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Cleveland: General Business & Economic News

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Kichler Lighting in Independence was just sold too, to a Livonia, Michigan conglomerate. Same story about nothing changing locally. Historically that's only true with strong local management that can make Cleveland a regional HQ, like Nestle/Stouffers in Solon.

 

http://www.cleveland.com/business/index.ssf/2018/01/kichler_lighting_sell_to_michi.html#incart_river_mobileshort_home

 

CLEVELAND, Ohio -- Kichler Lighting of Independence with 400 local employees has agreed to sell to Masco Corp. of Michigan.

 

Kichler Lighting of Independence is being purchased by Masco Corp. of Michigan.

The 80-year-old company that specializes in interior lighting fixtures is expected to retain the Kichler name and "operate in many ways as a stand-alone business," said Masco spokeswoman Sue Sabo.

 

That includes not making changes in Kichler's 700-person workforce, 400 of them in Northeast Ohio. "At this time, we do not anticipate relocating or eliminating any positions," she said. Companywide, Masco has 26,000 employees.

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Another acquisition by an out-of-town interest...

 

Courtland Partners of Cleveland agrees to be acquired by New York real estate investment firm

http://www.crainscleveland.com/article/20180109/news/147841/courtland-partners-cleveland-agrees-be-acquired-new-york-real-estate


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Not good

 

This one shouldn't have a major impact at least. The article says the combined number of employees is just 50.

 

The combined real estate group will have more than 50 people working from offices in the United States, Europe and Asia. StepStone said it will manage about $100 billion of capital allocations from institutional investors, including more than $2 billion of assets under management and deploying more than $10 billion per year to real estate investments through primary fund investments, co-investments, secondaries and recapitalizations.

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Something I've wondered about, and maybe someone here can explain the discrepency...

 

There's a large gap between the stats for the total Nonfarm Wage and Salary Employment data in Cleveland (which shows a rebound to pre Great Recession numbers, but showing the region has yet to regain the jobs lost during the 2002 recession), and the Local Labor Force data (which shows a drop-off and complete stagnation since the Great Recession).

 

Total Nonfarm Jobs from 1990 through 2017:

latest_numbers_SMU39174600000000001_1990_2017_all_period_M11_data.gif

 

Total Employment (Local Labor Force Data) 1990 through 2017:

 

latest_numbers_LAUMT391746000000005_1990_2017_all_period_M11_data_employment.gif

 

Does anyone know why the numbers are so different?

 

Source:  https://www.bls.gov/eag/eag.oh_cleveland_msa.htm

 

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^Not sure, perhaps the jobs are there, but they are not filled. The jobs number is always higher than the employment number.

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If you access http://ohiolmi.com/asp/CES/CES.htm

The seasonal adjusted numbers are much closer to the not seasonally adjusted numbers. I once emailed them why it was so different from the bls and if I remember correctly they attributed it to rounding but it didn’t really make sense. The Ohio labor market site also prepares reports in conjunction with the BLS so its confusing why their seasonal data is so different from that of the BLS.

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I once emailed them why it was so different from the bls and if I remember correctly they attributed it to rounding but it didn’t really make sense.

 

I used to work for the Commerce Department; the adjustment is mostly statistical smoothing biased somewhat by the prevailing trend, which is why the numbers always seem to lag what's happening on the street. The Commerce Dept. thinks of this as being conservative; however the effect is to prolong both up and down trends - slightly.

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Pretty sure this has been discussed on UO before, but not sure in which thread.  I believe the jobs numbers comes from the Current Employment Statistics (CES) dataset, which draws from a sample of firm and government agencies: https://www.bls.gov/ces/.  The labor force numbers come from a different source, the Current Population Survey (CPS): https://www.bls.gov/cps/lfcharacteristics.htm  Different data sources, so no surprise they don't line up.  I can't recall which is considered more reliable.

 

If I'm remembering it right, the most accurate source of this stuff is the Quarterly Census of Employment and wages, which doesn't extrapolate from smallish samples, but I don't think it has ready-made tables at the MSA level https://www.bls.gov/cew/

 

EDIT: here we go, here is an article from the Cleveland Fed about the accuracy of various measures: https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/2014-economic-commentaries/ec-201405-which-estimates-of-metropolitan-area-jobs-growth-should-we-trust.aspx

 

...there is the annual revision of the SAE data. These annual revisions are the most accurate employment statistics available for metro areas. For metro areas, they are a combination of the QCEW figures plus an estimate of the employment the QCEW does not include, excepting self-employment.

 

But you have to be patient for these, unfortunately. They don't come out as quickly as the initial SAE data (the CES/CPS)

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^Thanks, and coming from different data sources would make sense for some of the disparity.  However, the overall trends in the past before the Great Recession pretty much matched.  Post 2010 is where the large divergence starts, which made me wonder as to why.  That much of a difference, to me at first glance, just doesn't make sense when the trends in the past were so simiilar.

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CWRU startups glow at Consumer Electronics Show

Henry Bendon, Staff Reporter • January 18, 2018 • Leave a Comment

 

This year there were more startups from Case Western Reserve University students and alumni at the Consumer Electronics Show in Las Vegas, Nevada than any other educational institution. CWRU sent a delegation of ten new companies in fields ranging from biomedical technology to STEM education for girls to showcase their work in Vegas last week.

 

The team of organizations that helped the CWRU students and alumni make their way to CES includes the Larry Sears and Sally Zlotnick Sears think[box], which made some funding available to participating students and was itself on display at the show. The display for think[box] emphasized CWRU’s support for innovation by providing opportunities and facilities for students to design, test and fabricate products, described in a video taken of the booth’s representatives as “everything you could possibly need for your startup, under one roof.”

 

The companies also received assistance from LaunchNet, a business incubator at CWRU that helps CWRU students and alumni to “analyze business ideas to help see if they should go to market.” If the companies are determined to have viable product ideas, LaunchNet and its director, Bob Sopko, will then help the companies learn how to find customers, distribution channels, and other business focused aspects of forming a company.

 

https://observer.case.edu/cwru-startups-glow-at-consumer-electronics-show/

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Who could lead a new joint venture of Amazon, JP Morgan, and Berkshire Hathaway in healthcare?

 

http://www.crainscleveland.com/article/20180130/news01/150311/who-could-lead-new-health-care-company-started-three-billionaires

 

Toby Cosgrove is not the worst candidate on that list.  If he's the pick, might the organization be located in Cleveland?  It's much less far-fetched than Amazon HQ2.

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January 28, 2018 4:00 am      UPDATED 2 DAYS AGO

Banks feeling the draw to Northeast Ohio

By JEREMY NOBILE   

 

Jim Geuther, a Northeast Ohio banking veteran who has worked the market for some of the region's biggest players — like FirstMerit Bank, KeyBank and JPMorgan Chase Bank — said that at first thought, the increasing push by companies into this region the past few years was a bit unexpected.

 

Cleveland is a cheap place to do business and is surrounded by resources. The market has been growing slowly and steadily, and the mix of companies has been diversifying. So other banks wanting a piece of the market should make sense, right?

 

Yet the trend of banks breaking into this market has been steady, and on the surface, surprising to Geuther.

 

MORE:

http://www.crainscleveland.com/article/20180128/news/150031/banks-feeling-draw-northeast-ohio


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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KJP[/member] A friend of mine from HS currently works at Goldman Sachs in Chicago. He's 27, puts in about 70-80 hours a week and is looking for a change of pace.

 

He told me that he approached his boss in early January, and told him that he was considering leaving because he wanted to return to Cleveland, as his brother just had his first kid and his fiance is from Cleveland as well.

 

In response, his boss asked him to hang tight for the next 18 months, telling him "Stay here for 18 months, there has been talk of us expanding to Cleveland as our biomed portfolio expands in this office. If nothing has happened in 18 months, I will write you a recommendation, if it has happened, I will transfer you to the new office."

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Interesting. Here's a little tidbit… I was waiting to cross Clifton Boulevard yesterday during afternoon rush hour to reach the FedEx dropbox on the other side of the street. While waiting, I began to notice license plates and three of the cars passing by had New York plates. Another car parked on the street nearby was from Oregon.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Interesting. Here's a little tidbit… I was waiting to cross Clifton Boulevard yesterday during afternoon rush hour to reach the FedEx dropbox on the other side of the street. While waiting, I began to notice license plates and three of the cars passing by had New York plates. Another car parked on the street nearby was from Oregon.

 

Did a little audit of my apartment building again last week during the good weather. NY, Georgia, Texas, Maryland, Tennessee, and Michigan were all within a block of my apartment. With multiple NY and MD's

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I have seen a ton of plates from New York and New Jersey in Lakewood. I even mentioned it to my wife and friends during summer because it was so apparent especially some side streets where I saw 6 or 7 out of state plates parked on the street.

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Lots of girls from out of town on the dating apps, to the point where I've been surprised.

 

Thank you for providing some real evidence, instead of all of the conjecture!

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Who could lead a new joint venture of Amazon, JP Morgan, and Berkshire Hathaway in healthcare?

 

http://www.crainscleveland.com/article/20180130/news01/150311/who-could-lead-new-health-care-company-started-three-billionaires

 

Toby Cosgrove is not the worst candidate on that list.  If he's the pick, might the organization be located in Cleveland?  It's much less far-fetched than Amazon HQ2.

 

Kind of buried in the Cosgrove retirement stories is this little item:

 

"The money raised in this grass-roots effort will support innovation, research, education and patient experience. " The CCF spokesperson is referring to $50 million raised by the Clinic to honor Cosgrove; he added they intend to raise more.  It sounds as if the CCF $50 million would fit right into the Amazon/Berkshire/Morgan joint venture.

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Mayor Frank Jackson's 2018 budget calls for filling hundreds of vacant jobs by March 31

Updated Feb 1, 6:01 PM;Posted Feb 1, 5:20 PM

By Robert Higgs, cleveland.com

 

Cleveland's improving economy and the increase to the city's income tax that took effect in 2017 have provided enough revenue to stabilize the city's budget, Jackson said.

 

That means that the budget anticipates enough revenue coming in to pay for all 2018 expenses without having to rely on money carried over from the previous year. 

 

MORE:

http://www.cleveland.com/metro/index.ssf/2018/02/mayor_frank_jacksons_2018_budg.html#incart_river_mobile_home_pop


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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So they are going to post positions, vet resumés and interview in two months? That is doable if the positions are posted already or posted Monday morning, otherwise the process will be rushed IMO.

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NYT: The U.S. economy added 200,000 jobs in January. It was the 88th straight month that hiring increased, the longest such streak on record.

 

 

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Who could lead a new joint venture of Amazon, JP Morgan, and Berkshire Hathaway in healthcare?

 

http://www.crainscleveland.com/article/20180130/news01/150311/who-could-lead-new-health-care-company-started-three-billionaires

 

Toby Cosgrove is not the worst candidate on that list.  If he's the pick, might the organization be located in Cleveland?  It's much less far-fetched than Amazon HQ2.

 

Kind of buried in the Cosgrove retirement stories is this little item:

 

"The money raised in this grass-roots effort will support innovation, research, education and patient experience. " The CCF spokesperson is referring to $50 million raised by the Clinic to honor Cosgrove; he added they intend to raise more.  It sounds as if the CCF $50 million would fit right into the Amazon/Berkshire/Morgan joint venture.

 

Maybe I'm only teasing myself here, but today's WSJ said the A/B/M alliance is planning everything to work with IBM Watson software. And where is the newest Watson installation? East 105th and Cedar. Pieces are falling into place.

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Mayor Frank Jackson's 2018 budget calls for filling hundreds of vacant jobs by March 31

Updated Feb 1, 6:01 PM;Posted Feb 1, 5:20 PM

By Robert Higgs, cleveland.com

 

Cleveland's improving economy and the increase to the city's income tax that took effect in 2017 have provided enough revenue to stabilize the city's budget, Jackson said.

 

That means that the budget anticipates enough revenue coming in to pay for all 2018 expenses without having to rely on money carried over from the previous year. 

 

MORE:

http://www.cleveland.com/metro/index.ssf/2018/02/mayor_frank_jacksons_2018_budg.html#incart_river_mobile_home_pop

 

 

Does anyone know how many people the City of Cleveland employed in 1950, at the peak of it's population? 

 

I'm glad Jackson is trying to improve services, but they also need to work on improving efficiency at the same time. 

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Cleveland Clinic looking at more deals in Florida:

 

"Cleveland Clinic's growing presence on the Treasure Coast should enhance economic-development opportunities in the region as well as the quality of health care, several business and government leaders said.  Indian River Medical Center in Vero Beach and Martin Health System in Stuart embarked on separate partnerships with Cleveland Clinic in the past 10 days. IRMC leaders picked Cleveland Clinic to negotiate a takeover of the county-owned hospital, while Martin Health announced an affiliation agreement for cardiology and heart surgery with Cleveland Clinic...."

 

https://www.tcpalm.com/story/news/local/indian-river-county/2018/02/02/cleveland-clinic-partnerships-indian-river-medical-center-martin-health-system-would-boost-local-eco/1083456001/

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More data -- real estate friend who works at Howard Hanna's Rocky River office estimates that 20-25 percent of his office's work right now is handling relocations to the Cleveland area. He says that while only about 5 percent of his business is relocations, there are realtors at his office who handle nothing but relocations and they are busy. He promised to get me some hard data the next time I see him.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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More data -- real estate friend who works at Howard Hanna's Rocky River office estimates that 20-25 percent of his office's work right now is handling relocations to the Cleveland area. He says that while only about 5 percent of his business is relocations, there are realtors at his office who handle nothing but relocations and they are busy. He promised to get me some hard data the next time I see him.

 

This matches the very unscientific (but fun) moving van census of a few months back - that more full vans were heading TO Cleveland than away.

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February 04, 2018 4:00 am

Inca Tea is pumping up production, biz options

By RACHEL ABBEY MCCAFFERTY

 

Inca Tea is piping hot.

 

Its path hasn't been without hiccups or hurdles, but it has been steady since its founding four years ago. And the company's most recent investment will bring a significant amount of production to its headquarters in Cleveland's Slavic Village.

 

Ryan Florio started the purple corn tea company in February 2014, inspired by a trip to the Inca Trail in Peru a couple years earlier. That first year, the company was based in Florio's parents' home and sales were a little less than $50,000. in 2018, the company has its own headquarters in Slavic Village, with plans to soon open a freestanding cafe nearby, and Florio expects the company's sales to reach $1 million, including franchise fees and proceeds from a licensing agreement.

 

Up until now, the company has outsourced the manufacturing of its main product: bagged tea. But Florio, who describes himself as the company's TeaEO, has wanted to bring that in-house since the beginning. At the end of January, Inca Tea received two Fuso machines, one to make tea bags and one to automatically put those bags into envelopes. The machines, which cost about $300,000 together, can make rectangular or pyramid tea bags, turning them out at 80 bags a minute.

 

MORE:

http://www.crainscleveland.com/article/20180204/news/150771/inca-tea-pumping-production-biz-options

 


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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February 04, 2018 4:00 am UPDATED 20 MINUTES AGO

Tech startup is making waves in housing market

By STAN BULLARD

 

Bouts of brutally cold weather have not kept Alison Benoit, a real estate agent in the Pepper Pike office of Keller Williams, from writing six accepted offers on homes last month. That figure is as much as the 20-year veteran of the residential market says is typical for hot sales months in summer.

 

"For me it's not been all that different than working with a buyer who is pre-qualified with a lender," Benoit said of searches she has undertaken from Cleveland Heights to Medina that resulted in two closings.

 

However, the difference is that Benoit is working with people who will lease a home they select for three years from San Francisco-based tech startup Divvy Homes. After that time, if they want to stay, they will get to buy the house with a bonus for appreciation as well as credit for part of the equity they contribute.

 

The Cleveland area — technically from Amherst to Akron — is one of two markets, along with Atlanta, that Divvy is expanding into following the Jan. 25 completion of a $7 million round of funding from DFJ of Los Angeles and Caffeinated Capital of San Francisco.

 

MORE:

http://www.crainscleveland.com/article/20180204/news/150781/tech-startup-making-waves-housing-market


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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^ It took me a couple readings of that article to figure out that Divvy becomes the property owner during the lease period.  Interesting idea, but that model may only work as long as money stays cheap.

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Below is a comment from Amazon fulfillment center developer Seefried Industrial Properties at an event in #CLE this morning. Behind North Randall, Euclid projects. With high unemployment in #Cleveland's urban core, this comment suggests there either weren't large enough, build-ready sites in the core or the public #transportation was inadequate to expand the #labor pool's reach.

 

David Leb‏

@leb_cre

Why two amazon centers in cleveland just 20 miles apart? Comes down to labor. Up to 2500 employees in each center, tough to find enough labor in this market- Adam Goldberg @Bisnow


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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From the Arconic 4th Quarter Earnings press release:  "As part of the Company’s continued drive to reduce corporate overhead, Arconic announced that it will relocate its global headquarters in 2018 out of New York City to a more cost-effective location. The Company expects to complete the move by the end of 2018."

 

Arconic is the manufacturing part of the former Alcoa Aluminum combine, split out last year. No reason that headquarters site shouldn't be Cleveland. Yes, they have back office administration still in Pittsburgh from the old days when the whole company was there, but four of their operating divisions are headquartered in Cleveland. It makes as much sense to put the Hqs on Harvard, or perhaps downtown, as anywhere else.

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Arconic is the manufacturing part of the former Alcoa Aluminum combine, split out last year. No reason that headquarters site shouldn't be Cleveland.

 

Agree. Cleveland is essentially their headquarters already. Here's hoping.

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Unfortunately, only 80 people work at Arconic's New York HQ. An article from a year ago....

 

It probably wouldn't be remain 80 if they moved here. Even if it did, a Fortune 500 add in Cleveland comes once in a decade.

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Certainly, it would be a good addition. But it doesn't mean there's going to be a new skyscraper downtown nor probably any new construction as a result.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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From the Arconic 4th Quarter Earnings press release:  "As part of the Company’s continued drive to reduce corporate overhead, Arconic announced that it will relocate its global headquarters in 2018 out of New York City to a more cost-effective location. The Company expects to complete the move by the end of 2018."

 

Arconic is the manufacturing part of the former Alcoa Aluminum combine, split out last year. No reason that headquarters site shouldn't be Cleveland. Yes, they have back office administration still in Pittsburgh from the old days when the whole company was there, but four of their operating divisions are headquartered in Cleveland. It makes as much sense to put the Hqs on Harvard, or perhaps downtown, as anywhere else.

 

They actually have a manufacturing location more or less downtown (the old Howmet Tempcraft visible from the Shoreway) so while downtown might not make sense for most manufacturing companies, it might here.

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It's being close to their manufacturing sites was important to Arconic, they wouldn't have picked New York in the first place.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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It's being close to their manufacturing sites was important to Arconic, they wouldn't have picked New York in the first place.

 

It was the arrogance of a particular CEO, Alain Belda, who disliked "provincial" Pittsburgh, that moved Alcoa to NYC. He claimed the reason was to be near financial markets

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Article about University of California, San Francisco (UCSF) Hopsital and its plans with a strange mention about Metro in Cleveland and its plans. No other hospitals are mentioned in the article which is solely about UCSF Hosp.

 

https://www.healthcaredive.com/news/500m-donation-sparks-ucsf-hospital-plan/516810/

 

Always good to see Cleveland mentioned, though.

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Uh oh?

 

New York private equity firm to buy majority interest in American Greetings

 

Clayton, Dubilier & Rice will acquire a 60% ownership stake in the company, while the Weiss family, descendants of Jacob Sapirstein, who founded the company in 1906, will retain a 40% stake. Upon the close of the transaction, John Beeder, current president and chief operating officer of American Greetings, will become CEO. Zev Weiss and Jeffrey Weiss, current co-CEOs, and Morry Weiss, the current chairman, will be on the board. David Scheible will be the new chairman.

 

http://www.crainscleveland.com/article/20180213/news/151806/new-york-private-equity-firm-buy-majority-interest-american-greetings


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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