1 million while scouting the competition at into their channel at any time. daily users as of June 24 — up from events — including the FIRST Robot- “It easy to tell somebody, ‘Just go 750,000 in mid-April. And many of ics Competition World Championship grab that channel. You’ll get up to them keep the app open on their in April. Then it spread. speed quickly,’ ” Franklin said. DID YOU KNOW?... computers for hours on end. In her interview with Slack, Egts Projects have channels, too. Don Pawlowski of University said they use the tool “for everything Some subprojects do as well. And Tees closes it only when he restarts from lunch instructions, to switching then there are some random chan- his computer. out pit crew, to finding where that nels. A book channel. A wellness 70% “How did we do our business be- rookie wandered off to.” channel. A kudos channel. fore Slack existed?” said Pawlowski, They’re serious about it. During Sound complicated? It’s not, of subscribers have contacted a company who is chief technology officer for competitions “everyone has to be Franklin said. Employees picked it because of an advertisement they saw in the Lakewood-based custom ap- with someone with Slack on their up fast, she said, adding that she parel company. phone at all times!” Egts said. You probably did more training than Crain’s Cleveland Business. University Tees relies heavily on can find the entire blog post by do- she needed. Slack. For instance, customer ser- ing a Google search using the words On the other hand, if you were vice employees keep the app open “Slack” and “Fighting Unicorns.” Or trying to have all those conversa- all day, since they use it to respond visit: bit.ly/1MXMBiW tions via email, that would be hard, to customer questions. And some of — Chuck Soder according to Lauren Kotmel of the the company’s business develop- Downtown Cleveland Alliance. ment leaders use it to communicate She’s using Slack to communicate with teams of college students who expensive “Enterprise” version of its with a handful of volunteers who For advertising information contact Nicole Mastrangelo at market the company’s clothing at software, which could help the com- are working to promote the new 216-771-5158 or [email protected]. campuses throughout the country. pany make inroads with major cor- dog park near the Cuyahoga River. porations, especially those that have “If I imagined the amount of con- versation we’re having on Slack in Conversation starter to meet strict data security and re- tention policies. But for a small com- email, it would be very overwhelm- But why not just use email? pany like BoxCast — which sells a ing,” she said. For one, Slack more closely mim- device that allows video cameras to The group attracted about 100 ics the back-and-forth flow of an in- send live HD video to the Internet — people to the dog park for a grand person conversation — even if peo- it’s nearly perfect, according to CEO opening-style event on July 19, and ple log in at different times, Gordon Daily. it went smoothly. Slack “probably according to Pawlowski and several Four of the Cleveland company’s played a big part in that,” she said, other people interviewed for this employees (the founders and the because the app made it easy for story. To illustrate the point, technology team) started using the the volunteers to keep up with the Pawlowski and University Tees CEO free version of Slack in January. plans. Partly because messages did- Joe Haddad pulled up a Slack con- They loved it. And they think the n’t end up getting buried in peo- versation from Thursday, July 23. other eight people at BoxCast will, ple’s inboxes. At 1:17 p.m., Haddad posted an too: They plan to roll it out to the Slack also helped the volunteers email he received from a student rest of the company by Labor Day. get to know each other, Kotmel who said that working for Universi- When they do, they’ll probably added. ty Tees had jumpstarted his career upgrade to a paid version of Slack. “On Slack, we’re more inclined to and his life. For $8 per user, per month, they talk to each other as friends and be Two minutes later, Pawlowski can get a permanent, searchable less formal,” she said. chimed in, saying that somebody archive of their message and the That may scare some companies, THERE’S NO should read the letter at the upcom- ability to integrate the software especially bigger ones, according to ing summer sales conference to get with an unlimited number of other Daily, of BoxCast. new students “jazzed up.” At 1:18, programs. “You can so see how the corpo- someone else said they loved that It’s worth it, Daily said, noting rate antibodies will start to acti- BUSINESS idea. vate,” he said. that he rarely sends email to other LIKE YOUR BUSINESS. Then, at 1:33, one of the compa- employees anymore. His reasoning: How did OverDrive react? It cre- ny’s business development leaders Why would he want to hit “com- ated software that monitors Slack said he wanted to do it. Two days pose,” type email addresses, fill out for foul language. For the most part, Vorys, Sater, Seymour and Pease is a full-service corporate law firm that later, he read the letter to a group of a subject line and click on the body though, Franklin’s strategy is to works with all kinds of businesses to help them grow. We recognize that about 80 students in Chicago. of the email — before he starts writ- trust her employees. They’ve be- your business is unlike any other. And what a coincidence — because our What if Haddad had forwarded ing? haved pretty well so far, she said. the letter via email? People proba- But even clean Slack conversa- law firm is unlike any other, too. “Whether you know it or not, bly wouldn’t have been so quick to there’s a ceremony you’re going tions are often peppered with jokes, chime in, since that would involve through,” he said. silly video clips, smiley faces and putting another email into every- other stuff that has nothing to do one’s inbox, Haddad said. with work. “This dialogue wouldn’t have A channel for everyone Pawlowski, of University Tees, is For more information, visit vorys.com. taken place,” he said. Another advantage over email: all for it. Having fun online can cre- Slack mentions 10 big-name cus- ate stronger bonds between em- Vorys, Sater, Seymour and Pease LLP Slack makes it easier to follow on- tomers on the home page of its web- going conversations — even if ployees, he said. And that’s impor- 200 Public Square, Suite 1400, Cleveland, Ohio 44114 site, most of them tech companies you’re jumping in midstream, ac- tant — especially for companies 106 South Main Street, Suite 1100, Akron, Ohio 44308 (Salesforce.com, eBay, etc.) or media cording to Lori Franklin. where people work in different of- companies (such as The Wall Street She’s chief operating officer at fices. Or different states. Columbus Washington Cleveland Cincinnati Akron Houston Pittsburgh Journal and NBCUniversal). Howev- OverDrive, a big player in the elec- “It’s easy to lose touch when er, Slack is still working on a more tronic book business. The entire you’re 2,000 miles away,” he said. 20150810-NEWS--7-NAT-CCI-CL_-- 8/6/2015 2:11 PM Page 1
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8 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015
CONTRIBUTED PHOTO Platform Beer brewmaster Shaun Yasaki brews a beer the company created with Michael Symon’s B Spot burger joints. B Spot, others tap local brewers for unique beers
By KATHY AMES CARR [email protected] OCTOBER FEST Cleveland Beer Week’s annual brewery collaboration is its largest yet. A hybrid brew more than a year “This year, 24 breweries will be involved, with 16 of those based in North- in the making is rolling out this east Ohio,” event director Christine Montague said. “MadCap, Platform, week in all of chef Michael Symon’s Butcher and the Brewer, and Brick and Barrel are all new participants, so B Spot burger joints in Ohio. The we’re really excited.” The categories and partnerships are: Fly On Your Schedule. brew’s name — to be announced this week — is a collaboration WILD CARD: Brew Kettle, Rocky APA/IPA/IPL/PILS: Buckeye, between B Spot and Ohio City- River, Rhinegeist Smuttynose, Portside And Our Reputation. based Platform Beer Co. SESSION: Great Lakes Brewing STRONG BEER: Fat Head’s, It’s the first time B Spot has part- Co., Lager Heads, Oskar Blues Green Flash, Cornerstone nered with a local brewery to co- produce a house-made craft brew. BELGIAN/GERMAN HEFFE: DARK: Platform, Mad Tree, Brick “We’ve always promoted quality Thirsty Dog, Victory, MadCap and Barrel craft beer, but we’ve really taken our LIGHT ALE/LAGER: Butcher and TBD: Willoughby, Cellar Rats, support of local to the next level the Brewer, Ommegang, Chardon national partner TBA through this partnership,” said Brian BrewWorks Deibel, director of business perfor- mance and technology at Michael The format also is new. Symon Restaurants. “Last year, all participants created session beers under 6%,” Montague The principals behind Platform said. “This year, each brewer has a different style they will be brewing.” The Beer Co., whose model is predicated beer names will be announced mid-August. Meantime, Cleveland Beer Week’s on incubation and collaboration, say website, www.clevelandbeerweek.org, will be posting details beginning this this particular line of business is a week on the event’s festivities. harbinger for similar future projects. Cleveland Beer Week runs Oct. 9-18 and features more than 350 keg-tap- “A core concept of our business ping and beer-sipping celebrations — including 10 flagship events — at vari- was to invite home brewers in to col- ous restaurants, bars, retailers and other participating locations throughout laborate, but we realized there’s a Northeast Ohio. huge market for collaboration in the “We know that some 50,000 patrons attend Cleveland Beer Week,” Mon- food and beverage industry,” said tague said. “Retailers and breweries tell us this us their single best week out Reliable, safe, Classic Jet Charter. ARGUS Gold rated. Platform co-founder Paul Benner. of the year for craft beer sales.” — Kathy Ames Carr 440-942-7092. ClassicJetCharter.com. Willoughby, OH. Talks between B Spot and Plat- form materialized more than a year AIRCRAFT MANAGEMENT | SALES AND ACQUISITIONS | CLEVELAND BASED ago, before Platform opened its foot Gypsy contract brewing pro- a day-and-a-half.” doors, Deibel said. duction facility starts cranking out Thompkins organized a schedule “They approached us, and we beer in November, Platform’s own- of collaboration brews that so far loved the idea,” Deibel said. “This ers are hoping to schedule in more have also included Portside, Plat- presented an opportunity for us to be housemade conquests. form, Cellar Rats and Market Garden on the ground level and be involved “We’re in talks with a couple other Brewery, the latter of whose Ginger in making our own product.” local restaurant groups,” co-founder Pearl — a blend of Market Garden’s Discussions about recipes and Justin Carson said. “We love taking Pearl Street Wheat and Old City Soda styles formalized about six months someone’s idea, and working with Co.’s ginger beer — is currently on ago. “We sampled a bunch of differ- (brewer) Shaun (Yasaki) to translate tap. Up next are Bottle House in ent products, including some com- that idea into a beer.” September, Butcher and Brewer mercial examples,” Benner said. Other breweries are aligning with in November and Brew Kettle in “They were looking for a unique sen- locally based or mission-drive orga- December. sory experience.” nizations by way of co-developed “These collaboration beers are so The end result is a co-branded 6% beers, and industry followers expect fun to do because there are no rules ABV Belgian Pale Ale with specific this trend to continue. Microbrewers or boundaries,” Thompkins said. saison yeasts that yield a fruity, spicy gain more grassroots exposure, “We visit the brewery, determine a aroma and a little bitterness. while for-profits and nonprofits style, and then they go really quick.” “We think it’ll attract a lot of alike benefit from the positive asso- Meanwhile, Fat Head’s Brewery palates, which is great for B Spot,” ciations linked to homegrown craft and Great Lakes Brewing Co. in July Benner said. brewers. each tapped their own iterations of The beer is available at Platform’s Heinen’s earlier this year created a special brew that benefits ALS tap house and at B Spots in a CollaBEERation project that spot- research. A portion of the proceeds Strongsville, Crocker Park, Wood- lights unique small-batch craft from Fat Head’s Trail Head Pale Ale mere, Columbus and at FirstEnergy brewed products at its downtown benefits the Cleveland Metroparks. Stadium and Quicken Loans Arena. Cleveland location. The project And Brew Kettle is set to release at Deibel hinted at an eventual pres- began with Great Lakes Brewing the onset of the Cavaliers season its ence at B Spot’s two Detroit locations Co.’s special Rotunda Pale Ale that All For One session IPA. and its new Indianapolis outpost. commemorated the downtown gro- “Craft breweries are finding cre- “We have a lot in common,” cer’s opening in February. ative ways to engage or even give Deibel said. “We’re both Cleveland “Great Lakes had never partnered back because they are so connected businesses that want to grow in with a retailer before,” said Ed to their communities,” said Mary Cleveland and grow with integrity.” Thompkins, Heinen’s wine and beer MacDonald, executive director of Once Platform’s 120,000 square- merchandiser. “The beer sold out in Ohio Craft Brewers Association. 20150810-NEWS--9-NAT-CCI-CL_-- 8/6/2015 2:12 PM Page 1
Seth Godin best-selling author, entrepreneur David Stern former commissioner of the NBA
Mike Abrashoff retired U.S. NavyFuel: Commander, best-selling author Jackie Joyner-Kersee Olympic gold medalist,cleveland philanthropist Alexandra Wilkis Wilson co-founder, Gilt Groupe; CEO of Glamsquad Guy Kawasaki former chief evangelist, Apple; author; entrepreneur
WEDNESDAY, SEPTEMBER 30 | PLAYHOUSE SQUARE | RESERVE YOUR SEAT NOW
Give your company and career some jet Fuel. Prepare to be energized, entertained and fueled up with one great business idea after another. David Stern, Seth Godin, Jackie Joyner-Kersee, Guy Kawasaki, Alexandra Wilkis Wilson and other rock star business leaders will tell their stories and share invaluable secrets and strategies. Between presentations, you’ll rub
elbows with many of Cleveland’s business and community leaders. The intersection of inspirational and SM practical, September 30 will be one of your most powerful days this year. Register today to start your engines. FuelLeadership.com 20150810-NEWS--10-NAT-CCI-CL_-- 8/6/2015 4:07 PM Page 1
10 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015
PUBLISHER: John Campanelli ([email protected]) EDITOR: Elizabeth McIntyre ([email protected]) MANAGING EDITOR: Scott Suttell ([email protected]) OPINION Clean slate The battle over the Obama administration’s Clean Power Plan began long before it was officially un- veiled last week. So it came as no surprise when Ohio on Aug. 5 joined 14 other states to fight the imple- mentation of new federal regulations to reduce pow- er-plant emissions. Like most of the others challenging the U.S. Envi- ronmental Protection Agency, we are a coal-produc- ing state. Coal stands to lose under the new rules, FROM THE PUBLISHER which require states to reduce power plant carbon emissions 32% below 2005 levels by 2030. The pres- ident called the plan “the biggest, most important Weed: Real industry, real news step we’ve ever taken to combat climate change.” The majority of Americans agree that action must It was just before noon when I got based GIE Media, which publishes busi- ture Magazine, THC Biz and more.) be taken to limit greenhouse gases from power Noelle Skodzinski on the phone last ness magazines serving dozens of in- One of the reasons behind CBT’s plants, even if it means higher electricity costs, ac- week. dustries. By April, the deal was done. rapid growth is that it’s positioned cording to a recent Washington Post-ABC News poll. She’d spent the morning doing what “We signed the papers on 4/20 — itself as an ally to the marijuana busi- editors in the news business do these April 20th ,” Skodzinski said with a laugh. nesses. Those in support include people in coal country. days: searching news feeds, checking on After the sale, Hermes moved on, but “We’re advocating for the advance- Here’s what those fighting the regulations seem to impending legislation, writing an article Skodzinski stayed. ment of the industry,” Skodzinski said. be missing. The Clean Power Plan doesn’t tell states or two, tweeting links and posting news She’s telecommuting to Northeast “There’s a need out there for all kinds what and how to cut. The plan gives states flexibility online. Ohio from her home in New of information. The businesses in this to come up with their own solutions, with the initial Skodzinski is editor of one Jersey. Skodzinski is CBT’s industry are struggling with so many of Northeast Ohio’s newest only editorial staffer, at least issues.” plans due in 2016 and the final ones in 2018. media outlets, and unlike the for now. It also doesn’t hurt that legal marijuana Yes, Ohio is a coal-producing state. But coal has well-publicized downward The search is on for a man- is officially the fastest-growing industry proven to be harmful to our environment. Coal-fired trajectory of other local news aging editor, someone who in the United States — with 74% growth plants are the largest source of the planet-warming brands, her operation is rock- can work at GIE Media’s in 2014 and another 32% in projected eting upward. home office on Canal Road growth in 2015, according to research greenhouse gas emissions causing climate change. You could say that these and who can oversee the first from the ArcView Group. Ohio’s power plants produce the fourth most emis- are the salad days at Cannabis print issue, set to launch — at “The trajectory for this industry is sions per year, according to U.S. EPA data. The tide, Business Times. an ambitious 100 pages — in unbelievable,” Skodzinski said. however, has long been turning away from coal. Skodzinski and media vet- JOHN November. And she is hoping to take advantage. Ohio gets that it is not just a coal-producing state. eran Tim Hermes founded CAMPANELLI Job candidates won’t have “We want to become the go-to CBT in July 2014 in Virginia, to worry about a pre-employ- resource for businesses looking to We now are also a natural gas producer. The U.S. launching it as an online-only ment drug screening. navigate this very complex industry,” shale gas boom here in Ohio and surrounding states news site with a weekly email newslet- “It’s not that we’re seeking out some- she said. and elsewhere has lowered natural gas prices. Natur- ter, which now has more than 8,000 one who actually is a cannabis con- “Cannabis Business Times is going to al gas, in fact, passed coal in April as the dominant subscribers. sumer,” Skodzinski said. continue to grow and grow very rapidly, They soon added white papers on “But obviously with the position of and I think it will be around a very long fuel for electric power generation in this country for topics such as “The Marijuana Dispen- the magazine and the industry we’re time.” the first time in history, according to the U.S. Energy sary Handbook — 68 Golden Rules for covering, that’s not something we On Skodzinski’s business card is Information Administration. Success.” would hold against someone.” CBT’s logo, a circle with a marijuana Ohio is also a wind and solar energy manufacturer. “We were surprised by how quickly Cannabis Business Times isn’t a re- leaf inside. We now are a national leader in the production of the product took off and the readership creation of High Times; it’s a business- She has no problem passing it out. grew,” Skodzinski said. to-business news outlet with a diverse “I’m very proud of what I do,” she clean energy technologies, ranking first for the num- The plan was to grow the brand and audience that ranges from growers and said. ber of facilities manufacturing wind components perhaps get lucky enough to sell the cultivators to lawyers and security ex- “The information is finally catching and second for the number of solar equipment business in three years. perts. up with the plant. People are beginning providers as of 2013, according to the Pew Charitable Yet within six months of the launch, (It’s also not alone: There is a Mari- to understand marijuana is not some- they were in talks with Valley View- juana Business Daily, Marijuana Ven- thing to be afraid of.” Trusts. Green energy is getting cheaper and may one day make the whole debate moot. In the meantime, a mix of energy sources — with far less coal — ought to LETTER TO THE EDITOR be embraced. The U.S. gross national debt is over economy. long-term debt. There are those who argue that U.S. emissions are $18 trillion. That number may be ab- The Congressional Budget Office and So, as all the 2016 presidential hope- a drop in the global bucket. But what we do matters stract to some Americans, but the conse- organizations like the Committee for a fuls campaign throughout the country to the rest of the world. If we want to have a cleaner quences are real. Responsible Federal Budget and the following the GOP primary debate in planet, we won’t get there pointing fingers. Interest rates will rise, and more Campaign to Fix the Debt have issued Cleveland last week, we must continue It’s time for the United States to lead. Americans will pay higher rates on their several warnings that the unsustainable to hold their feet to the fire and demand mortgages, student loans and credit card debt, if left unchecked, will slow down that they offer specific solutions to fix the Ohio was on its way to forging a greener path with bills. job creation and hurt wages. But our debt. its renewable energy mandates. Those were frozen The high debt will also crowd out in- leaders haven’t shown the leadership or We cannot allow the candidates to ig- last year and the Legislature is taking another look. vestments we should be making in re- willingness to address this issue. nore the urgent need for action on this The federal mandates ought to provide plenty of in- search and education to create jobs and Reforming the tax code and reducing issue. better equip our workforce with the skills the growth of entitlement spending are a — Bruce Akers centive for Ohio to renew its renewable portfolio. they need to be successful in a global few steps we could take to reduce the Pepper Pike 20150810-NEWS--11-NAT-CCI-CL_-- 8/6/2015 2:23 PM Page 1
AUGUST 10 - 16, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 11 CRAIN’S SUMMER IN THE CITY PHOTO CONTEST “Cotton candy Cleveland sky” — By Julia Brown Julia Brown was rooting for the Tribe and enjoying her first date with her (now) boyfriend and friends when she took this photo. Brown, 26, works for an events company in downtown Cleveland where she is a reporter and associate editor for two print and digital magazine brands. Her prize is two tickets for a cruise on the Nautica Queen.
Summer in the City is a contest inviting people to share their Cleveland photos. Weekly prizes include gift certificates to metro Cleveland venues, grocery stores and retailers at a value of $50 to $100. Three grand prizes will be awarded PHOTO COURTESY OF THE CLEVELAND INDIANS after Labor Day. Add images at crainscleveland.com/SITC.
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By JOHN ETTORRE was perhaps my favorite new ac- “Walk Away Wealthy is loaded with John Ettorre has been writing quaintance. practical ideas you can use to maximize about Northeast Ohio’s entrepre- Not long after the Internet era Slowly throughout the weekend, the value of your business—to yourself neurial economy for more than 25 began, General Electric CEO Jack he revealed interesting personal and to the person you sell to.” years. You can connect with him Welch stumbled on a great idea: tidbits: that he had served in the — Now, Build A Great Business on Twitter @workinwithwords, and Brian Tracy, Author of reverse mentoring. Knowing that Marines, that he’s a martial arts check out GiveCamp at senior executives of a certain age enthusiast, and (a bit bashfully) www.clevelandgivecamp.org. “Launching a company without an exit would need to understand the In- that he’s tried his hand at fiction. plan is like building a car with no brakes. ternet if the company hoped to So much for lazy media generaliza- Walk Away Wealthy is a must-read for continue to thrive, he paired 500 of great contributors can be found in tions of young tech workers, I anyone who is starting or has started his top people with young GE tech- every age group. thought. a business.” nology guides. Afterward, with the aid of social It needs seasoned business ana- —Marshall Goldsmith, Author of The New York Times and What Got You Here Won’t Get You There Knowing Welch, a famously lysts who understand how the tool media, I dug a little deeper for in- great manager of people, I think he will be used not only by the non- sights about my collaborators. intended the mentoring to flow in profit’s audience, but also by the I learned that middle-aged Mar- Download your FREE chapter from the book the other direction, as well. organization itself. garet had been excited but a little now by visiting: www.walkawaywealthy.com He understood that in the It needs people who understand nervous about joining her first process, these young tech Sherpas how to arrange information most GiveCamp (she performed bril- also would gain valuable pointers efficiently, how to design it for vi- liantly). I found out that Michelle about corporate culture and some sual appeal, and how to craft a was a computer science major at softer skills from their elder col- concise message that resonates Ohio State, and I was touched by a leagues. with various audiences. poetic passage I found on her web- Tom Fox, SIOR Everyone would win, because Crucially, it also needs project site: “I believe that code can be successful organizations need all managers, who know at least a lit- powerful and beautiful.” Cummins tel 330 535 2661 sorts of contributions from people tle about all these disciplines and After Sunday’s closing presenta- Commercial Real Estate Services, Worldwide. www.naicummins.com with a wide variety of skills. how they intersect. They function tions of the projects, everyone left I was reminded of that program like skilled conductors, orchestrat- on an emotional high, looking for- when I recently took part in Cleve- ing the whole thing on an unusual- ward to doing it all again next sum- For Lease - 50,000 SF Industrial Space land GiveCamp, an annual event ly tight deadline. mer. in which the region’s grassroots And yes, it also requires plenty I also left bearing a useful re- tech community pitches in to cre- of purely technical skills. minder about what’s required for a ate websites, mobile apps and oth- Everywhere you went that week- successful region in the 21st centu- er technical projects for about 20 end, you bumped into talent. And ry. local nonprofits, all in a single it defied categories in a most pleas- In this cultural moment that weekend. ing way. glorifies technology, STEM learn- Yes, I wanted to do my small The project manager for one of ing and the accumulation of part to help these great causes, by my two projects was a seasoned wealth — sometimes to the exclu- joining some of my favorite big- pro, perhaps about the same age as sion of all else — we need to re- hearted veteran colleagues. some of the participants’ parents. member how much more it takes I was just as eager to meet and Yet she embraced everyone with to succeed, in technology, let alone collaborate with new creative tal- the same infectious enthusiasm for in the larger society. ent, which I’ve always found stim- their contributions and the impor- GiveCamp was a powerful re- 1530 Commerce Drive, Stow, OH 44224 ulating. I knew the combination tance of our mutual task. minder of how much can be ac- Ø2%Ø6@QDGNTRD ØØ2%Ø.EÚBD would be exhilarating. For me, the real beauty of events complished by channeling power- Amid all the focus on technolo- such as these comes in the period- ful altruistic instincts of smart .MDØ(MSDQHNQØ3QTBJØ+N@CHMFØ#NBJ ØØ#NBJØ#NNQR gy, it’s easy to think of these pro- ic down moments, when you get to people and valuing contributions Ø BQDRØNEØ ROG@KSØ/@QJHMF jects as requiring just “coding,” know your collaborators. from those from all sorts of back- and equally easy to assume all Will, a heavy-duty coder and grounds, at every stage of life, with lØ ØlØ"DHKHMFR ØØ LOØ$KDBSQHB coders are young. Actually, a good game developer whose day job is just about every kind of skill. website or other tech project re- with one of Cleveland’s most Because we’re going to need quires so many more skills, and prominent software companies, them all to succeed. 20150810-NEWS--12-NAT-CCI-CL_-- 8/6/2015 3:45 PM Page 1
12 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015 BUILDING A closer look at some of the Hildebrandt tenants:
continued from page 3 munity that included artists, but also Skidmark Garage other diverse businesses. “It’s like a home away from home One of the Hildebrandt building’s newest tenants for most of us,” Simmons said. is a long-simmering idea finally come to fruition. Hildebrandt’s “vision” for the build- Owner Brian Schaffran was living in LA 20 years ing helped make the space attractive to Soulcraft Woodshop when it ago, wishing there was something like a communi- moved in about three and a half ty car garage nearby. He sat on the idea after years ago, said co-owner Peter Debe- moving back to the Cleveland area in 2000, but re- lak, who also runs his own custom alized a motorcycle shop would be more manage- furniture business out of the com- able. He took the plunge this year, opening the munity woodshop. Hildebrandt’s family had a histo- shop up in March. ry of entrepreneurship, Debelak Customers can use one of five bays in the said, and he wanted to fill the build- garage, each decked out with a set of tools. Schaf- ing with people with that same spir- fran also wanted to bring on someone with repair it. expertise to help customers and found Dani Pajak “There’s a pretty rich community there,” Debelak said, noting the in- of Disowned Customs who had been revamping formal get-togethers, collaborative bikes from his home. Both also have day jobs out- open studio events and holiday mar- side of the garage. kets hosted. Pajak said if customers see him working on cus- Soulcraft’s presence helped draw tom bikes in the shop, it will help them see the po- another relatively recent addition to the building in Skidmark Garage, a tential in their own bikes. Schaffran said the community motorcycle shop. garage is really about learning and creating. The shop, where customers can “There’s something about working with your bring in their bikes to work on them, hands that rules,” Schaffran said. opened in March. Skidmark’s owner Brian Schaffran said he envisioned a place for apart- ment dwellers to store their bikes, but it’s ended up being more of a gathering place. He first learned about the Hilde- brandt building after chatting with Debelak, whose woodshop used the same model he planned for the mo- torcycle shop. Schaffran said he loved the “in- dustrial feel” of the building and was sold on it immediately.
On the rise Location and room to grow is an- other attractive feature for many of the businesses there. For Rising Star, a move to the Hildebrandt building earlier this year meant freeing up some room at At left, owner Brian Schaffran and Dani Pajak. Above, its Hingetown location, where the Sarah Begg said working on her first-ever motorcycle is roasters had taken up a third to half “therapeutic,” and she looks forward to coming to the shop of the space. after working all day as a hairdresser. The shop makes the The roasting operation is now up process doable, because it has all the tools she needs. and running at the Hildebrandt, PHOTOS BY REBECCA R. MARKOVITZ and general manager Robert Stock- ham said he hopes the paperwork for a retail component can be filed by fall. The company is envisioning a bit of coffee tourism, he said, and he wants the space to be a “destination” where guests can learn about the roasting process. Paula Hershman, owner of Store- house Tea Company LLC, said she was interested in moving to Cleve- land from Chagrin Falls, both for a better demographic fit with its cus- tomers and to work with the local refugee population. The company, which moved in May, has brought on two sisters from Rwanda to help with labeling, pack- aging and blending its teas. And the space meant the compa- ny could use Hildebrandt’s existing Above left, Skidmark Garage has bays set up for members or other customers to work on their bikes, plus one for Pajak. Above right, Marcus Hoffman works on kitchen until it’s ready to build out a custom paint job for one of Pajak’s customers. its own. Part of the building’s appeal to Molly Murray, manager of Wake Robin, was the chance to add to its history. The meats made there had been processed and sold locally. The story is similar for Wake Robin, which uses some locally grown produce and sells much of its sauerkraut, kimchi and other prod- ucts locally. “It’s neat to be restarting that his- tory and using the old infrastructure in new ways,” Murray said. Above, Pajak works on a set of custom handlebars for a bike he is modifying for a customer. 20150810-NEWS--13-NAT-CCI-CL_-- 8/6/2015 3:44 PM Page 1
AUGUST 10 - 16, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 13
Wake Robin Fermented Food Hildebrandt Artist Collective
Making fermented foods like For about the past two years, a sauerkraut or kimchi was a hobby 5,000-square-foot space in the for Molly Murray. But when her fa- Hildebrandt has been home to ther, who had been reading up on about a dozen artists who use it business theory and how busi- as a gallery and studio. nesses help communities, retired Textile artist Katie Simmons, from being a physician, it be- pictured at right, had been look- came her full-time job. ing for a space of her own when Murray is the manager of Wake she saw the spot up for grabs in Robin Fermented Foods, which the Hildebrandt building. opened about two-and-a-half She said the building has “good years ago and has been in the energy” and she just fell in love Hildebrandt building since the be- with it. ginning. (As an aside, she and her “I saw the need to have afford- father aren’t the only Murrays in able workspace in Cleveland, es- the Hildebrandt. Her brother, pecially,” Simmons said, noting Myles Murray, is the president of that it’s difficult to be creative a small solar-related company in without a space to work. the space.) Simmons found some friends in Wake Robin offers five flagship mediums ranging from graphic products, including sauerkraut, design to painting to help her cre- kimchi and a garlic cucumber ate the Hildebrandt Artist Collec- mixture, which can be found at tive. grocery stores and restaurants The shared workspace lends it- around the area. The company self to collaborative projects, she also has been working with local said, which can help artists get farms to make some seasonal out of their usual medium. products, like pickled green The artists open the studio up beans or curried cauliflower. Mur- to the community for events from ray said she’s passionate about time to time, where pieces might bringing healthy food to the peo- be on display or bands may be KATIE SIMMONS TEENA JENNINGS ple of Cleveland. CONTRIBUTED PHOTOS playing.
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14 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015 GOING PLACES JOB CHANGES Finance FARMERS NATIONAL BANK: Mark R. Witmer to senior executive vice president, chief banking officer; James R. VanSickle to senior vice president, chief risk officer; Joseph Talley Malitz Roche Kalson J. Haas Sraj Fladung Naegele A. Gerzina to senior vice president, chief lending officer, regional president. PARTNERS: Andy Malitz to general and marketing. Benesh to field installation techni- president, finance; Elizabeth Radi- manager, Sequoia Wellness, and cian. voyevitch to immediate past presi- NORTHWEST BANCSHARES INC.: executive director, the NEW Center at Marketing dent. Kevin Nelson to Ohio region presi- NEOMED. HENNES COMMUNICATIONS: dent. BOARDS Thomas Fladung to vice president. AWARDS Financial Service Insurance METLIFE PREMIER CLIENT Nonprofit ALZHEIMER’S ASSOCIATION BDO USA LLP: Laurence Talley to GROUP OF OHO: Danielle Sydnor OHIOGUIDESTONE: Cindy CLEVELAND AREA CHAPTER: PRESS CLUB OF CLEVELAND: director. to financial services representative. Naegele to vice president of ad- Ronald C. Stansbury (Ulmer & Mark Dawidziak (The Plain Dealer), SEGAL ROGERSCASEY: Richard D. vancement. Berne) to chairman; Robert L. Baz- Bob Dyer (Akron Beacon Journal), WESTFIELD INSURANCE: Brian Pietrzak to vice president. zarelli to secretary; Russell Tom Hamilton (Voice of the Cleve- Roche to group procurement leader. Real Estate Grindon to treasurer. land Indians); Ken Robinson (WTAM SKODA MINOTTI: Jeremy Long and COLLIERS INTERNATIONAL 1100) and Liz Ludlow Vaccariello Jon Shoop to principals. Legal CLEVELAND: Katie Watts to vice AMERICAN COUNCIL OF ENGI- (Reader’s Digest, formerly with Cleve- VANTAGE FINANCIAL GROUP: BENESCH: Richard D. Kalson to president, brokerage services. NEERING COMPANIES OF OHIO: land Magazine) named to the 2015 Deborah Baynes to human resource partner. Lynn S. Miggins (KS Associates NORTHSTAR TITLE SERVICES: Journalism Hall of Fame. Betsy Kling specialist. Inc.) to president. Manufacturing Chris Romano to escrow officer. (WKYC-TV3) received the Chuck WESTERN RESERVE PARTNERS: NATIONAL ASSOCIATION OF BUD INDUSTRIES INC.: Josiah Heaton Award. Andrew R. Ripich and Thomas A. Telecommunications WOMEN BUSINESS OWNERS Haas to president; Blair Haas to UNITED WAY OF SUMMIT: Debbie Wyza to analysts. DCT TELECOM GROUP INC.: Deb- CLEVELAND CHAPTER: Megan CEO. bie Monroe to account service rep- Patton (O’Donnell & Associates) to Plate (Akron General) received the Health Care MAYFRAN INTERNATIONAL INC.: resentative; Noreen DeLuca to cus- president; Heidi Murphy to presi- Barbara Matthews Woman Philan- INTEGRATED WELLNESS Frank Sraj to vice president, sales tomer service representative; Brett dent-elect; Donna Metzger to vice thropist of the Year Award. Send information for Going Places to [email protected]
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LINKEDIN: linkedin.com/company/crain’s-cleveland-business 1HZ AUGUST 10 - 16, 2015 CRAIN’S CLEVELAND BUSINESS 15 MIDDLE MARKET It takes a variety of bait to reel in the right talent By CHRISSY KADLECK Chamber of Commerce, reveals that 87% of companies [email protected] surveyed list it as a challenge, and that same percentage of firms have open positions. Of those companies, 33% Recruiting and relocating an average of five of its 30- have 11 or more open positions and 68% say it is some- plus annual hires from outside the area, Mentor-based what/extremely difficult to find qualified candidates for Component Repair Technologies (CRT) struggles to find open positions. the expertly skilled, highly technical employees it needs Middle market companies — defined nationally as here in Northeast Ohio to keep its growing aerospace those with revenues between $10 million and $1 billion component repair business on course. — in Ohio primarily are adding jobs in operations, mar- “As far as recruiting and getting the right talent in keting and sales, and manufacturing. place, anybody who tells you that they don’t lose sleep In Northeast Ohio, the struggle is real and has over that is not concerned about the future of their busi- prompted more and more companies into action, said ness,” said John Gallagher, human resources manager Judith Crocker, executive director for workforce and tal- for CRT, which has 400 employees — all in Mentor. CRT ent development at Magnet. “cannot fill positions fast enough to keep up with busi- “In the last year-and-a-half, we have seen more com- ness needs and growth,” he says, but it’s difficult to panies in this region realize that they have to become source skill sets such as engineering, machining, weld- part of the solution,” Crocker said. “They can’t just sit ing and non-destructive testing. and complain and be critical; they need to actually be- As Gallagher suggested, CRT is not alone in facing this come active in developing a solution.” workforce nail-biter. The ability to attract and retain talent is collectively one of the top three challenges cited by Ohio middle Getting to them early market companies, according to the report “State of the That paradigm shift has sparked an increase in work- Middle Market in Ohio.” based learning and internship programs. More local The report, which is a product of the National Center companies are recruiting college students and even high for the Middle Market in collaboration with the Ohio See TALENT, page 16 20150810-NEWS--16-NAT-CCI-CL_-- 8/6/2015 2:57 PM Page 1 16 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015 TALENT continued from page 15 c school students and offering them paid work experiences. FROM THE RECRUITING FILES “So they, the company, start to grow their future worker,” Crocker ERIKA SORRELL sourcing local talent working with a local temp Rosa, who took his time investigating job possibili- said. agency. ties both in California and Northeast Ohio. “It After being laid off in early 2014, Erika Sorrell Jack Schron, president of Jergens “Erika came in and demonstrated her abilities on aligned with what I did in the service but it was not struggled for 11 months to find a good paying job Inc., which manufactures clamping, the technical side very quickly,” Consolati said a dead match.” that put her experience and her associate’s de- fixturing and work-holding products “Her eagerness to learn new things and great abili- He ultimately decided to take a job at CRT and gree in electronics to work. as well as a line of precision electric ty to work with existing team members has made move to where he and his wife, Jane, would experi- She finally turned to a local temp agency to help screwdrivers, said his company has her a valuable member of our group.” ence their first “winter.” He joined the company as her connect with a manufacturing company with a very aggressive internship pro- a technical program manager on June 30, 2014. open positions. Her first and only placement was “Making a move from southern California to the gram. JUSTIN ROSA “We bring people in from what’s at ASG, a division of Jergens, Inc., based in Cleve- Midwest is quite a staggering jump, and I think it left of the vocational school pro- land. After serving two tours in Iraq with the U.S. Ma- took most of my family and friends by surprise grams, as well as community col- “It was months of putting in applications and go- rine Corps, Justin Rosa returned home to southern that I was willing to that,” he said. leges and associate degree pro- ing on interviews and it didn’t seem to be going California to map out his next career adventure, Beyond salary and benefits, Rosa and his wife grams,” he said. anywhere,” says Sorrell, 41. “It’s really tough to which included an internship with the California looked at the community, schools, crime statis- “We also encourage our employ- find jobs direct hire, at least for me it was.” State Assembly and a stint with the U.S. House of tics, housing and other quality-of-life issues. ees to bring their friends and neigh- The Warrensville Heights resident started Jan. Representatives as a field representative support- “There’s a lot to be said about quiet, quaint bors in, and we’ll help train them 12 in ASG’s X-PAQ manufacturing department as a ing veterans. places, family-owned business and a place where and bring them up to speed.” bench technician. She’s responsible for the assem- Rosa, who worked as a helicopter mechanic in you can raise a child in safety,” said Rosa, whose In those training scenarios, entry- bly of many of the ASG Precision Fastening prod- the military, had remained close with fellow veter- wife is expecting their first child in about a month. level workers first work in shipping ucts, specifically its SD2500 product line. ans, including Henry Distad, a Marine and current “This is a great place to start our family and we’re and then move into assembly. From She knew the company was looking to fill a per- inspection lead at Component Repair Technologies both very happy here. We purchased our own there, it’s all about aptitude and dri- manent full-time position and immediately felt it Inc., a Mentor company specializing in aerospace home in November — so very soon after moving ve, he said. was the right fit for her skills and her work ethic. component repairs. here.” T.J. McGowan, manager of em- “You get that vibe about a company,” she says. Distad encouraged Rosa, 33, to consider bring- John Gallagher, human resources manager for ployment services at WIRE-Net, “The people were really nice and that’s really impor- ing his technological expertise from the military to CRT, said Rosa was “an attractive candidate for helps manufacturing companies tant. They take pride in doing quality work and that’s CRT, which handles unique repairs on gas tur- many positions within the company.” with recruiting and placement and important to me as well. When I do my job, my bines. Distad had already recruited another veter- His job never lacks for excitement, Rosa said. “It currently has a list of about 30 cur- name is on that job and I want to do my best at it.” an from Georgia to join the company. is very high-paced and I have adapted well,” he rent job openings he is trying to Sorrell transitioned to a full-time permanent em- “My friends were doing well here. They liked the said. “It took some time to get used to but it’s defi- place. ployee June 1, said Chris Consolati, engineering organizational atmosphere at CRT, and they con- nitely a fun, challenging job.” “There is a large uphill battle try- manager at ASG, which has had good success vinced me that it would be worth looking into,” said — By Chrissy Kadleck ing to find people in skilled trade po- sitions,” he said. “We’ve had a surge over the last four or five years of to train the workforce they already nine people off the street to fill that skilled, entry-level positions with that plane, so quick-turn times are companies looking for machinists, have,” McGowan said. role.” newer workers. required to stay competitive in our welders and industrial maintenance “You already have people who “That is going to be a lot faster industry.” have proven themselves a cultural than waiting for a kid who is in the To keep that competitive edge, people. If a company is looking to Building from within hire someone with five years of expe- fit, and people that are going to be ninth grade to get through four CRT has had to search nationally for rience, there is an even bigger gap.” reliable employees.” Crocker said her organization years of high school and two years workers. McGowan and Crocker both urge He points to one local company helps companies identify good can- of community college training to do The company has found success their partner companies to consider which was able to promote eight didates for upskilling and addition- that job,” she said. recruiting from places such as Pitts- improving the skills of their current or nine people from production al training. Gallagher said his company in- burgh Institute of Aeronautics, workforces to fill higher-level slots. work into more technical positions Companies can then promote vests mightily in finding the best Michigan Institute of Aviation and “We have been urging companies rather than “searching for eight or those individuals and fill the less candidates and has hired an inter- Technology, Embry-Riddle Aero- nal recruiter to devote 100% of their nautical University and Purdue. efforts to fill the 20-30 open posi- CRT also actively recruits veterans tions at any given time. and those serving in the National “We need talent that problem- Guard and Reserves. solve, think quick on their feet and “The troop drawdown across all can be creative with solutions to fix branches of the U.S. military over these components,” he said, the past couple of years has allowed adding that CRT sits on advisory us to hire some amazing talent that boards at places like Lakeland would not have been available oth- Community College, Auburn Ca- erwise,” Gallagher said. FOCUS ON YOUR reer Center and Willoughby’s tech- “We were fortunate enough to nical school and recruits heavily in help a lot of these folks transition Northeast Ohio. from military to civilian life and as- “Every minute a plane is ground- sist their families with relocating to BUSINESS KNOWING ed, that airline is losing money on (Northeast Ohio.)” YOUR TECHNOLOGY IS COVERED. UNPARALLELED LUXURY HOME MARKETING Selling Your $500,000+ NE OHIO Home? COLDWELL BANKER WORLDWIDE LEADER in COX BUSINESS VOICEMANAGER SM LUXURY HOME MARKETING Over 21,000 sales over $1 Million 20+ PROFESSIONAL FEATURES Dollars closed last year. Average sales including Caller ID, Call Forwarding & Three-Way Calling $ line price $1.93 Million Dollars. / per mo* KEEP 25 your same number to make a seamless transition 800-777-0793 FREE MARKET Call for a ASK ABOUT EVALUATION readable voice mail with No Obligation. Email: [email protected] CALL (866) 791-2688 | VISIT COXBUSINESS.COM *Offer valid until 8/30/15. Minimum service term, equipment, installation, fees, taxes, and other restrictions may apply. See coxbusiness.com. © 2015 Cox Communications, Inc. All rights reserved. Each offi ce is independently owned and operated. 20150810-NEWS--17-NAT-CCI-CL_-- 8/6/2015 2:58 PM Page 1 AUGUST 10 - 16, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 17 Growing firm, ‘small company feel’ By RACHEL ABBEY McCAFFERTY than 20% have been there for more most clear when it discusses That sense of transparency is maintaining its culture, as well as [email protected] than 10 years. change, big and small — from de- part of the company from day one promoting from within. The company invests in its em- ciding to assign ID badges to in- for employees and for clients. Fender said at least half of the Fleet Response of Independence ployees, said CEO and president stalling new coffee pots. Fender said employees in client- people at Fleet Response started in has been growing steadily in recent Scott Mawaka. It helps them maxi- Varner said the latter decision critical roles sit with each depart- either its call center or its claims de- years, reaching 100 employees in mize their strengths and find re- actually raised issues because there ment in their first week and learn partment. 2013 and $100 million in annual rev- sources to improve upon their was some concern that employees what everyone does. For prospec- Fender said the mentor program enue in 2014. weaknesses. The stability of em- might interact less if the new coffee tive new clients, the company has started with about a dozen employ- But the company has maintained ployment helps management feel stations were installed in different the customer meet with the people ees at the manager level in all de- its small business culture as it’s good about the company, but it’s places around the office, though they’ll be working with at Fleet partments and five mentors at the grown. also good that customers know the the final decision was made to scat- Response. The idea is to make sure director level. And, it’s a commitment that com- continuity is there. ter them. The important thing is “everyone’s pulling in the right It gives people the chance to see pany officials believe has helped at- Companies get the most out of that the company be conscious of direction,” Fender said. what other areas of the business tract and retain workers to the mid- employees who are “loyal, proud the impact even small decisions In the past six months, Fleet Re- they might be interested in, as well dle market firm by empowering and dedicated,” Mawaka said. could make on its culture and com- sponse took that idea even further. as how “what they do affects the employees to make decisions, pro- The company’s commitment to municate the hows and whys of The company started a mentor pro- next process on down the line,” moting from within and keeping maintaining its culture is perhaps changes to employees, Varner said. gram that could help with its goal of Fender said. leadership accessible to the rest of the team. “We try to keep that small compa- ny feel,” said vice president of sales and marketing Jeffrey G. Fender. Fleet Response is a custom fleet services company with programs in- cluding accident and insurance I’m not a matchmaker. claims management. It can serve customer fleets of all kinds of vehi- I’m an cles, from small passenger sales cars to large flatbed trucks. The company was started in 1986 by Ron Mawaka Sr. as Rental Con- cepts Inc. attorney The idea, Fender said, was to pro- and a vide less expensive rental vehicles relationship for self-insured companies after ac- cidents. The company started doing some accident management in the builder. ’90s, and that side of the business took off, Fender said. In 2003, the company combined I know what it takes to grow a business. its different businesses to become It’s a melding of ambition and opportunity. Fleet Response. Today, the company A process of carefully matching potential is owned by the Mawaka family, along with Myron Zadony and with the resources to realize it. Claude Nolty. It’s about cultivating relationships. The company has historically tar- geted large, self-insured companies, All while representing interests but it continues to look for ways to and managing expectations. grow by finding new spaces in the in- I work with companies surance world, like handling some outsourced services for insurance at all stages of growth. providers, Fender said. And represent funds and portfolio companies in their quest to invest. Decision makers After years of leading our firm’s expansion, The nature of the business means I’m acutely aware of the risks and rewards. all employees at Fleet Response are So if you’re ready to grow, encouraged to make decisions on their own. Clients call when they’ve or ready to invest, been in an accident, and Fleet Re- I’m ready to do the deal. sponses’ employees take care of the rest, from arranging for a tow and a I’m IRA KAPLAN. rental car to negotiating with a body shop to following up on claims. One I’m on your team. of the company’s mantras is never to leave a driver stranded, said Jodie Varner, director of business develop- MY BENESCH MY TEAM ment. “That empowerment, I think, is the culture we create,” Varner said. Kari Hagan, a business develop- ment supervisor at Fleet Response, joined the company in November > Executive Chairman; Corporate & Securities Practice Group; 2013 from the corporate office of the Private Equity Practice Group Dots retail stores. She said she was drawn to the company because of its > Representing public and privately held growth companies; people and its culture. The fact that private equity, subordinated debt and venture funds; portfolio it was still small, but growing, also companies. offered “lots of opportunity to play a > Legal Services Include: Mergers and Acquisitions; Public and big role,” she said. Private Debt and Equity Financings; Business Counseling. Hagan said she was impressed by > 216.363.4567 | [email protected] the accessibility of the company’s executives, none of whom employ administrative assistants. The com- pany also supports work-life bal- ance, which she thinks affects turnover, because people don’t get burned out. According to an email from Varn- www.beneschlaw.com er, more than 45% of Fleet Response employees have been with the com- pany for more than five years. More 20150810-NEWS--18-NAT-CCI-CL_-- 8/6/2015 3:48 PM Page 1 18 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015 TAX TIPS CARL GRASSI Shareholders can be liable for unpaid taxes Most business owners operate reasonably equivalent benefit in ex- their businesses as corporations or change for the payments to the other separate business entities in shareholders. large part to protect their personal If not, the transfers would be assets from liabilities of the busi- fraudulent if the corporation was ness. insolvent at the time of the pay- Many owners are surprised, ments, or became insolvent as a re- therefore, to find that the IRS can sult of the payments. hold business owners responsible With respect to the bonuses and for the tax liabilities of the business loans, the tax court decided that under certain circumstances. these were payments for services A recent tax court case found not rendered by the shareholders and only that shareholders were liable that the corporation had therefore for tax debts of the business, but received reasonably equivalent val- that several minority shareholders ue for the transfers. who had nothing to do with the fi- The dividends were another mat- nancial fraud relating to the unpaid ter; under Florida law, dividends tax debts were liable for the taxes. are not a transfer in exchange for Although this type of transferee reasonably equivalent value. Grassi is president of McDonald liability is relatively rare, business The tax court then determined Hopkins LLC. owners must bear in mind that the (based on experts’ reports) that the IRS does have the authority to hold corporation was insolvent at the them responsible for unpaid corpo- Although the corporation en- time of the dividends, which was no ration taxes under certain circum- tered into an agreement to pay this surprise given the unpaid tax liabil- stances. liability over time, it was deter- ity. In general, the IRS is able to hold mined that it would take longer The dividend transfers were shareholders responsible for corpo- than 150 years to complete the pay- therefore fraudulent under Florida rate tax debts if there is a basis to do ment program. law and the IRS could recover. so under applicable state creditor The IRS therefore turned to the The shareholders also argued law. minority shareholders to recover a that the IRS had entered into a pay- If the state law relating to fraud- portion of these taxes. ment plan with the corporation, ulent transfers would allow a credi- The IRS asserted that all of the and therefore could not hold them tor to pursue a shareholder for amounts transferred by the corpo- responsible until it had exhausted monies transferred to the share- ration to the shareholders (other its remedies against the corpora- holder, then the IRS is also able to than salaries) were fraudulent tion. do so. transfers and could therefore be re- However, Florida law provides In the recent tax court case, a covered by the IRS. that a creditor need not exhaust its corporation failed to file tax returns The tax court decided that the remedies against the transferor be- or pay taxes for a number of years, loans (which were effectively treat- fore proceeding against the person even though the corporation had ed as advances of bonuses because who received the fraudulent trans- been very profitable. no loan documentation was ever fer. During this time, the majority prepared) were actually compensa- Normally a corporation provides shareholders were essentially em- tion and could not be recovered. complete protection of sharehold- bezzling funds from the corpora- The dividends paid to the minor- ers against liabilities of the corpora- tion, unbeknownst to several mi- ity shareholders, however, were tion. nority shareholders. found to be fraudulent transfers In situations such as the case dis- The minority shareholders (who under state law and therefore re- cussed above, where the corpora- were also employees of the corpo- coverable. tion is not adequately capitalized ration) did, however, receive trans- The ability of the IRS to recover (and particularly where the under- fers of money from the corporation, taxes from a transferee such as a capitalization is caused by fraud), including loans that were made in shareholder in a corporation is de- the IRS as well as other creditors lieu of normal bonuses, and divi- pendent on state law. can pursue shareholders for funds dends that were paid by the corpo- If the transfer is fraudulent under transferred to them. ration in other years based on their state law such that a creditor could It is therefore important to con- percentage of stock ownership. recover transferred funds, the IRS sider the corporation’s financial Upon audit, the IRS determined can also recover. solvency before paying dividends to that the corporation owed over The issue under Florida law (the shareholders or large bonuses to $120 million in taxes, penalties and state involved in this case) was shareholders who also are employ- interest. whether the corporation received a ees. 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To sign up, go to: crainscleveland.com/register. 20150810-NEWS--19-NAT-CCI-CL_-- 8/6/2015 2:59 PM Page 1 AUGUST 10 - 16, 2015 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 19 ADVISER KATE HUBBEN Technology offers a solution for health care Even though telemedicine has Six years later, physicians report co-pay, with an additional claim nicate to employees. been around since 2002, its time that telemedicine allows them to cost. Some vendors do have the capa- has come. The telemedicine busi- dedicate more time to patients An emergency room co-pay can bility to “speak” to the carrier and ness is booming and is projected with complicated symptoms. be several hundred dollars, not to it is worthwhile to ask this ques- to be a $2 billion industry by 2018. The shortage of primary care mention the investment of time tion and make sure it is ACA com- Now is the time for the owners of physicians is a significant market and energy expended while sitting pliant. both small and large businesses to force that may not affect business in the waiting room. And finally, consider if you want take a closer look and see if it is owners directly, but it is one that Telemedicine giant Teladoc to incent your employees to use right for their employees. eventually will have an impact claims there is a 400% return on telemedicine through plan design. Telemedicine has the potential through increased absenteeism in investment. The challenge to busi- Work with your broker consultant to impact myriad problems such the workplace. By 2025, experts ness owners is utilization. to determine if you could offer a as a shortage of primary care predict the United States will be Employees barely read their reduced co-pay or no co-pay at all physicians, rising health care facing a shortage of 160,000 physi- benefit summaries, much less re- to contrast with an office visit. claim costs and absenteeism. cians. member they have access to virtu- The claim cost will be less than Moreover, the early resistance Studies show that telemedicine al medical care. an office visit and more employees from physicians who thought it results in fewer follow-up appoint- The key to getting the return on will use it. would disrupt the relationship ments, which can mean fewer days investment for business owners is There are still outstanding is- with patients and adversely affect out of the office. being strategic in plan design and sues that need to be resolved in care has certainly waned. Virtual medicine originally was communicating with your em- the world of telemedicine. Last month, the Cleveland Clin- used exclusively by rural commu- ployees at open enrollment and Kate Hubben is client advocate, Not every state allows for video ic unveiled its program called My- nities and remote populations that throughout the year. human capital practice for conferencing or for physicians to Care Online, a partnership with did not have access to local physi- If you want to pursue telemedi- Willis of Ohio. prescribe virtually, and the reim- American Well, so patients can vir- cians. cine as an option for your busi- bursements through Medicaid and tually visit a physician for $49. As access to primary care physi- ness, be mindful of a few factors Second, thoroughly understand Medicare still are undefined. Most carriers and larger health cians becomes more of a chal- that can impact its success or your how your carrier integrates And to add more complications, systems also are buying in and lenge, health systems and carriers satisfaction. telemedicine into your company’s while physicians and health sys- have created their own “private la- are seeing that this might offer a First, the per-employee, per- plan design and cost structure. tems move toward the Account- bel” telemedicine services by us- solution. Additionally, physicians month cost can vary significantly. One of my clients has access to able Care Organization model in ing the technology established by are actually seeing that the intro- For a self-funded group, it ap- a telemedicine vendor through the which reimbursements and fees telemedicine vendors such as duction of email and a focused vis- pears to be free. However, carriers insurance carrier, but until Janu- are paid based on outcomes, the Teladoc, Doctors on Demand, MD it online can ultimately create a will insert it into the administra- ary 2016, the visit cost of $40 won’t telemedicine outcomes can be Live and American Well. closer relationship with the pa- tive fees and not bifurcate the cost. count toward the maximum out- harder to measure. In 2009, the University of Texas tient. For a fully insured group, the of-pocket. But despite the changing land- Medical School predicted that the A telemedicine appointment cost can be hidden in your premi- It is essentially a standalone scape of health care, one thing for only obstacle to the growth of can cost between $35 and $55 um. Work with your broker con- vendor that cannot “speak” to the sure is that virtual medicine is here telemedicine would be the adop- compared with a specialist visit sultant to make this completely carrier to track the cost. It is not to stay and is another “arrow in the tion by providers. that can range from a $50 to $80 transparent. ideal and challenging to commu- quiver” for employers. HOW CAN SOMEONE HAVE ALL YOUR ANSWERS BEFORE THEY ASK ANY QUESTIONS? Clairvoyance isn’t one of our skills. But curiosity is. It’s what leads us to listen to you. To think about what you’re telling us. And then ask thoughtful questions. It’s the only way to crack the puzzle. Because the answers don’t just jump out. You have to dig. Subordinated debentures, equity infusions and other solutions are all well and good, but when is the right time to use them? And why? Shouldn’t your bank want to find out? We do. Learn more at 53.com/Commercial We’re Fifth Third Bank. The curious bank.® Deposit and credit products provided through Fifth Third Bank. Member FDIC. Equal Housing Lender. 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Most today are rates will hit 4.5% by the end of the ness split has flipped completely terest rate environment will be a Capitalizing on the appetite, selling in less than three. year, but the stronger job market since 2008-09 when 75% of the great opportunity for people to some banks are launching new ser- should offset higher mortgage rates. book was based in refinancings. consider finding a house.” vices specifically to draw cus- Of course, the housing market Those make up just 25% of the busi- PNC Bank’s mortgage business is tomers. Healthy appetite hasn’t returned all the way just yet. ness today. The bulk is in new growing at a pace of 20% year-over- PNC, for example, has launched The mortgage business is re- For example, according to Realty- home sales. year. The market is “definitely com- a Home Insight Tracker to enhance bounding as the economy im- Trac, a real estate data company, ing back,” said Pete Boomer, mort- the mortgage application process. proves, and the evidence is in bank about 13% of homes nationwide are gage origination executive for PNC Next year will bring the start of an balance sheets. Appetites for resi- still mortgaged for more than A positive outlook Bank. additional education tool. Much of dential loans are hitting their high- they’re worth. In Cuyahoga County, The vibrancy of the local market “We’re in the middle of the best it is designed to target new, millen- est levels since the housing bubble that figure is nearly 33%. seems to generally mirror the na- nial homeowners. popped years ago. Yet, new home purchase volumes tional pulse, and Northeast Ohio’s Meanwhile, KeyBank is getting With the federal funds rate nationwide are up by about 20% at largest banks are getting their share “The bank has planned this back into first mortgages in 2016 af- pressed so close to zero for so long, this point, Fratantoni said. of the boom, too. change for more than a ter cutting the business about sev- a focus on the residential lending “Compared to a weak 2014, 2015 Huntington Bank reported year. Done right, providing en years ago. business is one way banks are suc- is looking strong,” he said. growth in its mortgage business of “Of course, being able to help cessfully expanding margins today. “And the growth is much stronger 70%, which in turn spurred a 13% mortgages can help Key customers buy homes will generate We’re in a “sweet spot” right now, than any time we’ve seen since hike in non-interest income. acquire new customers revenue for Key,” said Mark said Mike Fratantoni, chief econo- post-crisis.” “We expected the purchase mar- and retain existing Danahy, president of KeyBank mist for the Mortgage Bankers Asso- Notably, a July report by the Fed- ket to be strong, but it’s a bit customers for our Mortgage appointed to the post this ciation trade group association in eral Reserve Board reinforces stronger and broader than we ex- spring. Washington, D.C. there’s been “moderate to large” pected it to be,” said Jay Plum, se- consumer bank segment.” “But for us, it’s not simply a ques- And the strengthening economy groups of banks reporting strong nior vice president and director of – Mark Danahy tion of revenue, and it’s definitely presents a positive outlook for demand across most categories of consumer lending for Huntington. president, KeyBank Mortgage not simply a question of capitaliz- mortgage banking. home-purchase loans. Despite an expected hike in the ing on increased home sales,” he In July, the association hiked its Bankers say new-home sales are federal funds rate this fall, Plum said. forecast for purchase originations by definitely leading the business over- said the strong market should con- activity we’ve seen since the down- “The bank has planned this almost 10% from June. The group all as opposed to refinances that tinue for some time because it’s not turn,” Boomer said. “The economy change for more than a year. Done projects $801 billion in home origi- surged prior to the downturn. The like rates are going to go jump 10% continues to improve and we’re go- right, providing mortgages can help nations this year and $885 billion in balance of mortgages to refinanc- all at once. ing to see more people entering the Key acquire new customers and re- 2016 — a significant increase from ings is closer to 50/50 now, Fratan- “I would say that we’re expecting home buying arena, and we’re po- tain existing customers for our con- the $638 billion logged in 2014. The toni said. these kinds of trends for a little sitioning ourselves to have contin- sumer bank segment.” STAY CONNECTED WITH CRAIN’S TWITTER: @CrainsCleveland FACEBOOK: Facebook.com/CrainsCleveland CYBER SECURITY IN LINKEDIN: linkedin.com/company/crain’s-cleveland-business HEALTH CARE INSTAGRAM: instagram.com/crainscleveland DAILY E-NEWSLETTERS: CrainsCleveland.com/register PRESENTED BY IDEAS AT DAWN Join Crain’s Cleveland Business and our partners at Benesch as we explore the biggest challenges facing FIG. 4-B Nice house health care data security today. Successful in business Family person FEATURING Par golfer Makes a diff erence in the world G o o d MODERATORPANELIST PANELIST PANELIST neighbor Mike Stovsky Frank W. Carsonie John DiMaggio Seth Wolf Chair, Innovation Technology & Partner & Chair, Ê vÕ`iÀÊ>`Ê "]Ê Associate General Counsel, What’s better than a well-balanced portfolio? 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CrainsCleveland.com/Breakfast 20150810-NEWS--22-NAT-CCI-CL_-- 8/7/2015 2:37 PM Page 1 22 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM AUGUST 10 - 16, 2015 DEBATE continued from page 1 been great for the party,” Frost said. Thursday. They particularly laid tended. “It’s like street theater,” he said. first time and they were saying “I’ve spoken to our national claim to the restaurant’s rooftop “For a political junkie, well, “As you see here on East Fourth what a nice city Cleveland is.” leaders, to our state leaders, and patio overlooking the Q. (those cities) were paradise,” he Street, you see MSNBC setting up, A few minutes later, Democratic they are very grateful to the city of “Some of the candidates were said. “You see everyone you ever and they’ll be interviewing celebri- National Committee chair Debbie Cleveland for the job that they’ve here for dinner last night,” he said wanted to see and it’s one big par- ties and politicians, and huge Wasserman Schultz told the city to done.” Thursday afternoon. ty and everybody is in a mood to crowds of young people interested get ready — with a partisan twist. Friedlander, who worked for his talk.” in politics will be out there.” “Buckle up, Cleveland. You’re in father at Alvie’s delicatessen on In Atlanta for the 1988 Democra- Eating it up for an interesting ride, from the de- Public Square when the city was at tic convention, Jerse walked the Talking up Cleveland bate tonight to the GOP convention Earlier that day, restaurateurs in its depths, is enjoying the recent streets like he was doing in Cleve- in 11 months,” she said. the crowded East Fourth Street dis- upswing. land last week. “And here comes There was even a radio talk show “The good people of the Forest trict, talked about the bump they “To see what’s happening now (current secretary of state, then host, a native Clevelander, who al- City are going to get an up-close were seeing in weekday business. and to be a part of it is unbeliev- senator from Massachusetts) John ready was planning for her return and personal look at the Republi- “It’s been great,” said Jude able,” he said. Kerry from the other direction and trip when she comes back for the can Party of today, and I’m confi- Feyedelem, director of fine dining we just kind of looked at each oth- Republican convention. dent that when they get a close look for Michael Symon Restaurants, er and laughed,” he said. “I’m going to have a big party A walk down memory lane they won’t like what they see.” who was overseeing Lola Bistro last The one glitch he remembers oc- during the convention, you should Cuyahoga County Republican Thursday night. “We’ve been fortu- Convention veteran Jerse wan- curred in Charlotte, N.C., during come,” Ellen Ratner, Washington Party chairman Rob Frost, relayed nate that Wednesday and Thursday dered downtown for much of the 2012 convention. bureau chief for Talk Radio News a slightly different message. nights have been pretty good, but Thursday taking in the sights — the “In Charlotte, we went out to Service, told a group for 40-plus re- In the bowels of the Q after the we’ve certainly seen an uptick this crews setting up the stage on East dinner the night President Clinton porters waiting for the Democratic debate, not far from where the can- week.” Fourth Street for broadcasts by the was supposed to speak,” Jerse re- Party’s news conference to get un- didates’ surrogates were putting Brad Friedlander, one of three MSNBC cable news network, the called. “Even though we had cre- derway. their spin on the two-hour gabfest, partners of Praxis Restaurant crowds of Republicans whooping it dentials we couldn’t get back in the “I’m going to talk to my cousin he said his party’s leaders have Group, said the Republican Party on Red’s rooftop patio, and even hall because they let so many peo- Albert (Ratner, co-chairman emer- been complimenting him and the had pretty much commandeered the protestors gathered outside The ple in. itus of Forest City Enterprises Inc.) city on their stay here. his restaurant on Prospect Avenue Q. It reminded him of some of the But it’s the good feelings he came about holding it at Terminal Tower “I think this week has been great — Red, The Steakhouse — to use as cities that successfully hosted the away from Charlotte and the other (a building owned by Forest City),” for the city and I think the city has party central on Wednesday and four Democratic conventions he at- cities. she said. REAL ESTATE CLASSIFIED Phone: (216) 522-1383 Fax: (216) 694-4264 Copy Deadline: Wednesdays @ 2:00 p.m. Contact: Denise Donaldson E-mail: [email protected] All Ads Pre-Paid: Check or Credit Card AUCTIONS BUSINESS SERVICES AUCTION C. W. JENNINGS INDUSTRIAL EXCHANGE PRIME LAND DEVELOPMENT Global Expansion Consulting FLYNN Thursday, August 20th at 2 p.m. Construction • Acquisitions ENVIRONMENTAL Exporting • Financing UST REMOVALS • REMEDIATION INVESTMENT OPPORTUNITY DUE DILIGENCE INVESTIGATIONS 14.64+/- ACRES (855) 707-1944 (800) 690-9409 Avon - Corner of I-90 exit ramp/Rt 611 & Chester Rd. 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Minecraft players are the Republican Party’s nomination faced off at The organization, which launched in 2011, game for anything Quicken Loans Arena on Thursday, Aug. 6, for is moving out of its incubator space within Case Western is open the first debate of the election season. Frontrun- the Greater Cleveland Partnership’s offices Have kids who are good at (or just ob- to new ideas in teaching ner Donald Trump was aggressive and boastful, on Huron Road in downtown Cleveland and sessed with) Minecraft? An outfit called Su- while analysts gave high marks to the perfor- into its own digs at 8200 Sweet Valley Drive, per League Gaming is hitting town this week Case Western Reserve University is offering to give them a chance to strut their stuff in a a new course — a free one, no less — on how mance of Ohio Gov. John Kasich. The city itself just south of Interstate 480. The organization has filed an application to become a tax-ex- very public setting. coaching with compassion can help inspire drew praise and was the home base for a couple empt 501(c)(3) nonprofit entity. Super League Gaming, which bills itself as and motivate people to be effective leaders. days of many cable TV news shows. See related In quantifying its growth, Engage! Cleve- “the world’s first in-theater gaming league,” It’s the latest massive open online course, story, Page One. land said it now reaches more than 20,000 on Monday, Aug. 10, is bringing one of its or MOOC, from the university’s Weather- young professionals every year through so- events to the Regal Cinemas at Crocker Park head School of Management. The course, End of the line: The lawsuit that caused TCP’s cial media and events. in Westlake. The Crocker Park event is part which will be made available through stock price to crash is over. The company lawyer Its hallmark program — Cleveland Young of a 25-city tour running through Aug. 26 to Coursera, starts Oct. 5 and will be led by who filed it will receive $3.9 million, and she re- Professionals Week — included 39 events introduce Super League Gaming’s concept. Case faculty members Ellen Van Oosten, signed from the Aurora-based lighting products over eight days during the first week of June. Participants play Minecraft and watch the Melvin Smith and Richard Boyatzis. The company, according to a TCP filing with the U.S. During the week, the organization worked game play out on the big screen of the movie five-week course builds off concepts intro- Securities and Exchange Commission. In Febru- with KeyBank as its title sponsor and more theater. Each event is comprised of a 100- duced in Boyatzis’ other MOOC on inspiring ary, TCP general counsel Laura Hauser sued the than 125 other sponsors and partners. The minute session that includes live team leadership through emotional intelligence. company and Ellis Yan, who has since stepped group sold more than 2,250 tickets to the gameplay and individual battles, while play- The course is geared toward advanced down as CEO. Yan received $2.2 million in sever- events. ers work to climb the leaderboard. students and professionals, including exec- ance benefits. The lawsuit claimed that Yan “It’s been very rewarding to provide En- Gamers play in the traditional first-per- utives. Enrollment already has exceeded “physically assaulted” Hauser, threatened her gage! Cleveland and its people with a variety son view on their laptops while watching a 11,300 and is expected to grow even further and pressured managers to release mislabeled of resources that helped them advance their customized third-person aerial ‘world view’ by its start. Successful completion of the products. mission to energize Greater Cleveland’s YP with all players on the theater screen. course will be based on quizzes, the comple- community,” GCP president and CEO Joe “Our own children were the inspiration for tion of what Case refers to as “personal A new era: Northeast Ohio stands to lose a Roman said in a statement. “We’ve proudly Super League,” said Super League Gaming learning assignments” and the assessment publicly traded company and a corporate con- watched them mature as an organization co-founder John Miller in a news release. of the coaching essay. nection to one of its home-grown property em- and now wish them even greater success as “We saw how much our kids loved to play “You will learn how to truly help others, and we wanted to bring a more positive ele- and the techniques you learn will improve pires as shareholders of Associated Estates Real- they rev up their agenda in the coming months and years.” ment to the whole thing. Making games in- your relationships in all areas of your life,” ty Corp. approved its purchase by investment Engage! Cleveland also named a slate of teractive, team-based, and bringing gamers said Smith, a professor of organizational be- funds associated with Toronto-based Brookfield new board officers effective Oct. 1. They are: into a movie theater to play face-to-face real- havior and faculty director of executive ed- Asset Management Corp. Associated Estates re- chair Ira Kaplan (of Benesch); vice chair ly changes the experience for everyone.” ucation at Weatherhead. ported that 82% of its shareholders approved the Lauren Rudman (of ERICO); treasurer Chad Gameplay is open to players ages 7 to 14. — Timothy Magaw deal. Brookfield has a more than 100-year histo- ry of owning and operating assets with a focus on property, renewable energy, infrastructure and private equity. MILESTONE BEST OF BLOGS Excerpts from recent blog entries on vate equity purchase price multiple crept up Interest crests: The $225 million Pinecrest CrainsCleveland.com. to 10.1 times the target company’s trailing mixed-use real estate project in Orange Village earnings before interest, taxes, depreciation gained a $17 million initial investment from an and amortization, topping a historical high affiliate of Miami Beach-based Lennar Corp. and On the ball of 9.7 times in 2007. started clearing the site for the development. A fledgling professional football league As a result, The Journal said, “some firms Randy Ruttenberg, founder and principal of lead that hopes to kick off in spring 2016 is tar- looking for an edge in deals are taking a trip developer Fairmount Properties, said, “It’s ex- geting Akron as the home of a franchise. down memory lane.” tremely gratifying to see the potential we knew in Major League Football Inc. said it’s “in For instance, Riverside in May bought for Pinecrest affirmed by an accomplished national discussions” to base a franchise at the a second time Health & Safety Institute, a investor.” The $17 million is from Rialto Capital, COMPANY: Giovanni’s Meats and 30,000-seat InfoCision Stadium at the Uni- provider of training materials and car- a real estate investment unit of the Miami-based versity of Akron. diopulmonary resuscitation courses. It pre- homebuilder. Deli, Lyndhurst The Florida-based company said it’s also viously owned the business between 2006 engaging in a “series of community-centric and 2012. Belting one out: North Canton-based PRODUCT: Its sale after 47 years outreach programs to help build a fan base, Riverside partner Karen Pajarillo told The Timken Co. reached an agreement with private in business support local businesses and develop foot- Journal that her firm “didn’t have as much equity firm American Industrial Partners to ac- of a learning curve as others who are new to Giovanni’s, at 5716 Mayfield Road, has ball talent in the surrounding area.” the business,” though Health & Safety Insti- quire the Springfield, Mo.-based Carlstar Belts been acquired by a couple who say they plan Wes Chandler, president of Major League tute’s mix of revenue has changed over the Business for $220 million. Timken CEO Richard to “add a modern twist to the traditional Ital- Football, said Akron is the sixth city in years to include more online learning mate- G. Kyle said the deal adds a new category of ian atmosphere.” which the new league has begun conversa- rial. products to the bearings company. Carlstar The company was founded in 1968 by a tions to establish a franchise. makes belts for the industrial, commercial and traditional Italian butcher, and it remained in Major League Football is reviewing consumer markets in brands including Carlisle the Castrataro family for multiple genera- venues in the six cities and is evaluating fan The need for speed and Ultimax. tions. John Castrataro sold the business to and local business support to determine Cleveland Hopkins International Airport the husband-and-wife team of Matthew and which cities are the best fit for a team. It said is a star performer in at least one respect: Come together: Five of Ohio’s independent Priscilla Palesh in late June. it “plans to make additional announce- cell phone data speed. physician groups formed a statewide collabora- Matthew Palesh has a banking background ments over the next few months expanding CNNMoney.com noted that independent tive designed to allow them to better compete and a passion for food, and Priscilla Palesh that number.” network analysis company RootMetrics re- with the state’s health care giants like the Cleve- has a master’s degree and a background in Chandler, a former NFL wide receiver, cently put to the test cell phone data speeds land Clinic and Cincinnati-based Mercy Health. business and financial services. was a coach for the Cleveland Browns in at the nation’s 50 busiest airports. The organization, dubbed the Ohio Independent The Paleshes said they worked closely with 2007 and 2008. Castrataro throughout the transition process, The league’s CEO is former Chicago The analysis measured how the four ma- Collaborative, brings together more than 400 jor carriers perform in upload speeds, primary care providers and specialists spanning “getting to know the regulars and paying at- Bears general manager Jerry Vainisi. tention to the details that have made the deli download speeds and the reliability of the the northern part of the state from Canton, connection. Cleveland, Sandusky and markets in between. a success for nearly 50 years,” according to Second time around a news release about the transition. The best smart phone data speeds were The new owners said they have overhauled In what The Wall Street Journal said may found in Atlanta, at the country’s busiest In the money: Case Western Reserve Univer- the deli’s older systems, making the check- be “a sign of intensifying competition for airport. The fastest carrier there was AT&T, sity, again, shattered its yearly fundraising out process faster and smoother, and giving assets,” several private equity firms — in- but Verizon was the only network that record. For fiscal year 2015, which ended June 30, more services and better choices to their cluding The Riverside Co. Cleveland — are stayed connected 100% of the time. No. 2 the university reported bringing in $166.9 million customers. They have also doubled the staff, dipping back into old investments. was Hopkins, where T-Mobile offered the — about $15.3 million more than 2014’s record- and are preparing for additional improve- From the story: fastest service. breaking haul. Of note, the university’s School of ments as the months continue. Private equity firms, armed with $1.2 tril- Verizon on average left T-Mobile and Medicine, which is raising funds for its new med- To celebrate the new ownership and new lion in uncalled capital, need to fend off AT&T far behind, as it was the best carrier in ical education building, brought in $62.9 million direction, Giovanni’s Meats and Deli will host peers and strategic buyers in the fierce pur- 29 of the top 50 airports. Sprint performed — over $10 million more than last year’s all-time a launch party from noon to 2 p.m. on Satur- suit of assets. Standard & Poor’s Capital IQ the worst of the four major carriers. It was high. day, Aug. 29, featuring free samples, door Leveraged Commentary and Data said that not the best cell phone network at any of the prizes, music and 10% off all purchases. as of the first half of the year, the average pri- 50 busiest airports. 20150810-NEWS--24-NAT-CCI-CL_-- 8/7/2015 11:52 AM Page 1 Nine times is definitely a charm. 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