Taxing Time For Oil - Crain`s Cleveland Business

Transcription

20150223-NEWS--1-NAT-CCI-CL_--
2/20/2015
2:57 PM
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$2.00/FEBRUARY 23 - MARCH 1, 2015
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Clinic can
learn from
cable, too
A 6.5% tax on oil and gas extracted
in Ohio would amount to about $3
on each barrel and about 15 cents
on each mcf of gas.
DAN SHINGLER
Health care giant’s innovation
team is building diverse array
of corporate partnerships
Taxing time for oil
Ohio Tax Commissioner Joe Testa, a
staunch proponent of increasing the
severance tax, conceded that the lowprice environment for oil and gas is not
helping the administration to win support. Cutbacks at steel mills that supply
the industry, reductions in drillers’
budgets and low prices at the gasoline
pump all drive home the point that
prices are low, Testa said.
But he said the impact on Ohio’s
drillers is being overblown, largely because Ohio is a natural gas play for
drillers, and it’s the price of oil that has
taken the biggest hit over the last six
months. He does not think the state will
see a sharp cutback in drilling.
“A lot of it, I think, is more rhetoric
than reality,” Testa said. “Production
will increase, and we were really very
conservative on the production (assumptions). Our production projections really mirror the industry’s pretty
well.”
Much of the pushback against the
Maybe the next big medical breakthrough will come
from a cable company?
Big companies from all sorts of industries are helping
the Cleveland Clinic come up with big ideas — and turn
them into products.
And none of them are health care companies.
In fact, one is a cable company: Last week, Cox Communications became the fourth major corporation to
form an alliance with Cleveland Clinic Innovations, the
Clinic’s business development team.
Why would the Clinic want to work with a cable company?
Cox could help the Clinic figure out how to deliver
health care services to the home, said Brian Kolonick,
general manager of the Clinic’s Global Healthcare Innovations Alliance program. After all, Cox serves roughly 6
million homes and businesses in the United States.
Thus, the Clinic and Cox have formed Vivre Health, a
joint venture company that would commercialize technologies and services related to home health care delivery.
Indeed, all four of the major corporations that have
formed alliances with Cleveland Clinic Innovations bring
different capabilities to the table.
Lubrizol is a specialty chemicals company. Parker Hannifin makes mechanical products. IBM sells hardware,
software and technology consulting services.
However, they all see opportunity in the health care
sector. And they can help the Clinic develop new products, Kolonick said. Some would be commercialized by
the partner companies, and some would be spun off into
joint venture companies.
“We can learn a lot from somebody working in a completely different space,” he said.
The Clinic is working on specific projects with each of
See OIL, page 30
See CLINIC, page 27
Kasich’s plan to raise burden comes at a difficult period for industry
By DAN SHINGLER
[email protected]
08
Ohio Gov. John Kasich might have
run up against his toughest opponent
yet in terms of raising the state’s severance tax on oil and gas, and it isn’t the
Republican-controlled
Legislature
that’s opposed to the idea philosophically.
It’s low oil and gas prices, which are
giving the drilling industry more
rhetoric and evidence of hardship to
combat the tax proposal — and which
could sap the proposal’s potential revenues. The collapsing prices of the commodity already have caused drillers to
pull back in Ohio, and a tax increase
would only exacerbate the situation,
they say.
The governor, however, remains firm.
“It’s never the right time,” Kasich shot
back recently, when asked by a reporter
at a Columbus event whether it was a
bad time to propose a tax increase on
the industry.
7
ALSO INSIDE:
NEWSPAPER
74470 83781
0
Kasich contends that drillers in Ohio
have received what amounts to a “free
ride,” because Ohio’s severance taxes
are much lower than other producing
states.
The governor proposes to increase
the tax on oil and gas extracted in Ohio
to 6.5% of the commodities’ value, up
from the current flat tax of 20 cents per
barrel of oil and 3 cents on each thousand cubic feet (mcf). At recent prices,
the 6.5% rate would amount to a tax of
about $3 on each barrel of oil brought
up in Ohio, and about 15 cents on each
mcf of gas.
If Kasich gets his way, Ohio would go
from having the lowest severance taxes
in the United States to having a rate
that is higher than West Virginia’s rate
of 5%, but still lower than the 7.5% rate
that Texas collects. Kasich said other
governors just shake their heads in disbelief when he tells them Ohio’s current tax rate, because it’s so low.
But is now the time to try to raise the
rate?
By CHUCK SODER
[email protected]
HIGHER EDUCATION
Local professionals amp up efforts to get more
women involved in STEM fields ■ Pages 19-24
PLUS: WOMEN IN STEM STORIES ■ COLLEGE INCENTIVES ■ & MORE
Entire contents © 2015
by Crain Communications Inc.
Vol. 36, No. 8
2/20/2015
12:05 PM
Page 1
Small Business Matters
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By The Numbers
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SOURCE: NEOSA
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Northeast Ohio companies are learning a lot from biomimicry
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Zebra mussels can detect toxic algae. So maybe Avon Lake Regional
Water can figure out how to do it, too.
Turns out, fish and other underwater life forms can perform some
interesting tricks with water. Given
that they’ve been submerged in it for
millions if not billions of years.
Avon Lake Regional Water is one
of a few local companies trying to
take advantage of those skills.
Nine local companies aim to master the art of stealing ideas from
Mother Nature with the help of a local nonprofit called Great Lakes Biomimicry.
Three of them — Avon Lake Regional Water, Parker Hannifin and
Ross Incineration Services — aim to
use biomimicry to come up with better ways to monitor and clean water.
In some cases, they’re working together. And Lorain County Community College aims to help, too. The
college plans to create a water sensor
technology center on the third floor
of the sensor development center it
opened on its campus about a year
ago.
Avon Lake Regional Water plans
to take advantage of the new lab.
Like the other companies working
with GLBio, Avon Lake Regional Water will work with a student studying
for a Ph.D. in biomimicry from the
University of Akron.
The student will be tasked with
helping the utility figure out whether
there’s anything it could learn from
zebra mussels, which close their
shells when they encounter contaminated water, and any other creature
that can tell when toxic algae levels
are rising.
The utility plans to use LCCC’s water technology lab to create a sensor
that could mimic those capabilities,
according to chief utilities executive
Todd Danielson. Such a sensor could
help the utility get ready for algal
blooms like the one that contaminated Toledo’s drinking water last summer, forcing the city to issue a drinking water ban that lasted three days.
“The economic impacts are
huge,” Danielson said.
Ross Incineration Services might
use the lab, too. The company, which
is just south of North Ridgeville, has
identified a biological organism that
could help it come up with a new way
to purify the water it uses in its air pollution control system.
Lots of other companies could be
using biomimicry to develop water
technologies, too, according to Joe
Sherman, director of research and
development at Ross Incineration, a
subsidiary of Ross Environmental
Services in Elyria.
“I think it’s a great opportunity
not only for us, but any company …
that deals with water,” he said.
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GETTY IMAGES
Fish can play a role in local companies’ ability to clean water.
Parker Hannifin could use biomimicry to develop water technology, but for now it’s mainly focused
on another idea: Birds can see some
light rays that are invisible to humans, so the Mayfield Heightsbased motion and control technology company aims to come up with
a similar technology that could allow them to spot a piece of equipment that isn’t working right.
However, Parker could end up
helping Ross develop a better way
to clean water. It makes sense for
Parker, given that water touches so
many industrial process — and
Parker products, according to Pete
Buca, vice president of technology
and innovation for Parker’s fluid
connectors group.
Among those products are valves
for coffee machines and water purification systems for boats.
“Fresh water is used in so many
things,” Buca said. “It’s not just
drinking water.”
Parker has seen the benefits of
biomimicry: Inspired by the skin of
a snake, six years ago the company
developed a hose lined with ceramic hexagons. It was flexible and
much stronger than the steel pipe it
was built to replace. That pipe,
which was used to transport abrasive materials used to make cement,
would wear out every two weeks.
The new pipe has held up for six
years — and Parker sells them today, Buca said.
He’ll talk your ear off about biomimicry if you let him. Tom Tyrrell
will, too. He’s best known around
town for founding American Steel &
Wire in the 1980s, but now he’s the
CEO of GLBio.
The nonprofit has an ambitious
mission: To get people all over
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Northeast Ohio — be they researchers, business executives or
students — to start thinking about
what they can learn from nature.
Through evolution, plants and animals have already developed solutions for many of the problems we
humans would like to solve.
Tyrrell often will point to Japan’s
bullet train. Its nose was designed to
mimic the beak of the kingfisher, a
bird that can dive into water without making a splash. As a result, the
train is faster, quieter and uses less
energy.
True believers
Some of Northeast Ohio’s bestknown companies believe in the
idea: Sherwin-Williams, Goodyear
and Gojo Industries, which makes
Purell and other skin care products,
are among the companies working
with GLBio.
GLBio also has raised donations
to finance five biomimicry-related
education programs, most of which
are tied to local middle schools and
high schools.
Colleges like LCCC, the University of Akron and Baldwin Wallace
University have been weaving biomimicry into their education programs as well.
Plus, GLBio is holding training
sessions designed to help the companies it works with learn how to invent using biomimicry.
“We’ll have more … trained people in biomimicry than any other
place in the world,” Tyrrell said.
GLBio is raising money to fund its
own organization, too. The nonprofit has mainly been fueled by
volunteer work since Tyrrell started
See BIOMIMICRY, page 27
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2/20/2015
1:55 PM
Page 1
5
KeyBank is
increasing
investment
in small biz
Former Cleveland market
president Lisa Oliver is
leading a team that will
give support to firms
By JEREMY NOBILE
[email protected]
athletes and their representatives, to a link
on STACK’s popular website that is the
training centers’ primary source of referrals.
CEO Nick Palazzo, who founded the
company with friend and fellow Mayfield
High School graduate Chad Zimmerman,
said STACK has a “huge inventory in a lot
of individual communities to strengthen
relationships with customers actually on
the ground.”
Peter Barbaresi, who retained his role as
the president and CEO of the newly branded STACK Velocity Sports Performance
centers after the 2014 acquisition, said
STACK’s credibility with athletes has made
a “substantial” impact on the individually
operated facilities.
STACK added three locations last
December and has about five more “in the
queue,” said Barbaresi, who expects the
number of training centers to reach 50 by
KeyBank has more big plans for small business.
Key has launched a national Business Banking Segment — led by former Cleveland market president Lisa Oliver — to focus on helping companies develop and expand
operations, capitalizing on the sector’s growth
potential and possibly drawing new clients
and business opportunities.
As Key’s national business banking executive, Oliver will lead a team of bankers and advisers in supporting owners of businesses with
revenues up to $10 million through Key’s nationwide branch footprint. The goal is to better equip branch managers and clients with
streamlined access to advice and other resources supporting those firms both in person
and through other means, like digital or teleconferencing methods.
The business segment is about establishing
tighter relationships and providing better services and access to help businesses grow, Oliver said.
The segment is unique because of its focus
on small business owners. Larger companies
can be serviced through Key’s corporate bank,
she said.
“Business-banking size clients have very
targeted needs, very little time, and they’re
looking for partners who can create ease and
help them find a few hours in the day to do important financial work for their companies,”
Oliver said. “And most importantly, they want
ideas.”
Managers at Key’s roughly 1,000 branches
nationwide are being trained in how to better
serve and advise entrepreneurs as part of the
initiative.
Key, which has about $92 billion in assets,
also is bringing on new advisers whose purpose includes being available for questions
and consultations with clients and branch
managers on topics related to business growth
and the headwinds to that. Oliver said how
many people Key plans to hire is not yet
known, as the program continues through its
early stages.
The move reflects an investment in technology from the infrastructure the bank itself
needs to make so that access to people, data
and other resources works efficiently, to apps
and money management products for clients.
Feedback from customers helped lay the
foundation for the segment’s formation and
direction.
“Our clients like to work with local branch
managers, but we also know they find real value by having national specialists on speed
dial,” said Dennis Devine, co-president of Key
Community Bank and leader of Key’s consumer and small business lines. “Now, managers can call these specialists to work through
business issues to provide a local presence,
See STACK, page 26
See KEYBANK, page 30
STACK
EVOLVES,
EXPANDS
It’s not ‘just a media company anymore’ after
a pair of 2014 acquisitions bulked up offerings
By KEVIN KLEPS
[email protected]
STACK is celebrating its 10th anniversary, and like the goals of the thousands of
athletes to whom it has provided training
tips over the years, it believes it’s bigger
and better than ever.
The company, which originated in
Cleveland and has offices in New York and
Costa Mesa, Calif., bulked up considerably
with its acquisitions last June of Velocity
Sports Performance, the nation’s largest
sports performance training provider, and
digital developer Driven Apps.
In the last year, STACK has increased its
number of employees by 50%, from 24 to
36, and its digital audience has tripled.
Like any media company, it has transitioned from relying on its print publication
— in STACK’s case, a magazine that’s published six times per year and geared toward giving young athletes workout recommendations from established sports
stars and trained professionals — to supplementing its income with digital ads and
sponsorships. But STACK differentiates itself from many of its counterparts because
it’s doing the bulk of its business digitally,
thanks to its robust stable of content,
videos and, now, mobile applications and
training centers.
“We take pride in the fact that we’re not
just a media company anymore,” said Josh
Staph, STACK’s senior vice president of
content and a former Harvard University
running back. “That’s a key distinction for
the sales and marketing team. We’re able
to offer much more than a typical media
company can to a competing partner.”
43 ‘content studios’
STACK’s first magazine, which was distributed to 3,000 high schools nationwide
in February 2005, had LeBron James, then
in his second season with the Cleveland
Cavaliers, on the cover. The issue
promised to reveal James’ “training secrets
step-by-step.”
A decade later, current and aspiring
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6
2/20/2015
1:56 PM
Page 1
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The tug of war between the Ohio
Environmental Protection Agency
and the U.S. Army Corps of Engineers over the dredging of the Cuyahoga River has been couched in
terms of whether the sediment taken
from the bottom of the river is environmentally clean enough to be
dumped out in Lake Erie.
But behind that environmental argument is a financial argument
about who will pay what could be a
price tag of as much as $5 million to
keep the silt out of the lake. And any
delay in a final resolution could end
up hampering commercial shipping
and the asphalt, gravel, petroleum,
salt, cement and steel industries
along the river that the shippers
serve.
Since 2010, Ohio EPA and the
Corps of Engineers, along with the
Cleveland-Cuyahoga County Port
Authority and other government
agencies and environmental groups,
have been trying to solve the problem of how to handle and pay for the
disposal of roughly 200,000 cubic
yards of sediment the Corps dredges
up from the river bottom to keep the
Cuyahoga River safe for navigation.
The dredging deepens the depth
of the center of the river that commercial vessels use.
Every inch is important, since
every one inch of depth lost forces a
ship to lighten its load, said Glen
DAN SHINGLER
Roughly 200,000 cubic yards of sediment are dredged from the bottom of the
Cuyahoga River each year.
Nekvasil, vice president of the Lake
Carriers Association, which represents shipping companies on the
Great Lakes.
“We are always concerned about
the Cuyahoga River,” Nekvasil said
in an email.
“In recent years, vessels have routinely light loaded by a foot or more
(much more in the spring before
dredging has undone winter’s mischief). Depending on the vessel, 12
inches of lost draft translates into
1,000 or more tons of cargo left at
the loading dock.”
It’s the Corps’ responsibility to
keep shipping channels open, and it
is obligated to pay for the dredging
and for the most efficient, least
costly disposal of the spoils. If the
sediment is clean, open lake dumping is the preferred way to handle it.
But for more than a decade, the
Corps agreed that the dredged
material, called spoil, was too
See RIVER, page 29
Manufacturers seek stability from House
By RACHEL ABBEY McCAFFERTY
[email protected]
A tax deduction recently passed
by the U.S. House of Representatives would give small businesses
looking to buy equipment a confidence boost, industry groups say,
but it doesn’t look like manufacturers will get the stability they’re seeking — at least in this form.
The America’s Small Business
Tax Relief Act of 2015, which would
create a permanent equipment tax
deduction of up to $500,000, was
passed by the House on Feb. 13 by
a vote of 272 to 142.
If House Bill 636 were to be
passed in its current form, companies could write off eligible equipment purchases or leases on their
taxes, and more expensive purchases could be eligible for bonus depreciation.
U.S. Rep. Bob Gibbs, RZanesville, was one of the local representatives who voted for the bill
earlier this month, saying in a news
release that it gives “small businesses and farmers the certainty they
need to innovate, expand, and
hire.”
Companies have had access to
these measures in recent years, but
proposals can take months to actually get passed, said Miles Free, director of industry research and
technology at the Precision Ma-
chined Products Association in
Brecksville.
“We really need some stability in
the tax code,” Free said.
The members in Free’s association are entrepreneurs, not “gamblers,” he said, and they need
something they can count on. Last
year, the deduction didn’t pass until December. It’s difficult to decide
what kind of equipment to invest in
when the amount available can
change by a factor of 10 — the
amount available for 2015 has now
reverted to $25,000, Free said.
The House had tried to make the
bonus depreciation measure permanent last year, but the Obama
administration came out against
the measure in July, saying the approach was never intended to be a
“permanent corporate giveaway,”
and the bill ultimately failed to pass
the Senate.
The administration also released
a statement on Feb. 10 noting that
senior advisers would encourage
the president to veto House Bill 636
if it made it to his desk, though it
supports creating “permanent expanded expensing” through other
measures, making it a revenueneutral approach by closing tax
loopholes.
Rep. Tim Ryan, D-Youngstown,
was one of the legislators who did
not vote in support of the bill, but
he did say in a statement provided
to Crain’s via email that he — and
most of his Democratic peers —
would be interested in extending
the small business expensing in a
way that didn’t increase the deficit.
“I cannot support a bill that
makes large tax credits permanent
without paying for them—while at
the same time this Republican-led
House won’t even consider an unemployment extension, or extending key provisions of the child tax
credit and the earned income tax
credit,” Ryan said in the statement.
“I would be happy to support a
comprehensive tax reform package—one that did not increase the
deficit by almost $80 billion over
ten years.”
Omar Nashashibi, founding partner of the Franklin Partnership LLP,
which represents industry associations including Northeast Ohiobased PMPA, the Precision Metalforming Association and the
National Tooling and Machining
Association, said in an email that he
thinks the equipment expensing —
and the R&D tax credit, another recently introduced measure industry
groups are watching — have a good
chance of making it through Congress as part of comprehensive tax
reform.
Short of that, he said he does expect lawmakers to at least extend
the provisions through 2015.
2/20/2015
1:42 PM
Page 1
Paid Advertisement
Achieving a Smooth Ownership Transition
ne of the most important phases in
a company’s lifecycle comes after
the hard work of building the business
is done — ownership transition.
For an owner, the stakes are
high — and there’s only one chance
to get it right.
John Masters
Managing Director
Cleveland
Bank of America
Merrill Lynch
Unfortunately, succession planning is
an often-overlooked strategic objective
of a company, says Kevin Trieber, senior
vice president at Bank of America
Merrill Lynch.
“I’ve seen many companies put off succession planning
because it is an emotional discussion; many owners are
not prepared to consider life after their company,” says
Trieber, who consults middle-market companies on
succession strategies for BofAML. “It takes years to build
a successful company. The average business owner spends
80 hours or more working on a strategic plan and six
hours or less working on a transition plan.”
• Partnering with a private equity/financial sponsor. This
option can be a way to keep the management team intact
once the company is sold, and the original owner may stay on
board with a minority stake. Private equity firms are becoming
increasingly interested in middle-market companies, but it’s
important not to forget that in this type of deal, ultimate control
of the business will rest with the new majority owner.
• Going public. A company makes its shares available for
public purchase. An initial public offering (IPO) has the
potential to deliver more liquidity than some other strategies
but comes at a cost as public financial reporting requirements
are expensive and involved, and being a public company has
disclosure requirements which can impact confidentiality.
TAKING ACTION
Despite the wide variety of possible situations and options
for approaching them, a couple of rules apply in every case:
First, plan ahead. And second, find advisers you trust.
It’s important to remember that many strategies require
a long lead time. Options such as working with a private
equity sponsor typically require obtaining audited financial
statements, so they can only be carried out with proper
planning. Also, acting well in advance to deepen your
management team can benefit your company’s options
and valuation when the time comes for an exit.
Additionally, an ownership transition may involve a significant liquidity event for the owner. A skilled adviser can help
with financial planning and the tax implications that arise from
the cash windfall and tax considerations.
“I can’t emphasize enough the importance of engaging
the right adviser to help guide you through the process,” says
Masters. “It’s not just an accounting or legal discussion. The
implications are so much more.”
“Understanding the strategic alternatives through the lens
of your personal goals and objectives and the corresponding
trade-offs should be a non-negotiable.”
For more on how your Cleveland business can
plan for its transition, contact John Masters at
[email protected]
Ownership transition is an issue that many businesses
will address in the years ahead. According to the U.S. Census
Bureau, nearly two-thirds of the 4 million U.S. companies
are owned by baby boomers and many are looking to
retire or scale back their work.
“Back in 2008 when the financial crisis hit, we had quite
a few clients who were considering selling,” says John
Masters, Cleveland Commercial Banking managing director
at BofAML. “When the market dropped and valuations
followed, they found they had to retrench and work longer
than planned.”
The unplanned delay in transitions has led to today’s
unprecedented level of mergers-and-acquisitions activity
for middle-market companies, he says.
FACTORS TO CONSIDER: CONTROL, LEGACY, LIQUIDITY
When the time comes for a transition and the associated
liquidity event, the right approach depends on the specifics
of the business and the goals and objectives of the owner.
While there are many variables, considerations often
center on accessing liquidity, maintaining control, and/or
preserving a legacy.
Common transition routes include:
• Leveraging capital. An outside financing source provides
debt capital, allowing the owner to take cash out of the
business and diversify the risk of their investment into other
asset classes. This option can provide fast access to liquidity
while allowing shareholders the ability to maintain complete economic control of the business. But lending criteria
can be strict, and it’s an arrangement that comes with debt
service requirements.
• Setting up an employee stock ownership plan (ESOP).
Employees buy some or all of the company’s stock from the
owner(s) through the creation of a trust. This can be a top
option for preserving your legacy and rewarding your employees while achieving liquidity on a tax-advantaged basis.
It is, however, a longer-term transition and brings considerations such as ongoing administration costs and company
repurchase obligations.
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• Selling to a strategic buyer. A competitor or company
in an adjacent industry buys the business. This type of exit
often brings top dollar, as the buyer pays a premium for the
synergies it expects to gain by adding the business to its
operations. But this option involves giving up control, and
it can create uncertainty for employees.
For marketing disclaimer, visit bankofamerica.com/disclaimer. ©2015 Bank of America Corporation
02-15-0230.A
8
2/20/2015
1:15 PM
Page 1
Group believes opportunity is still there
‘Multimillion-dollar question’ is how to fund development along 3-mile roadway on city’s East Side
By JAY MILLER
[email protected]
A group of civic organizations is
working behind the scenes to make
good on the moniker given to the
extension of Ohio Route 1 on Cleveland’s East Side — the Opportunity
Corridor.
They’re building the foundation
for a revolving loan fund of as much
as $20 million that could be used by
neighborhood organizations to do
the critical land assembly needed to
begin the redevelopment of the unproductive land along the threemile roadway, now a patchwork of
vacant and abandoned property,
foreclosed-on homes and underutilized commercial and industrial
buildings.
Much of the land will require expensive environmental cleanup before it can be ready for redevelopment.
The goal is to rebuild some of
Cleveland’s poorest neighborhoods
on the city’s southeast side.
Brad Whitehead, president of the
Fund for Our Economic Future,
said fund research shows that 40%
of Cleveland residents who are in
economic distress live within two
miles of the roadway’s route.
“As we look at this, this as a once
in a generation opportunity to really work on a large canvas to do revitalization,” Whitehead said.
“We’re interested in working
with the (community development
corporations) and others in the
neighborhoods to make sure the
Opportunity Corridor is a source of
jobs for people in those neighborhoods.”
A 2011 real estate demand study
by Allegro Realty Advisors of Cleveland estimated that over the next
three decades, somewhere between
125 acres and 205 acres along the
roadway could be developed into
1.6 million of space for light manufacturing, distribution, offices or
laboratories. The study estimated
that that level of development
would create nearly 3,400 temporary construction jobs and 2,300
permanent jobs.
In a fast-growing city in the south
or west, land along a new road that
connects to an interstate highway
would attract major developers and
willing bankers
But the nature of the area around
the new road and the untested demand for its real estate will require
the community to assemble a pool
of risk capital to provide the first
dollars of investment to community development groups that would
assemble land.
“That is the multimillion-dollar
question,” said Deb Janik, senior
vice president of the Greater Cleveland Partnership.
“I think it’s going to take the
wherewithal of the philanthropic
community, the public sector, the
private sector and the civic sector to
come up with a concept of how the
funding might be secured, from
what partners, at what risk and
what appetite for risk and in a
structure that makes the most
sense for acquisition, for targeted
investment and development that
can generate revenue to repay, re-
for business.
Count on us to
be with you
every step of the way with
strategies for your business
banking needs.
The NYCB Family of Banks
plenish and reuse the fund,” she
said.
Janik was being cautious, given
the always daunting task of raising
money. But an effort to answer her
question is underway, led by the Future Fund, Cleveland Neighborhood Partners and the Greater
Cleveland Partnership.
Those groups are working with
four East Side community development corporations to map out future development of the corridor
and create a revolving loan fund
that would prime the pump for development.
Joel Ratner, president and CEO of
Cleveland Neighborhood Partners,
estimated that a fund of between
$10 million and $20 million could
be created.
The money would be lent to existing community development
corporations along the corridor that
have for years worked to improve
their East Side neighborhoods —
Buckeye Shaker Square Development Corp.; Burten, Bell, Carr Development; Fairfax Renaissance Development Corp.; and Slavic Village
Development.
These organizations have been
active in their communities for
decades. As nonprofits, they have
little capital of their own but are
conduits for public, philanthropic
and private money committed to
civic improvement.
The CDCs would assemble and
clean up properties, resell them to
developers or business users and
then repay their loans from the
fund.
This structure has been used successfully to redevelop many parts of
Cleveland,
including
Gordon
Square on the West Side and Midtown Corridor on the East Side.
Tim Tramble, executive director
of Burten Bell, said his group, which
has successfully developed residential and commercial projects along
Kinsman Avenue within the Opportunity Corridor development footprint, would be reluctant to use that
kind of loan funding, though he
would not rule it out.
But he lauded the assistance
Cleveland Neighborhood Partners
has offered in the past.
“We’re interested in Cleveland
Neighborhood Partners doing all
they can to provide resources to develop land along the corridor,” he
said.
“Without funders having a focus
and an interest (in our neighborhoods), we can’t do it.”
Crain’s 2015 program nominations
Nominations are now open for all of Crain’s Cleveland Business’ 2015
programs. Deadlines for each of the programs are:
■ Health Care Heroes
Nomination deadline: Feb. 27
■ Women of Note
Nomination deadline: March 30
■ Archer Awards
Nomination deadline: May 1
■ Who to Watch in Technology
Nomination deadline: May 18 (noon)
■ Forty Under 40
Nomination deadline: June 1
■ Crain’s 52
Nomination deadline: June 22
■ CFO of the Year Awards
Nomination deadline: July 10
■ General & In-House
Counsel Awards
Nomination deadline: Aug. 21
■ Who to Watch in Manufacturing
Nomination deadline: Aug. 24
■ Who to Watch in
Marketing/Creativity
Nomination deadline: Oct. 26
For more information on how to submit your recommendations for each of
the programs, go to: www.crainscleveland.com/nominations.
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2/19/2015
3:48 PM
Page 1
January again shows a slight job loss
By JAY MILLER
[email protected]
The Northeast Ohio economy
continues to grow slowly, even
though employment ticked downward in January.
The latest Ahola Crain’s Employment (ACE) Report shows that, adjusted for seasonal fluctuations, the
seven-county Cleveland-Akron metropolitan area region lost 2,784 jobs
in January, repeating a pattern the local economy has followed in recent
years. That’s a decline of 0.24% in an
economy with 1.16 million jobs.
The fragility that the up-anddown fluctuation shows is part of the
reason that Northeast Ohio hasn’t
yet fully recovered from the Great
Recession. In late January, the Metropolitan Policy Program of the
Washington, D.C.-based Brookings
Institution think tank issued its
fourth annual Global MetroMonitor,
a ranking of the economies of 300
largest metropolitan areas worldwide. The Cleveland and Akron metropolitan areas — which combined
comprise the ACE Report’s Northeast Ohio region — are among the
57% of North American metros that
have not yet recovered to 2007 levels.
The Akron economy ranked 198th,
while the Cleveland economy ranked
258th. The Brookings analysis looks at
both employment growth and regional income growth to come up with an
economic performance index.
In the past 12 months, employment in the ACE region has grown
1.31%, according to the ACE analysis, slightly behind the 1.5% average
employment growth for the Brookings group of 300 global metros.
“January 2015 is up 14,400 jobs
from January 2014, (that’s) good
news,” said Jack Kleinhenz, the
Cleveland Heights economist who
created the ACE Report model. “The
decline is in the service sector,
(while) goods-producing jobs are up
in January.”
The drop in service jobs, Kleinhenz
said, is the result of the loss of holiday
jobs in the retail, hospitality and personal services sector of the economy
that distorts job counts even when
economic models make seasonal adjustments. Kleinhenz has charted this
job loss — and a compensating gain
during the remainder of the first
quarter — since at least 2012.
Broken down, the regional economy lost 4,909 service jobs but gained
2,124 jobs in the goods-producing,
or manufacturing, sectors in the last
12 months.
Year over year, however, the region added 4,867 manufacturing
jobs and 9,538 service jobs. Though
manufacturing accounts for only
18.8% of regional employment, it has
provided 33.8% of the year-over-year
job growth, according to the ACE
employment data using seasonally
adjusted data.
That’s in line with the Brookings
analysis, which found that regional
economies around the world specializing in manufacturing have seen
some of the strongest growth.
Among its 300 metros, manufacturing employment grew 2.2%, while
service employment grew only 1%.
The ACE Report is based on payroll data from about 3,000 predominantly small and midsize employers
that is gathered by The Ahola Corp.,
a Brecksville payroll and human services firm. Kleinhenz’s analysis includes other economic indicators including construction data and retail
sales.
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20150223-NEWS--10-NAT-CCI-CL_--
10
2/19/2015
4:02 PM
Page 1
PUBLISHER:
John Campanelli ([email protected])
EDITOR:
Elizabeth McIntyre ([email protected])
MANAGING EDITOR:
Scott Suttell ([email protected])
OPINION
Right time
Gov. John Kasich is at it again, trying to increase
the state’s severance tax on oil and gas producers.
Here’s hoping he’s successful this time.
The Ohio Legislature has rebuffed Kasich’s
previous efforts to boost the drilling tax. Now, in his
latest two-year budget plan, the governor is putting a
new number before state lawmakers. He’s proposing
an increase of the severance tax to 6.5% of a driller’s
gross receipts, which primarily would be collected
on natural gas sales. The tax would apply to the
horizontal drilling method known as hydraulic
fracturing, or fracking. The rate for conventional
drilling would remain the same.
We’ve long advocated an increase in Ohio’s ridiculously low, volume-based tax on oil-and-gas extraction. After holding steady for more than four years at
the current rate of 20 cents a barrel, it’s time for a fair
increase that allows drillers to profit while compensating Ohio and its citizens for the cost of extracting
our non-renewable natural resources. Considering
how much has changed since 2010 with the
development of the Utica shale play in eastern Ohio,
it is well beyond time for a hike.
As Crain’s reporter Dan Shingler explains in this
week’s issue, the proposed 6.5% tax rate would put
Ohio in the mid-range of oil-and-gas producing
states. Even neighboring Pennsylvania, which is one
of few energy-producing states without some form of
a severance tax, is looking at a 5% tax on the value of
gas.
Shingler also reports on arguments being made
within the oil and gas industry that there is no worse
time to increase the severance tax, as the plummeting prices of gas and oil have created ripple effects of
layoffs and cutbacks throughout the industry.
That’s an easy argument to make when you are at
the down point of a cycle. However, the reality of a
commodity market is fluidity. A down price today
can easily be an up price tomorrow, as economic
and political factors change half a world away. And
we find it likely that drillers would somehow find a
reason to argue even at the high point that it would
be “no worse time” for a tax.
While we agree with the governor that the tax is
fair, we don’t agree with his proposal to apply much
of it to lowering Ohio’s personal income taxes. As
we’ve noted here, yet another cut isn’t needed.
Residents and businesses aren’t calling for it. And it’s
likely to damage our bottom line.
Instead, share more of the severance tax money
with communities where the drilling occurs.
Currently, Kasich’s plan calls for sending 20% of the
increased revenue to local governments in eastern
Ohio. Increase that amount so that local
communities directly impacted can deal with
infrastructure repairs, environmental issues and
other challenges brought on by increased drilling.
Revenue also should go toward further state
environmental regulation of drilling.
FROM THE PUBLISHER
City needs to be better biz partner
have been calling Brauser, urging him
There’s a great story unfolding on
to relocate the business.
the 31st floor of 200 Public Square.
“What they offer is, ‘Hey, come to
At a clip of about eight new employtown. We’ll show you around, introees a month, Gabriel Partners is filling
duce you to local government, local
cubicles and adding good-paying,
economic development, investors in
white-collar jobs to the downtown disthe area,’ ” Brauser says.
trict.
They offer to show him ofThe company has gone
fice space and leases; they
from about 15 employees at
tell him about the talent pool
the start of 2014 to about 100
and the investment commutoday. If all goes according to
nity.
plan, by the end of 2015,
“It’s kind of like, ‘Hey,
about 150 people will have
you’re important to us. Here
filled the entire floor.
are all the things that we
Gabriel Partners’ specialty
think you need. And we’d be
is helping financial instituhappy to introduce you to
tions comply with anti-monJOHN
the people you need to meet
ey-laundering regulations.
to be successful.’ ”
Banks contract with Gabriel CAMPANELLI
Brauser admits that if he
Partners to examine their
wasn’t loyal to his hometown, he’d be
transactions for signs of money laungone.
dering, investigate questionable activ“I’d be out of here. Absolutely.”
ity and then fill out all the necessary
That’s because while he’s received
forms for the bank to file or hand to
calls and offers to help from other
federal investigators.
cities’ economic development organi“Anti-money laundering is on fire,”
zations, he hasn’t heard a peep from
says Gabriel Partners’ dynamic CEO
anyone local.
Chris Brauser.
No local groups have asked him
It’s a great story — Cleveland native
what he needs or what his obstacles
leads new company to break-neck
might be. They haven’t offered to help
growth — and a story you probably
with his talent needs (he trains all his
haven’t heard.
own workers, many of them veterans).
But some people have heard.
And they haven’t offered any assisThey’re in Atlanta, Arizona and the
tance with finding investors, which is a
Carolinas. Tipped off by the new lease
priority for Brauser as he prepares to
Gabriel Partners signed in the fall, they
seek a $5 million to $10 million round
of funding later this year.
Yet Arizona is offering to do all of it.
A few weeks back, we wrote an editorial praising the Greater Cleveland
Partnership for prioritizing the support
of business start-ups, retention and expansion. Proactive outreach to businesses like Gabriel Partners needs to be
at the top of the plan.
With Brauser’s loyalty to and love of
Cleveland, we probably don’t have to
worry about Gabriel Partners moving
out of town.
But we certainly do have worry
about the other local businesses we
haven’t heard of … and what happens
when their phones ring.
Brauser wants to see a culture
change here. He wants it easier for
younger entrepreneurs to break into
the established business community.
He wants to make it easier for entrepreneurs to come together and connect. And he wants to see an end to
what he calls the “nihilist” negativity of
many in town.
He loves not only Cleveland but its
business advantages. He says his
prime-location office space is 10 times
cheaper than it would be in New York
City, six times cheaper than Chicago.
Educated workers are affordable.
The connectivity is great.
“All the pieces are here,” he says.
“We just have to make it easier.”
TALK ON THE WEB
Re: Style changes
for the Browns
Do we really think new uniforms and
a new logo will solve everything?
— Bill Applegate
Re: Ohio Supreme Court
backs fracking
Munroe Falls is dealing with conflicts
of interest and jurisdictional issues, as
well as the health and safety of the residents within its borders.
This case is much bigger than it looks,
folks.
— Homeowner of Record
There go all the neighborhoods.
— EdFromOhio
Re: Expansion
at Talan Products
Talan = classy company. It’s one of the
many bright spots in Cleveland manufacturing.
— Look
Re: MCPc backs The Foundry
in the Flats
Great stuff! Cleveland should get be-
hind this wonderful philanthropic vision
for its community youth.
It’s a great addition to the Ohio
City/Flats district, and I look forward to
seeing the river and lake further utilized
by rowers and sailors alike.
— 194068
This is truly exciting! Thank you to the
Trebilcocks and MCPc Charities for giving so generously to the future of our
city...our youth!
Can’t wait to see it blossom!
— Sue
20150223-NEWS--11-NAT-CCI-CL_--
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11
We are proud to sponsor
Wine by the Falls
Saturday April 18
7 to 11 PM
Chagrin Valley Country Club
Proceeds from the evening will support
many local shops and work to preserve
the historic Village of Chagrin Falls.
SANDVICK ARCHITECTS
The Foundry is scheduled to open this fall at 1831 Columbus Road in the Flats.
TALK ON THE WEB (CONTINUED)
There’s a lot of tension within the
existing facilities between the adult
rowers (masters), collegiate crews
and high school teams.
Just about every team has talked
about getting their own boathouse
at one point or another. Much of
the tension stems from the pressure exerted by the U.S. Coast
Guard and the shipping companies given the extremely limited
room within the Cuyahoga itself
(crews regularly interfere with
each other as well as priority commercial traffic).
The core issue, however, is that
the Cleveland Rowing Foundation
sorely lacks seasoned leadership.
Most established programs have a
significant professional staff with
experience in the national team
system.
As such, the governance of the
CRF, given its physical isolation
from most of the East Coast rowing
community, tends to be seen as
backward by outsiders.
— srsly
How does getting rowing banned
on the Cuyahoga help either group?
If it’s banned for high schools, then
it’s banned for recreational use as
well, no?
I agree that CRF is a mess and
desperately needs paid staff. But a
lot of their issues are lack of launch
space and competition for resources between the competitive
rowers and recreational rowers.
They currently are a member voting
organization that has been largely
volunteer driven that needs to transition to a professional org with
paid staff.
Moving the high school teams
would actually help them, in my
opinion.
— artem1s
Yeah, they desperately need a
paid, professional staff. It’s a nightmare rowing for any club out of that
boathouse.
— rustbeltlight
This is incredible!
Speaking for a lot of high school
rowers that are currently based at
CRF, this is seriously one of the best
things that could happen for us
youth rowers. Rowing is such a
wonderful sport and a lot of people
don’t realize how much of an impact it has on the Cleveland area.
Coming from a group that goes
downtown 6-7 days each week and
spends a few hours a day on/next to
the Cuyahoga, we see firsthand how
much Cleveland desperately needs
some sort of centralized building
like this.
This is a project that can institutionalize the sport of rowing and
provide a nesting place for an organized, professional staff that Cleveland youth rowing clubs so desperately need.
— Cuyahoga HS Rower
For tickets, visit elkandelk.com/WinebytheFalls
heFalls
MENTAL HEALTH FIRST AID
Get There
in Time
Re: Organizations helping
regional startups
Do you know how to handle a mental
Crain’s Feb. 2 story, headlined,
“Regional startup momentum is
providing broad path for diverse set
of entrepreneurs,” is a bunch of
propaganda BS. I haven’t been
helped once in my three years as an
entrepreneur.
— matt
health crisis in the workplace? We can
teach you how to respond safely and
effectively. We work with you.
Call 216-421-4131
Re: Rite Aid’s $2B
deal to buy Envision
Pharmaceutical
Rite Aid can’t afford to take on
more debt.
— VH
1955
60 YEARS
2015
www.recres.org
700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230
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tel 330 535 2661
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)NVESTMENT&OR3ALE-AJOR0RICE2EDUCTION
Crain Communications Inc.
Keith E. Crain: Chairman
Rance Crain: President
Mary Kay Crain: Treasurer
William A. Morrow: Executive vice
president/operations
Chris Crain: Executive Vice President,
Director of Strategic Operations
KC Crain: Executive Vice President,
Director of Corporate Operations
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& manufacturing
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Chief Information Officer
Thomas Stevens: Chief financial Officer
Mary Kramer: Group publisher
G.D. Crain Jr. Founder (1885-1973)
Mrs. G.D. Crain Jr. Chairman (1911-1996)
.ORTHÚELD2D"EDFORD(EIGHTS/(
Less than 1/2 mile from I-480
$700,000
60% Occupancy
46,600 SF
20150223-NEWS--12-NAT-CCI-CL_--
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2/19/2015
2:10 PM
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Pressure is upping ante for smaller banks
By JEREMY NOBILE
[email protected]
A fiscal squeeze is helping drive a
proliferation of sales by community banks across the country,
bankers and analysts say, as noninterest expenses grow faster than
revenues.
And with financial pressures fanning the flames burning into bank
margins, many smaller and midsize
community banks are either strategically merging away from the heat
or waiting for the fire to die down.
The most recent merger around
Northeast Ohio came last month
when Farmers National Banc
Corp., the holding company for
Farmers National Bank of Canfield
(with about $1.175 billion in total
assets), announced a $74 million
deal to acquire and merge with National Bancshares Corp., the parent
of First National Bank of Orrville
(with about $525 million in total assets). The merger is expected to be
completed in the second quarter of
this year.
Mark Witmer, president and
CEO of National Bancshares and
future senior executive vice president and chief community banking
officer with Farmers, said from a
profitability standpoint, the bank
didn’t need to merge to stay viable,
but doing so relieves some fiscal
pressures while benefiting hungry
shareholders.
Sales picking up
According to bank M&A activity
tracked by SNL Financial, Ohio saw
14 bank-to-bank sales in 2014, all of
which involved sellers with assets
around or under $1 billion. Those
figures show a clear pickup in pace
compared with eight sales in 2013,
five in 2012 and zero in 2011. That
Ohio activity also generally mirrors
the national pace.
Community banks tend to be locally owned and operated, but
there’s no formal definition of one.
The Federal Deposit Insurance
Corp. historically has classified
them as banks with assets under $1
billion, but that’s a long-referenced
figure that doesn’t account for industry growth. The Community
Bankers Association of Ohio considers the threshold for assets today
at $10 billion and below, said
Robert Palmer, the organization’s
president and CEO.
About 40 years ago, there were
roughly 17,000 community banks in
the country, with more than 600 in
Ohio. Today, Palmer estimates there
are about 6,600 in the country, with
193 currently operating in Ohio.
New charters are basically nonexistent across the country. Palmer
noted the only new community
bank opened since 2010 nationwide
came in late 2013, with Bank of Birdin-Hand in Pennsylvania.
Buyouts have been happening
since federal regulations made them
possible decades ago, “but the alarming part of it is it’s accelerating at a
much faster pace now,” Palmer said.
There are other factors at play,
Palmer noted, including growing
valuations in bank sales and a generally aging sector of current bank
executives who may sell or merge as
part of strategic succession plans.
But the financial crunch on margins is where community banks are
feeling the most pressure. And their
size makes them more susceptible
to those strains than their more
massive counterparts.
“In this post-financial crisis era,
it’s a very difficult time for banks in
general, and community banks in
particular,” said Kevin Jacques,
Boynton D. Murch Chair in Finance
at Baldwin Wallace University and a
former economist with the U.S.
Treasury Department. “The community banks are more dependent
on interest rate spreads and are
more sensitive to macroeconomic
conditions than larger banks.”
And while community banks will
never go away entirely, bankers and
analysts expect the trend of consolidations to continue as revenue
growth lags, costs mount and valuations creep upward.
“But those community banks
who choose not to sell will be in a
better position from a company
standpoint in future years,” said
Charlie Crowley, managing director
at Boenning & Scattergood, whose
practice assists banks with M&A
deals and financing. “There’s a segment of the population that wants
to deal with highly responsive community banks. In markets like
Cleveland, Akron, Columbus, there
are fewer candidates, and opportunities will be pretty good for those
who remain.”
Many banks are not actively entertaining a sale despite seeing a
blossoming of costs outpace revenue growth. While often cumbersome to quantify, Palmer said meeting regulations alone is costing
community banks between $100,000
to $1 million each annually.
Portage Community Bank CEO
Richard Coe said the crunch from
regulations is apparent. The bank,
which has about $330 million in assets, bumped up a compliance officer from part-time to full-time and
spends more man hours on compliance reviews, adding thousands
in annual costs. In terms of revenue, Coe said the Dodd-Frank financial reform act has cut deeply
into the bank’s mortgage lending
opportunities.
Not only are interest rates being
kept down because of macroeconomic policy, but the ability to
make high-risk loans is eliminated,
all of which is choking many community banks’ lending revenue,
Jacques explained.
“And if the regulators would let us
alone, we could do even more to
help customers,” Coe said. “But we
really are strapped to some degree.”
Lorain’s Buckeye Community
Bank, which has about $161 million
in assets, is seeing slowly growing
revenue dwarfed by growing expenses. Among the various impacts,
CEO Bruce Stevens noted how levels
of return on equity with banks in
this area are around 8% today. Prior
to the recession, that hovered
around 15%. It’s another way profitability has been hindered today,
Stevens said, at a time when costs
are only rising.
“And when you’re smaller, the
regulatory burden is more because
you just don’t have the assets to
spread it over,” Stevens said.
Neither Portage nor Buckeye
said they’re ready to sell yet,
though.
Achieving scale
First National Bank’s earnings
rose strongly by 43% in 2014 from
2013 — growth that Witmer attributes largely to niche lending, like
agricultural loans — but the stock
price grew only 11% with it.
Merging now, he said, will yield
better returns for shareholders and
achieve economies of scale that will
L E V E L
MY BENESCH MY TEAM
SELF
OUR CLIENTS HAVE SPOKEN.
Benesch is proud to congratulate real estate partners
Jeffrey J. Wild and Kevin D. Margolis on being named
BTI Client Service All-Stars for 2015.
BTI Consulting Group provides independent research on
how clients acquire, manage, and evaluate their professional
service providers.
www.beneschlaw.com
Jeff and Kevin are partners in Benesch’s Real Estate Practice
Group. We congratulate them, and the attorneys and staff
who work with them, on this prestigious, client-driven honor.
The only way to become a BTI Client Service All-Star is for corporate counsel to single you out. No attorney can lobby to be
added to the list, there is no self-submission process, and law firms cannot provide names of clients to be contacted. Jeff
and Kevin are among only 354 attorneys across the U.S. who earned this recognition for outperforming all other attorneys
in client service.
O F
spread out growing costs “to stay
ahead of the game” as profits compete with rising costs.
“We were seeing increases in the
costs of compliance — the money
we have to spend on regulations —
and IT,” he said. “So we looked at
the increases in cost … and then we
looked at how we can stay one step
ahead.”
Costly investments in IT, from
cybersecurity nets to mobile app
and alternative payment development, will be stronger and even
more manageable for both banks
with the merger.
“We can’t survive and say we’re
not going to take part in all the new
tech, because that’s what people
want,” Witmer said. “If we want to
keep up with the big banks, we
have to spend a lot of money. Instead of being two banks spending
that money, we’re now just one.”
Meanwhile, First Federal Lakewood, the largest mutual bank in
Ohio with about $1.6 billion in assets, has an active acquisitions
strategy to achieve scale that helps
manage the margin squeeze, said
president and CEO Thomas Fraser.
First Federal itself has seen noninterest expenses rise by 20 to 30 basis points annually, Fraser said.
Combined expenses for meeting
regulations plus investments in
technology mark about $3 million to
$4 million in annual costs. The regulatory components make up between $500,000 to $1 million of that.
Even at its size, Fraser said First
Federal “needs to be bigger to absorb those costs.”
“To be able to handle the expense requirements in today’s
banking world, I think we need to
be north of $2 billion in assets over
the next few years,” Fraser said.
L E A D E R S H I P
TEAM
S P O T L I G H T
ORGANIZATION
SOCIETY
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CRAIN’S SPECIAL REPORT
13
REBECCA R. MARKOVITZ
LIGHTING THE WAY FOR AN INDUSTRY AND A COMMUNITY
Giving Back — P. 14
Technology — P. 16
A Rich History — P. 18
For video and more photos, visit www.crainscleveland.com/nela
20150223-NEWS--14-NAT-CCI-CL_--
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FOR A BRIGHTER
TOMORROW
WITH AN ON-CAMPUS SCHOOL AND
CHANDELIER IN PLAYHOUSESQUARE,
GE LIGHTING’S INVESTMENTS IN THE
REGION’S FUTURE ARE LEAVING A
LASTING MARK ON THE COMMUNITY
Square.”
“It’s all over the place,” Einhouse said. “It’s
being tweeted, it’s on social media, it’s on the
national news, which is what we wanted.”
There were significant technical challenges
on the project, Einhouse said, ranging from
designing the chandelier to stand up to a
Cleveland winter to producing light with a
pleasing (that is, not too harsh) glow.
He said GE Lighting as a partner on the project “was open to everything. They were all
about wanting to make it as good as it could
be.” Vullo said the chandelier was “a challenge
for our technical team” but it has generated
lots of positive comments about the way it has
enhanced the look of PlayhouseSquare.
By SCOTT SUTTELL
[email protected]
GE Lighting’s Nela Park has been a part of
Northeast Ohio for more than 100 years. But
it’s the next 100 years, and the need to create
a highly skilled workforce for the future, that
drives one of the company’s central philanthropic efforts in the community.
In building No. 336 on the sprawling, leafy
(in better weather) Nela Park campus in East
Cleveland is the 10th-grade location of the
Cleveland Metropolitan School District’s MC2
STEM school. Students at MC2 STEM attend
classes at campuses embedded in business
and school sites around the city. In addition
to Nela Park, there are sites at the Great Lakes
Science Center, the Health Careers Center
and various college campuses.
GE Lighting began the partnership with the
Cleveland school district in 2008 as part of a
corporate initiative to support education, and
in particular STEM (science, technology, engineering and math) education, said Andrea Vullo, the company’s community relations manager and its MC2 STEM High School liaison.
The school, she said, is helping to “educate
and grow future innovators” — a particularly
appealing community initiative for a technology-focused company like GE Lighting.
“STEM, and getting enough kids interested
in STEM fields, is a challenge everywhere, so
it was something that really resonated (within GE Lighting),” Vullo said.
About 150 Nela Park employees across all
departments devote a total of about 2,450 volunteer hours annually to students at the
school, she said. They offer tutoring, mentoring, twice-monthly lunches with students and
help on the MC2 STEM school’s ambitious
sophomore project.
“We tell them that we’re going to challenge
them with the workload, which in many cases is college-level material,” Vullo said.
Students are responding to the challenge.
Historically, Vullo said, the school’s classes
have ranged in size from 80 to 100 students.
This year’s class has 110 students, she said,
and MC2 STEM projects that classes going
forward will be in a range of 100-115 students.
And those aren’t the only numbers that impress. Vullo said the school’s graduation rate
is 95%. Last summer, she said, GE Lighting
hired its first co-op student who graduated
from the MC2 STEM program; that student
currently attends Cornell University.
Mark D’Alessio, manager of communications for the U.S. Chamber of Commerce
Foundation’s Center for Education and Workforce, said community-oriented companies
like GE Lighting for years have been stepping
up their support — financially and through
volunteer hours — of public schools.
He noted that the Council of Chief State
School Officers, a nonpartisan, nationwide,
nonprofit organization of public officials who
head departments of elementary and secondary education, in December released a report on how K-12 schools can better prepare
students for the future. Among its recommendations: “Enlist the employer community as a
lead partner in defining the pathways and
skills most essential in today’s economy. Who
has a better understanding of workforce
needs than employers? Frankly, it’s a nobrainer that employers need to take the lead
on identifying the high-growth and high-skill
jobs of tomorrow to ensure career preparation programs are aligned to those needs.”
The school is a major focus of GE Lighting’s
community efforts, but the company also cuts
a wider path in education, from supporting
other STEM-related efforts — the GE Girls program works with 160 sixth-graders from the
Community challenge
ABOVE: CONTRIBUTED PHOTO, BELOW: REBECCA R. MARKOVITZ
Above, the GE Chandelier at PlayhouseSquare was unveiled in 2014 as the centerpiece of an overall outdoor renovation. Below, a Cleveland Metropolitan School District MC2 STEM school has been
housed on the Nela Park campus since 2008.
Cleveland area to help prepare them for STEM
studies — to sponsoring the FIRST Robotics
competition. Vullo said GE Lighting each year
also chooses a major project for volunteers to
work and make physical improvements.
The 2014 project involved work at the Euclid YMCA, including building a gazebo and
working on landscaping and new lighting.
Past projects have been at the Achievement
Centers for Children’s Camp Cheerful, Hiram
House Camp and the Diabetes Partnership of
Cleveland’s Camp Ho Mita Koda.
Brightening the Square
Corporate-driven efforts in the community
often are under the radar, apparent only to the
company itself and to the target of the work.
That’s not the case with the GE Chandelier,
the 20-foot-tall, 8,000-pound centerpiece of
the remaking of PlayhouseSquare.
The chandelier was officially turned on last
May and has become a high-profile marker of
PlayhouseSquare, which has undergone a $16
million transformation. (The dollar value of
the chandelier portion of the project was not
disclosed.)
GE Lighting sponsored the chandelier,
which features 68 LED (light emitting diode)
fixtures that operate at 25 watts apiece. GE’s
LED lighting is used in other parts of PlayhouseSquare, including digital signage, gateways
and building uplighting.
Tom Einhouse, vice president for facilities
and capital at PlayhouseSquare, said the chandelier has come, in some ways, “to define the
GE Lighting, with about 700 workers at Nela
Park, is the largest private employer in the city
of East Cleveland. As such, it’s an economic
bulwark for the eastern suburb, which
nonetheless is in severe financial straits that
have city officials looking at drastic measures,
including a merger or a municipal bankruptcy.
According to the state of Ohio’s most recent
audit that covered 2012, East Cleveland “had
about $5 million in debt outstanding, including around $411,000 of notes and $3.2 million
owed to a state public works program. During
the year the city ran a deficit of $4.9 million.
Total revenues were about $18.2 million.”
East Cleveland Mayor Gary Norton laid out
some striking figures related to the city’s economic challenges. The mayor said East Cleveland’s population has fallen to less than
18,000 in the 2010 Census from about 27,000
in 2000. Only about one-third of city residents
live in a home they own, Norton said, and the
median income is $20,500.
Of the 18,000 residents in East Cleveland,
about 14,000 are of working age, but only
5,100 actually are employed, Norton said.
About 2,000 East Cleveland residents are unemployed, and about 7,000 are retirees.
On top of those demographic challenges,
Norton said, the city — like many communities — has been hurt by the foreclosure crisis,
a loss of state funding and the departure or
closing of key employers, including Huron
Hospital.
In response to its financial problems, Norton
noted that East Cleveland has cut city staff by
one-third, reduced the city budget by 25% and
has undertaken initiatives including leasing
city land to businesses and implementing
agreements with nearby communities to share
the cost of services such as snowplowing.
“We’ve done a lot, but we have to take further steps,” Norton said.
In a recent conference call meeting with constituents, he said those options could include a
municipal bankruptcy, a merger or hikes in
property and/or income taxes. Norton said he
does not favor the tax-increase option, since
that would require an “astronomical” increase
in rates to produce necessary revenues.
Kathy Hexter, director of the Center for Community Planning and Development at the Maxine Goodman Levin College of Urban Affairs,
said GE Lighting, as the largest employer in a financially distressed inner-ring suburb, “is almost more like an anchor, like a hospital or a
university,” than a typical company.
Options for East Cleveland, she said, are
limited, as the city is small — it’s just a little
more than 3 square miles — and it contends
with heavy economic headwinds that plague
many Rust Belt communities: a decline of the
manufacturing base that puts subsequent
downward pressures on the tax base.
“There just aren’t easy answers here,” she
said.
20150223-NEWS--15-NAT-CCI-CL_--
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4:03 PM
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15
LED REVOLUTION
Light-emitting diodes are changing
the way GE Lighting does business
and opening up new opportunities.
Here, Cherian Jacob, senior global
commodity leader, shows off some of
the unique aspect of LEDs. For example, they can be easily molded for
signage and display versus their
neon counterparts. When LEDs
first were developed, they were
only available in color; white
LEDs were created later.
BEHIND THE SCENES
A walk around the sprawling Nela Park campus makes one
realize there is so much more to light than meets the eye.
NOW YOU SEE IT, NOW YOU DON’T
At Nela Park’s Lighting & Electrical Institute, more than 4,000 visitors each year receive training and education on subjects ranging from display lighting to new technologies. Visitors can see how various lighting techniques can drastically
change the appearance of colors and details, as pictured below. A retractable ceiling, showcasing overhead lighting
techniques, is a highlight, as is the Edison Awards Hallway, where winners of GE’s lighting design competition are on
display. Founded in 1933, GE says the institute was the first facility in the world devoted solely to the teaching of lighting.
PHOTOS BY REBECCA R. MARKOVITZ
COOL SCHOOL
The MC2 STEM High School, a Cleveland Metropolitan School District program,
opened in 2008 on the Nela Park campus. It offers open enrollment and a yearround calendar, with more than 100 10th-graders currently attending at the
site. Students participate in project-based learning and have access to employee volunteers as well as technology, such as the first high school MIT Fab Lab.
20150223-NEWS--16-NAT-CCI-CL_--
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3:34 PM
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THE EVOLUTION OF INV
LED technology is forcing GE Lighting to change its ways and tra
By CHUCK SODER
[email protected]
It might be 20 years before Randy Reid is forced to
replace a light in his house.
That’s because he’s replaced all of his light bulbs
with LEDs. And they are expected to last a really long
time.
That’s good for Reid, a lighting industry insider who
runs EdisonReport.net. But it could be bad for GE Lighting.
GE Lighting executives say they understand the challenge the company will face as people throw out the
bulbs that Thomas Edison invented 130 years ago and
replace them with light-emitting diodes – which are
semiconductors that emit light.
In response, GE Lighting is trying to transform itself
into a business that can make money in a world where
lights rarely need to be replaced.
How might they do that? By taking advantage of the
many things you can do with LEDs — and the computer chips that house them.
And GE Lighting isn’t just talking about selling lights
you can control with a smart phone. The company
wants its lights to wake you up in the morning and lull
you to sleep at night. It wants them to guide you to a
parking spot near your office and send you coupons
when you visit the store.
And that’s “just scratching the surface,” according to
John Strainic, general manager for GE Lighting’s North
America Consumer Lighting group.
“Anything and everything is possible,” Strainic said.
At left, vintage GE products like these Christmas lights are on display in the museum at Nela Park. At right, GE Lighting was part of the effort to crea
From streetlights to sleep
The East Cleveland-based unit of General Electric
has implemented new processes designed to help it
churn out innovative products. Products designed to
push customers to replace lights that still work just
fine. Products that in some cases could give GE Lighting a way to make money by selling software and services.
So will those products generate enough new revenue
to make up for the lack of people replacing burned out
light bulbs?
Reid thinks “it will be very difficult,” especially in the
consumer market. Most people aren’t lighting fanatics
like him. It’s hard to get them to replace a light that still
works, even with new features.
But he’s learned not to count GE out.
“They’re GE, so they can handle anything. They’ll
find a way,” he said.
One of the company’s first big inroads into the next
generation of LED lighting is well underway, in San
Diego.
There, more than 3,000 streetlights are hooked up
to GE Lighting’s LightGrid system. Today, the city can
control those lights from afar. And soon a few of them
will be equipped with cameras as part of a pilot project.
What could you do with those cameras? Well, if
Cleveland had them, they could spot those guys who
are constantly double parking right outside of Rick
Freeman’s residence in the Warehouse District.
The cameras also could be used to identify open
parking spaces, monitor traffic or figure out which
roads still need to be plowed during a snow storm, according to Freeman, who heads up GE Lighting’s effort
to develop intelligent lighting systems.
And why stop there? Eventually, GE Lighting could
add sensors that monitor the weather — or the level of
pollution in the air. Or maybe speakers, for playing
music or broadcasting emergency warnings.
“This is more valuable real estate than just lighting
control,” Freeman said.
On the consumer side, GE Lighting also just released
two new LEDs: One that emits an amber light designed
to help you fall asleep at night, and one that is much
brighter and whiter, to help you wake up in the morning.
For now, the company is selling the two bulbs under the
Align brand, via Amazon.com. But there are bigger opportunities for LEDs that can affect the way people behave: GE Lighting eventually could use similar technology to set the mood in classrooms, offices and hospitals.
‘Transforming our entire business’
The idea of using light to regulate sleep had been
floating around at GE Lighting for years. It finally came
to life partly because of General Electric’s FastWorks
process — a company-wide innovation system designed with the help of Eric Ries, author of the book
“The Lean Startup.” The book encourages companies
to get customer feedback constantly while developing
new products, which can help them change direction
early, before they spend a bunch of money going the
wrong way.
The FastWorks process is helping GE Lighting operate more like a startup, according to Tom Boyle, chief
innovation manager for consumer lighting. He noted
that the Align bulbs didn’t get developed under GE
Lighting’s old system because it was focused on metrics like light output and energy efficiency. The Align
bulbs didn’t fit that mold.
“Ideas like this got lost,” Boyle said.
GE Lighting decided to develop the bulbs because
customers said they like the idea. And then they said
they liked the prototypes, said GE Lighting’s FastWorks
leader, Jeff Patton.
“They literally said they would pull out their credit
card and buy that thing right now,” he said.
GE Lighting hasn’t just changed its processes because of the LED revolution. It’s also put new people
in new roles. For instance, Boyle’s only been in his job
for two years or so. And Patton was general manager of
consumer marketing at GE Lighting until he was put in
charge of its FastWorks effort and other new projects
about a year ago.
“We’re all having to reinvent ourselves,” Patton said.
Jaime Irick took it a step further: The rise of the LED
has pushed GE Lighting
with ideas, how it designs
ture them and how it sel
who leads GE Lighting’s p
ness in the United States
“We’re transforming ou
Not just light bulbs any
Reid, editor of EdisonR
a little bit of catch up w
Philips had already releas
ucts, which can be tuned
He’s more excited abou
ing is working on with a st
The Boston-based comp
ware that allows LEDs t
phones. The LEDs flicker
doesn’t notice. However,
smart phones can read
Morse code.
One day, you could be
baby food, and it could
straight to your phone, Rei
spread quickly, with GE’s
the parent company alrea
“They sell so many dif
It’s not just light bulbs,” R
ADVANCEMENTS IN GE LIGHTING TECHNOLOGY THROUGH T
INFORMATION PROVIDED BY GE LIGHTING. ITEMS LISTED AS “FIRSTS” WERE CONFIRMED BY THE NONPROFIT EDISON TECH CENTER.
20150223-NEWS--17-NAT-CCI-CL_--
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NVENTION
transform its business
WHO’S WHO OF NELA PARK
BETH COMSTOCK
CHIEF MARKETING OFFICER, GE;
PRESIDENT AND CEO,
GE BUSINESS INNOVATIONS
She’s not technically a GE Lighting employee, but she could
be important to its future. Last year, GE Lighting started reporting to GE’s so-called Business Innovations unit. It’s not a
bad place to be: The unit works with startup companies and
is generally tasked with pushing General Electric in new directions. Comstock has defended the company’s commitment to GE Lighting, telling media outlets the business unit
is “not for sale.”
MARYROSE SYLVESTER
PRESIDENT AND CEO, GE LIGHTING
Sure, she’s the chief executive at GE Lighting. But Sylvester
stands out for at least one other reason: She used to be
CEO of a GE business unit called Intelligent Platforms — a
unit that is key to GE’s effort to connect all sorts of industrial equipment to the Internet. That experience could come in
handy as GE Lighting starts connecting more of its LED
products to the Internet. She has spent 27 years at GE and
14 at GE Lighting (she left for another division in 2002 and
came back in 2011).
BILL LACEY
o create the bulbs used in the “Tribute in Light” at the World Trade Center site in New York City.
hting to change how it comes up
esigns products, how it manufacit sells them, according to Irick,
ng’s professional solutions busitates and Canada.
ng our entire business,” he said.
s anymore
isonReport.net, said GE is playing
up with its Align bulbs, because
eleased its Hue line of LED produned to a variety of settings.
about a technology that GE Lightth a startup called ByteLight.
company that has developed softEDs to send messages to smart
licker so fast that the human eye
wever, the light sensors in today’s
read the flashes as if they were
uld be in a store, grabbing some
ould send a coupon for diapers
e, Reid said. The technology could
GE’s help, given the relationships
already has with retailers.
ny different things to these stores.
bs,” Reid said.
THE YEARS
Last year, GE Lighting began reporting to General
Electric’s business innovations unit, which tries to
push GE in new, high-tech directions. It’s led by GE
chief marketing officer Beth Comstock. In September,
she told Forbes magazine that there’s a lot of opportunity for GE Lighting to work with startups, and that
lighting can become more of a service business.
What type of services could GE Lighting provide?
The company has already ramped up the amount of
help it provides to business customers that need to figure out how to portray their products in the best light.
Irick said those customers have been asking GE Lighting to provide more services related to things like logistics, installation, maintenance and software upgrades.
Technology gives the company the opportunity to
do even more. For instance, maybe one day GE Lighting could turn its LED streetlights into a Wi-Fi Internet network, according to Terry McGowan, a former
GE Lighting employee who is now director of engineering for the American Lighting Association.
McGowan doesn’t know if the company will actually do it, but he thinks it could be another way GE Lighting could make money off of all those light sockets it
has access to.
“All of a sudden you’re selling it as an Internet
hotspot. People are paying for Internet service and getting lighting almost for free,” he said.
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Lacey has worked at General Electric almost as long as
Sylvester has, starting at GE Appliances in 1992. He’s led
the corporate audit staff and helped manage the finances of
GE’s wind, energy and medical diagnostics business units.
In May, General Electric recognized his value by naming him
a company officer. Roughly 200 GE officials hold that title,
meaning that they “lead large revenue-generating businesses or are in critical technology or functional roles,” according to the company.
JAIME IRICK
VICE PRESIDENT AND GENERAL MANAGER,
NORTH AMERICA PROFESSIONAL SOLUTIONS
His title means he’s head of GE Lighting’s effort to sell products to businesses in the United States and Canada. Business customers account for 70% of GE Lighting’s revenue.
Before joining GE in 2003, he served in the Army for five
years, graduated from Harvard Business School, worked for
two tech startups as well as Goldman Sachs. Irick, who
joined GE Lighting’s LED business in 2010, was named a
company officer in September, joining Sylvester and Lacey.
17
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A WELL-PRESERVED LEGACY
There are 26 buildings at the 92-acre Nela Park. Its history
is just as remarkable as the technologies developed there.
HISTORY’S KEEPER
MOMENTS IN TIME
PHOTOS BY REBECCA R. MARKOVITZ
HISTORIC PHOTOS COURTESY OF GE LIGHTING
Andrea Vullo, community relations manager, has been
with GE Lighting for 13
years. Her efforts for the
centennial helped lead to the
creation of GE’s Museum of
Lighting Innovation, which is
in a tiny building once used
as the credit union. Nela
Park, which derived its name
from its National Electric
Lamp Association roots, was
built on a onetime vineyard
known as Panorama
Heights. On April 18, 1913,
more than 400 employees
moved operations from East
45th and Hough, transporting 18,000 crates and
records via horse-drawn
vans. The transfer was done
in 19 hours.
At least three time capsules (and possibly four)
were buried at Nela Park. The first (at right),
was uncovered in 2012, and the second was
opened in 2013. Findings included a lead box
filled with historic papers and photos along
with six Mazda lamps (one of which still works).
Unfortunately, the capsule being placed in the
above photo is inaccessible today. “Facilities
tell me we will crush the building if we try,” Vullo said. And, there may or may not be a fourth
capsule — building X-rays and historic documentation are inconclusive.
CAMP NELA
WORKS OF ART
Norman Rockwell was commissioned in the 1920s to create artwork for GE
advertisements. Seven of Rockwell’s original paintings are on display on campus; some of the paintings, however, were given away as retirement gifts.
One legacy of Nela
Park is that for many it
was more than a place
to work, with amenities such as a pool,
bowling alley, tennis
court, barbershop and
rec hall. “It was like a
fraternity back in the
day,” Vullo said.
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HIGHER EDUCATION
WOMEN IN
STEM
From middle school to college,
efforts to diversify the field
span the education spectrum
By CHRISSY KADLECK
[email protected]
The science-technology-engineering-math (STEM) needle moved an
impressive 18 percentage points this past October when 160 middle
school girls descended on Case Western Reserve University’s campus
for the kickoff of GE Girls, a yearlong STEM awareness and engagement
program for sixth-grade students from 16 schools in Northeast Ohio.
The high-energy program aims to bring STEM career opportunities
to life and included speakers from GE Lighting and CWRU, STEM activities with professors and confidence-building sessions with the
Cleveland Play House.
The efforts were rewarded with an impressive statistical change in
the interest level among the young girls in attendance.
Surveys done prior to the event revealed that 76.7% of the girls said
they were interested in pursuing a STEM degree; after the event, that
percentage soared to 94.7%. Better yet, the young survey takers unanimously agreed girls are capable of doing well in science or math.
GE Girls is just one example of the many efforts being waged by area
educators, researchers, professionals and corporations along what’s
known as the leaky pipeline — from K-12 to college to the workforce —
to attract, encourage, engage and retain women in high-demand, highwage STEM fields.
Staring down an impending national deficit of 1 million STEM workers by 2022, according to a 2012 White House report, and a discouraging number of women and minorities represented in the workforce, the
region is abuzz with partnerships, programs and interventions to attack the disparities at the middle school, high school, college and professional level.
Aiming for the middle
“We know that the U.S. simply isn’t producing enough STEM workers to meet the projected future demands, and we know that it’s pretty critical to our national economy and our regional economy to be able
to attract more students to these professions,” said Rob LaSalvia, chief
of educational programs at NASA Glenn Research Center. “And, as we
as an agency consider our future plans, going to Mars and continued
research and exploration, we know that it’s important to have a
pipeline of diverse future scientists and engineers and members of the
technical workforce.”
In its college internship program, NASA has seen 37% to 40% female
participation during the last three to five years. It’s not where they want
to be but it’s better than national statistics that show only 18% of all
engineering bachelor degrees are earned by females, LaSalvia said. But
most of the agency’s partnerships and collaborations are targeted to
the middle school level or younger.
“We realize to really turn students on to these field, you have to start
sooner than high school starting to build that career awareness, that
interest in science, that interest in math, that emphasis on the academic preparation necessary to be successful,” he said, pointing to initiatives such as its Summer of Innovation, a national program that used
NASA content to promote learning among as many as 40,000 students,
45% of whom were female.
Reaching younger children also has been a main outreach effort of
See STEM, page 20
19
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STEM
continued from page 19
Cuyahoga Community College’s Westshore
Campus in Westlake, said Terri Pope, president of the STEM-focused campus.
“What we are finding is if we don’t start
younger in middle school, and we wait until
high school, the math is not there to support
a science career and it makes STEM success
in college less likely,” said Pope, adding that
Tri-C has a history of hiring women scientists
and strong women professors particularly in
biology and chemistry.
STEM wings to fly
Take Beaumont School, which just
opened in January its $9.5 million STEM
wing. The new addition has eight classrooms
that are completely focused on STEM disciplines such as biology, earth science, pre-engineering, comparative anatomy, physics
and genetics.
“We know that STEM fields are lacking females and we want to be at the forefront of
exposing our girls to what future career they
could have and encourage them to explore all
possibilities,” said Anna Beyerle, public relations and marketing manager for the 327-girl
private school in Cleveland Heights.
“We think this type of education can make
girls better workers, better thinkers, develop
better critical thinking skills and give the girls
a really good foundation for the future no
matter what career field they decide to go
into, but it would be great to have some more
girl power out there.”
The school’s tech club, BeauTech, recently
took a field trip to Hyland Software and is currently engaged in an afterschool software
programming program with We Can Code IT,
a female-owned software education firm that
has a mission to diversify and fill the field.
“At Beaumont, we are doing HTML, CSS
and JavaScript and we had them coding in all
three languages in one hour. They were so excited to see their code come to life,” said Mel
McGee, CEO of We Can Code IT, which next
month will launch its new coding boot camp
for adults to offer accelerated training in soft-
Alexandra Andrus (left) and Margaret Schiffer (right) participate in We Can Code IT at Beaumont.
ware development to fill the need for programmers. “We also have a workshop for kids
8 to 14 where you can learn engineering and
computational skills using Minecraft and
that’s what we teach them.”
Women in STEM earn 33% more than
women in non-STEM careers, said Ben
Williams, director of special projects for the
National Alliance for Partnerships in Equity,
which is focused on helping educational institutions close the gaps that exist in the participation, persistence and completion of diverse women and under-represented men in
STEM careers.
“Many of the programs that are considered
high-tech, high-wage, high-demand careers
are within STEM and they are areas where
women as still grossly underrepresented in
the workforce in anything from welding to
engineering technology to information technology and supply chain management,”
Williams said. “Many of the opportunities for
young women coming through the K-12
pipeline can be accessed through career technical education up to and through associate’s
degree and we still have very few women pursuing those. The reasons for that are complex
and varied.”
Unconscious bias
Consider this alarming statistic from Shannon B. Lundeen, director of the CWRU’s Flora Stone Mather Center for Women: “Women
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are getting close to 60% of STEM degrees in
undergrad yet they represent only 24% of the
workforce.”
To that end, Lundeen said CWRU’s Women
in Science and Engineering Roundtable (WISER) works to inspire younger girls and support its undergraduates and graduates as they
transition from the classroom to the workplace by connecting them with corporate
partners and other female professionals in
the field. WISER is the third largest group on
campus and one of the most active and visible, she said.
“This is a problem that can’t be solved
through one outreach activity … It’s not going to be enough to just ramp up the confidence of young women who are pursuing
STEM degrees. You also have to argue for systematic, institutional changes that will enable
and empower these women to be successful
and persevere,” she said.
Kathleen Buse, faculty director of the Leadership Lab for Women in STEM at CWRU’s
Weatherhead School of Management, makes
the very same argument.
“The research shows is that we get
(women) through college, we get them with
engineering degrees and they drop out at
twice the rate of men in corporations,” Buse
said. “The companies that realize there is a financial incentive for having more women in
leadership and more women in STEM professions are the ones that are leading the way.
They are making the intentional changes to
make their workplaces more hospitable to
women and how they deal with the unconscious bias against women.”
Corporations have an important role to
play in the retention and advancement of
women in STEM, Buse said, but the most
powerful messages girls receive about science, engineering or math happens at home.
“We know that parents are the biggest influence on career choice for girls,” she said. “I
believe that we need to spend more time educating parents about unconscious bias and
how the choices they are making with their
daughters are eliminating STEM careers and
a very good future for them.”
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20150223-NEWS--21-NAT-CCI-CL_--
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WOMEN IN STEM STORIES
21
BY CHRISSY KADLECK
CHAI YUET LEE
LISA M. RIMPF
AZLIN M. BIAGGI-LABIOSA
Staring at a starry night, Chai Yuet Lee asked herself, “How
could it be possible that stars can hang freely in the sky?”
Watching a blinking object flying by, she wondered, “How can
a plane stay in the sky?” Riding on a plane, she asked, “How
can an 800,000-pound object not fall to the ground?”
These are the questions that initially drew Lee, a project engineer at Aviation Component Solutions in Richmond Heights,
to pursue a degree in aerospace engineering. Born and raised
in Malaysia, Lee said she was most influenced by her father —
also an engineer — and her curious personality.
“He is one of those stereotypical male engineers who wouldn’t prefer his daughter to be in the engineering field, but I
looked up to him and the way he taught us emphasizing math
and science,” said Lee, who earned her MBA with a concentration in finance at Case Western Reserve University after moving to Cleveland 10 years ago for her position at Aviation Component Solutions.
She said being “influenced” or having a “passion” for STEM
fields is not enough for women to persist and achieve longterm success in male-dominated workplaces.
“As a female engineer you have to be a little bit more assertive from a technical perspective,” she said. That isn’t second nature for Lee, whose Asian culture expects females to
speak softly and offer their opinion only when asked.
Currently an active member of Women in Aviation, which
works to encourage participation of female students in STEM,
Lee believes it’s incumbent upon women in the field to join
forces to mentor and sponsor younger girls and women.
“No doubt consistent advancement in technical knowledge
and skills are fundamental to excel in STEM field; nonetheless,
persistent strength in maintaining such high standards representing minorities in STEM field for myself also includes my
support system — managers who consistently guide and lead
me, and academic professors who taught, mentored or
coached us through their experiences,” she said.
During her awkward middle school years, Lisa M. Rimpf
says she was oblivious to the concept that math and science
weren’t popular subjects for girls.
“I had a gifted and talented teacher who was amazing, and
she never treated anyone differently so I never knew there was
any difference between boys and girls in STEM,” says Rimpf,
34, a research engineer at The Babcock & Wilcox Co. in Barberton. “Same thing in high school, I had some really great science and math teachers — both male and female — who are
always incredibly encouraging.”
Rimpf, a Region G Governor for the Society of Women Engineers (SWE), went on to earn her master’s degree in chemical engineering from the University of Toledo and now works
on clean energy deployment for the utilities industry.
She became involved with SWE, a philanthropic-professional organization, as a freshman at the University of Toledo and
has stayed engaged ever since. She hopes to be elected to the
organization’s board of directors next year.
Rimpf, who grew up on the west side of Cleveland, said the
support and encouragement she has received from fellow professionals in SWE has been incredibly important.
“For somebody like me who is still early to mid-career, I can
very easily find a mentor or coach who is much later in her career and traveled the path that I want to travel to give me insight.
“I do the same for college students. I can tell them, ‘I got a
D on an organic test, and it’s OK, I survived. I got my diploma
I am gainfully employed. It’s OK,’” she said, adding that her
mom has always been her biggest supporter and cheerleader.
She believes strongly in outreach efforts and she spends a
lot of time with middle school and high school students doing
hands-on activities and just putting a face on her profession.
“It makes it real; it makes it attainable having those faces —
people who look like your neighbors, somebody who looks like
you,” she said. “It makes a difference.”
Microscopes, not baby dolls, were on Azlin M. BiaggiLabiosa’s wish list when she was a little girl growing up in
Puerto Rico.
Her father was an engineer and her parents fostered her natural inclination and interest in science. But it was a chemistry
teacher in high school whom she credits with helping her
make the decision to pursue a bachelor’s degree in chemistry.
She didn’t stop there.
Biaggi-Labiosa earned her doctorate degree in chemical
physics from the University of Puerto Rico and was immediately offered a job at NASA Glenn Research Center.
Recently promoted to manager of the Nanotechnology Project at NASA Glenn, Biaggi-Labiosa, 37, said that females still
receive pushback in the STEM fields.
“Even though it’s maybe minimized right now, it’s still there.
You can see it and you can feel it,” she said.
“It has to do with changing the mentality of the older generation and of some teachers; I saw it even in female teachers.
We are women and we are thinkers and we’re not less than
men.”
Not long after she joined NASA, Biaggi-Labiosa mentored a
young woman in ninth grade who came to shadow her even
though she had no interest in science. After spending three
weeks with her, the girl was won over by the potential of science.
“I changed her mind and she is pursuing her bachelor’s in
chemistry right now,” said Biaggi-Labiosa proudly, adding that
she has kept in touch with the student over the years.
“Those mentoring and shadowing programs are important
and readily available. We have to start these programs earlier.
I tell this to all the girls: ‘Keep going and don’t get discouraged
because you will encounter a lot of problems but you just have
to keep going. Don’t let those things end your career.
“Try your best and change the mindset of the people around
you.’”
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22 CRAIN’S CLEVELAND BUSINESS
Schools using money as graduation lure
As performance stakes get higher, colleges try incentives in effort to get students to complete on time
By TIMOTHY MAGAW
[email protected]
AT A GLANCE
Money talks, especially to cashstrapped college students. And if
it’ll help them graduate on time, local colleges and universities are
more than willing to shell out the
dough.
A handful of local higher education institutions have pieced together creative incentive programs
— some with real dollars attached
in the form of rebates — that encourage students to take heavier
course loads, hopefully spurring
them to graduate in a reasonable
amount of time.
Colleges, of course, have always
been in the business of graduating
students, but it’s no easy task. Oftentimes, students linger about for
years without finishing their degrees.
But over the last few years,
there’s been a national push to encourage colleges and universities to
do a better job of graduating students.
In Ohio, that movement got a big
boost when the state began tying
the bulk of higher ed funding to
colleges’ ability to graduate students, rather than simply rewarding those institutions who enroll
the most students.
“The increased attention on
completion is a healthy thing,”
Cleveland State president Ronald
Berkman said. “There was a little
bit of inattentiveness about the issue. Whether we get pressure nationally or whatever the state for-
COST OF CLEVELAND STATE’S GRADUATION INCENTIVE PLAN SINCE ITS 2013 START:
2,893 STUDENTS RECEIVING $200 TUITION REBATE
122 STUDENTS RECEIVING $400 TUITION REBATE*
2,815 STUDENTS RECEIVING $200 TEXTBOOK CREDIT
TOTAL INVESTMENT:
—
—
—
$578,600
$48,800
$563,000
$1,190,400
*those continuing to graduate school
mula may be, I think it is our goal
and our mission to do everything
possible to create an infrastructure
that allows students to be successful.”
Take Cleveland State, which in
2013 hiked tuition by 2%, but
promised to give that money back
and provide a textbook credit to
students who completed 30 credit
hours in an academic year. So far,
the program cost the university
$1.19 million. Cuyahoga Community College appears to be following
suit, having recently announced a
plan to give students a reward
equal to 50% of tuition for each
successfully completed credit beyond 12 credit hours during the fall
or spring semesters.
Under Tri-C’s current tuition
rates, students completing 15 credit hours — the minimum required
to quality for the incentive — would
earn $156.81, or $52.27 per eligible
credit hour. The incentive is designed to change the culture of
what it means to be a full-time stu-
dent, according to Craig Foltin, the
college’s executive vice president of
administration and finance. The
feds characterize a student carrying
12 credit hours as a full-timer, but
he said it’s difficult for students to
make meaningful progress on their
degrees by carrying that course
load.
“We’re pushing ourselves to
push students even more,” Foltin
said.
What’s in a guarantee?
Ohio University in Athens made
headlines earlier this year when it
gained state approval to hike tuition for incoming freshmen by
5.1% — as opposed to the state limited cap of 2%. But under the plan,
the university promised tuition and
fees would remain unchanged for
up to four years under the school’s
so-called “Ohio Guarantee.”
It was the first of the state’s fouryear institutions to make such a
move — one that was said would
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encourage students to stick around
and help them budget better.
Lorain County Community College, meanwhile, announced a similar plan last spring. The college
said it would hold steady tuition
and fee rates for students registering in the fall of 2014 or spring 2015
for up to three years or until the
completion of their degree —
whichever comes first.
“For community colleges, that
cost and affordability piece is a
hallmark,” said Marcia Ballinger,
the college’s vice president of academic and learner services.
“We’re looking at how we can incent completion in a more deliberate way.”
Baldwin Wallace University, a
private institution in Berea, has had
a guarantee program in place for
the last few years, though it isn’t
locking in a price point.
Assuming students meet certain
benchmarks, such as meeting the
appropriate credit hour requirements and meeting regularly with
an academic adviser, BW promises that students can graduate in
four years. If they don’t, BW will
pick up the tab for up to one year
for the extra time it takes students
to finish.
Students must sign an agreement saying they’ll keep their end
of the bargain and give the school
permission to share their grades
with the students’ parents.
“If students finish in four years,
that’s the best way to contain the
cost of education,” said Lisa Henderson, BW’s assistant provost.
“It allows students to get themselves out on the market in a timely way.”
Of course, tuition rebates, rewards and guarantees are only a
small piece of the overall completion toolbox at area colleges and
universities. Intensive advising and
streamlined course scheduling
tend to be where colleges and universities are investing the most resources when it comes to completion.
If anything, the rebates, rewards
and guarantees are good marketing
devices, especially in Northeast
Ohio’s ultra-competitive higher ed
arena, according to Richard Vedder, an Ohio University economist
and director of the Center for College Affordability and Productivity.
“In a sense, schools are trying to
bribe students to complete on time
to increase their state appropriations,” Vedder said.
“I think that’s a legitimate thing
to do. It might be viewed as a
healthy development.”
20150223-NEWS--23-NAT-CCI-CL_--
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2:13 PM
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23
More than résumés and job searches
College career centers roll out talent development programs as more is expected from their services
By JUDY STRINGER
[email protected]
In December, Ohio Board of Regents chancellor John Carey handed college and university presidents a mandate to create a better
plan for the functioning of their career centers.
The state board oversees higher
education and as costs escalate, so
does the pressure to produce graduates who can get good jobs.
The chancellor is not the only
one applying the pressure. The
Obama administration is finalizing
metrics for its proposed college
rating system, which could include
data such as how many graduates
are employed within six months
and student loan repayment rates.
Even college students, who used
to wait until senior year to visit career offices, are seeking counseling
and services sooner and more often. In fact, when prospective students and parents visit campus
these days, many want to know
what the college is doing to prepare students for gainful employment or grad school and how successful those programs are, said
the University of Akron’s career
center director Laura Carey.
So frequent are the inquiries,
many universities now include career center stops during campus
tours.
“(Students and parents) probably were always concerned about
these issues,” said Heather Balas,
director of career and academic
development at Hiram College,
“but they are much more vocal
about it now.”
A new role
That means career centers —
once known primarily for holding
workshops about résumés writing
and interviewing — are now tasked
with collecting and communicating
education outcome data.
Perhaps more importantly, today’s college-based career centers
are expected to expand on their
traditional support roles of career
advising and job placement. They
instead must act more like talent
development departments central
to the university’s mission of keeping kids engaged, on track and ultimately ready for the workforce.
“These are fairly complex goals,
but I think our offices are being
looked at to provide an even
broader reach and bigger impact,”
said Ann Motayar, director of the
career services center at Kent State
University.
“We are still delivering many of
our traditional services. … Those
are still all important ingredients,”
she said.
“That delivery model, however,
is leaning more toward integrating
this into the overall academic program.”
Kent and other colleges are considering, for instance, integrating
career preparation into academic
requirements for students as early
as freshman. Students might have
to write a résumé as part of a
course or take a career planning assessment.
While there is little question
more students are using the career
service department than ever, Motayar said the percentage of direct
contact is still modest when compared to Kent’s overall student
population. The university wants
to take a more active role in
spurring students to action and
making them think about employment outcomes early on.
The career service office at Kent
also is working more closely with
targeted academic programs to increase student awareness of jobs in
industries they might otherwise
overlook.
For example, it recently organized an insurance career fair to
spotlight dozens of career opportunities to students pursuing other
fields of study. Motayar said Medical Mutual of Ohio was there recruiting nurses, but insurance
companies also need accountants,
PLAN YOUR
marketing associates, human resources professionals, adjusters
and customer service representatives, just to name a few.
Applying what you learn
In addition, college career offices are intensifying their focus on
internships and other experiential
learning opportunities for students. Mitzi Vázquez-Long, director of talent development for
Cleveland State University, said
Cleveland State is creating a larger
pool of internship opportunities
for its student body through
stronger ties with Northeast Ohio
businesses.
Unlike the “pay your dues while
making coffee for the boss and not
getting paid” internships of the
past, Vázquez-Long said Cleveland
State is seeking out projects or positions aligned to a business need
and where students can gain valuable skills and experience, typically while being paid.
“We consider those to be placements in the workforce,” she said.
It’s a more proactive approach
than the office has taken in the
past, said Vázquez-Long since they
no longer sit back and wait for
companies to come to them with
job or internship openings.
Now the career center contacts
companies to find out what the
university can do to “create a talent
pipeline” for them, she said.
Some regional colleges and universities also are more actively
steering parents and students to
the
state-run
career
site
OhioMeansJobs.com.
The career center at the University of Akron’s, for example, recently completed an extensive analysis
of how its academic programs
align with a list of in-demand jobs
on the website.
Carey said the analysis is already
being used in one-to-one career
counseling sessions, but will eventually be rolled out on its website
and anywhere else students and
parents look for information about
Akron.
“It really is a very valuable tool to
be able to look at the list of in-demand jobs in this region and then
look at the majors that prepare students for those positions,” she said.
Akron’s administration has taken a strong interest in sharing the
information not only with students
and parents but also faculty, since
they have more direct contact with
students than career centers do,
Carey said.
The bottom line is helping students understand how to assess
their talents and skills and then be
able to match them with both existing and emerging employment
opportunities.
“We are looking at, ‘What are
you learning with your degree in
English and how can we position
you in the workplace?’” VázquezLong said.
“That is different question than,
‘What can you do with a degree in
English?’”
A CHANGE IN FOCUS
Today’s university-based
career centers are undergoing
a transformation in many ways:
z Resume writing to creating
social media and LinkedIn
profiles: Students today put
themselves on social media
platforms and along with that
comes the need to understand
where and how to “brand” themselves to prospective employers.
z Unpaid internships to experiential learning: Colleges now
offer students internships that
have been vetted as projects in
the workplace and can provide
meaningful skills and experiences
for future employment.
z Senior focused to four-year
counseling: The career development process is being embedded
into the academic experience as
early as freshman year.
z One-time placement to lifetime job searching skills: The
emphasis on a single job placement is being replaced with a more
holistic approach to personal and
career development and giving students the skills to conduct three or
four job searches over a lifetime.
z Decentralized, stand-alone
department to more integrated
arm of university: The responsibility of college employability is extending beyond the walls of career centers to the entire university network.
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20150223-NEWS--24-NAT-CCI-CL_--
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2/19/2015
2:14 PM
Page 1
College Now grows through reinvention
Four years after rebranding, program not only provides scholarships but guidance services, mentoring
By KIMBERLY BONVISSUTO
[email protected]
In 2011, Cleveland Scholarship
Programs rebranded itself as College Now Greater Cleveland to better reflect its mission of not only
providing scholarships, but also
guidance and access to funds to
prepare for and graduate from college.
Now, four years later, it has expanded its board, added programming and nearly doubled its funding through corporate support and
grants, according to chief operating
officer Alenka Winslett.
Today, College Now provides
college access, navigation and retention services to students and
young adults at 150 locations in
Cuyahoga, Lorain, Medina and
Summit counties.
“In 2011, we had a focus on our
mission and expansion of our
board,” said Winslett, adding that
Lee Friedman came on board as
CEO. “We really looked at the needs
of the corporate community and
how we could help.”
The organization assists more
than 23,500 students each school
year and provides more than
$2 million in scholarships annually.
“The average family income of
our scholarship recipients is just
over $30,000, while the average cost
of the colleges they are going to is
$32,000,” Winslett said. “There is
definitely a need.”
College Now offers advising services in schools, libraries, recreation centers, a downtown Cleveland Now Resource Center and
other venues. While College Now’s
services are available to anyone,
there are programs targeted specifically to low-income students, including its mentoring program,
which continues to grow each year.
Someone to look up to
Through its mentoring program,
each scholarship recipient is
matched with a corporate mentor.
The electronic-based program began as a pilot in 2011 with 43 students and mentors, and has grown
to 750 pairs, with a goal of 1,100
pairs in two years.
Winslett said College Now is one
of the first programs in the country
to use the online platform for college mentoring. She said the program adapted a model used for
high school students. The “curriculum” involves discussion prompts
between the mentor and student at
different points throughout the college career. Discussions range from
ensuring students have their books
and paid their fees to helping line
up summer internships. Winslett
said the mentoring program also
helps students build networks.
Maria Spangler, director of community engagement for SherwinWilliams, became a mentor to Rebecca Rohwer, 20, in 2013. Rohwer,
a Brush High School graduate, is a
sophomore studying biology at
John Carroll University, which happens to be Spangler’s alma mater.
Spangler said she and her husband,
also a JCU alum, often attend track
and cross country meets to cheer on
Rohwer.
“The average family
income of our scholarship
recipients is just over
$30,000, while the
average cost of the
colleges they are going to
is $32,000. There is
definitely a need.”
– Alenka Winslett
chief operating officer,
College Now Greater Cleveland
“It’s been really fun to add this dimension to our little family — and
she’s become a part of our family,”
Spangler said. “And it’s easy for us
to go and cheer for John Carroll.”
Spangler said she was familiar
with the organization through her
company, which supports a variety
of initiatives in the Cleveland area.
She decided to take the leap as a
mentor as a way to give back.
“It’s really exceeded my expectations,” Spangler said, adding that
the online platform is “genius” and
provides regular prompts to keep
mentors and students connected
and the relationship viable. “For the
most part, life just drives what the
conversation looks like. College students naturally have an ebb and
flow of schedules. That natural flow
often drives what our conversations
are about.”
Rohwer called the mentor relationship “positive” and said Spangler is a great resource.
“I can go to her when I’m having
trouble or need someone to talk to,”
Rohwer said. “I have a teammate
who has the same scholarship and
also has a mentor. We absolutely
love having a mentor. It’s very helpful. I’d recommend it to anyone.”
Spangler said anyone considering
becoming a mentor should put
themselves in the students’ shoes.
She said many College Now scholarship recipients are first-generation college students who don’t
have the resources or people in
their lives to turn to for advice. “It’s
easy to forget what they don’t know
about the world.”
Getting it done
College Now boasts a 60% college
completion rate by scholarship recipients and states that its students
are five times as likely to graduate
from college as other low-income
college students. She said the program’s goal is to raise that statistic
to 80%.
COO Winslett said the organization awarded $1,000 scholarships to
25 graduates in five Cleveland public high schools in its first year as an
organization, when it was called
Cleveland Scholarship Programs.
Since then, scholarships awarded
annually have climbed to more than
$2 million. The organization has
awarded more than $62 million in
scholarships since its 1967 inception.
“Our recent growth is primarily
due to the partnerships with other organizations in the community that
are working with students — high
schools, post-secondary institutions,
non-profits, corporations, foundations and others,” Winslett said.
“We could not accomplish our
goals if we didn’t work together with
those entities to help students reach
their highest potential and move
them through their educational
path.”
Along with corporate support secured through its board of directors,
College Now also was awarded two
21st Century Community Learning
Center grants totaling $1.2 million
in 2014 to expand its ACT preparation program.
Last year the program also received a $1 million grant to manage
the Ohio AmeriCorps College Guide
program, which uses recent college
graduates to provide on-site college
counseling to students from lowwealth school districts across Ohio.
When you were 18, did you
have all of the answers?
We need 350 mentors for our next
class of college freshmen.
Apply to become a mentor today:
www.collegenowgc.org/mentoring
50 Public Square, Suite 1800, Cleveland, OH 44113 | 216.241.5587 | www.collegenowgc.org
20150223-NEWS--25-NAT-CCI-CL_--
2/20/2015
12:08 PM
Page 1
GOING PLACES
JOB CHANGES
CONSULTING
GABRIEL PARTNERS:
Frank Ewing to partner.
Send information for Going Places to [email protected]
UTILITY
FIRSTENERGY CORP.: David J.
Karafa to vice president, distribution
support, FirstEnergy Utilities.
BOARDS
FINANCE
FIRST FEDERAL LAKEWOOD: Heidi
Finniff to business development officer.
FIFTH THIRD PRIVATE BANK:
George von Zedlitz to senior vice
president, managing director,
Investment Advisors Division.
HOME SAVINGS AND LOAN CO.:
David Bell to relationship manager,
Cleveland market.
FINANCIAL SERVICE
D’AMORE TATMAN GROUP LLC:
Patrick J. Lysobey to staff
accountant; Robert A. Sorin to
director of business development.
HEALTH CARE
UNIVERSITY HOSPITALS ELYRIA
MEDICAL CENTER: Gary Dinger,
D.O., and Edward Craft, D.O.,
to family practice physicians.
INSURANCE
OSWALD COS.: Jessica Jung to director of sales, property and casualty.
WESTFIELD INSURANCE: Mike
Prandi to insurance operations
leader; Beth Riczko to group
underwriting and product leader; Rob
Bowers to national claims leader.
LEGAL
BROUSE MCDOWELL: Nicholas P.
Capotosto and Patricia A. Gajda
to members, Executive Committee.
MANUFACTURING
RPM INTERNATIONAL INC.: Carol
Baskey to manager, financial
reporting; Natalie Micale to
operational planning analyst.
TIMKENSTEEL: Rob Feielin to
director, application development and
support; Nick Valentine to director,
Faircrest Steel Plant; Paul Hodson,
Kevin Raketich, Karen Hannum
and Tim Haubenstricker to vice
presidents; Larry Pollock to director,
tube manufacturing.
REAL ESTATE
CUSHMAN & WAKEFIELD: Richard
Morehouse to director, property tax.
NAI DAUS: Jill Dzina to assistant
vice president and senior property
manager; Eytan Rosenblum to
associate.
SERVICE
VISUAL MARKING SYSTEMS:
James Weaver to vice president,
sales and global markets.
STAFFING
DIRECT RECRUITERS INC.: Rachel
Gulko to lead recruiter, plastics
industry practice.
TECHNOLOGY
INFORCE TECHNOLOGIES: Brian
Bock, Jonathan Ziernicki, Nikola
Tomic and Pavel Chukhin to
implementation developers.
SOFTWARE CRAFTSMANSHIP
GUILD: Stephanie Suchan to
marketing lead.
TELECOMMUNICATIONS
VOX MOBILE: Alan Ackroyd
to chief technology officer; Stephen
Davis to regional vice president.
25
MAXIMUM ACCESSIBLE HOUSING
OF OHIO: Scott Strawn to president; Patti Substelny to vice president; John Cotman to treasurer;
Jan Hollinger Jones to secretary.
NAMI GREATER CLEVELAND:
Farah Munir, M.D. (Freee Clinic and
Recovery Resources), to chair,
medical advisory board.
NORTH COAST BUILDING INDUSTRY ASSOCIATION: Mary Felton
(Fidelity National Title) to president;
Jeff Lugar to associate vice president;
Liz Schneider to treasurer; Rock
Bain to secretary; Aaron Kalizewski
to immediate past president.
AWARDS
JEWELERS VIGILANCE
COMMITTEE: David Bouffard
(Signet Jewelers Ltd.) received the
2015 Stanley Schechter Award.
Ewing
Finniff
von Zedlitz
Jung
Prandi
Riczko
Bowers
Capotosto
JEWISH FEDERATION OF CLEVELAND: Andrew Zelman (Euclid Media
Group) received the 2014 Bennett and
Donna Yanowitz Leadership Award.
KIDNEY FOUNDATION OF OHIO:
Joshua Augustine, M.D. (University
Hospitals) received the 2015 Person
of the Year Award.
20150223-NEWS--26-NAT-CCI-CL_--
26
2/20/2015
1:56 PM
Page 1
STACK
the end of the year.
None of the centers are in Ohio,
but Barbaresi said STACK would
“love” to open facilities in Cleveland, Columbus, Cincinnati and
Toledo.
“The uptick is pretty significant,”
he said.
The company believes the same
can be said about its acquisition of
Driven Apps, which produced mobile apps for Adrian Peterson and
Dwyane Wade, in addition to training-oriented products. The recently
released STACK Performance
Coach app provides customized
workouts and in-app messaging
from the 300 performance coaches
who work at the company’s growing
list of training centers.
“We also see those 43 centers as
content studios,” Staph said. “We
have hundreds of experts who can
submit content to us.”
Palazzo, also a former Harvard
football player, said prior to the acquisitions of Velocity Sports Performance and Driven Apps, the company’s only revenue streams were
advertising and sponsorships.
“We wanted to monetize our traf-
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fic in other ways,” Palazzo said.
“As we continue to grow our traffic, we really wanted more opportunities to provide other products and
services to them. The acquisitions
were really an acceleration of that
effort.”
Doubling down
It’s the traffic — online and, to an
extent, at the training facilities —
that is driving STACK’s bigger,
faster, stronger way of thinking.
Palazzo said the number of
unique visitors to STACK’s website
tripled in 2014, and that followed a
nearly 10-fold jump from 2012 to
’13.
ComScore, a Reston, Va.-based
Internet analytics company, provided Crain’s with 2014 data that
showed STACK averaged nearly 7.2
million unique visitors per month,
including a norm of almost 8.7 million from June to August — not coincidentally, when many athletes
are training for the start of the
school year.
As impressive as those numbers
are, Palazzo and Staph said they
think a more accurate reflection of
STACK’s online popularity comes
from Google Analytics because the
search giant includes traffic to
websites from users under the age
of 18.
The 2 million-plus Internet
users whose patterns are tracked
by comScore are all 18 and over,
according to Staph, which leaves
out a sizable chunk of the company’s audience.
Staph said Google Analytics
shows that the company averaged
about 15 million unique visitors in
the last four months of 2014, including a peak of almost 24.2 million last October.
Zimmerman — who, along with
Staph works in STACK’s 20-person
office in the Halle Building — said
digital revenue is STACK’s largest
source of funds “by a significant
margin.”
“It’s the growth engine,” the
company president added.
The progress has been made possible by STACK’s monstrous video
library — now more than 7,000
strong.
Staph said the Cleveland office
includes four full-time video producers who do the bulk of the production of the three to six daily
videos that STACK posts to its website each day.
There are videos that provide
sport-specific training tips, clips
that show NFL prospects working
out in preparation for the draft, fitness segments and a heck of a lot
more.
Zimmerman said STACK is generating “upward of 75 to 80 million
video impressions every month.”
Palazzo said a short-term goal is
to up that number to 100 million,
which the company CEO said will
bolster STACK’s efforts to monetize
its vast variety of videos via partnerships.
Palazzo — who works in STACK’s
eight-employee New York office, a
group that comprises the company’s marketing, advertising and
sales teams — said STACK is planning on doubling its revenue in
2015.
He wouldn’t provide any specific
numbers, but said the ambitious
plan is based on “video growth and
traffic growth.”
There’s love for print, too
STACK’s key demographic, the
12- to 24-year-old athlete, does the
bulk of its reading on smart phones
— so much so that the company’s
mobile traffic tripled in 2014. But
the product by which the company
made its initial splash is by no
means dead. STACK magazine’s
print schedule has been reduced
from nine to 10 issues per year to
six, but its reach has widened.
The magazine — its most recent
issue had double covers featuring
Houston Rockets All-Star James
Harden on one side and women’s
basketball standout Skylar Diggins
on the other — is distributed to
13,500 high schools and has a circulation of 880,000. Because the magazine is shared among so many
young athletes, STACK said its research shows there are six readers
per copy, which would give the
print product a total reach of just
under 5.3 million.
Staph said being on the cover has
“become a badge of honor” for
prominent athletes, who enjoy the
fact that STACK documents “what
they’re doing right.”
“We’re not talking to them
about contracts and holdouts, and
things that affect their money,” he
said. “We want to talk about the
hundreds of hours of preparation
that went into the three-hour performance that everyone gets to
see.”
In its next issue, STACK’s first as
the company enters its second
decade, another Cavalier will be
featured. Kevin Love will adorn the
cover of the March magazine.
“It’s sort of come full circle,”
Staph said.
Nowacki Asset Management LLC
Period
Nowacki Asset
Management (NET)
Growth of $1
Million
S&P 500 Total
Return
Growth of $1
Million
May 2011 - Year End
-7.46%
$925,400
-6.37%
$936,300
2012
29.99%
$1,202,927
16.00%
$1,086,108
2013
51.76%
$1,825,563
32.39%
$1,437,898
10/31/2014
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$2,219,459
10.99%
$1,595,988
Note: Returns are shown in U.S. dollars after fees. Date of inception for Nowacki Asset
Management is May 2nd, 2011.
Nowacki Asset Management (NAM) is a registered investment advisory firm specializing in
value-oriented investment management. All client assets are included in one composite and
invested using a value-oriented strategy. NAM claims compliance with the Global Investment
Performance Standards (GIPS®). The S&P 500 Total Return index is subject to volatility and
the NAM composite may or may not be more volatile than the index. Past performance is not
aguarantee of future performance. Investments carry risks and the potential for loss. Results as
of 10/31/2014 are still subject to final verification by an independent third-party. NAM only uses
short-term margin or leverage to buy securities after a client commits to deposit funds and the
funds are in the process of being transferred, but the money has not yet completed the transfer
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with the GIPS standards, contact Michael T. Nowacki at (440) 488-6936 or write Nowacki Asset
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20150223-NEWS--27-NAT-CCI-CL_--
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2:03 PM
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CLINIC
the companies. The Clinic’s relationship with Cox is new, but it already has produced results: Cox invested in a Columbus-area
company called HealthSpot —
which makes a product best described as a virtual doctor’s office —
after the Clinic introduced the two
companies. Clinic doctors provide
care through six of HealthSpot’s
walk-in kiosks, which allow people
to meet with a doctor via video,
while they’re out running errands.
The partnership with Lubrizol
was announced just three weeks
ago, but officials from the two organizations have been brainstorming ideas for new products for
about two years.
Since then, the Wickliffe-based
company — which is best known
for making additives that go into
other materials — has developed
multiple prototype technologies
with the Clinic’s input, according
to Deb Langer, vice president and
general manager of Lubrizol LifeSciences. She wouldn’t describe
the technologies, but she said Lubrizol has been working with a key
player on the team that performed
the first face transplant in the United States: Dr. Francis Papay, chair
of the dermatology and plastic
surgery institute.
“And we will do more,” Langer
said.
For a few years now, the Clinic
and IBM have been developing
software that eventually could allow doctors to tap into the power
of Watson — an IBM product best
known for crushing the world’s
best “Jeopardy!” players.
The Clinic has helped IBM develop software that one day could help
doctors diagnose patients and ana-
27
BIOMIMICRY
lyze data from electronic medical
records. Now they’re exploring other
ways to work together, Kolonick said.
As for Parker Hannifin, officials
from the Mayfield Heights company’s hose and tubing division in
Ravenna reached out to Cleveland
Clinic Innovations in 2007, long
before there was a formal alliance
program.
Since then they’ve developed
dozens of medical device prototypes together, including a few that
are completed products.
Back in 2007, the Parker relationship was an anomaly. Cleveland
Clinic Innovations has spun off
dozens of startup companies over
the past 15 years or so — but most
of them have traditionally come
from ideas generated by staff
members at the Clinic.
In 2011, the Clinic really started
broadening its horizons: Since
then it has formed alliances with
six other hospital systems, as well
as the University of Notre Dame.
The Clinic is helping those institutions commercialize more technologies, and members of the
group share ideas and best practices related to innovation and
health care.
Two years ago, the Clinic started
going after more private companies. And that quest continues.
Kolonick said he finds himself on
the phone with a new company
maybe twice a month.
Cleveland Clinic Innovations is
particularly interested in working
with telecom companies, given its
interest in delivering health care
services via the Internet. But it’s
open to working with any company that could help it come up with
new innovations and turn them
into products, Kolonick said.
Meet
Brett!
They don’t have to be big companies, he said, noting that he’s talked
to businesses of “all sorts and sizes.”
Cleveland Clinic Innovation isn’t
big on limiting who can and can’t
join its alliance program. For example, it recently formed a partnership
with a government organization,
though Kolonick isn’t yet able to say
what it is.
Innovations also gets a lot of calls
from other countries, he said. It already works with an economic development group called Enterprise
Ireland, and it has had exploratory
conversations with organizations in
Scotland, Singapore, the United
Arab Emirates and other countries.
To become an official partner,
however, the Clinic and the partner
organization have to find at least
one project that they can tackle together.
“There has to be some sort of outcome,” Kolonick said.
the organization in 2010.
When Lorain County Community College finishes the new water
technology lab, GLBio will move its
small office on campus into the
building.
The college plans to move some
equipment from its lab sciences
building into the water technology
center.
It will buy more using part of a $2
million state grant, which “will get us
started,” according to Tracy Green,
vice president of strategic and institutional development at LCCC.
Prototypes that can’t be made in
the college’s sensor technology center — the Richard Desich Smart
Commercialization Center for Microsystems — could be made in its
fabrication lab, which includes
equipment for designing, cutting
and building things. The college
could provide a good jumping off
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point for new companies formed to
commercialize those technologies,
Green said.
The school houses the Glide business incubator and a technology
transfer office that helps local inventors get to the point where they can
either launch a business or license
their technology to someone else.
Avon Lake Regional Water would
be in the market for those services —
if it can find a way to outsmart toxic
blue-green algae. If it succeeds, other utilities would want to use the
technology, too, Danielson said.
Avon Lake Regional Water doesn’t
have much experience commercializing new technologies, but it might
be a good way to generate revenue,
Danielson said, noting that wastewater treatment plants aren’t receiving as much federal funding as they
used to.
“We can’t be yesterday’s public
utility,” he said.
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20150223-NEWS--28-NAT-CCI-CL_--
28
2/20/2015
12:09 PM
Page 1
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20150223-NEWS--29-NAT-CCI-CL_--
2/20/2015
1:15 PM
Page 1
29
RIVER
environmentally toxic to meet federal guidelines to be dumped into
the Lake Erie ecosystem. So the
spoils were dumped in what are
called confined disposal facilities,
or CDFs, along the lakefront.
Until late last year, when the
Corps became convinced by studies of the sediment by the federal
EPA that environmentally harmful
discharges into the river have
been curtailed enough to allow the
spoils to be placed in the lake, a
cost the federal government
would bear. It announced it wanted to dump the sediment into
Lake Erie this spring.
But Ohio EPA and local environmental groups have loudly objected.
At a meeting in Cleveland last
Tuesday, Feb. 17, Lt. Col. Karl D.
Jansen, the district commander of
the Army Corps Buffalo District,
backed off its intention to use open
dumping and said the agency
would not dump dredged sediment
into the lake this year.
But the issue of who will pay for
CDF disposal has not been resolved
and no request for proposals to
dredge this spring have been post-
ed.
“The dredged sediment for 2015
would be placed in CDFs located in
Cleveland’s outer harbor, subject to
a non-federal entity providing
funds to cover the difference in cost
between (open-lake placement)
and placement in a CDF,” the
Corps said in an email to Crain’s
last Thursday, Feb. 19.
“At this point in time, we do not
know how the cost differential (between open-lake and CDF disposal)
will be paid, or who will pay,” the
email stated.
“The Corps of Engineers continues to work with stakeholders
through the Dredging Task Force to
resolve issues, including costs.”
That isn’t making the Ohio EPA
happy.
“It is our position that until all
parties — U.S. EPA, (the Corps of
Engineers) and Ohio EPA — agree
that the sediments meet the criteria
for open-lake disposal and do not
pose a risk to Lake Erie, all sediment
should be disposed of in the Cleveland confined disposal facility at
full federal expense as supported by
the Army Corps Federal Standard,”
Ohio EPA director Craig Butler said
at the public meeting at Burke
Lakefront Airport.
“Ohio believes the Army Corps is
inappropriately requiring us to pay
for alternative safe disposal, which
absolutely is the obligation of the
Army Corps,” he said.
The difference in cost is significant. Open lake disposal can cost as
little as $10 a cubic yard. Putting the
sediment in a confined disposal
facility, adding to the filled land
along the lake, is significantly more
costly.
The Corps has spent nearly $5
million disposing of Cuyahoga sediment in CDFs in recent years.
That’s $25 a cubic yard for 200,000
cubic yards.
The cost the two sides are fighting over could be anywhere from
$500,000 to $5 million, depending
on how this is resolved, according
to William Friedman, president and
CEO of the Cleveland-Cuyahoga
County Port Authority.
Friedman expects it will be resolved in time for work to begin in
the spring.
“It’s an argument over who is
paying for certain costs,” he told
Crain’s.
“There’s almost no chance that
this dredging will not occur.”
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20150223-NEWS--30-NAT-CCI-CL_--
30
2/20/2015
2:54 PM
Page 1
OIL
KEYBANK
governor’s proposed tax increase
has come from members of his own
party. Many Republican lawmakers, especially those representing
areas of eastern Ohio where drilling
is prevalent, are opposed. The issue
is a hot one in legislative discussions, said Brittany Warner, press
secretary for Ohio House Speaker
Clifford Rosenberg, of Clarksville,
near Cincinnati.
“Speaker Rosenberger and the
members of the caucus will be discussing that issue over the next several weeks,” Warner said in an email.
“The budget proposal is very comprehensive and calls for several major tax changes that the members of
the caucus are still evaluating.”
Rosenberger voted in favor of Kasich’s last proposal to increase severance taxes, which ultimately failed to
become law last year, but Warner
said low oil and gas prices are weighing on legislators’ minds as of late.
“Absolutely,” she said. “House
members are in discussion about
the economic impact a tax increase
would have on that industry and, in
turn, how that affects local communities and the state economy. So,
price and production volumes will
be part of the conversation.”
Testa, however, said the low
price of oil is distorting the picture
in Ohio, where drillers are after not
crude oil, but natural gas.
“Ohio is primarily a natural gas
play, so things have not shifted that
much,” Testa said. “If this were an
oil play, things would be different
economically — but it’s not, it’s a
natural gas play.”
The price isn’t right
While the price of oil has collapsed from more than $100 a barrel last year to about $50 a barrel today, the price of natural gas is in the
same $3 per mcf that it was selling
for in 2012 — though it did spike to
nearly $5 per mcf in the interim.
Drillers, however, are quick to
note that the prices of 2012 were, by
historical standards, very low. The
industry has always counted on
prices to rebound, and they have
not come back nearly as much or as
quickly as drillers and their investors had hoped.
And while Testa and the Kasich
administration believe prices will
rebound, those in the oil and gas
industry are not sure that will happen, at least any time soon.
“Many operators are struggling
to survive . . . we have to adjust to a
new era,” said Shawn Bennett, executive vice president of the Ohio
Oil and Gas Association.
Low prices already are slowing
down drilling in Ohio, and an additional tax burden will only exacerbate that situation, Bennett argues.
In Ohio, at least a half dozen drillers
have announced cuts in their operational budgets of up to 40%. And,
along with the rest of the nation,
the state has seen the number of
drilling rigs working here decline in
recent months.
“There are people out there who
think the oil and gas industry is immune to commodity prices and
we’re just rolling in money —
what’s happening today proves
that’s not the case,” Bennett said.
“You have people who won’t commit to new wells because they don’t
know what commodity prices are
going to be, they don’t know what
taxes are going to be and so forth.”
A question of priorities
That brings into question
whether the state can raise as much
money as the governor hopes —
more than $200 million a year by
2017 — from oil and gas, in an environment of low prices.
Testa said that’s not a concern,
because the administration was
very conservative in the price and
production volumes it predicts. It’s
not counting on a spike in natural
gas prices or any increase in production beyond what drillers themselves have predicted, Testa said.
Most in the industry say that if
drillers stopped developing new
wells in Ohio today, the state’s production still likely would increase
over the near term, because there
are wells that are waiting for
pipelines to come and take away
their gas.
But, over the longer term, they
say it will take continued drilling
not only to increase the state’s production, but just to keep it level as
the production rate of new wells
declines rapidly in as little as a year.
For that to happen, drillers will
have to keep investing in the Utica
shale — and they won’t, unless it’s
more profitable than other drilling
opportunities in Pennsylvania,
West Virginia or other parts of the
United Sates.
est in it. It’s not the same as if the
state was taxing other property, like
a farmer’s barn or cornfield, he said.
“The barn that you have on your
property, the tractor that you purchase, the corn that you put in the
ground — these are things that you
did. … The natural gas and oil is not
something that you did,” Testa
contends. “The natural gas and oil
is something that developed over
400 million years and happens to
be under the state of Ohio.”
That might anger many Ohio
landowners, but it’s in keeping with
the logic behind most states’ sever-
“There are people out there who think the oil and gas
industry is immune to commodity prices and we’re just
rolling in money — what’s happening today proves that’s
not the case.”
– Shawn Bennett
executive VP, Ohio Oil and Gas Association
“If they’re not getting any money
out of the ground, they don’t have
any money to put back in,” Bennett
said of Ohio’s drillers. “And it remains to be seen how long this
downturn will last . . . You have
some analysts saying it will be two
years or more. It will take a year for
the industry to get comfortable,
back on solid ground and moving
forward.”
Finally, there is the question of
fairness. The governor wants to use
severance tax proceeds, along with
money from an increase in the
state’s sales tax and other sources, to
help pay for an income tax reduction. Lowering the income tax rate
for all Ohioans has broad support,
but is it fair to ask one industry, such
as oil and gas, to shoulder more of
the cost than others? Testa thinks it
is, and that all Ohioans should benefit from the state’s oil and gas.
“It’s a one-time natural resource
that’s being extracted from Ohio,
most of which is going out of state
to out of state firms,” Testa said.
Even though the law says that the
oil and gas beneath the ground is
privately owned, Testa contends all
residents of the state have an inter-
ance taxes, said Andrew Thomas, a
long-time Louisiana oil and gas attorney who currently researches
the economics of drilling in Ohio
for Cleveland State University.
“It’s a fiction that people own the
ground beneath their house. …
People think they have a right to
what’s underground all the way to
China. The world does not look at it
that way,” Thomas said.
“There has to be a way to share
the value of the minerals with the
public and the best way to do that
is with a severance tax,” he said.
“And the severance tax has to be
real and meaningful and right now
it’s not. I support increasing the
severance tax for that reason.”
As to what the rate should be,
Thomas said he’s not sure. The severance tax should be examined
alongside things like the sales tax,
commercial activity tax and others,
to measure a driller’s total tax burden, but that’s often difficult to do
from state to state, he said.
He does, however, think Ohio’s
rate is due for a raise.
“It should be comparable to what
other states charge, and it’s not,”
Thomas said.
but also a specialized and timely expertise unique to that business.”
In the past, the same entrepreneurs seeking direction or advice
on how to grow their business
might have received assistance
through different, less-structured
methods.
Now, there’s more of a “fast lane”
for those services, Devine said.
“We want you to be able to walk
into a branch and we want to be able
to serve you holistically as a business
owner right through that same location,” Oliver said.
“Maybe this was a different
process before. Maybe you worked
with a business banker who wasn’t
local. Now, you have a branch manager you’re going to be seeing anyway, and they will be the face of the
relationship, and they’ll be tied to
experts who can help your business
grow.”
Key executives declined to comment on how much the company is
investing in its new business resource segment.
Fred Cummings, president at
Elizabeth Park Capital, a Pepper
Pike hedge fund that invests in
bank stocks, said the initiative for a
company like Key, which has always focused on small business,
comes down to fine-tuning the approach.
The move likely will attract more
entrepreneurs while further supporting existing clients. At face value,
that means drawing in more deposits, Cummings said.
But new, entrepreneurial customers could result in additional
business for the bank via possible
financing opportunities for the
client’s company or for the individual’s personal needs, which might
translate to mortgages or auto
loans.
“It’s a very good segment to focus
on because most businesses are
small businesses, and it’s a great
source of core deposits,” Cummings
said.
“It’s also a niche that’s very competitive because you got a lot of
small banks, and that’s where their
core business is.”
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20150223-NEWS--31-NAT-CCI-CL_--
2/20/2015
2:30 PM
Page 1
THE WEEK
FEBRUARY 16 - 22
Frack away: The Ohio Supreme Court ruled
that the Summit County community of Munroe
Falls cannot use its zoning laws to ban hydraulic
fracturing, saying such authority belongs to the
state. The court ruled 4-3 that Munroe Falls’ zoning ordinances and local laws governing oil and
gas drilling exceeded the authority of the city’s
home rule power. Munroe Falls has tried to stop
Ravenna-based Beck Energy Corp. from developing an oil and gas well within city limits after
the company in 2011 received a permit from the
Ohio Department of Natural Resources. The
court ruled state law prohibits local government
from exercising powers “in a manner that discriminates against, unfairly impedes, or obstructs oil and gas activities and operations regulated under” Chapter 1509 of the Ohio Revised
Code.
The future is now: Cleveland Clinic and broadband
and cable television provider
Cox
Communications
formed Vivre Health, a venture aimed at developing inhome health care services.
Dr. Thomas Graham, chief
innovation officer at CleveGraham
land Clinic, said that health
care transformation “will be led by organizations
that embrace innovation and collaboration. This
alliance will accelerate the creation, development and delivery of solutions that will improve
and extend human life.” See related story, Page
One.
Time for a change: An investor group affiliated with New York City-based Time Equities
Inc. paid $20 million to become the new owner
of the last six of Duke Realty Corp.’s office buildings in Northeast Ohio. Cuyahoga County land
records show Rockside Magnolia SCC LLC acquired the properties from the Indianapolisbased real estate investment trust. The just-sold
properties include four Independence office
buildings: the Freedom Square I, II and III office
buildings on the 4400 block of Rockside Road;
Oak Tree Place, 6111 Oak Tree Blvd.; and an adjoining six-acre parcel. Two other buildings —
Rock Run North and South on Lombardo Center — are in Seven Hills
End of an era: Anthony J. Alexander, former
CEO and now executive chairman of FirstEnergy Corp., will conclude a 43-year career with the
company on April 30. He’ll step down as executive chairman on that date. Alexander, 63, also
will leave FirstEnergy’s board of directors effective May 1. George M. Smart, currently the company’s lead independent director, on May 1 will
return to his prior role as chairman of the
FirstEnergy board.
Hoop it up: One of the nation’s longest-running relationships between a city and a conference tournament just added six more years. The
Mid-American Conference and Quicken Loans
Arena agreed to a six-year contract extension to
host the MAC men’s and women’s basketball
tournaments at the home of the Cleveland Cavaliers through 2023. The current agreement runs
through 2017.
Leaving a mark: The Gay Games that took
place last summer generated $120,000 for the
Gay Games LGBT Legacy Fund at the Cleveland
Foundation and $27,000 for the Gay Community Endowment Fund of the Akron Community
Foundation, a report found. The donations represent the net profit from Gay Games 9, which
Cleveland organizers describe as the most profitable in the event’s 32-year history. The report
was issued in conjunction with a panel discussion at the City Club of Cleveland. It found that
the games generated $6.8 million in revenue —
$2.36 million from sponsors and donors, $2.64
million from registrations and civic contributions, and $1.8 million in in-kind contributions.
31
REPORTERS’ NOTEBOOK
BEHIND THE NEWS WITH CRAIN’S WRITERS
Geauga County wants a
piece of region’s film action
This technology literally
is state of the art
Fun is just starting
for student venture fund
Geauga County has a message for Hollywood: “We’re open for business, too!”
Toward that end, the nonprofit Geauga
Growth Partnership has booked Cleveland
Film Commission President Ivan Schwarz as
the keynote speaker for its annual meeting
this summer.
“The Film Commission’s vision for increased economic development, workforce
development and job creation is so in concert with the mission of Geauga Growth
Partnership,” said GGP president Tracy
Jemison, in an announcement that also was
a nod to Cleveland’s success in getting
some economic boost from the movie business. “It makes perfect sense to bring Ivan to
Geauga County, so we can learn from their
successes.”
Movies like “The Avengers” and, coming
up soon, “The Wake,” starring Bruce Willis,
have chosen Cleveland as a location in recent years. Observers say that area businesses have benefited from that activity, and the
Geauga Growth Partnership has been
watching.
The group notes that businesses ranging
from hotels and restaurants to real estate
agencies all benefit from working with the
film industry. It said the county also has talent and production professionals who
could provide their services. (Plus, Geauga
County is about as picturesque a rural environment as any director could want.)
The event is June 24. Details on registration are coming soon.
— Dan Shingler
The Cleveland Museum of Art, already a
technology pioneer with its ArtLens app and
the interactive Gallery One, is stepping up
its digital game.
The museum is releasing its first special
exhibition mobile application, “CMA Senufo,” designed for the “Senufo: Art and Identity in West Africa” show, which opened on
Sunday, Feb. 22. The app is free and is available for iPhones. It offers “insightful commentary, high-resolution imagery and
video,” the museum says, and thus “encourages a closer look at some of the exhibition’s
individual objects and the story behind Senufo-speaking artists and patrons.”
“Senufo: Art and Identity in West Africa”
features nearly 160 loans from museums
and private collections in Europe, Asia,
Canada and the United States.
Museum director William M. Griswold
said the museum “takes the development of
cutting-edge technologies and interpretive
materials to the next level with this exhibition app.” He said the technology “allows
visitors to experience this exhibition in ways
not possible before.”
The museum’s partner for the next generation of exhibition art apps is DXY Solutions
LLC, a creative technology agency based in
Cleveland.
Dan Young, CEO of DXY Solutions, said
the museum “has a unique vision for using
technology to compliment its exceptional
collection; it’s great to partner with such a
forward-thinking institution.”
— Scott Suttell
The Northeast Ohio Student Venture
Fund has generated its first profit: $833.33.
For the first time, the fund — which is run
by graduate students at six local colleges —
received a check from one of the companies
in its investment portfolio last week.
A waste management software company
called Wastebits borrowed $25,000 from the
Student Venture Fund in April. If the Akronbased company had held on to the money,
it would have eventually converted into equity, giving the fund an ownership stake in
Wastebits. Instead, the company decided to
pay it back early, with interest.
The money will go back into the fund, according to Dan Hampu, who serves as an
adviser to the fund for the University of
Akron Research Foundation.
The fund, which has made a total of four
investments, began in Akron, but now it also
involves grad students from Case Western
Reserve University, College of Wooster, Kent
State University, Notre Dame College and
Walsh University.
They select which companies should get
funding. Then their recommendations go to
a board that includes faculty members from
each school, the University of Akron Research Foundation and the community.
“As much as possible, we follow a venture
capital structure,” Hampu said.
The fund has been able to accelerate its
investing lately: Over the past year or so, it
raised $250,000 from the Ohio Third Frontier program, the Burton D. Morgan Foundation and other donors. — Chuck Soder
WHAT’S NEW
BEST OF THE BLOGS
Excerpts from recent blog entries
on CrainsCleveland.com.
Hey, it’s only one month
COMPANY: Osborn, Cleveland
PRODUCT: ATB composite disc
brushes with a molded shell mill
mount
The Akron and Cleveland home markets
are off to a slow start in 2015, at least based
on asking prices as measured by the Trulia
Price Monitor.
Forbes.com reported that nationwide,
asking prices on for-sale homes “climbed
0.5% month-over-month in January, seasonally adjusted — the smallest monthly
gain since August.” Year-over-year, the
website said, “asking prices rose 7.5%,
down from the 9.3% year-over-year increase in January 2014.”
Asking prices increased year-over-year in
94 of the 100 largest U.S. metros. Akron and
Cleveland are two of the six markets where
year-over-year prices have fallen.
The Trulia data show Akron was the second-weakest market in the country, with
asking prices in January down 3.3% from
January 2014. Cleveland was the fourthweakest market; asking prices were down
1% in the first month of 2015 from the like
month last year.
Forbes.com said the metros where home
prices are rising fastest, including Atlanta,
Houston, Indianapolis and Denver, “are, almost without exception, the ones with
faster job growth. Why? A growing economy
fuels housing demand. Among the 10 metros with the biggest year-over-year price increases, nine had at least 2% year-over-year
job growth.”
On the flip side, the website noted, “nearly all 10 markets with the slowest price gains
(including six with declines) have had relatively sluggish job growth.” Akron’s yearover-year job growth is 1.6%, while Cleveland’s is just 0.3%.
Osborn, a major global supplier of industrial brushes, says its new brush design fits
into users’ existing shell mill holders and
eliminates the need for adapters to fit into
their milling machines.
The new mount design for Osborn ATB
“also eliminates the need for additional
tooling between the user’s spindle and the
composite disc brush,” according to the
company.
“This new design on Osborn’s ATB composite disc brushes eliminates that extra
adapter for use in milling machines and
saves our customers on the cost as well as
the extra step for set up,” said Mike
Akuszewski, field application engineer at
Osborn, in a news release.
“This new mount style adds more durability for applications that demand highspeed, clockwise and counter-clockwise rotation changes compared to other pin-drive
systems,” he said.
Osborn says the ATB composite disc
brushes are “easy to integrate in machining
centers and provide repeatable results.” The
new brush models additions to the existing
ATB line and “save customers on the cost of
the adapters,” according to the company.
For information, visit www.osborn.com.
The only prescription …
Send information about new products
to managing editor Scott Suttell
at [email protected].
The Wall Street Journal reminded us that
flu season “still has a few weeks until it
ends,” and it asked Dr. Daniel Neides, med-
ical director of the Wellness Institute at
Cleveland Clinic, for some advice.
Here, for instance, is his take on whether
flu sufferers should stay home and spend
days in bed:
Dr. Neides says when he prescribes bed
rest, he is erring on the conservative side to
ensure patients aren’t out and about, infecting others and contracting different strains.
“While you’re battling one infection, your
immune system is busy and you’re susceptible to other contagions. It’s hard to fight a
two-front war,” he says. “The point is to not
overtax the system so you can focus your
strength to fight the good fight.”
He doesn’t suggest patients with a bad
cold or flu lie prone all day. Rather, The Journal said, “he wants them to be as still as possible in a comfortable position.” That could
mean reclining in an overstuffed chair, and
not necessarily the actual bed, he adds.
Once a fever has subsided and a person
doesn’t feel lightheaded or dizzy when standing, a little activity can be added gradually.
Blaze of glory
Blaze Pizza, a chain that counts LeBron
James among its investors, “is taking over
America,”
according
to
BusinessInsider.com.
The story noted that Blaze opened 50
restaurants nationwide last year, and this
year it plans to open 60 to 70 new locations.
Celebrities including James and Maria
Shriver have invested in the brand, which is
based in Southern California.
Blaze is all about Chipotle-style customization.
Customers build pizzas choosing from
seven cheeses, eight proteins, 20 vegetables,
and three sauces, said Blaze president Jim
Mizes. The pizzas then are placed in a stone
hearth oven and are ready in about three
minutes.
The company’s website shows there are
outposts in Columbus and Cincinnati, but
not Cleveland. Maybe James can do something about that.
20150223-NEWS--32-NAT-CCI-CL_--
2/20/2015
12:10 PM
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Taxing Time For Oil - Crain`s Cleveland Business

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