Crain's Cleveland Business by Crain's Cleveland Business

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Surprises ahead in downtown apartment push As city center vacancies dwindle, developers see unheralded sites as conversion targets

RUGGERO FATICA

GrafTech site manager Brian Bartos stands near a machine that rolls graphite for today’s high-tech products.

HOT IN CLE LAKEWOOD GrafTech puts 21st-century twist on materials it’s made for 126 years By DAN SHINGLER dshingler@crain.com

magine a city with one of the nation’s largest buggy-whip makers 126 years ago and then, instead of disappearing like its peers, the buggy-whip company evolved to become a thoroughly modern and successful manufacturer and exporter of high-tech products. Now imagine that same company increasing its work force by more than two-thirds in the midst of one of the nation’s worst recessions. Actually, you don’t need to imagine — just go to Lakewood. Because that’s just about the kind of success that city has had with GrafTech International. See GRAFTECH Page 17

As apartment fever infects Northeast Ohio’s real estate community, developers and investors are buying and eyeing some unexpected buildings — including the vacant former headquarters of East Ohio Gas — for potential conversion to apartments in downtown Cleveland. Cyrus Sakhai, a principal of Sovereign Properties Ltd. of Manhattan, acknowledged that his company has been approached by several prospective buyers he would not identify and would consider a sale of the 21-story East Ohio Building, at 1717 E. Ninth St. Sovereign bought the building in a 2006 distress sale for $12 million to market it as offices. However, a soft office market downtown and the

STAN BULLARD

By STAN BULLARD sbullard@crain.com

East Ohio Gas’ former headquarters nation’s stagnant economy have done those plans no favors. Sovereign let the building go dark after the last See SURPRISES Page 12

INSIDE Think you’re a great driver? Prove it A growing number of Progressive Corp. customers are using Snapshot, a device that monitors driving habits. Crain’s reporter Michelle Park details the insurance product and gives it a test drive. PAGE 3 ALSO: The National Carbon Co., which later turned into GrafTech, pre-dated Lakewood.

■ Cleveland’s Manufacturing Mart gains support. PAGE 6

Fairmount Minerals enjoying sunny days in the sand business Her company sells industrial sand — stuff found all over the world, including at no fewer than 26 mines in North America that Fairmount owns or fared in its first year under controls. And yet Fairnew president Jenniffer mount sold sand as fast as Deckard, she can sum it up it could dig it in 2011. without using numbers. Deckard While most industrial “We were absolutely sold out. We couldn’t have made companies still were chasing their pre-recession sales records, Fairanother grain,” Ms. Deckard said.

Fracking, other markets boost Chardon company’s revenue line well past records By DAN SHINGLER dshingler@crain.com

Like most private companies, Chardon-based Fairmount Minerals doesn’t disclose its revenues. But if you want to know how the company

mount was shattering them, Ms. Deckard confirms. Ms. Deckard isn’t taking credit for the increase, which helped Fairmount grow to 752 full-time employees at the end of 2011 from 610 the previous year. The nation’s booming shale gas industry was the main driver of Fairmount’s burgeoning sales, because sand is used in hydraulic fracturing, or “fracking.” But the shale business wasn’t the

only sales driver, according to Ms. Deckard, who said “every one of our markets is growing.” Coming in about tied with fracking, in terms of sales to Fairmount’s end markets, is the foundry business, which uses sand to cast metal parts. They are followed by sales to glass makers, which use sand as a key raw material, and to companies that make filtration systems using See SAND Page 6

NEWSPAPER

74470 01032

SPECIAL SECTION

WHO TO

WATCHINTECH

Crain’s identifies some of the lesser-known players in NE Ohio technology ■ Pages 13-15

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JANUARY 16 - 22, 2012

A WORLD APART

COMING NEXT WEEK

New federal data show the United States ranks 14th in the world in total wages and compensation for manufacturing workers. That’s about on par with Ireland and Italy and far behind Norway, Denmark, Sweden and Germany. U.S. manufacturing workers earn an average of a bit less than $35 in total hourly compensation, which is about 60% of the amount that workers in No. 1 Norway receive. Here’s the data for the top 10, plus the United States, in 2010 U.S. dollars:

Higher Education In next week’s special section, we look at how much time college presidents must devote to fundraising and the challenges that those duties present. We also check in on the region’s entrepreneurship programs.

Hourly compensation

Country

Hourly compensation

Norway

$57.53

Germany

43.76

Switzerland

53.20

Finland

42.30

Belgium

50.70

Austria

41.07

Denmark

45.48

Netherlands

40.92

Sweden

43.81

Australia

40.60

United States

34.74

Country

CORRECTION

REGULAR FEATURES

Chuck Birchall’s role with Sports Director Online LLC was misstated in a Jan. 9, Page One story that described Mr. Birchall’s criticisms of JumpStart Inc., a nonprofit that assists and invests in local startup companies. Mr. Birchall is CEO of Sports Director Online but did not start the business.

Classified .....................18 Editorial .........................8 Going Places ................11 List: Architectural firms ...................16-17 Tax Liens ......................10 Reporters’ Notebook .....19

SOURCE: U.S. BUREAU OF LABOR STATISTICS; WWW.BLS.GOV

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Tim Magaw (tmagaw@crain.com) Health care & education Michelle Park (mpark@crain.com) Finance Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams

FINALISTS ANNOUNCED BrainMaster Technologies, Inc. eQed, LLC GrafTech International Holdings Inc. Kent Displays LineStream Technologies MesoCoat Inc. NASA Glenn Research Center – Shape Memory Alloy Team

NuVention Solutions Ohio Aerospace Institute Polyflow Powdermet, Inc. Spectre Sensors Inc. Tesla NanoCoatings Ltd. Thermalin Diabetes

Meet the remarkable people behind Northeast Ohio’s latest technological advancements

Join Us March 22 www.CrainsCleveland.com/niatix PRESENTED BY:

Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Marketing/Events coordinator: Jessica Snyder (jdsnyder@crain.com) Advertising sales director: Mike Malley (mmalley@crain.com) Account executives: Adam Mandell (amandell@crain.com) Nicole Mastrangelo (nmastrangelo@crain.com) Dawn Donegan (ddonegan@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Digital strategy and development manager: Stephen Herron (sherron@crain.com) Web/Print production director: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Graphic designer: Lauren M. Rafferty (lrafferty@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com) Audience development manager: Erin Miller (emiller@crain.com)

Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-2912, or email to customerservice@crainscleveland.com, or call 877-812-1588 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Reprints: Call 1-800-290-5460 Ext. 125 Audit Bureau of Circulation

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CRAIN’S CLEVELAND BUSINESS

SS&G’s lead dog to exit after 27-year run But blood remains the same, as first cousin of accounting firm’s managing director will step in By MICHELLE PARK mpark@crain.com

In 15 months, the man who has led SS&G since a gallon of gas cost roughly 90 cents will step aside for a family member. Gary S. Shamis, who has been managing director for the regional accounting firm since 1986, will relinquish the lead role May 1, 2013, firm executives told Crain’s Cleveland Business. Mr. Shamis, 58, will hand the reins of the firm to Robert M. Littman, 52, who is one of two managing directors for the firm’s Akron office. “Succession should be an evolution, not an event,” Mr. Shamis said, noting how he has watched other CPA firms struggle through rocky, or failed, successions. “We wanted to give Bob and his support team two busy seasons to transition some of the work.

THE WEEK IN QUOTES “Absolutely, the lion’s share of the growth is from fracking. But every one of our markets is growing.” — Jenniffer Deckard, president, Fairmount Minerals. Page One

“The demographics of fans that interact with teams’ digital content are very attractive for advertisers.” — Matt Balvanz, director of analytics, Navigate Research. Page 7

“One of the key challenges for tech leaders will revolve around talent. Unfortunately, our talent pool is not deep enough, especially in terms of quantity.” — Brad Nellis, executive director, Northeast Ohio Software Association, COSE Technology Network. Page 14

“The biggest success to date is creating a portfolio of Clevelandbased, early stage technology companies that are now employing significant numbers in the region.” — Joseph Jankowski, associate vice president for technology management, Case Western Reserve University. Page 14

“He knows the firm really well,” Mr. Shamis added of Mr. Littman, who is his first cousin (their mothers are sisters). “We’re not going to miss a beat.” SS&G ranked in 2011 as the 42ndlargest accounting firm in the United States with $64.8 million in revenue, according to Accounting Today. Mr. Littman has been with the firm since 1985 and was named a partner in 1990. He holds the firm’s single largest book of business, and as he assumes his new role, he’ll need to transition to other colleagues some of the work those client relationships require, such as compliance. “They don’t need to worry,” Mr. Littman said of his clients. “I’m still going to have relationships (with them); that’s really one of my loves in this business. I like being the trusted adviser.” Mr. Littman said Mr. Shamis has See SS&G Page 7

RUGGERO FATICA

Gary Shamis (right) will step aside in May 2013 after 27 years at the helm of SS&G; Bob Littman will take over.

INSIGHT

Excellent driver? Snapshot lets you prove it Rising number of Progressive customers seek savings with usage-based insurance device

INSIDE: Crain’s reporter Michelle Park documents her driving experience with Progressive Corp.’s Snapshot. Page 9 ON THE WEB: Watch a video of how the device works

By MICHELLE PARK mpark@crain.com

The monitoring of drivers’ realtime behavior behind the wheel to determine whether they deserve auto insurance discounts is gaining traction, with Progressive Corp. leading the pack. Progressive already offers its heavily advertised, usage-based insurance program, Snapshot, in 39 states, plus Washington, D.C. That geographic breadth eclipses at least two of the local company’s competitors — State Farm Insurance Cos. and Allstate Insurance Co. — which have made similar programs available in seven and three states, respectively. In the nine months since Progressive began advertising its Snapshot program nationwide, its number of participants has dou-

bled to 500,000. The company has found that one of four people to whom it offers Snapshot chooses to participate, and the majority of them receive discounts averaging 10%, said Richard Hutchinson, general manager of usage-based insurance for the company based in Mayfield Village. Snapshot measures the mileage someone drives, the times of day someone drives and the frequency of sudden braking. Progressive’s program requires the device to stay in a vehicle for six months; after the first 30 days, an initial discount is applied, and after the first six months, a second and final discount is given. The State Farm and Allstate programs entail perpetual monitoring. Mr. Hutchinson isn’t surprised

as our team tests it on the streets of Cleveland. www.CrainsCleveland.com/driving by the increase in Snapshot participants. “The majority of drivers subsidize the minority of drivers who are higher risk,” he said. “This allows the majority of people to prove that they are average and better than average.” While usage-based programs potentially could erode profit margins in the short term due to safe driver discounts, Allstate believes it will enjoy growth in policies with safer drivers, said Steven Armstrong, senior director of auto line management for the insurer in Northbrook, Ill. Plus, the programs are giving insurers “a gold mine of information that will help us transform the way we underwrite,” Mr.

Armstrong said.

Protecting its turf Progressive developed its earliest form of usage-based insurance in the mid-1990s, but waited to go national until it had gained approval for Snapshot in 35 states, Mr. Hutchinson said. If Progressive’s widespread exposure isn’t enough to suggest its dominance in this emerging market, perhaps its legal actions to protect its technology are. Progressive just last week received its fourth patent for system technologies related to Snapshot. Also, the company has sued Liberty Mutual Insurance — an issue that’s ongoing — and Allstate for patent See SNAPSHOT Page 9

Hiring push part of MRI Software’s broader goals IT firm, on its way to bigger digs in Solon, eyes local industry’s top tier By CHUCK SODER csoder@crain.com

When people talk about the big players in Northeast Ohio’s information technology sector, David Post wants MRI Software LLC to be mentioned alongside Post the likes of Hyland Software Inc. and Rosetta Marketing Group. Or maybe even be mentioned first. “We want to be seen as the software company in Cleveland,” said Mr. Post, who is CEO of MRI, which

sells software used to manage real estate holdings. And that’s not just talk. The company in Highland Hills has done a lot to expand its presence in Northeast Ohio since the start of 2010, when Vista Equity Partners of San Francisco paid $128 million to buy the business — then known as Intuit Real Estate Solutions — from accounting software firm Intuit Inc. of Mountain View, Calif. Today, MRI employs 261 people in the region, Mr. Post said. That’s

up 37% from 191 in January 2010, according to the 2010 Crain’s list of the region’s largest software developers. About 12 of the new positions were jobs MRI moved to Highland Hills from three other real estate software firms it acquired in 2011, Mr. Post said. The company will move more positions to Northeast Ohio in 2012 and will continue creating jobs, too, he said. The “hiring spree” is a big reason why MRI plans to move to Solon in April, Mr. Post said. It recently signed a 10-year-lease for 100,000

square feet at 28925 Fountain Parkway, taking space occupied by Agilysys Inc., an IT services company that is moving to Georgia. Not only is the new space twice as big as the company’s current headquarters at One Harvard Crossing, but it also will give MRI the setting it will need to attract top talent, Mr. Post said. The Fountain Parkway building has a “classy” feel with a lot of natural light and better amenities, including more space for meetings, he said. “If I want to do an all-hands (meeting), I’ve got to basically invade the cafeteria upstairs,” he said, referring to MRI’s current space. See MRI Page 10

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Downtown pedestrian bridge hits snag Federal grant slips out of reach; walkway key to mayor’s 20-year waterfront redevelopment hope By JAY MILLER jmiller@crain.com

The city of Cleveland’s plan for lakefront redevelopment has hit a bump after missing out at the end of the year on an $81 million federal grant to build a pedestrian bridge from Mall C, on a bluff overlooking Lake Erie, over railroad tracks and the Shoreway to the city’s waterfront museums. The bridge is a critical early piece of Mayor Frank Jackson’s 20-year plan to redevelop Cleveland’s waterfront. Anchored at the north end of the under-construction Cleveland Medical Mart and Convention Center, the bridge would allow conventioneers and other visitors to walk under cover to the lakefront. The bridge would end in a new public plaza and marina. The city also sketched in a new hotel on the waterfront that, because of the new bridge, could serve visitors to the new convention center. Despite failing to land the grant, the city doesn’t consider the question closed. It has enlisted the support of U.S Rep. Marcia Fudge to get back in the running for a grant. The congresswoman, who represents the East Side of Cleveland and nearby suburbs, said last week that she arranged and participated in a

mid-December conference call with city officials and Amit Bose, the U.S. Department of Transportation’s deputy assistant secretary of governmental affairs, to find out how to make the application a winner. Her office also hopes to arrange a face-to-face meeting between city officials and Mr. Bose to make Cleveland’s case for the federal grant. Rep. Fudge said money sometimes is left over in this kind of grant program, at times because some grants are not accepted as circumstances change. She held out hope that Cleveland’s application could be reconsidered for any remaining funds, noting that she asked Mr. Bose to explore that possibility. Mayor Jackson’s spokeswoman, Andrea Taylor, confirmed that city officials had spoken with the undersecretary and was appreciative of the congresswoman’s efforts to help.

RTA grabs some dough When he unveiled his lakefront redevelopment plan in November, Mayor Jackson said the city had applied for a federal Transportation Investment Generating Economic Recovery, or TIGER, grant. The centerpiece of the grant application is a $50 million covered pedestrian bridge that would open onto an all-weather promenade and

to an outdoor plaza that would be the connection between the Great Lakes Science Center and the Rock and Roll Hall of Fame and Museum. This area also would include a $2 million, 53-slip marina and a $6.3 million drawbridge. Both of those projects already are financed and are on the drawing boards. Mayor Jackson said last November he would like the bridge and the marina at the waterfront end to be completed by the end of 2013. U.S. Transportation Secretary Ray LaHood said on his blog last Nov. 15, after the application deadline had passed, that the department had received 828 applications, with a combined value of $14.1 billion, for a round of grantmaking that totaled only $527 million. On Dec. 15, the department awarded $511 million to 46 projects in 33 states and Puerto Rico. One of the winners was the Greater Cleveland Regional Transit Authority. It won $12.5 million for its plan to move a Red Line rapid transit stop from Euclid Avenue to Mayfield Road, bringing the stop closer to Little Italy, University Hospitals and Case Western Reserve University. That award fit the pattern of the latest round of TIGER awards. When Congress approved a transportation budget last year and continued the TIGER grant program, it said priority should go to rail, highway and transit programs built on existing systems, rather than on from-scratch projects. ■

Autoweek high on new Fusion, Dart, Acura Manufacturers unveil new models at auto show

EMBA

WEATHERHEAD EXECUTIVE MBA

The redesigned 2013 Ford Fusion sedan, the 2013 Dodge Dart, the Acura NSX concept and the open-air 2013 Porsche 911 cabriolet have been singled out by the editors of Autoweek magazine as award-winning vehicles at the 2012 Detroit auto show. The Fusion won Best in Show, the Dart earned Most Significant honors, the Acura NSX won Best Concept and the Porsche 911 cabriolet won the Most Fun award, said the magazine, which is a sister publication of Crain’s Cleveland Business. Northeast Ohio residents likely will be able to see these vehicles at the Cleveland Auto Show, set for Feb. 25 to March 4 at the I-X Center. The Fusion, which comes in gasoline, hybrid and plug-in hybrid models, also won the Detroit Institute of Ophthalmology’s EyesOn Design award at the auto show last week. J Mays, Ford’s chief creative officer, said in a statement that in the 13 years he has been with the company, the Fusion is the best car ever to come out of its design and engineering center in Dearborn. Autoweek’s Best in Show award is based on what car people will remember most from the show five years from now. “The Ford Fusion bucks the mid-

sized sedan trend of playing to the broadest common denominator,” Autoweek editor Wes Raynal said. “Where many of the big players are aiming for an inoffensively bland look, the Fusion delivers bold styling that projects a more luxurious message than we expect for its broad, family-car mission. The Fusion is built for the 99%, chock-full of 1% panache and punch.” Commenting on the Dart, Autoweek’s executive editor Bob Gritzinger said, “Dodge is re-entering the crucial small-sedan market with a Fiatbased car that we think drills the target dead center. The bold Dodge styling, the sport-tuned Alfa Romeo Giulietta chassis and the attention to interior detail will draw buyers into the showroom, while the strong fuel economy and $15,995 starting price should close the deal.” Honda’s luxury division used the NSX concept to signal the return of the sports car, which it sold from 1990 to 2006. “In a show filled with standout concepts, the NSX rose above all for its styling, performance potential and spiritual connection to the original, which remains a favorite of enthusiasts,” Autoweek news editor Greg Migliore said. “The new allwheel-drive system intrigued our editors, and we look forward to the production execution in the next few years.” ■

Volume 33, Number 3 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

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CRAIN’S CLEVELAND BUSINESS

Michigan investors note AlgiSys’ potential Mayfield Heights company wants to produce in-demand acids, biomass By CHUCK SODER csoder@crain.com

A Mayfield Heights company aims to use the $5 million it just raised to build a pilot plant where the company will grow algae to produce a nutrient that has become a hot commodity. It is unclear, however, whether the company will remain in Northeast Ohio. AlgiSys LLC has received a $5 million investment commitment from investors in Michigan, according to CEO Michael LoPresti, who would not identify them. The state of Michigan also has indicated it will provide the company with a “generous, aggressive loan package” if it moves to Michigan, Mr. LoPresti said, adding that AlgiSys plans to seek incentives from counties and cities in the state as well. AlgiSys, which employs three people full time and five part time, would like to stay in Northeast Ohio, Mr. LoPresti said. However, when the company has inquired about incentives offered by the state of Ohio, it usually is directed toward the Ohio Third Frontier program. And though the economic development program provides financing for technology companies, AlgiSys wouldn’t fit easily into the sectors it targets, he said.

The company has received other types of support from organizations in Ohio. For instance, it received in 2010 a $40,000 loan from the Cuyahoga County New Product Development and Entrepreneurship Loan Fund and paid it back a year later, freeing the company from an obligation to manufacture in the county. AlgiSys also has received grant money from the Center for Innovative Food Technology in Toledo and an investment of a few hundred thousand dollars from two principals at Tower Wealth Management LLC in Beachwood and a handful of their clients. In addition, AlgiSys has received assistance services from the Akron Global Business Accelerator, the University of Akron Research Foundation and BioEnterprise Corp. in Cleveland. The company aims to grow algae to produce both omega-3 fatty acids and high-protein biomass. There is particularly high demand for omega-3s, which are believed to have a variety of health benefits. Studies have shown that they can reduce the risk of heart disease and stroke and can be used to treat depression, rheumatoid arthritis and high blood pressure. The omega-3 that AlgiSys wants to produce — known as eicosapentaenoic acid, or EPA — commonly is found in fish oil. That’s because

fish eat algae, said Charles Roe, who founded the company with Mr. LoPresti in 2009 after the two men left a Florida firm that aimed to make fuel from algae. AlgiSys looks to produce EPA as a food additive or a supplement, Dr. Roe said. AlgiSys plans to sell the high-protein biomass as a food additive as well, he said. “The food … play is a more nearterm market,” said Dr. Roe, the company’s chief technology officer.

Birth of a revolution Other companies already produce food additives and other products from algae. Martek Biosciences Corp. of Columbia, Md., which last February was acquired for more than $1 billion by Royal DSM N.V. of Heerlen, Netherlands, produces different omega-3s that are available in food products. Another company, Solazyme Inc. of South San Francisco, Calif., which harvests algae oils for food and other uses, went public on the Nasdaq stock exchange last May, raising nearly $200 million. Dr. Roe cited several other companies that, like AlgiSys, are using fermentation instead of photosynthesis to get micro-organisms to produce various chemicals. “I think we are at the very beginning of a revolution,” Dr. Roe said. AlgiSys relies on a patented tech-

nology licensed from Virginia Tech, but Mr. LoPresti said he would not provide details about it for competitive reasons. The pilot plant to grow the algae would require 10 to 12 acres under its current design, he said. An official from the Michigan Economic Development Corp. said AlgiSys has not been approved to receive incentives from the state, but added that it’s possible the parties are in conversations about them. Mr. LoPresti did not respond to a phone message and an email requesting additional information. Companies that receive product development loans from Cuyahoga County are required to make the product in the county for at least seven years, but not if they repay the loan, said Greg Krizman, senior director of marketing for Magnet, a manufacturing advocacy and consulting group that administers the program. Mr. Krizman said he isn’t too worried about lots of loan recipients leaving the county. The loans are designed to be repaid over 10 years. He said eight or 10 of the 70 companies that have received loans over the past five years have paid them back ahead of time. “It’s not like a lot of people are paying them back early,” he said. AlgiSys could end up staying in Northeast Ohio, but the company can’t ignore the benefits of moving to Michigan, Mr. LoPresti said. “We have to go where there is private investment as well as public support,” he said. ■

ON THE WEB

Story from www.CrainsCleveland.com.

Lizard owner eyes Galleria for new brand Workers and residents in what city of Cleveland leaders are rebranding the “NineTwelve District” soon will have one more option for lunch or a post-work happy hour. John Lane, owner of Winking Lizard, confirmed he is finalizing plans and will begin work soon on the Lizardville Local Bar Local Grille, which will take over a former art gallery space on the first floor of the Galleria opposite Dollar Bank’s prominent presence. The new restaurant follows Winking Lizard’s Lizardville brand, which was unveiled quietly in Bedford Heights last April in the form of a beer store and whiskey bar. The downtown Cleveland location, though, will differ in format: It will be “draft beer-centric,” Mr. Lane said, with most beers from Ohio and contiguous states. The restaurant’s wine selection will be 90% to 95% from Ohio and contiguous states. Mr. Lane said the Galleria Lizardville will open in May or June; he currently is wrapping up blueprints for the 5,000-squarefoot space. — Joel Hammond

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CONGRATULATIONS RUSS On the sale of 700 and 750 West Resource Drive, Brooklyn Heights.

JANUARY 16 - 22, 2012

Manufacturing showcase gains traction As expo nears, business, political support grows New signage on windows at the Galleria promotes the Manufacturing Martâ&#x20AC;&#x2122;s upcoming expo, to be held Feb. 14-15.

By DAN SHINGLER dshingler@crain.com

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Robert Dracon joins First Place Bank Commercial Banking Team First Place Bank welcomes Robert Dracon, Vice President, to our Commercial Banking team. With more than 20 years of experience in commercial and corporate banking, Robert has spent his career actively involved in and committed to the Cleveland business community.

Itâ&#x20AC;&#x2122;s probably too soon to call Clevelandâ&#x20AC;&#x2122;s year-old Manufacturing Mart a success, especially given the lofty dreams of its founder, Mary Kay Denning, who wants nothing less than to revitalize the regionâ&#x20AC;&#x2122;s industrial base. But the Manufacturing Mart at least is attracting the support of some business and political leaders as it prepares for its first big event next month. Tracey Nichols, Clevelandâ&#x20AC;&#x2122;s economic development director, as well as local businessman and Cuyahoga County councilman Jack Schron are among those who say theyâ&#x20AC;&#x2122;re supporting the efforts of Ms. Denning and her partner, mechanical engineer and product development consultant Lindsey Frick. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a startup enterprise, but everyone has to start somewhere ... and anything that features Cleveland as a center of manufacturing is a good thing,â&#x20AC;? Ms. Nichols said. Cleveland-area manufacturers will get a chance to do just that Feb. 14 and 15, when the Manufacturing Mart holds the â&#x20AC;&#x153;2012 Manufacturing Expo,â&#x20AC;? for which it has secured the entire common area of the Galleria in downtown Cleveland. The building itself was preparing to become a giant sign for the event last week, as vinyl signage advertising the expo was set to be wrapped around the Galleriaâ&#x20AC;&#x2122;s exterior windows. Ms. Deming and Ms. Frick still

DAN SHINGLER

were working last week to attract both exhibitors and attendees to the expo. With room for 170 exhibitors, less than half that many had signed up as of last Thursday, Jan. 12. But Ms. Denning is undeterred. Manufacturers notoriously are late when it comes to committing to events, she said. And even if this first event falls short, she says it still will lay the groundwork for future shows. Others hope sheâ&#x20AC;&#x2122;s right. â&#x20AC;&#x153;I canâ&#x20AC;&#x2122;t tell you that one way or anotherâ&#x20AC;? whether the Manufacturing Mart and its expo are successes, said Mr. Schron, who owns Jergens Inc., a large Cleveland industrial supplier. â&#x20AC;&#x153;But Iâ&#x20AC;&#x2122;m going to kick off the event next month,â&#x20AC;? Mr. Schron said, confirming his role as keynote speaker for the expo. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m excited about it.â&#x20AC;? The expoâ&#x20AC;&#x2122;s list of speakers, aside from Mr. Schron, includes the chairman of the National Tooling and Machining Association, the director of NASA Glenn Research Center, the director of the National Institute of Standards and Technologyâ&#x20AC;&#x2122;s Manufacturing Extension Partnership, and executives from Eaton Corp., Parker

Hannifin Corp. and the Canadian Manufacturers and Exporters group. But the expo is only part of the Manufacturing Martâ&#x20AC;&#x2122;s mission. It also works to connect inventors with manufacturers, to connect manufacturers with engineering services, and to connect manufacturers with each other via its Club Manufacturing in North America. The latter entity, which is free to join, aims to help manufacturers reduce their waste and also acts as a sort of manufacturerâ&#x20AC;&#x2122;s rep, connecting suppliers with customers by using a proprietary software package. Some companies, such as New Wave Plastics, already are benefiting, said the Cleveland companyâ&#x20AC;&#x2122;s coowner, T.R. Mitchell. His company, which recycles plastics, was in need of new sources of material in order to boost its sales, he said, and Ms. Denning found it for him through other members of her club. â&#x20AC;&#x153;Mary Kayâ&#x20AC;&#x2122;s responsible for, last year, about a $500,000 or $600,000 increase in sales for us,â&#x20AC;? Mr. Mitchell said. â&#x2013;

Sand: Companyâ&#x20AC;&#x2122;s investments pay off continued from PAGE 1

Robert Dracon Vice President

â&#x20AC;&#x153;With his extensive knowledge of the Cleveland marketplace and what it takes for a local company to thrive and grow, Robert will be an important asset and resource to his business clients,â&#x20AC;? said Kenton Thompson, North Coast Regional President. Robert is a graduate of Cleveland State University with a Masterâ&#x20AC;&#x2122;s degree in business administration (ďŹ nance) and a Bachelorâ&#x20AC;&#x2122;s degree in ďŹ nance. He is a former board member and past president of the Sales & Marketing Executives of Cleveland; former board member and fundraising chair of the Brecksvilleâ&#x20AC;&#x201C;Broadview Heights Schools Foundation; and volunteer teacher for Junior Achievement. Robert may be reached directly at 440-9144264, or e-mail him at rdracon@fpfc.net.

ÂŽ

sand as a medium. Those customers reflect U.S. industry generally, and as manufacturing continues to experience a rebound, demand for all of Fairmountâ&#x20AC;&#x2122;s products goes up, Ms. Deckard said. But nothing is growing as fast as the fracking market. And demand for sand is so high from drillers that itâ&#x20AC;&#x2122;s driving up the cost of sand for other users, Ms. Deckard said. Tina Haddad, whose RH Industries on Clevelandâ&#x20AC;&#x2122;s West Side includes a small foundry operation where she casts brass parts, said the price of foundry sand has gone up about 10% over the last year. Sand isnâ&#x20AC;&#x2122;t Ms. Haddadâ&#x20AC;&#x2122;s biggest cost, to be sure â&#x20AC;&#x201D; natural gas and ingots are larger cost factors. But a 10% hike in sandâ&#x20AC;&#x2122;s price is still significant to large foundries â&#x20AC;&#x201D; and for Fairmount, the increase is another reason for its rising revenues, Ms. Deckard said.

â&#x20AC;&#x2DC;All sand is not equalâ&#x20AC;&#x2122; If you think Fairmount is in the commodities business, youâ&#x20AC;&#x2122;re wrong â&#x20AC;&#x201D; and if the company thought that way, it could fall behind its competitors, according to Ms. Deckard. â&#x20AC;&#x153;All sand is not equal,â&#x20AC;? she said. Known in the shale gas industry as â&#x20AC;&#x153;proppants,â&#x20AC;? the sand that drillers use must meet stringent requirements. Its purpose is to lodge itself into the cracks and fissures created when drillers fracture shale beds thousands of feet below ground. It must be tough enough to hold those cracks open so gas can escape and

to do it under enormous pressures, which means it must be a certain size and consistency. Too large and it wonâ&#x20AC;&#x2122;t get into enough cracks; too small and it will gum up the process and prevent gas from escaping, Ms. Deckard said. â&#x20AC;&#x153;See that?â&#x20AC;? Ms. Deckard asked, pointing to the largest grain of sand taken with a pinch of a visitorâ&#x20AC;&#x2122;s fingers from a desktop Japanese rock garden in the office of Fairmount chairman Chuck Fowler. Under a magnifier, it looks like a boulder, but itâ&#x20AC;&#x2122;s only about the size of the tip of the paper clip she uses to separate it from other grains. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s not nearly big enough to be a proppant,â&#x20AC;? she said. After 18 years at Fairmount, where she was promoted at the start of 2011 to president from chief financial officer, Ms. Deckard has come to know her sand. That knowledge is essential if sheâ&#x20AC;&#x2122;s to guide the company to greater success in the future. She works for a bona fide sand expert in Mr. Fowler, who has been known to boast of selling â&#x20AC;&#x153;sand to Saudi Arabiaâ&#x20AC;? because Fairmount had the right specialized products.

Happy investor When it comes to proppant sand, Fairmount has two challenges â&#x20AC;&#x201D; one in finding and processing enough of it to meet drillersâ&#x20AC;&#x2122; demands, and a second in finding ways to make better sand than competing companies. On the first front, Fairmount has been investing heavily in equipment, property and improvements to its processes, which include not just

digging the sand but also washing and sorting it to exacting standards. The company has invested millions of dollars in those processes over the last two years, said Matt LeBaron, managing director of New York-based American Securities, which bought a 51% stake in Fairmount in 2010. On the technological front, Fairmount also has been investing heavily, Mr. LeBaron said, allowing it last year to introduce proppant sands with proprietary coatings that make them perform better for horizontal drillers than the best natural sand. Thereâ&#x20AC;&#x2122;s a third way Fairmount is likely to invest, he said. It will make acquisitions, assuming it can find the right complementary companies. Despite rumors that it might pursue an initial public offering of stock, Fairmount probably wonâ&#x20AC;&#x2122;t do an IPO, Ms. Deckard said. Thereâ&#x20AC;&#x2122;s no need, she said, especially now that Fairmount is owned and backed by American Securities, which has put the company in an investment fund with a life span of 25 years and is well positioned to capitalize its growth. American Securities just activated its latest fund, with $3.5 billion in it, and has about $8 billion of investments under management, Mr. LeBaron said. Fairmount already is becoming a good investment for the firm, he said, and it believes the companyâ&#x20AC;&#x2122;s growth is far from over. â&#x20AC;&#x153;The market dynamics remain very positive and the long-term growth drivers are strong,â&#x20AC;? Mr. LeBaron said. â&#x20AC;&#x153;We view this as a long-term opportunity, and the company will continue to invest and build.â&#x20AC;? â&#x2013;

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College athletic conferences see green in digital media Horizon League, MAC establish content, now aim to monetize it By JOEL HAMMOND jmhammond@crain.com

A Cleveland State alumnus in Clearwater? There’s an app for that. A Kent State alumna in Kilimanjaro? There’s a streaming video feed for that. An Ohio State alumni group in Oslo? There’s a digital network for that. College athletic conferences and member schools rapidly are turning to emerging technologies to make their exclusive content available more widely. Next up: turning those new media into more revenue. “From the beginning, it’s been about getting our brand out, and we’ve done that,” said Bill Potter, a spokesman for the Indianapolisbased Horizon League, in which Cleveland State competes. “The next step is to figure out the inventory and what can be sold. We know there’s an audience out there for it,” said Mr. Potter, whose conference’s profile has been helped immensely by Butler University playing in the last two Final Fours in men’s basketball. The Horizon League before this academic year partnered with IMG College, a division of Clevelandbased global sports marketing giant IMG, on moving toward generating more revenue from its digital offerings. In the short term, that movement

is in the form of its “Horizon League Network Live” app for smart phones and tablets. For $1.99, fans anywhere can watch any live event in which a Horizon League school participates; Mr. Potter said there have been 1,358 downloads in the first month-plus, with a more intense push set for when students returned to campus this month. The app is the first test by the league for subscription-based services, after offering for six years on its Horizon League Network website free streaming video of league events. It still offers a televised game of the week, aired in markets Horizon League teams call home, but has reallocated some resources it was spending on traditional TV games to offer more streaming products.

Revenue building blocks The Cleveland-based Mid-American Conference partners with XOS Productions of Lake Mary, Fla., on its MAC Digital Network, through which the league streams and then archives content ranging from live events — 35 football games this fall, among others — to news conferences, a weekly wrapup highlight show and other newsworthy events. Streaming of basketball games is ongoing. The MAC produces the highlight shows, while XOS and member schools handle the live event pro-

SS&G: Firm also opens its second Chicago office continued from PAGE 3

been an unparalleled mentor who has included Mr. Littman in strategic decision-making, as has Mark A. Goldfarb, the other Akron managing director. “I am very excited about the opportunity — a little bit apprehensive,” Mr. Littman said.

Chicago push Mr. Littman aims to continue the firm’s growth and employee-centric culture. SS&G employed fewer than 10 people when Mr. Shamis began his tenure, and employs about 450 today, 340 of whom work in Northeast Ohio. “We want this firm to be double its size,” Mr. Littman said. “The most important thing for me is to make sure our clients are taken care of.” The leadership succession is not the only SS&G news: The firm this month opened an office in downtown Chicago staffed with 17 people, consisting of three partners and other employees recruited “amicably” from another firm. The newest office is SS&G’s 10th and its second in the Chicago market. It brings SS&G’s employee numbers in the Chicago market to 40, up from zero in October 2010 before it acquired a suburban Chicago office. “We really wanted to be downtown,” Mr. Littman said. “That’s where the business is.” The firm also legally has dropped the “Financial Services” from its name, so it’s simply SS&G Inc. The longer name, which was added in 1996, was limiting and created confusion about what services the firm

performed, executives said.

All good things … The last two or three years have seen more leadership changes at accounting firms than there likely have been in the past decade, said Allan D. Koltin, CEO of Koltin Consulting Group, a Chicago firm that specializes in consulting for the accounting profession. The surge in successions is not recession-related, Mr. Koltin said. Instead, it’s the result of a boom in accounting firm entrepreneurship in the 1970s and 1980s that now has many leaders seeking to pass the baton. Mr. Koltin, who consults for SS&G, is confident in the firm’s plan. “Bob, I think, is as exceptional and smart a client service partner as I’ve ever seen,” he said, referring to Mr. Littman. Mr. Shamis, who joined SS&G in 1981 and assumed the lead role from his late father and firm founder, Marvin Shamis, will remain president and a member of the executive and finance committees. He’ll turn 60 the day after the transition. “I’ve had this job for so long,” said Mr. Shamis, who will have led the firm for 27 years by the time he steps aside as managing director. “But all good things come to an end.” Mr. Shamis plans to do more consulting after the transition. “I get asked probably every week to do a consulting job for another CPA firm,” Mr. Shamis said. “I turn them all down because I’m too busy.” ■

duction, similar to how the Horizon League operates. MAC commissioner Jon Steinbrecher said traffic on macsports.com is rising, and the MAC sees advantages in becoming a content producer: Mr. Steinbrecher said taking the product directly to the consumer allows it “to not be filtered by anyone. “We hope to grow it as a revenue stream, but right now, it’s modest at best,” he said. “As we continue to build the content, continue to place it, we’re able to build our viewership.” Digital efforts are farther along at the Big Ten Conference. Its Big Ten Network is viewed in media circles as a pioneer that eventually led to similar products for the Pac-12, Southeastern Conference and even the University Texas’ Longhorn Network. The conference’s Big Ten Digital Network streams more than 500 events each year in addition to the television network’s programming, with those streamed events often replayed on TV in the middle of the day or overnight. The Big Ten invested in equipment it sent to each campus and streams in high definition. The conference also rolled out last

Sept. 1 — just in time for football season — its Big Ten To Go app for smart phones and tablets; the app is available to any subscriber of the Big Ten Network, providing more value to cable TV distributors and their customers. “Any more, fans are defaulting to whatever the best screen available is,” said Michael Calderon, the Big Ten’s vice president of digital and interactive media. Mr. Calderon would not disclose what percentage of the Big Ten Network’s sizable revenue the digital network comprises, but said it is “providing a significant revenue stream for us” from advertising sales. Each of the conference’s 11 members received $7.9 million last year from the network alone.

Recruiting tools, too Can smaller conferences such as the MAC and Horizon League count on revenue growth from these media? Matt Balvanz, director of analytics at Navigate Research in Chicago, thinks so. “The demographics of fans that interact with teams’ digital content are very attractive for advertisers,” said Mr. Balvanz, whose company measures and analyzes sponsor-

ships in sports and entertainment. “The number of impressions generated online is still fairly small for most teams compared to their TV broadcasts, but the audiences are definitely growing faster online.” That growth offers hope for the future of these league networks, said Nate Flannery, a former Horizon League employee and now president of WebStream Productions, an Indianapolis company that assists the conference with digital media. “Around the time the Horizon League did this, I think people thought it was a little crazy,” Mr. Flannery said. “Conferences have pushed for more exposure with this content, and now that the exposure has been reached it’s time to ask whether they should be charging for some of the content.” Cleveland State sports information director Greg Murphy said the exposure offers another benefit to the leagues and member schools: in recruiting. Cleveland State coaches can tell recruits and their families that the games will be available, allowing kids from California, perhaps — one of the men’s basketball team’s best current players, Trevon Harmon, is from Pasadena — not to feel so far from home. ■

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JANUARY 16 - 22, 2012

PUBLISHER/EDITORIAL DIRECTOR:

Brian D. Tucker (btucker@crain.com) EDITOR:

Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:

Scott Suttell (ssuttell@crain.com)

OPINION

New eyes

here is something to be said for institutional memory within an organization. Then again, when a board of trustees becomes so stagnant that some of its members remain in place for 20 and even 30 years, that body desperately could use new sets of eyes with which to view the organization it is charged with overseeing. The board of the MetroHealth System fits the above description. Fortunately, Cuyahoga County Executive Ed FitzGerald is intent on giving the board the new eyes and fresh perspectives it needs. Mr. FitzGerald is not bashful about injecting himself in the affairs of MetroHealth, which serves as the county’s safety net hospital for those who can’t afford medical care. His rationale is simple: The county subsidizes MetroHealth’s operations — last year, to the tune of $36 million — and he wants to make sure the money is well-spent. The keen interest Mr. FitzGerald has shown in MetroHealth and the composition of its leadership in his first year on the job contrasts with the relationship that existed between the health system and the former Board of County Commissioners, which was phased out at the end of 2010 after voters approved a new county charter. A polite view would be that the commissioners largely took a hands-off approach toward MetroHealth. However, it might be more accurate to say they bordered on neglectful in handling the one duty for which they were responsible, which was the selection of trustees for MetroHealth’s board. We don’t mean to knock the performance of any individual trustees. However, it’s hard to bring fresh thinking to an organization when the same faces remain on a board for decade upon decade. An appointment to the MetroHealth board became the equivalent of an appointment to a federal judgeship, which is for life. Rather than limit trustees to one or two six-year terms, the commissioners reappointed trustees three and even four times. Mr. FitzGerald already has made headway in changing the makeup of the 10-member MetroHealth board. He made two great picks last year in selecting as trustees J.B Silvers, the former CEO of the QualChoice health plan who now teaches at Case Western Reserve University, and Vanessa Whiting, a local tax and real estate attorney. Over the next two years, Mr. FitzGerald will get a crack at replacing three more trustees, who will have served an average of 26 years by the time their current terms expire. That’s no typo — 26 years. Mr. FitzGerald told Crain’s this month the new trustee appointees would elevate the board’s scrutiny of how public dollars are spent by the system, which has been criticized in recent months for the amount of money it has pumped into consulting contracts. His appointment of Dr. Silvers and Ms. Whiting already promises to pay dividends, as they are part of the search committee to find a successor to Mark Moran, who last month announced his intention to step down as MetroHealth’s CEO. We trust Mr. FitzGerald will choose well when the time comes for these important board appointments.

FROM THE PUBLISHER

FitzGerald shows no signs of slowing

Now, if Mr. FitzGerald could just find t appears Cuyahoga County Executhat internal auditor he’s been seeking tive Ed Fitzgerald is anything but for the past year. But that’s the way it is done as he reshapes the structure right now, as this country slowly inches and face of what had been a scandalits way out of the economic morass of the ridden, bloated bureaucracy. Last week, past three years. Finding the best, talented he chopped the salaries of several curpeople is a challenge for every business rent employees, and then promoted and owner or manager right now; it’s why we raised the salaries of a very small group. drew more than 200 people to a Two were promoted and breakfast program last month another was given a significant on “finding the right talent.” raise. Earlier, salaries had been BRIAN slashed for several folks, many TUCKER **** A CROWD WILL GATHER or most of whom had been in this week for the opening of the the transparently political hiring Greater Cleveland Aquarium in hall that was disguised as the the Powerhouse in the Flats, county auditor’s office. and it will be the culmination of There are those in this comyears of speculation and jockmunity — with its long history eying by several groups to be of union culture and salary the group to actually get an increases by classification — aquarium up and running. who will howl about this confluence of This one will be a bit unlike what visitors events. Others, like most of our readers see in most cities, given that it’s located and the county council members, see in and through a collection of spaces in this as nothing more than logical, good the lower level of this city’s old trolley business practice. system power generating facility. And The people who were paid too much you’ll be walking under and through the for their skill sets should be thankful the aquarium’s largest fish tank. Pretty cool. county didn’t just give them the boot.

What’s better is that this week’s gala opening will benefit a great charity, our Ronald McDonald House that serves families with kids battling severe illnesses in our area hospitals. **** CLEVELAND FED PRESIDENT Sandy Pianalto, in addition to tempering the expectations of some business promotion folks in a recent speech, also reminded them of a startling, toxic combination of factors holding Ohio’s economic recovery back. She cited recent research by her staff that showed that innovation and work force skill levels are the two biggest economic drivers of the past 75 years. Today, Ohio ranks 38th of 50 states in educational attainment by its populace. “We are the ninth-largest state in the country,” she told the chamber of commerce leaders. ”Ranking 38th in educational attainment is not good news for us,” and in fact much of the developing world is passing us in this key measurement. We cannot succeed as a nation if we don’t do a better job at higher education. It’s our only chance. ■

THE BIG ISSUE Are you worried about the prospect of natural gas wells being drilled in your neighborhood?

AMY VEGH

JENNIFER STONEBROOK

JON SADLIER

JANE VAN BERGEN

Cleveland Heights

Mentor

Rocky River

Cleveland Heights

Yes, (because of) the issues that have been discovered in Wyoming about fracking (the hydraulic fracturing method of drilling) and the drinking wells that have showed explosive levels of methane.

Yes, just safety concerns about having residential houses with gas wells nearby.

I don’t see it as being an immediate issue but I can certainly see with all the chemicals dumped in the Youngstown area, I would be concerned about that.

Yes. I live in a community that is extremely vocal about the environment. There are a lot of concerns over something like that without a huge amount of checks and balances and community input.

➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.

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Snapshot: Hurdles may block mandating devices continued from PAGE 3

infringement. The case against Allstate was settled last October, when the companies cross-licensed certain patent rights to each other and entered into a trademark coexistence agreement. Allstate launched its Drive Wise program in December 2010 and is working to achieve nationwide exposure for it by the end of 2013, Mr. Armstrong said. About 10% to 15% of Allstate’s new policy holders have been opting in, he said — numbers that exceed expectations. Like Progressive, Allstate sends drivers who opt in to Drive Wise a device they must connect to their vehicles to allow the sharing of data for discount purposes. Allstate’s discounts range from zero to 30%, Mr. Armstrong said. Bloomington, Ill.-based State Farm began offering usage-based insurance in the summer of 2009 in Ohio. Today, it offers two programs: Drive Safe & Save, and In-Drive, the latter of which is only offered in Illinois. The company’s goal is to roll both out to the rest of the country as efficiently and rapidly as possible, State Farm spokesman Dick Luedke said. Unlike Progressive’s and Allstate’s usage-based programs, State Farm’s features GPS functionality. For Drive Safe & Save, State Farm uses OnStar technology and simply measures mileage. In-Drive measures more than mileage, including how fast drivers make turns, how rapidly they accelerate and decelerate and the times they’re driving.

‘The $100,000 question’ Might this more snoopy form of insurance someday be the mandated norm? “That is the $100,000 question,” Mr. Luedke said. Many people in insurance circles predict these monitoring devices are the way of the future, said Robert C. Passmore, senior director for personal lines policy for the Property Casualty Insurers Association of America, which counts more than 1,000 member insurers. However, before the devices are mandated, insurers will need to clear

legislative and regulatory hurdles, Mr. Passmore predicts. Privacy concerns also could stand in the way of mandated programs, Mr. Luedke noted. “There are certainly people who don’t want insurers to know this information about them, and no insurer wants to lose those customers,” he said. Plus, there are customers with cars that can’t accommodate the devices, as vehicles must be 1996 or newer, Allstate’s Mr. Armstrong said. But he believes a mandate is possible if, over time, regulators believe usage-based insurance programs result in safer drivers. Though the answer to the mandatory use question is unclear, there is one point on which insurers agree: The ability to track a motorist’s real-time driving habits means calculating risk should become far more precise. “Insurers have, since the beginning of insurance, been in a race against one another to try to measure risk more accurately,” State Farm’s Mr. Luedke said. “It keeps getting more and more sophisticated.” It’s little wonder, then, that other insurers are taking a first stab at usage-based programs, including Hartford Financial Services Group Inc., which recently announced plans to launch a pilot program in the first half of 2012. Progressive’s Mr. Hutchinson said he believes the voluntary product will continue to build in popularity, not only because safer drivers are hungry for the discounts, but also because of the information the technology could provide people about themselves and their vehicles: Am I a good driver? Is my teenager a good driver? Where is my car? Did I leave my lights on? Mr. Hutchinson said Progressive hears from people who want to know what they can do to change their Snapshot results, and also from people who say they are more aware of their sudden stops and have stopped driving as much at night. “People like the empowerment piece of this,” he said. ■

DRIVING WITH MISS MICHELLE Finance reporter Michelle Park decided to put her driving skills to the Snapshot test. Here is her experience with the device, a video excerpt of which can be found at www.crainscleveland.com/driving. For the record, I’m confident that I’m a cautious, responsible driver. But for the sake of interactive journalism, I plugged a device into my car to confirm what I’ve been telling my mother for years.

5:14 p.m., Friday, Jan. 6 It begins. I am into my first minutes under the careful watch of Progressive’s Big Brother device, Snapshot. I immediately wonder if driving now, during rush hour, hurts my “score.” I’m aware on this first drive that I’m pumping my brakes for red lights. I resolve not to do that. No. Very few people actually get to put a monitoring device in their vehicles and face no repercussions. So, I’ll give this a true test run. No Goody Two-Shoes here.

4:27 p.m., Saturday, Jan. 7 Less than a day into this experiment, this guinea pig decides, while driving probably 30, 35, that she wants to turn left at the last minute. She’s delivered an electronic scolding. The Snapshot device beeps like one of those Tamagotchi pets my friends and I all had in middle school — you know, the electronic pets on a keychain that you feed and play with? No, you don’t? Neither did any of my colleagues when I mentioned it during our weekly staff meeting.

4:32 p.m., Saturday, Jan. 7 I can’t get my stupid, needless, sudden braking off my mind. I could have taken a non-sudden turn the next street over. I reflect how irked I’d be if this thing actually was calculating my discount.

I’m off to the drug store for duct tape. I’m glad this thing doesn’t record my singing. Progressive should be, too. The thought also occurs to me, as I record these notes and the time of night, that it’s quite late. Am I docked because I need duct tape at this hour? (No, it turns out, as I found that Progressive considers midnight to 4 a.m. the highest-risk period.)

7:04 p.m., Monday, Jan. 9 It happens again. TWICE IN FOUR DAYS. A truck brakes suddenly in front of me, and I try to pump my brakes, but the device is merciless. (According to Progressive, a deceleration of 7 miles per hour in one second is a hard brake. It’s the kind of brake that tugs your seat belt, they say.) I ask the Boyfriend if he thinks that qualified as a sudden stop. (We’re on our way home from the gym.) He agrees with the Tamagotchi. “Whose side are you on?” I ask, incredulously. “I’m on the smart, safe driver’s side,” he replies. This is genuine. He drives annoyingly safely. You know the type. I begrudgingly admit, though: The device’s measure of a “sudden brake” is pretty reasonable. The next morning is Tuesday. I’m somewhat embarrassed of my track record here. No matter how hard I try to ignore this device, it’s on my mind. (It doesn’t help that it chirps every time I start my engine as if to say, “Hello! I’ve got my discount-deciding eye on you.”) Maybe it’s true what insurers say, that these devices possess the power to actually change driver behaviors.

light on Clifton Boulevard in Cleveland would have earned him a chirp. “You’re lucky you don’t have Snapshot in your car,” I inform him. “In that case, I would have cruised right through,” he replies. His response begs the question: Do some drivers engage in less safe behaviors to avoid a ding from the device? That, of course, is not the intended outcome, said Progressive’s Richard Hutchinson, general manager for usage-based insurance. So, yes, brake to avoid that deer if need be.

Two minutes later “That would have been another one,” I report after the Boyfriend brakes suddenly to avoid another driver in a parking lot. “Actually, that would have been a good one by me,” he replies. “That idiot was driving willy-nilly through the parking lot.” Mr. Hutchinson says they hear these lines all the time — reasons why a sudden stop was the safe thing to do. Avoiding an animal, for one, or stopping hard because a light turned yellow. “Sometimes, people get mad,” he said. “Those kinds of situations are normal driving. The goal is not to have zero of these. It’s, ‘Relative to other people, where are you?’”

2 p.m., Thursday, Jan. 12 I ask Mr. Hutchinson to answer that question of me: Where am I as my driving relates to other people? His answer? I drive less than the average driver in my area, and I brake hard “a lot less,” he said. “If you kept up the way you stand, you’re probably going to get a healthy discount,” he said. “So far, so good.”

7:30 p.m., Tuesday, Jan. 10

The final score?

I gleefully inform the Perfect Driver Boyfriend that his sudden stop at this

Michelle: 1; Mother and Boyfriend who doubt her driving excellence: 0

Duke Realty appreciates your support and partnership in 2011 and looks forward to a great 2012.

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Summa’s insurance arm targets hospitals By TIMOTHY MAGAW tmagaw@crain.com

While SummaCare in Akron still gets the biggest share of its business from selling health insurance to individuals and employer groups, officials say a large Hauser part of the company’s growth strategy is tied to helping other health systems keep the gears turning on their self-funded benefits programs. SummaCare — the insurance subsidiary of Summa Health System — expects more business to come from Apex Benefits Services, its arm that serves as a third-party administrator for self-funded plans. Apex currently handles 23 self-insured employer groups, about one-third of which are health systems or hospitals. SummaCare plans to court other health systems over the next year, though its president, Marty Hauser, noted he “can honestly say we have not set a budgeted or targeted number.” SummaCare already has snagged University Hospitals, the region’s

second-largest health system, as a new client. Apex will process claims for the roughly 23,600 lives on University Hospitals’ insurance rolls. “We ultimately picked them because they were a local, Northeast Ohio company who, like us, is focused on outcomes and driving population health,” said Dr. Eric Bieber, University Hospitals’ chief medical officer. “We felt like that was a really good intersection.” SummaCare’s quest to add more health systems to its client roster comes as many toy with the idea of building their own accountable care organizations — a still murky facet of the federal health care overhaul that encourages health care organizations to coordinate the care of patient groups in a way that ultimately keeps them out of the hospital. Mr. Hauser said his company’s offerings have become particularly attractive given that hospitals are looking to develop their own ACOs but first are looking to better man-

WWW.CRAINSCLEVELAND.COM

age the patients they know best — their employees. “If you think about it, ACOs are about managing known populations,” Mr. Hauser said. “The populations these health care groups are most familiar with are their own employees. Oh, and by the way, it’s one of their highest-cost items.” SummaCare, which recorded $442 million in revenue in 2011, launched Apex more than a decade ago to serve as its so-called “business processing outsourcing” arm. However, it wasn’t until recently that the company saw Apex as the business line with the strongest growth potential. Summa officials say the potential growth of SummaCare’s insurance business is limited geographically to where it can obtain state approvals to sell its insurance products, which can take up to seven months to secure. It doesn’t face such strict restrictions in becoming a licensed third-party administrator for self-funded health plans — a process that takes only about 30 days, according to Keith Johnson, Apex’s executive director. Mr. Hauser said expanding the company’s role as a trusted thirdparty administrator among health systems will allow SummaCare to continue to be an integral part of Summa Health System’s future. “The system views us as a strategic asset, and that we are pivotal to their long-term viability,” he said. ■

N.Y. private equity firm buys area marketer By SCOTT SUTTELL ssuttell@crain.com

NAS Recruitment Communications of Cleveland, a marketing services agency focused on human resources, has been acquired by a New York private equity investment firm. Stone-Goff Partners said it bought NAS Recruitment from Interpublic Group of New York, a global advertising holding company. Financial terms were not disclosed for the deal, which was completed in partnership with NAS recruitments’ senior management team.

NAS Recruitment specializes in media buying, human resources marketing and communications, and employment branding. StoneGoff said the firm serves more than 2,000 clients from its 19 sales offices and the Cleveland headquarters. Among NAS Recruitment’s clients are well-known brands such as Toyota, Hyatt and US Cellular. “As media channels proliferate, NAS helps employers address an increasingly complex landscape for locating, attracting, and developing talent,” said Hannah Stone Craven, a partner at Stone-Goff Partners, in

a statement. NAS Recruitment’s chairman, Jim Miller, said in a Stone-Goff Partners news release, “With the ownership and strategic direction of our agency now in the hands of management and private equity partners, we will be even better positioned in the marketplace.” Mr. Miller and senior vice presidents Patty Van Leer and Matthew Adams, along with other key management members, will remain with the company in their current roles at NAS Recruitment, according to the Stone-Goff Partners news release. ■

MRI: Company’s product offerings grow, too continued from PAGE 3

The growth has been in the works for two years: A few months after Vista bought the business, Mr. Post told Crain’s he had plans to hire aggressively and expand it. Intuit, which is best known for accounting software products such as TurboTax and Quicken, announced in 2009 that it would lay off 40 employees — including some outside of Northeast Ohio — from Intuit Real Estate Solutions. Plus, the parent had other companies do some software development for the unit, which also relied on Intuit for functions such as human resources, payroll and IT support. Hired by Vista shortly after the acquisition, Mr. Post quickly set out to hire people in Northeast Ohio to fill those roles. MRI, which employs more than 400 people, has five other offices around the world. Even so, Mr. Post said he strongly prefers to have employees work from MRI’s headquarters, unless they need to meet regularly with customers in other regions. That’s why some positions from the three acquired companies are

moving to Northeast Ohio. It’s also why the company in 2010 laid off an undisclosed number of employees from across the country who worked from home, only to hire their replacements in Highland Hills. The concentration of employees in one building makes it easier for managers to manage and for employees to share knowledge, Mr. Post said. Plus, it helps MRI create “a unified culture,” he said.

‘Radar up’ for more deals The company has changed in other ways over the past two years as well. Its product offerings have become broader because of its three acquisitions. Last month, MRI acquired Realty DataTrust Corp., which makes a product called VaultWare that targets owners of apartment complexes. MRI also bought property management software firm Workspeed Management LLC of New York last July, and last October it bought Bostonpost Technology of Bedford, N.H., which sells software used to manage properties affiliated with affordable housing programs. MRI has its “radar up” for more acquisitions, Mr. Post said.

All three acquired companies sell software that customers access via the Internet, which represents another shift for MRI: Whereas software delivered as a service over the Internet was “a bit of an afterthought” when the company was owned by Intuit, the delivery method is a bigger priority for MRI today, Mr. Post said. Now the company develops software from the ground up with the intention of delivering it via the Internet on a subscription basis, he said. Many software companies have been transitioning to that delivery method because it provides them with a recurring revenue stream, makes maintenance easier and lets customers access software without incurring large upfront costs. Sales rose in 2011 and should keep growing in 2012, said Mr. Post, who declined to give revenue figures but noted that MRI is profitable. The company will spend much of next year ingratiating its new acquisitions, upgrading products and increasing its focus on the software-as-a-service delivery method. “We have a lot of heavy lifting in front of us,” he said. ■

JANUARY 16 - 22, 2012

TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.

LIENS FILED First Fruits Child Care Center LLC 21877 Euclid Ave., Euclid ID: 20-5120191 Date filed: Nov. 16, 2011 Type: Employer’s withholding, unemployment, corporate income, partnership Amount: $177,437 Horizon Electric Co. 15100 Arden Ave., Lakewood ID: 34-1942993 Date filed: Nov. 30, 2011 Type: Employer’s withholding, unemployment Amount: $125,257 Security Management Group Inc. 6433 Gale Drive, Seven Hills ID: 26-3798129 Date filed: Nov. 10, 2011 Type: Employer’s withholding Amount: $102,139 Studio Techne Inc. 31300 Solon Road, Solon ID: 34-1790162 Date filed: Nov. 8, 2011 Type: Employer’s withholding Amount: $160,146 Luxel Technologies Ltd. 4700 Lakeside Ave., Cleveland ID: 34-1889132 Date filed: Nov. 18, 2011 Type: Employer’s withholding Amount: $134,147 Rancho Manana Ventures LLC 5910 Landerbrook Drive, Suite 230, Cleveland ID: 84-1426090 Date filed: Nov. 8, 2011 Type: Employer’s withholding, unemployment Amount: $129,964

Type: Employer’s withholding, unemployment Amount: $88,982 Arthur L. Rogers Funeral Services 13201 Euclid Ave., East Cleveland ID: 34-1724078 Date filed: Nov. 30, 2011 Type: Employer’s withholding, failure to file complete return, corporate income Amount: $83,603 Childrens Community Access Program Inc. 526 Superior Ave., Cleveland ID: 34-1810688 Date filed: Nov. 10, 2011 Type: Employer’s withholding Amount: $81,292 Academy Answering Service Inc. 1446 SOM Center Road, Mayfield Heights ID: 34-0893191 Date filed: Nov. 22, 2011 Type: Employer’s withholding Amount: $80,613 La Veer Partners Inc., La Veer Childcare & Enrichment Center 6825 Broadway Ave., Cleveland ID: 75-3251077 Date filed: Nov. 8, 2011 Type: Employer’s withholding, unemployment, corporate income Amount: $72,040 Just in Temps Inc. 5386 Majestic Parkway, Suite A, Bedford Heights ID: 34-1937484 Date filed: Nov. 1, 2011 Type: Employer’s withholding, unemployment Amount: $69,651 Custom Window and Door Installation Inc. 4329 W. 23rd St., Cleveland ID: 42-1748249 Date filed: Nov. 29, 2011 Type: Employer’s withholding, unemployment Amount: $66,549 Beulah Baptist Church 14918 Cardinal Ave., Cleveland ID: 34-1214994 Date filed: Nov. 16, 2011 Type: Employer’s withholding Amount: $62,143

Handl-It Inc. 5386 Majestic Parkway, Suite A, Bedford Heights ID: 34-1700605 Date filed: Nov. 1, 2011 Type: Employer’s withholding Amount: $127,664

J & M Locomotive Inc. 316 Northridge Oval, Cleveland ID: 34-1821544 Date filed: Nov. 22, 2011 Type: Employer’s withholding, unemployment Amount: $53,278

Handl-It Inc. 5386 Majestic Parkway, Suite A, Bedford Heights ID: 34-1700605 Date filed: Nov. 16, 2011 Type: Employer’s withholding Amount: $119,180

J W Bock Construction Inc. 10303 Dewey Road, Brecksville ID: 34-1864518 Date filed: Nov. 29, 2011 Type: Employer’s withholding, unemployment Amount: $49,871

Handl-It Inc. 5386 Majestic Parkway, Suite A, Bedford Heights ID: 34-1700605 Date filed: Nov. 16, 2011 Type: Employer’s withholding Amount: $90,751

AAA Residential Services LLC 7277 Bessemer Ave., Cleveland ID: 86-1070011 Date filed: Nov. 22, 2011 Type: Unemployment Amount: $35,703

Extreme Cabling Inc. 17236 Sedalia Ave., Cleveland ID: 25-1905442 Date filed: Nov. 10, 2011 Type: Employer’s withholding, unemployment Amount: $89,000 Con-Pak Inc. 5386 Majestic Parkway, Suite A, Bedford Heights ID: 34-1894614 Date filed: Nov. 10, 2011

Edwards & Son Service Inc. 9000 Clinton Road, Cleveland ID: 34-1873286 Date filed: Nov. 8, 2011 Type: Corporate income Amount: $35,601 Avon Drive In Laundry & Dry Cleaning Co. 1830 Superior Ave. E, Cleveland ID: 34-0866085 Date filed: Nov. 10, 2011 Type: Employer’s withholding Amount: $34,872

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GOING PLACES JOB CHANGES ARCHITECTURE TDA ARCHITECTURE: John Waddell to senior project manager.

Waddell

Wright

Fagnilli

Fogarty

Ford

FINANCIAL SERVICE

Walter

Cahill

Bell

Coolbaugh Jones

CIUNI & PANICHI INC.: Jamie Zielinski and Michael Tilenni to auditors.

MARKETING

Selby

CONSTRUCTION RUHLIN CO.: Jeff Lawson to project manager, estimator; Morgan Covey to administrative assistant; Mike Bauman to mechanical estimator; Mary Meyer to administrative assistant, estimating.

HOWARD, WERSHBALE & CO.: Edward C. Lowe to principal; Gary T. Dayton, Lindsay Glavan, Kate Protsenko-Blake and Melanie McPeak to managers; Christina V. Luangrath, William Cope, Laura Bove, Ben A. Stumpf, Benjamin Whalley, Debbie Palmer and Shayna Raj to staff accountants; Kathy Loy to senior consultant; Linda C. Lewis to consultant; Audrey Cahn to para-professional; Linda S. Zevnik to senior manager. MCMANAMON & CO. LLC: Jeffrey D. Firestone to partner. SS&G: Kimberly A. Zagar and Paul Woznicki to directors; Brian Palisin, Marc S. Newman, Leif E. Erickson and Marie A. Brilmyer to associate directors. SS&G HEALTHCARE SERVICES LLC: Jeffrey L. Bushong to director.

HEALTH CARE CANDLEWOOD PARK HEALTHCARE: Cynthia Brewer-Knight to executive director.

MARCUS THOMAS LLC: Nikki Andrick and Pam Gant to account supervisors; Nicole Eberle to senior account executive; Chris Sledzik to account executive, PR; Dave Muller to art director; Brandi Hensler to copywriter; Allison Loparo to human resources generalist; Roger McMullan to junior art director; Sunny Chelmella to junior developer; Stefanie Riediger to junior planner; Edwige Winans to associate research director; Jessica Folger to audience insights strategist; Jim Gough to creative director; Brian Roach to associate creative director. PECCHIA COMMUNICATIONS: Jim Houck to senior consultant.

NONPROFIT POSITIVELY CLEVELAND: Colette M. Jones to vice president, marketing. SAINT LUKE’S FOUNDATION: LaTida Smith to vice president, programs, outcomes and learning. SUSAN G. KOMEN NORTHEAST OHIO: Lena L. Grafton to programs manager.

REAL ESTATE LEGAL DAVIS & YOUNG: Thomas W. Wright to managing partner and president; David J. Fagnilli to chief financial officer; Shannon M. Fogarty to partner; Nicole R. Ford to associate. DWORKEN & BERNSTEIN CO.: Richard Selby, Erik Walter and Kenneth Cahill to partners. JACKSON LEWIS LLP: Steven D. Bell to of counsel. JONES DAY: Stephen P. Coolbaugh to partner. THACKER MARTINSEK LPA: Marquettes Robinson to shareholder.

MANUFACTURING GOODYEAR TIRE & RUBBER CO.: John F. Winterton to president, North American Tire consumer business unit; Phillip Kane to vice president, North American Tire commercial tire business.

STOUFFER REALTY INC.: Betty Wulff to sales associate.

SERVICE THINK MEDIA STUDIOS: Olivia Otten to associate producer.

TECHNOLOGY THUNDER::TECH: Andrea Aber to account services team manager.

BOARDS APPLIED INDUSTRIAL TECHNOLOGIES: John F. Meier to chairperson. CLEVELAND COACH FEDERATION: Susan J. Cucuzza to president. LUPUS FOUNDATION OF AMERICA, GREATER OHIO CHAPTER: John Sheldon to chairman.

AWARDS KENT STATE UNIVERSITY: Debra

Great Lakes Mall adds 3 tenants Simon Property owned fastON THE WEB Story from Group Inc. has www.CrainsCleveland.com. casual restauannounced the signing rant, also plans of three new tenants at Great Lakes a location at the mall. Mall in Mentor and planned moves Simon said Bath & Body Works, by a handful of existing tenants to The Limited and Express will be new space. relocating within the mall to newly Simon said H&M, a Swedish renovated spaces in the next 12 to clothing retailer, plans to open a 18 months. Two more retailers — 17,000-square-foot location in the Spencer’s Gifts and Sarku Japan — mall next fall. Teavana, a specialty plan to undertake renovations of retailer offering teas and tea-related their current locations in the mall. merchandise, plans to open a The mall’s total renovation, 1,281-square-foot location in May. started in 2011 by Simon, was And Chop It Salad Co., a locally recently completed.

Smith

Adams Simmons (The Plain Dealer) received the 2012 Robert G. McGruder Award for Diversity, School of Journalism and Mass Communication.

RETIREMENTS RUHLIN CO.: Kathy Mitman, after 16 years; Sandy Kreuscher, after 13 years.

Send information to dhillyer@crain.com.

CRAIN’S CLEVELAND BUSINESS

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CRAIN’S CLEVELAND BUSINESS

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JANUARY 16 - 22, 2012

Surprises: Weak office building market spurs apartment talk continued from PAGE 1

office tenants exited two years ago. Insiders say K&D Group of Willoughby has the East Ohio Building — more recently marketed as 1717 E. Ninth — in its crosshairs for another downtown apartment project. The rumor is so strong it is common knowledge among office tenants and storekeepers in what’s now called the “NineTwelve District.” K&D last month announced plans to buy the Hanna Building Annex from PlayhouseSquare Foundation for conversion of the office building into 102 apartments, but CEO Doug Price acknowledged last week that K&D is “in the preliminary stages of another project besides the Hanna.” Mr. Price refused to say if the

STAN BULLARD

The Chester Commons office building, which new owners Steven Calabrese and partner Brian Intihar are considering turning into apartments.

Gillen

owner of the largest portfolio of apartments in Northeast Ohio might take on the East Ohio Building. But, he noted, the building is “certainly a possible candidate for conversion” by someone. Others share Mr. Price’s view. Tracey Nichols, Cleveland’s economic development director, has noted over the last year that the building has aged into consideration as a candidate for federal and state historic preservation tax credits.

No shortage of prospects The East Ohio Building is far from the only potential candidate for an apartment conversion downtown. The new owners of the historic Old Arcade have floated the idea of

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converting part of the Hyatt Regency Hotel to apartments. And then there is the Chester Commons office building at 1120 Chester Ave., which has been acquired by an investor group formed by veteran real estate investor and appraiser Steven Calabrese and partner Brian Intihar. Both men say they are not certain of their next move, though they plan to study converting the 60,000square-foot building to apartments. They also may continue marketing the structure, with an 80% vacancy rate, as offices. Paying just $875,000 for a lender-owned building that was marketed for $2 million — the same figure Cuyahoga County values it for property taxes — gives the new owner the ability to consider its options. Other sites that developers and urban planners see for potential apartment conversions include the administration building of the Cleveland Metropolitan School District, at 1380 E. Sixth St. — although it mostly is talked of as a hotel site because of its proximity to the new Cleveland Medical Mart and Convention Center — and the long-stalled renovation of the former Cleveland Athletic Club, at 1118 Euclid Ave. Tom Yablonsky, vice president of the Downtown Cleveland Alliance and midwife to dozens of city loft conversions, also sees opportunities for a multitude of new apartment conversions on Superior Avenue east of East 12th Street, and in the Flats on Old River Road north of Main Avenue and even on Center Street. Several buildings in those areas are eligible for multilayered financing involving tax credits, civic lowinterest loans and grants.

W E A LT H

Mr. Yablonsky said he sees the potential for apartments at the Chester Commons building. “Green space makes for great apartment locations,” Mr. Yablonsky said, referring to the just-renovated Chester Commons Park, catty corner to the Chester Commons building. He said he long has considered the building a target for loft conversion and plans to approach Messrs. Calabrese and Intihar to offer a grant to help study the possibility. While occupancy rates above 94% for downtown apartments and long waiting lists are cited by developers as reasons for considering more apartment projects, the weak market for older class B and C office buildings and bargain property values also are factors aiding the idea. Told about how little Mr. Calabrese’s group paid for Chester Commons, longtime office broker Bob Redmond, a managing director at Mohr Partners, blurted out, “Oh my God!” He sees it as a potent apartment play due to its central location near PlayhouseSquare and the East Fourth Street entertainment district, as well as its atrium and floor layout. However, the building is small enough it could be marketed to a law or other professional services firm with about 200 employees as a single-user property, Mr. Redmond said. That is what Messrs. Calabrese and Intihar did with the old WKYC Building after leasing it to the Calfee, Halter & Griswold law firm. Mr. Calabrese said he bought Chester Commons because the price was right, though he also cites a broader motivation. With a casino and a redone convention center afoot, he said, “I am very excited about what is going on in the city.” ■

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PAUL ALLEN

RICK ARLOW

WATCH

WHO TO

Business launch leader Bizdom U

aul Allen burst into regional entrepreneurial prominence last October when he was selected as the Cleveland business launch leader for Bizdom U, the new business development program that Cavs co-owner and casino gaming partner Dan Gilbert brought to Cleveland this year from his home in Detroit. However, the limelight hit him after years of work, most recently as a volunteer for multiple tech and startup-oriented nonprofits in the region. He moved here about five years ago from Connecticut with his wife, Dr. Rebecca Boxer, a cardiology fellow at University Hospitals. With him Mr. Allen brought management skills honed as executive director of the Connecticut Software Association nonprofit trade group, networking moxie — he is a cofounder of Tribe of Angels, a network of more than 6,000 investors — and a résumé studded with business credentials. Most recently, Mr. Allen served as interim director of the Shaker LaunchHouse incubator in Shaker Heights, where his family lives. He moved on when the Bizdom job came up last fall. Ross Sanders, Bizdom CEO, said in a phone interview that Mr. Allen bested a field of 500 candidates to get the job. “He has a lot of contacts in Cleveland, including with angel investors, that can help us,” Mr. Sanders said. “He just has a ton of startup experience, tech experience, working with leadership and 15 years with large companies.” Mr. Sanders also underlined Mr. Allen’s tech background, which dates to when Mr. Allen, with a newly minted master’s degree in psychology, started working in marketing and product testing for contractors to technology companies such as Adobe and Intel in the 1980s. In tech respects, Mr. Allen came from central casting. In a 20-year career, he has helped tech firm Obiquity secure $12 million in funding when he served as its director of corporate marketing, and also served as chief marketing officer of Monarch Teaching Technologies, which makes products for autistic students. He also is a founder of Reach Ventures, a data-focused private equity firm, and advised multiple companies. — Stan Bullard

Page 1

Co-founder LifeServe Innovations LLC

TECHNOLOGY

The innovators contributing to Northeast Ohio’s tech scene of the future can be found working in any number of areas and filling a variety of roles. Some you may already have heard of, still others might be new to the region or are

RAHUL ARAS President and CEO Juventas Therapeutics and Siron RX Therapeutics

ahul Aras leads two biotechnology companies — one designed to heal the inside of the body and the other focused on the outside. Juventas, spun out of the Cleveland Clinic in 2007 based on technology developed by Dr. Marc Penn, is developing a pipeline of regenerative medicine therapies for cardiovascular disease. Its lead product, JVS-100, encodes Stromal-cell Derived Factor 1 (SDF-1) and has

conducting their efforts under the radar. In this section, we highlight just some of those who are embracing new technologies or are leading interesting, intriguing and innovative efforts in Northeast Ohio.

been shown to protect and repair tissue following organ damage in a broad range of preclinical diseases, Dr. Aras said. Last spring, Juventas completed its Phase I clinical trial evaluating the safety and effectiveness of JVS-100 for treatment of patients with heart failure. Dr. Douglas Losordo of Northwestern University, principal investigator of the trial, said the results were “exciting and warrant further investigation of JVS-100 for treatment of heart failure in a Phase II clinical trial.” In the meantime, SironRX, formed in late 2010, is developing

therapies licensed from Juventas and the Clinic to promote wound repair and to prevent scarring of dermal wounds. The company’s therapeutic platform has been shown to promote tissue repair by recruiting stem cells to the damaged organ, Dr. Aras said. SironRX raised $3.4 million — about $1 million more than expected — from investors last year, and Dr. Aras said he expects to start a multi-center clinical trial in 2012. Before joining Juventas, Dr. Aras was the director of life science commercialization at Cleveland Clinic Innovations. — Scott Suttell

ick Arlow is proof that a person can study for an M.D. and a Ph.D. in biomedical engineering while running a self-founded company. Oh, and he’s 24. A New Jersey native, Mr. Arlow co-founded in 2008 LifeServe Innovations LLC, a Cleveland startup, with his partner, Zach Bloom, who he met during his undergraduate career at Lehigh University in Bethlehem, Pa. Their medical device company is poised to submit its first product to the Food and Drug Administration so that human testing may begin. The product performs percutaneous tracheostomy, or opens patients’ airways in a nonemergency intensive care setting. It is intended for critically ill patients, and so far, its use has been limited to cadavers. The company has filed an initial patent for the product, which its founders believe is safer and more effective than methods used presently. For one, Mr. Arlow said, it’s better designed for the anatomy of the neck. LifeServe won’t stop there. In fact, it’s launching this device but is developing others and has in the wings an invention that Mr. Arlow deems “revolutionary.” Mr. Arlow’s ability to make “significant progress” in all three roles — a Case Western Reserve University student, an entrepreneur and a researcher — impresses, said Mr. Bloom, CEO of LifeServe. Mr. Arlow says it’s a lifestyle that keeps him guessing. “I think I have an interesting set of experiences that can open up a lot of doors, and I don’t know necessarily where that’s going to be,” Mr. Arlow said. So far, LifeServe has raised close to $200,000, including in-kind services and grants, Mr. Arlow estimated. The company currently is working to raise a $75,000 match for an award from the Innovation Fund of the Lorain County Community College Foundation. Mr. Arlow, who lives in the University Circle area, didn’t always plan on biomedical engineering. He liked science and math but found certain other studies to be “too theoretical.” He chose this field because he enjoys building new things that affect people. — Michelle Park

WHAT NORTHEAST OHIO’S TECH ESTABLISHMENT IS SAYING PHILIP ALEXANDER CEO BrandMuscle Inc. ■ What types of attributes will be needed in tomorrow’s tech leaders? Certainly, a key attribute is the ability and courage to capitalize on the massive complexity presented by the unbelievably fast changes in technology, talent, resources and market dynamics. You want leaders who can provide creative solutions to problems that are being

cast differently each day than they were yesterday. ■ What are some of the most significant challenges those leaders will face going forward? Companies, particularly technology-based companies, will need to have the operational dexterity to move rapidly to respond to market changes. And building a culture that embraces creative solutions and a team that can deliver, requires strong leadership.

REBECCA O. BAGLEY President and CEO NorTech ■ What types of attributes will be needed in tomorrow’s tech leaders? An effective technology leader needs to maximize his or her relationships with various groups, both within and outside the organization, and empower others to get invested and involved in the long-term vision for the organization. Tomorrow’s advanced energy leaders will need to advocate for a robust and responsible set of energy policies that create more

READ MORE ESTABLISHED VOICES ON PAGES 14-15

private-sector demand for new technologies and generate economic impact. ■ What are some of the most significant challenges those leaders will face going forward? Access to financial capital is one of the single biggest challenges emerging technology leaders face in their businesses. Finding creative approaches to fund R&D and commercialize new technologies is key to developing a sustainable business. Human capital and finding a qualified talent pool also can be a growth-limiting factor for technology businesses.

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WHO TO

CRAIN’S CLEVELAND BUSINESS

MARIA BENNETT President and CEO SPR Therapeutics

ore than 75 million Americans live in a world of severe physical pain. Maria Bennett’s company, SPR Therapeutics — the SPR stands for “stimulation for pain relief” — is commercializing devices that aim to alleviate their suffering. SPR Therapeutics has devel-

LANCE HILL CEO Within3 Inc.

ince Lance Hill’s arrival as Cleveland-based Within3 Inc.’s CEO in 2008, the veteran tech executive has helped grow the social media company from one with only a few employees to a firm that now draws its work force from all over the country. “We went from having just two people to having over 50 people,

JOSEPH JANKOWSKI Associate vice president for technology management Case Western Reserve University

eet technology’s matchmaker. As associate vice president for technology management at Case Western Reserve University, Joseph Jankowski leads the commercialization efforts — the patenting, licensing and the creation of companies — around more than $300 million of annual research activity at the university.

MARC MILLER Founder SpearFysh Inc.

arc Miller has spent more than 20 years pushing ideas and techniques that would reinvent the way companies sell and manage their sales forces. Now he’s pushing his concepts into the world of software. In 1987, he founded Sogistics Corp., a Twinsburg firm that helps companies, especially those selling

WATCHIN TECHNOLOGY

JANUARY 16 - 22, 2012

oped what amounts to a two-stage system for the treatment of chronic pain through the use of proprietary peripheral nerve stimulation (PNS) products. Its fully implantable Micropulse long-term implant system has, to date, been used on three patients, all of whom report substantial reduction in shoulder pain they had experienced following strokes. SPR Therapeutics’ short-term

system for pain treatment involves the use of the Smartpatch, a device that can be used for up to 30 days to stimulate electrically a peripheral nerve to relieve pain. Ms. Bennett, 38, who holds a master’s degree in biomedical engineering from Case Western Reserve University and a bachelor’s degree from Miami University in engineering management, invented the Smart-

patch. SPR Therapeutics was formed in January 2010 as a portfolio company of NDI Medical LLC of Highland Hills, which develops neurostimulation-based therapies and medical devices. In April 2008, NDI sold its first spinoff, MedStim, to Medtronic Inc. of Minneapolis for $42 million. Ms. Bennett played a key role in developing the MedStim neurostimulation system for urinary incontinence. — Scott Suttell

and we’re still growing,” Mr. Hill said. “And that’s through the worst recession in a long, long time.” Within3’s products — customizable social media sites for health care organizations — have been a hit in the industry, Mr. Hill said. The company has snagged major clients both local and worldwide, including Akron Children’s Hospital, the National Association of Public Hospitals and Health Systems, and others.

Mr. Hill, however, isn’t solely focused on Within3, but also working to improve the region’s technology industry as a whole. For one, he serves on the board of the Northeast Ohio Software Association. “My personal intention is to continue in whatever way I can to help burgeon the entrepreneurial technology industry in Cleveland,” Mr. Hill said. Meanwhile, Marc Morgenstern, managing partner of the private equity firm Blue Mesa Partners who serves on Within3’s board of

directors, said Mr. Hill was an “extraordinarily calm and nondefensive listener,” which has made him an effective CEO and an important figure in Cleveland’s tech scene. “One of our investors said that in emerging growth companies you either find a CEO who is a great leader or a great manager, but you never find them in the same body,” Mr. Morgenstern said. “In everybody’s view, Lance is both of those things, which is extraordinarily unusual.” — Timothy Magaw

Some 170 new inventions are vetted every year by Dr. Jankowski’s team of 13, which assesses the potential impact of technologies and helps inventors define the value proposition of their work. Most recently, in the fiscal year that ended in July, the team facilitated 35 licenses and patents. In total, there exist today more than 30 companies spawned by Case Western Reserve technologies, and Dr. Jankowski is a director for four of the startups now. “I think the biggest success to

date is creating a portfolio of Cleveland-based early stage technology companies that are now employing significant numbers in the region,” he said. Additionally, Dr. Jankowski began collaborating with other university leaders last year to offer a yearlong certificate program to MBA, Ph.D. and juris doctorate students to teach the fundamentals of intellectual property, opportunity assessment and commercialization. Baiju R. Shah, president and CEO of BioEnterprise, said Dr.

Jankowski’s role as the facilitator for researchers at the region’s largest research institution is vital. “He can be the matchmaker between really high-potential innovation inside that institution and resources external to the institution that can translate that innovation into a product and company with regional impact,” Mr. Shah said. “It’s really regional and societal impact because many of these products are global in their reach.” Dr. Jankowski, 40, lives in Waite Hill with his wife, Jenny Sheaffer, and their two children. — Michelle Park

big-ticket products, boost sales by training salespeople and improving their selling process. Along the way he’s written two books, “Selling is Dead” in 2005 and “A Seat at the Table” in 2009. Both offer techniques for increasing sales productivity. Last year, he founded SpearFysh Inc., an offshoot firm also in Twinsburg that is developing software designed to help boost the results of a company’s sales team through cutting-edge data mining.

SpearFysh uses a high-tech pen that has been around for several years (the Livescribe Echo pen) and creates a system that salespeople can use to record sales calls and, at the same time, make a written record of the sales call. It then takes the information, converts it into digital text and then extracts information into sales reports. But more importantly, it allows sales managers to analyze the sales conversation and then coach salespeople to improve their skills. The SpearFysh system is in pilot stage with several companies, and

Mr. Miller said he hopes to be ready to launch officially in the spring. “Marc is an exceptional entrepreneur,” said Cliff Reynolds, director of the Great Lakes Innovation and Development Enterprise, or GLIDE, a business incubator at Lorain County Community College. “He’s taking an item already on the market and finding a new use for it.” GLIDE and JumpStart Inc. of Cleveland are among SpearFysh’s investors. It also has won an $800,000 Ohio Third Frontier loan. — Jay Miller

RON SEIDE President Summit Data Communications

on Seide is not an engineer, a code-writing software designer or even a systems administrator by trade. But the president of Akron-based Summit Data Communications has what it takes to be a leader in at least one important technology field — wireless data communications. A former executive with Cisco Systems, Mr. Seide and partners Andy Winson, Chris Bolinger and Jim O’Riordan left that company in 2006 to form Summit, and they’ve not looked back since. The company has grown to 35 employees and, in January, opened its first international office in Taiwan. Revenues in 2011 were just over $17 million. At first, the company focused on industrial applications. For example, when manufacturers and warehouses track the movement of their goods via barcodes on each item or container, Summit Data makes the system that allows the hand-held barcode readers and a central computer system to talk to one another — a key link for any firm trying to manage its inventory or work flow. But now the company has found a new niche in the medical arena that could be even bigger, according to Mr. Seide. That’s because the United States is working hard to get patient medical records into electronic formats, and wireless communications affords the ability to do that more efficiently, he said. Now only 10% of the company’s overall business, Mr. Seide said the medical portion of his business is growing fast enough that it should account for a quarter of sales by 2013. Mr. Winson said his partner, Mr. Seide, has the ability to understand customer needs, while also fully comprehending the limitations and opportunities of current technology. He said while Mr. Seide doesn’t have an electronic communications degree, he’s still an expert. “He doesn’t like to blow his own horn — but he actually did write a book on wireless,” Mr. Winson said, pointing to the book “802.11 (Wi-Fi) Networking Handbook” that Mr. Seide co-wrote with Cisco engineer Neil Reid. — Dan Shingler

WHAT NORTHEAST OHIO’S TECH ESTABLISHMENT IS SAYING BILL BLAUSEY Chief information officer Eaton Corp. Chairman Regional Information Technology Engagement Board ■ What types of attributes will be needed in tomorrow’s tech leaders? I don’t think this has changed dramatically over time, although one could argue the technology landscape has become more complicated. ... In any case, the best technology leaders have a broad sense of their company’s strategies, processes, customers and markets. Yet they also understand the technology capabilities, and how technology can improve company operations and benefit customers and supply chain partners. ■ What are some of the most significant challenges those leaders will face going

forward? We can say the challenges are related to today’s buzzwords ... However, I think the challenges still are much broader in areas of building organizational capabilities, understanding strategy and driving the appropriate technology investments. First, any leader has to build the right talent and organizational structure in his or her team. That is, what is the core competency of the organization, and how does this structure help create company benefits? In the end, decisions on talent and people trump all other decisions that a leader makes. Second, given the pervasive nature of IT and the increasing complexity, what are the best investment decisions given a company’s strategy? ... Strong technology leaders have the ability to articulate a business case for investment AND then demonstrate the benefits of those investments.

BRAD NELLIS Executive director Northeast Ohio Software Association, COSE Technology Network ■ What types of attributes will be needed in tomorrow’s tech leaders? Without question, a key attribute for tomorrow’s tech leaders is adaptability. Technology is changing faster than ever; in fact, VentureBeat recently predicted that 2012 will see social media lose their “sizzle,” citing slowing growth and a multitude of struggling startups. So entrepreneurs and tech executives can’t get too wedded to their current technology. They need the mindset that what they’re currently using, producing or selling will not be what they use, produce or sell forever. ■ What are some of the most significant challenges those leaders will face going forward?

In this market, one of the key challenges for tech leaders will revolve around talent. Unfortunately, our talent pool is not deep enough, especially in terms of quantity, but depth of experience in leading-edge technologies is also a challenge. As a region, we have a difficult time attracting talent, so tech leaders will need to be creative when looking to meet their needs: off-shoring, satellite offices, nontraditional hiring, etc. Going forward, funding for entrepreneurial ventures will be a challenge as well. The availability of capital in the region has certainly improved over the last few years and Ohio’s Third Frontier program rediscovered IT, both good things, but a struggling economy has put pressure on private equity’s ability to sell companies and open new funds. Therefore, entrepreneurs will need to be creative and put together a variety of funding sources to continue to grow their companies.

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WHO TO

JANUARY 16 - 22, 2012

TIM WILSON Vice president of development OnShift Inc.

hen talking about technology, OnShift Inc.’s vice president of development, Tim Wilson, 30, can’t help but crack a smile. For a guy who majored in marketing and public relations, Mr. Wilson sure has taken a love to the world of software development and what it means for tackling the world’s problems. At Clevelandbased OnShift, Mr. Wilson leads a team of about six developers who build scheduling software for health care organiza-

tions such as nursing homes, which allows them to more accurately predict staffing needs and reduce their labor costs. Mr. Wilson joined OnShift in 2009, and prior to that was an independent contractor who developed automation software. He’s also dabbled in the startup arena right out of college and launched his own venture, though it ultimately failed. OnShift CEO Mark Woodka said Mr. Wilson is destined to be one of the region’s future tech leaders because while he’s known as the “code guy,” Mr. Wilson also possesses the business acumen needed to make a difference at OnShift and the region. Finding someone with those qualities, Mr. Woodka said, is a rarity. “Tim has stepped up and wears both those hats equally well,” Mr. Woodka said. — Timothy Magaw

WATCHIN TECHNOLOGY

Director Liquid Crystal Institute, Kent State University

iroshi Yokoyama wants to create a new liquid crystal industry — one that has nothing to do with flatscreen TVs or computer monitors. And he wants to do it in Northeast Ohio. Dr. Yokoyama, who became director of the Liquid Crystal Institute at Kent State University last summer, is in the process is equipping the institute with about $2 million in new machines it will use to develop liquid crystal sensors, which he described as the next wave in liquid crystal technology. Today, most people are familiar with liquid crystal displays. Kent State invented the technology in the 1960s, though almost all LCDs now are made in Asia. But Dr. Yokoyama, who became a professor at the institute in mid-2009, said there is more that can be done with liquid crystals. In liquid crystal displays, electricity is used to alter the formation of liquid crystal molecules, creating an image on the screen. However,

the formation of the liquid crystals also is altered when they come in contact with other molecules. The resulting liquid crystal formation can be analyzed, making it possible to determine what type of molecule touched it. The institute could use the technique to develop a device that would detect explosives in the same way a dog would or analyze biological samples to check for cancer or other diseases. The goal is to license the new technologies to firms in Northeast Ohio or create companies to commercialize them, Dr. Yokoyama said, noting that the state of Ohio is funding much of the new research. Dr. Yokoyama has spent 30 years researching liquid crystals and tools used to alter materials on a molecular scale. Dr. Yokoyama is a “superb” scientist, but he knows how to lead an organization, said Timothy Moerland, dean of the college of arts and sciences at Kent State. “He is one of those people who can both manage and be at the bench himself,” Dr. Moerland said. — Chuck Soder

OTHERS TO WATCH John Knific Marc Plotkin Eric Neuman CitizenGroove Still fresh out of Case Western Reserve University, the three young entrepreneurs who founded Cleveland-based CitizenGroove — John Knific, Marc Plotkin and Eric Neuman — see 2012 as a year of rapid growth for the company that provides audition software for academic institutions’ music programs. CitizenGroove CEO Mr. Knific said the company now serves 38 clients, but he expects that number to grow to 100 by year’s end.

Brian Deagan Knotice

HIROSHI YOKOYAMA

CRAIN’S CLEVELAND BUSINESS

Akron-based Knotice, a provider of direct digital marketing software and services, has been on a consistent growth pattern since its founding in 2003. The firm — which was co-founded by Brian Deagan, who now serves as CEO — announced the opening last month of an office in Seattle, and in 2011, it hired 37, bringing its employee count to 88. According to the company, over the last five years, Knotice’s overall growth has exceeded 500% in both number of employees (511%) and revenue (535%).

Daniel Anstandig Listener Driven Radio Daniel Anstandig — a 28-yearold Beachwood native who as a teenager was a consultant to radio stations across the country — two years ago founded Listener Driven Radio, which today licenses its software to more than 125 radio stations and networks around the world. The company’s software puts listeners in real-time control of what songs are played and what news topics are discussed by enabling them to vote via phone, browser and tablet. Based in

Rocky River, Listener Driven Radio started in 2009 with two people and now employs 17; it became profitable in early 2011.

Oleg Fridman Stan Garber Alex Yakubovich ONOSYS They were just three college kids at Case Western Reserve University when they founded O-Web Technologies in 2003 — but the trio doesn’t seem to have slowed down since. In 2007, they founded ONOSYS, which develops mobile and online ordering systems for restaurant chains. The company now serves more than 75 brands including Papa John’s, Panera and Applebee’s. This summer, ONOSYS announced it also had developed a full-featured Facebook application that allows restaurant customers to place food orders through the restaurant’s Facebook page.

Majid Daneshvar Precision Made Products Metallurgy might be among the oldest of sciences, but Majid Daneshvar still is advancing the field. The founder of Precision Made Products in Brunswick is doing some interesting things with metal injection molding — including making parts that could not be manufactured using previous methods. Right now, the company is making parts for others, but Mr. Daneshvar has his sights set higher. He hopes to develop his own product line and form a company around it.

dealership in September 2010, transforming it into the Shaker LaunchHouse. The incubator now has 30 portfolio companies — many of which are tech-centered — and Mr. Goldstein said he hopes to soon be up to 45 client firms with visions of growing LaunchHouse to 100 companies.

Jason Therrien thunder::tech Jason Therrien started thunder::tech, an integrated marketing agency, in 1999, and it now employs 27 in an old vacuum plant on Payne Avenue in Cleveland’s Midtown neighborhood. The company has expanded its service line into graphic design, interactive media, search engine marketing, public relations and advertising, and that’s resonated nationwide: Forty percent of its revenue comes from out-of-state accounts, according to operations manager Marc Theodore. Its track record in tech solutions, meanwhile, has resulted in a spinoff, thunder::apps, a web-based software division through which thunder::tech manages data for clients.

Aaron LeMieux Tremont Electric

Dar Caldwell and Todd Goldstein brought their early stage investment firm and the dozen clients it was nurturing to an abandoned Shaker Heights auto

Aaron LeMieux, a mechanical and biomedical engineer, came up with the idea for the nPower PEG (Personal Energy Generator) while backpacking. The PEG is a small, lightweight electrical generator that produces power for handheld electronic devices by harvesting kinetic energy from human movement. It’s a technology that is scalable in both size and power output, according to the company. Late last year, Tremont Electric partnered with Streetsboro manufacturer Delta Systems Inc., to redesign and assemble a new nPower PEG. The new nPower PEG will have double the capacity, and feature a sleeker, more portable exterior.

2. Our other challenge locally is educating potential consumers to be early adopters. Culturally, we have a pretty conservative technology user base. That makes testing and developing early stage technologies very difficult here. The key is to find a local company willing to partner to

develop something that solves a business problem here that plagues others nationwide. Once we solve it first, we then could scale the solution to national or international customers. With the Internet, even health care services can be a high growth export for us.

Dar Caldwell Todd Goldstein Shaker LaunchHouse

WHAT NORTHEAST OHIO’S TECH ESTABLISHMENT IS SAYING SCOT ROURKE President and CEO OneCommunity ■ What types of attributes will be needed in tomorrow’s tech leaders? Innovation/creativity: The future will be all about unconventional revenue streams, such as giving away software and getting paid by the click or eyeball. The Internet is having a profound impact on the business model and players in nearly every industry (music comes to mind). The key is to truly understand where the value is and what people are willing to pay for.

BAIJU R. SHAH President and CEO BioEnterprise ■ What types of attributes will be needed in tomorrow’s tech leaders? Technology leaders need strong convening and collaboration skills.

Versatility: Technology is pervasive and is changing nearly every facet of our lives. ... It’s important to be adaptive, to keep your eyes open, and to anticipate the many changes that could produce opportunities (or threats). First movers have a big advantage, given the ability of technology to scale or go viral to nearly unlimited global audiences at little or no extra costs. ■ What are some of the most significant challenges those leaders will face going forward? 1. The biggest challenge in

The strongest leaders are able to bring together, persuade, and coordinate a network of partners and resources to advance their innovations to the marketplace. ■ What are some of the most significant challenges

Northeast Ohio is related to experienced tech talent. Collectively, we don’t have much technology and innovation experience that positions us well to compete against other cities with substantially more tech experiences, both good and bad. So we need to make sure we support the leaders we do have and work hard to attract talent locally and from abroad so they can compete and grow. Our culture locally still is more about wealth preservation, while Silicon Valley is about wealth creation, and risks and even failures are expected and learned from. This ultimately improves their talent and their businesses.

those leaders will face going forward? Increasingly, those development networks and resources are global from the outset, not just regional or national. Technology leaders will have to be able to manage such networks across multiple time zones and business cultures.

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CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JANUARY 16 - 22, 2012

LARGEST ARCHITECTURAL FIRMS RANKED BY LOCAL REGISTERED ARCHITECTS Local registered architects Name of firm Address Rank Phone/Website

12-1-2011 12-1-2010

Local office revenue (millions) Total staff

2011

2010

Major current projects

Top local executive Title

Parker Hannifin; Cleveland Clinic, Hillcrest and Twinsburg; PlayhouseSquare, Allen Theater; Rock & Roll Hall of Fame and Museum; Pro Football Hall of Fame; University of Mount Union

Paul E. Westlake Jr. managing principal

Westlake Reed Leskosky 925 Euclid Ave., Suite 1900, Cleveland 44115 (216) 522-1350/www.wrldesign.com

150

$25.0

$26.5

URS Corp. 1375 Euclid Ave., Suite 600, Cleveland 44115 (216) 622-2400/www.urscorp.com

303

$53.0

Herschman Architects Inc. 25001 Emery Road, Suite 400, Cleveland 44128 (216) 223-3200/www.herschmanarchitects.com

$8.5

$8.0

Retail stores; Dick's Sporting Goods, HH Gregg, Best Buy, Z Gallerie, Crislip Applebee's, Jo-Ann, Total Wine, Pandora. Chimney Rock, Odessa Texas; Cedar Mike Center North; Springhurst Center, Louisville Ky.; Settlers Market, Williamsburg president

GPD Group 520 S. Main St., Suite 2531, Akron 44311 (800) 955-4731/www.gpdgroup.com

325

$42.2

$36.0

Cuyahoga County Public Library, Parma: McDonalds Inc.; Akron Public Schools, Buchtel HS and Firestone HS; Goodyear parking deck

Dave Granger president

KA Inc. Architecture 1468 W. Ninth St., Suite 600, Cleveland 44113 (216) 781-9144/www.kainc.com

Horseshoe Casino, phase I Higbee Building, executive architect; Eaton World Headquarters, Beachwood executive architect; Fashion Outlets of Chicago, Rosemont, Ill. design and executive architect

James B. Heller president

Hasenstab Architects Inc. 190 N. Union St., Suite 400, Akron 44304 (330) 434-4464/www.hainc.cc

$6.3

$4.7

Ohio Department of Mental Health, behavioral hospital; Akron Children's Hospital; Summa Health System; Akron Zoological Park; Case Western Reserve University

Mark A. Ohlinger president

Bostwick Design Partnership 2729 Prospect Ave., Cleveland 44115 (216) 621-7900/www.bostwickdesign.com

$5.2

$5.4

Marymount Hospital surgery expansion; Ohio State University College of Medicine expansion; Cleveland Public Library, main library; Cleveland Clinic Center for Multidisciplinary Simulation; Fisher-Titus Medical Center expansion

Robert L. Bostwick president, director of design

Perspectus Architecture 13212 Shaker Square, Suite 204, Cleveland 44120 (216) 752-1800/www.perspectusarch.com

Cleveland Clinic; University Hospitals Case Medical Center; Veterans Affairs Medical Centers; Brookdale Senior Living; Ohio State University; Kent State University; U.S. Department of Homeland Security; Pepper Pike Country Club

Lawrence Fischer, William Ayars; managing design principals

Vocon 3142 Prospect Ave., Cleveland 44115 (216) 588-0800/www.vocon.com

110

$24.4

$18.2

KeyBank; Goodyear Tire & Rubber Co.; Jones Day; Cliffs Natural Resources; Nestle; Calfee; Hospice of the Western Reserve

Deborah V. Donley principal

Domokur Architects 4651 Medina Road, Akron 44321 (330) 666-7878/www.domokur.com

$7.6

$6.6

Capital Camps, Waynesboro, Pa.; Camp Southern Ground; Girl Scouts; Summa Health System; FirstMerit; J.M. Smucker Co.

Michael Domokur owner

Bialosky + Partners Architects LLC 2775 S. Moreland Blvd., Cleveland 44120 (216) 752-8750/www.bialosky.com

American Greetings corporate headquarters; LCCC culinary building; RTA Brookpark; Crocker Park Phase III; Ursuline College dining hall; KSU Schwebel Room; Millcreek Hospital; Portage Crossing; Campus 360 Toledo

Jack A. Bialosky Jr. senior principal

Richard L. Bowen + Associates Inc. 13000 Shaker Blvd., Cleveland 44120 (216) 491-9300/www.rlba.com

Vitamix expansion and renovation; Kent Municipal Courthouse; Central Ohio Transit Authority (COTA) McKinley facility renovation; CMHA Lee Road senior housing; Streetsboro Civic Center

Richard L. Bowen president

Stantec Architecture(1) 3700 Park East Drive, Suite 200, Beachwood 44122 (216) 454-2150/www.stantec.com

$6.7

$7.0

Ohio State University, CBEC; Cleveland Institute of Art; Beachwood High School; Rocky River City Schools, four renovated buildings; Euclid Schools, four new schools

Michael Reagan, vp, science and technology; Michael R. Carter, managing principal

TDA Architecture 4135 Erie St., Willoughby 44094 (440) 269-2266/www.thendesign.com

$5.0

$4.5

Spire Institute dormitories; Professional soccer stadium, Pittsburgh; Maple Heights HS stadium; Marriott, Jamaica; Marriott, Mexico; Lincoln Electric; Lutheran HS West; Marlington Schools; Pete Baur Buick GMC; Morris Cadillac Buick GMC

Robert A. Fiala managing partner

ADA Architects Inc. 17710 Detroit Ave., Lakewood 44107 (216) 521-5134/www.adaarchitects.cc

Architectural and engineering firm specializing in national retail, small, medium Martin Strelau and large box stores, shopping centers and mixed use developments, president educational K-12, supermarkets, senior living, child care and office

Dorsky + Yue International 23240 Chagrin Blvd., Suite 325, Cleveland 44122 (216) 468-1850/www.dorskyyue.com

Easton Town Center Phase II; Seasons of Tuxedo mixed-use, Manitoba; Miami William Dorsky Multispecialty Diagnostic; Met III Apts., Va.; Nanuet Mall, N.Y.; Mixed-use retail/ managing principal business district, Black Sea area; Port Royale Apts., Fla.

Braun & Steidl Architects Inc. 1041 W. Market St., Akron 44313 (330) 864-7755/www.bsa-net.com

$4.6

$5.0

C.C. Hodgson Architectural Group 23240 Chagrin Blvd., Suite 350, Cleveland 44122 (216) 593-0057/www.ccharch.com

Harris/Day Architecture 3722 Whipple Road NW, Canton 44718 (330) 493-3722/www.harrisday.com

$3.7

$4.1

HWH Architects Engineers Planners Inc. 1300 E. Ninth St., Suite 900, Cleveland 44114 (216) 875-4000/www.hwhaep.com

122

Richard Fleischman + Partners Architects Inc. 1020 Huron Road, Suite 101, Cleveland 44115 (216) 771-0090/www.studiorfa.com

$2.9

$2.5

University of Cincinnati; J.W. Peck Federal Building, Cincinnati; Cuyahoga County Public Library, North Royalton; Cuyahoga Community College; Cleveland Public Power; PNC, Cleveland

Richard Fleischman president

Robert P. Madison International Inc. 2930 Euclid Ave., Cleveland 44115 (216) 861-8195/www.rpmadison.com

$2.8

$2.6

Medical Mart & Cleveland Convention Center; Kappa House II; Akron Public Schools, Seiberling K-8 school; Almira School

Robert P. Madison chairman, CEO

Array Healthcare Facilities Solutions 3201 Enterprise Parkway, Suite 495, Beachwood 44122 (216) 292-7950/www.arrayhfs.com

$4.3

$3.7

Mercy Medical Center, Lorain; St. John Medical Center; VA, Pittsburgh; CWRU School of Dental Medicine; Mercy St. Vincent Toledo, master plan; UHS Arrowhead Behavioral Health

Christopher Trotta vice president, managing principal

CBLH Design Inc. 7850 Freeway Circle, Cleveland 44130 (440) 243-2000/www.cblhdesign.com

BGSU; Cuyahoga Community College; Cuyahoga County Public Library; Cuyahoga Falls Library; MetroHealth; NEOMED; Ohio State University Medical Center; University of Toledo Medical Center; Veterans Affairs Medical Center

Marc B. Bittinger, Timothy S. Hunsicker, Michael D. Liezert; principals

The Austin Co. 6095 Parkland Blvd., Cleveland 44124 (440) 544-2600/www.theaustin.com

$48.0

$45.0

Pfizer pharmaceutical plant; FedEx Ground expansions; FirstEnergy Perry maintenance facility; Bimbo Bakeries Topeka plant

Michael G. Pierce president

Herman Gibans Fodor Inc.-Architects 1939 W. 25th St., Suite 300, Cleveland 44113 (216) 696-3460/www.hgfarchitects.com

$2.2

Erie Square Apartments reconstruction; Mount Saint Joseph Nursing Home; Benjamin Rose Institute on Aging, office building; Slovene Home for the Aged; Progressive 650 Alpha building renovation; Kendal at Oberlin expansion

James G. Herman president

Makovich Pusti Architects Inc. 111 Front St., Berea 44017 (440) 891-8910/www.mparc.com

Veterans Administration, Wade Park; Airforce Reserve, Youngstown; St. Vincent Charity Hospital, exterior restoration; Southpointe Hospital Cleveland Clinic

Ronald J. Makovich president

Strollo Architects 20 W. Federal St., Suite 604, Youngstown 44503 (330) 743-1177/www.strolloarchitects.com

$2.5

$3.0

Joanie Abdue Comprehensive Breast Care Center, Youngstown; Meridian Community Care; Multiple assisted living projects; Joshua Dixon Elementary; Crestview Schools performing arts center; Girard Schools sports complex

Gregg Strollo, president, principal; Rodney Lamberson, executive vice president, principal

TC Architects Inc. 755 White Pond Drive, Suite 401, Akron 44320 (330) 867-1093/www.tcarchitects.com

Cleveland Clinic Richard E. Jacobs Health Center and Ambulatory Surgery Gary R. Hribar, vp, URS Center; Cuyahoga Community College Health Career and Technology building; division; William Colt, sr. Cleveland Medical Mart & Convention Center vice president

Etech Building, Tri-C; Courtyard by Marriott, University Circle; Hampton Inn Cleveland renovation

Charles Louis Schreckenberger president

Veterans Affairs Community Living Center, W.Va.; Chatham Health Center, Pa.; Cornelia C. Hodgson Parmatown Amenity Center; Harbourâ&#x20AC;&#x2122;s Edge CCRC, Fla.; Abbey Delray CCRC, president Fla.; Resthaven Rehab, Mich.; Greenfields of Geneva CCRC, Ill. Bridgestone; Akron-Canton Airport; Stark State College, Wind Research Center; MVNU Athletic Center; Green Local Schools; Dix Communication; Firestone Country Club; YMCA

R. Jeffrey Day president

GE Transportation, Erie, Pa.; Goodyear Tire & Rubber Co., Santiago, Chile; GE Peter P. Jancar Energy, Greenville, S.C.; General Mills, Cincinnati chairman

Akron General, Health & Wellness Center, Green; NEOMED research facility, Rootstown; Alpha Phi Alpha, Williams Tower, Akron; Akron MHA, Edgewood Robert C. Chordar Village; EHDOC, Pepper Tower renovation, Miami and Edward Marx renovation, president Chicago

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JANUARY 16 - 22, 2012

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Local registered architects Name of firm Address Rank Phone/Website

12-1-2011 12-1-2010

Local office revenue (millions) Total staff

2011

2010

Major current projects

Top local executive Title

Middough Inc. 1901 E. 13th St., Suite 400, Cleveland 44114 (216) 367-6000/www.middough.com

800

$2.6

$95.0

GSA A/E Services, State of Ohio; Meijer stores Midwest; Progressive Insurance; Cleveland State University CPH Visual Arts; Wal-Mart

Ronald R. Ledin president, CEO

Sandvick Architects Inc. 1265 W. Sixth St., Cleveland 44113 (216) 621-8055/www.sandvickarchitects.com

$1.4

John Hartness Brown Building, Cleveland; Rockwell Building, Cleveland; Mercantile project, Hamilton, Ohio

Jonathan Sandvick president

Van Auken Akins Architects LLC 1422 Euclid Ave., Suite 1010, Cleveland 44115 (216) 241-2220/www.vaakins.com

Cleveland waterfront planning; Akron Core City Vision Plan; Cleveland Medical Mart and Convention Ctr.; St. John Medical Ctr., master plan implementation; UH Geauga Medical Ctr.; Federal Reserve Bank of Cleveland

Jill V. Akins principal

Clark & Post Architects Inc. 6125 S. Broadway, Lorain 44053 (440) 233-8487/www.clarkandpost.com

Lorain County Community College-multi-purpose center, Smart Commercialization Center, University Center Ridge Campus; Beam Inc. renovations; Oberlin College dormitory renovations

Ronald A. Cocco president

Davison Smith Certo Architects Inc. 26031 Center Ridge Road, Westlake 44145 (440) 835-3957/www.dscarchitects.com

$1.4

$0.9

Western Reserve Rehabilitation Center, Hudson; Bath Creek Nursing Home, Cuyahoga Falls; Davita, multiple locations

William R. Davison president

Holzheimer Bolek + Meehan Architects 1382 W. Ninth St., Suite 300, Cleveland 44113 (216) 421-1100/www.hbmarchitects.com

Library projects in Ohio, Michigan, Virginia, Georgia, Missouri, Texas and Kansas

Dan Meehan, David Holzheimer, Peter Bolek; partners

Lesko Associates Inc. 27955 Clemens Road, Suite A, Cleveland 44145 (440) 835-0850/www.lesko-associates.com

$1.0

Euclid City Schools, new elementary schools; Toronto City Schools, new middle/high school; Midview Local Schools, new middle school; Indian Creek Local Schools, new high school; Vermilion Local Schools, master plan

Robert W. Blatchford Jr. president

RDL Architects Inc. 16102 Chagrin Blvd., Suite 200, Shaker Heights 44120 (216) 752-4300/www.rdlarchitects.com

$2.8

$2.4

Euclid Corridor, senior living; Cleveland Corporate Services; Garfield Phase III & IV, Pittsburgh; Homes of Syracuse; Laurel Lake; Woodlands at Zuck Park

Ron Lloyd president

Arkinetics Inc. Architects + Urbanists 3723 Pearl Road, Cleveland 44109 (216) 749-7800/www.arkinetics.com

$1.9

$1.7

Cleveland State University Union building; Holiday Inn Express; Spitzer Kia

Bruce A. Taylor managing partner

DLZ Ohio Inc. 614 W. Superior Ave., Cleveland 44113 (216) 771-1090/www.dlz.com

Thomas G. Sisley senior vice president

Chambers Murphy & Burge Restoration Architects Ltd. 43 E. Market St., Suite 201, Akron 44308 (330) 434-9300/www.cmbarchitects.com

$0.5

$0.6

Kent State University, Science Lab roof replacement and masonry repairs; Elizabeth Corbin Murphy Metropolitan Stippich restoration and adaptive reuse; Belmont County, sheriff's Lauren Pinney Burge residence restoration and adaptive reuse principals

Eberhard Architects LLC 2587 University Blvd., University Heights 44118 (216) 513-1300/www.eberhardarchitects.com

$0.5

Vocational Guidance Services renovation; Lazar residence

William T. Eberhard managing partner

LDA Architects Inc. 3109 Mayfield Road, Suite 201, Cleveland Heights 44118 (216) 932-1890/www.ldaarchitecture.com

$0.8

Euclid Belmore Apartments; Emerald Alliance VI PSH; McKinley Grove PSH; Helen S Brown Apartments; Greater Abyssinia Apartments; Westin Hotel; CWRU, Smith and Taft dormitories

Dominick Durante Jr. president

OSports — Osborn Sports Architecture 1300 E. Ninth St., Suite 105, Cleveland 44114 (216) 649-0460/www.osportsarch.com

KSU, athletic facilities master plan; Capital University, stadium upgrades; Hudson High School, multi-purpose stadium; Hudson School District, athletics projects; Wright State University, Rinzler Athletic; St. John's Jesuit HS

Christopher Alan Wynn principal, director of design

Karl R. Rohrer Associates Inc. 1566 Akron Peninsula Road, Suite 4, Akron 44313 (330) 923-8461/www.karlrohrer.com

$1.3

YMHA, Brier Hill Apartments remodel; Enterprise Green; SMHA Girard Gardens Edward Michael Monaco Apartments, fire alarm and security upgrade president

mbi | k2m Architecture Inc. 3121 Bridge Ave., Cleveland 44113 (216) 357-2794/www.mbi-k2m.com

$3.8

$3.2

Corporate clients, commercial office, retail, hotel and government agencies

Scott C. Maloney, president; Kevin C. Robinette, dir. architecture; Kelli M. Schaffran, dir. interior design

Weber Murphy Fox 1801 E. Ninth St., Suite 1500, Cleveland 44114 (216) 623-3700/www.wmf-inc.com

$1.6

$1.4

Baldwin-Wallace College, Conservatory of Music; Lorain County Community College, lab science building; Cleveland State University Euclid Commons

Douglas Hoffman branch manager, board vice president

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Formerly Burt Hill

RESEARCHED BY Deborah W. Hillyer

GrafTech: Heat-dispersing materials now more prominent continued from PAGE 1

The company, which in its heyday in the early 1900s employed more than 2,500 people in Lakewood, has been hiring there at a steady clip again. In 2010, the company employed 98 people in the city. Today, GrafTech has 165 employees there and is in the midst of hiring more engineers and production staff, said site manager Brian Bartos. GrafTech also plans to spend millions on new equipment and in refurbishing some of its older buildings in Lakewood to double production capacity from what it was just two years ago, Mr. Bartos said. The growth plans are the latest chapter in a long history that has seen the company evolve from making an iconic product of the 19th century — carbon brushes used in Cleveland’s famous and first-in-theworld electric streetlights — to producing advanced carbon materials that are vital components for today’s smart phones and flat-screen televisions. “This facility has been manufacturing some form of carbon or graphite material for 125 years,” Mr. Bartos said in reference to GrafTech’s original “Factory A” — now

a 22-acre site at West 117th Street and Detroit Avenue in Lakewood and the spot where the company began in 1886. Mr. Bartos is in charge of the company’s 22 buildings at the site, with its total of 200,000 square feet of manufacturing space. Lakewood can’t claim credit for recruiting the company to the city, though. If anything, Lakewood owes its existence to GrafTech more than the other way around. When the company first set up shop at its present location, there was no Lakewood. There weren’t even roads until the company, then known as The National Carbon Co., built them. The neighborhood built largely to house GrafTech’s workers was known as Bird Town, or Bird’s Nest, and Bird Town remains Lakewood’s oldest neighborhood. “The site kind of pre-dates Lakewood,” Mr. Bartos said. “When they built it, this was called West Cleveland.”

Farewell, ‘wet-cell’ days National Carbon was bought out by Union Carbide Co. in 1917, then was spit out again in 1991. It adopted the name GrafTech in 2002. But the name changes are nothing

compared with the technological changes that have come out of the Madison Avenue site. There, engineers not only developed the first carbons for streetlights, but went on to develop the first synthetic graphite in 1896. The company worked in batteries, beginning by producing wet-cell batteries in 1894 and then introducing the first battery for the consumer market in 1896. By 1898, it had perfected the dry cell battery. Those “D-cell” batteries that went into nearly every flashlight made during the 20th century were a National Carbon invention. The company also became an international leader in the production of graphite electrodes, which are used in arc furnaces to melt steel on a smaller scale than is done in the traditional blast furnaces found at larger steel mills. Those electrodes have become a growth business, as electric arc furnaces have been built far more often in recent decades than blast furnaces, and account for more than 80% of GrafTech’s sales, according to its most recent financial filings. But the glory — not to mention the best profit margins — has come

from innovation and new technologies. The most recent innovation might be the company’s biggest single success in the last 100 years — the development of carbon materials that can disperse heat better than almost any other material. Those materials have been increasingly important in the last 10 years. They’re used to disperse and manage the heat generated by electronic devices, especially those with touch screens or flat screens such as those found on most modern televisions. Peel away the screen from the average new TV and there’s a good chance you’ll find a thin film of graphite, made right here by GrafTech, behind the glass. Those products also are the reason GrafTech is growing. Its recent hiring spate in Lakewood, as well as its continued growth plans there, are in response to rising demand for its products, as more flat-screen televisions and smart phones are produced every year, Mr. Bartos said.

Tablets and beyond None of this has gone unnoticed, or unappreciated, by Lakewood. Mayor Michael Summers said the city has been fortunate to have

hosted such a company for so long. “The impact, through the generations, has been very significant for Lakewood,” Mayor Summers said. Along the way, the company has not asked for handouts from the city nor held its feet to the fire with threats of moving, he said. Instead, it has been involved in neighborhood improvement projects and has been a valued city partner. The mayor said he thinks it is Factory A’s location that has made the difference, and he hopes it will keep doing so. The company is near an entrance to Interstate 90, as well as to rail transportation, which makes it an ideal location that’s still removed from Lakewood’s residential neighborhoods, Mayor Summers said. As for Mr. Bartos, he said he’s focused on investing further in the factory and certainly not on moving it. The plant is the only one that makes the natural graphite materials that are used in electronic devices — and every year it seems like more device makers want to use it, he said. “Sometimes, we’re in devices before we even realize it,” he said. “And we’re starting to get a lot of traction in tablets (computers) now.” ■

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JANUARY 16 - 22, 2012

CRAIN’S CLEVELAND BUSINESS

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THEINSIDER

THEWEEK JANUARY 9 - 15 The big story: Diebold Inc. won’t be going far when it moves into its new global headquarters in a few years, as it has selected a site in Green — its current home — for that planned investment. The maker of automated teller machines and bank security equipment said it has signed a purchase agreement that includes 55 acres at the Union Square development, which is near the intersection of Massillon Road and Town Park Boulevard, adjacent to Interstate 77 south. Diebold also would hold the right of first refusal to another 36 acres surrounding the site.

Working harder: Steelmaker ArcelorMittal is ramping up its Cleveland Works further and says it will hire about 150 steelworkers over the next three months as it restarts more of the mill. The company said increased demand for the mill’s steel, which is flat-rolled and stamped into parts for automobiles, appliances and other big items, is the reason for the expansion. The move will add 480,000 tons to the mill’s annual production levels.

Shopping spree: Affiliates of DDR Corp. of Beachwood and Blackstone of New York formed a joint venture to buy a portfolio of 46 shopping centers from EPN Group of Northbrook, Ill., for a total of $1.4 billion. DDR said it will invest $150 million in preferred equity and own 5% of the joint venture formed with Blackstone Real Estate Partners VII, a real estate fund the Blackstone investment firm manages for its investors. DDR knows this portfolio of open-air shopping centers well; it already manages them and will continue to do so.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Another motivation to quit the habit ■ Smokers need not apply for a gig at University Hospitals, as the health system is the latest employer in the region that pledges not to add tobacco users to its payroll. Christine Schaefer, UH’s director of compensation and benefits, said the move is a natural progression of the health system’s wellness strategy. In 2005, UH designated that all its buildings and property would be smoke-free. “It just made sense that if we were trying to get our internal population healthy, we wouldn’t bring external people in who are smokers,” Ms. Schaefer said. She noted that the new policy would not affect existing employees who are smokers, but those who admit to being tobacco users would receive a discount on their health care premiums if they chose to enroll in tobacco cessation programs. UH applicants who fail a nicotine test also are welcome to reapply within 90 days if they kick the habit, Ms. Schaefer said. In 2007, the Cleveland Clinic was among the first organizations in the area to say it wouldn’t hire smokers. Summa Health System in Akron implemented a similar policy at the start of 2010. — Timothy Magaw

The state of things: KeyCorp is laying plans to expand in New York state. Cleveland-based KeyCorp said its KeyBank National Association subsidiary agreed to buy 37 retail bank branches currently owned by HSBC Bank NA in Buffalo and Rochester, N.Y. The branches are being sold by First Niagara Bank N.A. in connection with its acquisition of HSBC’s upstate New York banking franchise. KeyCorp said the deposits associated with these branches total approximately $2.4 billion, while loans total about $400 million. This and that: The Austen BioInnovation Institute in Akron has created its first company. The company, APTO Orthopaedics, has developed a device designed to help children who need spinal implants because of spinal deformities. … MedData Inc. in Brecksville, a provider of medical billing services, said it has acquired MedDirect Inc., a patient services company in Grand Rapids, Mich., that provides revenue cycle management services and personalized patient communications to health care organizations. … Esmark Steel Group, the steel services subsidiary of diversified holding company Esmark Inc., named steel industry veteran Peter Doyle as president of the company’s Ohio operations. To keep up with local business news as it happens, visit www.CrainsCleveland.com.

Care to pull some muscles, anyone?

■ Cleveland Indians season ticket account executive Jeff Stocker will represent the

■ Haven’t found a way to scratch that winter competitive itch, have you? Hermes Cleveland, the local operator of the Cleveland Corporate Challenge and area road races, is gearing up for its first Winter Corporate Games, which will be held this Sunday, Jan. 22, at Quicken Loans Arena. The 14-event summer challenge continues to grow, and the first winter installment will draw about 10 companies, Hermes’ Drew Kraemer said.

WHAT’S NEW

BEST OF THE BLOGS

Will Mr. Stocker be a game show hit? Tune in

A dose of sunshine: MetroHealth has taken the first few steps in finding a replacement for CEO Mark Moran, who announced last month he would not renew his contract with the health system that is subsidized by Cuyahoga County. In an email that MetroHealth said would be the first of several dispatches “to maintain transparency in the search process,” the system reported it has issued a request for proposal for an executive search firm to facilitate the national search for Mr. Moran’s successor. Also, three MetroHealth trustees were appointed to lead the search committee.

team in MLB Network’s first “Baseball IQ,” a game show featuring individuals from all 30 teams. They’ll be forced to answer list-style questions and will move through a March Madness-like bracket until one winner is crowned. How’d he get the job? By randomly providing the names of five Stocker Los Angeles Angels managers: Mike Scoscia, John McNamara, Buck Rodgers, Bobby Winkles and Gene Mauch. Curtis Danburg, the Indians’ senior director of communications, called Mr. Stocker out of the blue one day, asked him to name those men and, apparently satisfied, said he’d heard enough. The Angels question was one provided by MLB Network to teams who had to find who best would represent them. How will Mr. Stocker fare this week in Secaucus, N.J., where the network is based? Head on over to my blog, at www.Crains Cleveland.com/section/blogs04, to read how he did on questions provided by Crain’s readers. — Joel Hammond

Excerpts from recent blog entries on CrainsCleveland.com.

THE COMPANY: C.TRAC, Strongsville THE OCCASION: Its 40th anniversary Transformation has been a constant over the 40-year history of C.TRAC in Strongsville. Founded in January 1972 by David Hamister, C.TRAC (an acronym for Computerized Techniques for Review, Analysis and Control) Computer Services originally developed software for inventory management, mostly for distributors. But thanks to a changing marketplace, the company by the mid-1980s moved toward assisting direct mail companies with information management. The growth of direct mail and data entry services sustained the company until 2002, when a rebranding effort resulted in a rechristening of the business as C.TRAC information solutions. Today, it’s just C.TRAC, and president Susan Williamson describes the company as a “data-driven marketing solution provider” focused on services that include data analytics, database building and hosting, and direct mail and email campaign management. C.TRAC is marking its 40th anniversary with a new logo and website. Ms. Williamson said the new “blade” logo is representative of the three functional segments of its marketing service business today: Compile, Communicate, Comprehend. Plans call for the company to add to its 31-employee staff by as much as 20% this year, and to remodel and reconfigure its offices at 16855 Foltz Parkway. For information, visit www.ctrac.com.

Analysts see pitfalls bubbling up for Ohio shale ■ The economic potential of oil and gas shales in Ohio is exciting, but a Jan. 9 story from Bloomberg is a little scary. “Surging prices for oil and gas shales, in at least one case rising 10-fold in five weeks, are raising concern of a bubble as valuations of drilling acreage approach the peak set before the collapse of Lehman Brothers Holdings Inc.,” Bloomberg reported. Chinese, French and Japanese energy explorers “committed more than $8 billion in the past two weeks to shalerock formations from Pennsylvania to Texas after 2011 set records for international average crude prices and U.S. gas demand,” according to Bloomberg. But as competition among buyers intensifies, “overseas investors are paying top dollar for fields where too few wells have been drilled to assess potential production,” said Sven Del Pozzo, a senior equity analyst at IHS Inc. For instance, in the Utica shale of Ohio and Pennsylvania, “deal prices jumped 10-fold in five weeks to almost $15,000 an acre, according to IHS figures,” Bloomberg reported. “I don’t feel confident that the prices being paid now are justified,” Mr. Del Pozzo told the news service. “I’m wary.” Manuj Nikhanj, head of energy research at ITG Investment Research Inc., told Bloomberg that because drilling in the Utica shale still is in its infancy, the geological characteristics and potential bounty of the region are hard to assess. “The big risk is that people are jumping in with both feet too early,” he said. “Of course, the other side of that is that if they wait, they risk missing out on what could turn out to be a big deal.”

Those companies will compete in broomball, 3-on-3 basketball — don’t worry, those of you whipped by Crain’s this summer, we’re not entered — a scavenger hunt and hockey skills. The deadline to register is tomorrow, Jan. 17, at 11:59 p.m. — Joel Hammond

A new way to aid victims of violence ■ A Case Western Reserve University professor is aiming to help young people who’ve been traumatized by violence rest a little easier. James Spilsbury, an assistant professor in CWRU’s School of Medicine, is using a $17,000 grant — one of four distributed throughout the country — from the American Sleep Medicine Foundation to dole out blankets, sheets, pillows, night lights and sleeping bags to children who have been victims of violence. He said social workers typically focus on nightmares, insomnia and other symptoms of post-traumatic stress disorder rather than explore how improving a sleep environment can ease the pain the children experience. “It’s not like we’re saying, ‘Here’s a blanket’ and suddenly they’re going to be cured,” Dr. Spilsbury said. But, he added, “We’ve noticed with these families that their sleep environments aren’t very sleep-friendly.” Dr. Spilsbury is working with Mental Health Services for Homeless Persons Inc., an agency that works with the region’s poor, to identify candidates. So far, the team has helped 27 families, but Dr. Spilsbury would like to help as many as 300. — Timothy Magaw

If image is everything, the Midwest has some work to do ■ An experiment about how people form impressions of big U.S. cities did not turn out well for Cleveland. Samuel Arbesman, a senior scholar at the Kauffman Foundation and a fellow at the Institute for Quantitative Social Science at Harvard University, wrote on TheAtlanticCities.com about how he and a research assistant set out to add more rigor to city sentiment surveys. They asked 310 U.S. residents “for their mental reactions when they hear the names of the 50 largest metropolitan regions in the U.S.” They recorded respondents’ home ZIP codes. “What we found is that our initial perceptions about cities are in fact often grounded in statistical reality,” Mr. Arbesman wrote. “The positive or negative opinions of our survey respondents were correlated, often quite strongly, with such metrics as change in population, housing prices, and cost of living, and inversely correlated with measures like crime and unemployment. On the other hand, measures such as sales tax and traffic congestion appear to have little influence on people’s perceptions of different cities.” The top five cities with positive associations were, in order, Seattle, Denver, San Francisco, San Diego and Portland. The cities with the highest negative reactions: Detroit, Birmingham (Ala.), Cleveland, Oklahoma City and Cincinnati. Midwesterners also tend toward self-loathing. While certain cities are positively viewed by all regions, “each region has a better view of its own cities than those cities of other regions,” Mr. Arbesman wrote. However, “The Midwest appears to be the most selfhating (or at least the least positive toward itself) of the Census regions.”

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