20130211-NEWS--1-NAT-CCI-CL_--
2/8/2013
4:22 PM
Page 1
$2.00/FEBRUARY 11 - 17, 2013
THE STATE BUDGET: HEALTH CARE ANALYSIS
Expansion of Medicaid could help employers Businesses might INSIDE Utica is where it’s at not have to pick Companies as up tab for workers such Momentum, led by presiwith low incomes dent and CEO By TIMOTHY MAGAW tmagaw@crain.com MARC GOLUB PHOTOS
Matt Cole’s Fat Head’s Brewery & Saloon has expanded four times since opening in North Olmsted in 2009.
THEY’RE BREWING SOMETHING SPECIAL Craft beer is a rapidly growing market; Ohio could be home to 100 specialty pubs by the end of 2013 By KATHY AMES CARR clbfreelancer@crain.com
M
06
att Cole sees the glasses halfempty as a positive. It means customers are sating their thirst with one of his artisan beers. Not that Mr. Cole hasn’t faced a challenge or two meeting consumer demand since his Fat Head’s Brewery & Saloon opened in North Olmsted in 2009. The business has undergone four expansions, including the addition last April of a $2 million, 22,000-square-foot production operation in Middleburg Heights. Mr. Cole is working with the building’s landlord to keep vacant an adjoining 22,000 square feet, which he expects to use in the next two to three years. “It’s insane, actually,” Mr. Cole said of the company’s growth. Mr. Cole’s situation is a refrain echoed by craft brewers throughout Northeast Ohio, who have been experiencing doubledigit and even triple-digit percentage
The brewing area at Fat Head’s Brewery & Saloon in Middleburg Heights. increases in craft beer output over the last couple years.The momentum aligns with national trends, which reflect craft brewers’ market share gains as more consumers eschew the predictable Millers and Budweisers for more complex, flavorful beer. “I don’t see the growth of craft beer slowing down anytime soon,” Mr. Cole said. “People are trading up because craft beer is an affordable luxury.” See BREWING Page 19
Republican Gov. John Kasich’s decision to back the controversial expansion of Medicaid under President Barack Obama’s health care overhaul could prove beneficial to some employers, though the entirety of the health care reform law still might be a tough swallow for many in the business community. Gov. Kasich last week urged state lawmakers to move forward with an
Frank Tsuru, right, are focusing their shale drilling efforts on eastern Ohio, where the profits tend to be much higher. Plus, a recap of the sold-out Shale Summit. PAGES 3, 18 expansion of the government-run health care program, which would extend coverage to 366,000 uninsured Ohioans. See MEDICAID Page 8
THE STATE BUDGET: SALES TAX ANALYSIS
Negatives could arise from wider tax base Providers of services wary of dampening effects on business By JAY MILLER jmiller@crain.com
While the cuts in state income tax rates that Gov. John Kasich proposed last week as part of his 20142015 budget have met with strong support in the business community, the other part of his tax reform plan — to extend the sales tax to almost all business and professional services — is drawing considerable
skepticism. It’s too early for lobbyists to descend on the Statehouse, because few groups have had a chance to digest the entire tax package, unveiled last Monday, Feb. 4. But some business executives are voicing concern about the plan, while several of the state’s key business associations have issued “wait-and-see” statements, signaling they need time to evaluate the net impact of the tax actions on their members. It is likely that state legislators will face some of the most intense lobbying they have ever seen — after all, one of the new business services that will be taxed is lobbying. See REFORM Page 6
0
NEWSPAPER
74470 83781
7
SPECIAL SECTION
SMALL BUSINESS Many companies are hiring etiquette pros to help their employees mind their manners ■ Pages 13-17 PLUS: THE RISE OF ARBORWEAR ■ TAX TIPS ■ ADVISER ■ & MORE
Entire contents © 2013 by Crain Communications Inc. Vol. 34, No. 6
20130211-NEWS--2-NAT-CCI-CL_--
2
2/8/2013
3:54 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
COMING NEXT WEEK
FEBRUARY 11 - 17, 2013
ON THE ROAD Clevelanders, on average, spend 31 hours a year stuck in traffic, which is the lowest figure among Ohio’s three largest cities, according to data published by the Texas A&M Transportation Institute. The institute measured traffic congestion data for 101 metro areas, producing metrics that tally the cost of our time on the road. Washington, D.C., was the most-congested city. Here’s a small slice of the data for Ohio metro areas (the stats are per auto commuter, and the rankings are nationally):
Go shopping with us Next week’s special section will look at the future of retail, including a look at the region’s malls and the push to buy local. We’ll also feature technology trends in retail, bargain hunting and more.
City
REGULAR FEATURES Big Issue .....................11 Bright Spots ..................9 Classified ....................22 Editorial ......................10
WWW.CRAINSCLEVELAND.COM
Going Places ...............12 Personal View..............10 Reporters’ Notebook....23 What’s New..................23
Yearly delay
Rank
Congestion cost
Rank
Columbus
40 hours
25
$847
29
Cincinnati
37 hours
37
$814
33
Cleveland
31 hours
50
$642
57
Toledo
26 hours
71
$555
73
Dayton
24 hours
80
$507
81
Akron
23 hours
83
$483
85
SOURCE: 2012 ANNUAL URBAN MOBILITY REPORT; MOBILITY.TAMU.EDU/UMS
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 editor: Kevin Kleps (kkleps@crain.com) Sports 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) Energy, steel and automotive Tim Magaw (tmagaw@crain.com) Health care and education Michelle Park (mpark@crain.com) Finance Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing director: Lori Yannucci Grim (lgrim@crain.com) Events Manager/Operations & Logistics: Christian Hendricks (chendricks@crain.com) Events Manager/Promotions & Sponsor Relations: Jessica Snyder (jdsnyder@crain.com) Advertising director: Nicole Mastrangelo (nmastrangelo@crain.com) Senior account executive: Adam Mandell (amandell@crain.com) Account executives: Dawn Donegan (ddonegan@crain.com) Andy Hollander (ahollander@crain.com) Lindsie Bowman (lbowman@crain.com) John Banks (jbanks@crain.com) Sales and marketing assistant: Michelle Sustar (msustar@crain.com) Office coordinator: Denise Donaldson (ddonaldson@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)
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 Mary Kramer: Group publisher 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
20130211-NEWS--3-NAT-CCI-CL_--
2/8/2013
3:49 PM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
3
Ferry Cap puts legal screws to union Lawsuit alleges some employees have refused overtime in protest of relocation By MICHELLE PARK mpark@crain.com
Facing what it calls “dire” financial impact if it cannot fulfill orders in a timely manner, a Lakewood
manufacturer has sued some of its employees and their union over claims the employees are refusing to work overtime because they oppose a relocation. According to the lawsuit filed in
U.S. District Court last Tuesday, Feb. 5, Ferry Cap & Set Screw Co. is seeking an injunction against “an illegal strike being waged” by employees in violation of a collective bargaining agreement that con-
tains a no-strike clause and provides for arbitration of grievances. Named as defendants are the union, International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge 54;
INSIGHT
union district representative Jack K. Baker; and 12 men who are employed by Ferry Cap as operators of its heading equipment, which is used to form the heads of fasteners such as screws. Those men, Ferry Cap alleges in its complaint, “have been engaged See FERRY CAP Page 7
Original goal was slightly off mark Previous owners of Accurate Group had lofty hopes, which have been exceeded By CHUCK SODER csoder@crain.com
HAL STATA PRODUCTIONS
Frank Tsuru, president and CEO of M3 Midstream, known as Momentum, speaks at the Shale Summit on Feb. 5. By DAN SHINGLER dshingler@crain.com
MOMENTUM H IS BUILDING M3 Midstream believes Utica region is nation’s best investment in shale
ouston-based M3 Midstream is in the midst of spending $1 billion across eastern Ohio in a rush to bring pipelines and equipment online to process natural gas from the Utica shale region, which the company known as Momentum expects to be the star of the nation’s shale gas and oil industry. Drillers pursue the most profitable endeavors they can find, and that means coming to the Utica shale, said Momentum president and CEO Frank Tsuru, who spoke last Tuesday, Feb. 5, to nearly 600 attendees of Shale Summit 2013, an event organized by Crain’s Cleveland Business and public broadcasting organization ideastream. See MOMENTUM Page 18
THE WEEK IN QUOTES “I don’t see the growth of craft beer slowing down anytime soon. People are trading up because craft beer is an affordable luxury.”
“We would have rather found out that there was a character issue then, than three or five months into that person’s tenure.”
— Matt Cole, owner, Fat Head’s Brewery & Saloon in North Olmsted. Page One
— Ronald Fountain, chairman of the board of trustees, The MetroHealth System. Page 4
“If you’re constantly fixing your clothes, you’re not paying attention; you’re more likely to get into an unsafe situation — that doesn’t happen with the (Arborwear) clothes.” — Jim Skiera, executive director of the International Society of Arboriculture. Page 13
“The overall message is that when you are eating a meal, they really do look at how you eat. I’m not sure people realize that you are judged on your manners and your handshake.” — Laura C. Cessna, assistant director, student development and leadership, Office of Student Affairs, Northeast Ohio Medical University. Page 14
Four years ago, the previous owners of Accurate Group gave Paul Doman what might have seemed like a lofty goal: Grow the company’s sales to $50 million from $6 million, and increase profits to $5 million by 2014. Maybe they should have set the bar higher. The provider of real estate transaction services hit both targets last year. Accurate Group’s rapid growth has led to the creation of 61 jobs at its headquarters in Independence since Evolution Capital Partners bought a majority stake in the company in February 2009. It also generated a lot of cash for the Beachwoodbased private equity firm: An investment group led by ABS Capital Partners paid $55 million to acquire a majority stake in Accurate Group last December. In the process, Evolution Capital sold all its shares in Accurate Group, and an undisclosed amount of money was added to Accurate Group’s balance sheet. The company also took on an undisclosed amount of debt, said Mr. Doman, Accurate Group’s CEO. The influx of money, along with advice from Baltimore-based ABS Capital, should help Accurate Group keep growing, Mr. Doman said. The company aims to increase sales to $75 million this year from $55 million last year. “We’re expecting more growth this year and next year, frankly,” he said. The company plans to hire more managers, sales people, software developers and people to manage the company’s information technology infrastructure, Mr. Doman said. Accurate Group employs a total of 180 people nationwide, up from about 80 when Evolution Capital bought its stake in the company. See ACCURATE Page 8
20130211-NEWS--4-NAT-CCI-CL_--
4
2/8/2013
2:02 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MetroHealth is lining up interviewees for CEO post
SOLD 7505 TYLER ROAD MENTOR, OHIO
By TIMOTHY MAGAW tmagaw@crain.com
Newmark Grubb Knight Frank is pleased to announce the sale of 7505 Tyler Rd a 19,635 multi-tenant industrial facility Terry Coyne and Sue Licciardi represented the seller
FEBRUARY 11 - 17, 2013
Full Selection of Commercial & Investment Offerings Available at
TerryCoyne.com Or Call Terry at
216.453.3001 1350 Euclid Ave, Ste. 300 Cleveland, Ohio 44115
AIR CHARTER SERVICE AIRCRAFT MANAGEMENT
Cleveland’s Premier Air Charter Service Serving Northeast Ohio with four Beechjets and a Hawker
www.FlySkyQuest.com • 216-362-9904
The MetroHealth System plans to bring in a slate of candidates “as soon as possible” to interview for its CEO post, and it hopes to have its next leader in place by mid-year, according to Ronald Fountain, chairman of the health system’s board of trustees. After a nearly year-long search, MetroHealth lost its top choice last November when Dr. John Brennan, CEO of Newark Beth Israel Medical Center in New Jersey, suddenly reneged on his commitment to take over the health system subsidized by Cuyahoga County. Dr. Fountain said the search for Mark Moran’s replacement is on a “pretty good path,” and the committee is lining up schedules to bring in the candidates. Late last month, the board installed Dr. Edward Hills, the health system’s chief operating officer, as interim CEO after Mr. Moran notified the board in December he wouldn’t stick around until his permanent successor was named. Dr. Fountain said the search committee plans to bring in fewer than 10 prospects — perhaps five to seven, though he couldn’t provide
an exact number — to interview for the post. He wouldn’t disclose the identity of the candidates, but noted the search committee wouldn’t turn away anyone who was qualified “whether they’re local or from outside of the city.” Dr. Fountain said MetroHealth is sticking with its search firm, Witt Kiefer, which brought Dr. Brennan to MetroHealth’s attention. He noted there was nothing MetroHealth or the search firm could have done to predict Dr. Brennan’s decision to back out of the job. “We would have rather found out that there was a character issue then, than three or five months into that person’s tenure,” he said. Dr. Fountain said the search has piqued the interest of candidates who weren’t necessarily interested in the post during the first go-around; he noted that “the fact that somebody with Brennan’s profile was committed to do the job and was interested in it, I think that helps.” Dr. Brennan was poised to earn an annual salary of $685,000 — $135,000 more than his would-be predecessor, Mr. Moran. The value of Dr. Brennan’s total compensation package would have been be-
tween $750,000 and $1.1 million. Dr. Fountain’s term on MetroHealth’s board will expire in March, but he said he would continue to assist with the pursuit for the health system’s next leader should the search committee need his help.
Books look better Meanwhile, the health system’s finances, which have been dinged in recent years due to the rising amount of uncompensated care it provides to the county’s indigent, are on the upswing, according to Dr. Fountain. Once the health system’s 2012 books are audited, he expects MetroHealth to have met its goal of posting a $10 million surplus. In addition, MetroHealth’s books for 2013 are expected to be buoyed by an infusion of new dollars thanks to federal regulators signing off recently on a complex legal maneuver that could extend Medicaid coverage to as many as 30,000 people in Cuyahoga County. The move will let the health system receive some compensation for care for which it hadn’t been paid in the past. Last year, the health system provided $130 million in uncompensated care. ■
Apartments owners are diversifying investments with out-of-region buys By STAN BULLARD sbullard@crain.com
At a time when apartments are the favored property type of investors and lenders as occupancies swell and rents rise after the collapse of the housing market, three local apartment owners are finding places to grow — outside Northeast Ohio. Summit Multicapital LLC in Akron announced Jan. 16 it has acquired the 169-unit Mosteller Mansion Estates in Hickory, N.C., for $18 million. Meantime, an affiliate of Apollo Management in Pepper Pike has bought the 327-unit Georgetown Apartments in Kettering, Ohio, for $12.7 million from Connor Group of Centerville, Ohio, according to the Dayton Business Journal. Burton Carol Management LLC in Warrensville Heights also added to its portfolio of properties, which are in Northeast Ohio, Michigan and Florida, with the acquisition of Beachwalk Apartments in Novi, Mich., according to Joy Anzalone, chief operating officer. The 240-unit complex in suburban Detroit was purchased in a distressed sale from Huntington National Bank, Ms. Anzalone said. The apartment owners are following the tried-and-true investment strategy of tapping different geographies to diversify their holdings. In Summit Multicapital’s case, it is pursuing a plan to acquire properties in areas with population and rent growth, according to Edward Newman, Summit CEO. “We’re buying in areas that are
growing because people are attracted by the lifestyle, areas where people want to live, and in secondary markets,” Mr. Newman said. The Hickory, N.C., property is in the popular Lake Norman area outside of Charlotte, but it’s removed from the Charlotte market itself where Summit would need to compete with large, publicly traded real estate investment trusts, Mr. Newman said. Summit has been buying properties in North Carolina for the last six years, and the Hickory property is near a 312-unit property that it owns in Mooresville, N.C., Mr. Newman said. Summit also owns about 800 units in the suburbs of Denver, and this latest acquisition means about half of its 3,250-suite portfolio is in the Akron area and the rest outside the region. In Burton Carol’s case, it knows the Detroit area from other properties it has owned there in prior firms that it sold. It is a larger metropolitan area than Cleveland, but within a two-hour drive or flight that Burton Carol uses to define its target markets, Ms. Anzalone said. Although Beachwalk Apartments was bank-owned, Ms. Anzalone described it as a gem because it is located on Walled Lake, an inland lake near Detroit. Burton Carol had to compete with 19 other offers for the property. “There is exuberance in the market, but you need to be methodical,” Ms. Anzalone said. “We had no problem rising to the price. But you want to buy at a price that will allow
you to own a property for years.” Burton Carol is continuing to look for other opportunities outside the region, she said, but is shying from one of its favorite markets, Florida, because of the rise in selling prices there. Apollo did not return two calls by Crain’s deadline last Friday, Feb. 8, on the Dayton acquisition. Buying outside the region is a perfect balance to Northeast Ohio’s apartment market, which lacks population growth and has rents lower than in larger cities. That’s the view of Michael Barron, a vice president for investments at the Marcus & Millichap real estate brokerage, which has an Independence office. “In Northeast Ohio you get stability and cash flow,” Mr. Barron said, because units are less costly than in other areas, but the region’s slow-grow apartment market frees it from overbuilding typical in areas with population growth. “In other areas, you get price appreciation for the units and rent growth,” Mr. Barron said. Ralph McGreevy, executive vice president of the Northeast Ohio Apartment Association trade group, said owners of larger apartment portfolios can compete effectively for properties outside the region because of the market’s current strength. He considers the drive to buy outside Northeast Ohio a road well-traveled by property owners in the past. It’s now being trod by another group of growing apartment owners, Mr. McGreevy said. ■
Volume 34, Number 6 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2013 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. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
20130211-NEWS--5-NAT-CCI-CL_--
2/8/2013
3:54 PM
Page 1
20130211-NEWS--6-NAT-CCI-CL_--
6
2/8/2013
4:02 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
FEBRUARY 11 - 17, 2013
Congratulations to our Reform: Trade groups are cautious 2012 Top Producers continued from PAGE 1
Lawrence F. Kell Jack W. Drescher Thomas K. Gustafson Brian J. Lenahan Lawrence A. Kell Russell P. Rogers Gregory B. West Diana C. Golob Kevin J. Kuczynski Christopher J. Hondlik +1.216-861-7200 www.ostendorf-morris.com
THE CLEVELAND ORCHESTRA
ˇ DVORÁK’S “NEW WORLD” SYMPHONY NO. 9
FEB 21 -- 24 SEVERANCE HALL
| clevelandorchestra.com 216-231-1111
Some of the closest scrutiny will come from providers of businessto-business services, such as accountants and attorneys. But the expansion would hit most service businesses. “That would really stink,” said Jackie Koral, vice president of Cleveland Cinemas, which operates eight theaters in Ohio, many of which already pay a city admissions tax. “If they were to get rid of the city tax and go to a state tax, that wouldn’t be so bad. But to tack on another tax, that would be horrible because, of course, that gets passed on to the consumer.” Attorney Philip Eichorn, vice chairman of the Ohio Chapter of the American Immigration Lawyers Association, said his organization is taking a stand against expansion of the sales tax. “When you are a sole practitioner or small business entity, most of your clientele is individuals,” Mr. Eichorn said. “What (Gov. Kasich) is doing is not just forcing a lawyer to collect the sales tax, but increasing the cost of legal services.” Ed Sitter, a real estate broker in Toledo and chairman of the legislative and government affairs committee of the Toledo Board of Realtors, also opposes the new tax on his services. He worries that while the increase in sales tax is accompanied, for now, by a drop in the income tax, that offset won’t last. Mr. Sitter fears the income tax eventually will increase — but the sales tax will remain. He also questions how it would work in practice. “In the real estate industry, we’re just starting to bounce back from the housing debacle, and this will
Turns out the distance between middle management and upper management is one degree.
Executive MBA Open House Thursday, Feb. 21, 2013 12:00 p.m. – 3:15 p.m. Register at: weatherhead.case.edu/emba or call 216.368.6411.
“That would really stink. If they were to get rid of the city tax and go to a state tax, that wouldn’t be so bad. But to tack on another tax, that would be horrible.” – Jackie Koral, vice president, Cleveland Cinemas
add more cost to closing a house, something we can’t necessarily afford to do right now because margins are so thin,” Mr. Sitter said. “We … in the short run may have to absorb those costs and not pass them along to consumers.”
Details, details Although he is not yet taking a position on the governor’s proposal, attorney Larry Oscar, CEO of Hahn Loeser & Parks LLP, said he was concerned that the complexity created by the broadening of the sales tax would damage the governor’s campaign to brand Ohio as a more business-friendly state due to what Mr. Oscar called “unintended consequences.” Mr. Oscar wondered, for instance, how attractive it would be for a multistate law firm to base business in Ohio, where the sales tax would apply, rather than initiating legal actions from other states without a tax on legal services. Big trade associations such as the Ohio Society of Certified Public Accountants and Ohio State Bar Association so far are reacting in a measured way to the governor’s proposal, even though they long have opposed expansion of the sales tax. “This is a pretty comprehensive tax reform package that we want to carefully consider,” said Barbara Benton, vice president for government affairs for the accounting society. “We want our members to have a chance to evaluate it.” The bar association is similarly cautious. “While historically the Ohio State Bar Association has opposed this expansion of the sales tax as an undue burden on the consumers of legal services, we will examine these new proposals before making any decisions about them,” it said in a prepared statement on its website. “The devil may very well be in the details, which is why understanding the details is so important.”
Tradeoffs abound At present in Ohio, only specific services incur a sales tax, including cell phone service, carpet cleaning and laundry services, and printing and photocopying services. Under Gov. Kasich’s plan, all services would be taxed, except for a few that specifically would be exempt. Exemptions would be focused mostly on services considered necessities of life, such as medical and health care services, as well as carpentry, plumbing and other construction services, though the exemptions would extend, less obviously, to dance, tennis and other personal instruction services. Businesses and consumers would pay a sales tax on most other business and professional services, ranging from legal and accounting services to debt collection and advertising agency services. The tax also would apply to theater admissions, credit bureaus services and
bank service charges. At the same time, the state sales tax rate would drop to 5% from 5.5%. Locally imposed sales tax rates also would be cut through a formula designed to adjust most of the gains that counties and transit systems would see because of the expansion of the tax base. The formula would give local agencies an estimated 10% increase in tax collections.Gov. Kasich has said expanding the sales tax to services is a recognition that the economy — and the things people buy — have shifted dramatically from goods to services. Nationwide, some tax experts have argued that only by taxing services can the sales tax remain a meaning source of revenue for states, because the purchase of goods has declined as a percentage of household income, while the purchase of services has grown. Mark Engel, partner in charge of the Cincinnati/Dayton office of Columbus-based Bricker & Eckler LLP, sees a big debate ahead. Mr. Engel said because the sales tax is a flat percentage tax on goods, lower-income people tend to spend a greater share of their income on purchases and end up paying a greater share of their income on sales tax. He also sees arguments that might be used to oppose the sales tax expansion on business-tobusiness, or b-to-b, transactions. “The situation on b-to-b is an interesting issue because there is a train of thought out there that the sales tax should only be on final consumption,” he said. “There is one train of thought that any business-to-business transaction is not final consumption and therefore any business transaction ought not to be subject to (sales) tax,” Mr. Engel said. “Fortunately or unfortunately, depending on your perspective, (there is the idea that) business has to pay its fair share of taxes.”
End to the goofiness? Expanding the sales tax base to lower income taxes has motivated several states led by Republican governors to take a look at broadening their sales taxes; notable among them are Louisiana, North Carolina and Virginia. They have embraced the idea advanced by conservative economist Arthur Laffer that cutting income taxes and raising consumption taxes such as the sales tax will boost a state’s economy. “We strongly disagree with that presumption,” said Michael Mazerov, a senior fellow specializing in state fiscal policy at the Center for Budget and Policy Priorities, a progressive think tank in Washington, D.C. “There are good reasons to think it will be damaging to state economies.” The center argues that a sales tax disproportionally can hurt lowerincome people more than an income tax. One group that may welcome the new tax for uniformity sake, though, is landscapers. Right now, said Matt Ellis, president of the Ohio Lawn Care Association, some landscaping services are taxed and others are not. “If we do a major landscaping, we would (apply the sales) tax to plant materials but not on the pavers,” he said. Similarly, a landscaper would apply the tax to putting in a trellis but not a fence. “It’s really goofy,” he said. ■
20130211-NEWS--7-NAT-CCI-CL_--
2/8/2013
2:02 PM
Page 1
FEBRUARY 11 - 17, 2013
WWW.CRAINSCLEVELAND.COM
CRAIN’S CLEVELAND BUSINESS
7
Ferry Cap: Two union members wrote letter opposing move in 2012 continued from PAGE 3
in a concerted refusal to work overtime to protest the company’s decision to transfer its heading equipment to a different facility.” Ferry Cap makes critical strength fasteners used primarily in the heavy equipment and automotive industries and employs an estimated 56 hourly production and maintenance employees at its Lakewood operations, according to the lawsuit. The company’s website says Ferry Cap was founded in 1906 and is a supplier for companies such as Caterpillar, Mack Trucks and John Deere. Ferry Cap’s lawsuit states that the header operators’ refusal to work overtime “jeopardizes the company’s ability to fulfill customer orders in a timely manner.” It adds that an inability to fulfill orders in a timely manner “will result in Ferry Cap incurring significant financial penalties under supply contracts with customers, the loss of goodwill and the loss of customers.” “The potential overall financial impact of the work stoppage on the company is dire and could affect the company’s ability to continue business operations altogether,” the lawsuit maintains. An attorney for Ferry Cap declined comment for this story, and two phone messages left for the company’s director of operations were not returned by Crain’s deadline last Friday, Feb. 8.
Root of the dispute About a year ago, on Feb. 16, 2012, Ferry Cap announced to the union its intention to move its heading equipment to the Nelson Stud Welding plant in Elyria, which is owned by Doncasters, the same parent company of Ferry Cap. Shortly thereafter, on March 9, 2012, two union members wrote a letter to the parent company protesting the move of that equipment, Ferry Cap’s lawsuit says. A copy of that letter reveals the authors of the letter worried that moving the header group would not achieve cost savings for the parent company, but instead would cost Doncasters profits. They also
wrote that if any of the experienced workers who set up and run header machines were to decline to relocate to Nelson Stud, “we have more than 50% chance of losing our main customer base … due to lateness from lack of experienced people.” “We as a whole just hope that this is not being done to enhance another companies [sic] bottom line that does not perform as well as Ferry Cap,” the letter read. “Something just doesn’t smell right to us.” In August 2012, the union filed a grievance protesting the announced transfer of the heading equipment. Ferry Cap, the company says in its lawsuit, has been and is now ready and willing to process the disagreement between the parties through the grievance procedure. Indeed, its lawyers wrote, the grievance is scheduled for arbitration this March. In support of the union’s grievance, Ferry Cap alleges, the header operators “began to refuse to work any overtime … to pressure the company outside the scope of the grievance/arbitration procedure.” Ferry Cap responded on Jan. 18 by sending a letter to Mr. Baker, the union representative, protesting what it calls a “work stoppage.” It also asked the union to inform the header operators that the union does not condone or support their activity and that their “strike” violated the collective bargaining agreement, the lawsuit says. “The union should instruct the header operators to resume their normal work habits and accept overtime in accordance with their usual practice,” Ferry Cap’s letter to Mr. Baker read. Despite the letter, “the union has refused to take any action to stop the concerted refusal of the header operators to work overtime, thereby condoning this work stoppage,” the company’s lawsuit alleges. Ferry Cap warned the union that it could face liability — and monetary damages — for a breach of the collective bargaining agreement. According to the lawsuit, the collective bargaining agreement provides that there shall be no strikes, stoppages or slowdowns of work by
the union so long as the agreement is in effect. The agreement is effective through Feb. 21, 2016. The lawsuit also notes: “No provision of the agreement limits the company’s ability to require employees to work overtime.”
Legal experts weigh in One local labor and employment attorney thinks Ferry Cap has a strong case, provided that the facts in the company’s complaint are true. “The employer seems to have all their ducks in a row,” said Vincent T. Norwillo, a partner in the Cleveland office of Gonzalez Saggio & Harlan LLP out of Milwaukee. “They would seem to have a legitimate shot at convincing the court to issue at least a temporary restraining order.” To obtain what Mr. Norwillo said is “very rare relief” from the court, Ferry Cap must show — and seems to have shown — that a no-strike clause exists, that its contract provides for the mandatory arbitration of contract disputes and that employees’ refusal to work overtime is damaging or will damage the company irreparably. “This doesn’t happen every day,”
“The employer seems to have all their ducks in a row.” – Vincent T. Norwillo, partner, Cleveland office of Gonzalez Saggio & Harlan LLP Mr. Norwillo said. “The right to strike is the single most powerful economic bargaining tool available to a labor organization, and courts have been loath to restrict the right of unions. But since Boys Markets (a 1970 lawsuit), they’ve recognized this rare exception.” Another local labor and employment attorney, David A. Campbell, said he’s surprised Ferry Cap took to suing the employees rather than disciplining — and even firing — them. He also said he was surprised the collective bargaining agreement may not require mandatory overtime because most union contracts do. “I would simply handle it at the plant and discharge for subordination,” said Mr. Campbell, a partner in the Cleveland office of Columbus-based Vorys, Sater, Seymour and Pease LLP. “Either this company doesn’t have the appropriate contract … or they’re just simply
not responding the way a typical employer would.” In the company’s letter to union rep Mr. Baker, Ferry Cap’s director of operations wrote that the company is considering discipline of the header operators up to and including termination. One possible reason for Ferry Cap’s decision to sue, rather than terminate: Header operator jobs are skilled jobs, and the manufacturing work force is not exactly robust right now. “Companies like this — screw companies — typically have rather sophisticated machinery that requires some complex skill sets, things like setting up the machine, reading blueprints,” said Judith Crocker, director of work force and talent development for MAGNET, the Manufacturing Advocacy and Growth Network of Cleveland. “Those people are not out there, and the ones who are, are people who used to work for less sophisticated companies (and) need training,” Ms. Crocker. “If they had vacancies to fill and they were on a tight deadline, they would have a challenging time finding qualified workers to come in and immediately be able to do the job.” ■
WHEREVER YOU ARE,
YOU’RE CLOSE TO GREAT CARE.
Credit Union Commercial Lending For record low interest rates, call NOW! The nationally recognized care and expertise of The MetroHealth System is available at 17 convenient locations, so you never have to go a long way to make a great comeback.
For a physician near you, call 216-778-7878, or visit metrohealth.org
Jonathan Mokri
jmokri@cbscuso.com (440) 526-8700
www.cbscuso.com
20130211-NEWS--8-NAT-CCI-CL_--
8
2/8/2013
2:56 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
FEBRUARY 11 - 17, 2013
Medicaid: Government will pay full tab Accurate: Business ‘exploded’ continued from PAGE 1
In his announcement, the conservative governor cautioned he still was “not a supporter of Obamacare,” but stressed the role of the expansion in propping up the finances of hospitals that care for the uninsured as well as the importance of $1.4 billion in federal funds that would flow into the state as part of the deal. Those broad strokes led the Greater Cleveland Partnership, the region’s chamber of commerce, to throw its support behind the expansion just a few days before the governor’s announcement. Business groups long have argued that the cost of caring for the uninsured already has been shifted to those with private insurance in a “hidden tax” through premium hikes. Without the expansion of Medicaid, they’ve said, those increases could be even more severe. “Who ends up paying for it? The business community,” Joe Roman, Greater Cleveland Partnership’s president and CEO, said last week. “All legs of the stool would have seen undue harm as a result. There was no ability to just stand back.” More pointedly, however, if lawmakers approve the expansion, local businesses employing a slew of low-wage workers could steer their employees toward Medicaid rather than pick up the tab for their health care, according to several health care attorneys and benefits experts that spoke with Crain’s. “The more people Medicaid scarfs up at the lower end, the less people employers are going to have to worry about,” said John McGowan, employee benefits attorney with Cleveland law firm BakerHostetler.
Will they migrate? If approved, the Medicaid expansion would provide health care coverage to adults living at up to 138% of the federal poverty level, which equates to about $32,000 a year for a family of four and $15,400 a year for an individual. At present, Medicaid for the most part covers children and the elderly. The Affordable Care Act, or Obamacare, dictates that employers with 50 or more full-time employees offer health insurance that
Kasich
Roman
meets certain requirements or pay to the government a penalty of $2,000 or $3,000 per employee. Employees have the option to select the employer plan or, if their income qualifies, Medicaid — something many experts say lowincome employees might choose given the costs they would need to stomach for signing up for company-provided plans. “I think it will definitely happen because Medicaid is a no-cost option for these folks” said Paul Nachtwey, vice president of Todd Associates, an insurance brokerage in Beachwood. Employees also would have the option of buying their insurance on the public exchange — an online portal where individuals can shop for their own insurance. Their employers would be subject to the government penalty should they buy insurance through the exchange. However, should qualifying employees sign on with Medicaid, employers could skirt the penalty and forgo the cost of providing health care. “That would have the immediate effect of reducing costs employer would have to bear,” Mr. Nachtwey said. Gregory Hubbell, senior vice president in the Cleveland office of Aon Risk Solutions, a large insurance brokerage, said the expansion of Medicaid “certainly provides more options for all of us as individuals, so the tricky part for the employer would be, ‘What does Medicaid mean to me and my existing group health plan?’ Now there are the public exchanges and Medicaid — those are two wild cards that people might gravitate to.”
Mounting concerns The two pillars of health care reform driving President Obama’s goal of universal health care coverage are the Medicaid expansion
and the individual mandate, which is the law’s provision that requires most Americans to carry health insurance. To the delight of many conservatives, the U.S. Supreme Court last year ruled that individual states could sidestep the Medicaid expansion — a decision only a handful of Republican governors thus far have bought into. Gov. Kasich’s decision to go forward with the expansion has been seen by many as a sign the conservative movement is weakening in its opposition to the Affordable Care Act in the face of the president’s re-election. However, others have suggested it would have been irresponsible to forgo expanding coverage in Ohio at no additional cost to the state. The federal government has pledged to pick up the full tab for the first three years of the Medicaid expansion. Thereafter, the feds would cover 95%, which declines to 90% over time. Gov. Kasich, however, promised to reverse his decision should the feds fail to come through with the promised support. “This is in no way his endorsement of Obamacare,” said Robert Klonk, CEO of Oswald Cos., a Clevelandbased insurance brokerage. “He Klonk put politics aside and did what’s best for the citizens of Ohio. This was the only choice he really had.” Many people, however, are concerned that putting more low-income individuals on governmentfinanced health care programs only will push premiums for private payers north, considering Medicaid reimbursements rarely cover hospitals’ costs of providing care. Despite signaling its support for the expansion, the Ohio Chamber of Commerce said in a statement it still had “serious concerns” about the long-term financial stability of the program As Oswald’s Mr. Klonk put it, “This is not going to drive down costs at all. This is the hand we were dealt, and we have to play it the best way we can.” ■
all about Ita’s ter challenge
continued from PAGE 3
Plus, Accurate Group plans to start looking for other businesses to buy, Mr. Doman said. Though that process hasn’t yet begun, he said he knows of a few companies that Accurate Group would consider purchasing. Accurate Group “has just exploded” since Evolution Capital bought a majority stake in the business in 2009, said Brendan Anderson, co-founder and managing partner of the private equity firm. At the time, half of Accurate Group was owned by First American Title Insurance Co., which worked with Accurate Group to manage various transactions needed to close on a home purchase. Back then, the company was focused mainly on serving customers in North Carolina, where it was founded in 2003 as a home appraisal company, and elsewhere in the southeastern United States. The investment by Evolution Capital was intended to help the company expand nationwide, with the help an upgraded software system. “That’s happened, and it’s been wonderful,” Mr. Anderson said.
Change creates opportunity As part of the 2009 deal, Mr. Doman and Accurate Group chief information officer Michael Cullen left the Cleveland office of First American, which provides title insurance and other services related to real estate transactions, to lead Accurate Group and establish its new headquarters in Independence. That year the company upgraded its Magellan software so that a wider variety of lenders could use the system, which allows them to send work orders quickly to Accurate Group and complete other tasks needed to close a transaction. The
Automotive News publisher will retire; a new management team takes shape Peter Brown, vice president and publisher of Automotive News, a sister publication of Crain’s Cleveland Business and the leading publication covering the auto industry, has announced his retirement effective April 30.
water!
s in th e oi l and ga dustry. s in
W
Wednesday, February 13, 2013 Noon to 1:30 p.m. EST - Program Location: McDonald Hopkins, Fifth Third Center 600 Superior Ave., East, Suite 2100, Downtown Cleveland
RSVP: mcdonaldhopkins.com or call: 216.348.5400 to register. There is no charge for this program.
McDonald Hopkins LLC 600 Superior Ave., East, Suite 2100, Cleveland, OH 44114 • 216.348.5400
Carl J. Grassi
Shawn M. Riley
President
Cleveland Managing Member
Chicago • Cleveland • Columbus • Detroit • Miami • West Palm Beach mcdonaldhopkins.com
company integrated the software with some of the systems used by its larger clients, and it created a web interface that has helped other customers access the software. “We knew we could take the platform and scale it across the country,” Mr. Doman said. Using Magellan, Accurate Group helps clients manage property appraisers, title agents and notaries; conduct title searches; buy title insurance; and estimate home prices, among other functions related to home sales. Mr. Doman said he knew it was risky to join a real estate services company so soon after the housing market crash. However, he noted that the recession drove a lot of competitors out of the business. Plus, new regulations have helped increase demand for Accurate Group’s services, and low interest rates have boosted both home purchases and refinancing transactions, he said. “There was a lot of opportunity created by all the change in the marketplace,” Mr. Doman said. More expansion opportunities remain, said Phil Clough, managing partner of ABS Capital. Messrs. Doman and Cullen are well-equipped to keep growing the business, Mr. Clough said. For one, they have “a ton of experience” in the real estate services business, he said. Plus, as former executives at First American, they have the perspective needed to manage the company as it gets bigger, which Mr. Clough described as one of the biggest challenges facing the business. “Paul’s got a vision to make the company much bigger, and we’re investing in that vision,” he said. How much bigger? The company now has a new goal: Grow to $200 million in sales by 2017. ■
Mr. Brown, 64, joined Automotive News as editor in 1989 after serving 4½ years as the founding editor of its sister publication, Crain’s Detroit Business. He joined Crain Communications from the Detroit Free Press. Jason Stein, associate publisher and editor of Automotive News, becomes publisher and editor. In this role, Mr. Stein, 41, will oversee more than 50 automotive reporters and editors around the world and lead the publication’s sales, marketing, event and circulation departments. During his tenure, Mr. Brown has led Automotive News to dramatic growth and global prominence with a suite of print and online products that cover the automotive industry. He became publisher of Automotive News in January 2010 after serving as associate publisher and editorial director since 1992. Crain Communications vice president KC Crain has been named group publisher of the Automotive Group, which includes Automotive News, Automotive News Europe, Automobilwoche and Autoweek. Mr. Crain, 33, will continue as publisher of Autoweek and group publisher of Plastics News, European Plastics News, Rubber & Plastics News, European Rubber Journal, Plastics and Rubber Weekly, Tire Business, Waste & Recycling News, and Urethanes Technology International. — Automotive News
20130211-NEWS--9-NAT-CCI-CL_--
2/7/2013
3:24 PM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
9
BRIGHT SPOTS Bright Spots is a period feature in Crain’s highlighting positive business developments in the region. To submit information, email Scott Suttell at ssuttell@crain.com. ■ Cleveland-area entrepreneurs are in a pretty good mood, according to a new survey conducted by The Entrepreneurs’ Organization. The survey of 143 local companies with at least $1 million in annual revenue found 42% expect to hire more full-time workers in the next six months, and 56% plan to hire more part-timers in that time frame. Those surveyed also say they believe the economy is moving in a positive direction, with 56% reporting positive feelings about starting a new business in the next half year and 63% believing in a positive change in net profit. “The results from the survey underscore that Cleveland businesses are thriving despite the current economic climate,” said the organization’s Cleveland chapter president, James Benjamin. “We expect our businesses to continue growing, and we expect the market to rebound in a positive way.” The Entrepreneurs’ Organization is a network of more than 8,000 business owners in 40 countries. Membership in one of its 20 chapters is by invitation only; the average member is 41 years old with annual revenues of $17.3 million. ■ The accounting firm of Crum, Buchanan & Associates has merged with Levin, Swedler & Co. to create Levin Swedler Crum, Certified Public Accountants, located in Fairlawn. Company principals Gary Levin, Steven Swedler and Kevin Crum have more than 100 years of combined experience. The new firm serves business, individual and nonprofit clientele in Northeast Ohio. It offers audit services, tax planning, tax preparation, accounting, estate planning, and consulting services. “Combining our expertise, technology, resources and dedicated teams has allowed us to provide a new level of excellent service to our clientele,” Mr. Crum said in a state-
ment. “We have a shared mission, and that is to continue to utilize all of our resources most effectively for the benefit of the clients and community we serve. Merging with Levin, Swedler & Co. has allowed us to take meaningful steps to sustain our current rate of growth as specialized solution providers.” Mr. Levin founded Levin Swedler & Associates in 1986. Crum Buchanan was founded in 1996 by Mr. Crum. The merged firm plans to emphasize its expertise and experience in the areas of nonprofit organizations and audits of profit-sharing plans. Mr. Crum will manage the nonprofit practice; the profit-sharing plan audit practice will be managed by Todd Kennedy. ■ Business-to-business marketing firm Clayman Advertising Inc. has changed its name to Clayman Marketing Communications Inc. and moved into new offices at 1245 S. Cleveland-Massillon Road in Akron. “The name change is something we have thought about for some time,” said Margie Clayman, the firm’s vice president of client services, in a statement. “Even though we are still a full-service ad agency, our services are now so much broader than just advertising that we felt the new name was much more indicative of what we do today.” This is the fourth move in the firm’s 59-year history. It was founded in 1954 by Henry J. Clayman and now is headed by Larry Clayman. It serves clients throughout Northeast Ohio as well as in Illinois, Kansas, Michigan, Tennessee, and Oregon.
with an extensive background in sales and marketing. He served as the sales director at Event Merchandizing, managing that firm’s work for events such as the Live Earth environmental initiative and the 2012 London Olympics. He was responsible for providing all promotional merchandise and revenue-generating ideas as well as giveaways and advertising campaigns. In the London office, Mr. Garnelas will offer brand and graphic communications services through promotional products, commercial printing, and business documents. ■ Akron personal injury law firm Kisling, Nestico and Redick LLC said it has hired five attorneys and opened a Columbus office. The expansion brings the firm to a total of 22 attorneys and 40 support staff. Attorneys Antonio Magnone and Brian Zaber joined Kisling Nestico’s pre-litigation team, while Christopher Corrigan, Michael Maillis and Walter Messenger joined the litigation group. Messrs. Corrigan and Zaber work in the main office in Akron. Messrs. Magnone and Messenger joined
attorney Paul Steele in the new Columbus location. Mr. Maillis represents the firm in Youngstown. ■ Digital forensics company Digits LLC of Buffalo, N.Y., said it is expanding with the opening of offices in Cleveland and Rochester, N.Y. The Cleveland office at present is a virtual operation that is seeking permanent physical space for up to three employees, a company spokesman told Crain’s Cleveland Business in an email. “Our new offices in Rochester and Cleveland will help … better meet the needs of our clients and help them respond to corporate compliance challenges, litigation, and stay more secure from the ever-changing cyber threats corporate America faces every day,” said Michael McCartney, president and CEO of Digits, in a statement. “We feel that our presence in these cities will help to bring additional awareness of the significant corporate risks effecting business owners,” he said. The company, founded in 2006, specializes in digital forensics, data recovery, corporate computer investigations, network security advisory services and litigation support services.
■ Visual Evidence Corp., a trial presentation and courtroom evidence firm that has done business in Northeast Ohio for more than 27 years, said it has moved its offices to Valley View from downtown Cleveland. The move to 4,200 square feet at 8555 Sweet Valley Drive, Suite A, in Valley View means Visual Evidence will be able to “offer clients a new, state-of-the-art videoconferencing room that can accommodate 20 attendees, as well as free parking,” said Manfred Troibner, principal and co-founder of the firm. In addition, he said, “our new location offers easy access to clients throughout Northeast Ohio as we serve pre-eminent law firms in Akron, Canton and Youngstown, as well as in Cleveland.” Company principal Daniel D. Copfer Sr. added, “Our staff of nine, as well as our trial evidence production studios, has moved to facilitate the continued expansion of services we offer our litigation clients. We outgrew the space we were sharing, and will now be able to deliver more services to legal teams preparing for trial.” A sister company, VeDiscovery LLC, is remaining downtown at its current West Ninth Street location.
Crain’s is Cleveland Business
■ Proforma Promotional Solutions of Cleveland has opened its first European office, in London. The company said David Garnelas joined Proforma to increase its international presence and to expand the Proforma brand into new markets worldwide. Mr. Garnelas comes to Proforma
Flow Polymers to expand By FRANK ESPOSITO Plastics News
Strong sales growth in plastic additives will lead Flow Polymers LLC of Cleveland to install a new production line by the end of the year. Sales of SureFlo-brand additives made by Flow Polymers grew 40% in 2012, president and CEO Mike Ivany said in an interview last Tuesday, Feb. 5. The company had planned to add the new production line during 2012, but Mr. Ivany said Flow Polymers personnel were able to get more production out of the existing line, which started up in 2009. SureFlo’s growth has come from several areas, but Mr. Ivany said the material recently has provided the biggest benefit in blow-molded parts used in landscaping and trash removal. SureFlo is a proprietary mix of hydrocarbon resins that can increase flow and line speed, and can allow different resins to be reprocessed together. During 2012, Flow Polymers also moved part of its rubber-based business to an 83,000-square-foot plant about four miles from its existing
plant on Cleveland’s East Side. The additional space was needed after Flow Polymers closed a smaller plant in Connecticut in late 2011 because of environmental issues from a previous business at that site. Adding the second site and overall sales growth allowed Flow Polymers to add 25 jobs during 2012, Mr. Ivany said. More jobs might need to be added in 2014 after the second SureFlo production line comes on later this year. Flow Polymers’ main business has been rubber additives and dispersions since it was founded in 1984 by Cleveland entrepreneur Dan T. Moore. In late 2010, Mr. Moore’s Dan T. Moore Co. sold a stake of about 75% in Flow Polymers to Chicago private equity firm Geneva Glen Capital LLC. The existing SureFlo production line is in a 100,000-square-foot building that was used to manufacture torpedoes during World War II. ■ Frank Esposito is senior staff reporter with Plastics News, a sister publication of Crain’s Cleveland Business.
If you want a connection to it - you have to be connected to Crain’s. For advertising information call 216.771.5158 www.CrainsCleveland.com February 25 FOCUS: Higher Education Largest 2012 Northeast Ohio Philanthropic Gifts List
ad space close: Feb 14
March 4 FOCUS: NorTech Innovation Awards Northeast Ohio-Based Associations List
March 11 FOCUS: Small Business Most Expensive Northeast Ohio Home Sales of 2012 List (NEW!)
ad space close: Feb 28
ad space close: Feb 21
+ SHALE magazine with 20,000 bonus distribution ad space close: Feb 13
March 18 FOCUS: Real Estate Largest Investment Banks List
ad space close: March 7
20130211-NEWS--10-NAT-CCI-CL_--
10
2/7/2013
4:30 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
FEBRUARY 11 - 17, 2013
PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Come on
F
iddle-dee-dee. Fans of the movie “Gone With the Wind” will recognize the phrase as the one Scarlett O’Hara uttered whenever she was frustrated by something or someone. Gov. John Kasich had a fiddle-dee-dee moment recently when he teed off on the organization pursuing a legal challenge to JobsOhio, his pet economic development program. Only his catchphrase isn’t quite as catchy. It’s simply, “Come on.” An exasperated governor spoke those words as he challenged the motives of ProgressOhio, a left-leaning public policy group, for its lawsuit that looks to derail JobsOhio on constitutional grounds. “There’s no legitimacy to this,” he said during a Jan. 31 news conference. “Constitutional issue? Come on. This is a political issue designed to wreck the progress we’re having in Ohio.” Our response to the governor? Come on. Or, if you’d prefer, fiddle-dee-dee. The organization that has put the roadblock in the governor’s way definitely doesn’t share his politics, but that doesn’t make its lawsuit illegitimate. ProgressOhio opposes the shift of Ohio’s economic development duties from a state agency — the former Ohio Department of Development — to JobsOhio, which the governor established as a private entity. Its lawsuit alleges the legislation that cleared the way for this transfer of authority violates the Ohio Constitution in a handful of ways. Among them are that it would funnel public money — profits from the state’s liquor operations — to JobsOhio for its operations and would lend the credit of the state to a private corporation. The constitutional issues raised by ProgressOhio deserve to be debated in a court of law. However, the substance of the lawsuit has yet to be heard, as two lower courts have ruled that ProgressOhio does not have legal standing to bring the action before them. It’s now up to the Ohio Supreme Court to determine whether ProgressOhio can bring its case. Our hope is that the Republican-dominated high court won’t serve as the governor’s surrogates and simply reject ProgressOhio out of hand, but instead will give fair and honest consideration to the matter.
That’s cool
R
ight about now, most residents of Northeast Ohio already have had their fill of winter. While warm weather isn’t just around the corner, here is sure sign that spring is on the way: Pitchers and catchers report this week to the Cleveland Indians’ spring training camp in Goodyear, Ariz. And if that thought doesn’t do enough for you, in nine more Mondays the Tribe will hold Opening Day festivites at Progressive Field April 8 against the New York Yankees. Fans may need to wear parkas to the game, but it won’t be long before cool spring evenings give way to sultry summer nights. Hold that thought.
FROM THE PUBLISHER
Balance essential in Ohio’s newest industry and oil, and that means that some peohis is how ironic life and the ple will try to latch onto those riches, by attendant news business can be. whatever means possible. Most In a week that saw of them are interested in legitiCrain’s and ideastream BRIAN mate business or investment draw 600 people to a sold-out TUCKER opportunities. But as with any summit on Ohio’s new energy other economic boom, there industry, a Youngstown comwill be corner-cutters and pany gave that same industry’s crooks. opponents a gift-wrapped reaMr. Hofmeister, former presson for being. ident of Shell Oil, told the crowd An oft-repeated message at that Ohio and the nation stand our summit last week at Execuat a pivot point, and that the tive Caterers at Landerhaven next few decades could mark was balance. From the mornAmerica’s return as a dominant energy ing keynote speaker, John Hofmeister, superpower. But, he urged, there is legitthrough the end of the day, speakers disimate need for regulation and, he precussed the economic promise of Ohio’s dicted, the technology will only get betrich Utica shale but urged a balance with ter and better and safer and safer, appropriate regulation. because of that regulation. And at the same time, someone was There are risks, he said. This is a dandumping — against state laws and all gerous, messy business, and safety needs common sense — 20,000 gallons of to be forefront in the minds of those enfracking wastewater into a storm sewer gaged. in Youngstown. “Let me tell you,” he said, “you wouldHerein lies the problem with a sudden n’t want to be on an active drilling site. It abundance of money. It creates mistakes is noisy and messy.” springing out of greed, stupidity, or both. That said, if the companies adhere to, National energy interests are spending and even support, the efforts of regulabillions of dollars in Ohio to find, extract, tors, the advent of shale oil and gas could process and transport these new gases
T
guarantee America’s national security for decades to come. But this dumping incident raised concerns that should trouble anyone interested in this new industry. It’s clear that this new industry is enticing because of its scope and promise for Ohioans. Our state’s unemployment rate is a point below the national average, and there is little other reason other than the manufacturing, transportation, road-building, excavation and all the other work that accompanies the start of widespread drilling in the Utica shale. But as Mr. Hofmeister and others noted throughout the day, this is a business that is risky, dangerous and messy. It needs — and we should demand — stringent oversight so that it continues to change the economic landscape of the Buckeye State and its citizens. Gov. John Kasich and his administration have been aggressive in their calls for appropriate levels of taxation on the energy industry. Regardless of what those taxes end up being, some of that money should be spent on the safety measures needed to protect Ohioans now, and in the future. ■
PERSONAL VIEW
Place bets on technology with an edge By HERB KLEIMAN
I
t is still a formidable challenge. Northeast Ohio continually seeks economic growth similar to other regions of the country. Leveraging lessons learned elsewhere can contribute to refocusing our efforts and refining the way we invest. Northeast Ohio can focus on improving investments in technological research and development. As ideas move up the chain to a viable startup, how can we identify the most promising ones and vigorously back them? Sometimes our efforts may lead us down the path of the “law of large numbers.” Most problematic, picking winners and losers is tricky and elusive. And
Mr. Kleiman is president of Kleiman Associates, a marketing relations firm serving high-technology companies. there is always the continuing competition for funding of such worthy programs, as schools, police and fire, and the like. What to do? The effort proposed should focus on technological R&D funding. Keep in mind that the more radical the innovation, the more difficult it is to predict future sales and particularly its profitability. However, history shows payoffs can be huge. The methodology consists of looking for three different markets. Admittedly, the lines between them are blurred and they tend to merge. Still, a theoretical approach may prove to be beneficial. A company conceives a product that
in its initial years has no competition. It needs vigorous patent protection and the capacity to grow, sometimes quickly. Even a lead of just a few years will be most beneficial. A prime example is provided by Xerox. The company introduced the first dry printer with plain paper in 1961. The market it was entering was relatively small — especially when compared with the market it would eventually create. The Xerox 914 ushered in an entirely new demand. For the decade of the 1960s it had no competition, and growth was phenomenal. When its initial patent expired, the Japanese flooded the market, particularly with smaller versions, and Xerox first encountered competition. See VIEW Page 11
20130211-NEWS--11-NAT-CCI-CL_--
2/7/2013
4:30 PM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
11
THE BIG ISSUE What do you think of the U.S. Postal Service’s decision to stop delivering letters and other mail on Saturdays, but to continue to handle packages six days a week?
CORRIE FIDDLER
ELLEN KRAMER
ALEX CAVELLI
AL PAL
New Philadelphia
Brecksville
Mentor
Wadsworth
I don’t think it’s that bad of an idea. ‌ I don’t usually pick up my mail on Saturday, anyway.
It’s unnecessary to deliver on Saturdays. ‌ I’m phasing out (traditional mail), but not completely.
I don’t think it’s that big a deal. On Saturday, I don’t think people are really looking for mail. It’s something they’re looking for right after work.
If people are running small businesses, it could be negative to them. But as far as the average guy who works Monday through Friday ‌ I don’t think it makes a difference.
Need to get past the Gatekeeper? CALL TODAY, 440 575-7000
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
W W W . S A L E S C O N C E P TS I N C.C O M
SELL MORE.
LETTER
Summit is just the start of big shale events ■Crain’s Shale Summit last Tuesday at Executive Caterers at Landerhaven was a day to remember. A real palpable sign of what is coming to our region and what the transformative potential might be. Congratulations to your entire staff. One major takeaway for me was the sense permeating the entire venue that something big is coming — like a storm you can sense, but cannot yet clearly see. Everyone knows it is coming, but there is no consensus of the exact form it will or should take. There is a tangible positive energy, long absent in Northeast
Ohio. There was much discussion of the need to “get it right.� The need for transparency. The need to make certain that when development comes, it provides maximum benefit, economic and otherwise, with minimum disruption to the land and ecosystems. People are eager to be involved, be part of the process and get a piece of the action. But, most don’t know how to connect. Crain’s and its Shale magazine, particularly, are perfectly positioned to be the vehicle of connectivity between all the various stakeholders.
Accurate and actionable information, as always, will be key to making smart decisions. A good, unbiased clearinghouse is clearly needed. I look forward to Shale magazine providing regular updates of plans and participants in shale-related developments. A one-stop source for connecting the dots will be a very valuable resource. Steven A. Belman Owner Manufacturers Wholesale Lumber, Cleveland Troymill Wood Products, Middlefield
WHAT IGNITES YOU? E D U C AT I N G P H Y S I C I A N S , P H A R M A C I S T S A N D H E A LT H C A R E R E S E A R C H E R S
View: Apple has always been innovative continued from PAGE 10
Another product that was truly innovative was the Polaroid camera introduced in 1946. It offered instant photography, breaking the monopoly then held by Kodak. For about 10 years, as Polaroid built up its manufacturing capabilities, it grew quickly. It competed with Kodak in many of the traditional markets, and it opened new ones. Polaroid won a patent suit against Kodak in 1986 giving it sole status in instant cameras. Later, Polaroid senior management did not respond quickly enough to the growing threat of digital photography. More typically, markets are characterized by a “price elasticity of demand.� When price decreases, demand goes up. Price may go down for any of several reasons, such as the manufacturer’s learning curve. Most industrial and especially the consumer markets follow these laws. The transistor typified this principle. At relatively high prices, it was designed into expensive military and high-end systems. As its price was reduced, the volume of applications toward the lower end grew greatly. Transistors were invented in 1947 by Bell Telephone Labs and first manufactured by Western Electric, the manufacturing arm of AT&T. In 1952, it decided to license the product to all comers. Personal computers have been available since the mid-1970s. They were sold as kits, and their future
was in doubt. Then with introduction of Macintosh by Apple Computer, the consumer became interested. Competition emerged from new vendors such as Dell. As price kept descending, the personal computer crossed the “magical� point of $1,000. Sales expanded rapidly. At the same time, manufacturers of known integrity entered, such as IBM and Hewlett-Packard, giving the industry needed respectability. A company may choose the market that is characterized by its high quality of products and, therefore, its higher price. Success in this type of a market is relatively hard to achieve. The company must be able to differentiate the product. Sony Corp. decided many years ago to serve its customers high-end products. It first established itself in this enviable position with the introduction of the Trinitron color receiving tube. It utilized a three-gun configuration, which resulted in a higher quality image and more distinguishable colors. From 1966, the higher-end color TV market was dominated by Sony. The company has maintained its position ever since. Apple has consistently priced its products at the high end of the range. This was personified by its late CEO, Steve Jobs. Since its founding in 1977 Apple has brought out many innovations, including the mouse, which became an industry standard. As added product
lines were offered, Apple eventually became the world’s most highly valued technology company. â–
n e o m e d . e d u
Meet technology innovators who BSF DSFBUJOH KPCT BOE HSPXJOH UIF SFHJPOBM FDPOPNZ 1SFTFOUFE CZ
4QPOTPSFE CZ
Awards & Networking Gala 5IVSTEBZ .BSDI t o PMt &NCBTTZ 4VJUFT t *OEFQFOEFODF
&WFOU 5JDLFUT t "XBSE 'JOBMJTU *OGPSNBUJPO
XXX $SBJOT$MFWFMBOE DPN /*"5*9
20130211-NEWS--12-NAT-CCI-CL_--
12
2/7/2013
4:50 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Attn: Manufacturers & Warehouses 100K sq. ft. $38,518 $20,009 $14,314
Upgraded HID & T-12 fixtures to Energy Efficient T-8 & T-5’s
ARCHITECTURE VAN AUKEN AKINS ARCHITECTS LLC: Kevin Kennedy and Christopher Dewey to associate principals; Sara Shonk to project architect, Revit manager; Hillary Lyon to marketing coordinator.
Wolfgang
Gamber
Kotheimer
Drinkard
Gurbach
Kimmel
Kucharson
Hoy
Shandor
Kaminski
Krewson
Wensink
CONSTRUCTION GILBANE BUILDING CO.: Scott Orr to district manager; John Coughlin to project engineer.
CALL TODAY!
DISTRIBUTION
Turnkey project by
GREAT LAKES PETROLEUM CO.: Louise Kirk to chief financial officer.
ROI Energy www.ROI-Energy.com
ENGINEERING
330-931-3905
S
GOING PLACES JOB CHANGES
LIGHTING CASE STUDY N.E. Ohio Manufacturer Annual Energy Savings FirstEnergy Rebate Accelerated Tax Deduction Dramatically Brighter Facility
FEBRUARY 11 - 17, 2013
WHEATON SPRAGUE BUILDING ENVELOPE: Todd T. Wolfgang to project manager.
HALEMAGAZINE.COM News, insight and analysis of shale drilling in Ohio The promise of shale drilling. The power of Crain’s.
WISS, JANNEY, ELSTNER ASSOCIATES INC.: Nathan Gamber and Michael Kotheimer to senior associates.
FINANCE
FINANCIAL SERVICE
MARKETING
FIRSTMERIT CORP.: Sandra E. Pierce to vice chairman; chairman, CEO, FirstMerit Michigan.
SPERO-SMITH INVESTMENT ADVISERS INC.: Erica Aber to vice president, portfolio manager.
THUNDER::TECH: Craig Israel to creative director; Marissa Mendel to communications coordinator; Erika Port to search engine optimization specialist; Nathan Smetana to web developer.
HEALTH CARE ELIZA JENNINGS SENIOR CARE NETWORK: Denise Gannon to vice president, operations and COO.
Need Technology Help? Get Cox Business Tech Solutions for $14.99/mo for 3 months! An IT staff member could cost up to $6,000 per month compared to Cox Business Tech Solutions which provides unlimited helpdesk support for as little as $14.99 per PC/month.
LIGHT OF HEARTS VILLA: Elizabeth J. Hickle to executive director.
FUND FOR OUR ECONOMIC FUTURE: Karen Mozenter to director of funder engagement.
SUMMA WESTERN RESERVE HOSPITAL: Julia Drinkard to volunteer/human resources specialist.
SHIPPING
LEGAL BENESCH: Matthew D. Gurbach, Lisa M. Kimmel, M. Casey Kucharson and Amanda M. Miller to partners; Kelly M. Hoy to of counsel. DAY KETTERER LTD.: Steven D. Shandor and John S. Kaminski to members. JACKSON LEWIS LLP: Patricia F. Krewson to partner. MANSOUR, GAVIN, GERLACK & MANOS CO. LPA: David W. Hildebrandt to senior associate.
PROBLEM P ROBLEM ROBLEM
F FIXED IXED
Receive 24/7 remote help desk support from the experts at Cox Business. Software and network assistance, virus removal, and tune-ups for your company’s computers — we’re there. To get your business started today, visit www.coxbusinesstechsolutions.com.
1-866-791-2688 *Offer available to new subscribers of Cox Business Tech Solutions monthly subscription service in Cox, wired, serviceable locations of Connecticut, Ohio and Rhode Island. One year service contract required. $14.99 rate applies to the first computer for three months. After three months the rate is $19.99 per month for the first computer. Cox Business Tech Solutions will cover up to 10 computers. $14.99 for each additional PC (up to 9) will apply. Offer does not apply to Cox Business Tech Solutions non subscription services or site visits. Services may not be available in all areas. Other restrictions apply. ©2012 CoxCom, LLC., d/b/a Cox Communications Ohio and New England. All rights reserved.
GREAT LAKES SHIPYARD: Paul W. Deterding to vice president, general manager; David Dudley to shipyard foreman, new construction and repair; Paul M. Hendricks to assistant vice president, new construction.
STAFFING ALLIANCE SOLUTIONS GROUP: Rob Sable to chief information officer. ON SEARCH PARTNERS: Glenn G. Anderson Jr. to partner.
TECHNOLOGY MCPC INC.: Jim Gehring to director, managed services-sales; Jeff Wisniewski to director, managed servicesoperations; Jason Fant and Roger Mitan to managed services engineers; Paul Stancil to partner manager.
Berliner
MCDONALD HOPKINS: Katherine E. Wensink to of counsel. THACKER MARTINSEK LPA: Stacy RC Berliner to shareholder.
DIAGNOSIS
NONPROFIT
Rooney
THOMPSON HINE LLP: Emily S. Huggins Jones, Jared E. Oakes and Curtis L. Tuggle to partners.
BOARDS SHOES AND CLOTHES FOR KIDS: Scott Simon (North Pointe Realty Inc.) to chair; Allan C. Krulak to chair emeritus; vic gelb, Rockette Ewell and Terence J. Uhl to life directors; Dennis Rose to vice chair; Gerald Broski to secretary; A. Lamont Mackley to treasurer. YOUTH CHALLENGE: Ernest E. Vargo (Baker Hostetler) to president; David L. Lowery to vice president; Colleen C. Murnane to secretary; Thomas J. Fraser to at large.
AWARDS
MANUFACTURING
CUDELL IMPROVEMENT INC.: Walter E. Martens Jr. (Martens & Sons Funeral Home) received the Walter & Pauline Martens Lifetime Achievement Award; Timothy J. McGinty (Cuyahoga County) received the Exellence in Government Award; Linda Collins and Tom Hoover received Service Awards.
CARDPAK: Lisa Biber to senior accountant.
Send information for Going Places to dhillyer@crain.com.
WICKENS, Swearingen HERZER, PANZA, COOK & BATISTA: Malorie A. Rooney and Douglas J. Swearingen to associates.
20130211-NEWS--13-NAT-CCI-CL_--
2/7/2013
4:04 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
FEBRUARY 11 - 17, 2013
INSIDE
15 TAX TIPS: KEY ASPECTS OF IRS’ VOLUNTARY COMPLIANCE PROGRAM.
13
SMALL BUSINESS
MINDING THEIR P’S AND Q’S
SHARON SCHNALL
Arborwear establishes roots with strong gear Bainbridge Township company generates more than 50% of its sales via outdoor pros By SHARON SCHNALL clbfreelancer@crain.com
and Corporate Protocol. More employers are realizing their employees are an extension of their businesses, and they are calling on etiquette consultants to smooth over the rough edges. After 22 years in corporate sales, Mrs. Harding said she is all too aware
At one time, Arborwear’s rugged clothing was sold out of a truck bed. These days, not only is Arborwear a booth regular at tree care industry trade shows, it’s a well-known and respected special events sponsor and online vendor. And, with the company’s relocation and consolidation to Bainbridge Township from several other Geauga County locations, more opportunities for growth, visibility and brick-and-mortar retail are possible. Arborwear specializes in clothing designed for arborists, tree climbers and utility workers. “The clothes are designed to work with someone who moves their body — who works in the dirt and in the woods,” said Melissa LeVangie, a U.S. Department of Agriculture tree climbing inspector based in Massachusetts, who scales trees from 20 feet to 120 feet each workday. Arborwear was founded in Northeast Ohio in 1997 by Paul Taylor. Mr. Taylor and Bill Weber, 44, who formally joined the business in 2001, Weber previously owned respective tree service businesses. “Back when we were climbing trees, there were no clothes designed specifically for what we did,” Mr. Weber said. Arborwear introduced durable garments that allowed a full range of movement. In 2008, Mr. Weber became sole owner. “Bill and Paul were respected. They understood the business.
See ETIQUETTE Page 14
See ARBORWEAR Page 16
MARC GOLUB
Colleen Harding, founder of the Cleveland School of Etiquette and Corporate Protocol, is shown at Westwood Country Club in Rocky River.
Whether it’s with casual conversations or formal introductions, etiquette consultants stress importance of putting best foot forward By KIMBERLY BONVISSUTO clbfreelancer@crain.com
T
he average person decides whether they like you within seven seconds — 60% is based on appearance, 30% on voice and 10% on the content of conversation.
INSIDE: The Northeast Ohio Medical University has prescription for improving student behaviors. Page 14 And if someone doesn’t like you, chances are they aren’t going to buy what your company is selling, according to Colleen Harding, founder of the Cleveland School of Etiquette
20130211-NEWS--14-NAT-CCI-CL_--
2/7/2013
4:05 PM
Page 1
14 CRAIN’S CLEVELAND BUSINESS
TRY LIBERTY FOR YOUR
HOME LOAN
WWW.CRAINSCLEVELAND.COM
FEBRUARY 11 - 17, 2013
SMALL BUSINESS
Etiquette: Generations often don’t mix
Great interest rates & most current terms are available, subject to credit approval & program terms
LOW RATES LOW COSTS SUPERIOR SERVICE
216.359.5597 EQUAL HOUSING OPPORTUNITY
Largest national staffing firm headquartered in North East Ohio Nesco Resource is the one of the fastest growing Staffing Services Firms in the nation, with headquarters right here in the Cleveland Area. In 2012, Nesco Resource was one of only 2 large staffing firms in the country to win “Best of Staffing” recognition from both our clients and talent. Experience the Nesco difference, call one of our 7 NE Ohio offices today! www.nescoresource.com
www.talentalley.com
continued from PAGE 13
of how important it is to present oneself in a favorable light. Mrs. Harding, who started her company five years ago, said in general she is seeing a rising number of calls to her Bay Village firm from companies eager to shape their employees into more favorable company representatives. Similarly, Catherine Holloway, owner of Etiquette Consulting Services in Beachwood, said requests can come in from business owners, concerned spouses or civic and professional groups — all looking for an edge in the marketplace. Both Mrs. Harding and Mrs. Holloway offer everything from group seminars to one-on-one coaching, depending on the situation and request. They also might work with business professionals one day and young children the next. “When a company hires someone, it says to the market I approve of this individual and think they can represent my company in the market in a favorable manner,” Mrs. Harding said. “A lot of times they don’t realize they are not representing themselves, but the corporation, when they are in the market.”
A different generation
Subscribe to Crain’s Cleveland Business Call toll-free at 1-877-824-9373 or on-line @ CrainsCleveland.com Click on “Subscribe Now.”
Mrs. Harding said although the millennial generation grew up thinking everyone has the same opportunities, the boss isn’t going to name them the general manager right out of the box to be fair. “Our current graduates just spent eight years in sweatpants and hoodies and wearing flip-flops to school,” she said. “They grew up in a generation where everyone got a trophy and everyone was a winner; and now they have to report to a guy who looks like Lee Iacocca.” On the flip side, people who entered the business market in the ’60s, ’70s and ’80s were brought up in the era of IBM, during which everyone wore a blue or gray suit, good shoes and good pantyhose. Put the two generations together and there inevitably can be a communication problem. Since people judge according to their own standards, Mrs. Harding said it’s important for companies to teach their employees — whether they are fresh out of college or in the work force for 30 years — what is expected. Robert J. Pacanovsky, owner of Robert J. — Training & Design in
TOP 5 RULES FROM THE ETIQUETTE PROS ■ Dining: Dining is done in a certain environment. Everything is done methodically and is controlled. Eating is what people do when they are hungry. There is a difference, according to Colleen Harding, founder of the Cleveland School of Etiquette and Corporate Protocol. ■ Grooming: How you dress is a language that speaks to the eyes, Mrs. Harding said. Casual Friday does not mean it’s OK to throw on a pair of yoga pants and flip-flops. ■ Introduction: Be able to introduce yourself, carry a conversation and sell your company in the best way possible. Catherine Holloway, owner of Etiquette Consulting Services, said there is a correct way to Akron, added an etiquette consulting specialty in 2012 after seeing a need for such a service in the course of running his events and catering business. Indeed, he sees proper etiquette as a way to brand yourself and your company. “Wherever you go, once you identify yourself, the next question is what do you do or who do you work for? Once you answer that, you’ve branded yourself and your company for the rest of the event,” Mr. Pacanovsky said, adding that the soft skills of etiquette can potentially make or break a career and a company’s success. “There is a lot of competition out there for business, and everybody has the same thing,” he said. “I still believe business is all about relationships and, more importantly, the personal relationships.”
How do you do? Mr. Pacanovsky said part of the problem is that society has become more casual. “I love technology, but I do believe it’s outpacing us at times,” he said. “People are so reliant on technology they forget how to act in a formal manner.” Turning a cell phone off during an interview, and refraining from checking text messages or answering emails at a business lunch, may seem like common sense, but today’s graduates have grown up with technology at the ready and
enter and exit a room while conveying professionalism and confidence. ■ Interpersonal & Electronic Communications: Use proper English in all correspondence. Emoticons and abbreviated words are not appropriate. Proof an email before sending it, and pay attention if others are copied on the response. It’s not OK to have your cell phone on the table or to send or answer text messages or emails while with a client. ■ Image: Does a client need to move papers and boxes to sit down? Does your car resemble a trash can? Presenting a neat and clean image to a client — whether in the office or in the car — goes a long way in the workplace. think nothing of throwing a cell phone on the table. Mrs. Holloway, who started her business in 1994, said people come to the workplace with a lot of baggage — good and bad — that goes back to how they were raised and the circumstances they faced in becoming an adult. Over the years, Mrs. Holloway has worked with PTA groups, corporate clients, children, public and private schools, and even college and university employees. She said the key is to speak to the appropriate age level, gender and economic background of her clients to ensure success. One of the top requests etiquette consultants are asked to cover with employees are introductions. Mrs. Holloway said professionals want to walk into a room with confidence — not like a tornado. She said it can be a challenge for some people to maneuver through a networking event and hold conversations. Regardless, she said it’s a choice for individuals to step outside of their comfort zone and learn the appropriate behaviors. “I think that once you come out of college and are in the work force, you realize people are doing things differently,” she said. “You either rise to the occasion and learn the skills to play with the big boys, or you stay where you’re at.” ■
Medical school offers dose of good manners Dr. Elena M. Rossi, an adviser for medical students at the Northeast Ohio Medical University (NEOMED), took matters into her own hands, coming up with the idea of doing an etiquette program with medical students after taking a group out to dinner. One student ordered the most expensive item on the menu, while another dipped his breadstick into the unity butter dish and promptly placed it in his mouth. While some behaviors would make Miss Manners and Emily Post blush, Dr. Rossi said sometimes it’s just a matter of not knowing how to act appropriately. “They still don’t know certain
things,” said Dr. Rossi, associate chairwoman of pediatrics at Akron Children’s Hospital, chairwoman of pediatrics at St. Elizabeth Health Center in Youngstown and a clinical professor of pediatrics at NEOMED. “They don’t know the table setup; they don’t necessarily know where everything goes. They don’t know what to do with the bill. They don’t get the alcohol and cell phone question correctly.” Her idea grew into the annual NEOMED Business Etiquette Dinner and Professional Fashion Show for College of Medicine, College of Pharmacy and College of Graduate Studies students. Laura C. Cessna, assistant direc-
tor of Student Development and Leadership in the Office of Student Affairs at NEOMED, said the program, which began in 2010, provides students with an opportunity to learn proper dining and dress etiquette for clinical, business and social occasions. “This is a tool to help them do the right thing,” Dr. Rossi said. “Medicine is a business. “The overall message is that when you are eating a meal, they really do look at how you eat. I’m not sure people realize that you are judged on your manners and your handshake.” — Kimberly Bonvissuto
20130211-NEWS--15-NAT-CCI-CL_--
2/7/2013
3:14 PM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS 15
WWW.CRAINSCLEVELAND.COM
SMALL BUSINESS
Worker reclassification program eligibility expanded
A
little more than a year ago, the IRS announced a new voluntary compliance program to offer employment tax relief to businesses that improperly classify workers as independent contractors. Two IRS notices issued in December expand the program in several meaningful ways. Some of these expanded benefits expire in a very short timeframe, so business owners should examine any worker classification issues now to determine whether they can benefit from the expanded program. Some businesses may improperly characterize workers as independent contractors in order to avoid paying employment taxes, but more often that not, such classification occurs because business owners are simply not sure what types of workers need to be treated as employees. If workers treated as independent contractors should instead have been classified as employees under the tax law, this creates a significant tax risk to the business. There has been significant focus by the IRS and other governmental agencies over the last few years on whether businesses are appropriately characterizing workers as employees or independent contractors. Legislation has been proposed from time to time over the last several years to enhance penalties for failure to make the appropriate classification, and to take away the benefit of some of the exceptions to these penalties. Recognizing that part of the misclassification problem is caused by employers who believe that they may have misclassified a worker, but who are reluctant to change the classification due to the exposure to additional taxes, the IRS announced a program in late 2011 called the Voluntary Classification Settlement Program, or VCSP. Under the VCSP, employers who voluntarily change the classification of their workers from independent contractors to employees going forward essentially will not be penalized and will not be subject to audit for prior years. Under the original program, two of the requirements were that the business must: ■ have satisfied the Form 1099 reporting requirements for these workers for the three years preceding the year that a request for participation in the program is filed; and ■ not be under audit by the IRS. The recent announcements make beneficial changes to the program relating to these requirements. First, the IRS makes it clear that taxpayers can apply for this program even if they are under IRS audit for a different issue. Many businesses do not focus on the worker classification issue, so often the issue only comes up when advisers are consulted to deal with other parts of the IRS audit. The rule continues to be that no participation is allowed for taxpayers who are currently being examined by the IRS or other government agency specifically with respect to worker classification issues. The incentive is therefore to obtain this relief before the issue comes up on audit. The most significant change announced provides an exception to the requirement that Form 1099s
CARLGRASSI
TAX TIPS have been filed for the prior threeyear period. That is no longer required. This relief is only available through June 30 of this year. The IRS was made aware that many
businesses wanted to participate in the VCSP but had not filed some or all of the necessary Forms 1099. These businesses can now participate as long as they furnish to the workers and electronically file with the IRS all required Forms 1099, consistent with the nonemployee treatment, with respect to the workers being reclassified for the previous three years prior to executing the closing agreement with the IRS. The cost of this expanded program is more than the cost for an employer who did file the appropriate Form 1099s. However, this
cost is still dramatically less than if the IRS determines upon audit that the workers were misclassified. Many advisers have appropriately advised their clients to exercise caution with their decision to participate in this program. A business considering relief under this program must realize that it is not binding on any state or other governmental agency. There was some concern that the IRS would share the information provided in the VCSP application with such agencies. Surprisingly, the IRS has indicated in its FAQ publication that it will not share the
information with the Department of Labor or any state agency. The expansion of this program is very favorable, especially with respect to businesses that previously did not qualify, either because they were currently under audit by the IRS or had not filed Form 1099 for the workers at issue. The terms of the expanded program should be considered by any business using independent contractors whose status as such may be in doubt. ■ Mr. Grassi is president of McDonald Hopkins LLC.
The quickest way to deposit checks without stepping away from your business. Save time and improve efficiency with FirstMerit e-Deposit.* ®
FirstMerit e-Deposit allows you to deposit your checks from the comfort of your office or wherever ®
you do business. Receive same day credit when you scan your deposit before 7 p.m. EST.** Plus, enjoy streamlined processing and improved cash flow as well as the support of a local, dedicated team. Because more control of your deposits, means more control of your business. FirstMerit e-Deposit —just another way of putting you first. ®
firstmerit.com/youfirst
TO L E A R N MOR E, C O N T A C T :
Maureen Murman, Treasury Management Sales Officer, at 216-694-5637 maureen.murman@firstmerit.com.
Follow the latest market trends @firstmerit_mkt *Subject to credit approval. **Funds available next business day if deposit is scanned before 7 p.m. EST.
PERSONA L
BUSINESS
COMMERCI A L
W E A LT H
Member FDIC 985_FM13
20130211-NEWS--16-NAT-CCI-CL_--
2/7/2013
16 CRAIN’S CLEVELAND BUSINESS
3:23 PM
Page 1
WWW.CRAINSCLEVELAND.COM
FEBRUARY 11 - 17, 2013
SMALL BUSINESS
Arborwear: Retail store possible at new location continued from PAGE 13
They came from the business; they did the business. They could speak the same language to the professionals,” said Ms. LeVangie, who also is a certified arborist and owns Trees New England, a Barre, Mass., tree care consulting company. The clothing product line includes: tree-climbing pants; heavyweight sweatshirts; jackets; high-visibility outerwear; and rain gear. Prices range from $9.95 for a stocking cap to $179.95 for ascender pants.
Branching out
SHARON SCHNALL PHOTOS
Arborwear has attracted other followers such as horseback riders, motorcyclists, stone masons and rock climbers.
All clothes are conceived and designed in-house and manufactured in overseas and U.S. factories; tailored design and flexible features contributed to crossover use by mainstream consumers. Purchases for outdoor professionals — including monogrammed uniforms — represent 50% of the company’s 2012 gross revenues, which were under $10 million. And although Mr. Weber declined to discuss specifics about his company’s revenues, he did say he anticipated a 30% increase in 2013. Lake Metroparks utilizes Arborwear products for operations and natural resource staff, but especially the tree care crews. The clothes give employees a uniform and professional appearance, said John Grantham, director of park operations. The Lake Countybased park district encompasses more than 8,100 acres. “You can walk through prickers and briars,” Mr. Grantham said. “The pants wear like a pair of blue jeans, but they function like a pair of coveralls.” Arborwear has attracted other niche followers: horseback riders, motorcyclists, stone masons, ceramicists, rock climbers, carpenters and hikers, Mr. Weber said. The company serves customers in all 50 states and in Canada and Europe; their largest online accounts include Dick’s Sporting Goods, Amazon and Cabela’s. Last September, Arborwear moved operations to 18,500 square feet of 10-year leased space — formerly a U.S. Post Office branch. Previously, the 15 full- and parttime employees utilized 12,000 square feet of rented and owned space in several Newbury and Burton locations. Renovation and relocation costs totaled $100,000 to $150,000 and were financed by landlord and investor loans — investors have been involved since the company’s inception, Mr. Weber said. This headquarters location features ample warehouse and office space; a training center for offering continuing education courses to tree care professionals; and for the first time — a retail store. The store’s floors feature hardwoods of different species. The counters, display units and dressing rooms also highlight different woods: mulberry, basswood, black walnut and even sweet gum from a tree that once graced Yale University’s campus in Connecticut.
“The pants wear like a pair of blue jeans, but they function like a pair of coveralls.” – John Grantham director of park operations, Lake Metroparks Adding to the rustic atmosphere are vintage chainsaws, some customer donated, others owned by Mr. Weber.
True to its roots The retail portion was dubbed “man heaven” by one customer, said Mr. Weber. Perhaps, but the intent is about paying homage to the business’s roots in the tree care industry and the loyal customer base — tree care professionals. “I kind of choked a bit at the cost,” said Ms. LeVangie about her latest personal purchase of Arborwear pants. Any lingering reservations were addressed the day she accidentally walked into a barbed wire fence; the reinforced pants were not cut, neither was she. Safety features — albeit attractive — are purposeful: pocket angles prevent catching on tree limbs; breathable fabrics reduce fatigue; zippered exterior pockets maximize easy access to tools; mid-leg fiber panels prevent tearing by belt-slung chainsaws. “If you’re constantly fixing your clothes, you’re not paying attention; you’re more likely to get into an unsafe situation — that doesn’t happen with the (Arborwear) clothes,” said Jim Skiera, executive director of the International Society of Arboriculture (ISA). ISA is a 21,000-member arborist-certification and tree care education organization, based in Champaign, Ill. Beginning this month, Arborwear is offering discounted clothing to ISA members featuring the ISA logo. Additionally, attracting new customers to the store, growing the brand and reaping the benefits of the relocation and consolidation are on the agenda. “Our goal is to maximize the changes we’ve made, to smooth out the wrinkles,” Mr. Weber said. “It’s been a big transition.” ■
20130211-NEWS--17-NAT-CCI-CL_--
2/7/2013
3:18 PM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS 17
WWW.CRAINSCLEVELAND.COM
SMALL BUSINESS
How companies can best measure up SMALL Business is At the end of 2012, the Internal Revenue Service released a new set of regulations to “provide guidance … with respect to the shared responsibility for employers regarding employee health coverage.” As most of you know, the employer is required to provide health coverage to its employees or pay a tax. This only applies if the employer has 50 or more full-time employees or full-time equivalent employees. Employers are required to track that number monthly. As the proposed regulation points out, however, “determining full-time employee status on a monthly basis may cause practical difficulties for employers. …” To provide assistance with this problem, the proposed regulations adopt a look-back safe harbor period that a business can use to more effectively determine year to year its number of employees. Here’s how it works for a firm with regards to its current employees. Employers in 2013 determine an initial “measurement period,” which can be no less than three months but no more than 12 months. During the measurement period, employers must determine whether employees work a minimum of 30 hours per week. The employees who are determined to be full-time during the measurement period are then treated as full-time employees in the subsequent “stability period,”
DANIELCLEVENGER
ADVISER the duration of which must be greater than six months or the length of the measurement period. This means once an employee is determined to be full-time during the measurement period, that employee is considered full-time for the subsequent stability period regardless of hours. Employers also will be permitted to elect an administrative period of no more than 90 days between the measurement period and the stability period. This period may not, however, reduce or lengthen the measurement or stability periods. However, to prevent the administrative period from creating potential gaps in coverage, it must overlap with the prior stability period. Also, an employer may change its measurement and stability periods for subsequent years but may not change the measurement or stability periods once the measurement period has begun. If you are an employer that uses
a fiscal year plan instead of a calendar year, the proposed regulations allow for transitional relief. If an employer provided a fiscal year plan as of Dec. 27, 2012, that employer will avoid any applicable penalties so long as the applicable employee is offered affordable, minimum value coverage no later than the first day of the 2014 plan year. The measurement and stability periods must be uniform for all employees, but the employer may apply different measurement, stability, and administrative periods to each group of collectively bargained employees covered by a separate collective bargaining agreement; collectively bargained and non-collectively bargained employees; salaried employees and hourly employees; and employees whose primary places of employment are in different states. The IRS also provides guidance to employers on how to apply the look-back period for high-turnover employees, new hires and variablehour employees — those employees whose hours an employer cannot determine at the date of hire. The proposed regulations contain a number of requirements and this is only meant as a general road map. For more details, you should consult an attorney or benefits provider. ■
Big to Us! The Middlefield Banking Company built our business on helping small business. We will treat you with dignity and fairness, and give you the consideration you deserve. Come over to a Community Bank that delivers: UÊ UÊ UÊ UÊ UÊ
6>À iÌÞÊ vÊ >ÃÞÊ iV }Ê"«Ì Ã
iÀV > Ê > ÃÊ> `Ê iÃÊ vÊ Ài` Ì ,i> Ê ÃÌ>ÌiÊEÊ µÕ « i ÌÊ > Ã
>« Ì> Ê «À Ûi i ÌÊ > Ã ÛiÃÌ i ÌÊ- ÕÌ Ã
The Middlefield Banking Company www.middlefieldbank.com 888-801-1666 Main Office 888-801-1666 | West 440-632-1666 | Chardon 440-286-1222 Garrettsville 330-527-2121 | Mantua 330-274-0881 | Orwell 440-437-7200 Newbury 440-564-7000 | Cortland 330-637-3208
Mr. Clevenger is a partner with Day Ketterer Ltd., which has offices in Cleveland, Hudson and Canton.
7KH %XVLQHVV 5HVRXUFH IRU $YRLGLQJ &XVWRPHUV :KR 'RQ·W 3D\
7KH PRVW FRPPRQ LVVXH IDFLQJ DOO EXVLQHVVHV LV QRW JHWWLQJ SDLG IRU VHUYLFHV UHQGHUHG Gain the advantage by knowing your customers - be they companies or individuals - before it’s too late.
6LJQ 8S IRU D )5(( 75,$/
20130211-NEWS--18-NAT-CCI-CL_--
18
2/8/2013
2:10 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Summit expresses hope for balance
Momentum: CEO says rich gas in Utica is much more valuable continued from PAGE 3
Seminar speakers believe both sides can reap benefits in shale business By DAN McGRAW clbfreelancer@crain.com
Those expecting another seminar on how water molecules break up rocks or ways to dissect a 40page mineral rights lease might have gotten a surprise at Crain’s Shale Summit 2013. While there was ample talk of engineering and economic opportunities, many attendees said they were surprised by the themes of “collaboration” and “community” that dominated much of the event. “I expected this to be an industry meeting mostly, with just a lot of people talking about how to make more money off drilling,” said Bruce Murphy, a commercial painter and a member of the Russell Township Zoning Commission. “But it was interesting to hear people in the industry talk about environmental issues and how we should be doing this right. “Now, we’ll see if they do it,” Mr. Murphy said laughing, noting that he was drawing a lot of attention with his beard and ponytail in a crowd of mostly clean-shaven business types. The theme of the summit was “Getting It Right,” and nearly 600 attendees were attracted to the event, which was presented by Crain’s Cleveland Business and public broadcasting organization ideastream with Huntington National Bank as chief sponsor. The summit’s keynote speaker was John Hofmeister, former president of Shell Oil Co. and founder and chief executive of Citizens for Affordable Energy. Mr. Hofmeister emphasized that Ohio’s position atop the Utica shale’s abundant reserves of oil and natural gas is both a curse and a blessing when it comes to managing the drilling industry’s impact and also capitalizing on the economic opportunities it presents. “The curse that you are embracing is complexity, a kind of complexity that will test you,” said Mr. Hofmeister, who also is chairman of the National Urban League. “The blessing is prosperity, which is an economic value creation. … (There are) opportunities here that aren’t in other parts of the world.” Exploiting the Utica shale responsibly will be a challenge for Ohio’s drillers as well, he said. “The burden comes back to the (energy) companies,” he said. “They should be compelled to engage, and that always hasn’t been the case. They must embrace sustainability and corporate responsibility, and they also have to make a commitment to explain a very technical process and dispel mis-
FEBRUARY 11 - 17, 2013
HAL STATA PRODUCTIONS
Former Shell Oil Co. president John Hofmeister was the keynote speaker at the Shale Summit on Feb. 5.
ON THE WEB For photos and videos from the Shale Summit, log on to www.crainscleveland.com
information.”
Avoiding a battlefield Also speaking at the summit was Rich Cochran, president and CEO of the Western Reserve Land Conservancy, a nonprofit conservation organization that controls or protects about 35,000 acres from Sandusky to western Pennsylvania. In his speech, titled “Land Conservation as an Economic Development Tool,” Mr. Cochran announced that the conservancy will set up a steering committee made up of representatives of the energy industry, local business and political leaders, and environmental preservation groups to deal with drilling issues and environmental concerns. The goal of the steering committee, he said, will be to affect how drilling and related infrastructure is planned and executed across the Utica shale region in order to protect resources such as surface water, prime soils and wildlife habitat. Rather than digging in its heels to universally oppose drilling, the conservancy hopes to build collaboration, Mr. Cochran said. “There are no real winners and losers when an oilfield becomes a battlefield. … The oil and gas always gets extracted, the opposition loses and businesses spend more money to make less money,” Mr. Cochran told the attendees. “What are we left with? An old battlefield … on which the environmental and social devastation is sometimes bad enough to create ghost towns overnight.” Mr. Cochran said he has been watching and visiting other shale plays, including the Eagle Ford in south Texas, which geologists say has resources much like those found in the Utica. He also has been keeping a close eye on what has been happening close to home. “Having studied this situation in eastern Ohio for more than two years now, we have drawn the conclusion that if this oilfield becomes a battlefield we will all lose because during battles it is impossible to be deliberate, cooperative, and constructive,” Mr. Cochran said. “Everyone is angry. Things get destroyed.”
“The curse that you are embracing is complexity, a kind of complexity that will test you.” – John Hofmeister, former Shell Oil president, during his Shale Summit keynote speech
Calls for collaboration Shale Summit 2013 also featured six different panel discussions on topics ranging from upto-date information on Ohio’s oil-and-gas development, the impact of drilling on Northeast Ohio businesses, and community leaders sharing their experiences and concerns with regards to shale development thus far. Dennis Saunier, president and CEO of the Canton Regional Chamber of Commerce, said many of his city’s leaders have gone from being skeptics of drilling to supporting it, as they’ve seen the Canton area benefit economically from drilling. Tax receipts are up, while unemployment and commercial real estate vacancy rates are down in Canton, he said. “We have increased our hotel taxes by 17% over the previous year,” Mr. Saunier said. “There are so many skilled-labor jobs, companies can’t always fill them — and we are working to regenerate neighborhoods as more housing becomes needed. “Events like this are a great way to show how we can work regionally and collaboratively in common interests that will have economic benefits that the entire region will be participating in,” he said. Al Heher, an attorney with the Buckley King law firm in Cleveland who will lead a one-day seminar March 2 at Lakeland Community College on the legal issues of hydraulic fracturing drilling, said he was surprised by the “cohesive” message that was put out by the speakers and panels at the summit. “I really like to see that there is a conscious effort to do the right thing, for all the interests,” Mr. Heher said. “I think this is a real positive step to know we are all in this together, whether it be the blue-collar laborers or the property owners or the cities or the energy companies. Working together on developing the energy industry on Ohio can keep the collateral damage low and provide benefits for the entire community.” ■
Based on their well results to date, Utica drillers are on track to achieve an internal rate of return of 91% over the life of their wells, Mr. Tsuru said. That’s well above the next-best shale play, the Eagle Ford in south Texas, where rates of return are about 60% as drillers extract oil and “wet gas” — which consists of components such as natural gas, ethane, butane and other chemicals that are helping drive drillers’ revenues and profits. The rate of return in the Utica shale also is leagues beyond the returns offered by pure “dry” natural gas plays such as Arkansas’ Haynesville region, where a paltry rate of return of about 4% essentially has brought drilling to a halt, Mr. Tsuru said. It’s all because the Utica region is yielding not only dry methane gas, but also oil and an abundant mix of “wet gas” components. While the price of natural gas has plummeted in recent years, the price of oil and natural gas liquids has held up, Mr. Tsuru said. “The rich gas in the Utica is worth (more). For 1,000 cubic feet of rich (wet) gas, it’s worth about $5 when you include the methane and all the liquids, as opposed to 1,000 (cubic) feet of dry gas, which is worth about $3.30.” Mr. Tsuru said. The big differential is why drillers are flocking to eastern Ohio, and why Mr. Tsuru is focusing on the Utica as well.
Big bucks are flowing Much of Momentum’s Utica investment already is under way near Carrollton and should be online by the middle of this year, Mr. Tsuru said. Its investment includes a large pipeline project to help gather gas from wells that have yet to come online, or even to be drilled, and three large processing facilities that will separate dry methane gas from ethane, propane, butane and other valuable components. “We’re planning on spending, in phase one, $1 billion in eastern Ohio, and this is only going to grow,” Mr. Tsuru said. The initial investment will create facilities that cryogenically can process 800 million cubic feet of wet gas per day, separating methane from a mixture of more valuable liquids. It also will include the capacity to refine further about 135,000 barrels of those liquids per day, producing “purity products” such as refined ethane, propane, butane and other ingredients used by a variety of industries, Mr. Tsuru said.The processing plants are under construction near Kensington and near Leesville Lake, with Kensington the larger of the two, Mr. Tsuru said. The Kensington and Leesville plants will be connected by 36 miles of 24-inch pipeline, which will serve as a main gathering line to bring gas from wells in the area to the plants for processing, as well as to move gas back and forth between the two plants. In addition, Momentum is constructing a large processing, storage and shipping facility near the tiny town of Scio, which will be able to store 200,000 barrels of refrigerated liquids, along with additional pressurized storage facilities. The Scio facility, also known as the Harrison Hub, occupies 600 acres and includes 7,400 feet of rail-line frontage and another 40,000 feet of its own internal rail lines to manage shipping. Momentum has designed and will
operate the facilities, and has agreements with Chesapeake Energy Corp. to supply it with gas for processing, Mr. Tsuru said.
More investment awaits Those are only some of the Ohio developments taking place in the oil and gas industry’s “midstream” sector. They range from the $3 billion or more that Shell Oil plans to spend on an ethane processing facility just across the Ohio River in Pennsylvania to natural gas gathering and gas transportation lines built by companies besides Momentum. Momentum itself is involved in other pipeline projects within 50 miles of the Ohio-Pennsylvania border, though those are primarily to deliver gas from the Marcellus shale region, Mr. Tsuru said. But Mr. Tsuru said he is aware of pipeline projects in the works to ship natural gas and its liquids from the Utica region to processors on the Gulf Coast, refineries in the Philadelphia area, and to the western United States and Canada, where natural gas products will be used in sand and shale oil production. In the Utica shale, the construction of this midstream infrastructure will guide the progress and timing of its development, said Ned Hill, dean of the Maxine Levin College of Urban Affairs at Cleveland State University, which has been studying the Utica and its economic ramifications. While Momentum will have some facilities operational later this year, the bulk of the infrastructure needed will take longer to build, but is being planned — and drilling will continue to increase as more infrastructure comes online, Dr. Hill said. “The major uptick in the drilling activity will take place once the midstream facilities are largely in place,” Dr. Hill said. “I see that as a two, twoand-a-half year period before those investments are on the ground.”
Only the beginning The prospect that most excites Dr. Hill and other economic development experts is the effect they believe the gas and its byproducts ultimately will have on Ohio industries. Drilling already is giving a tremendous boost to Ohio’s steel industry, which produces pipe, tubing and other materials that drillers use. But in the long run, the new resources will have a profound effect on industries such as specialty chemicals and plastics, which rely on natural gas and its components for their raw materials, Dr. Hill said. “In about three years, you are going to see an increase in investment by the users of the natural gas liquids,” Dr. Hill said. “When that takes place, you’re going to see our nascent plastics industry do much more compounding here, much more formulation here.” Mr. Tsuru said he is only beginning to make investments in Ohio. Backed by large private equity investors that have pumped more than $1 billion into Momentum already, Mr. Tsuru said there is no shortage of resources to process and ship, nor a shortage of capital to build more midstream operations. “It’s going to look like a house that you’ve added on to 10 times,” he said of his company’s ultimate network of facilities and pipelines in Ohio. “I think we’re going to be here a long time.” ■
20130211-NEWS--19-NAT-CCI-CL_--
2/8/2013
11:50 AM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
19
Brewing: Industry grew about 14% in one year continued from PAGE 1
According to the nonprofit Brewers Association, there are 2,126 craft breweries in the United States, more than there have been since 1890. About 1,000 more are in the works. Craft brewers sold about 11.5 million barrels of beer in 2011, up about 14% from 10.1 million barrels in 2010. Ohio has 84 licensed breweries, with nine pending permits, including Granite City Food and Brewery in Lyndhurst, according to the Ohio Division of Liquor Control. The state has added 50 craft breweries since 2007. Even pioneer brewer Jack McAuliffe, who in 1976 founded New Albion Brewing Co. in California — considered the first modern microbrewery in the country — recently expressed interest in opening a brewpub in Cleveland. “I look at 2013 as the year Ohio tops 100 craft breweries,” said John Najeway, vice president of the Ohio Craft Brewers Association.
SUBMITTED
Paul Benner is the owner of the Cleveland Brew Shop, which is the area’s first home brew hub.
Tremont shop specializes in home brewing Beer drinkers who want to craft their own recipes can do so at Cleveland Brew Shop, which opened in November as Cleveland’s first home brew hub, at 2681 W. 14th St. in Tremont. Cleveland Brew Shop offers a variety of supplies for home brewers and vintners, including hops, grains, brewing equipment, fermentation vessels, and wine- and beer-making kits. The shop conducts monthly beer-making classes; the next one is scheduled for March 2. Owner Paul Benner also is working with Fresh Fork Market, a local community-supported agriculture program, to hold both a beginners’ and advanced brewing class for that CSA’s subscribers. “We would then have an Oktoberfest party for members and unveil the (home brews) that were created by the participants,” he said. Mr. Benner, who is director of admissions for Chamberlain College of Nursing’s Cleveland Branch, said he’s considering applying for state permits that would enable him to sell bottled beers and function as a small-scale brewery. For store hours or more information, visit: clevelandbrewshop.com. — Kathy Ames Carr
Not your parents’ frig A larger age demographic has become more quality conscious and connected to the creative, independent craft brewers, said Mr. Najeway, owner of Akron-based Thirsty Dog Brewing Co., which has seen its capacity surge from 7,000 barrels a year in 2010 to 25,000 currently. “When I was growing up, the Strohs and the Buds were in my parents’ refrigerators,” he said. “Many of the 20-somethings now were raised with craft beer in their fridges, so that’s what they’re choosing to drink.” That market is part of what is driving Thirsty Dog’s production swell, though Mr. Najeway, like many of his Northeast Ohio artisan brethren, are controlling their growth. Thirsty Dog is currently in 14 states, and although other markets have their hands out for his beer, Mr. Najeway is refraining. “We want to continue to satisfy market penetration in our existing footprints,” he said. “We don’t want to double distribution just to double it.” Fred Karm of Hoppin’ Frog Brewery in Akron, which recently was rated the 17th-best brewery in the world by RateBeer.com, emphasized similar thoughts of methodical growth, even as demand for his beer outpaces its current capacity. “We’ve been expanding our production by a factor of two since 2010,” Mr. Karm said. “We can pick and choose our markets. It’s not about trying to sell a million gallons a year, but making sure we’re making a superior beer that we can go home and drink with our friends and family at night.” Customers of the Brew Kettle in Strongsville over the years also have spanned a larger age range, said founder Chris McKim. He noted his customers mainly were educated, middle- to upper-middle class consumers when Brew Kettle opened in 1995 as Ohio’s first brewon-premise microbrewery where customers can make their own brew. Brew Kettle has expanded five times since then and has logged 100% output growth, from 2,500 barrels in 2011 to 5,000 in 2012. The brewery is on pace to double capacity again this year.
JANET CENTURY
John Najeway, the owner of Thirsty Dog Brewing Co. in Akron and vice president of the Ohio Craft Brewers Association, says his beer is being sold in 14 states, and there is demand for more. “We’ve had a constant problem of trying to keep up with production,” Mr. McKim said. “It’s terrifying sometimes. It’s like you keep going down a roller coaster hill, and you’re not sure when it’s doing to stop. “You just keep picking up speed,” he said.
Great Lakes in a can? Maybe Expansions and investments are part of the brewing vernacular at Great Lakes Brewing Co., which now is at a point where it is landlocked because of its inability to continue adding production capacity to its 65,000-square-foot brewhouse in Ohio City, said co-founder Patrick Conway. The nation’s 18thlargest brewer is “working closely” with the city of Cleveland to identify as much as 160,000 square feet for additional production and
warehousing, Mr. Conway said. “We need to expand, but we don’t have room to expand,” Mr. Conway said. Great Lakes Brewing last year maxed out its tank farm capacity with the addition of three fermentation tanks, to bring to 38 the number of 300-barrel stainless steel vessels on premises. The current annual brewing capacity of 200,000 is double its production of about 103,000 barrels in 2010, although it expects to roll out 150,000 barrels this year. The challenge for his company, Mr. Conway said, is “how do we get to 300 or 400” thousand barrels per year. But expanding the company’s brewing capacity isn’t the only potential investment on Mr. Conway’s mind. Other investments could include opening brewpubs in
other markets, producing larger, 750-milliter bottles and purchasing a canning line to put its brew in something other than bottles. “We’re hurt in the summer when our bottles can’t be in ball parks, golf courses and other venues,” Mr. Conway said.
A palace of fermentation A couple blocks over from Great Lakes Brewing, another Market District stalwart is planning for production increases and other investments. Sam McNulty, owner of Market Garden Brewery & Distillery and four other area beer-centric spots, said Phase I construction will begin this year on the 43,000square-foot Culinary Market Building on West 24th Street, which he bought last year for $800,000. Phase I will include retrofitting the building for additional brewing
and distilling, a retail store and a charcuterie, the latter of which will integrate cheeses, vinegars, pickles, yogurt and any other foods tied to fermentation. “We may call it the Fermentation Palace,” Mr. McNulty said. The expenditure still is uncertain, but will be higher than the $4 million investment associated with the Market Garden Brewery & Distillery on West 25th Street. The “Fermentation Palace” also will conduct workshops and tours. His brewpub tanks in 2012 nourished the area with about 1,600 barrels of beer, and in 2013 he expects to reach a capacity of producing 2,000 barrels annually. He plans to produce “several multiples” of that current target at the new facility. “We want to grow methodically and intentionally remain a boutique operation,” Mr. McNulty said. The growth strategies Mr. McNulty and other area brewers are deploying suggest that demand for craft beer still may outpace supply for years to come, according to those who work in the industry, which means more microbreweries likely will continue to pop up around Northeast Ohio. “I hope so,” Mr. McNulty said. ■
20130211-NEWS--20-NAT-CCI-CL_--
20
2/8/2013
11:46 AM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
FEBRUARY 11 - 17, 2013
NE OHIO SOFTWARE DEVELOPERS RANKED BY LOCAL FULL-TIME EMPLOYEES Number of local full-time employees Name Address Rank Phone/Web site
Full-time local 1-1-2013 1-1-2012 programmers Industry specialization
Software products
Year Top local executive founded Title
1
Hyland Software Inc. 28500 Clemens Road, Westlake 44145 (440) 788-5000/www.hyland.com
1,168
1,000
294
Health care, higher education, government, financial services, insurance, manufacturing
OnBase, enterprise content management software suite
1991
Bill Priemer president, CEO
2
MRI Software LLC 28925 Fountain Parkway, Solon 44139 (800) 321-8770/www.mrisoftware.com
320
266
NA
Business solutions for commercial and residential property management and real estate portfolio management
MRI Commercial, MRI Residential, Workspeed, Bostonpost, VaultWare
1971
David M. Post CEO
3
Snap-on Business Solutions Inc. 4025 Kinross Lakes Parkway, Richfield 44286 (330) 659-1600/www.sbs.snapon.com
240
230
65
Global electronic parts catalogs
Global EPC
2006
Timothy L. Chambers president
4
TMW Systems Inc. 21111 Chagrin Blvd., Beachwood 44122 (216) 831-6606/www.tmwsystems.com
230
207
109
Trucking and logistics software
TMWSuite, TL2000, TruckMate, Innovative, IDSC Netwise, IDSC ExpertFuel, TMT Fleet Maintenance
1983
David W. Wangler president
5
OEConnection 4205 Highlander Parkway, Richfield 44286 (330) 523-1800/www.oeconnection.com
197
202
36
Online parts and service exchange in the automotive original equipment parts business
OEC 2.0, D2DLink, CollisionLink, RepairLink, LinkIQ
2000
Charles Rotuno president, CEO
6
Turning Technologies 255 W. Federal St. , Youngstown 44503 (330) 746-3015/www.turningtechnologies.com
158
170
9
Assessment delivery and data collection solutions including student and audience response technology
TurningPoint, Triton Data Collection System, ResponseWare, RemotePoll, PresenterWare, QuestionPoint
2002
Mike Broderick CEO, co-founder
7
BrandMuscle Inc. 1100 Superior Ave., Suite 500, Cleveland 44114 (216) 464-4342/www.brandmuscle.com
145
154
21
Marketing solutions
BrandBuilder, BrandPlanner, BrandWorkshop, BrandLibrary, Digital Asset Manager
2000
Philip Alexander president
8
Fleetmatics Group(1) 31500 Bainbridge Road, Suite 1, Solon 44139 (888) 837-7243/www.fleetmatics.com
122
101
15
HVAC, telecom, cable, construction, plumbing and security industries
Mobile Control
2003
Dennis Abrahams COO
9
Virtual Hold Technology LLC 3875 Embassy Parkway, Suite 350, Akron 44333 (800) 854-1815/www.virtualhold.com
108
100
26
Technology, software, telephony, virtual queuing, multichannel customer experience
Conversation Bridge
1995
Wes Hayden CEO
10
Explorys Inc. 8501 Carnegie Ave., Suite 200, Cleveland 44106 (216) 767-4700/www.explorys.com
78
50
40
Health care transformation, health care IT
EPM: Explore, EPM: Measure, EPM: Registry, EPM: Engage
2009
Charlie Lougheed, president, chief strategy officer; Stephen McHale, CEO
11
Knotice 526 S. Main St., Suite 705, Akron 44311 (800) 801-4194/www.knotice.com
75
88
13
Data management, analytics and digital messaging solutions
The Knotice Platform
2003
Brian Deagan CEO
12
Foundation Software 150 Pearl Road, Brunswick 44212 (800) 246-0800/www.foundationsoft.com
72
58
12
Accounting software for construction
Foundation for Windows
1985
Fred Ode chairman, CEO
13
MIM Software Inc. 25200 Chagrin Blvd., Suite 200, Cleveland 44122 (216) 455-0600/www.mimsoftware.com
67
61
NA
Medical imaging
MIM, Mobile MIM, MIMcloud, MIM Symphony, MIM Encore, MIM Maestro
1999
A. Dennis Nelson CEO
14
Software Answers Inc. 6770 W. Snowville Road, Suite 200, Brecksville 44141 (440) 526-0095/www.progressbook.com
54
53
24
Web-based K-12 student, classroom, school and district management software
ProgressBook, GradeBook, ParentAccess, StudentInformation (SIS), SpecialServices, DataMap
1994
Paul Chaffee CEO
15
Urbancode Inc. 2044 Euclid Ave., Suite 600, Cleveland 44115 (216) 858-9000/www.urbancode.com
53
29
23
Technology
AnthillPro, uDeploy, uBuild, uRelease
1996
Maciej Zawadzki CEO
16
TOA Technologies 3333 Richmond Road, Suite 420, Beachwood 44122 (216) 925-5950/www.toatech.com
52
30
0
Field service management software
ETAdirect software suite
2003
Yuval Brisker president, CEO
17
Easy2 Technologies 1220 Huron Road E., 7th floor, Cleveland 44115 (216) 812-3200/www.easy2.com
44
44
12
Consumer product manufacturers and retailers
MYO (Make Your Own) Demo
1999
Ethan Cohen CEO
17
New Innovations Inc. 3743 Boettler Oaks Drive, Uniontown 44685 (330) 899-9954/www.new-innov.com
44
38
15
Medical
Residency Management Suite
1995
Steve Reed CEO
19
Main Sequence Technology Inc. 4420 Sherwin Road, Hamilton Hall, Willoughby 44094 (440) 946-5214/www.pcrecruiter.com
43
45
9
HR applicant tracking, recruiting CRM, staffing software
PCRecruiter, PCRecruiter Resume Inhaler, PCRecruiter Outlook Portal, MacRecruiter
1998
Martin H. Snyder, president; William F. Kubicek IV, vice president, marketing
20
FeneTech Inc. 260 Campus Drive, Aurora 44202 (330) 995-2830/www.fenetech.com
42
35
20
Fenestration ERP, Sales Automation
FeneVision
1997
Ronald W. Crowl president, CEO
20
ID Networks Inc. 7720 Jefferson Road, Ashtabula 44004 (440) 992-0062/www.idnetworks.com
42
41
15
Software solutions for law enforcement agencies
Jail Management, Records Management, ImageNet, FingerRoll Livescans, CAD and Mobile Systems
1991
Douglas Blenman Sr. president
22
Data-Basics Inc. 9450 Midwest Ave., Cleveland 44125 (216) 663-5600/www.databasics.com
41
37
21
Service management and accounting
SAM Pro Enterprise, TechAnywhere for Android
1974
Arthur K. Divell CEO
23
Tribute Inc. 1696-F Georgetown Road, Hudson 44236 (330) 656-3006/www.tribute.com
40
36
8
Industrial distribution, fluid power, hose, gaskets, seals, power transmission, process equipment, automation
Tribute Software, TrulinX Software
1981
Timothy Reynolds president, CEO
24
Imaging Science and Service Inc. 95 Executive Parkway, Suite 500, Hudson 44236 (330) 342-7760/www.issimage.com
39
37
8
Regulatory document compliance - sales and use tax exemptions, freight forwarding, product liability
TEAMS Express, LineLink
1994
Philip C. Hodge CEO
25
PreEmptive Solutions LLC 767 Beta Drive, Mayfield Village 44143 (440) 443-7200/www.preemptive.com
35
30
13
Software security, application analytics
Dotfuscator, DashO, Runtime Intelligence
1996
Gabriel Torok CEO
26
ONOSYS, a LivingSocial Company 1220 W. Sixth St., Suite 200, Cleveland 44113 (216) 426-0000/www.onosys.com
30
20
11
E-commerce, SaaS (Software as a Service) ONOSYS Online Ordering
2005
Oleg Fridman Stan Garber Alex Yakubovich co-founders, partners
26
Segmint Inc. One Cascade Plaza, Suite 1800, Akron 44308 (888) 734-6468/www.segmint.com
30
22
12
Financial services, health care, higher education, sports and entertainment
SegmintOne
2008
Russel R. Heiser II president, CEO
28
Pointe Blank Solutions Ltd. 7055 Engle Road, Suite 304, Middleburg Heights 44130 (440) 243-5100/www.pointeblank.net
29
25
NA
Health care, government
CasePointe, PropertyPointe, LivingPointe, ProjectPointe, DocuPointe
2000
Thomas J. Coury chairman, chief software architect
29
Associated Software Consultants Inc. 7251 Engle Road, Suite 400, Middleburg Heights 44130 (440) 826-1010/www.asconline.com
26
24
7
1978
Timothy W. Liston president
Mortgage, consumer and business lending PowerLender Loan Origination & software solutions for mortgage banks, Processing System, PowerSeller community banks, credit unions Secondary Marketing System
See LIST Page 21
20130211-NEWS--21-NAT-CCI-CL_--
2/8/2013
11:46 AM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Number of local full-time employees
Full-time local programmers Industry specialization 1-1-2013 1-1-2012
Name Address Rank Phone/Web site
21
Year Top local executive founded Title
Software products
30
Axentis Inc. 1660 W. Second St., Suite 250, Cleveland 44113 (216) 896-8300/www.axentis.com
25
22
NA
Governance, risk and compliance management
Axentis Enterprise
1999
NA
30
Dakota Software 23240 Chagrin Blvd., Suite 620, Cleveland 44122 (216) 765-7100/www.dakotasoft.com
25
22
12
Environment, health and safety
ProActivity Suite, Dakota Profiler, Dakota Auditor, Dakota Tracer, Dakota Scout, Dakota Metrics
1989
Reg Shiverick president
30
VeDiscovery LLC 1382 W. Ninth St., Suite 400, Cleveland 44113 (216) 241-3443/www.vediscovery.com
25
17
NA
Electronic data discovery for legal, medical, regulatory and knowledge management
VeHOLD (includes VeAGENT), VeANALYTICS, VeREVIEW, VePROCESS
2012
Ronald K. Copfer founder, CEO
33
Datacore Consulting LLC 5755 Granger Road, Suite 777, Independence 44131 (800) 244-4241/www.datacoreonline.com
20
18
6
Backup and disaster recovery
BDR
1998
Jim Conley CEO
34
Specialized Business Software 6325 Cochran Road, Unit 1, Solon 44139 (440) 542-9145/www.specializedbusinesssoftware.com
16
23
NA
Financial services, government, technology Docunym Document Imaging and Workflow
1999
Steve Wiser president
34
Tharo Systems Inc. 2866 Nationwide Parkway, Brunswick 44212 (330) 273-4408/www.tharo.com
16
15
NA
All industries
EASYLABEL 5 Silver, EASYLABEL 5 Gold, EASYLABEL 5 Platinum, EASYLABEL 5 Print Only, EASYLABEL 5 Multi-User
1982
Randy Thatcher president
36
Monarch Teaching Technology Inc. 20600 Chagrin Blvd., Suite 703, Shaker Heights 44118 (800) 593-1934/www.monarchtt.com
15
12
4
Education
VizZle
2005
Terry Murphy CEO
36
Workflow.com 875 Westpoint Pkwy, Suite 510, Westlake 44145 (440) 827-2000/www.workflow.com
15
13
5
Medical records software
Workflow EHR, Workflow PM
2004
Packy Hyland CEO
38
Apteryx Inc. 313 S. High St., Suite 200, Akron 44308 (330) 376-0889/www.apteryx.com
13
13
4
Custom applications for medical, dental and synthetic imaging, image processing, data security
Apteryx Imaging (dental imaging software), DICOM Capture View (DCV), DataGrabber, Continuum
1995
Kevin Crucs president
39
IQS Inc. 25000 Country Club Blvd., Suite 400, North Olmsted 44070 (440) 333-1344/www.iqs.com
12
12
NA
Discrete and process manufacturing, automotive, aerospace and defense, medical device manufacturing
IQS Quality and Compliance Software
1988
Michael Rapaport president, CEO
40
Bearware Inc. 7160 Chagrin Road, Suite 210, Chagrin Falls 44023 (440) 893-2327/www.bearwareinc.com
11
11
1
Logistics and supply chain
Retail Distribution System, webTMS, Retail Payment System, Claims Management System
1987
Robert J. Brooks III president, COO
40
Henning Industrial Software Inc. 102 First St., Suite 211, Hudson 44236 (330) 650-4212/www.henningsoftware.com
11
11
4
ERP and accounting software
Visual EstiTrack ERP, Visual Books Accounting, Visual WebTrack, iVET Mobile
1990
Richard G. Henning president
42
Factivity Inc. 23400 Mercantile Road, Suite 1A, Beachwood 44122 (216) 514-5141/www.factivity.com
10
10
NA
Manufacturing
Factivity, Planet Together
1984
John Leibert president
42
Incom Integrated Computer Systems Inc. 7353 Austin Powder Drive, Glenwillow 44139 (440) 439-7000/www.netincom.com
10
10
4
Lawfirms, membership organizations; unions, political organizations, gyms, neighborhood associations
Membership Tracking Program, Benefits Tracking Program, LPA Tracker
1988
Jon P. Lorenzo president, CEO
44
Linestream Technologies 1468 W. Ninth St., Suite 100, Cleveland 44113 (216) 862-7874 /www.linestream.com
9
5
3
Software
SpinTAC
2008
David Neundorfer president, CEO
44
Point2 Property Manager 6001 E. Royalton Road, Suite 150, Broadview Heights 44147 (866) 602-9007/www.point2propertymanager.com
9
9
4
Property management
Point2 Property Manager
2007
Don Katt director of development
46
Curtis Research Inc. 520 S. Main St., Suite 2442, Akron 44311 (330) 376-7665/www.curtissoft.com
8
8
NA
Health care
Proclaim ZAP
1985
David Kosakowski vice president, sales
46
LogicJunction Inc. 23950 Commerce Park Road, Beachwood 44122 (216) 292-5760/www.logicjunction.com
8
8
2
Hospital wayfinding, software development and 3D animations; custom solutions for LogicalEngine, Remote Agents medical, retail, government
2000
Mark Jowell CEO
46
Spede Technologies 24864 Detroit Road, Cleveland 44145 (440) 808-8888/www.spede.com
8
9
3
Real-time inventory control systems for warehouses and manufacturing, PLCcontrolled labeling
1980
Bob Bunsey president
SPEDE Material Control System, SPEDE Line-side Labeling System
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. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Formerly SageQuest.
RESEARCHED BY Deborah W. Hillyer
REAL ESTATE CLASSIFIED Phone: (216) 522-1383 Fax: (216) 694-4264 Contact: Denise Donaldson E-mail: DDonaldson@crain.com AUCTION Another Bambeck Auctioneers Inc.
Real Estate Auction
March 21 • 11:00 AM On-Site
List your Industrial, commercial or Retail Space Here! Crain’s Cleveland Business’ classifieds will help you fill that space..
Former 50 Bed Long-Term Care Facility
Contact Denise Donaldson at 216.522-1383
Ashtabula OH
DDonaldson@Crain.com
Redevelopment Opportunity See Web Site For Terms of Sale: Bambeck Auctioneers Inc. www.bambeck.com For daily on-line updates, sign up @ CrainsCleveland.com/Daily
REALTORS: Now is a great time to promote your Luxury Properties to high-end prospects. Call 216.522.1383 for more details.
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card BUSINESSES FOR SALE
FOR SALE
Business for Sale
Dining room set and breakfront for sale
Well established Ohio retailer, with 2 prime locations within Cleveland metro, specializing in army-navy surplus, workwear, and outdoor products. Company has clean financials and strong growth potential. Price: $575K Terms: Cash. May consider partial owner finance over two years. Seller will stay on as consultant for 3 months. Only pre-qualified buyers will be considered.
Email: dcainc@aol.com or call 800-880-2485
LOOKING TO SLOW DOWN and SELL YOUR BUSINESS? Motivated Entrepreneur Seeking An Owner Who Will TRAIN and Eventually SELL Business. Contact Me Confidentially at 216-952-0428 or BizPurchase1@Gmail.com.
BUSINESS SERVICE OWNERS!
From Stafford Company. Mahogany; table, 68” length, 45” width. Six chairs, three 18” leaves, ½” leather pad for entire table. Excellent condition. Purchased at Sedlak’s for $13,000; sale price, $6,000. Moving -- must sell. Rocky River. Free delivery.
440-596-0230
BUSINESS SERVICES
Submit your business card to promote your service.
Want to Buy or Sell a Business?
To find out more, contact Denise Doanldson at 216.522.1383
440-461-2202
Free Seller Market Analysis See our listings at www.empirebusinesses.com
20130211-NEWS--22-NAT-CCI-CL_--
2/8/2013
11:47 AM
Page 1
LEGAL NOTICE
LEGAL NOTICE
LEGAL NOTICE
To merchants who have accepted Visa and MasterCard at any time since January 1, 2004: Notice of a 6+ billion dollar class action settlement. Si desea leer este aviso en espaĂąol, llĂĄmenos o visite nuestro sitio web. Notice of a class action settlement authorized by the U.S. District Court, Eastern District of New York. This notice is authorized by the Court to inform you about an agreement to settle a class action lawsuit that may affect you. The lawsuit claims that Visa and MasterCard, separately, and together with banks, violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and MasterCard credit and debit cards, including by: ™ Agreeing to set, apply, and enforce rules about merchant fees (called default interchange fees); ™ Limiting what merchants could do to encourage their customers to use other forms of payment through, for example, charging customers an extra fee or offering discounts; and ™ Continuing that conduct after Visa and MasterCard changed their corporate structures. The defendants say they have done nothing wrong. They say that their business practices are legal and the result of competition, and have beneďŹ tted merchants and consumers. The Court has not decided who is right because the parties agreed to a settlement. On November 27, 2012, the Court gave preliminary approval to this settlement.
THE SETTLEMENT Under the settlement, Visa, MasterCard, and the bank defendants have agreed to make payments to two settlement funds: ™ I]Z Äghi ^h V š8Vh] ;jcYº ¡ V +#%* W^aa^dc [jcY i]Vi will pay valid claims of merchants that accepted Visa or MasterCard credit or debit cards at any time between January 1, 2004 and November 28, 2012. ™ I]Z hZXdcY ^h Vc š>ciZgX]Vc\Z ;jcYº ¡ Zhi^bViZY id WZ Veegdm^bViZan &#' W^aa^dc ¡ i]Vi l^aa WZ WVhZY dc V edgi^dc of the interchange fees attributable to certain merchants that accept Visa or MasterCard credit cards for an Z^\]i"bdci] š>ciZgX]Vc\Z EZg^dY#º Additionally, the settlement changes some of the Visa and MasterCard rules applicable to merchants who accept their cards. This settlement creates two classes: ™ A Cash Settlement Class (Rule 23(b)(3) Settlement Class), which includes all persons, businesses, and other entities that accepted any Visa or MasterCard cards in the U.S. at any time from January 1, 2004 to November 28, 2012, and ™ A Rule Changes Settlement Class (Rule 23(b)(2) Settlement Class), which includes all persons, businesses, and entities that as of November 28, 2012 or in the future accept any Visa or MasterCard cards in the U.S.
WHAT MERCHANTS WILL GET FROM THE SETTLEMENT Every merchant in the Cash Settlement Class that ďŹ les a valid XaV^b l^aa \Zi bdcZn [gdb i]Z +#%* W^aa^dc 8Vh] ;jcY! hjW_ZXi id V YZYjXi^dc cdi id ZmXZZY '* d[ i]Z [jcY id VXXdjci [dg merchants who exclude themselves from the Cash Settlement Class. The value of each claim, where possible, will be based on the actual or estimated interchange fees attributable to the merchant’s MasterCard and Visa payment card transactions [gdb ?VcjVgn &! '%%) id CdkZbWZg '-! '%&'# EVnbZcih id merchants who ďŹ le valid claims for a portion of the Cash ;jcY l^aa WZ WVhZY dc/ ™ The money available to pay all claims, ™ The total dollar value of all valid claims ďŹ led, ™ I]Z YZYjXi^dc YZhXg^WZY VWdkZ cdi id ZmXZZY '* d[ i]Z 8Vh] HZiiaZbZci ;jcY! VcY ™ The cost of settlement administration and notice, money awarded to the class representatives, and attorneys’ fees and expenses all as approved by the Court. >c VYY^i^dc! bZgX]Vcih ^c i]Z 8Vh] HZiiaZbZci 8aVhh that accept Visa and MasterCard during the eight-month >ciZgX]Vc\Z EZg^dY VcY Ă„aZ V kVa^Y XaV^b l^aa \Zi bdcZn [gdb i]Z hZeVgViZ >ciZgX]Vc\Z ;jcY! Zhi^bViZY id WZ Veegdm^bViZan
&#' W^aa^dc# I]Z kVajZ d[ ZVX] XaV^b! l]ZgZ edhh^WaZ! l^aa WZ WVhZY dc Vc Zhi^bViZ d[ dcZ"iZci] d[ & d[ i]Z bZgX]VciÂźh Visa and MasterCard credit card dollar sales volume during i]Vi eZg^dY# EVnbZcih id bZgX]Vcih l]d Ă„aZ kVa^Y XaV^bh [dg V edgi^dc d[ i]Z >ciZgX]Vc\Z ;jcY l^aa WZ WVhZY dc/ ™ The money available to pay all claims, ™ The total dollar value of all valid claims ďŹ led, and ™ The cost of settlement administration and notice, and any attorneys’ fees and expenses that may be approved by the Court. Attorneys’ fees and expenses and money awarded to the class representatives/ ;dg ldg` YdcZ i]gdj\] Ă„cVa VeegdkVa d[ i]Z settlement by the district court, Class Counsel will ask the Court for attorneys’ fees in an amount that is a reasonable egdedgi^dc d[ i]Z 8Vh] HZiiaZbZci ;jcY! cdi id ZmXZZY &&#* d[ i]Z 8Vh] HZiiaZbZci ;jcY d[ +#%* W^aa^dc VcY &&#* d[ i]Z >ciZgX]Vc\Z ;jcY Zhi^bViZY id WZ &#' W^aa^dc id XdbeZchViZ all of the lawyers and their law ďŹ rms that have worked on the XaVhh XVhZ# ;dg VYY^i^dcVa ldg` id VYb^c^hiZg i]Z hZiiaZbZci! distribute both funds, and through any appeals, Class Counsel may seek reimbursement at their normal hourly rates, not id ZmXZZY Vc VYY^i^dcVa & d[ i]Z 8Vh] HZiiaZbZci ;jcY d[ +#%* W^aa^dc VcY Vc VYY^i^dcVa & d[ i]Z >ciZgX]Vc\Z ;jcY Zhi^bViZY id WZ &#' W^aa^dc# 8aVhh 8djchZa l^aa Vahd request reimbursement of their expenses (not including the administrative costs of settlement or notice), not to exceed )% b^aa^dc VcY je id '%%!%%% eZg 8aVhh EaV^ci^[[ ^c hZgk^XZ awards for their efforts on behalf of the classes.
HOW
TO
ASK
FOR
PAYMENT
To receive payment, merchants must ďŹ ll out a claim form. >[ i]Z 8djgi Ă„cVaan VeegdkZh i]Z hZiiaZbZci! VcY ndj Yd cdi exclude yourself from the Cash Settlement Class, you will receive a claim form in the mail or by email. Or you may Vh` [dg dcZ Vi/ lll#EVnbZci8VgYHZiiaZbZci#Xdb! dg XVaa/ &"-%%"+'*"+))%#
OTHER BENEFITS
FOR
MERCHANTS
Merchants will beneďŹ t from changes to certain MasterCard and Visa rules, which will allow merchants to, among other things: ™ Charge customers an extra fee if they pay with Visa or MasterCard credit cards, ™ Offer discounts to customers who do not pay with Visa or MasterCard credit or debit cards, and ™ ;dgb Wjn^c\ \gdjeh i]Vi bZZi XZgiV^c Xg^iZg^V id cZ\di^ViZ with Visa and MasterCard. Merchants that operate multiple businesses under different trade names or banners will also be able to accept Visa or MasterCard at fewer than all of the merchant’s trade names and banners.
LEGAL RIGHTS
AND
OPTIONS
Merchants who are included in this lawsuit have the legal rights and options explained below. You may: Â&#x161; <_b[ W YbW_c je Wia \eh fWoc[dj$ You will receive a claim form in the mail or email or ďŹ le online at: lll#EVnbZci8VgYHZiiaZbZci#Xdb# Â&#x161; ;nYbkZ[ oekhi[b\ from the Cash Settlement Class (Rule '( W ( HZiiaZbZci 8aVhh # >[ ndj ZmXajYZ ndjghZa[! ndj can sue the Defendants for damages based on alleged conduct occurring on or before November 27, 2012 on ndjg dlc Vi ndjg dlc ZmeZchZ! ^[ ndj lVci id# >[ ndj exclude yourself, you will not get any money from this hZiiaZbZci# >[ ndj VgZ V bZgX]Vci VcY l^h] id ZmXajYZ yourself, you must make a written request, place it in an envelope, and mail it with postage prepaid and postmarked no later than CWo (." (&') to Class Administrator, EVnbZci 8VgY >ciZgX]Vc\Z ;ZZ HZiiaZbZci! E#D# 7dm '*(%! EdgiaVcY! DG .,'%-"'*(%# I]Z lg^iiZc gZfjZhi bjhi WZ signed by a person authorized to do so and provide all of i]Z [daadl^c\ ^c[dgbVi^dc/ & i]Z ldgYh š>c gZ EVnbZci 8VgY >ciZgX]Vc\Z ;ZZ VcY BZgX]Vci 9^hXdjci 6ci^igjhi A^i^\Vi^dc!Âş ' ndjg [jaa cVbZ! VYYgZhh! iZaZe]dcZ cjbWZg!
and taxpayer identiďŹ cation number, (3) the merchant that wishes to be excluded from the Cash Settlement Class (Rule 23(b)(3) Settlement Class), and what position or authority you have to exclude the merchant, and (4) the business names, brand names, and addresses of any stores or sales locations whose sales the merchant desires to be excluded. Note: Oek YWddej X[ [nYbkZ[Z \hec j^[ Hkb[ 9^Wd][i I[jjb[c[dj 9bWii (Rule 23(b)(2) Settlement Class). Â&#x161; EX`[Yj je j^[ i[jjb[c[dj# I]Z YZVYa^cZ id dW_ZXi is: CWo (." (&')# Id aZVgc ]dl id dW_ZXi! hZZ/ lll#EVnbZci8VgYHZiiaZbZci#Xdb dg XVaa &"-%%"+'*"+))%# CdiZ/ >[ ndj ZmXajYZ ndjghZa[ [gdb i]Z 8Vh] HZiiaZbZci 8aVhh ndj XVccdi dW_ZXi id i]Z iZgbh d[ i]Vi edgi^dc d[ i]Z settlement. ;dg bdgZ ^c[dgbVi^dc VWdji i]ZhZ g^\]ih VcY dei^dch! k^h^i/ lll#EVnbZci8VgYHZiiaZbZci#Xdb#
IF
COURT APPROVES FINAL SETTLEMENT
THE
THE
Members of the Rule Changes Settlement Class are bound by the terms of this settlement. Members of the Cash Settlement Class, who do not exclude themselves by the deadline, are bound by the terms of this settlement whether or not they ďŹ le a claim for payment. Members of both classes release all claims against all released parties listed in the Settlement Agreement. The settlement will resolve and release any claims by merchants against Visa, MasterCard or other defendants that were or could have been alleged in the lawsuit, including any claims based on interchange or other fees, no-surcharge rules, no-discounting rules, honor-all-cards rules and other rules. The settlement will also resolve any merchant claims based upon the future effect of any Visa or MasterCard rules, as of November 27, 2012 and not to be modiďŹ ed pursuant to the settlement, the modiďŹ ed rules provided for in the settlement, or any other rules substantially similar to any such rules. The releases will not bar claims involving certain speciďŹ ed standard commercial disputes arising in the ordinary course of business. ;dg bdgZ ^c[dgbVi^dc dc i]Z gZaZVhZ! hZZ i]Z hZiiaZbZci V\gZZbZci Vi/ lll#EVnbZci8VgYHZiiaZbZci#Xdb#
THE COURT HEARING ABOUT THIS SETTLEMENT On September 12, 2013, there will be a Court hearing to decide whether to approve the proposed settlement, class counselsâ&#x20AC;&#x2122; requests for attorneysâ&#x20AC;&#x2122; fees and expenses, and awards for the class representatives. The hearing will take place at: United States District Court for the Eastern District of New York ''* 8VYbVc EaVoV 7gdd`anc! CN &&'%& You do not have to go to the court hearing or hire an attorney. 7ji ndj XVc ^[ ndj lVci id! Vi ndjg dlc Xdhi# I]Z 8djgi ]Vh appointed the law ďŹ rms of Robins, Kaplan, Miller & Ciresi AAE! 7Zg\Zg BdciV\jZ! E8! VcY GdWW^ch <ZaaZg GjYbVc 9dlY AAE id gZegZhZci i]Z 8aVhh š8aVhh 8djchZaÂş #
QUESTIONS? ;dg bdgZ ^c[dgbVi^dc VWdji i]^h XVhZ In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720), you may: 8Vaa idaa"[gZZ/ &"-%%"+'*"+))% K^h^i/ lll#EVnbZci8VgYHZiiaZbZci#Xdb Write to the Class Administrator: EVnbZci 8VgY >ciZgX]Vc\Z ;ZZ HZiiaZbZci E#D# 7dm '*(% EdgiaVcY! DG .,'%-"'*(% :bV^a/ ^c[d5EVnbZci8VgYHZiiaZbZci#Xdb EaZVhZ X]ZX` lll#EVnbZci8VgYHZiiaZbZci#Xdb [dg Vcn jeYViZh relating to the settlement or the settlement approval process.
w w w. P a y m e n t C a r d S e t t l e m e n t . c o m s INFO 0AYMENT#ARD3ETTLEMENT COM LEGAL NOTICE
LEGAL NOTICE
LEGAL NOTICE
20130211-NEWS--23-NAT-CCI-CL_--
2/8/2013
2:06 PM
Page 1
FEBRUARY 11 - 17, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
23
THEINSIDER
THEWEEK FEBRUARY 4 - 10 The big story: It was no surprise that the twoyear state budget Gov. John Kasich unveiled last week would reduce personal income taxes. Unforeseen, though, was a call for a reduction in the state sales tax to 5% from 5.5%, and another tax cut that would provide a significant reduction to small businesses. See analysis, Page One
Bridgework: The Ohio Department of Transportation announced the final three teams that will vie for an estimated $330 million contract to design, construct and finance the second Inner Belt bridge in Cleveland and demolish the existing, aging span. They are: Kokosing Construction Co. with Michael Baker Jr. Inc.; Trumbull Corp., Great Lakes Construction Co. and Ruhlin Co. with URS Corp.; and Walsh Construction with HDR Engineering Inc. The finalists will submit detailed financial and technical proposals that ODOT will score on seven elements, including design, construction scheduling and green building initiatives. Goodbye, Cleveland: Eaton Corp. plans to finish moving into its new Beachwood building by Feb. 18. It began vacating its longtime downtown Cleveland home Feb. 2. Eaton said it will refer to the Beachwood building as “Eaton Center.” The company’s headquarters now is in Dublin, Ireland, following its acquisition of Cooper Industries of Ireland PROVIDED BY EATON CORP. last year. The The new Eaton Center diversified manufacturer said it will house about 700 employees at the new Beachwood building in the Chagrin Highlands corporate office park.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Akron Law to cut startups a break ■ Beginning this Thursday, Feb. 14, the University of Akron School of Law will offer at its Lakewood campus, 14725 Detroit Ave., free and discounted legal advice to small startup businesses. The school’s new Small Entrepreneur and Economic Development, or SEED, Legal Clinic is booked with appointments for its first office hours, according to Gary Spring, clinic director. And he expects it to keep busy. “Everywhere we go, there’s demand from people looking for help with their business,” Mr. Spring said. Mr. Spring and another attorney are leading a team of six law school students who will advise businesses on a variety of legal needs, such as contracts and commercial leases. The clinic is scheduled to offer office hours every other week, but could ramp up if the demand is there, Mr. Spring said. Initial consultation and services are free, but those businesses that seek continuing services will be charged a $300 fee, which is “still a bargain,” Mr. Spring said. Such legal services can cost tens of thousands of dollars, he said. The aim of the clinic is to give practical experience to the law students while meeting the needs of businesses. The intent is not to compete with the Cleveland Metropolitan Bar Association and its members, Mr. Spring said. To be eligible for clinic participation, a business must have operated for fewer than
WHAT’S NEW
Time to think about it: Pepper Pike financier A. Eddy Zai was sentenced to more than seven years in prison and ordered to forfeit more than $23 million for his participation in a fraud against the now-defunct St. Paul Croatian Federal Credit Union in Eastlake. Last November, Zai pleaded guilty to nine federal counts in the fraud scheme.
After getting pasted …: Ferro Corp. sold its solar pastes business, which has been a millstone around the company’s neck the last couple years because of a decline in production of solar cells, where the pastes are used. Ferro said the buyer is Heraeus, a privately owned precious metals and technology company based in Hanau, Germany. Terms of the transaction were not disclosed.
This and that: Data analysis software developer Segmint Inc. of Akron raised about $3.3 million from a group of 50 investors, according to a filing with the Securities and Exchange Commission. The money will be used to cover general expenses. … The Cleveland Clinic added another partner to its growing Innovation Alliance — a collaborative effort designed to lead to the commercialization of medical technologies. Its newest partner, the Innovation Institute, is a newly launched for-profit company based in Orange County, Calif., owned by a group of nonprofit health systems.
All the way with A.J.? ■ A.J. Hyland for president? Don’t hold your breath. But don’t be surprised if at some point you see his name on a Hyland ballot. The former CEO of Westlake’s Hyland Software Inc. said he is thinking about getting into politics at some point. It may never happen, and even if it does, Mr. Hyland said he isn’t sure what office he would seek. But he could start a third political party “that actually tries to make the country better instead of bowing to special interests,” he said via email, noting that he’s registered as an independent. If he did run for an office, he probably could make a large donation to his own campaign: Hyland Software, which makes content management software, has done particularly well since Mr. Hyland took over as CEO for his older brother Packy 12 years ago. It employed 1,168 people in Northeast Ohio as of Jan. 1, up from 134 at the start of 2001. The younger Mr. Hyland stepped down as CEO last month, saying he wanted to focus more on his family and philanthropic causes. He was replaced by chief operating officer Bill Priemer. — Chuck Soder
In Ohio, things are cooking
COMPANY: National Safety Apparel, Cleveland PRODUCT: WorkWear line in UltraSoft AC fabric The company describes the UltraSoft AC fabric as its “most comfortable flame-resistant material yet.” National Safety Apparel, which makes protective apparel for industrial safety workers, says its flame-resistant work garments have been revamped “to be more comfortable, modern, and customizable,” and the UltraSoft AC fabric is the latest variety to be added. Work shirts and coveralls are available in either 7-ounce medium blue or khaki, while coveralls and work pants are made with 9-ounce navy fabric. Each garment is offered with optional features to best fit the needs of the job. For instance, work shirts are available with multiple pockets, pocket flaps, and short sleeves. Work pants offer cargo pockets, flame-resistant hook-and-loop adjusters and additional knee reinforcement patches. The “enhanced softness” of the material comes from its 88% Pima cotton and 12% high-tenacity nylon blend, resulting in “an inherently flame-resistant finished product,” National Safety Apparel says. For information, visit www.nsamfg.com.
Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.
Advertising ROI, and then some ■ Local nonprofits looking to make a splash over the airwaves, in print, on billboards or other media could do so at a significantly discounted rate with the help of the Cleveland chapter of the American Advertising Federation. The group is looking for local nonprofits that want to maximize their media budgets, and AAF-Cleveland guarantees a three-toone return on the investment. For instance, if a group has an advertising budget of $10,000, AAF-Cleveland guarantees $30,000 in market value for the investment. “It is a deeply discounted amount,” said Jim Gagen, president at SynerG Marketing & Media in Lakewood and the chairman of the AAF-CLE project. “They see value in it.” This is the second year AAF-CLE has offered the service, which is made possible through donated air time and other media. Last year’s participants included Big Brothers/Big Sisters of Greater Cleveland, the Beck Center for the Arts in Lakewood and Guidestone, an agency that offers social services ranging from assistance with finding work to counseling for troubled youth. All the revenue generated from the program supports the AAF-Cleveland’s scholarship program, which assists Northeast Ohio college students pursuing careers in communication. Interested groups should visit www.aafcleveland.com/aafcle-non-profitprogram for information. — Timothy Magaw
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
Sharing’s a virtue: University Hospitals Health System is about to start sharing health records with other hospitals. UH is the first major hospital system in Cleveland that has agreed to share records through the state of Ohio’s health information exchange. The agreement is a big win for the CliniSync exchange, which is trying to get hospitals all over Ohio to share electronic medical records. Not only will UH’s 10 hospitals and 100 physician practices join the exchange — which now has received commitments from 71 hospitals and hundreds of private practices — but the agreement also shows CliniSync can win over big hospital systems.
five years, post annualized gross revenues of less than $100,000 and be otherwise unable to afford an attorney, Mr. Spring said. —Michelle Park
■ It feels like Ohio is the center of the restaurant universe — at least according to trade publication Nation’s Restaurant News. The Penton Media property included Melt Bar & Grilled and two Columbus-based chains —Jeni’s Splendid Ice Creams and Piada Italian Street Food — in its list of 50 breakout brands for 2013. Melt was singled out for “breakout factors” that include a “distinctive beverage program,” an “innovative approach to food/operations” and premium products. The Lakewood chain, started by Matt Fish, has four restaurants now and plans a Columbus eatery next year. Jeni’s has a store in Chagrin Falls and has made its products widely available in Northeast Ohio grocery stores. Piada has restaurants in South Euclid and Canton. In addition, Cleveland chef Jonathon Sawyer was named the MenuMasters Innovator for 2013. The awards are produced by Nation’s Restaurant News and sponsored by Ventura Foods. They honor outstanding menu development plus excellence in foodservice research and development. Publisher Randall Friedman said Mr. Sawyer “is truly a trailblazer in culinary innovation and never rests on his latest success.”
Cold comfort ■ There was a choice comment from a Cleveland commodity futures trader in a Wall Street Journal story about financial con man Russell Wasendorf Sr., who recently was sentenced to the maximum 50 years in jail after admitting to orchestrating a fraud at his futures brokerage and mislead-
ing regulators for almost 20 years. Wasendorf, 64, pleaded guilty last September to the fraud at Peregrine Financial Group Inc. that federal prosecutors said “had cost clients $215.5 million and masked a business that never was profitable,” according to The Journal. He also was ordered to pay the full amount of missing funds in restitution. But that’s a pipe dream; Wasendorf’s assets are being liquidated but they aren’t expected to come close to covering the shortfall. The Journal said Wasendorf’s sentence brought little comfort to Kevyn Davey, a 45-year-old independent commodity futures trader in Cleveland. Mr. Davey told the paper that he lost around $5,000 when Peregrine filed for bankruptcy. “To me, the fact that he rots in jail doesn’t matter,” he said. “The money would be the thing.”
A game of concentration ■ Poverty in the last decade has risen most rapidly in neighborhoods that already have a lot of poor people, according to a commentary from three researchers at the Federal Reserve Bank of Cleveland. The increasing concentration of poverty was found in 83 of the 100 metro areas studied by researchers Dionissi Aliprantis, Kyle Fee and Nelson Oliver. In the Cleveland Fed’s service area of Ohio and western Pennsylvania, “the concentration of poverty rose markedly in many major metro areas due to the severity of the recession in Ohio,” according to the bank. The researchers found that between 2000 and 2010, the total poverty rate of the United States rose from 11.3% to 15.3%. The government’s official poverty threshold is a family of four earning just more than $22,000 a year.
20130211-NEWS--24-NAT-CCI-CL_--
2/8/2013
11:48 AM
Page 1
BMW Cleveland
BMWCleveland.com 440-542-0600
2013 328i xDrive $
Lease From
The Ultimate Driving Machine®
299mo./ 36 mo. lease
*
BMW Cleveland 6135 Kruse Dr. • Solon • 1-866-210-6710 • www.BMWCleveland.com * 36 month lease with first payment, $2,950.00 cash or trade in and BMW bank fee due at delivery. License and taxes are extra. 10k miles per year, includes all BMW incentives. Offer expires February 28, 2013
Introducing the all new 2013 Range Rover
2012 Jaguar XJL $799/mo
SIGN THEN DRIVE
NOW TAKING RESERVATIONS
RANGE ROVER
6137 KRUSE DR., SOLON (440) 542-0601 www.jaguarcleveland.com
LAND ROVER SOLON CLEVELAND
Due at delivery applicable sales tax. Jaguar Financial Services 42 month lease. with 10,000 miles per year, $.30 per mile thereafter. To very qualified customers through Jaguar Financial Services. Offer ends 2/28/13. Stock #J01910.
6137 KRUSE DR., SOLON 1-866-210-6707 www.landroversolon.com
6135 Kruse Dr. • Solon • (440) 542-0600 • www.DavisAutomotive.com