July 27 - August 2, 2015 - Crain`s Cleveland Business

Transcription

20150727-NEWS--1-NAT-CCI-CL_--
7/24/2015
11:38 AM
Page 1
Vol. 36, No. 30
Entire contents © 2015 by Crain Communications Inc.
$2.00/JULY 27 - AUGUST 2, 2015
Cleveland school district is hoping for more collaboration from the charter school community — P. 3
Hyatt Regency Cleveland owners surface as potential buyers of iconic downtown Renaissance — P. 4
Building a budding
business in pot law
By JEREMY NOBILE
[email protected]
CONTRIBUTED PHOTO
Cleveland Indians season-ticket holder Jeff Thomas believes his seats in Section 254, which offer this view of the action
at Progressive Field, are the best value in the ballpark.
Changing view of Tribe
Renovations likely will include removal of seats under overhang
By KEVIN KLEPS
[email protected]
0
NEWSPAPER
74470 83781
7
30
Jeff Thomas thinks the Cleveland
Indians season tickets he has in the
fifth row of Section 254, which offer
a perfect view of home plate, are the
best “dollar-for-dollar” deal at Progressive Field.
There’s just one problem: He’s
been told his seats won’t be around
in 2016.
According to three Tribe customers who spoke with Crain’s, the
Indians recently notified seasonticket holders in the 200 level at
Progressive Field — the 13 sections
of seats under the overhang that
stretch from home plate down the
third-base line — that they are re-
moving those seats to open up the
main concourse. The work would
be part of the second phase of renovations at the 21-year-old ballpark, which underwent a $26 million, privately funded facelift prior
to the 2015 season.
The Indians are being much
more cautious when it comes to
discussing specifics for the next
stage of Progressive Field enhancements, which are expected to include a new scoreboard and sound
system.
“When we announced the renovations (last August), we said there
would be more phases,” Tribe senior director of communications
Curtis Danburg told Crain’s. “It’s
very similar to what we did last
year.”
When asked about the removal of
seats in the 200 sections, Danburg
would only say that the Indians
have notified a “targeted” group of
season-ticket holders that they
might need to be relocated next
season.
“We’re being proactive with
those who might be affected,” Danburg said.
Thomas, who owns Alpha Asset
Management in Akron, said his season-ticket representative from the
Tribe made it sound as if the transformation was much more of a given.
“They basically told me that they
are removing all of the seats under
See TRIBE, page 21
When Cleveland attorney Kevin
Murphy attended his first medical
marijuana conference, he was largely expecting to see a crowd of young
20-somethings in flip flops and
clothes covered in bright pot leaves.
A childhood pal — who would
eventually go on to start his own
business insuring companies tied to
the cannabis industry — encouraged
Murphy to join him at the New York
conference. The two had a mutual
friend who just started a dispensary
in San Diego, and the duo set out to
see what they could learn about the
budding industry, cognizant of the
possible business prospects.
This was about six years ago. Murphy had just started at Walter |
Haverfield LLP at the time. And he
was wary how his fellow partners
would respond to his interest in the
marijuana industry. When Murphy’s
friend offered to cover his travel expenses, though, reluctant and skeptical, he decided to tag along.
And he was pleasantly surprised
with what he learned.
“When I went, I was really blown
away,” Murphy said. “You’re expecting people in marijuana hats, people
stoned out of their minds, like
maybe it was a big vacation in New
York for a bunch of hippies. But it
was not. It was a lot of lawyers and
investment bankers.”
That’s when it clicked for Murphy:
Cannabis had strong potential as a
legitimate industry. The conference
showed interest was high on the East
Coast with businesspeople at a time
when the only legitimate market was
on the other side of the country.
“I knew it was going to be huge,”
he said.
See how it develops
Marijuana, now a multibilliondollar industry, is not entirely mainstream, but it’s getting there.
“We don’t touch the plant.
We’re negotiating
documents. And we’re
doing it in states where it’s
legal. Sure, there is some
risk, but because there’s
risk, there’s a lot of
reward.”
– Kevin Murphy
attorney, Walter | Haverfield LLP
More than 20 states have approved medical cannabis. Recreational use is gaining traction. And
as businesses pop up around the
country to support the industry,
from dispensaries and cultivation
centers to related products like
smell-proof bags and grow lights,
lawyers like Murphy are carving out
niches representing those firms.
After the conference, back at Walter | Haverfield, Murphy shared his
enthusiasm to work with cannabisrelated companies. His colleagues
encouraged his efforts.
Shortly after beginning those efforts, Murphy was counseling his
See LAW, page 13
7/24/2015
9:59 AM
Page 1
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Page 1
JULY 27 - AUGUST 2, 2015
WWW.CRAINSCLEVELAND.COM
CRAIN’S CLEVELAND BUSINESS
3
Efforts to bring
charter schools
on board getting
‘mixed’ results
Their participation could
speed up transformation plan
of Cleveland school district
By TIMOTHY MAGAW
[email protected]
The plan to turn around Cleveland’s failing
schools has started to gain some traction, although its strongest advocates say that momentum could be accelerated by more involvement from the city’s charter school
community.
A few local charter operators — most notably, the ever-growing Breakthrough Schools
network — have embraced the radical transformation effort spearheaded by Cleveland
mayor Frank Jackson over the last few years.
However, there still are several operating within the city limits that are skeptical of cozying up
with the Cleveland Metropolitan School District, even if there are levy dollars to be gained.
“We need to get over this turf of who owns
kids,” Cleveland schools CEO Eric Gordon
said during a recent meeting with Crain’s reporters and editors.
The ultimate goal of the transformation plan
is to triple the number of students in the city’s
high-performing schools by 2018-2019 —
whether they are run by charter groups or the
district — and shut down the worst schools. It’s
all part of a so-called “portfolio strategy,” in
which charters and the district work together
to massage those mid-performing facilities
into high-performing schools. Opportunities
for collaboration might include, for instance,
shared enrollment systems or joint professional development for faculty.
But so far, charter reception has been
“mixed, and we wish it were better,” according to Piet van Lier, the director of school
quality, policy and communications for the
Cleveland Transformation Alliance, the mayor’s school quality watchdog group.
There’s a considerable amount of students
— 2,758 — enrolled in charters unaffiliated
with the district that the alliance would classify as “mid-performing” schools. That unaffiliated cohort represents a significant opportunity for the district to align itself with some
of the most promising charter schools and
hopefully nudge them into that “high-performing” category. At present, not a single
school unaffiliated with the district is included in that “high-performing” category.
Promising conversations
There isn’t a highly visible campaign underway — say, with TV commercials or billboards
— to persuade charters that working with the
district is in their best interests, though talks
are occurring behind the scenes. While many
charters have been downright disdainful toward the district in years past, it appears that
mistrust has begun to thaw, at least to the point
where they’re sitting at the same table.
The most prominent example of those talks
is in the form of the still-young Gates DistrictCharter Compact work, which is being
See CHARTER, page 12
REBECCA R. MARKOVITZ
A Baxter robot hard at work alongside his human co-workers at Standby Screw Machine Products Co.’s Berea plant.
A robot is always on standby
Berea company joins growing list of Ohio businesses benefiting from robotics
By RACHEL ABBEY McCAFFERTY
[email protected]
In Standby Screw Machine Products Co.’s
Berea plant, an expressive robot in an apron
works steadily alongside equipment that has
been running since World War II.
The machine is a collaborative robot called
Baxter from Rethink Robotics in Boston.
Standby Screw Machine has two of these robots, which can run safely among the company’s employees in its plant. The company purchased them last fall; one’s been running since
November, with the other getting started this
spring. These machines, along with more traditional industrial robots, help the company
simplify some of the monotonous jobs in its
plant and “put the labor where it’s really needed,” said chief operating officer Bill Marcell.
Using robots in manufacturing is nothing
new, but there are far more options today as
machines have been getting more sophisticated and more affordable. Many have better
gripping or vision capabilities than in the past,
while others are smaller or better able to work
alongside humans, said Bob Doyle, director of
communications for the Michigan-based Association for Advancing Automation.
There’s been “fantastic growth” in the robotics industry in recent years, with 2014 being the
strongest for robot orders and shipments since
the Robotic Industries Association — part of the
Association for Advancing Automation — started tracking the data in the ’80s. Companies ordered 27,685 robots from North American companies in 2014, a 28% increase compared to
2013, according to an association news release.
“All companies are always looking for a
competitive edge,” Doyle said.
CORRECTION
Finding their place
After receiving incorrect information,
Crain’s misidentified someone in a photo that
appeared in a July 13, page 4 story about a
network of organizations interested in the
maker movement. Here’s what the caption
should have said: LeanDog’s Mike Kvintus
and his stepdaughter, Abbie Stoner, work on
electronics for a “Sumobot.”
According to data provided by a representative on behalf of Rethink Robotics, Standby
Screw Machine is one of more than 20 Ohio
customers the company added in the past
year. Rethink Robotics is one of the companies
making so-called collaborative robots, which
can be used safely without barriers around it.
Standby Screw Machine, which did not dis-
close its annual revenue, makes precision
turned parts for industries including outdoor
power products. The company spent the
equivalent of about $30,000 on each of its Baxter robots, sales manager Drew Rabkewych
said in an email. The Baxter robots are used for
packaging — one actually picks up the pieces
fed to it by an industrial robot — and for
milling and moving certain parts.
Standby Screw Machine has nearly 400 employees, about 150 in Berea and the rest in a
plant in China. It also has nine robots, either already installed or on the way — four, with a fifth
planned for August, in Berea, and two, with two
more on order, in China. While Standby Screw
Machine’s industrial robots have to be kept in
cage-like cells, the collaborative Baxter robots
can be placed in employee spaces. Marcell
demonstrated how an employee could even
bump the machine without harm, since it pauses if something unexpected is touching it.
The company’s robots have helped to keep
the company globally competitive, consolidating operations and reducing the possibility of
human error. The robots even added capacity
to the plant, Marcell said. He said the company always needs to make things faster and less
expensively, and it will continue to find ways
to automate and streamline its processes.
Robots also will play an important role in
the highly automated contract manufacturing
plant that Randy Theken, founder of the
NextStep family of companies, intends to
open next year. He said he plans to use robots
to more accurately inspect finished parts
made by 3-D printers, as well as perform
milling and turning operations. Robots don’t
get tired, he said, and can often perform more
efficiently and effectively than humans.
“We believe that there’s a lot of mundane
tasks that are performed in the manufacturing arena,” Theken said.
In the automotive industry, which has been
using robots in its plants for decades, the machines have helped ease the demands on employees.
“It’s really a support-the-operator strategy,” said Al McLaughlin, plant manager for
General Motors’ Parma Metal Center.
Robots were first used in body shops and
assembly plants, where there were many
parts to handle and weld, McLaughlin said.
Today, he said the Parma plant often uses robots for welding, material handling and structural adhesives, which need to be precise.
Growing demand
The increased attention in robotics isn’t just
supporting the manufacturers who incorporate them into their plants, as area automation
system integrators see the demand as an opportunity to boost sales.
Rick Stark, president of South Shore Controls Inc. in Perry, said demand has been high
as companies seek to eliminate variability
from their products and as robots come down
in price. Overall, the automation systems integrator sees exponential growth in the market in the next five years.
And it’s not just companies focused solely on
automation that are reaping the benefits. Euclid-based welding equipment maker Lincoln
Electric Co. has been adding to its automationrelated offerings in recent years and made a
number of acquisitions in that area. Lincoln
Electric started in the automation business 10
to 15 years ago, but customers wanted the company to evolve to provide whole automation
systems, not just parts, said Steve Hedlund,
president of global automation.
A similar story unfolded at Cleveland-based
Jergens Inc. In recent years, Jergens has seen
some of its products, like its precision electric
tools, being attached to the end of robot arms.
In the past year or two, customers began asking Jergens to start offering its own automated, robotic solutions, said CEO and president
Jack Schron.
When technical services manager Doug
Wright joined its division ASG from Lincoln
Electric, he said he was told Jergens was leaving money on the table by not offering these
automated systems. Wright said Jergens is now
working on creating some standard, pre-packaged systems with its precision fastening tools,
and in a few years, he’d like to see the company creating custom systems for customers.
“It’s being demanded by the customer, really,” he said.
4
7/24/2015
10:00 AM
Page 1
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STAN BULLARD
Toronto-based Skyline International Development is in line to be the next owner of the Renaissance Hotel Cleveland.
Renaissance is on verge
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[email protected]
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Cleveland’s most venerable
downtown hotel may yet gain a new
owner as Toronto-based Skyline International Development says it has
the Renaissance Hotel Cleveland
under contract.
If Skyline, which also owns the
Hyatt Regency Cleveland at The Arcade, consummates the deal, it will
be the first time the nearly 500room property has changed hands
since 1993. Undertaking the purchase also puts the Canadian real
estate developer and hospitality
firm at the reins for a multimilliondollar renovation expected to be essential — if it wishes to retain the
prized Marriott affiliation.
Michael Sneyd, Skyline CEO,
confirmed the firm has a purchase
agreement in place for the inn in a
phone interview with Crain’s. He
acknowledged the firm is in a due
diligence period on the transaction.
Skyline bested at least three other
major hotel operators to buy the
hotel, according to three Cleveland
real estate sources familiar with the
situation.
A pending deal to buy the property may explain why the current owner, the Hong Kong-based Cheng
family, which owns multiple Renaissance-branded properties globally,
retained Dallas-based Aimbridge
Hospitality to manage the hotel effective July 1. Such a move might allow the operation and its Marriott
affiliation to remain intact through
an ownership change as corporate
Marriott previously managed it until the end of June.
Asked why Skyline wants to own
the property, Sneyd said “that’s a
longer discussion” and had to end
the conversation for a looming conference call on another line.
However, the why is clear. Skyline
is an aggressive, expansion-oriented
real estate and hotel concern that
also has a penchant for top-flight old
hotels. The 1918-vintage Renaissance Hotel Cleveland is of such
pedigree, for it has a federal landmark designation and a lavish marble-floored lobby with a fountain
and large arched windows with a
sweeping view of Public Square and
the city’s skyline. The Renaissance
also has substantial meeting rooms
and banquet halls as well as its own
exhibition floor capable of competing for conventions in its own right.
The Hyatt purchase that brought
Skyline to Cleveland has the landmark Arcade as its centerpiece.
Sneyd declined to comment on
the proposed purchase price for the
grande dame of Cleveland hotels.
However, the city has been in a
frenzy of downtown hotel development since the Global Center for
Health Innovation, along with a
massive rebuilding of the Cleveland
Convention Center, opened in
2013. Hotel prices are on the climb
nationally. Cuyahoga County land
records value the inn at 24 Public
Square at $25 million for property
tax purposes; it last traded to the
Cheng family as part of a portfolio
with multiple properties in 1993.
At the same time, the explosion
in the number of downtown hotel
rooms that helped the city win the
Republican National Convention in
2016 also makes owning one a dicey
proposition later on. The city will
need to consistently win massive
conventions that the 600-room
publicly funded Hilton Convention
Center hotel is designed to attract
to keep the hotel market healthy on
a long-term basis.
Moreover, if Skyline wants to
keep the Marriott flag and its muchvaunted reservation and reward
system, that comes with a pretty
price tag that might lower the selling price.
David Sangree, president of Lakewood-based Hospitality and Leisure
Advisors, said keeping the flag will
mean a substantial renovation and
updating to the tune of more than
$30 million. The property’s public
areas were last updated in 2010. The
plush carpet at the building’s Superior Avenue entrance and lobby
shows obvious wear.
Landing another marquee flag
would also require similar investments, he said. However, going it
alone as an independent hotel —
should Skyline go that route —
would let it captain its own fate
without chain costs — or benefits.
Sangree was encouraged that
Skyline, which already knows the
Cleveland market, might be the
prospective buyer.
“Toronto is the New York of Canada. It’s a much more vibrant lodging
market than Cleveland,” Sangree
said. And Skyline was birthed by
such a competitive market.
Skyline’s Cleveland entry reflects
its daring. Skyline entered the sole
bid — nearly $8 million — for the
Arcade at a Dec. 5, 2011, Cuyahoga
County sheriff’s sale of the property, which had been put into foreclosure by its lender, Bank of America.
The previous owner, L&R Corp. of
Chicago, had spent $60 million in
2001 to convert much of the Arcade
to a hotel from little-used office and
shop space. However, retail space
that survived on the first two levels
of the Arcade remains largely empty. Skyline is now on its third brokerage firm for selling space at the
Cleveland jewel.
Skyline International Development, according to its website,
owns more than 2 million square
feet of real estate, has over 2,600
acres with development rights for
more than 7,000 residential units
and nearly 1,300 rooms in its holdings. It employs more than 1,500.
Its lodging interests include part
ownership of Toronto’s iconic
Omni King Edward Hotel, as well as
ownership of, under the Skyline
Hotels & Resorts brand, the Pantages Hotel and Spa.
Skyline has been active on the
sell-side recently. On July 8, it sold
Cosmopolitan Hotel Toronto, a 50room boutique it developed in 2005,
to Vancouver-based Executive Hotels and Resorts. The transaction includes the sale of 29 Skyline owned
rooms, lobby restaurant, conference
rooms, spa space, parking and other
amenities.
Skyline was founded in 1998 by
Gil Blutrich, its chairman, and has
traded on the Tel Aviv stock exchange since 2014.
Parties on the sell side of the Renaissance deal remained mum.
Jackie Brown, the asset manager of
Washington, D.C.-based CTF Development, which represents Cheng
U.S. interests, did not return an
email and phone call by July 23.
Aimbridge also did not return two
phone calls. Aimbridge surfaced as
the manager of the hotel after CTF
ended Marriott Corp. management
of the property June 30, when many
local observers originally expected a
new owner to gain control of the
structure.
7/23/2015
11:09 AM
Page 1
5
Team Sawyer is bigger, busier than ever
Chef’s empire has expanded, with ‘opportunities everywhere’
By KATHY AMES CARR
[email protected]
Jonathon Sawyer works in fastforward motion.
It wouldn’t be unusual to catch
him zigzagging around the Greenhouse Tavern kitchen, innovating a
new version of a dish using that
day’s foraged finds at Trentina, then
jetting to another metropolis for
culinary enrichment — all by the
time the clock has circled one full
rotation.
His enthusiasm, passion and tireless curiosity about food, health and
the environment mean that his
plate is always full.
But Sawyer is methodical about
how he plans to continue evolving
his brand under the umbrella of his
well-known restaurant group, Team
Sawyer, following his guiding principles of sustainability and responsibly sourced food.
The 240-employee company currently operates three Cleveland
restaurants, Tavern Vinegar Co. and
concession stands at FirstEnergy
Stadium and Quicken Loans Arena.
Refreshed menus and dishes at
each establishment dazzle diners
and social media followers on a daily basis. A visit to one of his eateries
after a couple-month absence feels
like an entirely new experience.
Crain’s caught up with Sawyer
and some of his team members to
revisit Team Sawyer’s intentions.
Here’s a look at the James Beard
Award-winning chef’s current business growth plans and some
thoughts on the long view:
Quick-serve restaurants
The 3,600-square-foot Noodlecat
on Euclid Avenue is being reframed
as a quick-serve lunch and dinner
format.
Customers will be able to build
their own noodle bowl with a choice
of broth, noodle, buns, protein and
a separate salad.
“It’ll be more like a traditional ramen shop because it’s more accessible,” says Julie Novak, director of
restaurants for Team Sawyer.
The first phase of a four-phase
transformation already has begun,
with a new menu prototype complete and the closing time adjusted
to 8 p.m. instead of 10 p.m. as of two
weeks ago.
The Euclid flagship will serve as a
model for additional outposts in the
900- to 1,000-square-foot range.
Targeted markets include Pittsburgh, Louisville, Detroit and other
cities within a day’s drive — and
then eventually beyond.
“There are opportunities everywhere,” Novak said.
Sawyer also is developing a fried
chicken and scotch quick-serve
concept for busy, populated areas.
“It’ll have fried chicken, scotch,
champagne and a couple of draft
beers,” Sawyer said.
His Sausage and Peppers stand in
FirstEnergy Stadium’s Dawg Pound
area is test-driving the fried yard
bird concept.
The stand during the 2015 football season will offer the fried chicken, handmade Streetos (a spin on
Fritos) and a toss-up of Sawyer’s
personal favorite tunes from its
jukebox.
New chapters
Fresh off publishing his first
cookbook, “Noodle Kids,” Sawyer is
scribbling his vinegar compendium
(a history, how-to and recipes), and
a culinary biography filled with
Sawyer’s experiences and family
recipes.
“It’ll cover the Mad Cactus, working with Mike Symon, the whole
story,” he said.
He’s encouraging his other chefs
to follow the same route. Chef Brian
Goodman, for example, is working
on a cookbook about sandwiches.
Meanwhile, Team Sawyer’s
Chef’s School cooking classes that
launched earlier this year have
nearly sold out through December.
The monthly 100-level course
topics range from handmade pasta
to whole animal butchery, and will
eventually progress into 200-level
and 300-level classes. Look for
coursework on subjects such as vegetable butchery and egg.
Wide open spaces
Team Sawyer established a corporate office within a 2,400-squarefoot space in the Hamilton Building
in Cleveland’s St. Clair-Superior
neighborhood.
Plans call for a test kitchen that
will host visiting chefs and function
as ground zero for new product development.
Sawyer also is scouring the Cleveland area for between 10,000 to
25,000 square feet in unused industrial space for both a vinegar and
pasta production facility.
Team Sawyer catering
The company about six months
ago established a catering arm of
the business that offers specialized
menus featuring dishes from its
restaurants, as well as customized
menus.
Internal sustainability initiatives
Culinary schools don’t always
teach aspiring chefs about potential
investor pitfalls, building lease
landmines or other legal quandaries. Nor do they address the
mental health toll that afflicts many
a talented employee who maintains
a fifth-gear pace six or seven days a
week.
Team Sawyer is developing a
Chef’s Advocacy Foundation that
would bring awareness to these and
related issues.
“We’re still in the early stages, but
we’ve created a 501(c) nonprofit entity that would provide assistance in
the culinary and hospitality industries through legal aid, mental
health and addiction counseling,
business and continuing education,
and many other facets,” said Amelia
Sawyer, Team Sawyer co-owner.
“There is a need for these services in
the industry, based on our observations.”
Team Sawyer also recently implemented a mandatory four-day work
week for management.
“We’re encouraging our employees to treat the fifth day as a day of
enrichment, whether it’s dedicated
to foraging, volunteering, or doing
TED talks,” Novak said.
“We want to make sure they have
time for their families or other outside hobbies during their other two
days off.”
Additional restaurants
A second Greenhouse Tavern and
Noodlecat in the Columbus market
is on Team Sawyer’s radar, although
specific locations are still in the
works.
Sawyer’s ultimate Team Sawyer
vision?
“I’d love my chefs to write cookbooks, win awards, and watch them
and their families grow up,” he said.
“That’s so much more important
than valuing growth in terms of the
number of employees or restaurants
you have.
“It’s not about money. It’s about
being satisfied.”
Along those lines, on a more personal level, he added: “I’d love to do
a 10-seat legacy restaurant with
three or four dinner services a week.
I’d make the dishes, pair the wine or
beer, and serve the guests myself.”
CONTRIBUTED PHOTO
Jonathon Sawyer has a lot on his plate, including the transformation of his
Noodlecat restaurants, producing more cookbooks and developing a corporate
office in Cleveland’s St. Clair-Superior neighborhood.
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Diebold’s Responsive Banking platform is a conceptual design that shows how banking could be done in the future. The
concept includes screens with virtual bank tellers and the ability to conduct business with mobile devices instead of cards.
Diebold shifting into ‘walk’
mode; running will be next
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[email protected]
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Andy W. Mattes, president and
CEO of Diebold Inc., thinks the
Green-based company is on the
cusp of entering the next phase of
its three-step transformation plan.
When Mattes joined the company in June 2013, he emphasized the
role software and services would
play in the future of what had primarily been a maker of automated
teller machines.
The plan, announced in November 2013, started with the cost-cutting and foundation-building
“crawl” phase. Now, Mattes said,
Diebold is ready to enter the “walk”
phase, which is about broadening
its portfolio and expanding its market. That lays the groundwork for
the final, growth-focused “run”
phase in the future. Mattes said the
company will need a few more solid quarters of results to show a
trend, but Diebold’s shift from
making hardware to providing services is becoming apparent in its
orders.
In the first quarter of 2015,
Diebold announced service-led
projects with $100 million of total
contract value, Mattes said. That’s a
“very meaningful shift” in the company’s business model, he said,
though the company has not in the
past tracked this figure on a quarter-to-quarter basis.
The way people bank is changing, and the company is looking to
create products and services, like
machines with virtual bank tellers
or ATMs that can be synced with
users’ phones, that serve the customer of the future. People want
banks to be close to their homes or
offices, but they also want flexibility and convenience, Mattes said.
“We’re a company in transformation in an industry that’s transforming,” Mattes said.
The company strategy isn’t the
only thing that’s changed at
Diebold in the past two years. The
headquarters are going through a
cosmetic upgrade, with a more
open and transparent layout and
bright colors adorning the walls.
There have been big changes in
leadership, as well. He pointed to
the growth the company has seen
in the past two years in markets like
Latin America and Europe, both of
which he put under new leadership.
When Mattes joined the company,
there were no Diebold machines in
the UK. The company passed the
1,000 mark last Thanksgiving.
But it hasn’t been easy. Mattes
said about half the leaders in the
company are new to the organization or at least to their position. He
compared them to top athletes who
are still figuring out how to best
work together, though he said he
was excited to have seen the attitude change from “tell me to let’s
do this.”
“We’re still learning to become
an all-star team,” he said.
Mattes also has built upon the
cost-cutting measures Diebold put
into place before he came on board.
The goal is to cut $200 million from
its budget between 2013 through
2017, investing half back into the
company. In 2013, the company
stopped four straight years of
shrinking cash flow, he said.
Full-year revenue for 2014 rose
nearly 7% over 2013. In the first
quarter of 2015, Diebold reported
total revenue of $655.5 million, a
decrease of 4.8% from the prior
year. But it would have been an increase of 1.1% in what Diebold
called “constant currency,” which
calculates how the company would
have performed if the currency environment had stayed the same.
The company saw revenue growth
in financial self services and in security.
Rising with Phoenix
Acquisitions like that of Phoenix
Interactive Design Inc. in March
can help Diebold in its long-term
goals.
Since the company has never
created hardware, its software programs aren’t hardware-biased,
Mattes said.
As banks have been merging or
acquiring one another, systems
have found themselves working
with multiple hardware vendors.
Having a hardware-agnostic software system allows banks to put a
common face forward on those dif-
ferent machines. The acquisition of
Phoenix gives Diebold that independent software system.
Also in the first quarter of 2015,
Diebold signed what Mattes called
a meaningful deal with Walmart in
terms of hardware like ATMs, as
well as software and services.
Some of Diebold’s machines already have been installed, but the
majority will be deployed in 2016.
Mattes didn’t get into specifics
on the five-year project with Walmart, but he noted that it marked
the company’s first foray into retail.
Diebold also was able to displace a
competitor, he said.
Additionally, the acquisition of
Phoenix gave Diebold software
space in all of Florida’s Publix
stores, Mattes said. He’s hoping
those two retail locations will serve
as a springboard for other partnerships.
A KeyBanc Capital Markets Inc.
analyst report from May highlighted the company’s long-term
growth potential as it “positions itself to take advantage of technology shifts occurring in the banking
industry” and said it was maintaining its positive stance on Diebold
shares.
As banks rely more on automation and service becomes a more
important differentiator, Diebold’s
reputation as what KeyBanc called
a “best-in-class service provider”
could be beneficial.
Also in May, Imperial Capital LLC
maintained its “in-line rating” and
one-year share price target of $39 in
an analyst report. At the close of
business last Monday, July 13,
Diebold’s stock price was $34.11.
The analyst report said it believed
there would be more “bank transformation” projects in the United
States and globally in coming years,
which could be a boon for Diebold.
“Diebold has experienced significant headwinds,” Imperial Capital’s analyst wrote, “some of which
we believe are easing. We see potential positive catalysts from increased Brazil orders, renewed momentum with U.S. regional bank
customers, and most importantly
over the long term, the strategic expansion of the electronic security
business.”
7/23/2015
11:10 AM
Page 1
Region loses 1,785 jobs in June;
manufacturing takes biggest hit
By JAY MILLER
[email protected]
Northeast Ohio’s economic engine
continues to sputter along, as the latest
tally of employment showed a loss of
1,785 jobs in June from May, a 0.15%
decline. Employment in the seven counties of the Cleveland-Akron metropolitan
area was 1,161,708 people in June,
according to seasonally adjusted data
in the latest Ahola Crain’s Employment
(ACE) Report. That compares unfavorably with May, when regional employment was 1,163,493.
The job loss was in both goods- and
service-producing business. Goods-producing industries, largely manufacturing, lost 1,330 jobs, or 0.6% of all jobs
in the sector. Service businesses,
which employ 81.2% of the region’s
workers, lost 456 jobs, a 0.05% loss.
Cleveland Heights economist Jack
Kleinhenz, who created the ACE model,
attributed the softness in seasonally
adjusted employment to a downturn in
the oil and gas industry; a slight, but
broad, contraction in demand for the
region’s goods and services; and
consequence of a strong dollar, which
slows exports. Kleinhenz, though,
advised economy watchers to look
beyond month-to-month fluctuations to
the longer term, where Northeast Ohio
continues to show gains.
“Job growth has increased approximately 9,300 jobs or 0.8% year-overyear,” Kleinhenz said, noting the regional labor market’s slowdown is similar to
the experience of the broader U.S.
economy during the second quarter.
But the June ACE estimate of total
non-farm employment of 1,161,708
also falls below both the three-month
and six-month moving average of
employment — 1,163,141 and
1,162,772, respectively — which,
Kleinhenz said, indicates employment
lagging more than previously expected.
Cleveland Fed economist Joel Elvery,
who compiles the bank’s quarterly
publication that tracks the economies
of the metropolitan areas in the Fourth
Federal Reserve District, said he sees
the economy growing modestly over
the long term.
“I see the (regional) economy as slow
and steady,” Elvery said. “There was
accelerated employment growth during
the recovery, and now we’ve just fallen
back to our low-growth trend. We’ve
been there since about mid-2013.”
The Cleveland Fed’s July 2015
“Fourth District Metro Mix,” shows the
Cleveland regional economy has
recovered to 95.3% of its level before
the recession, the state at 98% and the
national economy at 101% of
pre-recession levels.
Elvery attributed the regional lag
partly to continued population decline.
“Another factor is that manufacturing
has grown more slowly in the Cleveland
metro than in Ohio or the United
States,” he said. “It continues to be an
important sector” of the economy.
7
2:20 PM
Page 1
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City speeds up efforts to
improve road conditions
Budget for street fixes rises ahead of 2016 GOP convention
By JAY MILLER
[email protected]
The Frank Jackson administration calls it just a matter of implementing a new funding model.
But the city of Cleveland has
found a way to double its spending
on pothole repairs and street
resurfacing in time to ensure
smoother travel for the city’s Republican Party visitors next July —
and to respond to complaints from
drivers and city council that the
city’s roads are in deplorable condition.
The city’s 2015 budget for road
improvements will hit $73.5 million, up from $36.4 million in 2014.
For 2016, the budget calls for another $65 million in asphalt and
road smoothing labor.
At the same time, it is implementing a new strategy for prioritizing its road work.
The issue was aired in March at
the end of a particularly rough
winter at a Cleveland City Council
caucus. The administration and
council agreed the problem was a
lack of money.
“My streets have never looked so
bad in all my years in this body,”
said Councilman Mike Polensek,
who has represented parts of
Collinwood since 1977.
“It’s embarrassing. It shouldn’t
be like this. This is fixable.”
Indeed, the city already was
working on a plan to improve its
roads.
Darnell Brown, the city’s chief
operating officer, said a pavement
management study is underway
that would rate the condition of
every bit of pavement for which
the city is responsible.
Then, the city will adopt a
“worst-first” strategy for prioritizing road work. \
The goal is to catch deteriorating
streets before the base below the
pavement starts breaking down,
since resurfacing streets is much
cheaper than rebuilding from the
base up.
That plan now is in place.
“You’ll see a change in riding
surfaces in the city in general,”
Brown said.
“If we can catch these roads before the base deteriorates, that’s
our strategy now.”
years.
As in the past, the city can use its
dollars as matching money for
state and federal transportation
funds.
Ready for a facelift
It’s rough out there
Brown said the goal is to resurface every city street in 20 years,
doing the worst 5% every year.
Cleveland also is investing in
stronger, but more expensive,
pavement materials that will last
longer. The city primarily is responsible for surface streets, not
freeways or major state-numbered
roads.
Repair and replacement of major roads and freeways — such as
the George V. Voinovich Bridge,
the Interstate 90 span over the
Cuyahoga River, the Opportunity
Corridor on the city’s East Side or
the $41.5 million Lakefront West
project that is transforming the
West Shoreway into a 35 mph
boulevard — is overseen by the
Ohio Department of Transportation,
The conditions on Cleveland’s
freeways and other major roads
were ranked among the worst in
the nation in a survey released last
week by TRIP, a nonprofit organization funded by insurance companies, businesses involved in
road construction and engineering
and labor unions. The TRIP report,
“Bumpy Roads: America’s Roughest Rides and Strategies to Make
our Roads Smoother,” ranked the
Cleveland metropolitan area sixth
for the share of its major roads in
bad condition — 52%. San Francisco topped the list with 74% of its
roads providing a rough ride.
Some of the new money for
Cleveland’s street repair will come
from the $100 million bond issue
Jackson announced in December
that will fund the city’s five-year
capital improvements plan. At the
time, Jackson said $35 million of
the bond issue will go to road and
bridge work over the next several
Cleveland also is getting a timely financial boost from the Northeast Ohio Areawide Coordinating
Agency, which, through some debt
restructuring, has created a pilot
program that is pumping an additional $36.7 million into road work
in its four-county service area during fiscal 2015 and 2016, a period
that began July 1, 2014.
And Cleveland, with the Republican National Convention fast approaching, is getting the lion’s
share of the first year’s allocation.
The city is getting $12 million of
that money in the first year. An additional $24.1 million will go for
projects in Lake and Lorain counties and other parts of Cuyahoga
County in fiscal 2016.
“We’ve got a significant portion
our transportation system that has
to be brought up to a state of good
repair,” said Marvin Hayes, NOACA’s director of communications
and public affairs.
“So we came up with a list of
projects not part of our existing
planning and we were able to finance this primarily by restructuring some debt of our existing programs and realized an amount of
money we can do in this, two-year
preliminary program,” he said.
Among the Cleveland roads getting facelifts are West Third Street,
Prospect Avenue and the North
and South Marginal roads at the
lakefront.
East Boulevard and Parkwood
Drive on the East Side and Denison Avenue and West Boulevard
on the West Side also are on the todo list.
The city has created a web page
to help residents stay up to date
and report problems. It’s at
www.clevelandgis.org/apps/RoadRx/.
7/23/2015
1:18 PM
Page 1
9
Website making ripples in water industry
SplashLink has signed up hundreds of subscribers since 2014 launch and raised $815,000 from investors
By CHUCK SODER
[email protected]
Recently, someone from a local
water technology company told
Bryan Stubbs that the business
might join the Cleveland Water Alliance.
The main reason? It wants a subscription to SplashLink.com.
Since last fall, the Beachwoodbased website has signed up hundreds of paid subscribers, all of
whom are somehow tied to the water industry.
Cities and utilities use SplashLink
to find companies that can help
them complete projects related to
sewer systems, water treatment
plants and other infrastructure.
Companies use the site to find projects that they can bid on. And they
both use it to hunt for grants and
other funding set aside for water-related projects.
The subscriber base includes several Cleveland-area cities — such as
Akron, Willoughby and Eastlake —
and companies.
For instance, the Cleveland Water
Alliance has about 45 members, and
well over half of them are SplashLink subscribers, according to
Stubbs, executive director of the
group,
No other website makes it so easy
for people in the water industry to
find jobs, to find money and to find
each other, according to Stubbs.
“It’s definitely solving a complex
problem,” he said.
The alliance is one of three industry organizations that has been promoting SplashLink to its members.
It has other allies as well.
The company has raised a total of
$815,000 from 11 individual investors, including billionaire Home
Depot cofounder Kenneth Langone
and Chuck Fowler, the former CEO
of Fairmount Minerals (now called
Fairmount Santrol) in Chesterland.
SplashLink vice president Jason
Wuliger said he had a family connection to Langone.
Fowler is a member of the Cleveland Water Alliance. It also won a
$100,000 grant from the Innovation
Fund at Lorain County Community
College in December.
And in late June, the company
formed another partnership, this
time with a publisher: Scranton
Gillette Communications of Arlington Heights, Ill.
That company, which owns three
water-related publications, is promoting SplashLink to its subscribers and working to build
awareness about the website,
Wuliger said.
The importance of listening
Today, SplashLink has 13 employees. Wuliger was the second
person to come on board in October 2013. The first was CEO Ebie
Holst.
She arrived at the idea because
she has an unusual hobby: Tracking
major trends that drive significant
investments and other changes in
the world.
Over time, that hobby drove her
to become more interested in the
growing demand for water around
the world — and the strain that is
being put on water supplies.
So about five years ago she started talking to local companies in the
water industry.
She asked how they acquired customers and addressed problems in
their industry. She asked about
whether they cared about water
problems in China.
At first, the Northeast Ohio native
was thinking about water-related
challenges as a possible economic
development opportunity for the
region. After all, she spent several
years working as a consultant for local economic development groups
since moving back to the Cleveland
area in 2001.
But as she learned about the
problems that companies in the water industry faced, she started thinking a technological solution might
help.
Which makes sense, given that
she spent the 1990s in Silicon Valley, serving as a consultant for a few
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“The more I listened, the more
my technology hat started to come
back on,” she said.
So what were the problems in the
water industry?
Companies have a hard time
finding what they need when they
need it, Holst said.
She gave an example: If a city
needs a contractor to work on its
water system, it might put a request
for qualifications up on its website
and in a newspaper. And that request might end up on one of the
websites that aggregate all sorts of
construction-related projects.
But the water projects can get
lost on those sites, and some that
aren’t construction related may not
appear at all, she said.
Plus, those sites don’t aggregate
funding opportunities, which has
proven popular with SplashLink’s
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The site’s subscribers pay different rates: Cities and utilities — the
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year per user, though the price
comes down for customers with
more users.
Contractors and other companies — the problem solvers — pay
$429 per user, before volume discounts.
SplashLink will probably be
worth the cost, according to Eastlake Mayor Dennis Morley. He’s
looking for funding that could help
the cash-strapped city cover the
cost of sewer and wastewater treatment projects.
“Even if we find one thing to help
us, that will cover the cost,” he said.
Turn up the volume
MAR Systems of Solon is thinking
about applying for two grants it discovered through the site. However,
the water treatment technology
company has already benefited
from SplashLink in another way:
Through the site, it stumbled upon
a profile created by Trionetics, a
Brooklyn Heights company that
builds water treatment systems for
industrial users.
Now Trionetics sells tanks that
contain the material MAR Systems
invented to pull metal contaminants out of water, according to
Missy Hayes, vice president of business development for MAR Systems.
“He’s across the 480 bridge,” she
said, referring to Trionetics president Phil Maitino. “I didn’t know he
existed.”
SplashLink’s biggest challenge?
To build its subscriber base as fast
as possible, Holst said. Sure, the site
automatically scours about 4,000
websites looking for projects and
funding opportunities, regardless
of how many subscribers log on
that day.
Even so, SplashLink.com becomes more valuable as more subscribers sign up, create profiles and
post projects, Holst said.
“Volume makes us better,” she
said.
20150727-NEWS--10-NAT-CCI-CL_--
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7/23/2015
4:34 PM
Page 1
PUBLISHER:
John Campanelli ([email protected])
EDITOR:
Elizabeth McIntyre ([email protected])
MANAGING EDITOR:
Scott Suttell ([email protected])
OPINION
Eyes on Ohio
Ohio Gov. John Kasich is ready to become the
leader of the free world, announcing last week that
he was joining the full roster of Republican
candidates already clamoring for the party
nomination for president to be awarded next July in
Cleveland.
He’s at the bottom of the polls and has work to do
in short order to crack the top 10 by the time the first
GOP debate is held here Aug. 6. Only the top 10
candidates in recent public polling will get a place on
the stage. Perhaps Donald Trump will goad a
handful of others to drop out by then, helping
Kasich’s cause. Otherwise, it may be tough for
Kasich to make the cut.
Ohio is the cradle of presidents, and we wish the
governor well in his quest to add to the state’s
leadership legend, despite the odds against him.
His campaign can have many positive effects on
the Buckeye State and those who live and do
business here. Kasich will, no doubt, highlight our
successes (candidates don’t normally lead with the
bad stuff.) His cheerleading will serve not only as
marketing for the Kasich brand, but for the entire
state. That can’t hurt.
Kasich also can present a more moderate view of
GOP politics in a time where compromise has lost its
meaning. He pushed Medicaid expansion. He speaks
with passion about aiding the less fortunate. He’s
proposed tax hikes where he sees the need (fracking,
sales taxes) and balances them with massive income
and small business tax cuts, too. The Republican
faithful might benefit by hearing someone who isn’t
down-the-line predictable. Well, someone other
than Trump.
But we worry about the drawbacks that a Kasich
candidacy can bring, too. A week in New Hampshire
looking for votes, not new jobs for Ohio. Trips to
Iowa and wherever else early primaries are held may
be necessary for candidate Kasich, but how does that
serve Gov. Kasich? What happens to Ohio while he’s
away?
And what about the cost to Ohio’s taxpayers of his
presidential pursuit? One state legislator, a
Democrat, already has introduced legislation that
would force Kasich’s campaign, not taxpayers, to
cover his out-of-state security costs. Kasich’s people
offer no information, citing security concerns.
Taxpayers deserve answers.
We are now in full campaign mode with a year to
go until the nominations and the R vs. D slugfest.
Whether Ohio’s governor makes waves in the
campaign, we know this: Ohio will again play a
pivotal role in choosing the next president.
There will be a lot of decisions that impact the way
we live and work in the next 16 months, but none
more important than that.
Might we suggest it’s time to begin some R&D.
Educate yourself on all the issues and all the
candidates. Even if you don’t vote for a Buckeye, you
have to vote for someone who’ll be good for the
Buckeye State.
FROM THE EDITOR
Mentors come in many forms
Ever notice how the town you grew up
mentors don’t have to wear fancy suits
in feels like a time capsule when you reand they don’t have to boast of a fancy deturn home?
gree. Sometimes, they wear an apron and
I had lunch a few months ago with my
a welcoming smile.
dad at the Perkins restaurant where I
Mentors are around us throughout our
waitressed during summers while I was in
lives and careers. And sometimes the notcollege. Out of the corner of my eye, I
so-obvious mentors teach us the most
caught a glimpse of Nancy, one of my favaluable lessons.
vorite co-workers from back in
Nancy taught me the importhe late ‘80s.
tance of hard work, a positive
Almost 30 years later, a lot
attitude and the ability to mulhas changed at the suburban
titask. Granted, my parents
Youngstown restaurant. The
had already instilled those
salad bar is gone. May it rest in
lessons in me. But let’s face it:
peace. It probably buckled unBy the time you reach your
der one last sneeze. The color
teen years, your parents are the
scheme has been updated. The
last people you want imparting
’80s mauve has been replaced
life lessons.
by test-marketed green.
I’m now on the receiving end
But Nancy? She’s a constant, ELIZABETH
of that reality as I visit college
walking the same floors, wait- MCINTYRE
campuses with my teenage
ing the same tables and, I’m
son. Where he goes to college is
sure, offering the same encouraging
his choice, not mine or my husband’s.
words and solid advice to every college
With every rolling green quad and urban
kid privileged to work with her, just like
academic landscape, I remind myself that
she did with me.
I would have bristled at a “This-is-theNancy has spent her life serving people,
school-for-you!” endorsement from my
but her service goes beyond delivering a
parents. So my encouragements and
Big Biscuit Breakfast to a hungry cusopinions only come when asked. And that
tomer. She serves young adults just learnmade me think of Nancy and the way she
ing what it means to have responsibility.
had the license my parents did not to help
She serves as a sounding board and a sage.
guide me. She deeply impacted my knowWe hear a lot in the business world
it-all self when I was 19, not much older
about the importance of mentors. Well,
than that college-bound son of mine.
So often, we limit our professional
growth by narrowing the definition of
mentor. Who says a mentor has to be
higher up the ranks than us? A mentor
can be a co-worker. He can be someone
we supervise and, yes, she can even be
someone younger than us.
There is value in intentional mentoring
programs, but they need to go hand in
hand with the kind of informal mentoring
that happens every day.
So, I’m raising my hand, as a long-ago
college-aged waitress now entrenched in
middle age. I’m still learning and being
mentored. And the mentors are plentiful,
from people in my field and my workplace to people in my everyday life. From
millennials — yes, including my kids —
who are teaching me about technology
and the latest trends, to baby boomers,
who continue to show me the value of
building an old-school social network.
And if I can have an impact on someone else as a mentor, I am eager to do
that, to carry forward the lessons Nancy
taught me.
It’s not a bad idea for all of us to think
about allowing ourselves to be mentored
by those younger and older and about
being a mentor to those in need of advice
or, perhaps, even just an ear.
Who knows what impact you might
have on someone’s life and career, and
who knows what you might learn?
TALK ON THE WEB
Re: Veritix emerges
as ticketing powerhouse
This is another fantastic Cleveland
tech success story, and CEO Sam Gerace
and his team deserve a ton of credit as
they have quietly built a global leader in
their industry.
Beyond that, it’s great to see acknowledgment of his work beyond Veritix. Sam
is a pillar of our entrepreneurial community and gives back constantly to aspiring entrepreneurs looking to replicate
his success.
Sam came on board as one of the
founding members of JumpStart’s mentoring program (now 70-plus mentors
strong), and I am proud to know him and
grateful for his support.
— Anthony Hughes
So we’re just going to totally ignore
how Veritix/Flash Seats has a monopoly
on the industry by controlling primary
and secondary markets and bans the resale of tickets in any secondary market
outside of Flash Seats?
What they do is no different than the
pending litigation against Ticketmaster
and the Golden State Warriors. Let’s not
praise Flash Seats without pointing out
that they have forcibly taken control of
the market at the massive detriment to
the consumer who now must suck it up
and pay a hefty fee to buy AND sell tickets.
So, in addition to cashing in on the
sale of tickets in the primary market
(which will be 100% sold on Flash Seats
by the time the Cavaliers next take the
court), they also hit the consumer on resale. You bought tickets to a game three
months out and can no longer make it?
That’s fine, put them up for sale on Flash
Seats. Just know that when you sell your
tickets for $100 each, you’ll only see
around $75-80 back.
Oh, and the chump who bought your
tickets for $100 each? He’ll be shelling
out a minimum of around $125!
— 173056
20150727-NEWS--11-NAT-CCI-CL_--
7/23/2015
11:11 AM
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11
CRAIN’S SUMMER IN THE CITY PHOTO CONTEST
“Early morning stand-up paddle boarding” — By Brian Willse
Brian Willse was paddling along during a 6-mile ride from Rocky River to Edgewater when he
took this photo. Willse, 47, is a partner at the brand and design firm Boondock Walker. His prize
includes two concert tickets, a parking voucher and a $30 gift card to Music Box Supper Club.
Summer in the City is a contest inviting people to share their Cleveland photos.
Weekly prizes include gift certificates to metro Cleveland venues, grocery stores and retailers at a value of $50 to
$100. Three grand prizes will be awarded after Labor Day. Add images at crainscleveland.com/SITC.
PERSONAL VIEW
NE Ohio companies raise record
amount of venture capital in 2014
By RAY LEACH
This month, JumpStart released
the 2014 Northeast Ohio Venture
Capital Report — a comprehensive
yearly assessment of angel and venture capital investment activity in
our region.
We’ve been compiling these reports since 2004. But unlike past
years, 2014 gives us a unique
chance to look back over 10 years of
work in Northeast Ohio to identify
trends and measure the progress of
our region.
So, how’d we do?
In 2014, the total amount of venture capital raised by companies in
Northeast Ohio hit a 10-year high of
$336 million, more than tripling the
$103.5 million raised in 2004. The
report shows a similar trend in the
total number of companies receiving venture capital, which more
than tripled from just 36 companies
in 2004, to 104 companies in 2014.
Overall, investors have pumped
$2.3 billion into Northeast Ohio
companies in the last decade.
JumpStart does not claim to have
helped all of these companies
achieve their impressive results.
Nor do the other partners in the
Ray Leach is CEO at JumpStart
Inc., a local nonprofit that assists
entrepreneurs.
Northeast Ohio ESP Network, a collaborative group of more than a
dozen entrepreneurial service organizations that receive partial funding from the state of Ohio.
However, we’ve helped a lot of
them. In fact, of the estimated 412
Northeast Ohio companies that received venture capital investment
in the last decade, roughly 75% received investment, assistance or
both from the Northeast Ohio ESP
network.
In total, the network’s collective
work across the last decade has
helped nearly 1,000 entrepreneurs
raise $1.7 billion in capital and create/retain more than 4,000 jobs.
Because we work with so many
startup companies, we are in a
unique position to gather the kind
of data seen in this report. We
might not catch every single deal in
Northeast Ohio — especially nonpublic deals. However, our yearly
survey of the companies we work
with, combined with publicly available information, creates one of the
most comprehensive regional venture capital reports in the Midwest.
Overall, the statistics in this report are very encouraging. However, it’s not all wine and roses. Our
region also has seen a persistent
stagnation in “early stage” capital
activity over the last five years.
This is a strong statistical marker
of the growing “Series A” gap that
has many of Ohio’s economic leaders very anxious.
Along with accelerating job
growth, we must prioritize the filling
of this Series A gap if we hope to
build on the other encouraging
trends shown in this report.
There is much work ahead. However, the last 10 years have been a
true game-changer for Northeast
Ohio, and we should all take a moment to recognize how far our region has come. No one person or organization could have achieved
these results alone, and I believe our
future success will depend on our
continued spirit of collaboration.
See for yourself how Northeast
Ohio’s entrepreneurial ecosystem
has taken off over the last decade.
You can download the 2014 Northeast Ohio Venture Capital Report at
http://bit.ly/1KhYT8e.
STAY CONNECTED WITH CRAIN’S
TWITTER: @CrainsCleveland
FACEBOOK: Facebook.com/CrainsCleveland
LINKEDIN: linkedin.com/company/crain’s-cleveland-business
INSTAGRAM: instagram.com/crainscleveland
DAILY E-NEWSLETTERS: CrainsCleveland.com/register
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CHARTER
continued from page 3
funded by the Bill and Melinda
Gates Foundation through the National Association of Charter School
Authorizers.
The $100,000 planning grant — for
which the district, Breakthrough and
the Cleveland Foundation applied —
is being used to develop an action
plan of sorts outlining how charters
and the district could work together.
And if it goes well, additional dollars
could flow from the Gates Foundation.
“It’s potentially significant if this
work becomes a vehicle to involve
more charter schools in the focus of
the Cleveland Plan,” said Helen
Williams, the foundation’s program
director for education. “It isn’t a
done deal, but it’s a huge opportunity to grow and develop an agenda. In
the past, there’s been a lot of mistrust between the district and charters.”
At present, there’s a small steering
committee — led by independent facilitator Maria Dimengo — made up
of charter and district officials discussing ideas how they might be able
to work together. It’s not just the
usual suspects like Breakthrough,
but also charters lacking any formal
relationship with the district.
“We’ve got so many players at the
table already, and we have a lot of ingredients a lot of other cities don’t
have,” Breakthrough CEO Alan
Rosskamm said. “A little healthy
skepticism isn’t a bad thing, but it
seems like they’re all open to it.”
One of those is Richard Lukich,
the president of Constellation
Schools, one of the larger charter operators in the city without any formal
ties with the district that has a sizable
amount of students in those socalled “mid-performing” schools.
Lukich was one of the early critics of
Jackson’s turnaround plan, so having him at the table is a sign of
progress for those involved with the
effort.
“Depending how that goes — and
it seems to be going well now — we
might re-evaluate whether we want
to partner with the district,” Lukich
said about the compact work.
“There’s a long history of mistrust
between public schools and charter
schools, especially in Cleveland. We
just weren’t prepared to jump in and
partner with the district.”
Three years in, the Cleveland
Plan’s proponents say their efforts
have been promising but that
progress should be accelerated.
For one, there are fewer students
in failing schools and many of the
city’s best-performing schools are at
capacity. Plus, the district’s graduation rate is on the upswing, and
more low-performing charters are
closing. Still, the number of students
in the city’s high-performing schools
has declined since the Cleveland
Plan was signed into law.
As part of that effort to nudge
more parents to enroll their children
in Cleveland’s best schools, the
transformation alliance for the last
two years has published a school
quality guide with profiles of the
city’s schools. Those guides allow
schools — even the charters unaffiliated with the district — to supply
verbiage describing their institution
to run alongside the transformation
alliance’s quality rankings. That
push alone, alliance officials say, has
resulted in more face-to-face time
with the charter community.
To date, however, it’s been a bit of
a struggle to get those unaffiliated
charters to participate. Asked about
the guide and why his organization
doesn’t participate, Constellation’s
Lukich said, “I don’t care about it,
quite honestly.”
He added, “We’re looking at providing additional information in the
future, but I was skeptical about the
transformation alliance because of
the makeup of the board,” which includes the most-ardent supporters
of the Cleveland Plan.
“It’s weighted so heavily against
charter schools,” Lukich said.
That’s not necessarily the case, the
alliance’s leaders say. For one, its
board includes Breakthrough’s
Rosskamm; Richard Frank, the head
of OhioGuidestone, which operates
the up-and-coming Stepstone Academy charter school; and Darlene
Chambers, the former head of the
Ohio Council of Community Schools
— a charter sponsor — and the current leader of the Ohio Alliance of
Public Charter Schools.
“The district has been supportive
of our efforts and what we’re trying
to do,” Frank said. “Our goal at Stepstone is the same as the transformation alliance and CMSD. We all want
the same thing. It would be counterproductive to try to hinder that in
any way.”
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20150727-NEWS--13-NAT-CCI-CL_--
7/23/2015
1:13 PM
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LAW
first client — childhood friend
Patrick McManamon, who pulled
him to the New York conference.
Today, McManamon is managing director of Westlake-based Cannasure, which insures companies
working in the marijuana industry
and related products.
McManamon recalls the early
days trying to find insurance
providers for clients. Some people
laughed at him. Others hung up. Today, McManamon — whose business saw revenue growth of 400%
last year — now is receiving calls
from companies that ignored him
years ago.
“I think, being on this side of the
Mississippi back in those days, no
one really knew what was going on,”
he said.
“People still don’t really understand how big the industry is.”
Murphy started attending more
conferences, learning everything he
could and networking across the
country.
Without any marketing, through
connections and word of mouth,
Murphy saw his own business grow.
He began drawing more and
more clients including MAD Farmaceuticals in Rocky River, which
supports various aspects of the legal marijuana industry, and a Colorado company called incredibles,
which produces THC-infused
foods.
A partner in Walter | Haverfield’s
real estate practice group, Murphy’s
work ranges from advising new businesses and eager investors on the legal obstacles they face to helping established companies negotiate
leasing and operating agreements.
His business is growing significantly overall.
Murphy estimates his efforts tied
13
TAX LIENS
to the cannabis space now make up
more than 20% of his work. And as
he carves out his niche where only
a few firms are truly active, he expects that to continue to grow.
“I’m getting phone calls really
through word of mouth, and it really started with Cannasure,” he said.
“But nobody knows anything
about it, and why would they?
There’s nothing they can see.
There’s nothing they can touch.
There’s no one they can really talk
to. So I keep getting more and more
of these calls.”
Many of Murphy’s colleagues in
related practices have gotten involved, too. Encouraging his efforts,
the local law firm sees opportunities to market its growing cannabis
expertise down the line, particularly if marijuana is legalized in some
form in Ohio.
“Depending on how Ohio voters
address issues this fall, or if Ohio
moves to some legalization, we
think we will be extremely well situated to respond to that need,
which we think many clients will
have as they see the business aspects,” said Walter | Haverfield
managing partner Ralph Cascarilla.
“It’s not a huge component of our
firm overall, but it’s a niche we’re
going to nurture over time and see
how it develops.”
A legal gray area
While of growing interest to the
legal market, not all firms are as actively entertaining new clients tied
to cannabis and its related industries because of their own concerns
with legality; but Murphy says that
just creates additional opportunity
for attorneys like him.
Bruce Reinhart, a partner with
McDonald Hopkins who co-chairs
the firm’s government compliance,
investigations and white collar defense group, said many firms — including his — will provide advice to
a business regarding the legal climate they’re facing, but they won’t
help with actual work, like negotiating operating or lease agreements.
It’s where the issue hits a legal
gray area. The administration has
said it won’t come down on legitimate businesses, yet the drug is still
illegal on the federal level.
And lawyers face some unique
risks as well. The American Bar Association prohibits lawyers from
engaging in illegal conduct and accepting money earned through illegal means.
“The problem is, for a lot of this,
the people who are operating in this
area are putting a lot of faith in the
fact the government is saying
they’re not going to enforce the law
as it is,” Reinhart said. “But that
could change over time.”
That’s why, Reinhart says, more
firms aren’t jumping into the practice yet. Those concerns in mind,
Reinhart’s advice for anyone asking
about getting involved in the
cannabis industry is simple: “It’s illegal on a federal level. It’s fraught
with a lot of business risk, professional liability risk and criminal
risk. And they shouldn’t do it.”
And that goes for his firm as well.
He says his firm has made a business decision to not aid clients in
the marijuana-related space.
But those concerns don’t faze
Murphy.
“We don’t touch the plant. We’re
negotiating documents. And we’re
doing it in states where it’s legal,”
Murphy said. “Sure, there is some
risk, but because there’s risk,
there’s a lot of reward. And I think
the risk is minimal.”
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
Searles Financial
21744 Country Way, Strongsville
ID: 46-1174831
Date filed: May 12, 2015
Type: Employer’s withholding,
unemployment
Amount: $13,597
Bright From the Start Early
Learning Center LLC
3591 Lee Road, Shaker Heights
ID: 46-2293680
Type: Employer’s withholding
Amount: $13,348
Rising Stars Childcare
Enrichment
9100 Turney Road, Garfield Heights
ID: 26-4583224
Type: Employer’s annual federal
tax return
Amount: $11,033
Sobel Corrugated
Containers Inc.
18612 Miles Road, Warrensville
Heights
ID: 34-0676585
Amount: $10,745
American Midwest
Enterprises Inc. Paponettis
13450 Snow Road, Brook Park
ID: 34-1583758
Amount: $8,515
Bona & Sons Plumbing &
Heating Co. Lewis Plumbing
& Heating Co.
18525 Saint Clair Ave., Cleveland
ID: 34-1645392
Amount: $7,879
Hargur Inc. Turney Deli
4525 Turney Road, Cleveland
ID: 20-1129797
Amount: $7,710
A to Z Auto Service Inc.
13747 State Road, North Royalton
ID: 313-4271845
Amount: $7,585
Incredible Kids Childcare
& Preschool Center
4651 Northfield Road, North Randall
ID: 26-1912243
Type: Unemployment
Amount: $6,254
Enhydro Sewer and Drain LLC
1047 Oakes Road, Broadview Heights
ID: 46-1461519
Amount: $6,213
Rite Beverage Inc. Kinsman Shoprite
12807 Larchmere Blvd.,
Suite 3, Shaker Heights
ID: 20-1842660
Type: Employer’s withholding,
unemployment
Amount: $5,799
TRAINING PRIMARY CARE
DOCS TO PRACTICE
WHERE WE PREACH.
Facing a critical shortage in primary care physicians
by 2020, the Ohio University Heritage College
of Osteopathic Medicine and the Cleveland Clinic
have joined forces to train new physicians inspired
to tackle the unique health care issues facing
communities throughout northeast Ohio.
OPEN JULY 2015
ohio.edu/medicine/cleveland
20150727-NEWS--14-NAT-CCI-CL_--
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7/23/2015
1:48 PM
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GOING PLACES
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CITIZENS BANK: Michael D.
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METROHEALTH SYSTEM:
Margarita Diaz to manager, health
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JACKSON LEWIS P.C.: Suellen
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Daniel L. Jacobs to attorney.
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CTRAC: Cari Gornik to content
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HUMAN ARC: Deborah Neilly to director, marketing and communications.
Nonprofit
AMERICAN ENDOWMENT
FOUNDATION: John Farren
to executive vice president, director
of development.
MT. SINAI HEALTH CARE
FOUNDATION: Daniel J. Cohn
to program officer, urban health.
NEW AVENUES TO
INDEPENDENCE: Kathleen
Gustafson to controller.
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20150727-NEWS--15-NAT-CCI-CL_--
7/23/2015
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Page 1
15
SHALE
RUNNING ON EMPTY
Some say Utica downturn
is all part of the cycle
By Dan Shingler
I
t’s been a tough year
for Ohio’s fledgling
shale-drilling industry and
its supply chain, and while
there’s no immediate end to the
pain in sight, insiders say they remain confident that the state’s Utica
shale play still has a bright future.
It’s an industry in which it’s storming one
day and sunny the next, insiders are keen to
point out, but these are certainly dark days.
“It sucks,” says Ohio Oil and Gas Association
executive vice president Shawn Bennett. “People are packing up and leaving and there are
jobs being lost. Things just aren’t going gangbusters the way they were a year ago.”
The problem, say Bennett and others, is as
plain as the numbers on your home’s gas bill.
“The commodity prices have had a severe
dampening effect on the level of activity in the
Utica over the last several months. The last time
I talked to you (in late spring) things were bad
— they’ve only gotten worse,” Bennett said
during a mid-July interview.
Bennett was referring primarily to the price of
natural gas — the most valuable and prevalent
commodity in Ohio’s Utica shale. It’s what
brought drillers, right after then-CEO of Chesapeake Energy Aubrey McClendon declared his
belief that there was half a trillion dollars’
worth of gas just waiting to be unlocked from
See CYCLE, page 17
“Things
just aren’t
going gangbusters the
way they were
a year ago.”
— Shawn Bennett
executive vice
president, Ohio
Oil and Gas
Association
DAN SHINGLER
20150727-NEWS--16-NAT-CCI-CL_--
16
7/23/2015
1:14 PM
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Columbus
Washington
Weak gas infrastructure
fueling Utica’s struggles
By DAN SHINGLER
[email protected]
Field-tested
for over 50
years
IT’S
Cleveland
Cincinnati
Akron
Houston
Pittsburgh
In Ohio’s Utica shale, getting the
natural gas out of the rock is the easy
part.
Getting it out of the state, however,
where it can fetch a decent price, is
another matter entirely.
“The problem we have in this entire play is we’re still behind on midstream infrastructure and we need
pipelines to get the gas out of the region,” said Ned Hill, an economist
and former dean at Cleveland State
University, now with Ohio State University, who has been studying Ohio’s
shale boom.
Midstream means pipelines and
processing plants for the most part.
It’s the part of the oil and gas industry
that either gets natural gas to end
markets like Canada or the East Coast
— where it sells for a fair bit more
than it does in gas-drenched Ohio —
or the part that separates out natural
gas liquids like propane, butane and
ethane and processes them.
In other words, it’s the highway to
lucrative markets for the Utica shale’s
two chief commodities — methane
and ethane — and so far there are not
enough lanes open.
To see the extent of the problem,
consider this. In recent months, natural gas has been selling nationally
for between $2.60 and $3 per thousand cubic feet (mcf). That’s at places
like the Henry Hub in Louisiana,
where gas is gathered and sent to
nine interstate pipelines that distribute it to where it’s needed across
much of the U.S.
But in Appalachia, the number of
pipelines available to take gas is limited — and that’s reflected in the
price of gas. Gas is either stranded
and left waiting to be produced later,
or it’s sold off to a market where buyers with pipeline capacity far outnumber the drillers waiting in line for
pipeline space.
So, when drillers elsewhere were
getting maybe $2.75 per mcf for their
gas, in Ohio: “On July 4, I saw Utica
gas sell for 64 cents,” said Ohio Oil
and Gas Association executive vice
president Shawn Bennett in a recent
interview.
To be fair, that’s a strikingly painful
price, even for the Utica. But that
same day in mid-July, Bennett looked
up the price of Utica gas while the
Henry Hub price was $2.80, and
found that Ohio drillers were only
getting about $1.12 for their gas.
That’s about typical, he said.
What’s worse, he said, is the fact
that the Utica’s chief strength — the
high liquid content of its natural gas,
including ethane — has turned into a
weakness.
That’s because, whether they want
to or not, drillers must pay to remove
ethane and other liquids from all but
the driest gas that they bring up. Too
much ethane, and pipelines won’t
take their gas for transport at all.
Those liquids were a bonus for
drillers a year ago. In fact, they were
the reason many drillers preferred to
sink their bit into the Utica rather than
the Marcellus or other shale plays
where there are fewer liquids.
But the price of ethane ha s dropped
along with the price of natural gas itself, meaning that now drillers must
DAN SHINGLER
Construction of a Momentum midstream processing plant is seen in eastern Ohio.
sometimes remove it at a loss — they
get less for the liquids than what it
cost to pay processors to separate
them from the gas. That leaves the
Utica at a disadvantage, Bennett said.
“The market on natural gas liquids
has now gone from a benefit to a
cost. Now, you’re selling your product for less than it cost to process, so
there’s virtually no uplift at the moment,” he said. “People are focusing
their attention on dry gas plays because they don’t have to pay for the
processing.”
From A to B
Bennett and others praying for an
end to the situation say it will only
end when gas finds more routes to
end users and when Ohio’s ethane
finds a cheap route to processors
who can turn ethane into ethylene
and polyethylene, the building
blocks of many plastics.
“It’s about finding burner tips,”
Bennett says.
Bennett notes there are several
major pipelines already under construction or about to open.
“There are a variety of projects
that have my hopes up,” he said, referring specifically to the ET Rover
pipeline, which is 710 miles, taking
gas to Michigan and Canada; the
Leach Xpress by Columbia, which is
160 miles that will connect drillers to
Houston’-based Columbia Pipeline
Group’s larger system; and the REX,
the Rockies Express pipeline that will
connect to 1,700 miles of pipelines to
western states.
“Those are three projects I do believe will be completed and will help
get some of this gas into better markets,” Bennett said.
There are other midstream projects coming as well.
There are more natural gas-burning electric plants coming online too,
including a $900 million, 700megawatt plant now being built in
Carroll County by Carroll County
Energy.
There’s at least one small “cracker” plant in the works that will help
process ethane from local drillers
into plastic feedstock planned for
Monroe County by Texas-based Appalachian Resins. Another cracker is
planned for Belmont County, this
one proposed by Asian investors, but
it’s not quite as far along.
There might also still be hope for
an Odebrecht ethane cracker on the
Ohio River at Parkersburg, though
talk of that has quieted as Odebrecht
has faced troubles in its home country of Brazil.
And, finally, there’s the big ethane
cracker Shell has been planning in
Beaver County, Pa., also on the Ohio
River — a project expected to cost as
much as $5 billion to complete.
There’s been less talk of that too, but
also some signs of hope.
“To me, It’s looking more and
more like the Shell cracker is going to
be built. I drive by it all the time.
They’re putting in power lines and
infrastructure,” said Jeff Dick, director of the Natural Gas and Water Resources Institute at Youngstown
State University.
No overnight solution
The problem is, pipelines, processing plants and natural gas-fired
power generation facilities take time
to build. None of the ethane crackers, assuming they’re built, would
come on line before 2018. The Rockies Express connection won’t be
made for a year, Columbia won’t begin its construction until next year,
and the ET Rover line won’t be connected until 2017.
Until then, drillers in Ohio have to
hope that natural gas prices recover
nationally enough to improve their
profits here — even if they do sell
have to sell their gas for less than
drillers in other shale plays — or
hope that Ohio attracts more power
plants and industrial users that can
buy the gas locally. Or both.
But things will improve, industry
executives promise.
“I don’t think this is the new normal; it’s the exception,” said Frank
Tsuru, president and CEO of Momentum M3 Midstream, which has
built $1.6 billion worth of processing
plants, mostly to separate ethane
from Ohio’s wet gas.
Tsuru would love to see the improvement come sooner than later.
Like the drillers, he, too, needs a
market for his ethane, and he’s hoping some combination of new cracker plants and ethane pipelines, now
on the drawing boards, will give it to
him.
“The rock is good, the performance of the Utica wells is terrific. I
don’t think anyone has anything to
worry about,” Tsuru said. “We just
need to get come take-away for our
products.”
20150727-NEWS--17-NAT-CCI-CL_--
7/23/2015
1:14 PM
Page 1
CYCLE
deep beneath eastern Ohio.
When McClendon said that, in
September 2011, the price of gas recently had been beaten down, along
with the price of oil, by a severe economic slowdown from which neither the world nor the United States
had yet recovered. Gas was selling at
roughly $4 per thousand cubic feet
(mcf), but many industry backers
were confident it would bounce
back. After all, in the years leading up
to the recession it had been selling
for $6, $8, even $10 per mcf.
Except, it didn’t bounce back.
Plagued by their own success at finding and extracting natural gas,
drillers flooded the market and saw
lower and lower prices. The national
market price for gas was close to $2
per mcf in 2012 and, though it briefly
popped above the $4 mark in 2014,
the price has remained below $3 per
mcf so far this year.
That’s caused a slowdown in
drilling across the nation, but perhaps more so in the Utica, where gas
has been trapped and selling at lower prices than elsewhere in the U.S.
The number of rigs drilling in Ohio
has dropped with the price of gas.
There were 59 horizontal drilling rigs
working Ohio’s shale in December
2014. Since June 1, the number of
rigs working in the state has been between 18 and 25, far less than half
what it was.
Fewer rigs means fewer wells being drilled, fewer sales for the industry’s supply chain, less need for employees and things like trucking and
oilfield service — not to mention a
slowdown in royalty payments to
Ohio landowners and a slump in
eastern Ohio’s sales of everything
from pickup trucks to hotel rooms.
Companies that make drilling
equipment have seen their sales
slump, and steelmakers across the
state that were enjoying a boom in
the sale of steel tubing virtually all
have announced one or more rounds
of major layoffs in the last year.
Things have certainly slowed
down in Carroll County, which was
an early epicenter of Utica drilling
activity and has seen more wells, rigs
and industry workers come in than
probably any other Ohio county.
There were eight rigs feverishly
drilling wells there a year or so ago.
“With the severe decline in prices,
it’s my understanding we’re down to
two rigs now — and the two rigs are
necessary for Chesapeake, which is
our largest producer, to keep leases
held by production,” said Carroll
County economic development director Glenn Enslen.
In other words, the company is
drilling wells only because its lease
terms with landowners requires that
it do so by a certain date — or it loses
its lease. That doesn’t mean the tap
will be opened wide, though, or that
the company is drilling at anywhere
near the pace at which it could.
Enslen is careful not to make light
of the situation — for people whose
jobs at a supply or service company
are endangered, or for businesses
facing slumping sales, the situation
is no joke. But the longtime local official says the economy in and
around his community is still much
stronger than it had been for
decades before the shale boom.
Construction just started this
month on a new power plant that
will not only provide 900 construction jobs for up to three years, but is
committed to paying into the local
school system for 30 years. That will
enable local schools that have not
passed a tax levy since the 1970s to
build new schools for grades K-12,
he said. And there are still jobs, even
for those with no college degrees, if
they have the right skills.
“If you have a commercial driver’s
license, they’ll fight over hiring you,”
Enslen said.
A silver lining
So far, local employment in places
like Carroll County has not been affected much by the slowdown, say
Enslen and others.
That’s probably because the rigworkers who have packed up and
left were mostly workers from outof-state, said economist Ned Hill,
who has studied the economics of
the Utica for four years with Cleveland State University. He recently
moved to Ohio State University.
Hill said he’s not expecting to see
a spike in unemployment, even with
a slowdown in drilling, as a result of
jobs lost in the drilling industry —
but it could have effects elsewhere.
“Because most of the crews
drilling are from out of state, you
probably won’t see it in our in-state
numbers. But it will have an effect
on retail sales and lodging,” Hill said.
“We never had that much direct employment in industries directly related to oil and gas extraction, most of
it was from the construction of mid-
stream infrastructure — and that
hasn’t stopped.”
Enslen and Hill both also see a silver lining to the slowdown: It will
give everyone from local governments to midstream pipeline and
processing companies a chance to
play catch-up after being far behind
the pace of production since drilling
in the Utica began.
Carroll County has been struggling to provide roads, water and
sewer hookups for businesses still
eager to locate there in order to service the Utica. Some potential new
businesses have had to put off their
plans or grow more slowly than
they’d like.
“I believe now this will give us
some breathing room to get some of
that done. And the industry will
come back, because it is cyclical,”
Enslen said.
That’s something you hear a lot in
the Utica region these days: “It’s
cyclical.” The oil and gas industry is
famous for its boom and bust cycles,
as most insiders with a Texas area
code will attest.
“This thing is cyclical — and we’re
in a little bit of a (down) cycle —
right now, but I feel good about
where we are,” said Frank Tsuru,
president and CEO of Houstonbased Momentum M3 Midstream.
Together with its partners, Momentum has so far invested about $1.6
billion on gas processing plants and
gathering lines in Ohio, and Tsuru
said he’s glad for every penny
they’ve spent so far.
“I’d buy more (processing capacity) if I could,” Tsuru said, noting that the Utica, at least in terms
of the production of natural gas and
related liquids like ethane, has
17
failed to disappoint. In fact, in spite
of the bad news of recent months,
most observers say the Utica shale
is working out just fine — and few
qualified experts express much pessimism over the shale play’s longterm viability and success.
“I’m not concerned — not at all,”
said Jeff Dick, director of the Natural Gas and Water Resources Institute
at Youngstown State University.
He’s also a petroleum geology professor and a landowner waiting for
his property in Columbiana County
to be drilled.
Ohio’s gas and other resources
aren’t going anywhere during the
slump, Dick figures, and if anything,
prices for them should only get better. He counsels patience.
“I talk to my neighbors, farmers
around me, and I say, ‘What’s the
hurry?’ I tell them in five or six years,
maybe you’ll get $5 (per mcf). But
they all say, ‘I want the money
now,’” Dick said. “There’s a feeling
in the general population that it’s a
one-time chance — get it now.”
But if Ohio landowners don’t cash
in now, then when?
That’s the half-trillion-dollar
question, if McClendon’s initial projections for the Utica hold true.
The answer, says OOGA’s Bennett,
depends on a number of factors, including how quickly more pipelines
are built in Ohio, how quickly new
uses of natural gas come into play
and, more than anything, on the
price of natural gas itself.
“Everybody’s going to slow down,
try to make it through this lull and
wait for prices to rebound before we
get back to where we were. When
will that happen? I just don’t know,”
Bennett said.
20150727-NEWS--18-NAT-CCI-CL_--
18
7/23/2015
1:15 PM
Page 1
Job picture is losing some momentum
By DAN SHINGLER
[email protected]
There was a time in Ohio when
just about any new graduate with a
degree in geology or petroleum engineering could pick the company
they wanted to work for and probably even pick where they wanted to
work.
That time was 2014.
Today, for the time being at least,
is a whole new world.
“It was definitely tougher this
year. I still have about 10 kids that
are still looking for permanent
jobs,” said Bob Chase, who retired
this summer from his post as chair
of the Department of Petroleum
Engineering and Geology at Marietta College.
Energy and
Natural Resources
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He’s been teaching petroleum
engineers and helping them find
work at the school since 1978.
This year, the school awarded degrees in petroleum engineering to
65 students, and Chase worked with
a few more students that got degrees in geology.
While all but about 10 have found
jobs, they’ve not had their pick of
jobs and locations the way some
previously classes did. Some who
might have wanted to stay in Ohio,
for instance, have had to accept
jobs in other states, where there is
currently more drilling and exploration.
“Two years ago, that would not
have been a problem,” Chase said.
At Youngstown State University,
about 100 students graduated this
year with degrees in geology. They
too are finding a job market that,
while still offering opportunities, is
more limited than it was a year or
two ago.
“All of our students, unless academically they’re just scraping by,
they get jobs. They just might not
get them in the first month anymore,” said Jeff Dick, a geology professor and director of the Natural
Gas and Water Resources Institute
at Youngstown State.
“If you want a job as a geologist,
you can have a job,” Dick said. “It’s
just a matter of where you’re willing
to move to and how hard are you
willing to work.”
On the blue-collar side of things,
there are fewer jobs for rig workers
in Ohio than there were a year ago
— a halving of the number of the
rigs operating in the state took care
of that.
But economists say most of those
jobs were held by out-of-state
workers so, while the loss of their
spending will be felt by local businesses, they will not likely affect
Ohio’s unemployment rate.
Other workers, on the construction side of things, are busy.
There are still plenty of pipelines,
processing plants, and other infra-
structure projects in the works,
providing jobs for pipefitters, construction workers and operators of
heavy equipment.
Michael Bertolone, a trustee of
Operating Engineers Local 18 in
Cleveland, says his union still sees
demand for workers who can operate the heavy equipment needed to
build pipelines and other infrastructure.
“It’s kept us busy,” Bertolone
says of Ohio’s growing shale drilling
industry.
But jobs have not become so
easy to get that the union is giving
them away either — and Local 18
has been in a spat with the builders
of the ET Rover pipeline, for their
use of non-union contractors to offload steel pipe in Massillon.
The really bad news, in terms of
jobs supported by oil and gas, has
come from area steel companies.
Virtually every mill in Ohio making
steel tubing has announced significant layoffs, including Timken
Steel in Canton, Republic Steel and
U.S. Steel in Lorain and Vallourec
Star in Youngstown.
Together, those mills have idled
nearly 1,000 workers in the last
year, all of them citing low demand
from the oil and gas sector in the
process.
What remains to be seen, however, is how a slowdown in drilling
will impact smaller businesses.
That includes small companies
that make parts or provide services
to drillers, as well as countless hotels and restaurants across eastern
Ohio, some of which only recently
sprung up to serve the shale boom.
“Because most of the crews
drilling are from out of state, you
probably won’t see it in our in-state
numbers,” said economist Ned Hill,
formerly of Cleveland State University and now a faculty member at
Ohio State University, commenting
on the impact of a drilling slump on
Ohio jobs.
“But it will have an effect on retail sales and lodging,” he said.
YOU CAN WATCH US, TOO
Look for Crain’s Weekly Report webcast, which will hit your inboxes Friday
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20150727-NEWS--20-NAT-CCI-CL_--
20
7/23/2015
11:14 AM
Page 1
Contact:
Phone:
Fax:
E-mail:
Denise Donaldson
(216) 522-1383
(216) 694-4264
[email protected]
REAL ESTATE
Copy Deadline: Wednesdays @ 2:00 p.m.
All Ads Pre-Paid: Check or Credit Card
AUCTIONS
LAND
30 Acres in Chagrin
Falls School District
ATTENTION SELLERS
Call to include your
Property in an
Upcoming Auction!
-Located in South Russell Village
(Geauga County)
-Beautifully Wooded Property
-Zoned 2 acre residential
$850,000.00
AUCTION - AUGUST 13, 2015
COMMERCIAL, DEVELOPMENT & RESIDENTIAL PROPERTIES
PARTNERSHIP DISSOLUTION FORCES IMMEDIATE SALE!
8 OFFICE CONDOS - THE COURTYARD OFFICE PARK
7055 ENGLE RD., MIDDLEBURG HTS., OH 44130
Please contact Paul at
216-469-7529
OFFERED INDIVIDUALLY
WITH PUBLISHED RESERVE
PRICES OF ONLY:
$20.00/SF
All units located within 6 contiguous buildings. Units ranging from 800-2,600
SF, Published Reserve Prices range from $17,000 to $52,000 per unit ($20/Sq Ft).
Solid brick constructed one floor private entranced buildings. Immediate highway
access (½ mile from I-71 Bagley Rd Exit) and minutes from Cleveland Hopkins Int’l
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parking. Great upside potential for users, investors or user/investors.
For daily on-line
updates, sign up @
CrainsCleveland.com/Daily
On-Site Inspections: Thursdays, July 30th & Aug 6th from 1:00 PM to 3:00 PM
OUT-OF-STATE SELLER ORDERS IMMEDIATE SALE!
OFFERED WITH A PUBLISHED
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FOR SALE
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3592 LEE RD., SHAKER HEIGHTS, OH 44120
LAND CONTRACT
Attractive all-brick constructed office building with ample parking in rear.
Centrally located just minutes from SR-8 & SR 422, the property was built in
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leaving a terrific opportunity for the new owner to custom finish.
3 acres. 5700 s.f. beautiful
building, nice area near 271.
New 20 yr. roof, HVAC &
parking. $249K
On-Site Inspection Dates: Thursdays, 10:00 AM to 12 Noon, July 30 & August 6
RESIDENTIAL PROPERTIES
RELOCATION FORCES IMMEDIATE SALE!
330-468-5238
RESERVE PRICE OF $125,000
2,318 SF RESIDENTIAL HOME
BIDDING TO COMMENCE AT:
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1443 ELMWOOD, LAKEWOOD, OH 44107
5 Bedroom, 2 ½ Bath, 2-story colonial with 2 ½ car garage. The home also
includes a full basement, central A/C, 2-fireplaces and spacious outdoor patio.
Located in an established residential community the home has been recently
updated including Kitchen, Baths, HVAC, roof, etc.
Open House Dates: Sundays, August 2 and 9 from 12 Noon -1:30 PM
RETIRING OWNER ORDERS IMMEDIATE SALE!
2,144 SF DUPLEX - INVESTMENT OPPORTUNITY!
RESERVE PRICE OF ONLY:
$15,000
2029 WEST BLVD., CLEVELAND, OH 44102
Currently rented for $700/Month. This 2,144 Sq. Ft. Duplex consisting of 4 Bedrooms,
2 Baths on approximately .8 acres is a terrific opportunity for homebuyers and
investors. Located in an area of wide boulevards, tree-lined streets, old-fashioned
front porches, Cleveland doubles, newly constructed townhomes and lofts.
List your commercial, industrial,
executive property or retail space
HERE!
Crain’s Cleveland Business’ classifieds will help you fill that space.
Contact Denise Donaldson at 216.522-1383
Open House Dates: Sundays, August 2nd and 9th from 2:00 PM to 4:00 PM
[email protected]
AUGUST 27th AUCTION
BIDDING TO
COMMENCE AT ONLY:
PARTNERSHIP DISSOLUTION FORCES IMMEDIATE SALE!
150 +/- ACRE DEVELOPMENT SITE
150 +/Acres
8
$750,000
I-271 & SR-8, MACEDONIA, OH 44056
($5,000/AC)
Located near I-271 and SR-8 and bordered by Highland Rd., Empire Pkwy
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surrounded by several established residential developments. Possible rezoning opportunity for the astute builder/developer.
FOR BROCHURE AND TERMS OF SALE, CALL:
216.861.7200
CHARTWELLAUCTIONS.COM
$)"358&--"6$5*0/4t)"//"$0..&3$*"-#30,&3"(&
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Crain’s on-line Classsifed
When you advertise in our print publication, your ad will
also appear in our on-line classifed for a full month.
Call Denise Donaldson at 216-5
522-1
1383
to reserve your space.
CLASSIFIED
BUSINESS SERVICES
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BUSINESS SERVICE OWNERS!
Where to find your professional!
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your service.
To place your Crain’s Cleveland Business
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Call Denise Donaldson at 216-522-1383
To find out more, contact
Denise Donaldson at 216.522.1383
___
Confidential box numbers available @ $35 per ad.
20150727-NEWS--21-NAT-CCI-CL_--
7/24/2015
11:50 AM
Page 1
21
TRIBE
the overhang,” he said. “I think
they’re all gone.”
The 13 sections in the 200 level
each have six rows of seats. In
Thomas’ case, the seats are terrific
— an unobstructed, and dead-on,
view of home plate. That’s not the
case in other areas along the thirdbase line, as the overhang from the
suite levels blocks the view of the
scoreboard and other parts of the
ballpark.
‘Cosmetic facelift’
Mark Klang, owner of Amazing
Tickets Inc. in Mayfield Village, said
he has “a few” season tickets in the
200 sections. He said he’s been
hearing about those seats being removed for at least the last four
years.
“It’s nothing new,” Klang said.
According to Klang, the next
phase of renovations is expected to
include a club behind home plate
that will be exclusively for seasonticket holders — possibly just for
those in the box seats adjacent to
the concourse. (Thomas said he’s
also heard of plans for a new bar or
“eating and drinking area.”)
“It will be pretty exciting — pret-
ty similar to the Terrace Club from
1994 to about 2001,” Klang said. “It
was difficult to get into. They kind
of built some hype around the Terrace Club, but the novelty has kind
of worn off now.”
The Indians refreshed the foodand-drink options at Progressive
Field this season with the addition
of The Corner and the five neighborhoods in the Right Field District,
which has offerings from such
Northeast Ohio staples as Melt,
Barrio and Sweet Moses. Two years
earlier, the Infiniti Club, which features a lounge and premium seating along the first-base line, debuted.
Progressive Field, however,
doesn’t currently have a dedicated
space specifically for season-ticket
holders.
Klang expects that to change
soon.
The possible removal of the seats
under the overhang is “basically a
cosmetic facelift for the ballpark,”
he said. “You will be able to see into
the stadium from back there.”
Renewals ‘on hold’
The anticipated changes aren’t
an inconvenience for Klang, a bro-
ker who said he’ll “just relocate” his
200-level season tickets to another
area of the ballpark.
For Thomas — who has held
Tribe season tickets since 1993 and
has been in his current location for
14 years — a possible move isn’t so
simple.
Thomas, who shares his season
tickets with a few friends and said
he attends half of the Tribe’s home
games, pays about $20 per seat. According to the price chart from the
3D seat viewer on the Indians’ website, moving to Section 154, the
area directly in front of Thomas’
perch behind home plate, would
cost from $38.43 to $69 per game.
The cheapest of those tickets, the
field-box seats in the last seven
rows of Section 154, cost $3,113 per
season ticket, which would be
about a $1,400 hike for the Akron
business owner.
Eric Pelham — a Tribe seasonticket holder since 2006 who owns
City Tap at 748 Prospect Ave., along
with three bars in Bowling Green —
has similar concerns. He’s sat in
Section 259 along the third-base
line for the last five years.
Pelham said he received a call on
Monday, July 20, telling him his
seats wouldn’t be available in 2016.
“It’s disheartening,” he said. “I
asked my rep, ‘You’re eliminating
these tickets. Can I move to a comparable section or even into the top
five rows (of the field-box seats) at
a discounted price?’ There is no
plan in place like that.”
Every team that renovates its facility is forced to relocate seasonticket holders.
In the Indians’ case, the moves
caused by the possible removal of
seats in the 200 level might be a little more complicated, since the
prices in the sections under the
overhang are so low.
“They’re not selling all those tickets in that area,” Thomas said. “I
hope they give us something in the
back row (of Section 154) for maybe
$25 a game. That would seem to be
reasonably fair.”
A season-ticket holder who
asked to remain anonymous told
Crain’s that when the Indians made
a section of club seats along the
third-base line available only to
groups in 2015, he was given the
chance to move to better seats at
the same price he was paying. The
deal was good for one season.
That might appease the likes of
Thomas and Pelham. The longtime season-ticket holders expect
to learn more when they receive
their renewal packages in the coming weeks.
Danburg, the Tribe’s senior director of communications, said the
renewal process for the seasonticket holders who have been notified of a possible change is “on
hold.” Plans for the next phase of
renovations — which Danburg said
could come from a “mixture” of
team financing and dollars from
Cuyahoga County’s sin tax on alcohol and cigarettes — are still being
finalized. He said the club hopes to
make an announcement by the end
of the 2015 season.
The Indians, to their credit, have
one of the most affordable pricing
plans in Major League Baseball. According to Team Marketing Report’s Fan Cost Index, the Tribe’s
average ticket cost of $22.38 in 2015
was the seventh-cheapest in MLB,
and the $4 norm for a 12-ounce domestic beer was tied for the lowest
in baseball.
Pelham and Thomas believe the
value is especially good for those
who don’t mind sitting under the
overhang.
“I have the best seats in the
house for the money,” Thomas
said.
PRESENTED BY
The Solon Select is a
distinguished group
of more than 800
businesses that have
chosen to locate in
the City of Solon.
PRODUCED BY
GOLD SPONSOR
SILVER SPONSOR
When It Gets
Down to Business…
Solon Gets It!
The City of Solon welcomes these new businesses:
Berkshire Hathaway Home Services
Machinery Exchange Corporation
Nobu Tei
Always free to attendees, the Expo provides a day of
Cleveland’s best food, entertainment, knowledge and
inspiration that will leave you with a revitalized
outlook on your own upcoming events.
EARLY BIRD EXHIBITOR
SPONSORSHIP
DEADLINE: AUGUST 1
Park Place Technologies LLC
Planet Fitness
Trend Consulting Services
And thanks these real estate professionals for
bringing new business to Solon:
Jeffrey Calig – NAI Daus
Terry Coyne – Newmark Grubb Knight Frank
David Hexter – NAI Daus
Kristy Hull – Newmark Grubb Knight Frank
Contact Nicole Mastrangelo at [email protected]
Georgeann Lawrence – Cleveland Commercial Group
ATTENDEE REGISTRATION NOW OPEN!
5VFTEBZ0DUt".1.
The Music Box, The Improv & Shooters
.BJO"WF$MFWFMBOE0)
Solon’s Got It!
Prime industrial, office and retail sites at www.solonohio.org
CrainsCleveland.com/EventExpo
City of Solon • 34200 Bainbridge Road • Solon, Ohio 44139 • 440.337.1313
Peggy Weil Dorfman, Economic Development Manager • [email protected]
20150727-NEWS--22-NAT-CCI-CL_--
7/24/2015
10:55 AM
Page 1
THE WEEK
JULY 20 - 26
GETTY IMAGES
The big story: Ohio Gov. John Kasich officially became the 16th contender hoping to take the
stage on the last night of the Republican presidential convention in Cleveland a bit less than a
year from now. Speaking at Ohio State University, Kasich talked about his faith, personal responsibility, resilience, empathy and family —
what he called the building blocks of America.
“We’ll take what we learned in the heartland and
take that to Washington, D.C., and fix the country,” Kasich said. Still to be determined is if he
polls well enough to qualify for the GOP’s first
debate, on Aug. 6 at Quicken Loans Arena.
What’s to eat?: Nestlé celebrated the official
opening of its Nestlé Research & Development
Center in Solon — a $50 million project for which
the company has huge ambitions. The 144,000square-foot center’s goal focuses on nothing less
than “transforming the way the world enjoys
frozen and chilled foods,” Nestlé said. That mission reflects the “profound shifts in how people
eat right now,” said Paul Grimwood, chairman
and CEO of Nestlé USA. With the 2014 move of
Nestlé Pizza to Solon and the R&D center’s opening, Nestlé employs more than 2,200 people in
the Cleveland area.
Moving on: The president and CEO of Myers
Industries Inc., John C. Orr, will retire as an officer effective Dec. 31. Orr will remain on the company’s board until the 2016 annual meeting.
Akron-based Myers makes polymers for a variety
of industries and is a distributor of tools, equipment and other supplies for the tire, wheel and
under vehicle service markets. Orr has been CEO
since 2005. The company is working with DHR
International Inc. to find a successor.
A legend’s illness: Retired U.S. Rep. Louis
Stokes, a Democrat who served in Congress from
1969 to 1999, announced he was diagnosed with
lung and brain cancer. In a statement, Stokes, 90,
said, “For years, I’ve made it my career in fighting for the people of Ohio, but now I must devote
my time and energy to working with my doctors
in this current health challenge which my family
and I are totally immersed.” The Cleveland Public Library’s main building expansion in downtown Cleveland and the Veterans Administration hospital here are among buildings that bear
his name.
Hitting the spot: Drugstore chain Rite Aid
and HealthSpot, a Columbus-area company that
makes a product best described as a virtual doctor’s office, opened HealthSpot stations inside 25
Rite Aid pharmacies in Ohio. The HealthSpot stations are in the Akron/Canton, Cleveland and
Dayton/Springfield markets. Customers will
connect with medical professionals from institutions including the Cleveland Clinic and University Hospitals.
22
REPORTERS’ NOTEBOOK
BEHIND THE NEWS WITH CRAIN’S WRITERS
Hispanic Alliance
prepares for the future
organizations in Cleveland,” Crespo said.
— Timothy Magaw
There’s a major concern by some that
there isn’t enough Hispanic representation
on Cleveland’s boards and commissions,
and one local nonprofit hopes to prepare
promising professionals in the Hispanic
community for those roles and others
through intensive leadership training.
The Hispanic Alliance is currently recruiting its fourth cohort of students for its leadership development initiative, which kicks
off with an orientation Aug. 20. Slots are still
available for the program, and interested individuals are encouraged to apply at
HALDICLEV.org. Program participants
meet once a month to participate in training
sessions and community service projects.
“The Latino community and the assets of
the Latino community have been invisible
to the overall business and corporate community in Cleveland,” said Juan Molina Crespo, the alliance’s executive director.
“There’s a tremendous amount of value to
corporate America beginning to recognize
the importance of being multicultural and
bilingual and what that brings to a corporation or company.”
There are no hard and fast requirements
to participate in the program. Crespo, for
one, said past participants ages have ranged
from the early- to mid-20s all the way to the
late 50s. Typically, he said, participants are
in middle-management and looking to advance their careers.
“We’re excited about the potential of this
and what it means not just for the individuals involved, but for what it means for other
IT recruiter adds
talent to the menu
WHAT’S NEW
BEST OF THE BLOGS
Nicole Dauria was reading through a
March article in Crain’s about the shortage
of qualified talent in the hospitality industry
when inspiration for a new business opportunity struck.
Dauria, a Solon-based IT recruiter, said
she called her longtime close friend, Fire
Food & Drink owner Douglas Katz, and other chefs to discuss the industry-wide challenge and a potential solution. She tested
their typical approach and posted for a line
cook position on Craigslist and Indeed.
“I got 100 résumés, some from people in
Kohl’s who don’t have any cooking experience,” she said. “Restaurant owners and operators may have to sort through all those
résumés to find one possible candidate, and
they don’t have that kind of time.” So Dauria launched clehospitalityjobs.com, an online database for Cleveland-based hospitality
industry employers and job candidates. Résumés are screened before they are posted.
The site is free for job candidates, although restaurant clients pay a tiered
monthly fee to post a job position and have
access to the job seeker database. The database already has amassed more than 100 résumés within two weeks. Employer clients
so far include Spice Cos., Crop Bistro & Bar,
Grove Hill Tavern, Fire Food & Drink and
Red Restaurant Group.
“We want these employers to have access
to a database of qualified candidates so they
Excerpts from recent blog entries
on CrainsCleveland.com.
Exchange rate: One Corporate Exchange, a
Beachwood office building with corporate tenants, was acquired by an affiliate of Brooklyn,
N.Y.-based Shelbourne Global Solutions LLC.
Through Shelbourne One Corporate Exchange
LLC, the investors paid $11.25 million for the
building with 89,000 square feet of office space.
The four-story structure is home to high-profile
tenants including the corporate headquarters of
Aleris, a global rolled aluminum products company.
Drink to this
COMPANY: Excelsior Marking,
Akron
PRODUCT: HandJet EBS-250
The company’s new marking device is a
hand-operated, ultra-compact and light
ink-jet printer.
It operates using battery power or wireless controls.
The printer weighs just under two pounds
and is designed for users who need to mark
products in the field.
By using solvent-based inks in an array of
colors, the HandJet EBS-250 “provides fast,
clean printing on a variety of corrugated
materials, in addition to metal, glass and
plastic substrates,” the company says. The
product’s high-volume ink-jet cartridge
provides up to 100,000 characters.
Excelsior says the HandJet EBS-250 uses
a Microsoft Windows-based program to format and transmit messages that are created
on a personal computer. Messages can consist of alphanumerics and logos from Windows fonts and symbols, as well as diacritical characters.
The hand-held system maximizes battery
life up to 50 continuous hours. Its battery
recharges in just two and a half hours.
Excelsior is a full-service marking products company.
Its products include steel branding dies,
stencils, rubber stamps, roll coders and steel
stamps.
For information, visit www.excelsiormarking.com.
Send information about new products
to managing editor Scott Suttell
at [email protected].
Wine Enthusiast released its list of the
100 best U.S. wine restaurants for 2015, and
Ohio’s only entry is from Cleveland: chef
Jonathon Sawyer’s Trentina.
Here’s what the magazine had to say
about the restaurant:
The Wine Program
The discovery-driven wine list highlights
Trentino Alto-Adige, Friuli-Venezia Giulia,
Veneto, Lombardy and Valle d’Aosta, with a
small sampling of wines from Germany and
Austria as a nod to the history of TrentinoAlto Adige.
Favorite Pairing
Strangolapreti alla Trentina, with Grosjean 2012 Gamay Valle d’Aosta.
Fun Fact
The beverage pairing with the 12-course
Menu Bianco includes non-alcoholic pairings in addition to wine, beer and cocktails.
The place to be
A “penchant for downtown living” has
“become a national phenomenon and
spread into secondary cities, especially
those in the Midwest … which have seen a
surge in mixed-use urban development and
population growth,” according to a new
study by CBRE Group Inc. summarized in a
piece by real estate website GlobeSt.com.
The company surveyed 11 Midwest cities
for the study “and found a slew of investment activity taking place, with both Fortune 500 companies and new industries like
high tech relocating into the region’s CBDs
in order to attract and retain all that youthful talent,” according to the story. “CBRE
also noted that many local governments
have recognized the opportunities and have
invested in downtown areas to make them
more accessible and walkable.”
The piece focuses on Indianapolis and
notes that since 2005, that city’s downtown
can focus on building their businesses,” she
said. If all goes accordingly, Dauria plans to
expand the job board concept nationwide.
— Kathy Ames Carr
Tucker Ellis puts
its lawyers on trial
As fewer legal cases are resolved today by
trial juries, Tucker Ellis LLP has launched a
program designed to bolster courtroom
skills of the firm’s mid-level trial lawyers.
Led by Cleveland trial lawyer Bob Tucker,
the Tucker Ellis Trial Institute will encompass
every aspect of a real trial, from being hired
by a client to defend a products liability case
to trying the case in front of an actual jury.
The inaugural institute will conclude with
four jury trials that will be conducted in
Cleveland between the spring and summer of
2016 with senior trial lawyers serving as “special masters,” who will provide feedback on
everything from case strategy to handling depositions. Lawyers from the firm’s Cleveland,
Columbus, Los Angeles, San Francisco and
Denver offices will participate.
Tucker said 40 years ago, lawyers were in
court every day for small cases. But those
hands-on experiences don’t come along as
often these days. The trial institute is designed to help fill that gap.
“This remarkable program couples trial
skills coaching with real-client involvement,
making it unlike any other training available
in the legal community,” said Tucker Ellis
managing partner Joe Morford. “We strive to
provide our clients a different and better experience than they would have with any
other law firm.”
— Jeremy Nobile
population has grown from 16,900 residents
to the current 27,000. This growth was mirrored in most of the other cities in the study,
which included Kansas City, Cincinnati,
Columbus, Cleveland, Minneapolis, Milwaukee, Detroit, St. Louis, Pittsburgh and
Louisville. Downtown Cleveland’s population now exceeds 13,000 and is projected to
rise to 23,000 by the end of 2020, according
to Downtown Cleveland Alliance.
CBRE “found that all of the cities in the
survey have seen increased construction
spending, particularly on mixed-use projects
meant to attract millennial residents,”
GlobeSt.com reported. The report noted that
Cleveland, Detroit, Pittsburgh and Minneapolis “all currently have more than $1 billion worth of new construction projects underway.”
The most for your money
Thirty. That’s the number of Cleveland
houses you could buy for the cost of the average apartment in Manhattan’s SoHo, according to an analysis from CityLab.com.
In bustling SoHo, the average apartment
these days is going for $2,912,792, data from
Zillow show.
CityLab.com used Zillow data to find the
10 large metro areas in which home buyers
could purchase the most homes for the
price of one in SoHo. The markets primarily are in the South and the Rust Belt, CityLab.com found. Here are the numbers:
Memphis, 38; St. Louis, 34; Birmingham, 32;
Cleveland, 30; Detroit, 29; Oklahoma City,
28; Cincinnati, 26; Atlanta, 23; Nashville, 20;
and Las Vegas, 18
The gap in housing prices “is even more
disparate when comparing SoHo to specific
ZIP codes from Zillow’s data,” CityLab.com
noted. In cities like Detroit, Flint and Saginaw in Michigan, or Toledo, “a potential
apartment owner could snap up whole
blocks of average homes in certain ZIP
codes: more than 50 in Toledo or Saginaw,
and nearly 70 in the city of Detroit,” according to the story.
20150727-NEWS--23-NAT-CCI-CL_--
7/24/2015
10:00 AM
Page 1
12 rock stars
of the business world.
Live at playhouse square. september 30.
Guy Kawasaki
former chief evangelist, Apple;
author; entrepreneur
David Stern
former NBA commissioner
Jackie Joyner-Kersee
three-time Olympic gold medalist,
philanthropist
Seth Godin
best-selling author, entrepreneur
Fuel: cleveland
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The 2015 Sprinter Cargo Van
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The 2015 Mercedes-Benz Sprinter Cargo Van features Best-In-Class cargo room and payload1 with towering
available interior standing heights up to 7 feet. The Sprinter’s 5'x8' load floor offers abundant room for
plywood, sheetrock and other material, while a standard turbo diesel engine delivers up to 18%2 greater fuel
efficiency. And, to protect your business, standard Crosswind Assist3 helps keep your vehicle on course in
strong, gusting winds. To discover better ways to build your business, visit northolmstedsprinter.com.
Sprinter of North Olmsted
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*Plus optional equipment. Not all options available in the U.S. 1. Based on a comparison of the Automotive News classification of full-size commercial vans at time of print. 2. Fuel savings estimate of up to
18% according to FTP75 testing of engine OM651 (4-Cylinder) versus MY13 OM642 (V6). Individual mileage will vary, based on factors including vehicle load, driving style, road conditions and fuel quality.
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* Offer expires 7/31/15. 2015 smart pure coupe $99/mo for 36 mos with $1,393 due at signing. Based off an MSRP of $14,330. U.S. Environmental Protection
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July 27 - August 2, 2015 - Crain`s Cleveland Business

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