April 11 - Crain`s Cleveland Business

Transcription

20160411-NEWS--1-NAT-CCI-CL_--
4/8/2016
2:04 PM
Page 1
VOL. 37, NO. 15
APRIL 11 - 17, 2016
Business of Life
FINANCE: Hurting the poor?
Critics take issue with Huntington’s deal
The Fixers
P. 6
Artists explore Cleveland’s
issues ahead of the RNC
FOCUS: Middle Market
Paid sick leave is a growing concern
P. 22
P. 17
SOURCE LUNCH
Santina Protopapa on arts and education
P. 23
CLEVELAND BUSINESS
Who helps to fix
them?
Fed chief Mester says challenges remain
BY JEREMY NOBILE
[email protected]
@JeremyNobile
As the top Federal Reserve official
in Cleveland explained last week, it
was a long time coming, but Ohio’s
labor markets have finally returned
to their pre-recession peak.
Although that bodes well for the
regional economy and generally indicates a positive outlook for companies that are seemingly well staffed,
there are still longer-run challenges
facing the business sector, said
Loretta Mester, president and CEO
of the Federal Reserve Bank of Cleveland.
Mester spoke with Crain’s about
labor market conditions in Ohio and
BY LYDIA COUTRE
[email protected]
@LydiaCoutre
When MetroHealth trauma surgeon Dr.
Amy McDonald has to tell parents their child
has died, she wants nothing more than to sit
with them, mourn with them and support
them.
But then the next trauma victim
comes in, and she has to help.
“If I’m at work, and I have a patient die, I can’t sit there and
grieve,” said McDonald, MetroHealth’s director of trauma in the
intensive care unit. “I’ve got to
move onto the next patient. What
else can I do? You learn to start
compartmentalizing.”
A culture of needing to be flawless,
invulnerable and strong has left those
emotionally draining cases largely undiscussed, tucked away in the corners of caregivers’ minds alongside the daily stresses of
long hours, paperwork, self-criticism and
mounting requirements. The list goes on.
The joy and passion that brought caregivers to the health profession can be cast in
the shadow of these stresses.
For decades, there wasn’t a space to discuss or deal with these stresses, but in the
last several years, the issue is getting what
many say is much-needed attention. More
surveys and studies are looking into the issue, with many showing doctor burnout
topping 50%.
Dr. Adrienne Boissy, chief patient experience officer at the Cleveland Clinic, said
burnout comes in three main forms: emotional exhaustion, depersonalization and
Entire contents © 2016 by Crain Communications Inc.
P. 27
Labor market
is on the mend
Increasing stress being
placed on caregivers is
big cause for concern
SEE CAREGIVERS, PAGE 26
The List
The largest commercial contractors
across the Fourth Federal Reserve
District — which comprises all of
Ohio, western Pennsylvania and
eastern Kentucky — following a
speech in Cleveland last Wednesday,
April 6.
The good news is Ohio’s unemployment is now at 4.9%.
That’s a sharp decline from the
11% peak seen in December 2009
during the height of the Great Recession.
Overall, the unemployment rate is
one good indicator that business
here is thriving again.
“But that doesn’t mean everyone
can get a job who wants a job,”
Mester said.
Yet, with unemployment hovering
around Mester’s long-run level of
SEE MESTER, PAGE 25
SparkBase closing
after long struggle
Lack of cash stifles
effort to fix loyalty
card company
BY CHUCK SODER
[email protected]
@ChuckSoder
ISTOCK
SparkBase was in bad shape when
Stephen Haynes took over as CEO
last May.
At the time, he thought the company still had a fighting chance to
turn itself around by moving beyond
its stagnant core business — processing gift card and loyalty card
purchases. But he changed his mind
last month, after SparkBase lost two
key clients.
On March 22, the company ceased
almost all of its operations, laying off
14 of its 18 employees. Those who
remain aim to find a buyer interested in acquiring the company’s software. They’re also supporting a few
remaining clients.
In short, SparkBase “just ran out
of money,” said Haynes, who also
manages a local venture capital firm
called Glengary, which owned a
stake in the Midtown Cleveland-
based company.
SparkBase would’ve needed to
raise more capital to restructure itself,
but it had a hard time finding willing
investors with cash on hand, Haynes
said, noting that Glengary and many
other venture capital firms in Ohio
are out of cash. SparkBase’s complex
ownership structure made that task
more difficult, he added.
As for the company’s existing investors, they “didn’t want to write
more checks,” he said.
Those financial issues caused the
two clients to leave, he said. When
they did, Haynes decided that it
would take “too much time, too
much effort and too much money”
to turn the company around.
“This was a decision I was brought
in to make. … I decided it wasn’t
worth it,” he said.
Over the past decade, SparkBase
had raised nearly $9 million from a
long list of investors, including North
Coast Angel Fund of Mayfield
Heights and more than 40 individuals. It also received $1 million from
the Innovation Ohio Loan Fund as
well as two Cuyahoga County loans
totaling $790,000.
If the company can find a buyer
for its software, any money it receives would go toward paying back
those government loans. The state is
SEE SPARKBASE, PAGE 27
4/8/2016
10:55 AM
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Employees at the four CBS Radio
stations in Cleveland received an
email on March 15 telling them the
parent company was pursuing
“strategic alternatives for its radio
division.”
The announcement was described as the “end of an era” by the
Los Angeles Times, and speculation
was all over the map regarding the
future of the 117 stations CBS Radio
owns in 26 markets. But, industry insiders stressed to Crain’s, this move
is anything but surprising during
uncertain times for traditional radio,
as listeners spend more time on digital music, podcasts and subscription services such as Spotify and
Pandora.
John Gorman, a former WMMSFM, 100.7 program director,
launched oWOW, an internet rock
station, in 2015. He compares terrestrial radio to fax machines because
he says it’s like a dated appliance in
the digital age.
“Let’s face it, radio as a platform is
worth less every day,” said Gorman,
who was with WMMS from 1973-86.
“The revenues aren’t there anymore.
With the switch over to digital, it’s
not going to come back.”
Radio stations would argue that
with live streaming and shows being
offered as podcasts, they’re keeping
up with the times. But even the most
ardent radio supporter would admit
the industry is facing more than its
share of obstacles.
Representatives from the four
Cleveland CBS stations — WKRKFM, 92.3; WNCX-FM, 98.5; WDOKFM, 102.1; and WQAL-FM, 104.1 —
referred Crain’s to CBS’ corporate
office in New York. Karen Mateo,
CBS Radio’s senior vice president of
communications, said it was “very
early in the process,” and that the
company wouldn’t be commenting
beyond its initial announcement of
a possible sale or spinoff of the radio
division.
Should CBS decide to sell its radio
properties — either bit by bit, or in
one large chunk — the future of any
station would get more tenuous.
Such a move or series of moves,
however, might be the less likely scenario, for multiple reasons.
A big one is the list of potential
buyers is limited. The two largest radio companies, iHeartMedia and
Cumulus Media, are ridden with
debt and struggling with lofty loan
payments.
“Based on available capital and
based on the market of radio stations today, it’s not like there are
lines of usual suspects out there
waiting to buy up these stations,”
said Michael Harrison, the editor
and publisher of Talkers magazine,
a leading industry trade publication.
“That may not be the road available
to them.”
In Cleveland, which Gorman said
isn’t a “growth market” for radio, the
options for a potential sale are even
more scarce, the industry veteran
said.
“I really think CBS has to look at
each market individually,” Gorman
said. “What is the best deal in each
market, and who’s buying? It’s almost like I have a storage room full
of fax machines, but who’s going to
buy them?”
IPO ahead?
Another significant reason a sale
of the radio stations might be less
likely than it first appeared last
month is by spinning off its radio
properties, as CBS did with its Outdoor division in 2014, the company
could reap the tax benefits created
by an initial public offering. In a recent memo to staffers, CBS Radio
president Andre Fernandez, while
not ruling out a sale of some or all of
the company’s stations, said an IPO
is the preferred move.
“Corporations are
not necessarily
forthcoming with
local branches.
That makes it
difficult for people
who work at a
company like CBS
when this kind of
story gets out
there. It’s an
atmosphere of
uncertainty.”
— Michael Harrison
editor and publisher,
Talkers magazine
Operating the radio division independently, Fernandez said in the
memo, would make employee contributions “even more important.”
But converting its digital billboard
business, CBS Outdoor Americas
Inc., into a real estate investment
trust hasn’t really paid off for shareholders of the spinoff, Outfront Media Inc. The company’s stock is
down more than $9 per share, to
$20.87 as of April 7, in the last year.
A high-level CBS Radio source in
Northeast Ohio told Crain’s the fourstation Cleveland group is optimistic
about the possibility of an IPO,
which the source believes is the
most likely scenario. The four CBS
radio stations in Cleveland also touted results from the most recent
Nielsen quarterly, which showed
that WDOK ranked first among all
women listeners in the 25-54 age
group, and that 92.3 and 98.5 occupied two of the top three spots
among men in the 25-54 demographic.
WKRK, WNCX, WDOK and WQAL
reached nearly one million listeners
per month in the quarter, the ratings
showed. Numbers such as that are
why Harrison, the Talkers editor and
publisher, said radio isn’t sidling up
to its death bed.
“It still has life in it,” Harrison said
of traditional radio. “It still has an
audience of people who have grown
up with it and like it. It still generates
ratings and revenue.”
But, he added, debt is a huge
problem for the owners of far too
many stations. That has resulted in
financial cuts that have affected the
product, Harrison said.
“What is wrong with the picture is
too many stations operate with budgets that are so depreciated that they
can’t afford to do radio well,” he
said. “What adds to the problem is
the fact that radio is not the most
cutting-edge form of technology in
life as it is, so therefore it can’t afford
to be anything but its best. If it can’t
afford to do even an average job because of bad planning, that makes it
unworkable.”
An ‘uphill battle’
CBS Radio, while not debt-ridden
like the industry leaders, isn’t without its problems. The company’s radio revenue dropped 6% in 2015,
and CBS took a $484 million writedown on the value of its FCC radio
licenses, The Wall Street Journal reported. The four Cleveland stations,
all housed at the Halle Building, didn’t experience the staff cuts that
took place at several CBS Radio
properties across the country last
year, sources said.
CBS hasn’t given a timeline on
when it will decide on a sale or spinoff, and sources said it could take a
year or more. Gorman, who admitted it took months for his internet
radio station to get potential advertising partners to take it seriously,
said the web has changed everything
for traditional radio.
“It’s been an uphill battle for us,
but at least we don’t have the debt,”
he said of oWOW, which has office
space in Cleveland’s Gordon Square
Arts District.
“The great thing about online (radio) is outside of our own investors,
we don’t have a lot of overhead. As
long as we keep the lights on, we pay
our employees and we have the
equipment, we’re doing OK.”
CBS’ ultimate decision for its radio division, which has properties in
every top-10 market, could wind up
being a positive one for the likes of
WKRK, WNCX, WDOK and WQAL.
But corporate announcements
such as the one made last month always bring a ton of questions.
“Corporations are not necessarily
forthcoming with local branches,”
Talkers’ Harrison said. “That makes
it difficult for people who work at a
company like CBS when this kind of
story gets out there. It’s an atmosphere of uncertainty. It becomes difficult to deal with people above you,
people below you and someone in
the media who presents a threat because they don’t want to say anything they’re not supposed to.”
4/8/2016
2:05 PM
Page 1
CRAIN’S CLEVELAND BUSINESS z APRIL 11 - 17, 2016 z PAGE 5
Skyscraper intrigue swirls downtown
BY STAN BULLARD
[email protected]
@CrainRltywriter
Before steel and stone can start reshaping downtown Cleveland’s skyline with new office buildings, the
more fundamental building blocks
are tenants who will occupy, and pay
for, the space.
Speculation about new skyscrapers is ramping up thanks to activities
by two of downtown Cleveland’s
largest corporate citizens: SherwinWilliams Co., which is working on an
acquisition that would make it the
world’s biggest coatings company,
and Medical Mutual of Ohio.
Rico Pietro, a principal at Cushman & Wakefield Cresco brokerage
in Independence, believes it makes
for additional excitement in the
downtown market.
“When you add Sherwin-Williams’
potential need with the Medical Mutual requirement, you could have two
significant buildings come out of the
ground in the next few years,” Pietro
said, in addition to the proposed NuCLEus mixed-use project. “Wherever
they go, you’ll see additional development in that area.”
Likewise, Kevin Piunno, a senior
vice president at Cresco, said what
happens if and when the companies
set their course triggers many conversations among office brokers.
“Can you imagine Landmark as a
mixed-use project with apartments
and offices,” he asked, pointing to the
follow-up opportunity — or liability
— if the paint company should move.
At this point, what’s clear is both
Sherwin-Williams and Medical Mutual may be too large to move into existing empty office space, even with a
16% vacancy rate among top-tier
buildings. Both also may be able to
redo their existing properties to stay
put. However, each is also large
enough to launch a real estate developer’s project downtown or in the
suburbs.
Sherwin-Williams has 2,800 associates in 900,000 square feet of the
company-owned Landmark Office
Towers, 101 W. Prospect Ave.
Medical Mutual has a requirement for 380,000 square feet, as
much space as it has in The Rose
Building, 2060 E. Ninth St., with
about 1,300 workers downtown. It
also has 700 workers in Beachwood,
Copley and Strongsville offices that
it may consolidate together in some
to-be-determined fashion.
Conway wrote in an email, “S-W
has experienced dynamic growth
over these past few years (i.e. nationwide we open one new paint store
every three-to-four days) which have
resulted in more downtown jobs and
our need to expand into space in the
adjacent Skylight Office building.”
With the Valspar deal, SherwinWilliams has said it intends to keep
its headquarters in Cleveland and
maintain what it describes as a “significant presence” in Minneapolis.
At the same time, it has said it expects synergies from combining with
Valspar, with growth opportunities
in product lines and globally, as well
as efficiencies that will benefit the
companies and their customers.
costs — from the proposed combination, according to a Securities and
Exchange Commission filing of the
conference call transcript.
The big proposed acquisition, as
well as a CEO transition to former
chief operating officer John Morikis
from long-term CEO Christopher
Connor, surfaced since rumors started circulating in the real estate industry that the company had sized up
sites for a new headquarters downtown. Insiders privately say the plans
have varied, but have ranged from
600,000 to 900,000 square feet in size.
Sherwin-Williams’ Conway argues
the company may be able to expand
within its footprint if law firms and
other tenants in the building decide
to move. Akron-based FirstMerit
Corp. also has a branch and some offices in the complex that total 9,000
square feet, which may become
available through the bank’s proposed merger with Columbus-based
Huntington Bank.
Others note the company could
do short-term leases in other spaces
for some workers.
‘Intriguing’ opportunities
Meantime, farther east on
Prospect at the Rose Building, which
is on the corner with East Ninth,
Medical Mutual openly discusses the
options it is mulling.
SEE SKY, PAGE 27
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Leaving options open
Ask Sherwin-Williams about a potential headquarters project search
and Mike Conway, director of corporate communications, answers, “Assessing space, land and building and
new paint store location needs, is
nothing new, something we’ve been
doing for 149 years as part of our regular business planning cycle.”
Conway said the paint and coatings company’s focus is on concluding the proposed acquisition of
Valspar Inc. of Minneapolis. The
$11.3 billion deal is scheduled to be
closed early in 2017 if shareholders
and regulators approve it.
“It’s business as usual here at
Landmark,” Conway said.
However, the company for the
first time last year leased 50,000
square feet across the street in the
Skylight Office Tower, 1660 W. Second St. Sherwin-Williams would not
disclose how many people or which
of several teams it moved next door.
Whether the combination nets
more headquarters jobs in Cleveland
— and if so, how many — are obvious questions that remain unanswered. When an analyst asked
about how many corporate costs
could be cut in the consolidation
during a March 21 conference call,
Sean Hennessy, Sherwin-Williams’
chief financial officer, said, “I don’t
think we’re ready to talk about anything like that.”
He said the company would not
elaborate beyond saying 42% of the
$280 million in cost savings it expects will be in the area of selling,
general and administrative expenses
— which includes headquarters and
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Huntington Bancshares is pushing back against some challengers
questioning the bank’s pending
merger with Akron’s FirstMerit
Corp.
While Huntington may disagree
with some of the issues raised by
groups like The Ohio Fair Lending
Coalition and New York-based
watchdog group Inner City
Press/Fair Finance Watch — who
both argue the combination could
result in more harm than good, particularly in some low-to-moderate
income Ohio communities the
banks currently operate in — the
groups say Huntington is at least
hearing them out.
Some of those neighborhoods,
like those in and around Akron and
Cleveland, are expected to see a reduction in branch locations as operations in the expanded Huntington
footprint are consolidated to
achieve the cost savings that made
the deal attractive to shareholders
and executives.
Lawyer and Inner City Press executive director Matthew Lee, who
regularly challenges bank mergers,
has called the deal “one of the most
negative bank proposals in years.”
He said that closing 100 or more
branches in the affected communities could be as harmful “in its way
as the toxic drinking water in Flint,
Mich.”
Collectively, the challengers to the
deal take issue with the impact of
branch closures, the bank’s lending
procedures and Huntington’s financial commitments to affected communities.
Part of the Fed’s role in signing off
on a bank merger is identifying the
public benefit.
But reducing the branch network
as proposed would make it harder
for people in Akron and Cleveland
communities to access banking services, Lee argues.
“The harm of the branch closures
outweighs any benefit that can be
shown,” Lee said. “It’s important
that this gets full scrutiny. As proposed, this should be denied.”
If nothing else, Lee and the other
groups involved, including the National Community Reinvestment
Coalition in Washington D.C., are
urging the Fed to extend its commentary period beyond the current
April 15 deadline by another 30 days
and hold public hearings.
Sources indicate the comment
period seems like it could be extended. But as of last week, the Fed,
which makes that call, has not approved an extension.
Fighting branch closures
Huntington CEO Steve Steinour
has said the bank aims to cut FirstMerit’s total expense base by 40%
when the two expectedly merge
around the third quarter, with most
of that coming from back-office operations and a branch network con-
solidation.
So far, Huntington has proposed
the closing or consolidation of 107
branches in its combined eight-state
footprint in merger applications
filed with the Federal Reserve Bank
and the Office of Comptroller of the
Currency.
At least 60 of those are in Ohio,
with 49 in Northeast Ohio, specifically.
Meanwhile,
additional
branches will need sold to comply
with regulators.
OCC filings show Huntington is
looking to sell off branches representing $600 million in deposits in
the Canton market, or 43% of their
total deposit base there, and another $50 million in the Ashtabula market.
Huntington provided a 42-page
response to Lee’s comments to the
Fed on March 31 through its law
firm, New York-based Wachtell, Lipton, Rosen & Katz, arguing customers will benefit from an overall
extended network of branches and
ATMs while FirstMerit customers
will have access to more bank products and services.
“The legacy customers of FirstMerit Bank will also benefit from the
extended branch hours of Huntington Bank branches on Saturdays,
and such customers in Ohio and
Michigan will enjoy the added convenience of Huntington Bank
branches co-located in local major
grocery stores, which are open seven days a week and for longer hours
than traditional branches,” the law
firm wrote.
The firm also said that the 43
branches proposed for closure so far
in Cleveland, Akron and Canton,
74% are “short-distance” consolidations as defined by the OCC and
within one mile or less from a receiving branch. Of the total 107 proposed closing, 58% are considered
“short-distance.”
But Lee wasn’t impressed with the
response, calling its tone “dismissive.”
In a reply, Lee points out that in
selecting branches to close or consolidate against the branch that
would receive those customers,
Huntington is opting to shutter the
lower income location, and there is
“nothing moving the other way.”
“We will have more comments,
but for now the comment period
should be extended; evidentiary
hearings should be held; and on the
current record, the application
should not be approved,” he wrote
in a reply to the Fed.
Regarding whether Huntington is
reconsidering what branches to
close, Huntington spokesman Brent
Wilder pointed out that 13 are in
designated low-to-moderate income communities and that “proposed branch actions are not finalized and are subject to regulatory
input.”
Lending criticized
Inner City Press, along with the
Fair Lending Coalition, also call out
the banks for what they deem as inadequate lending to minority appli-
cants and in poorer neighborhoods
regardless of any apparent compliance with provisions of the Community Reinvestment Act and other
regulations.
Charles Bromley, director of the
Ohio Fair Lending Coalition, which
is working closely with the NCRC
and other groups to articulate credit needs to the Fed and Huntington,
said the Fed commentary periods
are a chance to shed light on those
lending issues.
For example, in a lending analysis
provided to the Fed, Inner City Press
said Huntington made 197 home
purchase loans to whites in the
Akron MSA in 2014.
However, it made nine to African
Americans and three to Latinos. In
Cleveland that year, 582 home purchase loans were made to whites, 37
were made to African Americas and
nine were made to Latinos.
According to the most recent census data, the Cleveland population is
52% African American, 33% white
and 10% Hispanic.
The bank declined to comment
for this story on its lending procedures, including those tied to the
CRA and Home Mortgage Disclosure Act.
But its law firm addressed them in
a response to the Fed.
“Any implication in the March 19
E-mail that Huntington Bank has
engaged in prohibited discrimination in its home mortgage lending is
unfounded,” the firm wrote before
explaining its lending procedures
and highlighting, among other
things, past community development loans made in the Akron and
Cleveland regions.
“This is our chance to hold them
accountable,” Bromley said.
“The most important thing is to
have a discussion with the bank
about how they’re going to make
credit available and how they’ll
make their products available to the
underserved community.”
And while Huntington, so far, has
committed $20 million to the Akron
and Canton communities and $5
million to Flint, Mich., Bromley said
it’s not enough.
The dollars also don’t address
overall lending practices he, and
others, are scrutinizing and suggesting need improved.
Notably, KeyCorp, in a partnership with the NCRC, announced in
March it is committing $16.5 billion
over five years to communities it
serves — with a focus on eastern
New York — affected by its merger
with First Niagara Financial Group,
the parent company of First Niagara
Bank.
Of course, that commitment
came five months after Key announced its acquisition plans, and
Huntington’s merger was announced just two months ago.
Asked if Huntington is planning to
make additional financial commitments, Wilder was unspecific, but
said the bank will “continue to make
proactive announcements about
commitments within specific communities and more broadly across
the enterprise.”
4/8/2016
10:56 AM
Page 1
The Week
CLEVELAND BUSINESS
700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1
1230; Phone: (216) 522-1
1383; www.crainscleveland.com
THE BIG STORY
BEST WISHES
The Cleveland Convention Center,
turned FirstMerit Convention Center
of Cleveland, is now the Huntington
Convention Center of Cleveland.
Huntington Bancshares Inc. on April 6
announced an agreement between
FirstMerit Corp. and Cuyahoga County
for the Columbus-based bank to officially take over naming rights for the
building as a merger between both
companies draws closer to completion. The company is taking on all
terms of the original 20-year, $10.3
million deal approved between county
council and the Akron-based bank
that was announced last September.
That agreement, which runs to 2035,
provides the county with $400,000
annually over the 20-year period, plus
regular adjustments for inflation,
which brings the deal to more than
$10 million over its lifetime.
Kent State University president Beverly Warren announced she has been
diagnosed with breast cancer and will
undergo surgery. In an email to the
university community, Warren said
her medical team at the Cleveland
Clinic has assured her that the cancer
is “in a very early stage and that there
is a high expectation for a full recovery.” Warren said she would remain
active and involved in the business of
the university throughout her recovery. She expects to have a reduced
public schedule into May. Warren
joined the university as its 12th president in July 2014 after having served
as provost and senior vice president
at Virginia Commonwealth University.
Publisher/editor
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Jay Miller, Government
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Dan Shingler
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Rachel McCafferty
Manufacturing/energy
Jeremy Nobile, Finance
Lydia Coutré,
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CAN YOU GIG IT?
Fairlawn City Council authorized a
plan that involves installing a new
high-speed fiber internet network and
wireless access points throughout
the city and the Akron-Fairlawn-Bath
Township Joint Economic
Development District. Fujitsu Network
Communications of Texas will build
the so-called FairlawnGig network.
Extra Mile Fiber LLC of Dayton will
serve as FairlawnGig’s anchor service
provider. The construction project is
slated to cost about $10 million.
PLANS ON TRACK
An advance guard of more than 500
internet columnists; print, television
and radio reporters; media executives
and technicians who are leading the
way for 20,000 of their media associates on April 6 descended on Quicken
Loans Arena to check out the logistics of the Republican Party’s presidential nominating committee in July.
Republican Party officials laid out the
plan for convention week. Jeff Larson,
CEO of the Republican Committee on
Arrangements, said he was confident
about the soundness of the security
plan being put together. “I believe this
will be one of the most secure conventions that we’ve had, but we’ll still
allow people to get around and enjoy
the things this city has,” he said.
PEACE OF M ND
NO TO NORTH CAROLINA
Cuyahoga County Executive Armond
Budish is taking a symbolic stand
against anti-LGBTQ legislation passed
in the state of North Carolina. In an
April 5 executive order, Budish said no
officer or employee of Cuyahoga
County is authorized to approve any
non-essential official travel to North
Carolina. The order is a direct
response to North Carolina’s “Public
Facilities Privacy and Security Act,”
passed on March 23 to counteract a
civil rights ordinance passed in
Charlotte earlier this year.
A CLOSER LOOK
Directors of specialty transportation
insurer National Interstate Corp.
appointed a special committee to
consider a $30-per-share offer from
American Financial Group Inc. to
acquire the shares of National Interstate not already owned by American
Financial’s Great American Insurance
Co. subsidiary. Richfield-based National
Interstate said the special committee
comprises five of its directors: Norman
L. Rosenthal (serving as chair), I. John
Cholnoky, Patrick J. Denzer, Donald W.
Schwegman and Alan R. Spachman.
At $30 per share, the deal is valued at
about $293 million.
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3/16
PAGE 8
4/8/2016
10:57 AM
Page 1
Round 1 ends, but battle looms
FirstEnergy, following favorable decision from utilities commission, might be underdog in next bout
BY DAN SHINGLER
[email protected]
@DanShingler
FirstEnergy Corp. won its big
fight. Now it has to defend its title.
The Public Utilities Commission
of Ohio on March 31 provided
Akron-based FirstEnergy with a
unanimous decision approving the
company’s proposed power purchase agreements.
Because those PPAs include special fees put to ratepayers to guarantee the profitable sale of power from
FirstEnergy plants to its distribution
arm, interests ranging from local
governments to other power companies and environmentalists cried
foul. The deal is anti-competitive
and only ensures that dirty coal and
outdated nuclear plants remain online longer than any invisible hand
would allow, they contend.
But the PUCO sided with FirstEnergy. It agreed the plants are necessary to Ohio, in part because they
represent on-demand backup power that could be needed again if, say,
natural gas prices were to spike because fracking were banned. And
that settled the matter. Or not.
Observers and industry experts
say a bigger fight now looms — and
the utility is probably the underdog.
FirstEnergy’s 18-month slugfest
in front of the PUCO was brutal, and
no doubt costly in terms of public
relations, advertising and lobbying.
It also might have just been a warmup for the real brawl, or brawls, that
are to come. The next venue is prob-
ably national, too, before the Federal Energy Regulatory Commission.
“I think there’s a high probability
FirstEnergy will lose when it goes to
FERC,” predicts Andrew Thomas, a
longtime energy law attorney and an
economic researcher on energy
matters at Cleveland State University.
FERC has jurisdiction because
FirstEnergy sells power from the
plants affected by the PPAs into the
wholesale market, which is the federal agency’s domain. Thomas said
FERC does not like anti-competitive
deals or transactions that are not
arm’s length.
Former PUCO chairman Todd
Snitchler, who now consults with
power generators seeking to sell into
the Ohio market, thinks FERC represents the biggest threat to FirstEnergy’s PPAs, especially because competitors are complaining that the
PUCO ruling upsets the wholesale
power market. FERC must waive
some of its rules on affiliate transactions for the PPAs to stand, he said.
“That case is one I think people
feel have very strong merits, and
there’s a great likelihood of success
in that case,” Snitchler said. “That’s
the one most industry watchers
think has legs.”
Connect the dots
Even if FirstEnergy does survive
an FERC fight, it probably will come
back home for a slugfest with heavyweight lawyers before the Ohio
Supreme Court, assuming the PUCO
stands by its decision on any ap-
peals, as expected. If that happens,
lawyers will be throwing jabs about
how the PUCO is circumventing the
Ohio Legislature’s intention, in violation of the state constitutions, with
a few other hooks no doubt thrown
in as well.
The PUCO’s March 31 rulings on
FirstEnergy and Columbus-based
AEP “continue an unwelcome trend
of government intervention in competitive markets, at the urging of the
state’s electric utilities,” wrote the
Office of the Ohio Consumers’
Counsel. “As a result, several million
Ohioans will pay a lot more for electricity than the market prices intended by the state Legislature.”
The Consumers’ Counsel continued, “It is difficult to connect the
dots between electric deregulation
and market prices in the 1999 Ohio
law to making consumers pay for reregulation and subsidized power
plants in the decisions today. The
Ohio Consumers’ Counsel has asked
federal officials who oversee the nation’s electric markets to protect
Ohioans from paying subsidies for
power plants.”
For its part, FirstEnergy said the
PUCO ruling is legal and valid —
and should stand.
“FirstEnergy’s Purchased Power
Agreement complies with existing
Federal Energy Regulatory Commission (FERC) rules that promote customers shopping for retail energy
supply,” the company said in a
statement.
“With the PPA, customers retain
their ability to select a generation
supplier, and the PPA has no impact
on the price customers pay for generation,” the utility added. “FirstEnergy believes energy costs will increase in the future. Under the PPA,
the company’s Ohio utilities will
help safeguard customers from future rate increases by crediting customers’ bills when energy prices
rise.”
About those PPAs …
Meanwhile, environmentalists,
other power generators, local governments, green-energy advocates
and others are jumping onboard the
opposition train, either complaining
to FERC or threatening to take the
matter to the Ohio Supreme Court
or the PJM Interconnection, which
sets the rules for the electric grid
upon which FirstEnergy relies and
seeks a level playing field for all generators who use the grid.
Any of them could make utility
PPAs null and void. The energy and
financial world is certainly watching
to see what happens.
New York based Fitch Ratings issued a release on Monday, April 4,
addressing the likelihood that
FirstEnergy’s sweet deal will face potentially souring challenges. The
PPAs, as they now stand, represent a
“constructive credit development
for them and their Ohio-based utility and power generation subsidies,”
Fitch wrote.
Of course, in a release headlined
“Fitch: Ohio Affiliate PPAs May Face
Further Scrutiny,” the way things
currently stand was not the issue the
credit rating agency was pointing
out.
“However, pending complaints
filed with the Federal Energy Regulatory Commission (FERC) earlier
this year are a source of uncertainty
regarding the viability of the affiliate
PPAs,” Fitch continued. “In addition, Fitch expects parties opposing
the PPAs will seek a rehearing and,
ultimately, judicial review of the
PUCO order.”
In other words: Those PPAs are
nice, if you’re a FirstEnergy creditor,
but get ready to watch them get assailed in a variety of venues and
courts and they could get thrown
out.
Even some who have supported
FirstEnergy’s argument before the
PUCO aren’t optimistic the company’s victory will last. But, as in any
case before a court or regulatory
body, no one is sure of the outcome.
“I think it will more likely than not
be shot down,” said Matt Brakey, an
energy consultant to businesses and
president of Shaker Heights-based
Brakey Energy. “But the odds aren’t
much better than a coin flip.”
Snitchler basically agrees but is
reluctant to predict an outcome.
What he is sure of, he said, is that
Ohio’s electricity market will face
more uncertainty for up to two years
as the matter winds its way through
courts and regulatory agencies.
That probably helps FirstEnergy,
he said, because uncertainty will
make it more difficult for competitors to make investment decisions
about building new plants in Ohio
or that would sell into its electricity
markets.
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Nonprofits lean on efficient training
“What we found is our
disposals are going to be
quite a bit less for the simple
fact that we’re able to get
things out in plenty of time
for our consumers to have
this product before an
expiration code may come
into play, or anything else.”
BY LYDIA COUTRE
[email protected]
@LydiaCoutre
From the moment a food item
was donated to the Akron-Canton
Regional Foodbank last year to the
time it was in the hands of those in
need, it would sit in the foodbank’s
volunteer center for 92 days, on average.
But now, with the help of Lean Six
Sigma training from Akron Children’s Hospital, the nonprofit can receive, sort, inspect, pack and deliver
food donations in about 39 days.
“We’ve only been doing this project since the end of December, so I
think the more we get more people
involved in this, I think that 39 days
… could be in the 20s,” said Matt
Petrick, senior manager of operations for the foodbank.
Lean and Six Sigma principles —
the idea of eliminating waste and removing variation, respectively, in
different processes — have been implemented in many for-profit sectors, from manufacturing to health
care to construction. But it’s not as
common in the nonprofit world,
— Matt Petrick,
senior manager of operations,
Akron-Canton Regional Foodbank.
said Mike Antochow, deployment
leader for Akron Children’s Center
for Operations Excellence, who provided the training to the foodbank.
Many haven’t realized the benefits or shy away from the cost of
training, which Petrick said would
be about $6,000 per person for the
training Antochow provided.
The children’s hospital provided
training and certification for free to
two staff members and helped the
foodbank streamline processes that
officials there have known for a
while needed improvement. Without the hospital, the cost could have
been prohibitive, said Barb Hornick,
the foodbank’s technology and operations analyst, who went through
the training with Petrick.
“We’re not there to try to tell peo-
ple what to do,” said Antochow, who
also is training several other foodbank employees for smaller projects
on a different Lean Six Sigma level of
certification.
“We’re there to try to train and
SEE NONPROFITS, PAGE 16
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20160411-NEWS--10-NAT-CCI-CL_--
PAGE 10
4/7/2016
4:20 PM
Page 1
Opinion
From the Publisher / Editor
A shot of reality
about stress in
the workplace
Editorial
Capital ideas
Phenom, a promising mobile app and social media company for athletes, made more noise on its way out of Cleveland than it ever did while it was here.
But that’s OK.
The conversation articulated by Phenom founder Brian
Verne in a piece in VentureBeat, and joined by others in the
tech, entrepreneurial and economic development communities, is a healthy development for a city that has made
strides in entering the new economy but still has much
work to do.
Phenom recently left its home base in Cleveland to join the
highly praised 500 Startups business accelerator in San Francisco, where it can make valuable connections in the startup-rich (and literally rich) Silicon Valley.
Verne told Crain’s tech reporter Chuck Soder in February
that the benefits of being part of a big-time accelerator
weren’t the only reason for the move, as he considered potential investors in Northeast Ohio too risk-averse to support
a consumer technology company like Phenom.
Ray Leach, CEO of venture development organization
JumpStart, argued in pieces in this publication and VentureBeat that Phenom’s departure is a healthy sign for Cleveland.
There’s “nothing upsetting” about Phenom joining 500 Startups, he wrote in VentureBeat.
“In fact, the founders’ willingness to go where they have
the best chance of success is exactly the kind of entrepreneurial hustle our city, state and country need right now.”
True enough. But Verne, again in VentureBeat, had a different take, writing, “The truth is, it is a problem that we left
Cleveland. We should have been able to find funding at the
level and speed that would allow a promising startup to grow
and compete. And while we did get some local backing, the
funding ecosystem at large is so bureaucratic and slow-moving that it’s more likely to kill than nurture startups.”
This is not a new complaint.
Northeast Ohio entrepreneurs for years have lamented the
lack of available capital here.
Complicating matters further of late is that LaunchHouse
no longer is running its bootcamp-style startup accelerator
program (it continues to provide office space and educational programming related to entrepreneurship) and Bizdom Cleveland late last year ended its accelerator program,
too.
Does Cleveland have the right mindset to support its
young companies? There are many tech startups and others
that have grown and thrived here, but Verne, who remains
an advocate for the region, thinks we could do better.
“It is imperative that more investors in Cleveland empower smart young entrepreneurs who have the intelligence and
drive, but not the means, to build a great company,” he wrote
in VentureBeat, undoubtedly echoing the feelings of the
smart, young entrepreneurs this region needs to drive more
growth.
A well-timed event hosted by Jones Day, “TechniCLE
Speaking 2016: Fostering Innovation,” takes place this Thursday, April 14, and features a series of short talks and moderated panel discussions. It promises to focus on issues including “how to best support, position and leverage the local tech
industry in the ongoing revitalization of Northeast Ohio’s
economy.”
One of the featured speakers: Brian Verne. Another is
Frank Sullivan, CEO of innovative manufacturing company
RPM International and a longtime advocate of tech education in the region.
This is a chance for some of the region’s best minds to assess where we are and where we need to go. Figuring out how
to improve support for smart entrepreneurs will go a long
way to making Northeast Ohio’s economy work better for all
its residents.
PUBLISHER AND EDITOR: Elizabeth McIntyre
([email protected])
CLEVELAND BUSINESS
MANAGING EDITOR: Scott Suttell ([email protected])
SECTIONS EDITOR: Tim Magaw ([email protected])
Perspective can be a beautiful thing.
I got a dose of much-needed perspective early in my career
from my older sister, a registered nurse. I was reminded of that
last week when I read Crain’s reporter Lydia Coutre’s story on
caregiver stress.
All jobs come with some level of stress. Mine became acute
a month into my first job as a copy editor at the Lorain Journal,
which at the time was an afternoon newspaper. That meant the editing shift started at 5
a.m. Not only that, but deadline awaited the
minute you walked in the door because the
presses started rolling before 9 a.m.
For a 22-year-old just out of college, I wasn’t completely unfamiliar with deadline pressure, having worked at the student newspaper. But I wasn’t used to deadline pressure at
Elizabeth
the ungodly hour of 5 a.m.
McIntyre
I spent the pre-dawn hours, when I’d much
rather be sleeping than spellchecking, writing
headlines, fixing grammatical errors and sharpening syntax.
One Thursday morning, the editor stormed into the newsroom with a freshly printed paper in hand: “Who wrote this
&#%!@ headline?” Now this particular editor was one of the
most talented journalists I’ve worked with, but he also was one
of the most profane, demanding and, at times, downright cruel people I’ve known. Humiliation was one of the sharpest tools
in his management toolbox, and as I raised my downcast eyes
to the headline in question, my heart stopped.
I was about to be eviscerated.
There in big, bold type, was my work: “Council tables police
chef’s funding request.” Police chef, not police chief. I knew I
was cooked.
The stress made my voice quiver: “I wrote it,” I squeaked. He
turned, narrowed his eyes, and paused. Slowly, a sarcastic smile
crept across his face. His eyes locked with mine. “Don’t worry,
honey,” he oozed. “Only 30,000 people saw it.” He then threw
the paper at me and walked away.
I don’t know how I got through the rest of that workday. That
night, I fell apart. The tears started and didn’t stop for three
days. I couldn’t believe I’d made such a boneheaded mistake
— and in my first month on the job! I even contemplated a career change.
Finally, on day three, I called my big sister, the nurse, and unburdened myself. “How could I make such a mistake?” I sobbed.
“I’m so embarrassed. I want to die!” After patiently listening, she
laid it on the line as only a sister can: “Yes, it was awful, but you
need to learn from it and move on. It’s not the end of the world.
When I make a mistake at work, someone might die.”
And she was, of course, right. Health care workers, like my
sister and millions of others, deal in life-and-death situations
regularly. Those encounters take a toll, which is why it’s important that hospitals in Northeast Ohio and nationwide are offering solutions to help caregivers manage the stress inherit in
their profession. It’s not just about the consequences of making a mistake. It’s about the pressures of providing care faster
to more patients, of needing to put on a veneer of invulnerability, of working long hours. Health care workers dedicate their
lives to the well-being of others. Their own well-being is vital,
but it’s not as easy as “physician (or nurse, or respiratory therapist, or X-ray technician) heal thyself.”
Our health care institutions and their leaders recognize that.
Their employees, and in turn all of us, will be healthier for it.
WRITE US: Crain’s welcomes responses from readers. Letters should be as
brief as possible and may be edited. Send letters to Crain’s Cleveland
Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by
emailing [email protected]. Please include your complete name and city from
which you are writing, and a telephone number for fact-checking purposes.
SOUND OFF: Send a Personal
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20160411-NEWS--11-NAT-CCI-CL_--
4/7/2016
2:30 PM
Page 1
START THE
CONVERSATION
PROM AND GRADUATION SEASON IS UPON US
Take our parent-teen drinking and driving pledge
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Letter to the Editor
On behalf of Greater Cleveland Volunteers, I want
to bring attention to National Volunteer Week, April
10-16, 2016, and thank all the wonderful volunteers
we have in Cuyahoga County.
National Volunteer Week began in 1974 as a way
to recognize and celebrate the efforts of volunteers.
Since then, the original emphasis on celebration has
widened. The week has become a nationwide effort
to urge people to get out and volunteer in their communities.
National Volunteer Week is about inspiring, recognizing and encouraging people to seek out imaginative ways to engage in their communities. It’s
about demonstrating to the nation that by working
together, we have the fortitude to meet our challenges and accomplish our goals.
Each year, Greater Cleveland Volunteers takes this
time to thank all of its volunteers that help at a wide
variety of organizations in the community. From tutors and mentors that help children in the schools,
to dedicated meals-on-wheels delivery volunteers,
to caring individuals that comfort patients in hospitals, hospices or nursing homes, and those that help
the unemployed find job, our volunteers make Cuyahoga County a better place to live.
National Volunteer Week is also a time to promote
volunteerism and encourage more people to serve.
If you have an interest but aren’t sure what volunteer opportunities are available, look at our website:
greaterclevelandvolunteers.org or call 216-391-9500.
— Joy Banish
Executive Director
Greater Cleveland Volunteers
Web Talk
Re: Indians home opener
and 2016 outlook
While it is greatly appreciated that the Indians added an
extra game for the ticket exchange, we all learned the
“buyer beware” downside of dynamic pricing. In exchange for a $100 Opening Day ticket, we will now get
two $20 tickets. While many will learn from this and not
make that mistake again, the Indians will surely sell out
— Donald Sinko
the home opener again next year.
The Indians need to do three things to increase attendance: 1. Lower ticket prices. The Indians doth protest
too much when they say how “low” their prices are. Not
so in the real world. 2. Win more games. They seem to
be working on this with some success. 3. They need a
little luck. It always helps. I think their gradual phasing
out of Chief Wahoo may help #3.
— Seth Hirschfeld
Re: RTA’s budget crunch
I would recommend that RTA take a look at its organization chart and take a meat ax to it. There are way too
many departments and senior staff members. RTA does
not need its own police force. Cleveland has a perfectly
good police force. I would also recommend that it shut
down the ill-conceived Waterfront line. Most days and
times, no one rides it at all. Finally, I would observe that
every person in the county pays the tax that supports
RTA, yet very few of them use its services. Robbing
Peter to pay Paul is unsustainable in the long term, since
Peter will just move to a “safer” location to avoid being
robbed. Ultimately, the riders themselves need to pay
for the services they use, not the general population.
— Henry Holtkamp
This is such a baloney argument, with all due respect.
All those transit riders also pay for fancy highway
expansions in suburbs they never visit. In the United
States, we share the cost of infrastructure. The gas tax,
which hasn’t been raised in almost 30 years, only pays
for like 50% of the cost of interstate highways anymore.
Everyone’s taxes pay for stuff they don’t use. That doesn’t mean they aren’t good investments. The cities that
are eating Cleveland’s lunch economically, like Seattle,
are investing huge in transit. Petty arguments against
transit that amount to “I got mine” aren’t serving this region well. Where is our empathy for low-income workers?
— Angie Schmitt
According to data from the Tax Foundation, gas taxes
and other user fees cover just 52% of the cost of maintaining Ohio’s road network. That means that 48% of the
money spent on roads comes from the general funds of
state and local governments, which is paid into by
everyone, regardless of whether or not they own a car.
Nine percent of Ohio households lack access to a car, a
number that climbs to 24% in Cleveland, yet Henry Holdkamp claims it is the drivers who subsidize transit and
not these individuals — 63% of whom are low-income,
according to the Brookings Institution — who subsidize
drivers. Ohio spends more money mowing the lawns
alongside roads than it does to support transit, but
we’re supposed to believe RTA is the real culprit.
— Tim
Ohio’s state-level transportation funding remains mired in
a long outdated, near-primordial pro-highway philosophy
that should embarrass us all. As noted in Crain’s wonderfully enlightened April 4 editorial, “Not fare,” the typical
state provides 20% of the transit needs in their state,
whereas Ohio is at eight-tenths of 1%. Further, at least
16 other states spend substantial additional state tax
revenue supporting intercity rail passenger transportation as part of their efforts to provide a balanced, multimodal transportation matrix for all residents. Decades
ago, many of my fellow transportation-improvement advocates and I responded to requests from a small group
of Akron-area state legislators with information about
how states across the nation funded urban and intercity
public transportation services. Failure of Ohio’s legislators to constructively use this information produced the
decades of inaction largely responsible for Ohio’s current transportation funding fiasco. Throughout more recent decades, our annual urging of Ohio’s legislative and
executive leadership to consult with their counterparts in
other states about transportation funding has been similarly ignored. Is it too much to expect that this editorial
will finally grab the attention of our state “leaders” about
the urgency of adopting more enlightened transportation
funding priorities? Experience suggests the answer will
be that it is too much to expect. Facts on the ground demand that answer come in the form of legislative and
executive action to meet the full range of Ohio’s urban
and intercity transportation needs.
— J. Howard Harding
Re: Source Lunch with Dominic Ozanne
Dominic Ozanne has raised the standards in the
design/build and general construction industry, and not
just for minorities. I have seen first-hand the
professionalism he brings to the business. What is not
apparent is his hands-on commitment to help small and
minority businesses in the industry with mentoring and
partnering. Being very involved in this facet, I see this as
a very important component to making this region grow.
He recognizes how difficult the construction industry is
make a difference in! We all need to support these
efforts. Thank you, Dominic.
— Neil Dick
Re: Ruling favors utilities
PUCO subsidizes FirstEnergy and AEP with job-killing
electrical rate increases that will harm all of Ohio’s
employers and, ultimately, every Ohio resident. This
multibillion-dollar drain on Ohio’s businesses will have
a more negative impact on Ohio’s economy than any
— 203156
Ohio tax increase I can remember.
Lt. Antonio Matos
Post Commander
Ohio State Highway Patrol
Lynette Blasiman
Director
Safe Communities
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20160411-NEWS--12-NAT-CCI-CL_--
PAGE 12
4/7/2016
2:22 PM
Page 1
There is an art to what this
BY DAN SHINGLER
[email protected]
@DanShingler
Whiskey Painters of America president Ron Beahn is also a collector of the unique art. (Dan Shingler)
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Who’s in the mood for a little art?
Because if your budget, or your
space, is too small to stretch for a big
and pricey canvass, the solution
might be right under your nose. But it
might smell like Jack Daniels or Johnny Walker; a group of distinguished
artists known as Whiskey Painters
can find a muse in any spirit.
And these masters of small pieces
turn out some remarkable and collectible works, known as Whiskey
Paintings. The works are created by
a national group of artists that got its
start in Akron. The Whiskey Painters
of America (WPA) club remains active and based in Silver Lake, and it
just began one of its two annual
shows.
Plenty of people have never heard
of Whiskey Painters, Whiskey Paintings or any association of whiskey
and painting at all. Here’s what you
missed:
Way back in the days of men who
were so mad that they would start
companies and still drink two martinis at lunch, some of them were also
crazy enough to want to paint a little
during their liquid lunch. At least
they were after Akron industrialist
Joe Ferriot, the founder of injection
molding company Ferriot Inc., figured out a way to do it. Ferriot popularized what became sort of the antithesis of “pop” art, called Whiskey
Painting.
Ferriot fitted a working pallet into
an aspirin tin, cut some brushes
down to ultra-portable size, and
sliced his pressed paper medium
into pieces that would fit in a shirt
pocket — about four inches by five.
His kit had all he needed to practice his wet passion on the road, except of course, for water. But then,
Ferriot figured, who ever said you
had to use water? So he didn’t. He
sat at bars in New York and elsewhere on his travels and dipped his
brush in whiskey. Turns out, it not
only worked great, but an artist didn’t have to buy much whiskey when
producing little card-sized gems and
giving them away to strangers at the
bar, either.
State of the art
The concept turned out to attract
some extremely talented and wellknown artists, and by the 1960s, the
club was formed. Its roster has included some great painters, and it
still does.
The most famous probably is John
Pike, known to most who have studied the art of watercolor for his
teachings, books and materials, but
also to admirers who frequent the
galleries of the Smithsonian or collect his 20th century illustrations.
There’s also Paul Strisik, a famous
artist who worked in Rockport,
Mass., and Middletown artist Marc
Moon, another internationally
known artist who was a longtime
member of the group before he
passed away in 2006.
Chagrin Falls’ Lois Salmon Toole
also is a noted artist who is an active
Whiskey Painter. And, don’t forget
Medina’s Fred Grath, says Ron
Beahn, the current president of the
Whiskey Painters of America.
“He’s won many awards and is a
very, very accomplished painter,”
Beahn said.
Grath, like Beahn, is also not just
20160411-NEWS--13-NAT-CCI-CL_--
4/7/2016
2:23 PM
Page 1
group does with a drink
a creator of whiskey paintings, but a
collector.
“It’s a noteworthy organization
that’s sometimes kind of overlooked
by people,” Grath said. “They don’t
recognize the top-notch artists that
participate. It’s not a novelty. Some
people might think it is, but it’s not
to me — I collect the art myself.”
Their collectibility might be one of
the things that makes Whiskey
Painters so popular. Being small,
they don’t take up a lot of space, so
collectors can put many of them on
their walls — or even in books. And
they also don’t cost as much as larger paintings, making Whiskey
Painters accessible to more people.
For example, one of Grath’s fullsized paintings, on a canvas 32 inches wide and 23 inches tall, will cost a
collector between $2,300 and $5,000,
Grath says. But even his most expensive Whiskey Paintings have sold for
less than $1,000, and most sell for
$500 or less, he said.
The price is right
Pricing is a bit of a hot topic at the
moment, too. The WPA has two
shows annually — one in Northeast
Ohio, and the other in Augusta, Ga.,
Beahn said. This year’s show at the
Cuyahoga Valley Art Center in Cuyahoga Falls began last Monday, April
4, and runs through May 12.
Beahn, who also runs Ron Beahn
Custom Framing in Cuyahoga Falls,
has been busy painting and gathering works for this year’s sale and
show. About 30 WPA members are
participating, and most will have
eight paintings at the Cuyahoga Valley Art Center, he said. Some will be
very affordable.
“We have a standing rule that you
can’t have anything for less than
$75, so they usually start at around
$90,” Beahn said. But, with a couple
hundred paintings in the whole
show, there will be a wide variety of
prices, he added.
There’s always a chance, too, that
a painting picked up at the show will
rise in value. But Beahn advises buyers to simply buy what they like,
without thinking of it as an investment. Most members of the WPA
have been painting for decades, he
said, so they are already well-known
in art circles.
There is another way to invest in
the group, though. Beahn said the
WPA is currently open to taking on
one or two new members. It doesn’t
happen often, since membership
has always been strictly limited to
150 artists (fewer than 300 have ever
gotten in), but at the moment there
are a couple openings.
Potential new members don’t
have to be world famous, but they
should be competent artists. They
should also be someone you might
actually want to have a drink with,
Beahn joked.
He’ll likely meet some new people
at the upcoming show, said Cuyahoga Valley Art Center executive director Dave Whited.
“We’re pretty excited about it. It’s
one of our best attended shows of
the year, and a lot of them are local
artists,” Whited said. “We probably
have about 30% of the artists walk
their work in, and then we have others who ship in stuff from all over the
country.”
He appreciates the small scale of
the work.
“We’ve got a gallery full of paintings, so it’s a good thing they’re
small,” Whited said.
Chagrin Falls artist Lois Salmon Toole created this whiskey painting of Cleveland. (Dan Shingler)
Let Nesco work for you.
20160411-NEWS--14-NAT-CCI-CL_--
PAGE 14
4/7/2016
3:46 PM
Page 1
TAX LIENS
The Internal Revenue Service
filed tax liens against the
following businesses in the
Cuyahoga County Recorder’s
Office. The IRS files a tax lien
to protect the interests of the
federal government. The lien is
a public notice to creditors
that the government has a
claim against a company’s
property. Liens reported here
are $5,000 and higher.
Dates listed are the dates
the documents were filed in
the Recorder’s Office.
LIENS FILED
unemployment
Amount: $7,978
Type: Employer’s withholding
Amount: $6,108
Special Transport & Rigging Inc.
4730 Warner Road, Garfield Heights
Date filed: Jan. 6, 2016
Type: Failure to file complete return
Amount: $8,536
Caliber Jet LLC
29550 Detroit Road, Suite 300,
Westlake
Type: Partnership income, quarterly
federal excise tax return
Amount: $7,383
Brystil Inc.
5250 Transportation Blvd.,
Suite 10, Cleveland
Type: Unemployment
Amount: $5,999
Best Mens Wear Inc.
4227 W. 222 St., Fairview Park
Type: Employer’s withholding,
unemployment
Amount: $8,251
Michael & Sons Landscaping Inc.
P.O. Box 40422, Bay Village
Elewski & Associates Inc.
6833 Hillside Road, Independence
Type: Unemployment
Amount: $6,970
Kenton Industries Ltd.
1455 E. 185 St., Cleveland
First Fruits Child Development
Center 1
21877 Euclid Ave., Euclid
Type: Failure to file
complete return
Amount: $5,800
Curious Minds Learning Place Inc.
420 E. 275 St., Euclid
Amount: $5,702
Gala Catering Co.
Pazzos Grand Ballroom
7874 Broadview Road, Parma
Amount: $5,404
LIENS RELEASED
Americore Employment LLC
5933 Mayfield Road,
Mayfield Heights
Date filed: Dec. 11, 2015
Date released: Jan. 25, 2016
Amount: $9,222
Atlantis Co.
105 Ken Mar
Industrial Parkway,
Broadview Heights
Date filed: May 9, 2013
Amount: $33,151
Atlantis Co.
P.O. Box 5047, Largo, FL
Date filed: Oct. 1, 2013
Amount: $32,435
2016 CLEVELAND
HERITAGE MEDAL
BESTOWED UPON INDIVIDUALS
WHOSE SIGNIFICANT CONTRIBUTIONS THROUGH
LEADERSHIP, COLLABORATION AND SERVICE HAVE LEFT AN INDELIBLE MARK
ON ALL SPHERES OF THE CLEVELAND COMMUNITY.
MORTON L. MANDEL
THE REV. DR. OTIS MOSS, JR.
SANDRA PIANALTO
RICHARD W. POGUE
SEN. GEORGE V. VOINOVICH
THE INAUGURAL CLEVELAND HERITAGE MEDAL
WILL BE PRESENTED ON MAY 21, 2016
AT METROHEALTH GALA2016
To join us in the celebration, please call 216-778-7509.
Cleveland Heritage Medal Selection Committee:
Deborah Z. Read , Esq., Thompson Hine LLP, Co-Chair
Ronald B. Richard, The Cleveland Foundation, Co-Chair
Mitchell Balk, The Mt. Sinai Health Care Foundation
Julie Boland, EY
Akram Boutros, MD, FACHE, The MetroHealth System
Margot J. Copeland, KeyBank Foundation
John R. Corlett, The Center for Community Solutions
Pamela B. Davis, MD, PhD,
Case Western Reserve University School of Medicine
Kristen Morris, Cleveland Clinic
Grafton J. Nunes, Cleveland Institute of Art
Rear Admiral Michael Parks,
The American Red Cross of Northeast Ohio
Jerry Sue Thornton, PhD, Cuyahoga Community College
Avon Drive In Laundry
& Dry Cleaning Co.
1830 Superior Ave. E.,
Cleveland
Date filed: Nov. 10, 2011
Amount: $34,872
B & I Automotive Repair Inc.
33200 Aurora Road, Solon
Date filed: Oct. 17, 2014
corporate income
Amount: $13,227
C & D Truck &
Equipment Service Inc.
4015 Jennings Road,
Cleveland
Date filed: Aug. 19, 2013
Amount: $29,582
California Ceramic
Supply Co. No. 211
19451 Roseland Ave., Euclid
Date filed: April 6, 2009
Amount: $7,834
California Ceramic
Supply Co. No. 211
19451 Roseland Ave., Euclid
Date filed: Feb. 23, 2009
Amount: $5,369
Craig I. Smith an LLC
2824 Coventry Road,
Shaker Heights
Date filed: Sept. 4, 2008
Type: Individual income tax return
Amount: $73,760
Dream on Foundation Inc.
968 Bryan Drive, South Euclid
Date filed: Sept. 3, 2015
Amount: $11,037
20160411-NEWS--15-NAT-CCI-CL_--
4/7/2016
10:50 AM
Page 1
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20160411-NEWS--16-NAT-CCI-CL_--
PAGE 16
4/7/2016
3:21 PM
Page 1
NONPROFITS
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coach folks to see that, ‘Hey, there’s
another way of doing things,’ and
then having them really drive the
improvements.”
At any given time, the foodbank’s
volunteer center used to hold
180,000 pounds of donations.
Before items left the center after
three months of holding, volunteers
would have to re-inspect the donations to ensure the expiration date
hadn’t come around since the last
inspection. Now that they’ve cut
that storage time in more than half,
that step is eliminated, and only
60,000 pounds are waiting to be
sorted and inspected.
“What we found is our disposals are
going to be quite a bit less for the simple fact that we’re able to get things
out in plenty of time for our consumers to have this product before an
expiration code may come into play,
or anything else,” Petrick said.
The new process has a bonus of
improving volunteer experience.
Now volunteers can be more social,
sit around a table and chat while
they work.
“It’s just a better feeling of teamwork,” said Hornick.
Without training, Petrick and
Hornick agreed they wouldn’t have
gotten to where they are today without the training.
“I think we were able to look at
things with a fresh perspective,”
Hornick said. “It was a tremendously productive exercise to do that.”
Building internal capacity
A few years ago, the Cleveland
Public Library was struggling to fix
its processes and find efficiencies,
said Cindy Lombardo, the library’s
deputy director/chief operations of-
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ficer. Every morning, she’d walk
through a hallway of boxes upon
boxes of material ordered through
CleveNet (a consortium of libraries
that share materials) but that hadn’t
been shipped. Customers weren’t
getting their items as quickly as the
library would like, Lombardo said.
“If you’re a nonprofit,
you need to find
ways to reduce
the waste and
the variation of
processes even
more so because
you may not have
the resources
that a for-profit
organization has.”
— Barb Hornick, technology
and operations analyst,
Akron-Canton Foodbank
So the library brought in an external consultant with Lean Six Sigma
expertise.
The outcomes “exceeded our
wildest dreams,” Lombardo said.
There hasn’t been an overnight carryover in at least two years.
Seeing the benefits of this project
and another that recently started,
the library has decided to train some
of its own staff.
With the help of state of Ohio
scholarship dollars, Lombardo is
sending several staff members to
LeanOhio Boot Camp, a public-sector-tailored training through Cleveland State University’s Maxine Goodman Levin College of Urban Affairs.
Developing experts within the
staff instead of relying on outside
consultants is a smarter way to use
taxpayer money and will help the library apply the tools more regularly,
Lombardo said.
Time is money
At the foodbank, the training for
Petrick and Hornick was a “huge
time commitment,” but it was very
helpful, and Hornick said she would
encourage other organizations to
look into it.
“If you’re a nonprofit, you need to
find ways to reduce the waste and
the variation of processes even more
so because you may not have the resources that a for-profit organization has,” Hornick said.
Antochow said Akron Children’s
Hospital has reached out to other
nonprofits and is looking at providing more training, which proved to
be incredibly helpful for him as well.
Though he has been working with
the principles for years, teaching
others the basics helped him take a
step back and learn new things he
can take back to the hospital.
He’d encourage other experts
who spend all their time improving
processes at their own organization
to seek out similar opportunities to
train others.
“Knowing that folks in Akron and
Canton now are going to benefit
from that because there’s more food
available here in the community,
that’s definitely a very rewarding
thing as well,” he said.
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20160411-NEWS--17-NAT-CCI-CL_--
4/7/2016
2:25 PM
Page 1
Focus
MIDDLE MARKET
ADVISER - P. 19
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TAX TIPS - P. 20
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Q&A - P. 21
Nothing to sneeze at
Lack of paid leave to care for family, selves is a growing concern
BY LYDIA COUTRE
[email protected]
@LydiaCoutre
A child with cold or flu symptoms on an early weekday morning
leaves many parents with a choice:
send their child to school sick or
take off work to take them to the
doctor.
If that mother or father is one of the
49 million employees in the
United
States without paid sick leave, lost
wages and concerns of being fired
often loom over that decision, said
Patricia Stoddard-Dare, associate
professor at the Cleveland State
University School of Social Work,
who co-authored a study on paid
sick leave.
“So now, the well-intentioned
mother might say the best thing for
my family unit is to send my child
to school sick,” Dare said. “I don’t
want parents to be put in that
position.”
But many are. The study,
released in the journal
Health Affairs in March, found that
workers without paid sick leave are
1.6 times more likely to forgo medical care for their family and three
times more likely to forgo that care
for themselves when compared with
working
adults with paid sick leave.
The cost of those decisions
comes from two places, StoddardDare said.
“It’s coming from wage loss and
then it’s also coming from your
care, (which) becomes more expensive now because you delayed
it,” she said. “You might need to
go to an emergency room. You
might need to get after-hours care
which is more expensive, or your
condition got worse.”
Offering paid sick leave can keep
sick employees home, and therefore colleagues healthy and productive, said Linda Quinn, associate lecturer in Cleveland State’s
department of mathematics, who also co-authored
the study. A paid sick
leave benefit can add
job stability, help with
employee retention,
boost the mental
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2:25 PM
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and physical health of caregivers
and cut down on worker errors, accidents or injuries.
Yet the United States lags behind
other nations: Of the 22 countries
ranked highly in economic and human development, it is the only one
that doesn’t mandate that employers offer paid sick leave.
Seventy percent of full-time employees in the country have paid sick
leave benefits, while only 19% of
part-time workers have this benefit,
according to the study, which has a
third co-author, LeaAnne DeRigne,
associate professor at the School of
Social Work at Florida Atlantic University in Boca Raton.
Benefits that matter
The study controlled for various
demographic variables, including
gender, education levels and income
brackets — people in all different
sectors and with all different education or experience levels can be
without paid sick leave.
As many employers look to recruit
younger workers, they find that paid
sick leave is a key attraction as newer employees demand the benefit,
said Scott Hamilton, the Illinoisbased North American managing director of human resources and compensation consulting for Arthur J.
Gallagher & Co.
Quinn said it’s important that
paid sick leave benefits be offered in
the right way. Packaged PTO time, in
which days off could be used for
paid sick leave or vacation, can leave
employees weighing a vacation later
in the year against taking care of
themselves immediately, she said.
Many employers say PTO packages can offer flexibility, ease employer concerns about abuse of
those sick days and offer a cost to
budget that benefit.
Stoddard-Dare said studies have
shown that abuse to be minimal,
such as one in San Francisco, a city
that has mandatory paid sick leave,
which found that though workers
were allotted five to nine paid sick
days a year, most only used three
and about a quarter used none.
“Internationally, it does not ap-
pear that countries that mandate
paid sick leave are at a disadvantage,” Stoddard-Dare said.
Industries hit hardest
People working in the service industry, such as food service, health
care, home health, and child or elder
care, are less likely to have paid sick
leave — only 35.4%, according to the
study.
Stoddard-Dare said if she eats at a
restaurant, drops her child off at a
childcare facility or is choosing a
place for her elderly parent to reside,
“then I would want to know if those
employees have paid sick leave.”
In the service industry in particular, Hamilton said employers are
balancing the cost of high turnover
against the cost of not offering a total reward package, which includes
a reasonable base salary and time
off.
“If you’re not offering a basic
competitive total reward package,
you’re going to have very high
turnover, which the cost of that may
more than offset not offering a small
amount of paid sick,” Hamilton said.
It becomes a “rational conversation” to see what the real costs of
each are.
Swathi Ravichandran, associate
professor and program coordinator
for Kent State University’s hospitality management program, said hospitality workers tend to be part-time
employees of small organizations
that have fewer employees.
“These are not people that make a
whole lot of money,” she said. “Even
giving up that one shift is still a big
deal. It affects whether they could
maybe make rent or not. So it does
matter.”
The cost question
Cost is a big factor for businesses
deciding to offer the benefit, and
mandates are generally not supported by the hospitality industry because of that, Ravichandran said.
It’s the same argument that
comes up during conversations
about raising the minimum wage. As
cities and states raise minimum
wages, the real, measured impacts
on businesses may be able to indicate how they could be affected by a
mandated paid sick leave.
In a statement, the Ohio Restaurant Association said it recognizes it
doesn’t want management or staff
coming to work sick, but a paid sick
leave mandate would have a negative impact.
“When it comes to managing time
off and other work place issues, employers working in cooperation with
their employees is a much better approach than a one-size fits all government mandate,” the statement
read. “One of the benefits of working
in the restaurant industry is the ability to customize one’s work schedule/shifts from week-to-week.”
At the Cleveland Clinic, employees earn paid time off throughout
the year, which they can take as sick
days or vacation, said Guy Van
Tiggelen, the Clinic’s executive director of Total Rewards, compensation and benefit packages for employees.
Because human capital is important, offering a competitive benefits
package is key — and the right thing
to do, Van Tiggelen said. Sick employees should have the time to take
care of themselves, he said, and
should be able to stay home to avoid
getting coworkers sick.
“But probably the most important
reason is because we are a health
care organization, we’re really concerned about the patient,” Van
Tiggelen said. “If a caregiver or employee comes in who is sick, there’s
always that risk they could pass it
along to either one of our patients,
or a family member or visitor who is
with the patient.”
The Visiting Nurse Association of
Ohio offers all regular employees
paid time off. It allows the home
health employees, who spend much
of their time visiting clients, to feel
comfortable staying home to take
care of their families or themselves,
said Gene Karlen, VNA’s chief human resources officer.
“It’s sort of that practice what you
preach,” Karlen said. “We’re sharing
that with our clients, and wanting
them to reach optimal health. So we
like to have our employees focus on
themselves as well.”
20160411-NEWS--19-NAT-CCI-CL_--
4/7/2016
2:59 PM
Page 1
ADVISER: Stacy Feiner
Exit planning: It’s
all in your head
This thought keeps gnawing at
you. You own a business — and you
don’t have an exit plan.
The legal and financial risks are
sizable, but you keep saying you
don’t have time.
But it’s more than that.
You know it, and I know it.
It’s your business. It’s either important to you or it’s not.
Leaving your business is emotional and you don’t want to face it. The
way you see it, exit planning means
you’re done, you won’t be important
anymore, your life is over.
It stirs up fear and anxiety over
what’s next, combined with the fact
that you don’t know how to do it.
You pacify yourself for the moment
by saying you’ll get to it later, but all
the time and logic in the world won’t
penetrate the power of these fears.
The truth is it’s all in your head.
You’re facing a mental block when it
comes to exit planning. You can’t ignore it.
If leaving something this substantial — something you built with
sweat and tears — to your children,
to your employees or to a worthy
buyer is important then you know
you have to wake up and do it right.
Here’s what it takes:
Start by getting your head in the
game. Emotion and logic are excellent business partners. The psychology of business is about marrying
your emotion with logic so you can
look at whatever lies ahead with the
same confidence you bring to everything else you do in business. Dig
into your psychology.
Step No. 1:
Get your head in the game
Business psychology goes deeper
than strategy. It digs into your gut,
shoves a mirror in your face, and
challenges your thinking. When
emotion and logic come together,
you make levelheaded, powerful decisions that put you in front as the
leader.
Wind up: Don’t assume that exiting a business is about winding
down. This couldn’t be further from
the truth. Your most important job
before transitioning the company to
new leaders is to position it for success for another 30 years.
Set up: As the business owner,
you’ll want to set your successors up
for success or you will want a buyer
to pay a premium for your company.
A strategic plan and a financial commitment to a formal transition
process allows you to drive the quality of what you walk away with and
what you are remembered for.
Step up: Exiting your business is
not business as usual. Just like building a new plant, installing a new ERP
system or launching a new product,
exiting your company requires capital. Expect to make a capital investment and add new resources to ensure your desired outcome.
Wake up: Look at the situation
square in the face. You are letting go,
negotiating a deal, and redefining
Where does your business need to go?
We can take you there.
Our attorneys combine trusted
legal services with an experienced
business perspective to help
our clients reach their goals.
Stacy Feiner is a business
psychologist and an executive
coach at BDO USA.
what matters. Get a coach to be your
partner in this and help you build
the mental fortitude, stay focused,
see things clearly, be bold in the way
you solve problems, and not become
a problem yourself. Every elite athlete has a coach. Ambitious business
owners should, too.
www.taftlaw.com
ANN ARBOR / CHICAGO / CINCINNATI / CLEVELAND / COLUMBUS / DAYTON / INDIANAPOLIS / NORTHERN KENTUCKY / PHOENIX
35th Anniversary
PROMOTE.
35th Anniversary
CLEVELAND BUSINESS
VOL. 36, NO. 47
NOVEMBER 23 - NOVEMBER 29, 2015
ALLYSON O’KEEFE, 37
Partner; Porter Wright
35th Anniversary
CLEVELAND BUSINESS
VOL. 36, NO. 47
NOVEMBER
23 - NOVEMBER 29, 2015
Allyson O’Keefe started her legal career at Porter Wright in 2004 after completing
a summer internship there as a Case Western Reserve University law student. Since then, she has
worked on many significant deals across Cleveland, including Flats East Bank, The
Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been promoted to real estateALLYSON
partner.
O’KEEFE, 37
“Young professionals who live downtown are so excited about the city,” said O’Keefe, a
Partner;
Porter
Columbus native who
lived downtown
forWright
10 years before moving to Rocky River. “The ones
who aren’t from here are often more excited about it. When you move here from somewhere
else,
you
don’t
for granted.”
VOL.
36,
NO. take
47 it Allyson
NOVEMBER
23 - NOVEMBER
NOVE
EMBER 29,
29, 201
2015
O’Keefe started her legal career at Porter Wright in 2004 after completing
a sumWhen O’Keefe is not working or spending time with her husband and two children, she can
mer internship there as a Case Western Reserve University law student. Since then, she has
be found volunteering on the boards of nonprofit organizations and watching college football.
worked on many significant deals across Cleveland, including Flats East Bank, The
Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been proWHAT INSPIRES YOU ABOUT YOUR WORK?
moted to real estateALLYSON
partner.
O’KEEFE,
Just seeing what Cleveland has gone through
in the time
that I’ve 37
been here, there’s obvious“Young professionals who live downtown are so excited about the city,” said O’Keefe, a
ly a lot of excitement around real estatePartner;
development.
I started
in 2004 when we were crazy
Porter
Columbus native who lived downtown
for Wright
10 years before moving to Rocky River. “The ones
busy with development. That was sort of the boom from ’04 through ’08. I saw it go through
who aren’t from here are often more excited about it. When you move here from somewhere
the downturn, then I saw it rise again, even stronger than before locally.
else, you don’t take it for granted.”
Allyson O’Keefe started her legal career
eer at Porter Wright in 2004 after completing
comple
etin
ng a sumsumWhen O’Keefe is not working or spending time with her husband and two children, she can
mer
internship
as a Case Western
she
has
Reserve University
law student. Since tthen,
hen, sh
he h
as
WORKED
ON there
ARE MIXED-USE
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IS
MANY OF THE PROJECTS YOU
be found volunteering on the boards of nonprofit organizations and watching college football.
ss Cleveland, including Flats East Bank, The
The
worked on many significant deals across
THAT AN AREA OF EXPERTISE?
Metropolitan
at the 9, Uptown
in every
University
and Steelyard Commons, and
rsity
d has
has
ha
s been
be
een proproro
Yes, definitely. Real estate is
extremely interesting
because
deal Circle
is differWHAT INSPIRES YOU ABOUT YOUR WORK?
moted
to real
estate
ent. You can never get bored
because
there’s
so partner.
much variety there, from tax
Just seeing what Cleveland has gone through in the time that I’ve been here, there’s obvious“Young
who live downtown
so excited about the city,” said O’Keefe,
own are
O’Keefe
e, a
credits to historic renovations,
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ly a lot of excitement around real estate development. I started in 2004 when we were crazy
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mixed-use to residential. Columbus native who lived downtown for 10 years before moving to Rocky River.
busy with development. That was sort of the boom from ’04 through ’08. I saw it go through
who aren’t from here are often more excited
xcited about it. When you move here from
m somewhere
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ew
where
ere
the downturn, then I saw it rise again, even stronger than before locally.
else,
you LEADERSHIP
don’t take it for
granted.”
YOUR
STYLE?
HOW WOULD YOU DESCRIBE
CLEVELAND BUSINESS
USINESS
Step No. 2:
Take the helm
You own the process. Avoid the
risk of selling your company at a discount or saddling your successor
with an underperforming company
by being at helm.
Build your bench: Design your talent management system to get top
performance. Develop a working
knowledge of your people across the
enterprise so your talent decisions
are always smart. Establish a philosophy, know-how, and processes to
hire the right people, provide them
clear direction, and prepare them for
new roles as the company grows.
Enhance value: Form an expert
team to build and drive the plan with
you. Work specifically with a management consultant who will focus
you on increasing profitable revenue
by helping you define your strategy,
improve operational efficiencies, ensure financial accountability and tap
the sweet spot in the market.
Be transparent: Be transparent
about your plans for company’s future after you leave. Transparency of
the vision will gain employee confidence as well as mitigate the risk of
employees “bailing out.” Often the
future leader will have a bigger vision, more capital and an updated
strategy to stimulate growth in ways
that benefit employees.
Remember, get your head in the
game. Take control of exit planning.
Coach Tom Landry says it best, “A
coach is someone who makes you do
what you don’t want to do, who has
you see what you don’t want to see,
so you can become who you have always known you can be.”
For this endeavor, perform like an
elite athlete. The psychology of your
decision rests squarely in your
hands.
Why not?
Let the Custom Reprint Department help you leverage this great press.
For more information contact
Krista Bora, Reprint Account Executive
[email protected] • tel 212.210.0750
O’KeefeI expect
is not working
or spending
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“Allyson is extremely bright and quick witted, but what truly distinguishes her
successfulInc.
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Reprinted with permission from the Crain's Cleveland Business. © 2015from
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ability to encourage
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Expertise Pays Off
For more than 80 years, we have helped middle
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+ Risk assessment/risk mitigation
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Cleveland | 216.363.0100
Canton | 330.966.9400
Delaware | 740.362.9031
Elyria | 440.323.3200
Worthington | 614.781.6174
Business Advisors and
Certified Public Accountants
maloneynovotny.com
20160411-NEWS--20-NAT-CCI-CL_--
PAGE 20
4/7/2016
2:26 PM
Page 1
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MIDDLE MARKET
TAX TIPS: Carl Grassi
Tax relief may be on the
way for property owners
Dramatic changes in the real estate market over the last decade have
led to more frequent disputes between property owners and tax authorities regarding the appropriate
value of real estate subject to real estate taxes.
A recent decision by the Ohio
Supreme Court may make it easier
for property owners to get some relief when the value of the property
has declined since it was acquired.
Property owners are generally
prevented from arguing for a lower
valuation than that established by a
recent purchase price for the property.
In its recent decision, the court
considered whether an appraiser’s
report could rebut the presumptive
validity of a tax valuation based
upon a recent sale price.
In this case, the property owner,
which had purchased a Comfort Inn
hotel in 2007, filed a complaint for
tax year 2009 seeking a reduction of
the value assigned to the property
from $3.49 million down to a little
more than $2 million.
At the Board of Revision hearing,
the hotel owner’s expert appraiser
explained that the 2007 sale price of
$3.49 million was not representative
of the property’s value.
Specifically, the appraiser relied
upon evidence indicating that the
Comfort Inn hotel and other comparable hotels were experiencing a precipitous decline in revenue streams
from 2007 through 2009 based upon
significantly reduced occupancy levels attributable to the economic
crash in the fall of 2008.
The Board of Revision found the
appraiser’s report and testimony to
be well supported and reduced the
property value from $3.49 million
down to $2.6 million.
The Board of Education appealed
this decision to the Board of Tax Appeals.
The Board of Tax Appeals acknowledged the presumptive merit
subscribed to the 2007 sale price, but
held that its “recency” was rebutted
by information provided and relied
upon by the owner’s appraiser, and
further reduced the property value
to about $2.53 million.
On appeal to the Ohio Supreme
Court, the central issue was whether
the assumed validity of a property
valuation based upon a recent sale
price can be rebutted by an appraisal
report and testimony.
The court first observed the general rule that the presumptive validity
of the sale price may be rebutted by
evidence showing that the sale is not
recent, not at arm’s length, or not
voluntary.
The court then instructed that it is
permissible to rely upon information
contained in an appraisal report and
testimony to conclude that the presumptive validity of the sale price is
not reflective of the property’s actual value.
The court warned, however, that
the mere fact that an expert has
opined that the property value
should be reduced is not sufficient to
Carl Grassi is president of
McDonald Hopkins LLC.
undermine the validity of the sale
price.
Rather, specific information bearing on the question of recency, the
arm’s length character of the sale, or
the voluntariness of the sale proffered by an expert appraiser,
through a report or testimony, may
be sufficient to successfully rebut the
presumption of sale price validity.
At issue on this appeal was evidence of recency, and, curiously,
whether the transaction was at arm’s
length.
With respect to recency, the court
found compelling that a significant
downward market shift for hotels
had occurred between January 2007
and the Jan. 1, 2009, tax lien date.
Because the appraiser convincingly articulated that a “softening” of
the market had developed between
the approximate time of the sale and
the tax lien date, the Supreme Court
of Ohio held that the 2007 sale could
not be deemed recent relative to the
Jan. 1, 2009, tax lien date.
With respect to the arm’s length
transaction component, the owner’s
appraiser opined that the sale was
not truly arm’s length because the
owner did not act as a fully knowledgeable, typically motivated buyer.
The appraiser reached that conclusion based upon his finding that the
owner paid too much given the hotel’s ongoing performance issues at
the time of the sale.
Possibly because the school
board did not oppose that argument, the court held that an arm’s
length transaction had not occurred
and therefore the 2007 sale price
was not representative of the tax
valuation.
The primary takeaway of this decision is that evidence proffered
through an expert appraiser can
overcome the presumption of sale
price validity even when the sale at
issue occurred only two years prior
to the tax lien date.
Consequently, litigants challenging the valuation of property based
upon a sales price that is unrepresentative of the actual value of the
property would be wise to explore
the reasons for that variance and articulate, through expert testimony,
how such reasons diminish the
property valuation.
20160411-NEWS--21-NAT-CCI-CL_--
4/7/2016
2:26 PM
Page 1
Budget Dumpster tackles trash problem with tech
BY JUDY STRINGER
[email protected]
Not so long ago, before the likes of
Expedia and Hotels.com, shrewd
consumers had to connect directly
with airlines and hotels to find the
right fit. The same could be said of
Dumpsters.
Getting the right-sized Dumpster
rented for the right amount of time
— for a kitchen remodel or cleaning
out grandma’s house — required
calling three or four different refuse
collectors. The bigger companies often had higher charges or shorter
rental periods, while the smaller
players weren’t staffed with customer service reps to man the
phones.
“Most of these companies, their
business is set up to deal with big
contractors, big construction companies,” said Mark Campbell.
Neither large nor small haulers, he
said, are structured to cater to “the
person who might not know everything there is to know about renting
a Dumpster.”
Campbell and brother-in-law
John Fenn launched Budget Dumpster in 2005 to do just that.
The Westlake company has no
Dumpsters of its own. It contracts
with haulers all over the county to
take the hassle out of Dumpster
renting.
“We don’t compare ourselves to
Waste Management or Republic
(Services),” Fenn said.
“We are more like an Expedia, Orbitz or Priceline or Hotels.com
where we work with a bunch of different vendors, hundreds of vendors
nationally, and offer (consumers)
different pricing and terms.”
Campbell and Fenn grew up together in West Park.
The duo initially started a boutique real estate firm, with Campbell
selling and Fenn marketing, before
transitioning into a junk removal
with a company they founded called
Cleanup Contractors.
“People kept calling and asking for
Dumpster services and not the labor
we provided,” Campbell said. “So, a
light went off in John’s head.”
Today, at about 1,500 boxes per
week, the idea appears to be a good
one. In the last three years alone,
Budget Dumpster has seen rapid increases in sales and employees.
Revenues grew from roughly $10
million in 2013 to nearly $30 million
last year.
To date, Campbell said the company is up another 40% in 2016.
Employment, which now hovers
at about 60 full-time staff, grows by
about 10-15 people each year, he
said.
The partners attribute much of
their success to alleviating pain
points on both sides of the Dump-
Q & A: Amit Patel & Naman Desai
Amit: I’m a Clevelander, born and
raised. I love this place. This is definitely one of the best cities to start
a company given ability to quickly
test and validate your concept,
stay lean and create awareness to
a tight community.
Aren’t there similar services
to Quo already? How do you
separate yourselves?
Amit: Nobody offers an end-to-end
apartment search concierge experience, and our carefully tailored,
concierge interaction differentiates
us from the search sites. Our
concierges are dedicated to making
sure renters land the best apartment for their needs. And they
aren’t beholden to other motivations, which is frequently the case
with others in this industry.
Let’s be candid. How has the
first year gone for Quo? Where
do you want to improve?
Amit: The first year was a great
success. We validated our model
and demonstrated a market fit. We
were fortunate to see solid traction, steady growth, and public relations that met or exceeded almost all of our growth targets.
Now we want to improve the member experience through a more robust technology platform that creates interactions that are easy,
timely, and goal oriented.
Naman: We are also building out
tools and assistance for our
concierges so that they’re
equipped with domain knowledge
to make them even more proficient
in serving members. Finding a new
home is a big decision and having a
knowledgeable assistant on your
side is a tremendous help.
As you’ve made traction
with the startup, what
strategies have worked and
which, perhaps, haven’t?
Naman: We’ve spent a lot of time
testing different channels and
measuring how they work. Our digital ad strategy has become more
efficient, and we’ve also been able
to devise a corporate partnership
strategy that keeps us in front of
potential renters without being obtrusive. Because renting in New
York City, Cleveland and Chicago is
Amit Patel
Naman Desai
I’ve learned that continuous network and warm intros to investors
are key in order to keep growing
the business.
Naman: I went through Techstars
NYC with ClassPass. It was a great
experience and conditioned my
mind in a number of ways. For example, always keeping an eye on
how people are using your product.
You might think they’ll love X but if
you see them using Y more, that’s
worth digging into. It’s important to
be passionate about your idea but
also open to different ways of addressing the problem you’re trying
to solve. We frequently take a step
back to make sure we haven’t
missed something.
proving the experience.
Naman: I can’t imagine being creating a technology-assisted solution
for this process without having
spent significant time as a
concierge, and frequently perusing
our concierge interactions. It’s important to be connected to both
the process, and hiccups that slow
it down, as well as the renter’s
mindset. Finding an apartment is an
emotional process and you can’t
separate that from the experience.
Mark Campbell and John Fenn of Budget Dumpster. (Contributed photo)
ster transaction. Smaller haulers
don’t typically have big marketing
departments or budgets.
Contracting with Internet-savvy
Budget Dumpster gives them access
to customers they might not reach
otherwise.
“We are a sales arm of their organization,” Campbell said. And, big
companies see the Westlake firm as
“a consistent stream of business,”
Fenn added.
For consumers and small busi-
co-founders, Quo
Tech innovators Amit Patel and Naman Desai had already helped friends and families find places to live
for years, so it only felt natural to marry that experience with their collective backgrounds in startups to
launch a new business.
Just like that, Quo was born. It’s an on-demand service that helps prospective renters identify apartments by pairing people with local concierges who in turn help those users with everything from scheduling viewing appointments, cleaners and movers to acquiring insurance.
Launched in Cleveland in March 2015 and soon after expanded to New York City and Chicago, the yearold business has drawn at least 50,000 apartment seekers. The founding duo has raised more than
$350,000 for their business and working toward a $1 million goal.
Crain’s spoke with Amit and Namaan about their first year, what they’ve learned along the way and how
innovation has played a role in their early success.
— Jeremy Nobile
Why did you want to start
the company here as opposed
to anywhere else?
nesses, the benefit is a simpler and
often less costly rental experience.
The large volume of requests generated by Budget Dumpster allows
haulers to bring down their prices,
said Sean Nally, who works in the
company’s marketing department.
Budget Dumpster passes the saving
on to its customers.
While there are similar “Dumpster
brokers,” in the marketplace, most
are local or regional, according to
Finn.
Only a handful work nationally.
The broad reach coupled with value keeps customers like Kathy Houle
coming back.
She’s a project coordinator for
Centennial, Colo.-based Inre Media,
which installs multimedia equipment at hotels, convention centers
and resorts.
It relies on Dumpsters to haul
away the packaging materials and
any debris from retrofits.
Houle regularly calls Budget
Dumpster with quote requests for
projects across the country — many
at the same time.
Nally said the company operates
in 150 U.S. markets, including most
of the bigger metropolitan areas.
Currently, its biggest markets are Atlanta and Chicago, but the company
is seeing large gains in Southern California and all across the South,
where DIY projects can go on “365
days a year.”
Now that is has a national footprint, Budget Dumpster’s focus is
honing in on its existing relationships with haulers.
“A lot of these guys, at first they really don’t know who we are or what
we do, but as soon as they see the
type of business we can bring, obviously they value our relationship on
a different level,” Campbell said.
“It gives us a unique opportunity
to explore ways we can bring more
business to them.”
cyclical — it ramps up over the
summer — we tested out taking
summertime reservations during
the winter months. That was a
huge success and something we’ll
continue to emphasize. We tested
out a few guerilla marketing techniques, such as posting witty ads
on Craigslist, which is still the go-to
destination for many apartment
hunters, but that proved to not be
an effective method of acquiring
users.
Both of you have worked with
past startups, some of which
went well and some that didn’t
pan out. What’s something
you’ve learned from those past
experiences you apply to Quo?
Amit: I went through the LaunchHouse accelerator with another
startup and I learned a great deal
from the program. They pressed
hard on the customer development
approach from Steve Blank (who
launched the lean startup movement), which is what we’ve applied
to Quo. I was also able to meet and
network with the local investor
community. Unfortunately, Tagora
didn’t pan out since I wasn’t able to
secure the right talent and funding.
So both of you are still involved
with that granular work, too,
taking calls and talking to
customers?
Amit: We really enjoy being
concierges as we get to learn ways
to improve the process for our
team and enhancing the member
experience. It’s a way for us to understand what can we innovate in
the process and build underlying
technology to make our business
more efficient to scale while im-
Where does Quo go from
here? What can we expect
next from you two?
Amit: We are in the process of
building out an app that will add to
the speed and efficiency of our
service, but in a very natural way.
Using technology to facilitate the
rental process in real time will allow
us to provide a higher level of service to even more renters. Speed
and quality are two metrics we focus on, and the app is built around
those pillars. We want to scale the
business and continue our growth
into other highly transient markets
such as San Francisco; Los Angeles; Washington, D.C.; Austin and
more.
20160411-NEWS--22-NAT-CCI-CL_--
PAGE 22
4/8/2016
10:57 AM
Page 1
Business of Life
Artist’s projects get to heart of issues
BY JAY MILLER
What should visitors to Cleveland for July’s
Republican National Convention see and hear
about the city’s assets and challenges?
Artist Kate Sopko and a group of filmmakers
are asking that question to a group of Clevelanders who are active in a range of civic ventures and asking for their answers in the form
of tours they would give RNC delegates if they
had the chance.
The films, combined into an installation
Sopko calls “The Fixers,” will be available at
SPACES Gallery in the Flats this summer. The
films also will be available online through the
gallery’s website, and Sopko is working on installations in places where convention delegates will stumble across them.
“We’re trying to make it as accessible as possible,” the Garfield Heights native said. “A convention is a moment where we galvanize
around higher-level politics, and Cleveland has
a landscape that has a lot we can say about policy being effective or ineffective, (trying) to
serve people’s needs.”
As it’s a work in progress, Sopko was reluctant to get into details, but she’s planning for
the films to cover seven or eight issues, such as
school policy and infrastructure needs. Sopko
also realizes that, given the time pressures visitors will face, her work may have a broader impact on Cleveland-area residents.
Each film will have anywhere from three to
20 interviews with people who are knowledgeable and insightful about the film’s issue. For
each film, the interview subjects were chosen,
and the interviews were guided, by a person
who is well-networked around the particular
subject matter.
The cost of the project, which Sopko pegs at
a little under $25,000, is being underwritten by
SPACES; Art Matters, a New York foundation
that supports artists who are pushing aesthetic and social boundaries; and an online crowdsourcing site called Hatchfund.
This is not Sopko’s first foray into what she
calls social practice, or public works of art.
“Public work has the possibility of just shifting the way we think about our world and the
way we interact with our world, the way we relate to other people,” she said. “We’re setting
the table so people can talk to each other about
getting interested in the city.”
Sopko, a 2000 Kent State University graduate, said she has been working seriously as an
artist for five years. Before that, she worked as
an arts administrator, at SPACES and elsewhere, and done what she calls, “kitchenwork,”
or work that she continues.
She sees her arts administration experience
as critical to the kind of art projects she undertakes.
“You’d be surprised at how much art work is
administration,” Sopko said. “It’s managing
and scheduling people and you have to figure
out how to ship work, insure work.”
Among her recent projects is a series of what
she calls “forts” — places people have created
for centuries — that answer questions about
the things people value enough to defend. She
also has an ongoing project called “City Repair
Cleveland,” that brings people together to find
ways to improve their neighborhoods.
“The Fixers” will be exhibited at SPACES,
2220 Superior Viaduct, from May 20 to July 29,
and at Smack Mellon gallery in New York City
from June 18 to July 31. The preview trailer can
be seen at https://vimeo.com/156270302.
Still images pulled from the trailer for “The Fixers.”
20160411-NEWS--23-NAT-CCI-CL_--
4/8/2016
10:58 AM
Page 1
CRAIN’S CLEVELAND BUSINESS z APRIL 11 - 17. 2016 z PAGE 23
BUSINESS OF LIFE
Source Lunch
Santina Protopapa has a passion
for using the arts to educate.
As executive director of the Progressive Arts
Alliance, a program that combines art and STEM
(science, technology, engineering and math)
education, Protopapa leads the small staff of
employees and contractors who works with
students in local schools.
The program has grown since it began in 2002
and now serves five schools in Cleveland, one in
Garfield Heights and two in Warrensville Heights.
In March, the alliance took a project to share
at SXSWedu, inspired by an installation done at
Cleveland’s Mound STEM School. There, students
worked with artists to create an LED light and
sculpture installation on clouds. The students had
already been learning about both clouds and circuits,
and this project combined the two.
Santina Protopapa
— Rachel Abbey McCafferty
How has the program
evolved over the years?
Over the years, PAA’s
programming has evolved by
effectively adopting and
adapting emergent trends in
education. When we launched in
2002, STEM and the Maker
Movement were not a part of the
education field. As we’ve grown
over the years and deepened our
commitment to partnering with
schools, we’ve maintained a niche
in teaching and learning that
harnesses the current trends in
the field. We’ve accomplished this
by operating as an arts-integration
lab in which our artists engage in
R&D that allows them to develop
innovative projects and the
corresponding curriculum to
engage students and their
teachers in Cleveland classrooms.
Through our lab approach, we are
able to iterate and refine these
projects as part of our ongoing
school partnerships. After we
iterate our prototypes in local
schools, the refined work becomes
model projects or curricular units
that we share with the national
education field. As a result,
we’ve discovered that our work
not only has a transformative
impact on students, but also
impacts the professional
development of classroom
teachers and professional artists.
How is the alliance different
from an extracurricular arts or
STEM program at the schools?
Progressive Arts Alliance’s
arts-integration programs are
different than extracurricular arts
or traditional STEM programs in
that we custom design experiences that provide equal weight
in an art form and in an aspect of
the STEM curriculum. These
programs are designed to use
meaningful inquiry to deepen
students’ understanding in core
curriculum content. Our artist-educators accomplish this by
applying the principles of projectbased learning to our work. This
results in students demonstrating an increased capacity to
articulate comprehension of
grade-level content. Students
also walk away with new technical and creative skills that can be
applied to a variety of contexts.
How does the work of the
alliance fit into the students’
day-to-day education?
PAA maintains ongoing partnerships with a number of Cleveland
schools. These partnerships
enable our in-school workshops
to be custom-designed to align
with the curriculum that students
are working on at that moment.
After students work with their
teachers to learn a new concept,
they turn around and work with
PAA’s artists-educators to apply
that new knowledge to large-scale
projects that challenge them to
collaborate and problem-solve
with their peers.
EDUCATION
What do you think is the role
of arts in education?
FIVE THINGS:
The arts play an essential role in
providing a robust curriculum for
students to develop the critical
skills needed to be successful in
the 21st century. Each art form
provides students an opportunity
to develop critical thinking and
listening skills, refined attention
to detail, and design thinking
skills that are essential to any
career path. A well-designed
learning environment for students
includes a transdisciplinary
curriculum in which the arts are
not only offered as stand-alone
subjects, but are also seamlessly
integrated into other areas of the
core curriculum.
MUSICAL TALENT
What role do the arts play in
your life, outside of work?
I’ve been involved in music ever
since I can remember. Learning to
play an instrument taught me
how to be a good student and
developed my perseverance. I am
so grateful that I was able to
take music lessons starting in
kindergarten. Music really helped
me develop my leadership skills.
Once I began studying and
learning to play jazz, I was able to
develop creative problem-solving
skills that play a role in every
aspect of my life. Jazz also
taught me how to collaborate
with others. Outside of work, I try
to immerse myself in experiencing
and learning about music and its
cultural context whenever I have
the opportunity.
Outside of work,
Protopapa plays the
vibraphone and DJs —
vinyl only, no laptop. She
thinks collecting music
and “finding those hidden
gems” is the best way
to learn about music.
LISTENING TO?
LUNCH SPOT
Afro-Cuban jazz, Latin jazz
and classic ’70s salsa
La Bodega
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Cleveland
216-331-3001
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Stevie Wonder’s Songs in
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BEST LOCAL SPOTS
Johnny Mango World Café
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FAVORITE CITY
LANDMARK
Terminal Tower. Protopapa
said she lives downtown
and loves learning about
the city’s history.
The meal
A Greek salad (the 55)
and a tomato-mozzarella
sandwich with chips (the
40), both with water
The vibe
The Superior Avenue
location is decorated
with local art. It has
ample seating and
natural lighting in its two
dining areas.
The bill
$21.97, plus tip
20160411-NEWS--24-NAT-CCI-CL_--
4/8/2016
11:56 AM
Page 1
June 22, 2016
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Page 1
MESTER
5%, it seems the challenges facing
companies today are deeper than
monetary policy may be able to affect.
Some employers are still finding it
difficult to find workers, particularly
for more highly skilled jobs. In Ohio,
that tends to be more weighted toward skilled manufacturing and
construction jobs, Mester said, but
even some service sectors are facing
problems.
It’s a trend reversal from past
years.
For example, bankers a few years
ago struggled to find compliance officers. Today, they report more issues in filling teller positions. Even
some retail companies are having
trouble filling general staff positions.
The struggle to find workers is a
sentiment punctuated in a recent
survey by PNC Financial Services
Group, whose April 2016 economic
outlook report found that nearly 40%
of Ohio businesses respondents say
it’s harder to find qualified employees compared to a year ago. The
bulk of those positions tend to be in
technology and skilled positions.
“But we’re hearing from a swath of
contacts in service sector industries
that even with the occupations that
are considered lower-skilled positions, they’re having trouble finding
workers,” Mester said.
The fact that even some service
and retail companies report difficulties finding workers while unemployment is low points to a broader
issue, too.
For one, Ohio and the rest of the
Midwest face the challenge of low
population growth, Mester said.
Ohio’s population has been growing
at less than 0.4% a year through the
past five years, which is about half
the rate seen in the nation as a
whole, she points out. It’s also considerably slower than the western
and southern regions of the United
States.
The slow population growth is a
likely factor in some businesses filling what are considered lower-skill
positions — there simply are fewer
people.
Mobility issues further compound
the problem. Despite a presence of
renowned companies with highpaying jobs, like those provided by
Cleveland’s strong health care industry, many skilled workers in the
Midwest are being trained here,
then moving away.
Those kinds of issues can’t really
be addressed through monetary policy, Mester said.
“Once you have this high-skilled
group of people, we have to try to do
things to keep them in the city,”
Mester said. “Even though your innate population isn’t growing, there
are things you can do to keep people
here. If you look downtown, you see
a lot of development going on, and
that’s reflective that we have a lot of
potential here.”
A positive outlook
Mester said more employers are
offering increased incentives and retention packages to keep workers
around. And while wage growth
seems slow right now — which
Mester said could be a result of companies thinking that even if they pay
more, they won’t attract the people
they want because of a skills gap —
it could accelerate as companies
compete for talent.
According to the PNC survey,
though, that may not happen immediately.
The survey notes that only 23% of
Ohio respondents expect to increase
employee wages this quarter, which
is down from 36% in the fall and 26%
from last spring.
“The expectation is that as we
continue on and labor markets improve — and I expect more improvement over the year — we will see
more upward pressure on wages,”
Mester said.
The outlook for the economy is
still rather positive, she said. Labor
markets will continue improving,
and wages should go up.
And businesses are generally still
optimistic, said PNC economist
Mekael Teshome. The PNC report
shows that Ohio’s small and midsize
businesses are cautious about the
next six months, but they still expect
stable sales and profits despite
greater pessimisms about the economy, which seem tied to stock market lows and rhetoric of presidential
candidates. It’s almost as if businesses expect to do well despite the
greater economy, he said.
Manufacturing — which makes
up about 15% of the Ohio economy
compared with 10% across the nation — health care and professional
services are expected to lead Ohio’s
job growth, according to the report.
But the region’s remaining unemployment issues are more structural
today, or deeply rooted in other
problems, than cyclical, meaning
based on the business cycle, Mester
said. That’s a shift compared with
the years immediately trailing the
last recession.
And that’s significant, Mester
said, because monetary policy can
have little effect on structural problems.
An oil well worker laid off by the
sink in prices simply isn’t going to
transition to a skilled nursing job, for
instance. It’s that mismatch between skill sets creating the structural issues in this region.
Hiking interest rates won’t help
retrain workers, but the right kind of
programs can.
“As a country, we need to figure
out how to do that in an efficient
way that’s not burdensome to businesses,” Mester said.
“I think we should be able to do
that.”
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20160411-NEWS--26-NAT-CCI-CL_--
PAGE 26
4/8/2016
11:49 AM
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z APRIL 11 - 17. 2016 z CRAIN’S CLEVELAND BUSINESS
CAREGIVERS
lack of personal accomplishment.
In his State of the Clinic speech
earlier this year, Clinic CEO Dr. Toby
Cosgrove highlighted concerns that
roughly half of caregivers and physicians reporting unreasonable stress.
He said the system is planning town
hall meetings to address caregiver
stress, which is a “major concern,”
not only for the Clinic but across all
health care delivery.
Northeast Ohio hospitals have
programs to help caregivers talk
about and manage their stress and
systems to identify stressed physicians. They continue to look for
ways to reduce stress for caregivers
and ensure they are accessing the
supports they need.
“If we can give tools to people so
they can reclaim their love, their
passion, their enthusiasm of being a
health care provider, then it’s phenomenal and everybody will benefit
from it,” said Dr. Francoise Adan,
medical director for University Hospitals Connor Integrative Medicine
Network and its SMART (Stress
Management and Resilience Training) program.
Compounding stressors
The past several years of health
care reform have exacerbated stress
for doctors. Paperwork already was
a frustrating, time-consuming task
that took providers away from patients. Electronic health record requirements from the Centers for
Medicare and Medicaid Services
added to that.
Other CMS programs have
brought more scrutiny and added
pressure for physicians to keep costs
down. And doctors are asked to see
more patients in less time. Doctors
who see more patients per week report higher levels of burnout, ac-
cording to a national study by TINYpulse, which helps track workplace
issues like happiness and engagement. The study, released in March,
also found that on a scale of one to
10, health care employees rate their
work-life balance at 5.87, while all
other industries average 7.02.
“Many of us work long hours, and
we sacrifice time that we could be
spending with our families in order
to take care of others,” said Dr.
Robert Richardson, elected president of the medical staff at St. Vincent Charity Medical Center, who
acts as the physician representative
on St. Vincent’s board of directors.
To top it all off are the driven personalities the health care field often
attracts. As a group, physicians are
predisposed to burnout, Adan said,
noting that many are compulsive perfectionists and can be guilt-ridden.
“The culture of being a physician
doesn’t emphasize at all taking care
of yourself and emphasizes being
superwoman or superman,” Adan
said. “That all combined really puts
them at risk of burnout.”
St. Vincent, like most hospitals,
has a system in place to identify
burnout. A health and wellness committee at the hospital investigates
reports of physician impairment, including substance abuse, emotional
problems or stress, Richardson said.
The idea is not to punish them, but
get them help.
The committee, which gets referrals from colleagues, supervisors or
providers themselves, provides advice, support or treatment referrals.
Bob Smith is the director of
MetroHealth’s medical staff assistance program, which offers a free,
confidential, on-site outlet where
overwhelmed physicians can feel
safe addressing their stress. Smith
said when the program began three
years ago there were significantly
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“I said, ‘Don’t be
ashamed that you get
emotional. This is very
difficult. The day you
should worry is when it
doesn’t bother you.’ ”
— Dr. Alfred Connors,
chief quality officer, MetroHealth
more supervisors referring physicians than self-referrals. In the past
18 months, that has flipped.
Though the portion of MetroHealth’s medical staff accessing the
program has remained steady, more
and more are coming on their own,
identifying they need support, which
is an encouraging sign, Smith said.
Case Western Reserve University
is looking for ways to get ahead of
provider stress, said Dr. Steven Ricanati, assistant dean for student affairs at Case’s School of Medicine.
He said as a pass/fail curriculum,
fewer lectures and small-group,
team-based learning helps promote
collaboration over competition,
which decreases stress. From the beginning, he wants students to understand that medicine is a team
sport. When physicians work together, they have more support, give better care and are less likely to experience burnout, Ricanati said.
The school also works to identify
stressed or overworked students and
get them treatment, like university
health services. Ricanati oversees
one of the school’s academic societies, which puts students into small
communities to foster close relationships, which can offer support
and help identify students who may
be struggling.
And in an effort to prevent getting
to that point, the school brings out
therapy dogs before exams, offers
yoga classes and encourages students to get together for social
events. Some may sound silly, Ricanati said, but they are a small but
important piece of preparing graduates to be flexible in a time of
tremendous change for the health
care industry.
Managing stress
216.831.7171
cp-advisors.com
At UH, the eight-week SMART
program is a “safe, confidential,
non-judgmental, supportive” environment, where providers learn very
practical skills — nothing they
haven’t heard of, Adan said — to
build their resilience.
She teaches skills like mindfulness,
positivity, gratitude and breathing
exercises “to emphasize that it’s OK
to take care of yourself and to take a
few minutes to make yourself part of
your priorities,” she said.
Patricia McMullen, nursing supervisor at UH Portage Medical
Center, enrolled in the program recognizing that it could help her manage stress in and out of work. The
small class afforded her the opportunity to talk about the stress she
sees as the afternoon shift supervisor for the whole hospital’s nursing
staff. She’s often stepping in for
staffing shortages, helping families
cope or responding to code calls,
such as cardiac arrests.
Nurses, supervisors, a staffing secretary, a physician and others gave
her small group a mix of experiences. The younger participants
turned McMullen onto smartphone
apps that offer background music
for meditation. In turn, she gave
them her best stress relief tip: stepping outside for a walk.
The fellowship those group classes offered made her realize she was
often isolated during lunch. Now,
she eats with people. She breathes
deeply a lot at work.
“There was nothing that was really
earth-shattering,” she said. “But when
you take the hour once a week with a
group of people, it’s just better.”
MetroHealth offers Schwartz
Rounds, a panel of providers and
support staff that presents and
opens up a discussion to encourage
the room to discuss the emotions
they deal with on various cases. The
tool was developed by the Schwartz
Center for Compassionate Healthcare in Boston.
The first at MetroHealth last fall
drew 300 people. Since then, they’ve
averaged more than 225 at the
monthly program.
McDonald, the trauma surgeon,
presented at one of the panels that
discussed the day the victims of the
2012 shooting at Chardon High
School came into MetroHealth.
Years later, it still struck deep and
strong emotions among presenters
and the hundreds gathered. McDonald spoke about a case few
heard of that day. While her colleagues worked to save the high
school victims, she dealt with many
other traumas, including deaths —
in particular a 12-year-old boy who
was shot. Despite immediate efforts
to save the child, he died.
Since then, she has struggled with
the conversation around that day.
Everyone — the media, the public,
hospital administration — wanted
to talk about the Chardon victims
and offer support for the emotional
toll of that case, but no one asked
her about the tragedy of the 12-yearold from Cleveland. “That was upsetting to me,” McDonald said.
“Every life should be valued.”
She doesn’t want attention for
every case. It can become a distraction. And she understands, to an extent, why some make news and others don’t. But she grieves for all lives,
she said, and had a hard time reconciling the attention and discussion
around one over another. This panel gave her a chance to discuss and
deal with it.
For about a decade, the Cleveland
Clinic has offered emotional support
through Code Lavender, a service that
sends interventions, such as counseling or spiritual care, to patients and
caregivers. In a world where people
see death and dying every day, it’s a
busy service, Boissy said.
Because physicians don’t typically show vulnerability, creating a culture that promotes that is key after
so many years of not acknowledging
there was a problem, Boissy said.
Cosgrove focusing on the issue at his
State of the Clinic and beginning the
town halls are good steps toward
changing that culture and facilitating a conversation.
Keeping in touch with your emotions but managing them in a way
that lets you remain effective is a difficult, but critical balance to maintain, said Dr. Alfred Connors, chief
quality officer at MetroHealth. He
recalled a time a medical student got
embarrassed when he saw her crying
after a family made a difficult decision to not take aggressive actions to
revive their father if he died.
“I said, ‘Don’t be ashamed that you
get emotional. This is very difficult,’ ”
he said. “ ‘The day you should worry
is when it doesn’t bother you.’ ”
‘You are not weak’
Burnout can have clear implications for a provider suffering, including depression, anxiety and substance abuse. There have also been
a number of studies talking about
the impact of burnout on medical
error rates, quality care, safety and
patient satisfaction, Boissy said.
The implications could reach further unless the industry tackles
burnout. If stress isn’t addressed
and managed, many worry that doctors will walk away from a profession
already facing a shortage.
By 2025, the nation will face a
shortage of between 46,000 and
90,000 physicians, according to a
2015 study conducted for the Association of American Medical Colleges. The TINYpulse study found
that health care employees who responded are more likely than those
in other industries to leave their job
for a 10% raise.
And when physicians leave, that
means fewer people doing more
work, increasing stress and exacerbating the problem.
When McDonald presented to her
MetroHealth colleagues about the
12-year-old child who died, she
learned of another provider who
struggled with the same conflict.
She felt better after having the
chance to talk about these shared
experiences. Seeing another physician or surgeon dealing with the
same emotions, McDonald said,
“You realize again: You are not
alone. You are not ‘weak.’ ”
20160411-NEWS--27-NAT-CCI-CL_--
4/8/2016
2:05 PM
Page 1
The List
COMPANY
THIS ADDRESS
YEAR PHONE/WEBSITE
COMMERCIAL CONTRACTORS
Ranked by 2015 Revenue
LOCAL
REVENUE
2015
(MILLIONS)
FTE EMPLOYEES
NEW CORPORATE # OF CORPORATE AS OF 4/1/2016
# OF LOCAL
NEW LOCAL
LOCAL
PROJECTS
CONTRACTS
PROJECTS
CONTRACTS
CORPORATE
2015 (MILLIONS) STARTED 2015 2015 (MILLIONS) STARTED 2015
YEAR
FOUNDED TOP LOCAL EXECUTIVE
1
Turner Construction Co.
1422 Euclid Ave., Suite 1400, Cleveland 44115
(216) 522-1180/www.turnerconstruction.com/cleveland
$348.5
$339.6
40
$9,961.0
1,500
163
5,300
1902
Jason Jones
vice president,
general manager
2
Cleveland Construction Inc.
8620 Tyler Blvd., Mentor 44060
(440) 255-8000/www.clevelandconstruction.com
$300.7
$25.1
4
$225.4
33
145
895
1980
Jon D. Small
president
3
Gilbane Building Co.
950 Main Ave., Suite 1410, Cleveland 44113
(216) 535-3000/www.gilbaneco.com
$283.7
$288.1
19
$4,882.5
193
62
2,645
1873
Scott Orr
vice president
4
Donley's Inc.
5430 Warner Road, Cleveland 44125
(216) 524-6800/www.donleyinc.com
$268.0
$283.0
20
$392.0
39
262
506
1941
Malcolm M. Donley
president, CEO
5
The Ruhlin Co.
6931 Ridge Road, Sharon Center 44274
(330) 239-2800/www.ruhlin.com
$175.5
$112.6
32
$177.1
49
315
225
1915
James L. Ruhlin
president, CEO
6
The Austin Co.
6095 Parkland Blvd., Cleveland 44124
(440) 544-2600/www.theaustin.com
$163.4
$4.6
16
$203.9
80
80
200
1878
Michael G. Pierce
president
7
Fortney & Weygandt Inc.
31269 Bradley Road, North Olmsted 44070
(440) 716-4000/www.fortneyweygandt.com
$89.1
$6.6
16
$85.4
79
106
106
1978
Greg Freeh
president
8
Kokosing Inc.
13700 McCracken Road, Cleveland 44125
(216) 587-4900/www.kokosing.biz
$86.5
$170.1
23
$825.1
203
251
2,314
1951
Brett Burgett
owner
9
Shook Construction Co.
10245 Brecksville Road, Brecksville 44141
(440) 838-5400/www.shookconstruction.com
$53.5
$13.1
8
$98.2
46
48
257
1926
Chris Halapy
executive vice president
10
John G. Johnson Construction Co.
1284 Riverbed St., Cleveland 44113
(216) 938-5050/www.johngjohnson.com
$50.0
$18.0
20
$18.0
20
23
23
1943
Marty Weber, president,
owner; Mike Weber, vice
president, owner
11
Infinity Construction Co.
18440 Cranwood Pkwy., Warrensville Heights 44128
(216) 663-3777/www.infinityconstruction.com
$43.5
$39.5
46
$39.5
46
55
55
1997
Charles A. Izzo
president
12
Drake Construction Co.
1545 E. 18th St., Cleveland 44114
(216) 664-6500/www.drakeconstructionco.com
$33.0
$12.0
55
$19.0
62
32
46
1954
Steve Joseph Ciuni
president
13
Continental Building Systems
23240 Chagrin Blvd., Suite 400, Beachwood 44122
(216) 454-2500/www.continental-buildingsystems.com
$28.2
$28.8
12
$327.6
54
14
141
1984
Rick Adante
project executive
RESEARCHED BY DEBORAH W. HILLYER
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all
responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.
SPARKBASE
still owed $936,000; a county representative didn’t respond to questions in time for this story’s deadline.
With the help of all that funding,
SparkBase grew from eight employees in November 2010 to 40 in January 2013. But that number had fallen
to 20 by May 2015, when the board
hired Haynes to replace founder
Doug Hardman.
So what happened? For one, over
the years, revenue from the company’s core business — which involved
working through third party companies to sell gift and loyalty card programs to small retailers — flattened
out, Haynes said. Attempts to go after
larger clients didn’t pan out either.
SparkBase also spent a few years
developing and marketing a mobile
app that consumers could use to redeem coupons and other rewards.
But in January 2014, Hardman said
that the company had backed off on
what had been an aggressive plan to
market the Paycloud app. The company realized it was going to be hard
to drive widespread adoption, Hardman said at the time.
Cash flow problems
Just before Haynes was hired,
SparkBase had struck a deal to sell its
core line of business to another company so it could focus on marketing
a new version of its software.
Haynes said he saw potential in
the new software: It could be used by
both internet retailers and physical
stores, but it also could be used by
any organization that wanted to reward its employees or customers for
any reason.
It also was easier to use than
SparkBase’s old system, which
forced the company to spend a lot
time providing customer support.
SparkBase managed to attract
some new customers, but its ability
to invest in growth was limited:
When SparkBase sold its core business, it received some cash up front,
but additional milestone payments
arrived more slowly than expected,
Haynes said.
“We never really got enough operating cash to grow the company,” he
said.
Even though SparkBase was in “a
fragile position” before Haynes arrived, its employees remained “unbelievably committed” to turning
the business around, he said. That’s
one reason why he decided to serve
as CEO.
“I thought it was worth the effort
because the team was so committed
to it, despite the odds,” he said.
So what will happen to those employees? Many of SparkBase’s investors “are able to refer them to our
other portfolio companies or other
high-growth companies in the region,” Haynes said.
“They were all entrepreneurial so
given the shortage of technology talent in the region, most are in high
demand,” he said.
SKY
The health insurer’s leases on all
of its area properties expire at about
the same time in 2020, which Jared
Chaney, Medical Mutual executive
vice president, said puts it in a “once
in a generation” position to plan its
physical operations.
“We may decide combining all four
operations into one building makes
sense,” Chaney said. “It may make
sense to have two. I’m positive we will
not have four buildings. We’ve got all
the options available to us.”
Asked if the chance to change the
company’s culture is a factor,
Chaney said, “It’s exciting. We’re in
a 116-year-old building. It certainly
wasn’t built for how we use it today.”
The changing nature of office use
by companies also may come into
play. Bob Redmond, the Ohio broker
for Mohr Partners, said offices have
been growing smaller since the early
2000s thanks to technology, the popularity of open offices and the ability to put more workers into less
space as a way to cope with rising
building costs.
“Companies look at how their offices allow them to compete for the
best and the brightest,” Redmond
said, noting that was a factor in the
movement of the EY accounting firm
into the namesake Ernst & Young
Building. He said there is a striking
contrast in how Sherwin-Williams
presents itself with the contemporary design of its research center in
the Flats and its art deco HQ.
Where local business
comes to grow
We’re behind local business 100% with lending solutions like:
•
•
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•
Working Capital Lines of Credit
C & I Loans
Equipment Guidance Lines
Commercial Real Estate Loans
Rates as low as 200 basis points above the Treasury!
We help local business because local business helps the
community! Whether you’re just starting or taking your
business to the next level, trust Geauga Savings.
440-564-9441 Ext: 173
20160411-NEWS--28-NAT-CCI-CL_--
4/8/2016
11:00 AM
Page 1

April 11 - Crain`s Cleveland Business

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