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State may shift tech plan focus more to IT
Sensor tech center’s 2nd chance on right track State axed first crack after puzzling delays By CHUCK SODER csoder@crain.com
The big boxes of machinery sitting in Lorain County Community College’s Entrepreneurship Innovation Center represent the first equipment bought by a member of the Wright Center for Sensor Systems Engineering, an economic development effort that was torn apart and put back together after the state threatened to revoke its financial backing. Those boxes also represent a lot of opportunity for Jack Keller, owner of Spectre Sensors Inc. The maker of pressure sensors recently moved its six-person adminKeller istrative office from Bay Village to the entrepreneurship center’s third floor, partly because of the sensor testing and packaging capabilities that will be available just down the hall, Mr. Keller said. Spectre Sensors has a plant in the Buffalo area, but is considering opening a 10-person manufacturing operation somewhere in the region to be close to the sensor center and collaborators at NASA Glenn Research Center. “It sounds too good to be true,” Mr. Keller said. Spectre Sensors isn’t the only company interested in the capabilities the Wright Center is trying to create for sensor technology at Lorain County Community College and five other Ohio institutions. Each has lined up local industry partners that plan to use equipment they are buying with the help of $17 million the Wright Center doled out in August. The Wright Center’s goal is to create jobs by helping local companies develop new products and by attracting new businesses to the region, said center director Bill VerDuin.
Report identifies areas Third Frontier should consider next By CHUCK SODER csoder@crain.com
HOOPS HIT HOME Cleveland will transform into basketball central as MAC, NCAA tourneys return; Horizon League also possible By JOEL HAMMOND jmhammond@crain.com
A
ttention all Cleveland-area Purdue University alumni: You’d better sit down for this. One of your own is cheering for the Ohio State Buckeyes — who throttled the Boilermakers, 87-64, on Jan. 25, and played them again on Sunday — to nab the top overall seed in the coming NCAA men’s tourna-
ment. But Alex Cavazos has a good reason. The director of room operations at the Cleveland Marriott Downtown at Key Center hopes a top-seeded Buckeye team ends up at Quicken Loans Arena for the NCAA tournament. And that would mean a full hotel, not only at his place but likely all across town. See MADNESS Page 9
COLUMBUS — The next generation of Ohio’s Third Frontier economic development program may put more money into information technology than it has in the past. A report prepared by the Battelle Memorial Institute, a Columbus-based research organization, listed IT as one of six technology industries the Third Frontier should consider focusing on as the recently renewed “If (Ohio is) not program enters its second phase. at a competitive The other industries advantage (in identified as having strong IT), we’re going job-creation potential were to get our biomedical; advanced materials; advanced energy/clean clocks cleaned.” technology; aerospace; and – Rick Fearon, vice instruments and controls. chairman and chief The 10-year-old Third financial and planning Frontier initiative, which is officer, Eaton Corp. intended to spur the growth of a high-tech economy in Ohio, previously put little money toward IT companies and projects because the commission that oversees it believed Ohio didn’t have enough of a competitive advantage over other regions to justify the investment. The Battelle report, presented last Thursday, Feb. 17, at a meeting of the Third Frontier Advisory Board, which helps guide the commission, suggested funding additional studies analyzing Ohio’s ability to capitalize on market opportunities in each of the six areas. See TECH Page 21
INSIDE New face in town
STEVE BENNETT ILLUSTRATION
Michael Deemer, a new executive with Downtown Cleveland Alliance, will focus on reducing the office vacancy rate — currently 22% — in the city’s center. Read Stan Bullard’s story on Page 3.
08
See SENSORS Page 8
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SPECIAL SECTION
Read up on 20 finalists for the 2011 NorTech Innovation Awards, which honor the region’s top technologies ■ Pages 15-18 ■
Entire contents © 2011 by Crain Communications Inc. Vol. 32, No. 8
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WORK IT OUT
COMING NEXT WEEK Air travel in Northeast Ohio Crain’s takes a look at how changes in the airline industry may affect air service in Northeast Ohio and offers some perspective on what’s happened elsewhere.
They just don’t make work stoppages like they used to — or at least in the numbers they used to. The U.S. Bureau of Labor Statistics reports that in 2010, there were 11 major strikes and lockouts involving 1,000 or more workers, the second-lowest annual total since the government began tracking the data in 1947. Those 11 major work stoppages idled 45,000 workers for 302,000 workdays, up from the record lows of 2009, when just five stoppages idled 13,000 workers for 124,000 workdays. Average annual major work stoppages have declined in a big way over the decades:
List: Private equity and venture capital firms ..20 Personal View ..............10 Reporters’ Notebook ....23 What’s New ..................23
Average annual work stoppages
Total days idle from major work stoppages
1971-1980
269
228.18 million
1981-1990
69
102.65 million
1991-2000
34
60.26 million
2001-2010
17
17.32 million
Decade
REGULAR FEATURES Best of the Blogs ..........23 Big Issue ......................11 Classified .....................22 Editorial .......................10 Going Places................12
FEBRUARY 21 - 27, 2011
SOURCE: U.S. BUREAU OF LABOR STATISTICS
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700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Tim Magaw (tmagaw@crain.com) Health care & education Michelle Park (mpark@crain.com) Finance Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Marketing/Events Coordinator: Jessica Snyder (jdsnyder@crain.com) Advertising sales director: Mike Malley (mmalley@crain.com) Account executives: Adam Mandell (amandell@crain.com) Dirk Kruger (dkruger@crain.com) Nicole Mastrangelo (nmastrangelo@crain.com) Dawn Donegan (ddonegan@crain.com) Business development manager & classified advertising: Genny Donley (gdonley@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Production manager: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com) Circulation manager: Erin Miller (emiller@crain.com) Customer service manager: Brenda Johnson-Brantley (bjohnson-brantley@ crain.com) 1-877-824-9373
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Penske steers Porsche brand to Beachwood Automotive group’s $3.4M purchase of former Chrysler dealership a ‘pretty good price’ By STAN BULLARD sbullard@crain.com
JASON MILLER
Michael Deemer, previously an adviser to former Ohio Gov. Ted Strickland, now is charged with new business development in downtown Cleveland. “I’ll be a single point of contact for people looking to do business downtown,” Mr. Deemer said.
Publicly traded Penske Automotive Group of Bloomfield Hills, Mich., plans to start pitching peppy Porsches at a former Chrysler domain in Beachwood. Penske plans to move the recently acquired Porsche of Bedford to
Beachwood, said Penske spokesman Anthony Pordon. At the former Fred Baker Porsche Audi in Bedford, which Penske acquired last month, both Audi and Porsche were combined in a single store. It’s a practice Penske plans to end. “For the brands to grow, and to represent the customer and brand See PENSKE Page 8
POUNDING THE PAVEMENT By STAN BULLARD sbullard@crain.com
STEVE BENNETT
New exec part of Downtown Cleveland Alliance’s $1.25 million plan to ramp up attraction efforts THE WEEK IN QUOTES
M
ichael Deemer most recently played an insider role as an economic policy adviser and legal counsel to THE TASK(S) AT HAND former Gov. Ted Strickland. His Michael Deemer, the director of new role in downtown Cleveland Downtown Cleveland Alliance’s new will be far more visible — and will business development center, will focus require lots more shoe leather. mostly on reducing Cleveland’s office vacancy rate, which stands at 22%. Mr. Deemer, 36, on Jan. 31 “(Mr. Deemer) will be knocking on started work as director of the doors within 25 miles of downtown Cleveland to attract companies and new business development working to retain companies in downcenter for Downtown Cleveland town,” said DCA president Joe Alliance. He and two staffers will Marinucci. face the daunting task of trimming the city’s 22% office vacancy rate, a nearly 5 million-square-foot challenge. At Downtown Cleveland Alliance, a nonprofit that markets and oversees downtown development, Mr. Deemer is See DEEMER Page 19
“One of the important criteria for the projects is that you’re investing in a platform.” — Bill VerDuin, director, Wright Center for Sensor Systems Engineering. Page One
“Walmart promised to sell 100 million (compact fluorescent light bulbs). The number ended up being like 144 million. We ... made the packaging for every one.” — Tony Petrelli, president, CardPak. Page 7
“(Manufacturing’s) contribution to the national economy will be less than in the past years.”
“It’s got great facilities and great people. That was a huge factor in deciding to move it (to Solon) — the talent.”
— From a Personal View by Herb Kleiman. Page 10
— Chris Koch, president, Carlisle Industrial Brake and Friction. Page 11
INSIGHT
Hospitals eye improved readmission rates to avoid Medicare cut Feds target chronic diseases, ‘the drivers of cost’ By TIMOTHY MAGAW tmagaw@crain.com
Northeast Ohio health care providers are looking to slow the rate at which people with chronic diseases return to the hospital in order to pre-empt a move by the
federal government to siphon Medicare dollars from those institutions with high readmission rates. Starting in October 2012, federal regulators will withhold a portion of all inpatient Medicare payments — starting at 1% and rising each year — for hospitals whose 30-day
readmission rates for patients with certain chronic conditions are above the national average. Those withholdings could cost Ohio hospitals $17.8 million in the first year, according to estimates from the Ohio Hospital Association. “What this is going to do is force hospitals even more to make sure that the time is indeed appropriate for the person to leave and that they
are healthy enough and can go out on their own,” said Tom Campanella, director of the health care MBA program at Baldwin-Wallace College. It’s a problem that’s particularly relevant in Cuyahoga County, where the 30-day readmission rate for Medicare patients with heart failure is 26.1% compared with 24.7% nationally, according to data from the federal Centers for Medicare
& Medicaid Services. A group of Cleveland-area hospitals hope to reduce that percentage by at least 20% by March of next year. “These chronic diseases are the drivers of cost,” said Diane Solov, program manager for Better Health Greater Cleveland, a nonprofit coalition of health care professionals helping coordinate a local effort. See READMISSIONS Page 9
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A fresh spin on old manufacturing Precision Made Products receives national funding for its take on metal injection molding By DAN SHINGLER dshingler@crain.com
Majid Daneshvar is making metal do some pretty interesting things. Interesting enough, in fact, to receive funding from the National Science Foundation and a partnership with Case Western Reserve University’s Department of Materials Science and Engineering. The president of Precision Made Products of Brunswick is working in what’s known as metal injection molding, or MIM — a process that
molds metal the way others do with plastic. By processing the metal into pellets, similar in appearance to what a plastic injection molder might use, the metal can be melted and molded into any shape. “It’s been around for a few decades, but it’s getting new respect as a manufacturing process,” said Dr. Daneshvar. But no one’s done what Dr. Daneshvar can do, which is to turn two MIM parts into one, he says. MIM is a two-step process. After a piece of metal is molded in the first
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step, it goes through a process called sintering, in which high temperatures basically weld its molecules together. Before sintering, the pieces are “green” and break easily; after sintering, they have the strength of the steel or other metal of which they are made. Dr. Daneshvar can take two green pieces that have been molded in the first step of the MIM process, sinter them together and have them come out as one piece. On finished parts that he shows visitors, there is no seam where the two pieces were joined together, and it’s as though they were always one piece. In addition, his MIM-produced pieces do not shrink during sintering the way others do. While most MIM pieces shrink in size by almost 20% during sintering, those made with Precision Made Products’ special metal pellets shrink far less, Dr. Daneshvar said. Those two factors won Precision Made a $150,000 grant from the National Science Foundation to further develop the technology, as well a partnership with CWRU to help on the work. The lack of shrinkage allows the process to produce more intricate shapes than before, while the cosintering ability allows for the manufacturing of pieces that were previously impossible to make at all. For instance, some medical devices require metal pieces with intricate channels inside the part itself. Co-sintering solves this problem because that part can be made in halves — each with matching grooves — that can be joined with the channels inside. These channels are invisible from the outside of the part, and there’s no way to machine them inside once a part is made, Dr. Daneshvar said. “It offers a lot of design flexibility, and that’s the key,” said Dr. Jim McGuffin-Cawley, chair of CWRU’s Materials Science and Engineering department, who is working with Precision Made. Precision Made, which has 15 employees, is just beginning to commercialize products and is selling into the medical device arena. That will keep the company going and allow for some growth, but the real next step will be for the company to develop its own products with the technologies, Dr. Daneshvar said. “That’s the key to growth,” he said. “I don’t want to be just a MIM shop.” Ultimately, he said, he hopes to see the company develop medical devices or other products that will be its own, so that it might one day grow as big as companies such as Steris Corp. have done. For CWRU, the project is a chance to broaden the school’s engineering work, Dr. Cawley said. “There’s the reason I’m choosing to work with these guys,” he said. “I think it will lead to something that will not only help them commercially, but also will help us with process engineering at the university.” ■
Volume 32, Number 8 Crain’s Cleveland Business
KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. ©2010 KeyCorp ADL2403
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HEALTH CARE HEROES
Banks fill in economy-forced training gaps
Crain’s Cleveland Business on May 2 will publish its Health Care Heroes section, and we’re seeking nominations to help identify honorees among the dedicated professionals who work in Northeast Ohio’s world-class medical and wellness communities. The nomination period runs through March 25. In the Advancements in Health Care segment of the section, Crain’s will honor people and institutions in the following categories: ■Allied Health ■Health Care Advocate ■Nurse ■Physician ■Volunteer New this year to Health Care Heroes is a segment called Wellness that will honor the region’s Healthiest Employer. To tell Crain’s how your hero has touched the lives of people they serve and made a positive difference in the community, go to www.crainscleveland.com/ marketing/hcheroes.html. The 2011 Health Care Heroes luncheon is scheduled for the week of May 16. Tickets will be available beginning April 1.
Teaching budgets increase as books improve By MICHELLE PARK mpark@crain.com
The men aren’t strangers, but they pretend to be this February morning. They shake hands, introduce themselves and the mock consultation begins. Justin Flowers asks his “client� — KeyBank branch manager John D. Steinbrenner — what his financial goals are. Mr. Steinbrenner plays the slightly hesitant customer while Mr. Flowers covers the bases, reviewing the ways in which the client could allocate his assets. When the role-playing is over, Mr. Flowers immediately inquires: What would Oliver Mr. Steinbrenner, a banker with more than a dozen years in the business, have done differently? Mr. Steinbrenner suggests only a minor change. Not every novice banker is mentored as Mr. Flowers has been through the Key Community Bank Management Associate Program. His is the second class to undergo
the nearly year-long training, which was reinstated in 2009 after an eightyear hiatus. The renewed version is more hands-on, and its ultimate aim is to grow personal bankers and set them on a path to branch management. As balance sheets and the economy improve, banks aren’t just reinvesting in lending — they’re reinvesting in their people, too. Some observers say a dearth of bank training over the last decade has created a scarcity of skilled people. Paying people to train becomes less attractive in lean financial times, said Lisa Oliver, president of KeyBank’s Cleveland district. Ultimately, the in-house training programs Ms. Oliver said were “ripe� with budding bankers in the 1970s and ’80s faded in number. So did the number of well-trained personnel. “There weren’t new crops of bankers moving to Cleveland,� Ms. Oliver said. “There was a fairly finite group (here).� Training programs, she noted,
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are one way to create a sustainable flow of people with know-how. “We need to steal from each other or we need to grow them,� Ms. Oliver said. KeyBank’s management associate program, in which Mr. Flowers is involved, entrenches novice bankers in varied roles to teach them the ropes — products and customer service, for example — and pays them full-time salaries. Mentors also are provided. Six are training in Cleveland, with a total of 31 enrolled across four states in which the Cleveland-based bank operates.
Other banks jump in Thomas J. Fraser, executive vice president and chief lending officer for First Federal of Lakewood, agreed that bank training waned as the industry became more focused earlier this millennium on booking loans than developing skills. Some of the lack of training, Mr. Fraser said, is evident in the loans that were made that can’t be supported in today’s economic environment. “I think the industry as a whole has moved back toward making sure everyone is current on the best lending practices and the best ways to service customers,� Mr. Fraser said. First Federal of Lakewood increased its training budget probably 40% in 2010 over 2009, and a similar increase is planned this year, too, Mr. Fraser said. It has ramped up both sales and credit skills training. To the southeast, Valley Savings Bank in Cuyahoga Falls last October began its “Valley Savings University,� an in-house training program that takes place outside bank hours. All 32 employees are paid to undergo the training — something president and chief operating officer Ann H. Durr said was motivated by increased compliance demands and newly added products. Such internal training is “fairly unique� for institutions of Valley Savings’ size (roughly $105 million in total assets), Ms. Durr said. She’s confident it will increase employee confidence and productivity. The training trend extends beyond Northeast Ohio: Both the Ohio Bankers League and the American Bankers Association have recorded modest growth since mid-2010 in registrations for the training programs they offer.
Motivation to train Many banks are increasing training for lending personnel because there will be more creditworthy borrowers as the economy improves, said James Thurston, spokesman for the Ohio Bankers League. Mr. Thurston said the league is debuting this year 11 training programs focused on commercial lending. First Federal of Lakewood expects its educational efforts to pay off in increased revenues, loan volumes and performing loans, all of which already are up, Mr. Fraser said. He believes the enhanced training also will result in lower credit losses and costs. At Charter One Bank, which has 115 Northeast Ohio branches, business banking specialists are undergoing or already have completed an advanced certification, said Maria Tedesco, director of business banking. Both those specialists and branch managers are taking a new, three-day program geared toward teaching them to better assist small businesses in managing cash, among other things. “What I want to see is growth in our lending, in our deposits and our cross-sells of ancillary services to customers,â€? Ms. Tedesco said. “That’s when I know when we’re having more robust relationships, that this is paying off.â€? Another reason for the growth in training: Today’s bankers are recognizing there’s a need to develop the next generation of leadership as baby boomers who waited to retire in light of the recession begin doing so, said James G. Edrington, senior vice president within the American Bankers Association’s professional development group. Mr. Flowers, a May 2010 Cleveland State University grad who worked as a part-time teller for KeyBank before beginning its management associate program in June, cites many positives from his training. Among them are meeting senior leadership and gaining a better grasp of the complexity of the profession. “I think with banks like Key looking to reinvest in people, ultimately, you’re giving people mobility (to go) up, down, horizontal, wherever their passions are,â€? Mr. Flowers said. â–
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Customers reuse Solon packaging specialist’s recycled product CardPak’s sales double over last two years By DAN SHINGLER dshingler@crain.com
CardPak legally can’t print money, but that hasn’t stopped the maker of paperboard packaging products from finding a way to turn green paper into cash. CardPak’s paper is green in the sense that most of it has been recycled — a selling point that has allowed the company in Solon to boost sales 50% in the last two years, to $30 million in 2010, said president Tony Petrelli. Often, CardPak’s customers want packaging that will bolster their own environmental image or the reputations of specific products. That was the case in 2007, when CardPak landed a contract with GE Lighting to provide packaging made with recycled paper for the company’s energy-efficient compact fluorescent light bulbs. Mr. Petrelli had laid out a new strategy when he arrived at CardPak in 2006 — he wanted the company to be a leader in environmentally friendly packaging and also an expert on warehouse-club packaging. With the GE deal, the first part of the strategy paid off in a big way, setting the stage for further expansion into renewable packaging. “Walmart promised to sell 100 million” of the bulbs, Mr. Petrelli recalled. “The number ended up being like 144 million, and we were fortunate in that we made the packaging for every one of them.” Mr. Petrelli’s approach to growing the business has been two-pronged. First, he offers customers recycled paper for their packaging, along with designs that use less plastic — and sometimes less packaging, too. That’s important for companies such as GE that are appealing to consumers’ environmental conscience when marketing their products, he said. But, along with the green packaging, Mr. Petrelli has turned CardPak’s attention toward packaging not only for Walmart, but for the many warehouse clubs around the United States, including Sam’s Club and Costco. Those selling environments require a special kind of packaging in which the package for a product frequently doubles as its main display. While a traditional retailer might have a display case or signage to advertise a featured product, warehouse stores rely on products that can sit upright in their shipping boxes and advertise themselves to shoppers walking down the aisle. Devising packaging that ships, displays and then sells a product isn’t as easy as it sounds, said Tom Mendosa of the retail consulting firm Hudson Access Group. “Your only ability to communicate with the customer is right there,” Mr. Mendosa said. “The package is literally your first and only shot that you’re going to get at that customer, so it has to be a home run.” Mr. Mendosa said he has worked twice with CardPak on behalf of his clients, which were selling products in warehouse clubs. Most recently, he said his client Roku Inc. has used CardPak’s packaging to secure a place for its popular digital media players in warehouse stores. With warehouse clubs playing a bigger role in the marketing of more products, Mr. Mendosa said vendors
that can approach those stores with well-designed packaging that is up to the retailers’ specifications have a distinct advantage. CardPak has become expert at helping suppliers do so, he said.
Carbon-conscious buyers What’s more, Mr. Mendosa said, green packaging is a selling point not only with consumers, but also with retailers themselves. “Buyers, particularly at Walmart, are directly compensated for reducing their carbon footprint,” he said. “So you, as a vendor, benefit from coming up with greener packaging designs like CardPak develops.” Between the green packaging and the warehouse-store expertise,
CardPak’s sales have jumped from $20 million a year in 2008, Mr. Petrelli said. The company employs 115 people, a number that has not gone up along with sales, as new equipment and improved production methods have allowed CardPak to take on more work with its existing work force. Mr. Petrelli doesn’t think the company’s growth is over yet. Companies only are beginning to move into greener packaging and still are abandoning packaging products such as plastic clamshell packages in large numbers. CardPak is positioning itself to grow by investing capital back in the business, Mr. Petrelli said. Last year, it brought in a new printing press at a cost of $6.5 million, he noted. ■
PHOTO PROVIDED
CardPak’s packaging has resonated with environmentally conscious customers.
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Sensors: Each location will have different focus continued from PAGE 1
The Wright Center’s first attempt didn’t go so well. The state in December 2006 awarded a coalition led by Cleveland State University a $23.8 million grant from the Ohio Third Frontier economic development program for a sensor center. Two years later, the state froze the center’s financial support because it had spent only a few million dollars of the grant money. The group hadn’t purchased any of the equipment it said it would buy, it hadn’t yet built the headquarters it had planned to construct at Cleveland State, and it had raised just $34 million in matching funds, well below the $50 million it promised to raise from university
and industry partners. The new plan scrapped the construction of the headquarters and instead moved a planned sensor packaging center to existing space at Lorain County Community College. The Wright Center also was able to reduce the amount of capital it was required to raise to about $30 million, Mr. VerDuin said. He was named center director in 2008, so he said he does not know all the reasons why the center stumbled early on. However, Mr. VerDuin said some of the industry members on the Wright Center’s previous board were grant recipients too focused on their own companies’ projects. The new board, chaired by Biomec founder and ElectroSonics Medical
CEO Trevor Jones, has shown greater interest in economic development. “The new board is more outward focused,” Mr. VerDuin said. Mr. VerDuin said the new board favored proposals that could help create new products quickly while laying a foundation for industry collaborations beyond the ones listed in the application. “One of the important criteria for the projects is that you’re investing in a platform,” he said.
Playing to their strengths The Wright Center over the past few weeks finished approving contract terms for the last of its grant recipients. Now all six sensor center sites are free to move ahead with
equipment purchases. They also received smaller amounts of money for operating costs. Different sites will have different capabilities. The Cleveland Clinic Lerner Research Institute is targeting companies that want to create sensors for health care products, such as a sensor it is developing with Parker Hannifin Corp. of Mayfield Heights. The sensor would control a device that would deliver drugs into a patient’s eye. The University of Akron, however, aims to develop sensors for advanced energy technology. For instance, it will use some Wright Center money to alter a dynamometer normally used to measure the power of gasoline engines so that it could be used
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on hybrid systems. As for the other grant recipients, the Austen BioInnovation Institute in Akron will focus on sensors to diagnose medical problems and monitor patient health, Youngstown State University will focus on sensors for manufacturers, and Ohio State University will work on sensors that can detect electromagnetic waves in the terahertz spectrum, which could be used by the military and a variety of industrial sectors. Sensor makers need plenty of help figuring out how to package what they make, said Chris Mather, managing director of the community college’s sensor site. The country has only a few centers focused on packaging, Mr. Mather said. Plus, when he was president of Ion Optics in Cambridge, Mass., packaging was as big of an issue as building the sensors themselves, he said. Mr. Mather is helping the community college build relationships with out-of-state companies and institutions that have sensor fabrication labs. They then could recommend sensor makers check out the college’s packaging and testing center. Those companies would pay fees to use the center, though they could follow Spectre Sensors’ lead and look for nearby office space. “Doing things like this center has a huge indirect effect over time,” Mr. Mather said. ■
Penske: Dealer ‘trade’ rare in recent times continued from PAGE 3
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attributes properly, you have to separate the facilities,” Mr. Pordon said. In terms of demographics and traffic count, it makes sense to move the Porsche dealership to Beachwood, he said. Penske set the move in motion Feb. 7 by paying nearly $3.4 million to Jordan Real Estate Investments LLC of Beachwood for the former Chrysler dealership at 25855 Chagrin Blvd., according to Cuyahoga County land records. In a different economy, the 3.8acre site on the busy Chagrin corridor might have been an attractive purchase for a retail or office developer, as it sits near the Interstate 90 interchange and the Science Park development of office buildings. However, soft office and retail markets and the continuing real estate credit crunch have stifled most such projects. Jeffrey Sherman, a principal at the Sherman-Andrezejczyk property appraisal firm in Willoughby, said based on recent nearby sales, the buyer got a “pretty good price” for the former dealership. A former Dairy Queen on a smaller Chagrin site near Eton Chagrin Boulevard shopping center in Woodmere Village sold for $43 a square foot last summer; Penske paid about half that amount, Mr. Sherman said. However, Mr. Sherman said, few car dealerships have traded so far in the region due to the weak economy, and he is eager to see more such transactions to determine the trend in dealership valuations. Beachwood Mayor Merle Gorden said designs for Penske’s planned Porsche store will be reviewed by the city’s planning commission late this month. Penske operates 325 dealer franchises, mainly in the United States and the United Kingdom. ■
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Yes, this year’s men’s Final Four is in Houston, but for two weeks in March, Cleveland will be basketball central as the city plays host first to the Mid-American Conference tournament and next to eight games of the opening rounds of the NCAA tournament. “It will generate a great buzz for us,” Mr. Cavazos said. The MAC men’s tournament is back for its 12th season at The Q beginning Thursday, March 10, while the MAC women also will play in Cleveland for the 11th straight year, starting March 9. The MAC tournaments each bring eight teams to the city for quarterfinal games, with the lucky ones staying through Saturday, March 12, when each tournament’s championship game is played. Conference spokesman Ken Mather said those games translate into about 1,000 room nights for area hotels that accommodate players, administrators, officials, bands and cheerleaders. Mr. Cavazos said the Marriott hosts the eight women’s teams that advance to play in Cleveland, and each team usually gets a block of 25 to 30 rooms in the 400-room hotel. The men’s teams stay at the nearby Renaissance Cleveland Hotel; the Ritz-Carlton Cleveland also sees “strong transient” demand from the MAC tournament, according to director of sales and marketing Lynn Coletto. Traffic will pick up once the teams coming to Cleveland are determined, Ms. Coletto said; the first round of both the women’s and men’s tournaments are played at campus sites, on March 6 and March 8, respectively.
The Bucks would mean bucks Only days later, Cleveland State University plays host to openingweekend games in the NCAA men’s basketball tournament, on March 18 and March 20 at The Q. It’s the third time in 11 years the opening rounds of the tournament will be played here. Mr. Cavazos said it would be ideal if Ohio State, which won its first 24 games of the season before losing at Wisconsin on Feb. 12, earned the tournament’s No. 1 overall seed; the selection committee gives preference to that team and would place it at the nearest site, in this case Cleveland. Positively Cleveland, the region’s convention and visitors bureau, said the economic impact figure used for the NCAA tournament’s past two visits — in 2000 and 2005 — is $9 million per year; eight teams will come to Cleveland, with two eventually moving on to the round of 16. Mr. Cavazos said the list of hopefuls also includes schools such as Pitt, which is relatively close, has a big basketball following and currently is in line either for a No. 1 or No. 2 seed. The NCAA only allows hotels to host one team, but there are no restrictions on media; CBS in April signed a new agreement to broadcast the weeks-long tournament and brought on Turner Sports as a partner. There now will be four different networks airing games, increasing the number of media and crews handling coverage.
On the Horizon In addition to those two events, there also is a chance the Horizon League tournament will be played at
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WHAT’S ON TAP MAC men’s tournament Quicken Loans Arena First round: Tuesday, March 8 (at campus sites) Quarterfinals: March 10 Semifinals: March 11 Final: March 12, 6 p.m. (ESPN2)
MAC women’s tournament Quicken Loans Arena First round: Saturday, March 5 (campus sites) Quarterfinals: March 9 Semifinals: March 11 Final: March 12, 1 p.m. (SportsTime Ohio)
NCAA men’s tournament Quicken Loans Arena First-round games: Friday, March 18 Second-round games: March 20
Horizon League men’s tournament Quarterfinals and semifinals at campus site of No. 1 seed; championship game at highest remaining seed First round: March 1 (campus sites) Quarterfinals: March 4 Semifinals: March 5 Championship: March 8, 9 p.m.
CSU’s Wolstein Center, depending upon how the rest of that league’s schedule plays out. The conference’s No. 1 seed plays host to the tournament’s quarterfinal and semifinal games (March 4-5), with the championship game — set for Tuesday, March 8 — played at the campus of the highest remaining seed. Cleveland State, despite an inconsistent season, still can win the crown. After last Wednesday’s tight win over Wright State and Valparaiso’s loss to Milwaukee, the Vikings were a halfgame ahead with two conference games remaining. If Valparaiso wins its final three and CSU its final two, though, the Crusaders likely would win the tiebreaker, which would be the teams’ records against the No. 3 seed. CSU lost twice to the probable No. 3 seed, conference power Butler, while Valparaiso split two games. The tournament the last three seasons has been played at Butler, which calls Indianapolis home. A spokesman from the Indianapolis Convention and Visitors Association said the group had no estimate of what the tournament has brought to town, but a conservative estimate would be in the range of 15 to 20 rooms per night for players and coaches, not counting administrators, cheerleaders and pep bands. Holding the tournament here would help CSU on the court, as it seeks to get back to the NCAA tournament: The Vikings are 14-1 at the Wolstein Center, and with the No. 1 seed, would get a bye into the semifinal round. And while the conference keeps all ticket revenue, CSU would keep concession money. Over the last two seasons, the Horizon League semifinal and championship games together have drawn an average of 5,994 fans. “It would be a huge benefit, for us and the city,” said CSU spokesman Brian McCann. ■
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Readmissions: Primary care docs play role continued from PAGE 3
To curb costly readmissions, local hospitals are looking at ways through various national collaborative projects to educate their patients better and provide suitable follow-up care. Many of the precautions — such as following up with patients or ensuring they understand what to do after they’re discharged — aren’t revolutionary ideas, but they’re part of a growing health care model focusing on preventive care. “It seems obvious what should happen, but there are all sorts of barriers to the right things actually happening,” said Dr. Eric Bieber, chief medical officer at University Hospitals. Health care professionals say a key component of reducing readmission rates is properly educating patients rather than simply sending them home with lists of instructions. At Southwest General Health Center, physicians and nurses are asking patients and their family members to repeat their discharge instructions to ensure they fully understand what they should be doing when they go home — a process that already has shown results. The hospital’s 30-day readmission rate for patients with heart failure at the start of 2010 hovered at 24% but fell
to 18% by the end of the year, according to Leslie Szabla, Southwest’s vice president for quality. “I really believe by partnering with the patient we’re doing the right thing,” Ms. Szabla said.
A primary concern Hospital officials say another important aspect of reducing readmission rates is ensuring that patients connect with primary care physicians shortly after they’re discharged. So, many institutions have implemented programs to follow up with patients to ensure they’ve made appointments and are taking other appropriate measures. “You have those discussions with the patient, and if those things aren’t working, it alerts us we have other issues to address,” said Cathy Koppelman, UH’s chief nursing officer. The Cleveland Clinic and its community hospitals recently beefed up their case management staffs to better identify patients at the highest risk for readmissions in order to connect those patients with the proper care agencies after discharge, said Dr. David Bronson, president of the Clinic’s regional hospitals. Traditionally, patients had been left to fend for themselves once they left the hospital. But as federal
health care reform takes hold, UH’s Dr. Bieber said health care providers are shifting toward an accountable care model that focuses on the “best outcome of patient irrespective of where care is delivered.” University Hospitals has a pilot program that will send nurses to a heart failure patient’s home within three days if that person doesn’t meet Medicare’s reimbursement requirements for home care services. Though the health system absorbs the cost, Ms. Koppelman said the program has reduced readmissions and will be expanded to serve other patient populations. Aside from shaking off the impending Medicare payment penalties, hospital officials say the efforts to reduce readmission rates are aimed at improving patient satisfaction. Simple steps such as offering patients literature in different languages and scheduling follow-up doctor visits can have a long-lasting impact, according to Dr. Giesele Greene, chief medical officer at St. Vincent Charity Medical Center. “That’s a significant economic opportunity as well, but I think more importantly the impact to the patient and quality of life is going to be the big success story,” Dr. Greene said. ■
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PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Open letter
D
ear Mr. President: We understand you’re going to be in Cleveland this week to talk to small business leaders about how this country can win the future. We believe if you want the entrepreneurial spirit of small business to blossom, you’ve got to cut the size of the federal deficit and the federal government in big ways. For years, our country has been caught in a vortex where private-sector employment as a percentage of total employment is going down and the percentage of public-sector employment is going up. It’s an employment model that will collapse under its own weight, because the public sector does not create jobs that pay for themselves. Public-sector jobs ultimately are sustained by the taxes paid by private-sector employers and employees. And the more public-sector employees there are, the more taxes are required to pay their salaries. The higher the tax burden on private-sector employers, the less they are able to invest in new ideas, new equipment and new people. And the higher the tax burden on people, the fewer goods and services they can buy, which reduces the need for private-sector employers to invest in new ideas, new equipment and new people. Hence, the vortex. The thought of cutting jobs of any sort during a period of high unemployment seems counterintuitive, and suggestions that public-sector jobs should get the ax in order to reduce big federal and state deficits have raised the ire of union leaders representing government workers. But, Mr. President, job cuts are precisely the strong medicine recommended by the blue-ribbon panel you appointed a year ago to study how to bring the federal budget into balance by 2015 and so improve the nation’s fiscal outlook. It is interesting that the final report issued in December by your National Commission on Fiscal Responsibility and Reform is titled, “The Moment of Truth.” The title and the report’s contents both suggest that the United States has reached a crossroads, and it cannot continue to bear the burden of a government that spends far more than it takes in, in part because it has become too large an employer. As the report states in its preamble, the commission’s members “share a common belief that America’s long-term fiscal gap is unsustainable and, if left unchecked, will see our children and grandchildren living in a poorer, weaker nation. … Every modest sacrifice we refuse to make today only forces far greater sacrifices of hope and opportunity upon the next generation.” Part of the sacrifice must come in reducing the federal work force, which consists of 2 million employees, not including contractors. The commission calls for eliminating 10% of those jobs by 2015. It also backs a three-year pay freeze for federal workers and Defense Department civilians. Mr. President, proving to employers large and small that the federal government is serious about getting its fiscal house in order would be the biggest step your administration could take to assure the nation’s health over the long haul. Private employers would have confidence that more of their dollars could go back into their businesses, which would put hiring back where it belongs.
FROM THE PUBLISHER
Midsize companies have big impact
A
this process,” he says, “is that our metrics s the economy starts to thaw — measure the value mid-market companies and perhaps even heat up in are creating. The higher each company’s some sectors — our attention value, the more the enterprise is conreturns, as it does every spring, tributing to the region in terms of to the vital and dynamic middle-market good jobs and thriving, sustainable busicompanies that are essential to Northnesses.” east Ohio’s present and future. The awards program — designed to The Crain’s Leading Edge Awards are honor 100 companies for what intended to shine a spotlight they do for their own employees on the mid-market companies BRIAN and management as well as leading the way in creating TUCKER what they do for the region — value and prosperity in a 17will be held on Wednesday, May county region that is our corner 18, at Cleveland State University. of Ohio. The program honors One particular standout comcompanies that export a sizable pany will be honored with the portion of their goods and Richard Shatten Civic Distincservices outside the region and tion Award. have sales between $1 million You also can refer another and $750 million. company at the EDGE (EcoKirk Neiswander, creator of nomic Development through Growth & Entrepreneurs EDGE and the awards Entrepreneurship) web site by clicking program, knows how important it is to on “Refer a Company.” Deadline for recognize these companies, all of which nominations is Friday, March 4. submit a detailed nomination form We’ll see you at the dinner! (available online at www.edgef.org/ nomination-form). **** CONGRATULATIONS TO THE MEMBERS “One of the benefits of participating in
of Cuyahoga County Council for approving Bonnie Teeuwen as the new public works director and refusing to bow to pressure from a state association interested in preserving the status quo. By confirming the appointment of the former Ohio Department of Transportation district director, the council rejected the position of the County Engineers Association of Ohio, which argued that the job must be filled with a person who is both an engineer and a certified surveyor. As County Executive Ed Fitzgerald so aptly put it, it’s important to have the best person in that job — Ms. Teeuwen is a trained engineer — who can hire surveyors as they’re needed. This is about what’s right for our future, not what some outmoded law requires in each Ohio county. That’s precisely why voters here threw out the concept of county government “as it always had been done.” Look how far that got us, in wasted taxpayer funds in the pockets of corrupt officeholders and crooked businessmen. ■
PERSONAL VIEW
Join tech parade, or risk being left behind By HERB KLEIMAN
L
et’s try something different. Over the past few years, a multitude of information sources along with the ubiquitous Internet have become routine. The future only offers more of the same. We in Northeast Ohio have to accommodate this explosion of technology — or be left behind. I suggest an increase in communication networks similar to those first introduced about 50 years ago in Silicon Valley. The major interest then was the hardware end of the business. This activity included making the chips and the equipment that use them. In the 1950s through the 1970s, it helped the formation and the initial growth of Intel, Scientific Data Systems and Advanced Micro Devices, to
name just a few of them. More recently, with software as the focus, companies such as Amazon, Google, Microsoft and eBay have been using the informal network in much the same manner as their predecessors. We here have long depended upon our traditional strength and excellence in manufacturing, a capability still much in demand. But its contribution to the national economy will be less than in the past years, and especially so in the previous decades. It is best exemplified by our close ties with the production of automobiles and trucks. Even if this industry were to regain its past glory, our relationship will be drastically different and certainly downsized. Consider that 50 years ago foreign penetration of the U.S. market
was limited to Volkswagen and a few high-end models — altogether only a few percent. Today Japanese, South Korean, western European and other foreign manufacturers are well-entrenched. This trend will continue, but at a slower pace. How should our community respond to this global competition? This subject has been argued for many years, with the inevitable hand-wringing. Recently, various plans to develop and foster incubators in Shaker Heights and other communities have emerged. These entities present a new or renewed interest in fostering growth. Many of the programs recently tried have not yet worked. They will take years to take hold. The incentives are not new: low-interest loans, outright grants, incubator space for See VIEW Page 11
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No. I can understand the new rule they have at the hospitals because they’re trying to promote health. (But) you’ve got people who smoke who can perform their job and some people who don’t smoke who can’t perform their job.
Should an employer be allowed to hire someone who’s a poor driver … someone who’s a social alcoholic? I can’t say yes or no for a smoker because there are so many other vices in the world.
No, because then they have to start discriminating against everything from being overweight to other bad habits people might have. It’s a really slippery slope. Until smoking becomes fully illegal, you can’t.
No. I’m a smoker. It’s a choice that someone has that’s being criticized and penalized.
➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.
Hawk buyer moves brake unit HQ to Solon Carlisle brings about 20 high-paying jobs there By DAN SHINGLER dshingler@crain.com
It’s often bad news when an outside giant comes in and buys a local company. But since Charlottebased Carlisle Cos. purchased Cleveland-based Hawk Corp. last October for $413 million, things have worked out well locally — for Solon, at least. Instead of moving Hawk’s headquarters from downtown Cleveland to Charlotte or to Indiana, where Carlisle’s brake and friction subsidiary is headquartered, Carlisle decided to make Solon the headquarters for its entire brake and friction unit, said Chris Koch, president of the Carlisle Industrial Brake and Friction subsidiary. Solon economic development manager Peggy Weil Dorfman is happy with that decision. Asked how Solon was doing lately, she said, “Much better now that Carlisle is here.”
To be fair, Hawk, which makes brake and friction materials for a broad range of vehicles and equipment, already had some significant operations in Solon, where it employs about 75 workers, including its executive staff and sales and marketing team, as well as research and engineering professionals. Its major local production operations are in Medina, where it employs about 400 people, and Akron, where it has 35 workers. It made sense for Carlisle Industrial Brake and Friction to move to Solon because Hawk represents about two-thirds of the unit’s total annual revenues of more than $300 million, said Mr. Koch, who is moving to Solon to run the business. The two companies make similar brake and clutch products, but they do so for different uses and market segments, he said. Hawk was headquartered in downtown Cleveland, but that was mostly because its former owner,
Ronald Weinberg, had an office there. Most of the company’s corporate offices were in Solon, Mr. Koch said. “It’s got great facilities and great people,” Mr. Koch said of Hawk’s Solon operations, which operate under the name Wellman Products Group. “That was a huge factor in deciding to move it here — the talent.” The move won’t mean a big jump in employment for Solon. Ms. Dorfman said she has been told by the company the relocation probably will mean about 20 new employees, at least at the start. Mr. Koch said the staff could grow, along with the company, over the long term. But the jobs Carlisle is bringing will be executives and their support staff — the kind of high-paying professional jobs cities such as Solon seek. Perhaps more importantly, from Ms. Dorfman’s perspective, it cements Carlisle a little more firmly in town. Mr. Koch agreed. “It’s a commitment to Ohio and a commitment that we aren’t going to be pulling things out,” he said. ■
View: New-age dialogue can benefit cities continued from PAGE 10
startups and expert review panels. Dependence upon these traditional solutions is most uncertain at best. We have to look elsewhere. In his new book, “Triumph of the Cities,” Edward Glaeser points out that cities are far from withering in this new global age of instantaneous information sources. They have taken on new importance as they encourage face-to-face communication and the rapid exchange of ideas. This new dynamic that has evolved over the past two decades is natural to the city. The theme is that cities encourage quality conversations. Dialogue should be welcomed and encouraged. The national headlines may be beneficial. Apple (once Apple Computer) is now the most-valued hightech company in the world, based on its market capitalization. The
company always has resorted to its own immediate area and communication channels to satisfy its employee rolls. In the heart of Silicon Valley, it has filled its key employee slots by first seeking them within the local community, especially at the lower and middle levels of the engineering/scientific ranks. Its recent success has been spectacular. As Apple approaches $100 billion this year, let’s not forget that its prospects were not always so bright. Over the years, it had experienced numerous layoffs. Anyone looking to work there, or in fear of losing his job, would covet such information — the earlier, the better. I suggest the establishment of more coffee houses, such as Starbucks and its many offshoots. This move will help toward breaking from the isolation of our cubicles and screens. For example:
■ Employees would like to know that a geographical area offers several opportunities for their skills. This is especially true for those initially recruited from outside the community. Once entrenched in the job, especially if married, he or she can look locally for another job should a layoff occur. ■ Employers may seek to hire the best and most talented locally. They favor those who do not incur exorbitant moving costs. Conversely, were they to have layoffs, they could count neighboring companies to hire at least some of its ex-employees. ■ Even beyond employment news, there is the ambience and dynamic among those working in a similar industry. Roughly, everyone speaks the same language, knows the same people and wants to keep up with the latest happenings. No one is alone or isolated. ■
HELPING GREAT IDEAS TAKE ROOT THE TEC TECHNOLOGY CHNOLOGY GREENHOUSE
is a new type of business incubator or driven by a unique public-private collaboration. Strategic partners nture, include the City of Mentor, CADVenture, Inc. and Lake Erie College – each contributing an important nutrientt to wth. enhance successful business growth. h are d t i d We’re looking for entrepreneurs who determined to see their innovative ideas blossom into commercially viable product-driven businesses. The Technology Greenhouse provides the ideal environment and all the critical services you’ll need, including early-term financial assistance, office space, state-of-the-art engineering software, technical training, coaching and business plan development. To accelerate your seedling idea into a revenue-generating reality, contact Tom Thielman, program administrator, at (440) 974-5739 or Thielman@cityofmentor.com or visit MentorTechnologyGreenhouse.com.
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GOING PLACES JOB CHANGES FINANCE
and Sean Brady to associates; Melissa Costigan to administrative assistant.
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M. Ernst to partner.
communications.
ROETZEL & ANDRESS LPA: Matthew Golish and David Oeschger Jr. to associates.
REAL ESTATE
MARKETING
KEYCORP: Tim Lathe to executive vice president and sales executive, Key Community Bank; Tim Swanson to head, Key Private Bank; Tom Tulodzieski to Great Lakes regional president.
SS&G HEALTHCARE SERVICES LLC: Cindy Cairns to practice manager. STOUT RISIUS ROSS: Patrick A. Brown to managing director.
OPTIEM LLC: Jonathan Morgan to user experience analyst; Julianne DiLorenzo to front-end developer.
FINANCIAL SERVICE
HEALTH CARE
GRANT THORNTON LLP: Dave Reynolds to federal tax manager.
CENTURY OAK CARE CENTER: Tim Dye to administrator.
SKODA MINOTTI: Brian Bailey to manager; Katie Reinhard, Amanda Riccardi, Beth Greenwood and Amanda Franz to staff accountants.
METROHEALTH: Dr. Catherine C. Fallick to Heart & Vascular Center; Dr. Ali Totonchi to Division of Plastic Surgery.
SMART BUSINESS NETWORK INC.: Tammy Wise to vice president, business development, Content Marketing Division.
SS&G: Matthew Weber to manager; Suzanne Bondor, Brittany Joseph, Eugene Sapo, Stephen Kresnye
LEGAL BRICKER & ECKLER LLP: Christopher
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HOME TEAM MARKETING: Andrea Essig to administrative assistant.
NONPROFIT CIVIC COMMONS: Mike Shafarenko to president. TEAM NEO: Jenny W. Febbo to vice president, marketing and
CHICAGO TITLE INSURANCE CO.: Claudia Demarco to national commercial service; Pam Fultz to commercial escrow officer. MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES: Michael S. Barron to senior director, National Multi-Housing Group.
Reynolds
Ernst
Golish
Oeschger
Essig
Morgan
DiLorenzo
Barron
Kline
SERVICE CORPORATE UNITED: Vicki Ferraro to member engagement manager; Barbara Sexton to director of member development; Katie Virtue to manager of category development. EXPERIENT: Christine Blythe to business development manager; Bill Gibson to strategic sales executive;
Todd Belebczuk to specialist, marketing support. PRIMESOURCE HEALTHCARE SYSTEMS INC.: Eric Kennerk to account executive. RIOT CREATIVE IMAGING: Jeffrey Ardo to creative media sales specialist.
TECHNOLOGY AUDIO VIDEO INTERIORS & SAFETY TECHNOLOGIES: Kevin Kramer to purchasing agent.
BOARDS CENTER FOR PRINCIPLED FAMILY ADVOCACY: John D. Sayre to president; Brian R. Potter to president-elect; Sarah Gabinet to treasurer; Sarah E. English to secretary. INTERNATIONAL SOCIETY OF CERTIFIED EMPLOYEE BENEFITS SPECIALISTS, NORTHEAST OHIO CHAPTER: Christopher Goldsmith (Sibson Consulting) to president; Mark Fiala to vice president; Tom Scurfield to secretary; Steve Jackson to treasurer. KENDAL AT HOME: Georgia J. Anetzberger (Cleveland State University) to chair. LEGAL MARKETING ASSOCIATION: Jeanne Hammerstrom (Benesch, Friedlander, Coplan & Aronoff LLP) to president.
It’s time for your business to accomplish big things again.
NORTHEAST OHIO TRADE AND ECONOMIC CONSORTIUM: Tracy Drake (Columbiana County Port Authority) to chairman; Rick Hale to vice chairman; Iris Harvey to secretary; Steve Paquette to treasurer. OPEN DOORS ACADEMY: Roger S. Frank (Little Jacket) to president. ROCKY RIVER PUBLIC LIBRARY: Catherine Manzo (Lakewood Hospital) to president; Audra Bednarski to vice president; William Henson to secretary.
Now’s the time to reinvest in your business’ future. The last few years haven’t been easy. It’s been work just to maintain the business you’ve built. It’s time to get back to growing it. Whether that means buying new equipment, improving your working capital, or reinforcing your overall finances, Fifth Third Business Bankers can help you take action to get your business moving forward with confidence. Stop in your local Fifth Third Banking Center, call 1-866-534-7249, or visit 53.com, and let’s get your business moving.
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SPACES: John Farina (Cleveland Museum of Art) to president; Scott Richardson to immediate past president; Arnie Tunstall to secretary; Nancy Fisher-Crum to treasurer; Lori Kella to vice president, programming and exhibitions.
AWARDS AMERICAN INSTITUTE OF ARCHITECTS: Judson A. Kline (Herschman Architects) to fellow.
Send information for Going Places to dhillyer@crain.com.
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Unlimited 4G data for the unlimited ways you do business. Get unlimited 4G email, text and Web on a wide range of 4G devices like the HTC EVO™ smartphone and the new Dell ™ Inspiron™ 11z notebook. No data caps. No worries. When productivity meets mobility at blistering 4G speeds, it’s truly business without limits. Only from Sprint. 1-800-573-8288 sprint.com/smallbiz SAVE
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Sprint ranks #1 in Small Business Wireless Value. — 2010 ATLANTIC-ACM Business Connectivity Report
Sprint Customized Connection Savings: Offer ends 4/16/11. $10 monthly discount requires activation on select business plan and mobile broadband plan. Savings claim based on participation in eligible plans for 12 consecutive months. No more than one discounted connection offer allowed per line of service on select business plans. Voice/3G Data Usage Limitation: Sprint reserves the right, without notice, to limit throughput speeds, and to deny, terminate, modify, disconnect or suspend service if off-network usage in a month exceeds (1) voice: 800 minutes or a majority of minutes; or (2) data: 300 megabytes or a majority of kilobytes. Prohibited network use rules apply. See in-store materials or sprint.com/termsandconditions for specific prohibited uses. Mobile Broadband/Connection Plan: Includes 5 GB of data usage. Additional data usage is $0.05/MB. Connection Plan 3G Data Usage Limitation: Sprint reserves the right to limit throughput speeds or amount of data transferred; and to deny, terminate, modify, disconnect or suspend service if usage exceeds 300 MB/month while off-network roaming. 1,024 KB equal 1 MB. 1,024 MB equal 1 GB. Other Terms: Coverage is not available everywhere. The Sprint 4G Network reaches over 70 markets and counting, on select devices. The Sprint 3G Network reaches over 271 million people. See sprint.com for details. Offers and service plan features not available in all markets/retail locations or for all phones/networks. Pricing, offer terms, fees and features may vary for existing customers. Other restrictions apply. See store or sprint.com for details. ©2011 Sprint. Sprint and the logo are trademarks of Sprint. The HTC logo and HTC EVO are trademarks of HTC Corporation. Other marks are the property of their respective owners.
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he main purpose of the NorTech Innovation Awards is to recognize and highlight some of the technological advancements taking place in the region, especially those that have the ability to impact industries and markets in a positive way. Rebecca Bagley, president and CEO of NorTech, a regional technology advocacy organization, said nominations were received this year in several broad categories, including biosciences; instrumentation, controls and electronics; advanced materials; advanced energy; and flexible electronics. Of about 30 nominations received, 20 innovations were selected as finalists. Winners will be announced at an award reception this Thursday, Feb. 24. This year’s keynote address — titled “Journey of Innovation and Success in Northeast Ohio”— will be presented by Hiroyuki Fujita, president and CEO of Quality Fujita Electrodynamics LLC of Mayfield Village. Dr. Fujita also will be the recipient of a new honor this year, the Regional Impact Award. “It gives the nominees a good perspective of what they are trying to attain,” Ms. Bagley said. In 2009, Dr. Fujita and QED were the recipients of a NorTech Innovation Award, and QED was designated by Forbes magazine as the 11th “Most Promising Company in America.” The company makes state-of-the-art MRI coils for customers worldwide, including Siemens Healthcare in Germany and Toshiba Medical Systems Corp. in Japan. “It’s been significantly impactful not only in jobs but also in recognition,” Ms. Bagley said of QED.
ATTEND THE EVENT Winners of this year’s NorTech Innovation Awards will be announced at an award reception from 5:30 to 8:30 p.m. this Thursday, Feb. 24, at LaCentre Conference and Banquet Facility in Westlake. Tickets can be purchased online at www.CrainsCleveland.com/niatix or by calling Jessica Snyder at 216771-5388. Ticket sales close this Tuesday, Feb. 22.
FOR MORE ON THE FINALISTS ... ... turn to Pages 16-18 for detailed explanations of this year’s 20 finalists and their innovations: ■ The University of Akron ■ Ashlawn Energy LLC ■ Flocel Inc. ■ Sunflower Solutions ■ Tipton Design and Engineering ■ Mar Systems Inc. ■ RTI International Metals Inc. ■ Altronic LLC ■ NASA Glenn Research Center ■ Kent Displays Inc. ■ Echogen Power Systems Inc.
JUDGES FOR THIS YEAR’S AWARDS ■ Codonics Inc. ■ Aeroclay Inc. ■ VasoStar Inc. ■ CleveMed ■ AllTechMedical Systems America Inc. ■ Aesir Metals LLC ■ Biopolymers International Inc. ■ R.W. Beckett Corp. ■ The University of Akron/ Kent State University
The profile information was gleaned from nomination forms.
■ Martin Abraham, founding dean, College of Science, Technology, Engineering and Mathematics, Youngstown State University ■ Dianne Anderson, executive director, Great Lakes Energy Institute, Case Western Reserve University ■ Dave Baldwin, president, Aquarian Technology Systems LTD, Lexington, Ohio ■ Stephen Cheng, dean, College of Polymer Science and
Polymer Engineering, University of Akron ■ Dennis Cocco, co-director, the Great Lakes Innovation and Development Enterprise, Elyria ■ John Dearborn, president, JumpStart Inc. ■ Walter E. Horton Jr., vice president for research and dean, College of Graduate Studies, Northeastern Ohio Universities Colleges of Medicine and Pharmacy
■ Max Lewis, vice president, Global Innovation (corporate division), Sherwin-Williams Co. ■ Kathy Needham, deputy chief of the business development and partnership office, NASA Glenn Research Center
Judges took into consideration creativity, feasibility, collaboration and triple-bottom-line impact in reviewing the nominations.
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University of Akron Ultrasonic rubber devulcanization extruder and technology
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new technology may revolutionize the way rubber is recycled. Currently, rubber recycling is mainly based on burning used tires to recover the caloric value, which only is about two times higher than the caloric value of coal. Tires also are crushed into fine particles for addition to virgin
rubber as filler. However, a patented continuous process for the ultrasonic devulcanization of tire rubber and other rubber waste has been developed, allowing for the recovery of rubber materials so that they can be shaped, revulcanized and reused. In 2010, a novel 3.5-inch ultrasonic industrial extruder was designed and manufactured by Avraam Corp. of Akron and funded by Nike; it is suitable for recycling industrially important types of rubber used in shoe soles, gaskets, seals, roofing mem-
Flocel Inc. In vitro blood-brain barrier model for drug discovery
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locel, a spinoff of Cleveland Medical Devices, is breaking down barriers in brain research. Pharmaceutical companies spend millions of dollars each year to develop and test drugs using in vitro models of the “Blood-Brain Barrier,” a mechanism that explains why certain substances circulating in the blood are able to get into the brain and others do not. Most of those drugs do not work, Flocel says.
Sunflower Solutions EmPower Plant manual solar tracking system
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he earth revolves around the sun — but if you’re stuck here on terra firma, it sure looks the other way around. And to get the most out of your solar panel,
Tipton Design and Engineering Egg carton technology for bigbox retail packaging
Using technology licensed from the Cleveland Clinic Foundation and developed by Damir Janigr, Flocel has developed small, easyto-use test equipment that more accurately predicts if drugs will be able to get into the human brain than existing methods, and thus improves the quality of researchers’ in vitro experiments. Flocel says it has five products that help with the study and understanding of the blood-brain barrier. One of those is called the Dynamic in Vitro Blood-Brain Barrier (DIVBBB) cartridge, which Flocel says “helps narrow potential compounds down to a handful of viable drug candidates more efficiently” and reduces both animal testing and the cost of clinical trials. Improving the quality of in vitro experiments is critical, Flocel says, because treatment of central nervous system-related diseases has become “the biggest challenge facing pharmacologists.” The company says it is estimated that at least 75 million people in the United States and more than 1 billion worldwide are afflicted by central nervous system diseases including depression, bipolar and schizophrenia.
2010 AWARD WINNERS Twelve winners were honored last year: ■ Akron Research Commercialization Corp. ■ ViewRay Inc. ■ InSeT Systems LLC ■ NASA Glenn Research Center ■ ABSMaterials Inc. ■ Kent Displays Inc. ■ MesoCoat Inc. ■ RSP Tooling ■ Catacel Corp. ■ Cleveland State University, Fenn College of Engineering ■ Parker Hannifin Corp. ■ Tremont Electric LLC
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hen a manufacturer asked Tipton Design and Engineering to devise a new type of packaging for the products it ships to Walmart stores across the globe, the Solon company suggested boxes made of … paper. Molded pulp, to be technical. The material — ground-up recycled paper mixed with glue and transformed with heat into a rigid package — had been used before. But this is the first time it will be used by big-box retailers, which are known for rigid packaging standards, said Roger Tipton, president of the materials engineering services firm. To get there, Tipton modeled the material virtually and tested its strength. The boxes broke in initial
branes and tire rubbers. The design was based on the discovery and research carried out by professor Avraam I. Isayev and his students at The University of Akron. This overall process is economically feasible since the processed rubber is cheaper than
virgin rubber, especially given the rising costs of raw materials. It also saves the energy needed in making new rubbers and it creates new materials and products. Also, factory rubber waste will be eliminated by the incorporation of devulcanized rubber into the manufacturing stream, as is done by the plastics industry. It’s anticipated this technology will have a significant impact on the expansion of recycling technology in the automotive, shoe, building and tire industries.
you’ll need to keep re-aiming it to keep up with the sun’s changing position in the sky. That’s usually done by complex machines and computers — or not done at all, in the case of many fixed photovoltaic installations that just point in one constant direction. But it’s important to change the direction of the panels in environments where they’re hard to come by and maximizing solar power generation is critical; places such as Africa, where the panels must be positioned by hand. Sounds easy,
but positioning the panels just right, whether it’s cloudy or even before the sun comes up, can be tougher than it sounds. And getting it right means a gain in electricity of 30% to 40% over a panel that’s not property aimed. Which brings us to Shaker Heights-based Sunflower Solutions. Its emPower Plant manual solar tracking system allows users with little or no education, even children, to accurately set up and adjust solar panels. The system uses sun-tracking algorithms, a color-coded system and the user’s
computer simulations, but once produced, the product passed, Mr. Tipton said. It will launch in Walmart stores in the second quarter of this year. Molded pulp packaging is expected to do exactly what Intercrown, a manufacturer in China, asked that it do: reduce costs. The molded pulp type doesn’t use raw wood, which is scarce and costly in China. Recycled scrap paper from Intercrown itself is incorporated into the new packaging by the packaging vendor, and that reduces Intercrown’s waste disposal expenses. The molded pulp packaging is lighter, which should produce transportation savings. It’s 100% recyclable, too. Now Intercrown, which asked for the new packaging specifically for curtain rods, is rushing to have it developed for other products. It is anticipated that the new packaging will result in savings not only for Intercrown, but for Walmart and endusers, too.
RTI International Metals Inc. Continuous casting method for making titanium ingots
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TI International Metals Inc. of Niles has discovered a more efficient way to work with titanium. The manufacturer has developed an innovative approach that allows near net-shaped titanium ingots — or masses of refined cast metal — to be produced by continuous casting. According to the nomination, the process is more productive than the conventional method, which is to produce individual ingots. It also effectively disproves the conventional wisdom that titanium cannot be continuously cast, and it allows for the elimination of “hotworking” steps for making certain types of titanium mill products, resulting in significant improvements to yield, cost and energy consumption. (Hot-working is done at a temperature high enough to permit
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recrystallization.) RTI’s innovation allows ingots to be produced via a continuous casting method. The unique characteristic of the continuous casting furnace is the utilization of a molten glass seal, which allows the ingot to be continuously withdrawn out of the furnace. The process maintains the integrity of the inert gas within the furnace chamber and prevents outside air from leaking into the furnace chamber. Five patents have been granted for this innovation. The innovation has the potential to open up markets for which titanium previously had been too expensive, such as transportation, energy, marine and construction. A functional prototype as well as a production furnace have been built and are operational. More than 50,000 pounds of ingot have been produced in the production furnace.
Mar Systems Inc. Sorbster
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ighting the war to clean the nation’s waterways of heavy metals such as mercury and selenium is the task of Sorbster. The material produced by Solon-based Mar Systems Inc., which employs eight people, uses a process that extracts heavy metals from water by converting them to a gas that then solidifies them so they can be collected from the water. Sorbster’s developers say it also
Altronic LLC Reinforcing pulse ignition system
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t often makes sense for large industrial operations to generate their own power for heating and cooling. Many use engines powered by natural gas, which is economical and clean burning. But, as with other fuel-burning systems, there are business opportunities for companies that can help users increase their energy efficiency and reduce pollution. Altronic LLC of Girard makes its money doing just that. It improves
NASA Glenn Research Center Inflatable Radome/ Satellite Antenna System
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ASA Glenn and a partner are working to make first responders even faster responders. The Inflatable Radome/Satellite Antenna System is a portable, ground-based antenna that can target geostationary satellites to establish communi-
Ashlawn Energy LLC Vanadium Redox Flow Batteries for energy storage solutions
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eaming up with local partners GrafTech International Ltd., Innoventures Inc. and Painesville Municipal Electric Power, Ashlawn Energy is working on one of the greatest challenges confronting renewable energy: how to manage intermittent power.
location to provide easy-to-use instructions so the system can be adjusted in 30 seconds. The company says its systems are the solution for many in developing nations — a market seldom considered by other solar companies seeking to serve more advanced audiences. Sunflower Solutions says its customers are mostly nonprofit organizations working in the Third World. So far, in its first four months of commercialization, Sunflower has sold 10 systems costing between $9,000 and $24,000 each.
is friendlier to the environment than existing products that use harsh chemicals and require regular flushing. Mar developed Sorbster with a variety of patents and with help from the U.S. Environmental Protection Agency, which seeks ways to reduce heavy metals from the nation’s groundwater supplies and waterways. Studies of Sorbster’s effectiveness also were produced by the University of Akron, Hiram College and Case Western Reserve University. The toy-like name of the product belies the serious contributions to its development by a variety of
the ignition systems that spark the fuel-burning engines, and its latest advancement— a patented, reinforcing pulse ignition system — is proving to be a big success. Sales of the system have grown since its introduction in 2008 to about $2 million in 2010. The reinforcing pulse ignition system is compatible with existing spark plug engines and allows engines burning natural gas to operate more efficiently — at leaner air/fuel mixtures — than engines with competing ignition systems, according to Altronic. The system gives engine makers a higher degree of flexibility in controlling the spark than with
cations in military and disaster relief operations. The system “can be transported easily in as few as two airline-checkable cases,” NASA Glenn says. It can be deployed in less than an hour. The technology was developed by GATR Technologies of Huntsville, Ala., and it benefits from a tech transfer relationship with NASA Glenn. The system provides high-bandwidth Internet access enabling data transfer, video cell coverage and phone via satellite
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Renewable power can’t be generated at will. Since the wind doesn’t always blow and the sun doesn’t always shine, renewable power can’t be generated at will. That presents a challenge, in that renewable power can’t be turned on or cranked up to meet peak demands — and sometimes provides the most power when demand is weak. Ashlawn Energy and its partners hope to solve that problem by
developing a battery system that would allow utilities to store power when it’s generated by the wind or sun, and then can be used when customers need it most. The technology is similar to what is used in
Kent Displays Inc. Boogie Board LCD writing tablet
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ent Displays more than doubled the size of its work force over the past year, all because of the success of the Boogie Board. The company, located just south of Kent, released the electronic writing tablet in January 2010, and over the course of the year Kent Displays sold eight times more Boogie Boards than the company
organizations, from JumpStart Ventures to the Ohio Third Frontier program, that have allowed Mar to test the product in the laboratory and in streams. Production-wise, Sorbster uses commonly available, inexpensive materials, which makes for an inexpensive product. When Sorbster enters production, the company anticipates expanding to 25 employees in the area. Initial clients include industrial users and government wastewater treatment plants that are under federal guidelines to remove heavy metal from water. The company said the product also can be used to cleanse standing water in brownfield sites of heavy metals.
competing systems, Altronic said. A stronger, better-timed spark, Altronic has found, allows engines to use a very lean — meaning fuelsaving — fuel mixture. A major customer is GE Jenbacher, a leading maker of power-generating gas engines. Jenbacher uses the Altronic reinforcing pulse ignition system across a broad product range. Altronic has been owned by the Hoerbiger Group, a diversified Austrian firm, since January 2009.
networks. NASA Glenn says the initial technology was developed through a 1998 SBIR (Small Business Innovation Research) contract to address large-aperture deployable reflectors for space power and communications applications. Additional refinements were made possible by a 2006 Space Act Agreement with NASA Glenn that enabled GATR to collaborate with Glenn researchers and to tap into Glenn’s antenna expertise and test facilities. The antenna system has been deployed on every continent except Antarctica.
initially projected. Hence the need to expand its work force to about 100 from 45 at the beginning of 2010. The product is like an electronic dry erase board: The user presses a stylus against the Boogie Board’s flexible liquid crystal display, causing the crystals beneath the stylus to change color. The Boogie Board uses power only when the user presses a button at the top to erase the image on the screen.
CRAIN’S CLEVELAND BUSINESS 17
fuel cells, and can be used to store power for a few hours or a few days. It’s also scalable and can handle multimegawatt applications, the company says. A demonstration project is up and running in Painesville, but Ashlawn Energy now hopes to commercialize the technology. The company said it expects annual sales of $120 million by 2015, by which point it expects to be manufacturing the systems in Ohio, with a work force of about 900 people.
Kent Displays, founded in 1993, formerly focused on developing single-color glass LCDs for portable, battery-powered devices. Today, however, the company’s future lies with the patented liquid crystal displays that roll off the custom-made manufacturing line at its Portage County headquarters. The plastic rim around the display is made in China. The company, which sells the product under its Improv Electronics brand, this year plans to release a larger Boogie Board as well as one with memory, allowing images to be saved to a computer. Kent Displays also plans to sell its flexible displays to other manufacturers that would build the screens into their own products.
Codonics Inc. Codonics SLS 500i Safe Label System
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iddleburg Heightsbased Codonics Inc. wants to take the human error out of drug administration in the operating room. The company’s SLS 500i Safe Label System prints a data-rich bar code to label intravenous medication while a syringe is being prepared. The goal is to help institutions adhere to medication labeling standards. The company said in its nomination form that drug administration errors occur in one in 140 cases, with many more unreported, according to data from the Anesthesia Patient Safety Foundation. The labels the system prints contain information to identify individual drugs and their concentration and expiration. It asks a user
Several prototypes of the system are in use at Massachusetts General Hospital. — a hospital nurse, for example — for confirmation of the drug before it prints a label, providing a sort of double-check; it then audibly repeats the type of drug in a syringe, a way of triple-checking for the user. Currently, several prototypes of the system are in use at Massachusetts General Hospital, a partnership Codonics said has been vital to its development. Codonics said Massachusetts General played an integral role in connecting the company with scores of end users, with whom Codonics has worked to ensure their needs were met. Additionally, the American Society of Anesthesiologists in 2008 honored Codonics and its labeling system with the Innovation and Technology Award.
CRAIN’S PROUDLY Echogen Power Systems Inc.
RECOGNIZES THIS YEAR’S SPONSOR PARTNERS:
Advanced energy recycling using a CO2-based power cycle
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chogen Power Systems wants to use carbon dioxide to reduce the amount of carbon dioxide in the atmosphere. The Akron company has developed an engine that converts industrial waste heat into electricity. The machine uses carbon dioxide in a “supercritical” phase to absorb heat from all sorts of sources, such as smokestacks, boilers or even solar thermal concentrators. The heated carbon dioxide, which shares the properties of a gas and a liquid, is used to drive a turbine, producing electricity. The system can recycle some of that heat for use in other industrial processes or to warm up nearby offices, and supercritical carbon dioxide even can be used for cooling purposes. Echogen is testing a prototype capable of producing 250 kilowatts of electricity at a power-generating facility in the Midwest, and three manufacturers have expressed interest in testing the technology. The company doesn’t plan to stop at 250 kilowatts, though: It’s developing a 330kW system as well as another that could produce more than 8 megawatts. Echogen says its thermal engine is smaller, cheaper and more effective than existing waste heat recovery systems. The engine has the potential to produce electricity for less than 4 cents per kilowatt/ hour, resulting in a payback “significantly below the 3-year threshold for competing products,” according to information from the company.
In partnership with:
Thank you for supporting Northeast Ohio’s world-class technology corridor and its role in our region’s economy.
2011 Event & editorial coverage:
N OR T ECH I NNOVATION A WARDS . COM
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VasoStar Inc. Vibrational guidewire system for crossing chronic lesions
AeroClay Inc. A clay-based aerogel, a lightweight porous material that can have a variety of mechanical properties
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eroClay Inc. is developing ways to use familiar, freeze-drying technology from the food business in a new way. AeroClay’s basic product is a clay designed to serve as a platform material that will allow a variety of polymers to be used in new ways. It also is biodegradable, as its only byproduct is water. AeroClay is developing its product, also known as AeroClay, under an exclusive license with Case Western Reserve University, which holds six international patents on the technology. The company is also pursuing four provisional patents of its own. Since freeze-drying extracts water from various materials, the process is used to lighten the AeroClay material, which can be combined with high-performance polymer materials to go into uses where weight is critical. It also can provide stronger mechanical properties than traditional materials, according to the company. With $1 million from angel investors and government sources, AeroClay Inc. is working with several companies to develop prototypes that would serve as alternatives to existing products used in packaging and building materials. Materials made with AeroClay may go into products in the aerospace, automotive and absorbent materials markets. AeroClay’s headquarters and a planned production plant will be located in Northeast Ohio.
Aesir Metals LLC Carbidic Outer Edge Ductile Iron
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esir Metals LLC, a steel and iron foundry in Struthers, has developed a new iron-based material that is hard on the outside while remaining soft and flexible on the inside. The material is made using a process that eliminates certain manufacturing steps, which ultimately reduces costs. The production of the material — known as carbidic outer edge ductile iron — doesn’t require heat treating or expensive alloying elements and can be produced in a much faster time frame. The material can be produced in as little as two
The University of Akron/Kent State University Flexible, transparent, stretchable and conductive films
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esearchers at the University of Akron and Kent State University have created a new market for electronic technologies by developing flexible and stretchable polymer films,
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asoStar Inc. of Mentor calls its innovation the solution to “the last frontier” in interventional cardiology because it will allow doctors to treat patients with blocked blood vessels noninvasively. In order to put a stent in a patient, doctors must ever so delicately thread through blood vessels
CleveMed SleepView, a sleep apnea screening device for home use
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leveland medical device firm CleveMed wants to put 12 million people to sleep. Or, at least, better sleep. The company’s SleepView product provides a sleep apnea screening device for home use, rather than a lab-based polysomnogram, for the 12 million people the company says suffer from undiagnosed sleep apnea. The disorder, in addition to producing lethargy due to sleep complications, also has been associated with cardiovascular problems, such as stroke and congestive heart failure. Not only can physicians send the two-ounce, wearable SleepView — akin to the heart-rate monitor strap runners use — home with patients, CleveMed has developed webbased software that allows a patient to input his or her data. In turn, the data are scored by registered sleep technologists, and a network of board-certified sleep physicians interprets the study. Working with distributors in
weeks compared to steel mill lead times of more than four months. “The lead time to get the product on the market is a lot quicker now,” said Mark DeBruin, the inventor of the material and co-founder of Aesir Metals. Using a special process, the mold can be controlled so that the chemistry at the surface is different from that of the base material. The material is being tested for mining applications and die materials and has been successfully tested for gears and agriculture uses. Though Aesir is primarily focusing on those applications due to customer demand, the company believes it could be used to eliminate the need for heat treatment in wind turbine bearings and gears.
which will spur the creation of lightweight and flexible portable electronic devices. Miko Cakmak, a distinguished professor of polymer engineering at the University of Akron, developed the technology and worked with Kent State University’s John West on the liquid crystal technology for the flexible displays. Researchers say the benefits of the technology are many. The products, for one, will be lighter
a malleable guidewire to penetrate blockage, which often is a soft, jellylike substance. However, when those vessels have been blocked for at least three months — known as chronic total occlusions — the material is dense and calcified, and it becomes difficult for doctors to break through that blockage without using a stiffer wire at the risk of puncturing the vessel. For this reason, only 10% of patients with these types of occlu-
Northeast Ohio, Chicago and the southeastern United States, CleveMed has sold 50 SleepView systems to primary care physicians, ear, nose and throat doctors and cardiologists; more than 280 sleep studies have been performed. CleveMed has filed 12 patents covering the SleepView over the last four years. The company has received various grants from the National Institutes of Health, totaling more
AllTech Medical Systems America Inc. High-performance low-cost total MRI system
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llTech’s mission has been to manufacture a high-performance, lower-cost MRI system, and the Solonbased outfit says its new innovation has advanced that goal. AllTech says its high-performance low-cost total MRI system, the Echostar Centauri 1.5T system and its spectrometer, increases global access to this expensive but necessary medical technology. The company says it has leveraged the highly skilled biomedical engineering base found in Ohio with low-cost manufacturing capabilities in China to develop its initial product and is on its way to a successful market entry. Indeed, more than five systems already are in place in hospitals
R.W. Beckett Corp. Beckett Distributed Energy Storage System
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ne of the biggest problems electric utilities long have faced is their inability to hold power for later use, because electricity can’t be stored. As a result, utilities must have enough generating capacity to meet peak capacity, not just average de-
and more durable. Also, they’ll consume less energy and use fewer raw materials to manufacture. Traditional transparent and conductive materials are brittle and unable to withstand repeated flexing, which can result in cracking and faltering electrical conductivity over time. Recently, the University of Akron
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sions are treated noninvasively — the alternative being medicine only or open heart surgery. The vibrational guidewire system for crossing chronic lesions is a safer and more effective alternative because it enables doctors to “jackhammer” through the blockage using fast vibrations created in the guidewire, just a few inches away from the lesion. VasoStar has completed the innovation’s prototyping,
pre-clinical testing and clinician review. VasoStar believes that its vibrational guidewire system will reduce total procedure time and become the standard for treating blocked vessels. The company says the total coronary market for VasoStar is at least $125 million. VasoStar said it aims to develop and commercialize an innovative electromagnetic guidewire technology to create new jobs and expand Ohio’s core competencies and cardiovascular medical device expertise.
Biopolymers International Inc. than $1 million. Additionally, it also was given a Cuyahoga County product development loan, administered through Cleveland-based manufacturing advocacy organization Magnet, which CleveMed credits for assisting in the development of the SleepView.
Green polymer chemistry using enzyme catalysis
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located in emerging markets, and the company has cobbled together about $50 million in investments from a consortium of capitalists. The innovation costs approximately 30% less than previous products with similar capabilities, according to AllTech. “AllTech’s pioneering move into the emerging market with a significant price reduction expands this capability to a previously unserved and large population and promises to have repercussions felt in the near future in the American and European marketplace,” according to the firm’s nomination. Meanwhile, AllTech points to the innovation’s potential to bolster both Northeast Ohio’s high-tech industry and the region’s economic development. “AllTech itself is predicted to provide new scanners ultimately over the entire global marketplace with an increasing share of the manufacturing for Ohio,” the nomination said.
his method of creating specialty biopolymers and polymers is green in more ways than one. It’s green in the new, fresh sense: Biopolymers International Inc. in Cleveland is the first to use natural enzymes to create specialty biopolymers and polymers, which include rubbers and plastics, in a highly efficient way. A patent for the method is pending. The method is green in that it’s more environmentally friendly. Instead of using harsh solvents, the company’s method employs natural enzymes, which can be recycled. For now, Biopolymers International, which is owned in part by the University of Akron Research Foundation, has researchers and business people nationally and internationally considering the best uses for the biopolymers. One area of focus is using them in the medical field, particularly for drug delivery. A possibility, explained president and chief marketing officer Lel Somogyi, is placing a layer of biopolymers on implants used in breast reconstruction for cancer patients. Those biopolymers potentially could deliver drugs over time to kill any residual cancer.
mand. Maintaining part-time generating capacity is expensive, inefficient and adds to carbon emissions. R.W. Beckett believes it has a solution to help reduce the need for standby power, a solution that may also serve as a backup during a power outage. The North Ridgeville company’s distributed energy storage system, based on a lithium-ion battery, will allow utilities to store energy. A single unit would provide power to two to 10 homes.
Units would be charged during times when power demand is lowest and discharged when demand rises above generating capacity. When Energy Technologies Inc. of Mansfield learned about the power storage system ETI officials approached Beckett about developing mobile power supplies. ETI already makes deployable power supplies for military and other uses. The two companies won a $1 million Third Frontier Advanced Energy grant to help develop a product line for military applications.
Research Foundation has supported Dr. Cakmak and his research team in the startup of a new company, Flexible Functional Film Technologies, which will commercialize the technology. The company’s manufacturing operations, according to the orga-
nizations’ nomination form, will generate new high-tech jobs. The world electronic display market is $61 billion and the market for environmentally friendly electronics continues to expand. Researchers say early applications for the technology will include mobile phones, electronic reading devices and computers, but it will also impact products such as solar cells, wearable electronics and biomedical devices.
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Parent of Cleveland convention center developer creatively tries to raise cash By THOMAS A. CORFMAN Crainâ&#x20AC;&#x2122;s Chicago Business
If you canâ&#x20AC;&#x2122;t sell them, borrow against them. Six months after the collapse of a $1.2-billion blockbuster deal to sell the Merchandise Mart and its nationwide showroom business, Vornado Realty Trust is looking to raise cash in smaller ways, people familiar with the companyâ&#x20AC;&#x2122;s plans say. The New York-based real estate investment trust â&#x20AC;&#x201D; the parent company of MMPI Inc., which is developing the new Cleveland convention center and medical mart â&#x20AC;&#x201D; is considering putting a $150 million mortgage on 350 N. Orleans St. and possibly selling a joint venture stake in the building, the boxy neighbor of the historic riverfront Merchandise Mart. Vornado, which owns the former Apparel Center debt-free, has hired real estate firm Eastdil Secured LLC to market the 1.2-million-square-
foot structure not only to lenders but also to investors, sources say. The building is nearly 95% leased, according to real estate data provider CoStar Group Inc. Leases totaling roughly 250,000 square feet have been Kennedy signed in the building in the past 18 months. How much of a stake Vornado is willing to sell could not be determined. But Vornado executives expect a deal would value the property at $255 million, or $211 a square foot, sources say. At that price, the value of 350 N. Orleans would have more than tripled since 1998, when Vornado acquired that building, the Mart and other real estate holdings of the Kennedy family for $630 million. That transaction valued 350 N. Orleans at $77.6 million, CoStar says. A Vornado spokeswoman declined to comment. Christopher Kennedy,
president of Merchandise Mart Properties Inc., could not be reached for comment, a Mart spokeswoman said. In August, a deal to sell the Mart division and most of its real estate assets to a New York real estate firm that also operates showrooms. Nearly four years ago, Vornado put $550 million in loans on the Merchandise Mart and used the money for other investments. Those loans donâ&#x20AC;&#x2122;t come due until 2016. Earlier this month, Vornado announced it had obtained a $150 million loan on a 506,000-squarefoot office building in Arlington, Va., that the company previously owned debt-free. â&#x2013;
part of a $1.25 million plan to amp up the groupâ&#x20AC;&#x2122;s business attraction and retention efforts over the next five years. Those efforts will include a high-profile ad campaign. Mr. Deemer is entering the business world after a decade in state government. He landed his policy adviserâ&#x20AC;&#x2122;s role with Gov. Strickland after leaving a key administrative post as deputy first assistant Ohio attorney general in May 2008; Mr. Deemerâ&#x20AC;&#x2122;s exit from that office came a few weeks after his boss, former Attorney General Marc Dann, relinquished his job amid scandals. Joseph Marinucci, president of Downtown Cleveland Alliance, said the group decided it needed added staff firepower to fulfill the desire of its property-owner board to focus more attention on business development while continuing its street maintenance and security initiatives downtown. Success for Mr. Deemer and a yet-to-be hired junior staffer plus one who will be reassigned will be measured by reducing the cityâ&#x20AC;&#x2122;s office vacancy rate. He also will work on filling retail vacancy, too, but Mr. Marinucci said the feeling is that retailers will follow if the number of people in downtown businesses and apartments grows. Mr. Marinucci said Mr. Deemer â&#x20AC;&#x153;will be knocking on doors within 25 miles of downtown Cleveland to attract companies and working to retain companies in downtown.â&#x20AC;? Mr. Deemer said he is excited about stepping into a role implementing a â&#x20AC;&#x153;well-thought-out strategyâ&#x20AC;? that can capitalize on business opportunities created by $2 billion in planned construction in downtown Cleveland, from the convention center to the casino, as the real estate market reawakens from the recession. The other factor in talking up downtown is the ad campaign, which began Jan. 1, with ads in regional editions of national publications and in local publications, too. It
â&#x20AC;&#x153;One of the ... problems today in Cleveland is that things drag on. The longer a deal drags on, the less chance it occurs.â&#x20AC;? â&#x20AC;&#x201C; William West, chairman, Ostendorf-Morris Co. uses celebrity chef Michael Symon and other well-known downtown business owners to show people who are successful here and to depict the city as a place companies would want to locate. The marketing campaign is designed to develop interest in downtown as a location for up-andcoming ventures and to produce leads, with Mr. Deemer reinforcing the message through personal contacts, said Robert Falls, whose Falls Communications of Cleveland is one of three firms running the campaign. So far, the campaign has produced no leads, but Mr. Deemer believes they will surface both via the marketing effort and through leads from Downtown Cleveland Allianceâ&#x20AC;&#x2122;s partners, who include building owners, brokers and the city administration. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ll be a single point of contact for people looking to do business downtown,â&#x20AC;? Mr. Deemer said. â&#x20AC;&#x153;But I will not be waiting for the phone to ring. Iâ&#x20AC;&#x2122;ll be aggressively reaching out.â&#x20AC;?
Mr. Westâ&#x20AC;&#x2122;s choice Downtown Cleveland Alliance selected Mr. Deemer from 36 candidates and a dozen interviews, Mr. Marinucci said. Mr. Deemer also will serve as Downtown Cleveland Allianceâ&#x20AC;&#x2122;s in-house counsel. William West, a longtime downtown property owner and chairman of the Ostendorf-Morris Co. real estate brokerage, was among the Downtown Cleveland Alliance board members who selected Mr. Deemer. â&#x20AC;&#x153;There is no perfect animal when it comes to this job,â&#x20AC;? Mr. West said.
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Thomas A. Corfman is a reporter at Crainâ&#x20AC;&#x2122;s Chicago Business, a sister publication of Crainâ&#x20AC;&#x2122;s Cleveland Business.
Deemer: Officials confident in ad run continued from PAGE 3
CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS
Although a commercial real estate broker knows the market and the properties â&#x20AC;&#x201D; three were passed over in favor of Mr. Deemer â&#x20AC;&#x201D; Mr. West said few have the background to know about financing, construction, legal restrictions and incentives for companies. And, in Mr. Westâ&#x20AC;&#x2122;s view, creating a single point of contact for businesses interested in downtown could be huge. â&#x20AC;&#x153;I travel a lot for a few corporations,â&#x20AC;? Mr. West said. â&#x20AC;&#x153;In some towns itâ&#x20AC;&#x2122;s amazing how fast you can get to the core of things. In Houston, you can meet with one person and know in a day what they can do. One of the biggest problems today in Cleveland is that things drag on. The longer a deal drags on, the less chance it occurs.â&#x20AC;? However, Robert Roe, managing director of Jones Lang LaSalleâ&#x20AC;&#x2122;s Cleveland office, takes a show-me approach, as he does not know Mr. Deemer. â&#x20AC;&#x153;Our town will benefit from having someone focus on downtown because the government economic development officials handle so many other things on a daily basis,â&#x20AC;? Mr. Roe said, â&#x20AC;&#x153;but heâ&#x20AC;&#x2122;s going to have to establish a value proposition for himself and DCA or heâ&#x20AC;&#x2122;s just another person calling on companies and the brokers do that. He could help some brokers with city incentives, but the good brokers know that.â&#x20AC;? Mr. Deemer sees his job for Downtown Cleveland Alliance as a return to his days of serving as a staffer for the Ohio Poverty Law Center in Columbus after finishing law school at Ohio State University. â&#x20AC;&#x153;I think there is no better way to get up every morning and help people than bringing more businesses to downtown Cleveland,â&#x20AC;? Mr. Deemer said. He and his wife, Vanessa Coterel, planned to move here since last year, when she joined the Cleveland office of the U.S. Department of Education as an attorney. â&#x2013;
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CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS
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FEBRUARY 21 - 27, 2011
PRIVATE EQUITY & VENTURE CAPITAL FIRMS LISTED ALPHABETICALLY Minimum investment (thousands)
Preferred project investment (thousands)
$1,000
$1,000-5,000
Arboretum Ventures 11000 Cedar Ave., Cleveland 44106 (216) 658-3989/www.arboretumvc.com
NA
Athenian Venture Partners 20 E. Circle Drive, #37146, Suite 229, Athens 45701-3751 (614) 360-1155/www.athenianvp.com
Name Address Phone/Web site
Top executive Title
Name Address Phone/Web site
Minimum investment (thousands)
Preferred project investment (thousands)
$3,000
$5,000
$250-500
John McIlwraith, Don Aquilano, managing dirs.; Dov Rosenberg, director
MCM Capital Partners 25201 Chagrin Blvd., Suite 360, Beachwood 44122 (216) 514-1840/www.mcmcapital.com
NA
Jan Garfinkle founder, managing director
Miami Valley Venture Funds 900 Kettering Tower, Dayton 45423 (937) 222-4422/www.daytonregion.com
$100
$0
NA
Karl O. Elderkin managing partner
Morgenthaler 50 Public Square, Suite 2700, Cleveland 44113 (216) 416-7500/www.morgenthaler.com
$500
$500
$1,000-4,000
Darrell W. Austin managing partner
Mutual Capital Partners Fund 5805 Bridge Ave., Cleveland 44102 (216) 928-1908/www.mutualcapitalpartners.com
$1,000
Blue Chip Venture Co. 250 E. Fifth St., Cincinnati 45202 (513) 723-2300/www.bcvc.com
$1,000
$2,000-5,000
Jack Wyant managing director
MWV Pinnacle Capital Fund LP P.O. Box 241065, Cleveland 44124 (216) 502-4740
Blue Point Capital Partners 127 Public Square, Suite 5100, Cleveland 44114 (216) 535-4700/www.bluepointcapital.com
$10,000
$20,000
David P. Given John F. Kirby managing partners
National City Equity Partners 1965 E. Sixth St., Suite 1010, Cleveland 44114 (216) 222-2491/www.ncepi.com
Allos Ventures 250 E. Fifth St., Suite 1100, Cincinnati 45202 (513) 297-2605/www.allosventures.com
Austin Capital Partners LP 1422 Euclid Ave., Suite 500, Cleveland 44115 (216) 574-2284/www.austincapitalpartners.com
Brantley Partners 3550 Lander Road, Suite 300, Pepper Pike 44124 (216) 464-8400/www.brantleypartners.com
$5,000
P. Pinkas $10,000-20,000 Robert founding partner
$3,000
Mark E. Mansour managing director and principal Christina S. Howard, vp, Dayton Development Coalition, general partner
$5,000-15,000 NA Bill Trainor $3,000-10,000 Wayne Wallace general partners $1,000
Eric Von Hendrix, president; June E. Taylor, co-president
Edward S. Pentecost, $5,000-20,000 chmn., CEO, managing general partner
NA
NA
Richard Langdale, managing ptnr.; Bill Frank, Nick Braun, partners
$2,500
$10,000
F. Howard Mandel president
$750
$1,000
Bob Savage, Jeff Barry, Mark Horne, Ian Bund, partners
Michael Goldberg managing partner
Peppertree Capital Management Inc. 86 West St., Chagrin Falls 44022 (440) 528-0333/www.peppertreecapital.com
$4,000-8,000
John M. Mueller CEO
Plymouth Venture Partners 101 Main St. , Toledo 43605 (419) 205-9000/www.plymouthvc.com
$500
$2,000-3,000
Dr. Donald C. Harrison managing director
Primus Capital Funds 5900 Landerbrook Drive, Suite 200, Cleveland 44124 (440) 684-7300/www.primuscapital.com
$2,000
$2,000-5,000
David A. Jones, chmn., managing dir.; Kolema Karleski, managing dir.
Redline Capital, Midwest Capital 20600 Chagrin Blvd., Suite 495, Cleveland 44122 (216) 991-1201/www.redlinecapital.com
$500
$1,000
Todd Peter president
Reservoir Venture Partners 400 W. Wilson Bridge Road, Suite 130, Columbus 43085 (614) 846-7241/www.reservoirvp.com
$500
$1,000
Curtis D. Crocker managing partner
$2,000
$15,000
Bassem Mansour, Steven Rosen, co-CEOs; Michael Lundin, partner
Bridge Investment Fund LP 11000 Cedar Ave., Suite 100, Cleveland 44106 (216) 658-5470/www.bridgefundllc.com
$250
$250-1,000
CapitalWorks LLC 1111 Superior Ave., Suite 970, Cleveland 44114 (216) 781-3233/www.capitalworks.net
$2,000
Charter Life Sciences 3130 Highland Ave., Suite 3205, Cincinnati 45219 (513) 475-6643/www.clsvc.com Chrysalis Ventures 737 Bolivar Road, Suite 1500, Cleveland 44115 (216) 453-1299/www.chrysalisventures.com
NCT Ventures 274 Marconi Boulevard, Suite 400, Columbus 43215 (614) 794-2732/www.nctventures.com
$500
Top executive Title
$15,000
W. Wilson $15,000-40,000 Loyal managing director
CID Capital 400 West Wilson Bridge Road, Suite 130, Columbus 43085 (614) 429-4236/www.cidcap.com
$500
CoreNetwork 101 Main St., Toledo 43605 (419) 697-9696/www.core-network.org
$100
$250
Robert J. Savage, managing ptnr.; Phil Gamble, sr. project mgr.
Resilience Capital Partners LLC 25101 Chagrin Blvd., Suite 350, Cleveland 44122 (216) 292-0200/www.resiliencecapital.com
Custer Capital Inc. 14 S. High St., New Albany 43054 (614) 855-9980/www.custercapital.com
$100
$700
William M. Custer president
River Cities Capital Funds 221 E. Fourth St., Suite 2400, Cincinnati 45202 (513) 621-9700/www.rccf.com
$1,500
Daniel T. Fleming, president, managing $3,000-10,000 dir.; Edward C. McCarthy, J. Carter McNabb, managing dirs.
Draper Triangle Ventures 737 Bolivar Road, Suite 1500, Cleveland 44115 (216) 363-5300/www.drapertriangle.com
$500
$2,000
Michael Stubler managing director
The Riverside Co. 50 Public Square, 29th floor, Cleveland 44113 (216) 344-1040/www.riversidecompany.com
$5,000
Stewart A. Kohl $5,000-50,000 Bela Szigethy co-CEOs
Early Stage Partners LP 1801 E. Ninth St., Cleveland 44114 (216) 781-4600/www.esplp.com
$500
$1,000
James M. Petras managing director
RiverVest Venture Partners 11000 Cedar Ave., Suite 100, Cleveland 44106 (216) 658-3982/www.rivervest.com
$500
$500-6,000
Edgewater Capital Partners 28601 Chagrin Blvd., Suite 205, Cleveland 44122 (216) 292-3838/www.edgewatercapital.com
$1,000
$4,000
Christopher Childres managing partner
Rocket Venture 300 Madison Ave., Toledo 43604 (419) 252-2700/www.rocketventures.org
$100
$500
Evolution Capital Partners LLC 29325 Chagrin Blvd., Suite 302, Pepper Pike 44122 (216) 593-0402/www.evolutioncp.com
$1,500
$2,000-7,000
Brendan D. Anderson Jeffrey D. Kadlic Paul L. Gierosky managing partners
$500
$2,000-6,000
R. John Fletcher, CEO, founder; Pearson M. Spaght, Linda Tufts, Peter Kleinhenz, directors
Fletcher Spaght Ventures 180 E. Broad St., Suite 810, Columbus 43215 (614) 429-4236/www.fletcherspaght.com Gates Group Capital Partners 6120 Parkland Blvd., Suite 202, Mayfield Heights 44124 (440) 684-9900/www.gatesgroupcp.com Glengary LLC 3201 Enterprise Parkway, Suite 430, Beachwood 44122 (216) 378-9200/www.glengaryllc.com Key Principal Partners Corp. 800 Superior Ave., 10th floor, Cleveland 44114 (216) 828-8125/www.keyprincipalpartners.com Kirtland Capital Partners 3201 Enterprise Pkwy., Suite 200, Beachwood 44122 (216) 593-0100/www.kirtlandcapital.com Linsalata Capital Partners 5900 Landerbrook Drive, Suite 280, Mayfield Heights 44124 (440) 684-1400/www.linsalatacapital.com Max-Ventures LLC 4400 Renaissance Parkway, Suite 4, Cleveland 44128-5794 (216) 765-2505/www.max-ventures.com
$1,000
$100
$10,000
$10,000
G. Kleinhenz $2,000-10,000 Peter managing director
E. M. de Windt Jr. $5,000-25,000 senior managing director, CEO
$500
Stephen R. Haynes managing director
R. Sinnenberg $15,000-40,000 John chairman $10,000 50,000
John G. Nestor chairman, senior managing partner
$10,000
Frank N. Linsalata, Eric V. Bacon, $20,000-35,000 chmn.; Stephen B. Perry, sr. managing dirs.
$2,000
Michael Feuer $5,000-10,000 CEO, senior managing director
RockWood Equity Partners LLC 3201 Enterprise Pkwy., Suite 370, Beachwood 44122 (216) 378-9328/www.rockwoodequity.com Roulston Ventures Management LLC 1200 East St., Fairport Harbor 44077 (440) 350-1230
$2,000
$500
Karen Spilizewski vice president Robert J. Savage, fund manager; Greg Knudson, director
Owen M. Colligan $4,000 -10,000 Brett R. Keith managing directors 1,000
Thomas H. Roulston II general partner
Signet Enterprises LLC 75 E. Market St., Akron 44308 (330) 762-9102/www.signet-enterprises.com
$1,000
S. Manna $5,000-20,000 Anthony chairman
South Franklin Street Partners 10 1/2 E. Washington St., Chagrin Falls 44022 (440) 264-8040/www.sfspartners.com
$2,000
Shawn R. Ely, William W. $2,000-10,000 Vogelgesang, managing directors
Sunbridge Partners 3659 Green Road, Suite 118, Beachwood 44122 (216) 360-0151/www.sbpvc.com
$1,000
$2,500
Triathlon Medical Ventures 250 E. Fifth St., Suite 1100, Cincinnati 45202 (513) 723-2600/www.tmvp.com
$250
$3,000-5,000
Zapis Capital Group LLC 26202 Detroit Road, Suite 300, Westlake 44145 (440) 871-1300/www.zapiscapital.com
$50
$250-500
John Gannon general partner John M. Rice, Suzette Dutch, Dennis Costello, Carrie Bates, George Emont, managing ptnrs. Lee Zapis, CEO Rich Bongorno, CFO
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.
RESEARCHED BY Deborah W. Hillyer
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Tech: Industry cluster creation at center of plans
ON THE WEB
Story from www.CrainsCleveland.com.
Healthy pipe maker seeks $1B in credit Tube and pipe maker JMC Steel Group of Beachwood is in the market for more than $1 billion in new credit as it seeks to facilitate a change in control and reorganize its balance sheet. Assuming it can secure that financing, a controlling interest in the company will be purchased by JMC Group executive chairman Barry M. Zekelman and his family for an undisclosed sum, JMC said in announcing the proposed transaction. The Carlyle Group would retain a minority stake in the company, as well as representation on its board of directors, the company stated. JMC plans to close the transaction by March 31. It announced it also plans to borrow $1.1 billion to retire its existing debt and facilitate the transaction. How much of that might go to the Washington D.C.-based Carlyle Group is not being disclosed, said Carlyle spokesman Chris Ullman. The Carlyle Group, with $97.7 billion under management and more than 270 companies in its portfolio, is private, and Mr. Ullman said it does not disclose transaction details. Mr. Ullman said the transaction is not a distressed asset sale. Far from it, he said, noting that JMC is profitable and on good terms with its existing lenders. “It’s in fantastic health,” he said. “It’s a testament that manufacturing can thrive in America if you have the right resources and strategy.” The strategy used by Carlyle in the case of JMC was to put its resources to work buying other companies in the tube and pipe industry. Since buying JMC as the John Maneely Co. of New Jersey in 2006, Carlyle has purchased similar operations in Illinois, Ohio and Pennsylvania. By combining them into one entity, JMC has been able to cut costs by eliminating overlapping positions and at the same time gain purchasing power with its increased scale, Mr. Ullman said. — Dan Shingler
continued from PAGE 1
In addition to IT, the Battelle report suggested the board start with the biomedical and advanced materials sectors because they appear to pose clear opportunities for job creation. The advisory board also added the advanced energy/clean technology sector to that list. The board may later decide to conduct studies on the other two sectors.
Clear focus Though the Third Frontier traditionally has funded a broad set of technology commercialization projects, it always has set aside pots of money for industries believed to have significant job creation potential. The Third Frontier should focus more on investing in particular industries in an effort to create “clusters” of nearby companies in the same field, said Mark Kvamme, the new director of the Ohio Department of Development, which oversees the Third Frontier. Gov. John Kasich in January appointed Mr. Kvamme to lead an effort to phase out the agency and replace it with a new nonprofit called JobsOhio. Economic development groups often try to form industry clusters in
IN BRIEF Smart phone adoption reaches 27% in U.S. The past year was a “game changer” for the mobile industry, according to digital marketing company comScore, as smart phone adoption drove mobile media consumption and augmented the potential for mobile marketing campaigns. According to the comScore “2010 Mobile Year in Review” report, based on data from products within the comScore mobile suite of services, smart phone adoption reached 27% in the U.S. in December, an increase of 10% from the same period a year earlier. Of those, 36% browsed the Internet on their mobile devices. (The report can be found at http://tinyurl.com/5v3yfzf.) — BtoB
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“Whether it’s the Cleveland Clinic, whether it’s GM, whether it’s robotics, (information technology) touches everything.” – Mark Kvamme, director, Ohio Department of Development an effort to attract talent, investors and other companies to a given region. Advisory board member Tom Waltermire, however, cautioned that the program shouldn’t focus so much on clusters that it becomes too narrow. “We decided a long time ago we did not want to make bets on a small number of industries,” said Mr. Waltermire, who is CEO of business attraction agency Team NEO. As for the IT sector, the state could benefit by increasing its focus in the area even though other regions already have established themselves as leaders in the industry, Mr. Kvamme said. He cited how IT affects so many industries. “Whether it’s the Cleveland Clinic, whether it’s GM, whether it’s robotics, it touches everything,” said Mr. Kvamme, who lives in California and is a venture capitalist with Silicon Valley-based Sequoia Capital. Rick Fearon of Cleveland-based
Eaton Corp. suggested that, before investing more in IT, the Third Frontier will have to make sure Ohio does indeed still have a chance to stake out a place for itself in the IT industry. “If we’re not at a competitive advantage, we’re going to get our clocks cleaned,” said Mr. Fearon, who is vice chairman and chief financial and planning officer for the diversified manufacturer.
Direct investments The push for greater focus on cluster creation is one of several changes Mr. Kvamme is recommending for the Third Frontier, which is about to start spending $700 million in bond money that voters approved in November when they passed a ballot issue to extend the program for another four years. Mr. Kvamme also has suggested, among other things, that the Third Frontier be able to make direct equity
investments in companies as opposed to giving grants, and that it put at least half of the bond money toward projects that can spur significant job creation in three to five years. Today, about 60% of Third Frontier projects have longer time horizons, according to an estimate from Norm Chagnon, executive director of the Third Frontier Commission. On the topic of the state taking equity in companies through the Third Frontier, Mr. Kvamme said he’d like the program to learn a few lessons from Temasek Holdings, which the government of Singapore started in 1974. Temasek has since generated a 17% return, compounded annually, according to the firm’s web site. A few officials from Northeast Ohio’s venture capital community said in January that the Third Frontier shouldn’t take direct equity in companies, arguing that doing so could create conflicts of interest on a company’s board and make it harder for the company to attract other investors. While walking out of the Columbus hotel where the advisory board meeting was held, Mr. Kvamme told Crain’s that those issues would be addressed. ■
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CRAIN’S CLEVELAND BUSINESS
Contact: Phone: Fax: E-mail:
WWW.CRAINSCLEVELAND.COM
FEBRUARY 21 - 27, 2011
REAL ESTATE
Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com
AUCTION
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
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FEBRUARY 21 - 27, 2011
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
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THEINSIDER
THEWEEK
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
FEBRUARY 14 - 20
Moment of truth near for Chancellor
The big story: Scott A. Wolstein is stepping
■ Chancellor University is expected to learn its fate this week when the for-profit university in Cleveland finds out whether it will maintain its accreditation. The university’s accrediting body — the Higher Learning Commission in Chicago — issued a “show-cause” order against the university in February 2010. The commission questioned whether Chancellor met accreditation criteria related to board governance, finances and assessment of student learning. The Higher Learning Commission’s trustees are scheduled to meet Thursday and Friday, Feb. 24 and 25, to determine whether the university will maintain its accreditation. The board’s ruling will be made public after Chancellor has been notified in writing of the decision, according to Susan Van Kollenburg, vice president for meetings and communications at the Higher Learning Commission. In mid-January, Chancellor underwent an on-site evaluation by officials from the Higher Learning Commission. Terry Uhl, a spokesman for the university, said the site visit went well. Losing accreditation could be a potential death blow to the institution, which formerly was known as Myers University. Without accreditation, students at the university couldn’t receive federal financial aid. If the Chancellor is successful in its bid to remain accredited, university officials plan to move from the school’s home at East 40th
away entirely from Developers Diversified Realty Corp., a company he co-founded with his father. The Beachwood-based real estate investment trust announced Mr. Wolstein has agreed to resign from the role of executive chairman of the company’s board. Mr. Wolstein said his departure was “the right thing to do today. It’s more of an operating business. There is not as much Wolstein deal-making and entrepreneurial activity as there was.” Mr. Wolstein said he wants to go back to dealmaking and noted the move allows him to give more time to the $270 million Flats East Bank Neighborhood he’s developing in Cleveland with his mother, Iris Wolstein, and Fairmount Properties of Cleveland.
So what’s in chapter 12?: Stores in Medina and Mentor are among seven in Ohio that bookseller Borders Group plans to close by April in conjunction with its Chapter 11 bankruptcy filing. The Ann Arbor, Mich.-based company is closing about 200 of its 642 U.S. stores. Other Ohio closings are in Cincinnati, Columbus (two stores), Dayton and Mason. Borders’ Chapter 11 filing in U.S. Bankruptcy Court in Manhattan indicated the company had assets of $1.28 billion and liabilities of $1.29 billion as of Dec. 25, 2010. Five years later …: A dispute between Nacco Industries Inc. and a New York hedge fund that stemmed from a 2006 battle to buy a Florida consumer products maker was resolved in Nacco’s favor — and left the Mayfield Heights company with a $60 million settlement. Nacco said in a regulatory filing that it entered into a settlement agreement with Applica Inc. of Florida, which marketed appliances licensed under the Black & Decker name, and with Applica’s primary shareholder, hedge fund Harbinger Capital Partners. Nacco alleged that Harbinger improperly interfered with its bid to buy Applica five years ago. By the numbers: Stephanie McHenry, the former regional president of Urban Partnership Bank, will take the reins this spring as Cleveland State University’s new chief financial officer. Ms. McHenry, who will be paid $190,000 per year, starts the job April 1. She will replace Jack Boyle III, who will retire later this year.
In the mail:
A warning letter Steris Corp. received from federal regulators says the Mentorbased medical equipment company has misbranded products used to confirm the effectiveness of its steam sterilizers. The letter stated that labeling and marketing materials for Steris’ Verify SixCess Class 6 Challenge Packs and Verify SixCess Class 6 Chemical Indicators wrongly indicate that the products can be used to determine whether medical devices cleaned in the company’s steam sterilizers have been successfully sterilized. The U.S. Food & Drug Administration said the products only can confirm that a sterilization cycle has met designated physical parameters.
Street and Chester Avenue to a location with more space and parking. It is leasing its current home from the Cleveland-Cuyahoga County Port Authority. — Timothy Magaw
Mentor Rotary to stage big battle of the ’bots ■ Manufacturers in Lake County take competition seriously. Indeed, they’re planning to bash each other’s electronic brains out. Fredon Corp. and Roll-Kraft Industries, both of Mentor, say they will turn the March 12 meeting of the Rotary Club of Mentor — a wine tasting, no less — into an all-out brawl. With Fredon’s machining and manufacturing capabilities and Roll-Kraft’s tube and pipe-forming skills, the two are calling their battle the Clash at the Clocktower. It will be held on the campus of Lakeland Community College. Each company is sponsoring a robotic team made up of area high school students and, as fellow members of the Alliance for Working Together, they’ll kick off that organization’s robotics competitions at the event. Both Fredon CEO Roger Sustar and Roll-Kraft CEO Chuck Gehrisch are members of the alliance, a group of local manufacturers and educators seeking to improve job training and opportunities for manufacturing workers. Proceeds from the event, which will include a silent auction, will go toward the Alliance’s future activities. — Dan Shingler
A film that hits close to home ■ Chris Blake’s monetary support of a Cleveland International Film Festival selection is rooted in a realization that came when his younger brother fell ill: There are people who desperately need bone marrow, and we might be matches. Mr. Blake, a partner with the law firm Hahn Loeser & Parks LLP and a film festival board member, contributed $1,000 to support the festival’s showing of “More to Live For,” a film that tells the story of three people shaken by cancer and dependent upon bone marrow matches that could save them. Mr. Blake’s brother, Keith, who is 10 years younger, was diagnosed with acute lymphocytic leukemia about four years ago. Doctors tested six family members to see if one could donate bone marrow if Keith needed a transplant; Mr. Blake was the only match. Ultimately, Keith didn’t need a transplant, and he’s been cancer-free for more than two years. But the lesson remains. Mindful that he’s a bone marrow match for at least his brother, Mr. Blake began running and eating healthier. And now, he’s a sponsor of a film with a message he hopes will resonate. “It’s my way to help tell the world that everyone should be tested for a possible match,” Mr. Blake said. — Michelle Park
WHAT’S NEW
BEST OF THE BLOGS
COMPANY: MIM Software Inc., Cleveland PRODUCT: Mobile MIM app
Excerpts from recent blog entries on CrainsCleveland.com.
remains “the leading cause of preventable deaths.”
Clinic a leader in expanding a smoke-free U.S. work force
Here’s one place where Detroit and Cleveland are in the lead
■ Hospitals and medical businesses in many states are following the lead of the Cleveland Clinic and are refusing to hire smokers, according to The New York Times. The hospitals and companies are doing this, the newspaper said, because they want to increase worker productivity, reduce health care costs and encourage healthier living. The policies also “reflect a frustration that softer efforts — like banning smoking on company grounds, offering cessation programs and increasing health care premiums for smokers — have not been powerfulenough incentives to quit.” An official at the Clinic, which stopped hiring smokers in 2007 and has championed the policy, told The Times, “We’ve had a number of inquiries over the last six to 12 months about how to do this. The trend line is getting pretty steep, and I’d guess that in the next few years you’d see a lot of major hospitals go this way.” This affects a lot of people and has big consequences for employers. About 20% of Americans still smoke, The Times said, and smoking
■ Cleveland is the third-fastest-growing metro area for tech jobs, according to some statistics compiled by Dice.com. The site, which tracks about 75,000 available tech and IT jobs nationwide, said job openings in Cleveland this month are 62% above levels of February 2010. The Dice.com numbers showed the top four cities are Detroit (with tech jobs up 101%), Cincinnati (up 75%), Cleveland and Columbus (up 57%).
MIM Software, a provider of medical imaging software, says the Mobile MIM offers remote diagnostic viewing of CT, PET, MRI and SPECT images on the iPhone, iPod Touch and iPad. The app is free to download. Physicians and other medical professionals can download images to the device using MIMcloud, an Internet-based service that allows secure upload and download of encrypted medical data. Mark Cain, chief technology officer of MIM Software, says the app “gives doctors anytime, anywhere access to important scans, raising the bar for efficiency, convenience and patient care.” The company says the Mobile MIM app is designed as a “thick client,” which means data are downloaded to the device for viewing instead of being streamed to the device from a server. Visit www.MIMSoftware.com for more information.
Weatherhead Showcase
March 5, 2011 10:00am – 12:30pm Registration starts at 9:30am To learn more, visit weatherhead.case.edu/showcase
Need a burger (or sub, or burrito) fast? Head to Akron ■ If you like fast food, Akron is one of the better places to live. So said The Daily Beast, which turns seemingly every aspect of life into a slideshow and has done so again with a breakdown of the 40 U.S. cities where fast food restaurants are most prominent. Akron was No. 32 on the list, with 55 fast food restaurants per 100,000 residents. Cleveland wasn’t in the top 40. No. 1 was Orlando, Fla.
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