CLEVELAND, Ohio - BioEnterprise, which promotes and nurtures healthcare companies and bioscience technologies, will oversee marketing, promotion and tenants at the struggling Global Center for Health Innovation.
The nonprofit company was retained Monday by the Cuyahoga County Convention Facilities Development Corp., the nonprofit organization that oversees the Huntington Convention Center and Global Center.
According to the agreement, BioEnterprise will handle programming and marketing, which had been done by SMG, the company that manages the center and the convention center.
BioEnterprise has had a suite in the five-year old Cuyahoga County-owned Global Center. Under the new deal, BioEnterprise will move 20 executives, including business development, marketing, strategic initiatives and finance, into the 8,000-square-foot Business Showcase on the second floor of the center. The space had been designed for healthcare startups, but has generally been vacant.
"I am very, very excited," Cuyahoga County Executive Armond Budish said in an interview Friday with cleveland.com. "The new partnership will lift the Global Center and BioEnterprise to new levels of success."
During the same interview, Aram Nerpouni, president and chief executive officer of BioEnterprise, said the agreement is a "very natural extension of our role. Our mission is to grow the biomedical sector with new companies and jobs. We see it [the Global Center] as a great platform and opportunity."
Here's eight things to know about BioEnterprise's agreement:
Why was BioEnterprise brought in?
The $465-million Global Center and convention complex is being paid for with a quarter-cent increase of the sales tax in 2007. The concept for the center: to persuade big health-care companies to build showrooms for their medical technology, attract medical trade shows to adjoining convention center space and provide cutting-edge meeting space for continuing education.
Since the center opened in 2013, few companies have used the building for its orginal purpose.
At least 20 percent of the four-story glass building -- formerly called the medical mart -- remains empty.
Colliers International had unsuccessfully marketed the building for more than a year.
Healthcare executive Fred DeGrandis was hired in April 2015 to oversee the center, but no one has held the top spot since he left in June 2016. A national search was begun.
Last December, Budish began discussions with BioEnterprise officials about taking a role in running the center.
What will BioEnterprise do?
The company, created in 2002 by community and philanthropic leaders, has co-hosted the Northeast Ohio Biomedical Innovation Destination suite in the Global Center with Team Northeast Ohio to showcase the biomedical sector in Northeast Ohio.
Nerpouni said the company's work at the center will be similar to what it does every day.
"We work with young start-up companies and private equity investors around the globe to find the highest potential companies," he said. "One of the goals is to increase occupancy and tenancy. We expect a very active building with a clear purpose of global thought leaders coming into Cleveland to meet around innovation."
Nerpouni said he did not want to reveal all his plans, but indicated that there is a great deal of interest in the company's plans for the building.
What about BioEnterprise's current operations in University Circle?
The company will stay in University Circle, where it owns two floors of a building on Cedar Avenue.
"Our space at University Circle is 75 percent incubator space," Nerpouni said. "University Circle is the engine for the biomedical sector in Ohio. We've seen remarkable growth."
Moving some operations to the downtown Global Center may lead to collaborations with Cleveland State University and the MetroHealth System, he said.
Will it cost the county more money?
No. Money already in the marketing and programming budget will be overseen by BioEnterprise instead of SMG. The county will save money by not paying an executive to oversee the center.
BioEnterprise will pay no rent for the space it occupies in the center.
Will there be a name change?
Neither the Medical Mart or Global Center has resonated with companies or the general public.
"I would say that we have a lot of work to do before I think about that name," Nerpouni said.
What about the current tenants?
Many leases expire at the end of 2018 and early 2019. Renewal discussions will get underway, Nerpouni said.
The center saw an increase in lease income from $955,000 in 2016 to $1.22 million in 2017 because some financial incentives used to entice tenants in 2013 expired, said George Hillow, executive director of the Facilities Development Corporation.
Some tenants have already found alternative uses for their showrooms. Steris is using its showroom for continuing educational programs and the MetroHealth System holds staff and educational meetings in its space.
One successful tenant is the Healthcare Information and Management Systems Society, known as HIMSS, which occupies the fourth floor of the building. The nonprofit medical organization held 140 meetings in 2016 at the innovation center.
That compares to 150 other meetings in the Global Center in 2016, 15 more than the prior year, officials said.
Nerpouni said he was impressed by the roster of current tenants.
"We are getting them engaged and listening and hearing what is important to them," he said.
What about SMG?
The company will continue to run the basic operations at the Global Center and continue running the convention center.
"SMG is good at running a convention center because that is what they do," Budish said. "The Global Center is different and needs someone with connections in the health care world."
What are the goals for the future?
Budish's goals:
- To generate enough revenue for the Global Center to become financially and operationally stable. "We can increase revenue by giving tenants a reason to come in and remain."
- To attract more large and repeat business, including educational programming from events held at the attached convention center.
- To enhance innovation and entrepreneurship. It should support startups and early-stage businesses, which would receive guidance, connections and funding.
BioEnterprise's goals
- To enhance marketing and expand programming and tenant engagement.
- Host innovation and other competitions and produce tenant and corporate programs. The company expects to bring the hundreds of company and networking meetings it holds yearly into the center.
- Partner with SMG and Destination Cleveland to develop a "more robust pipeline of meetings and events."