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Companies catch on to ‘cloud’ software Internet programs allow savings on leases, servers By CHUCK SODER csoder@crain.com
are asking their lender for permission to rent the project’s six condos, which haven’t sold in the sour housing market. The argument, Mr. Kaufman said, is that “nothing beats cash flow.” Real estate developers throughout Northeast Ohio are ramping up to start building apartments, from Green in Summit County to North Ridgeville in Lorain County. Ari Maron, a partner in familyowned MRN Inc., which is constructing the 102-suite Uptown Apartments on Euclid Avenue near Mayfield Road in the city’s University Circle neighborhood, said the drive for
Ron McClellan understands why he’s starting to see commercials talking about software that comes from “the cloud.” Several Northeast Ohio business executives say their companies are starting to deploy online versions of all sorts of software programs. They now consider implementing software delivered via “the cloud” — another word for the Internet — when upgrading to new versions of the software. The growing popularity of cloud software, which also is referred to as software as a service, is probably why Microsoft Corp. and Salesforce.com Inc. have been airing commercials about it over the past few months, said Mr. McClellan, director of online and hosted services for Hyland Software Inc. of Westlake. “When you see consumer commercials talking about the cloud, you know it has hit mainstream,” he said. Mr. McClellan has seen the popularity increase firsthand: 25% of the 800 new customers Hyland signed in 2010 opted to use the online version of the company’s OnBase document management software as opposed to the version that customers host themselves. In an interview with Crain’s in
See APARTMENTS Page 21
See CLOUD Page 21
MARC GOLUB
The 102-suite Uptown Apartments are under construction in University Circle and part of a bounceback for the rental market in Northeast Ohio.
Apartments a safe haven for developers Vacancies at lowest level since 2000; lenders more eager to hop aboard By STAN BULLARD ■ sbullard@crain.com
INSIDE Ohio City improvements
NEWSPAPER
71486 01032
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Much like other areas of Cleveland, Ohio City business owners will contribute funds to help with security and cleanup in the bustling area. Read the story on Page 3.
D
avid “Joe” Kaufman, who is a partner with his brother Jay in the University Lofts apartments and condominiums at 2010 Euclid Ave. in Cleveland, speaks for many developers when he says, “It’s a Kauffman wonderful time to be in the apartment market.” The Kaufmans’ 1-year-old, 30-suite apartment development adjoining their Brothers Printing Co. shop has been at 93% occupancy or higher since last October. Their property manager is starting to collect $200 deposits for people going on a waiting list. The rental market is so strong, David Kaufman said, that the brothers
Anticipating graduate drop, colleges recruit outside Ohio By TIMOTHY MAGAW tmagaw@crain.com
Northeast Ohio’s colleges and universities are casting a wider net to attract more out-of-state students in order to combat the region’s population stagnation, which ultimately could dampen their enrollments. The recession proved to be a boon for some colleges, with enroll-
ments swelling to all-time highs as hordes of students flocked to area colleges in hopes of boosting their job prospects. However, college officials predict enrollment could slow given the expectation that the number of high school graduates will decline over the next several years. Despite a few dips in some years, the number of high school graduates in Ohio grew over the last
decade. The number sat at slightly more than 120,000 for the 20102011 academic year, but is expected to recede to 107,000 by the end of the decade. Though much of the Midwest has experienced similar declines, Northeast Ohio’s colleges are trying to tap into markets such as Pittsburgh, Detroit, Chicago, Erie, Pa, and See RECRUIT Page 6
According to figures from the National Center for Education Statistics, Ohio high school graduates have increased 9.7% from 2001-02 to 2010-11. But, projections show a similar downward trend coming: In the 2019-20 school year, the NCES projects a decrease of 11.8% from 2010-11.
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COMING NEXT WEEK Mom knows best By some accounts, the ‘mom demographic’ is one of the most important in terms of purchasing power. We’ll look at some of the vehicles used by small businesses in Northeast Ohio to target this group. Plus, grand openings, tax tips and more.
REGULAR FEATURES Big Issue ........................9 Classified .....................22 Editorial .........................8 From the Publisher .........8 Going Places................10
Letter ............................9 Personal View ................8 Reporters’ Notebook ....23 The Week.....................23 What’s New ..................23
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CRITICAL MASS The number of “mass layoff actions” — the federal government’s term for layoffs of at least 50 people by a single employer — has fallen substantially in the past year. The government reports that employers in March took 1,286 mass layoff actions involving 118,523 workers, down from 1,635 actions involving 146,901 workers in March 2010. The March 2011 layoff actions were the lowest figure since September 2007, before the recession hit hard. Here’s how the data have evolved in six-month intervals over the last few years:
Month
Layoff actions
Workers affected
March 2011
1,286
118,523
September 2010
1,541
137,941
March 2010
1,635
146,901
September 2009
2,305
219,924
March 2009
2,950
295,543
September 2008
2,192
233,034
March 2008
1,500
150,502
SOURCE: U.S. BUREAU OF LABOR STATISTICS; WWW.BLS.GOV
weatherhead
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Weatherhead’s Part-Time MBA program ranked #14 in the nation. – Businessweek, “Best Part-Time MBA Programs” Weatherhead’s Executive MBA program ranked #16 among schools in the United States. Worldwide, the program ranked #21. – Businessweek, “Best Executive MBA Programs”
Learn more about Weatherhead MBA opportunities at weatherhead.case.edu.
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Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation
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Ohio City to follow ‘clean and safe’ model Businesses would assess themselves for added security, maintenance By JAY MILLER jmiller@crain.com
Ohio City is getting serious about its business. Cleveland City Councilman Joe Cimperman expects to introduce legislation today, May 2, that will begin a process leading to property owners in the city’s Ohio City neighborhood assessing themselves for added security and maintenance in
THE WEEK IN QUOTES “When you see consumer commercials talking about the cloud, you know it has hit mainstream.” — Ron McClellan, director of online and hosted services, Hyland Software Inc. Page One
“We have to look outside of Ohio to make our freshman class. To do that, we have to go out and market Kent State and offer those students good financial aid packages to close the deal to get them to enroll.”
the district. Eric Wobser, executive director of Ohio City Inc., the neighborhood’s nonprofit community development organization, said property owners want to create a business improvement district, or BID, that Wobser would add a privately financed “clean and safe” program to existing city police and public
service efforts. The BID in Ohio City would be patterned after business improvement districts that already cover a large part of downtown Cleveland and the Gordon Square Arts District on Cleveland’s West Side. Creation of a BID in Ohio City anticipates a reinvigorated neighborhood with the renovation of Market Square Park and the
100th anniversary of the West Side Market, the neighborhood’s heart. Both properties are at the intersection of West 25th Street and Lorain Avenue. Working in one of the city’s oldest neighborhoods, Ohio City Inc. has made great strides in the last year to redevelop and focus its business district. Mr. Wobser said the area is using the presence of the West Side Market to brand the neighborhood as a center for artisan foods and other products made in Northeast Ohio in order to capitalize on growing
INSIGHT
SMALL STEPS, BIG FUTURE State, handful of Northeast Ohio investors fill the financing gap for entrepreneurs in search of more modest seed capital By CHUCK SODER csoder@crain.com
I
n Michael Camp’s view, providing entrepreneurs with mentoring and relatively small amounts of seed capital — say, between $10,000 and $50,000 — is a fast, low-risk way to create new businesses, jobs and wealth. Too many investors, however, are looking to make larger deals or consider brand-new startups too risky, said Dr.
Camp, academic director at Ohio State University’s Center for Entrepreneurship. A few organizations in Northeast Ohio, and the state of Ohio itself, are working to fill that gap. The newest program is the Ohio’s New Entrepreneur Fund. Backed by a grant from the state’s Third Frontier economic development program, the fund this summer will award $20,000 grants to 10 teams of entrepreneurs trying to start
— Health Care Hero nomination for Dr. Bruce H. Cohen, a 2011 winner in the physician category. Page H-5
See SMALL Page 7
“(Lynda Corea) has educated thousands regarding the power they have to save lives by becoming registered organ, eye and tissue donors.” — Health Care Hero nomination for Lynda Corea, a 2011 winner in the volunteer category. Page H-6
JESSE KRAMER
To help clients grow, LaunchHouse expands
S
haker LaunchHouse is preparing for liftoff. The once-tiny business incubator has grown rapidly of late with the help of the city of Shaker Heights, a new investor and a long list of supporters. Among those backers are more than 50 clients who plan to pay to use space in Shaker LaunchHouse’s new 23,000square-foot headquarters — the former Zalud Oldsmobile dealership at the
corner of Lee Road and Chagrin Boulevard that the city of Shaker Heights bought in 2005. Nine clients already have signed up to rent for $500 a month all 12 offices Shaker LaunchHouse is building inside the dealership’s 7,000-square-foot showroom. Another 30 have agreed to pay $100 a month to have desks in an open work space designed to promote collaboration. And others will pay $30 a month to use Shaker LaunchHouse’s services and work from a coffee bar that will be built into the north side of the showSee LAUNCHHOUSE Page 7
Rise in bank deposits signals more uncertainty By MICHELLE PARK mpark@crain.com
Shaker LaunchHouse, founded by Todd Goldstein (left) and Dar Caldwell, is one a of a handful of investor groups focusing on smaller cash infusions for entrepreneurs.
By CHUCK SODER csoder@crain.com
See ASSESS Page 4
Consumers continue to adopt ‘fortress’ attitude
— T. David Garcia, associate vice president for enrollment management, Kent State University. Page One
“There are very few doctors in the world with as much clinical expertise and leadership in the field of mitochondrial disease as Cleveland’s own Dr. Bruce H. Cohen.”
consumer demand for local products. The Ohio City group and Charter One Bank recently announced a small business development grant program that is helping West Side Market merchants and other Ohio City retailers expand in the neighborhood. Virginia Houston, the neighborhood group’s director of marketing and development, said 20 new businesses opened in Ohio City in 2010 and only six retail storefronts currently are vacant. According to a fact sheet prepared
Bank deposits are continuing to grow, with the mounting cash seen as another sign that people and businesses remain uncertain about the strength or extent of the economic recovery. Several banks doing business in Northeast Ohio are reporting yearover-year increases in core deposits — an indication that depositors still want to keep cash readily accessible should they desire or need it. “There are more deposits sitting in the bank today than there might be in two years,” said Todd Barnhart, director of retail deposits for PNC Bank, which reported core deposits of $140.3 billion as of March 31, a 6.5% increase over its deposits at March 31, 2010, and a 17% jump over levels of March 31, 2009. “I think you really see the continued fortress attitude,” Mr. Barnhart said, noting that consumers “want to stay liquid because they’re not really sure yet if the economy’s taken hold.” Other banks also have seen growth in core deposits, which include savings, checking and money market accounts. Fifth Third Bank’s core deposits were up nearly 10% across its markets as of March 31 from the like date last year. Deposits have grown in part because the Cincinnati-based bank is adding customers and because “many consumers and companies became more risk averse” and have created “cash cushions,” said Jerry Kelsheimer, president and CEO for Fifth Third in Northeastern Ohio. U.S. Bank spokeswoman Lisa H. Clark described the bank as “deposit heavy” currently. Deposits across its 25-state footprint were up 7.3% as of March 31 from the like date last year after rising 4.5% over the previous 12 months. And growth isn’t exclusive to the big boys: Eaton Family Credit Union, with three Northeast Ohio locations, recorded 5% deposit growth in the first quarter and 25% growth in the See DEPOSITS Page 21
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Tech hopes fuel Erieview purchase Adjacent building will house Stafford law firm By STAN BULLARD sbullard@crain.com
Two buildings on Erieview Plaza in downtown Cleveland have changed hands after their recent and separate purchases by buyers hailing from across town. Andre Tremnorod, CEO of Broadvox LLC, a provider of voice over Internet protocol telephone service, heads an investor group that on April 11 acquired the seven-story, 65-75 Erieview Plaza building from lender Ib Property Holdings LLC of Coral Gables, Fla., for $2.5 million. Meanwhile, brothers Joseph and Vincent Stafford of the Stafford & Stafford law firm bought the adjoining seven-story 55 Erieview Plaza building from Dallas-based Boxer Properties for $700,000 on April 27. Mr. Tremnorod said in an interview that he bought the 200,000-squarefoot, 65-75 Erieview building despite a 30% vacancy rate after spotting it for sale on the CoStar Group online realty data site. “We think there will be a technology renaissance in Cleveland,” said Mr. Tremnorod, who has an office at the Halle Building, where about 80 Broadvox employees work. Mr. Tremnorod, a Northeast Ohio resident, said the company’s headquarters is in Dallas because it is easier to recruit technical personnel there. He said he bought 65-75 Erieview as
STAN BULLARD
65-75 Erieview, from East 12th Street an investment and has no plans to move Broadvox’s Cleveland office there. Mr. Tremnorod said he and his partners plan to install a backup power supply and additional cooling systems to the building to make it suitable to house data centers and technology-oriented firms. The new owners also will install Broadvox voice over IP systems for tenants. “We will bring this building full circle. It was originally built by Ohio Bell Telephone Co. and now will be a home for next-generation telephony,” Mr. Tremnorod said.
Although asking rents are not yet set, he said the low purchase price for the building will allow the new owners to offer competitive rents for early stage and other technology companies. The Stafford brothers will move from their current building at 2105 Ontario St. to make the 55 Erieview building the new home of their law firm. The brothers last January sold their building on Ontario to a group linked to Rock Ohio Caesars LLC for a parking lot near the proposed Horseshoe Casino at Tower City. Vincent Stafford said at the time of the sale the brothers hoped to invest in another part of downtown. Mr. Stafford did not return a phone call last Thursday, April 28, but the online AT&T phone directory www.any who.com already lists 55 Erieview as a second address for the firm. Although Mr. Tremnorod declined to comment on the price his group paid for 65-75 Erieview, both buyers bought the structures for big discounts from historic values. The 65-75 Erieview building, formerly occupied by offices of Charter One Bank, last sold for $3.25 million in 1997 and has a market value of $6.3 million for Cuyahoga County property tax purposes. The 55 Erieview building last sold for $1.9 million in 2003 and now has a market value of $2.25 million for property tax purposes. “Those are ‘signs of the times’ numbers,” said Alec Pacella, a specialist in investment sales at NAI Daus in Beachwood. ■
Assess: Other BIDs have been received well continued from PAGE 3
by the nonprofit, many of the key
property owners in the neighborhood are supporting the effort. Among them are the owners of Great Lakes Brewing Co., Dave’s Supermarket and MRN Ltd., a developer that owns the United Bank Building at West 25th Street and Lorain Avenue and has been the driving force behind the redevelopment of East Fourth Street in downtown Cleveland. A BID is a creature of state law that allows property owners in a defined area to add a small assessment to their property tax bills to pay for a variety of services. The downtown BID, which was created in 2005 and reapproved in 2010, provides more than half the money for the nonprofit Downtown Cleveland Alliance, which operates the well-received Downtown Ambassadors clean and safe program.
A 60% majority needed The boundaries of the Ohio City BID would be Jay Avenue on the north, Chatham Avenue on the south, West 24th Street to the east and West 28th Street to the west. It does not include St. Ignatius High School and Lutheran Medical Center, though those nonprofit organizations have been involved in the planning for the BID, said Jeffrey Verespej, director of advocacy and operations for Ohio City Inc. Mr. Verespej said the assessments for property owners will run from about $100 a year to as much as
$20,000, depending on the length of a property’s street and alley frontage. He said a typical retail property would pay about $700 a year. With the introduction of city legislation, the BID sponsors will need to return to City Council with a petition indicating that property owners who control 60% of the frontage support the BID to win city approval of the special district. Mr. Wobser anticipates the assessment will bring in about $125,000 a year. Sixty percent of that total would go toward beefing up security and 30% toward keeping the sidewalks clean and in good repair. The other 10% would go toward administration, while the Ohio City nonprofit would continue to raise money for marketing the neighborhood and covering other needs, such as parking and traffic planning and supporting the district’s block clubs. The BID could use its assessment to fund capital improvements such as street lighting and landscaping. “I think (the BID) is going to help,” said Doug Perkowski, who owns four Ohio City properties, including three along West 25th Street. “If we make the area look better, a little bit safer, in the end we’re not spending money, we’re going to make more money.” Mr. Perkowski was on the steering committee that drafted the plan for the improvement district. ■
Volume 32, Number 18 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2011 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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Recruit: Cost plays a role in luring students not from Ohio continued from PAGE 1
Buffalo, N.Y. College officials say such locations have a strong alumni presence, and their proximity makes the markets attractive. Among the tactics employed by local colleges are lining billboards along interstate highways, escalating print advertising and deploying recruiters and alumni to out-ofstate high schools. “We targeted those areas because of the alumni presence, and the alumni and current student body have been of great benefit to us building awareness in those areas,� said Susan Dileno, vice president of enrollment management at Baldwin-Wallace College. About 88% of B-W’s undergraduate
student body is from Ohio, which Ms. Dileno considers a high number, though the private college in Berea has made progress over the last few years in adding out-of-state students. In 2006, only 11% of B-W’s incoming freshman class was from out of state. Although the final numbers aren’t yet available, about 20% of its incoming freshmen class is expected to hail from outside Ohio. “It’s not a huge jump,� Ms. Dileno acknowledges, “but we have made some inroads.�
It’s all about the bill Private college tuition is typically the same for both in-state and outof-state students, while public schools charge out-of-towners thousands
of dollars more. To entice those students, Northeast Ohio’s public universities are offering lucrative financial aid packages. For instance, Kent State University and the University of Akron offer to cut out-of-state fees in half or altogether for students who meet specific academic qualifications. “We have to look outside of Ohio to make our freshman class,� said T. David Garcia, Kent State’s associate vice president for enrollment management. “To do that, we have to go out and market Kent State and offer those students good financial aid packages to close the deal to get them to enroll.� Mr. Garcia said Kent State president Lester Lefton made a heavy push
about three years ago to recruit more out-of-state students. The university hired five recruiters who travel extensively each fall. Some of the targeted areas include Illinois, Michigan, Pennsylvania, Maryland, Virginia and New York. So far, the strategy has worked. The number of out-of-state students has climbed each year since 2007. Last year, Mr. Garcia noted, Kent State saw an increase in the number of out-of-state freshmen while the number of in-state freshmen declined. On the other hand, John Carroll University, a private Jesuit college in University Heights, is trying to carve itself out as a cheaper alternative to some of the costlier private schools along the East Coast,
Faster payroll has its merits.
according to Brian Williams, its vice president for enrollment services. Mr. Williams said John Carroll’s tuition plus room and board comes to about $40,000 annually, while some schools along the East Coast are $50,000 a year and more. “Those (cost) differences play a role in generating more interest out of state,� Mr. Williams said. “People are recalibrating and investing more time to ensure they are sure about their finances.�
Waiting to pounce However, not all the colleges are delving into out-of-state recruiting. Cleveland State University has placed some billboards along the I-90 corridor from Erie to Buffalo and on I-75 near Detroit, but it still focuses primarily on recruiting Ohioans, said Heike Heinrich, the school’s director of undergraduate admission and student transition. Cleveland State has shied away from its reputation as a commuter school and invested heavily in its residence halls over the last few years. The university is in the midst of a $57 million residence hall expansion. The first phase opened last August with 300 beds, and the second will open an additional 300 this fall. “We’re definitely cognizant of that (population loss), but at this point in time, we’re focused on our own backyard,â€? Ms. Heinrich said. Only about 2.25% of Cleveland State’s undergraduate population is from out of state. Likewise, the University of Akron hasn’t focused heavily on out-ofstate recruiting, but over the next year the school plans to establish its longterm plan for enrollment growth, said Mike Sherman, its senior vice president, provost and chief operating officer. The university plans to hire another recruiter to focus on out-ofstate recruiting, but where that person might be stationed hasn’t yet been determined. “Within the on-campus mix, we’re going to have to decide the proportion of in-state and out-of-state and international students we’ll want,â€? Dr. Sherman said. “I imagine we’ll be growing out of state. ‌ But over the next year, we have a lot of work to do to work with strategic enrollment issues.â€? â–
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On June 27, Crain’s Cleveland Business will publish a special section called “Northeast Ohio’s Comeback Kids: Great Business Turnaround Stories.� We’re aiming to profile individuals or businesses that have proven to be battle-tested — those that came close to the brink of ruin, but instead moved in a positive direction due to careful management and calculation. Nominations can be submitted via email to sections editor Amy Ann Stoessel at astoessel@crain .com; please include “Comeback Kids Nomination� in the subject line. More than anecdotal evidence — such as current and past revenue and employment numbers, in the case of businesses — is preferred and recommended as part of the nomination. Turnarounds must have been sustained over at least a twoyear period. Nominations should be no longer than a single page. The deadline for submission is the close of business on Monday, May 9.
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Small: Investors hope LaunchHouse: Businesses offer mentoring funds keep talent here continued from PAGE 3
continued from PAGE 3
new businesses. Those groups will spend 11 weeks working on their ideas in Columbus at the 10x business accelerator, which OSU’s Fisher College of Business created in conjunction with the new fund. If the state likes the results, it will expand the fund to work with incubators elsewhere in Ohio. Besides this new fund, two existing Northeast Ohio organizations — Shaker LaunchHouse and Hatch Partners LLC — are expanding the number of investments they make in fledgling companies. The Ohio’s New Entrepreneur Fund, LaunchHouse and Hatch are all different, but each typically provides entrepreneurs with $10,000 to $50,000 in seed capital and the advisory services of experienced entrepreneurs — a combination that Dr. Camp and some members of Northeast Ohio’s business community say is an effective way to grow new companies. To back up that assertion, Dr. Camp cited two out-of-state programs: TechStars, which operates business incubators in New York, Boston, Seattle and Boulder, Colo., and Y Combinator, which is based in the Silicon Valley region of California. Together, the Ohio’s New Entrepreneur Fund and 10x were designed to work like a nonprofit version of those two for-profit programs, which provide small amounts of money and large amounts of mentoring from experienced entrepreneurs. The two incubators, which take equity stakes in the companies they work with, have helped launch lots of businesses and have become magnets for investors looking for promising companies. “It’s better than the venture capital model, and it’s certainly better than the angel model by itself,” Dr. Camp said.
Stemming the exodus The Shaker LaunchHouse business accelerator in Shaker Heights and its affiliated for-profit investment fund also drew inspiration from TechStars and Y Combinator, according to founders Todd Goldstein and Dar Caldwell. Thanks to a $250,000 cash infusion from an undisclosed investor, the investment fund — Goldstein Caldwell & Associates LLC, which does business under the LaunchHouse name — will make about 15 investments of about $10,000 each over the next 12 months. The fund made just 12 investments from 2008 through 2010. At the same time, the two entrepreneurs who founded Findaway World LLC of Solon are ramping up the number of investments they make and the assistance they provide to entrepreneurs through Hatch. Blake Squires and Christopher Celeste can invest more through Hatch now because last December they sold their shares in Findaway World, which makes Playaway-brand digital audio players. One reason they wanted to put more time and money into Hatch is because they saw so few groups in the area making smaller investments. Mr. Squires said the need grew last year, when the Cleveland Foundation decided to suspend the operations of the Civic Innovation
Lab, which made $30,000 investments in for-profit companies and nonprofit groups with ideas that could benefit the region. “We saw a big gap in those $30,000 to $50,000 to $80,000 opportunities,” Mr. Squires said. Making small investments available to entrepreneurs could help keep talented young people in the region, according to Mr. Caldwell, of LaunchHouse. “That’s one of the big reasons why we’ve seen this exodus from Cleveland,” he said.
Startups need a jump Ron Copfer, who has started multiple information technology companies in Northeast Ohio, for years has wanted to see local organizations provide more entrepreneurs with relatively small amounts of seed capital. In particular, he’d like to see business development group JumpStart Inc. fill that role. In March, the Cleveland-based nonprofit — which invests a few hundred thousand dollars in individual startups and provides advisory services to those companies and others — organized a public meeting to address a series of criticisms that Mr. Copfer and two other entrepreneurs raised in a chain of emails forwarded to business leaders and politicians throughout the region. Mr. Copfer in the emails suggested, among other things, that JumpStart should make smaller investments, and more of them. Doing so would give the largest possible number of startups a chance to succeed, Mr. Copfer said. It also would get more companies to the point where they would be ready to receive larger investments, he said. “The ground-up model will be the fuel for the other models,” he said. JumpStart, which receives nearly half its money from the state of Ohio, does provide operational support to groups that provide small amounts of capital to entrepreneurs. Among them are the Lorain County Community College Foundation’s Innovation Fund and the Wooster Opportunities Fund, which was created late last year. JumpStart will provide services to the Cleveland International Entrepreneurs Fund when it launches in June. JumpStart CEO Ray Leach said the organization invests a few hundred thousand dollars at a time because it wants to prepare companies to attract larger amounts of follow-on capital in the shortest possible amount of time. Attracting follow-on capital is a key metric by which JumpStart is judged when applying for state money, he said. JumpStart would make smaller investments if its financial backers deemed them a priority. Mr. Leach said he sees unmet demand for investments of all sizes, but he noted that most entrepreneurs are looking for $50,000 or less. That level of support often is provided by individuals, be they wealthy investors or an entrepreneur’s friends and family, Mr. Leach said. In Northeast Ohio, though, there are only so many people with money to spare, he said. “There’s a heck of a lot less friends and family money here than in other parts of the country, particularly for a first-time entrepreneur,” he said. ■
room, which is attached to a service bay that will house prototyping equipment as well as seminars and networking events. About two-thirds of the clients are entrepreneurs, and the rest are service providers who aim to help them, said Dar Caldwell, who in early 2008 founded the incubator with Todd Goldstein. “This is probably the most affordable work space in, maybe, America?” Mr. Caldwell said to laughs. Shaker Heights has provided support in the form of $500,000. Most of the money is helping renovate the city-owned building; the rest goes to fund incubator operations. A for-profit investment fund that is affiliated with the nonprofit incubator and does business under the LaunchHouse name also recently raised $250,000 from an unidentified investor, according to Messrs. Goldstein and Caldwell. They declined to say how much of the money will go toward investments and how much will go toward operating costs for the fund, which they created in 2008 as Goldstein, Caldwell & Associates LLC. However, the money will allow the fund to finance more companies: The for-profit fund plans to invest
“It’s awesome to see the (financial) support coming together.” – Dar Caldwell, co-founder, Shaker LaunchHouse
an average of $10,000 in 15 companies during 2011, Mr. Goldstein said. By comparison, the investment fund financed just 12 companies in its first three years. “It’s awesome to see the support coming together,” Mr. Caldwell said. The incubator began in a 700square-foot office above a strip mall in University Heights as a vehicle to help the investment fund’s portfolio companies grow. One reason Mr. Goldstein, 28, and Mr. Caldwell, 29, created it, however, was to help young entrepreneurs and keep them in the region, they said, noting that the incubator is open to entrepreneurs of all ages.
Incubator as farm team They are trying to mimic the successes of the Y Combinator incubator in Silicon Valley and a traveling incubator called TechStars, both of which provide entrepreneurs with assistance and small amounts of money. Much of Shaker LaunchHouse’s assistance will come
from more than 100 members of the business community who each have committed to providing at least four hours of free assistance every quarter to businesses affiliated with the incubator. Shaker Heights hopes Shaker LaunchHouse will help develop a “farm team” of companies that grow and move into nearby offices, said Tania Menesse, director of economic development for the city. Though Shaker LaunchHouse won’t move into its new headquarters until early May, it already is helping the city attract companies, Ms. Menesse said. Two businesses, an information technology company and another focused on engineering, have expressed interest in finding office space near the incubator, she said. “That’s exactly what we counted on happening here,” she said. Messrs. Goldstein and Caldwell want to open similar incubators in other Northeast Ohio cities eventually, Mr. Goldstein said, adding that a few municipalities have approached them already. They also would like to keep expanding Shaker LaunchHouse, he said. “As you can see, we have a whole lot of parking on both sides,” Mr. Goldstein 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
Tighten up
T
o this point, John Kasich has laid the burden for bringing down the cost of primary and secondary education in Ohio on the backs of teachers and other unionized school employees. Now, the governor and the Legislature need to turn their attention to channeling more tax dollars into the classroom by forcing a sharp reduction in the number of school districts that operate statewide. School districts in Ohio should gain greater control over their benefit costs thanks to the passage of Senate Bill 5, which made those benefits no longer subject to negotiation under contract talks with public employees. However, any savings the districts might realize from benefit packages that aren’t as generous as in past years still may not offset the reduced support for education that schools likely will see in future state budgets, including the next two-year budget proposed by Gov. Kasich. We get the feeling there are those in state government who believe that by applying intense budget pressures at the local level, many school districts will combine voluntarily, thereby reducing the overall cost of education. We’ve got two words for those people: Keep dreaming. Consider the case of the Mogadore and Springfield school districts, which already share a treasurer and are thinking of expanding upon their collaborative relationship. But raise the idea of consolidation of the two districts and it’s a whole different story. “We have ‘Friday Night Lights’ (football) here, and if we ever got away from that, it would just kill this town,” Mogadore school board President Rodger Sansom recently told The Plain Dealer. Losing the uniqueness of their high school football programs is the least of the worries of most school administrators when talk of consolidation arises. But losing their jobs is big cause for concern. Two school districts that combine don’t need two superintendents, or two human resource directors, or two treasurers, or two school boards. That’s why the people in charge don’t initiate these conversations. It is going to take a top-down approach for the state to realize the significant benefits that can be gained from eliminating pricey administrative jobs and putting that money toward classroom education instead. A year ago, the Brookings Institution and the Greater Ohio Policy Center released their valuable study, “Restoring Prosperity: Transforming Ohio’s Communities for the Next Economy.” In it, the two groups recommended that the governor and Legislature appoint an education reorganization commission with two tasks: 1.) to study the current costs of K-through-12 administration and to propose ways individual districts can reduce those costs; and 2.) to develop a plan to reduce by at least one-third the number of school districts in Ohio from the current 611. The last governor did not form that commission. The current one should make it a top priority. Teachers will make their sacrifices, but there’s also big money to be gained from doing away with tons of administrative overhead. It is a potential savings bonanza that should not be ignored.
FROM THE PUBLISHER
Some civil debate on a loaded issue
W
responses from readers via any number riting a column is mostly an of social media vehicles, and occasionally, enjoyable experience, espea good, old-fashioned email like the one cially if you’re a particularly printed on these pages from William opinionated sort (just ask Moench. my bride — bless her soul), because it Unlike the letters to the editor that gives you an opportunity to sound off start out calling us idiots, Mr. Moench is about the issues of the day in hopes of complimentary and thoughtful in tone, connecting with readers and provoking despite the fact that he’s telling them to think about those same me I’m all wet. issues. BRIAN But that’s OK. I really am glad On a regular basis, that also TUCKER when my column — or our means you’ll receive dissenting editorials that also appear on opinions (see wife reference, this page — provoke reader above) from readers, and that can response, because that’s exactly range in quantity and quality, as what they should do. And as you can imagine. long as they’re not libelous, the Sometimes, my columns have letters we receive are published brought anonymous, threatening as soon as we can find the space. hate mail. Other times, readers This week’s letter from Mr. have picked up the phone, Moench takes me to task for ridiculing a always surprised when I answer directly. new Ohio law that gives gun owners with But our boss, Keith Crain, does the same permits to carry concealed weapons the thing, and it’s one of the many things right to tote those weapons into a bar, that I believe sets our family-owned restaurant or other venue that serves publishing company apart from the alcohol. competition. He’s correct when he says I was uninOf course, in the new age of technologyformed on the stiff requirements faced driven instant communications, we get
by those who want a CCW permit. Read his letter and you’ll know more, as well. And he’s right that all the regulations in the world won’t stop shooting tragedies such as those he references — carried out by imbalanced people bent on slaughter. It’s a bit comforting to know how rigorous the permitting process is, and the fact that the CCW permit holder needs to re-apply every five years. But that’s where I stop, because I still don’t understand why Mr. Moench or any of the other Ohioans who have undergone the extensive training feel they need to have a concealed gun when they eat at Max & Erma’s or Applebee’s. And I find it quite unnerving that some people do just that when I’m in such places with my wife and kids. This is an issue on which Mr. Moench and I will need to agree to disagree, but I respect the tenor of his letter and his attempts — unlike others on this same issue — to keep it “short and civil.” What are your feelings? Let us know, and we’ll keep the dialogue going, in these pages, and perhaps even on our web site, CrainsCleveland.com. ■
PERSONAL VIEW
Ohio, U.S. futures lie in increasing exports By SHERROD BROWN
C
ompanies that export their products and services experience faster annual growth, pay higher wages to employees and are more likely to stay in business than those that don’t. With his National Export Initiative, President Barack Obama announced a target to double American exports over the next five years. Ohio companies can’t afford to be left out of this important initiative. That’s why, last week, I invited the president’s principal trade adviser, Ambassador Ron Kirk, to a forum with Northeast Ohio business and community leaders. We need to ensure that any national export strategy works for Ohio companies and manufacturers. Our trade relationships must create — rather
Mr. Brown is the senior U.S. senator from Ohio. than jeopardize — American job growth. This focus on exports is long overdue. In 2010, the U.S. trade deficit was $630 billion. The United States ranked fourth in exports — yet we ranked first in imports. Exports are critical to our economic recovery. How can we harness the job-creating effects that increasing exports bring? Strong trade enforcement must be at the center of our approach, with increased efforts at educating small business owners about opportunities to sell in the global marketplace. In addition to holding an Export Promotion Forum with Ohio businesses, Ambassador Kirk and I visited ArcelorMittal — just one of the many Ohio companies that represents our state’s long and vibrant
history with the steelmaking industry. In recent years, few industries were hit harder than domestic steel producers. The construction and automotive sectors suffered from the recession, which sent the demand for steel into a nosedive. Increased imports of underpriced steel products such as piping and tubing were making it almost impossible for domestic producers to compete at home or abroad. A number of cases involving the trade of steel products have been brought before the U.S. International Trade Commission (ITC) over the last several years. Many of these cases involved unfairly subsidized imports from China, a country that has shown a blatant disregard for international trade laws by manipulating its currency and providing unfair subsidies to its manufacturers. See VIEW Page 9
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THE BIG ISSUE What area of Northeast Ohio do you think could be better developed, and what should be done there?
WEDNESDAY, MAY 11, 2011 11:30 am Registration • 12 Noon Lunch & Program
PETER RASKIND Interim CEO, Cleveland Metropolitan School District
Moderated by Kim Wheeler
CHRIS CASA
CAROL BOBKA
FLOYD OLIVER
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South Euclid
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Cleveland
Bedford
Obviously, the lakefront. I’d like to see a lot of restaurants and hotels for businesses to hold conferences there.
The shoreline, for sure. It’s beautiful. They just need to clean it up and plant flowers, and build apartments and condominiums.
The lakefront for starters. ... I hope to see an aquarium there and a place for families to enjoy the water without necessarily going in the water.
Downtown. It needs more people-friendly places. They have hotels, but after you leave the hotels there are few places outside of Tower City Center for shopping.
Emmy Award-Winning Anchor & Education Reporter, WKYC TV 3
➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.
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Permitted gun carriers are qualified ■I generally find Brian Tucker’s column to be fair and balanced and I look forward to reading it each week. But in the April 18 issue, Mr. Tucker just couldn’t help himself and had to ridicule and lampoon the bill that would allow concealed carry weapon permit holders who happen to be “carrying� to eat dinner at Max & Erma’s or Applebee’s, which we like to do — but unfortunately, they also serve liquor. The law is not designed to benefit those yahoos that you referenced, who are not going to be thwarted anyway by any law regulating firearms, or some silly sign prohibiting firearms on the premises. See “Fort Hood Massacre� or “Virginia Tech Massacre� for examples of failure to comply with posted signs.
LETTER So that you might be more informed on these matters, please note that those of us who have concealed carry weapons permits undergo 10 hours of classroom instruction on Ohio Law, we are instructed on the responsibilities of those who choose to carry, proper firearms handling, two hours of actual range practice, and a written final exam. Upon passing all of those hurdles, the candidate is awarded a certificate stating successful completion of the “NRA Basic Pistol Course.� At that point, the candidate makes an appointment with the local county sheriff, is fingerprinted, photographed and his information submitted to the
FBI for an extensive background check. If the candidate has no record, he eventually is issued a license similar to a driver’s license, which must be renewed every five years. All of these requirements are spelled out in Section 2923.125(G)(1) and Section 2923.125(G)(2) of the Ohio Revised Code. Mr. Tucker mentioned none of these facts in his column, and he owes us an apology for his mischaracterization. Otherwise, keep up the good CORPORATE work.
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View: New markets prove crucial continued from PAGE 8
Thanks to rulings from the ITC in favor of American steelmakers â&#x20AC;&#x201D; which have enabled our government to apply equalizing border tariffs to dumped, underpriced imports â&#x20AC;&#x201D; the domestic industry is on the rebound. I witnessed it firsthand at V&M Starâ&#x20AC;&#x2122;s groundbreaking of a new, $650 million steel production facility in Youngstown, which has brought hundreds of jobs to the Mahoning Valley. Similar rulings enforcing international trade laws have aided the tire industry in northwest Ohio and the paper industry in southwest Ohio. Enforcing trade laws means creating American jobs â&#x20AC;&#x201D; and allows our manufacturers to trade fairly and freely in domestic and overseas markets alike. But enforcing our trade laws, while vital, is only part of the equation. We must do a better job at educating Ohio small business owners about opportunities to grow their businesses through global market development. According to the Senate Small Business Committee, less than 1% of the nationâ&#x20AC;&#x2122;s nearly 26 million small businesses export their products. Last December, my office held three export seminars across Northeast Ohio. At each, dozens of small business owners turned out to learn
how to expand their exports or begin exporting for the first time. Agencies such as the U.S. Commercial Service, a division of the Commerce Department, can help small businesses â&#x20AC;&#x201D; many of which donâ&#x20AC;&#x2122;t have the resources to develop overseas relationships on their own â&#x20AC;&#x201D; make those critical connections. Thankfully, the president has shown a real commitment toward increasing exports. He signed an executive order creating the National Export Initiative, and regularly seeks recommendations from the labor, business and government officials who make up the Presidentâ&#x20AC;&#x2122;s Export Council, of which I am a member. To complement the work of the PEC, I recently organized the Ohio Export Advisory Group to help advance Ohioâ&#x20AC;&#x2122;s export opportunities abroad. Ambassador Kirkâ&#x20AC;&#x2122;s visit to Cleveland is another sign of the presidentâ&#x20AC;&#x2122;s seriousness about advancing the export market. Rebuilding Ohioâ&#x20AC;&#x2122;s manufacturing base â&#x20AC;&#x201D; and our economy â&#x20AC;&#x201D; will depend in large part on helping our small businesses find new markets for their product, which we can do by enforcing trade laws and providing a support system for our small businesses. For Ohio, and for our nation, we must turn the presidentâ&#x20AC;&#x2122;s aspirations into reality. â&#x2013;
Investments in Clevelandâ&#x20AC;&#x2122;s Future An all-star panel presents an inside look at major projects now underway, including the Horseshoe Casino, Flats East Bank, Convention Center and Medical Mart. Scott Wolstein, Flats East Bank Marcus Glover, Horseshoe Casino Tracey Nichols, City of Cleveland
Ari Maron, MRN Ltd. Stephen Norton, STERIS Corp. Kristi Tanner, Ohio Dept. of Development
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Med device M&A likely will bounce back By FRANK ESPOSITO Plastics News
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The market for mergers and acquisitions among companies involved in the fragmented market of medical device outsourcing is expected to bounce back this year, according to industry observers. The number of such deals has been in decline since 2008, when 44 were made, according to Rob Andrews, a managing director with Stout Risius Ross Advisors LLC of Chicago. That number plunged to 16 in 2009 and 10 in 2010, but â&#x20AC;&#x153;looks to be increasing,â&#x20AC;? Mr. Andrews said at the Plastics in Medical Devices 2011 conference, held April 11-13 in Huron. The conference was hosted by Plastics News Global
Group, a part of Crainâ&#x20AC;&#x2122;s Cleveland Businessâ&#x20AC;&#x2122; parent company Crain Communications Inc. Overall revenue in the medical device outsourcing sector was estimated at $8.5 billion for 2010, and sales in the sector are growing at annual rates of 8% to 12%, Mr. Andrews said. But the market remains fragmented, with West Pharmaceutical Services Inc. of Lionville, Pa., being the only company with a market share of more than 10%. West Pharmaceutical has a 12% share, but is one of only nine medical device outsourcers with a share of 2% or more. â&#x20AC;&#x153;Despite growth in the sector, itâ&#x20AC;&#x2122;s also seen decreasing margins,â&#x20AC;? Mr. Andrews said. â&#x20AC;&#x153;There are high costs of product development and a complex regulatory process. Itâ&#x20AC;&#x2122;s also
dealing with a threat from low-cost manufacturers and increasing complexity in technology and materials.â&#x20AC;? Still, there are private equity firms that seem up for the challenges. Among them is Roundtable Healthcare Partners of Lake Forest, Ill. At the conference, RoundTable senior partner David Koo said the medical device outsourcing market â&#x20AC;&#x153;has a great opportunity to consolidate.â&#x20AC;? â&#x20AC;&#x153;Customers want to outsource, but they also want to reduce their number of vendors,â&#x20AC;? Mr. Koo said. â&#x20AC;&#x153;There arenâ&#x20AC;&#x2122;t enough large players in the sector. That makes it attractive to large corporate buyers.â&#x20AC;? â&#x2013; Frank Esposito is a senior reporter with Plastics News, a sister publication of Crainâ&#x20AC;&#x2122;s Cleveland Business.
GOING PLACES JOB CHANGES
LORAIN NATIONAL BANK: Thomas J. Lloyd to vice president, legal counsel.
ARCHITECTURE
OHIO COMMERCE BANK: Eric Johnson to assistant vice president, loan administration officer.
VOCON: Denver L. Brooker to studio director.
EDUCATION CLEVELAND STATE UNIVERSITY: Berinthia R. LeVine to vice president for university advancement and executive director, CSU Foundation Inc.
FINANCE CHARTER ONE: Greg Bleyl to mortgage loan officer. FIRST FEDERAL OF LAKEWOOD: Thomas J. Fraser to executive vice president, COO. LIBERTY BANK N.A.: Craig Reay to chief credit officer; Michael Allen to private banking team leader.
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FINANCIAL SERVICE CROWE HORWATH LLP: Lindsay Ricciardi to manager, audit and financial advisory group. GRANT THORNTON LLP: Robert Nelson to business advisory services manager.
HEALTH CARE LU-JEAN FENG CLINIC: Dr. Elaine A. Campbell to mental wellness coach. METROHEALTH: Dr. Charlotte Bowen Wagamon to Department of Orthopaedic Surgery; Dr. Alok Kumar Jain to Division of Gastroenterology.
LEGAL OGLETREE DEAKINS: Sheila Ninneman to of counsel; Charles Billington III to associate. ROLF GOFFMAN MARTIN LANG CO. LPA: Aric Martin and Paul Lang to partners.
MARKETING AKHIA: Candis Hecking to director, creative services; Jessica Hartney to senior designer and production manager; Angela Bachman and Tracy Burt to account directors; Megan Becka and Olivia Mihalic to account executives.
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BOARDS ST. VINCENT CHARITY MEDICAL CENTER: Melvin Pye Jr. (Fairfax Place) to chair; Judge Christopher Boyko and William R. Joseph to vice chairs; Jeffery Weaver to treasurer; Brent Buckley to secretary.
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ne needs to look no further than this year’s Health Care Heroes to prove there are heroes all around. To determine this year’s honorees, an independent panel of judges took into account nominees’ leadership, approach to health care and philanthropy/ community service in selecting winners in the categories of advancements in health care, allied health, health care advocate, nurse, physician and volunteer. The judges were Lois A. Bowers, managing editor of Medical Economics; Sheryl Stevenson, managing editor of Ophthalmology Times; and Tracey Walker, managing editor of Formulary. Winners in the category champions of corporate wellness were determined by Healthiest Employers, an Indianapolisbased technology and data research company.
ADVANCEMENTS IN HEALTH CARE DR. DEREK ABBOTT Assistant professor of pathology Case Western Reserve University School of Medicine Nomination emphasis: Pathology research FROM THE NOMINATION: r. Derek Abbott’s nearly 10 years studying NOD2, a gene that has been linked to such inflammatory conditions as Crohn’s disease and sarcoidosis, are paying off. The gene is responsible for regulating the body’s immune responses, but Dr. Abbott and his colleagues at Case Western Reserve University’s School of Medicine have found that two Food and Drug Administration-approved cancer drugs — Tarceva and Iressa — limit the activity of NOD2 and its “binding partner,” RIP2. Thus, the crew says it’s now able to target treatment more effectively for two sets of problems. First, it has tracked down a potential cause of Crohn’s, which affects the intestines, and sarcoidosis, which affects the lungs and other organs. Second, it also now says it can employ the cancer drugs for more than cancer; instead, the drugs also can be used to combat maladies caused by NOD2 hyperactivation — such as rheumatoid arthritis and multiple sclerosis — as those drugs can slow down that activation. In 2006, the same year Dr. Abbott joined CWRU, he received the Burroughs Wellcome Career Award in biomedical sciences, intended to advance the early career of a researcher. In addition, Dr. Abbott currently is the principal investigator on four National Institutes of Health research grants. Dr. Abbott, 39, also was published in December in the journal Genes and Development, and sits on the editorial board of the Journal of Immunology. “Dr. Abbott is a very energetic scientist, driven to excel and push the frontiers of his field,” said Clifford V. Harding, professor and chairman of pathology at University Hospitals Case Medical Center, in the nomination. “He is always developing new ideas and questioning models of the field.”
D
CODONICS INC. Middleburg Heights Nomination emphasis: 500i Safe Label System FROM THE NOMINATION: odonics Inc. of Middleburg Heights has developed one more layer of safety to assist doctors, nurses and other health care practitioners. According to the Anesthesia Patient Safety Foundation, drug errors occur in one in 140 cases in the operating room, and Codonics says that figure likely is an underestimate. So in 2008, it licensed SmartLabels technology from Massachusetts General Hospital, and it developed its 500i Safe Label System. Hospital staff members simply scan a drug vial, and the system provides both audible and visual confirmation of the medicine and its dosage. Then, the system prints labels for syringes and intravenous and invasive monitor lines, thereby minimizing the chance of vial or syringe swaps in harried operating rooms. The system, which also was nominated earlier this year for a Crain’s NorTech Innovation award, is the first in its class of advanced syringe labeling patient safety devices; it also meets all labeling standards set forth in 2010 by The Joint Commission and the American Society of Anesthesiologists. And to ensure it met the expectations and needs of end users — as well as international labeling guidelines — Codonics sought opinions from anesthesiologists across the world. In addition, the company said it tested the system with more than 40 end users.
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DR. CHRISTINE ZIRAFI Cardiologist, medical director, cardiac catheterization services Parma Community General Hospital Nomination emphasis: Heart attack response system FROM THE NOMINATION: r. Christine Zirafi has been instrumental in helping Parma Community General Hospital slash the time it takes to open up a patient’s blocked artery once he or she is rushed into the hospital. Under Dr. Zirafi’s direction, the hospital has reduced its annual average “door-to-balloon” time from 119 minutes in 2004 to 55 minutes in 2011. The American College of Cardiology’s goal is 90 minutes. “She’s had a patient in there in nine minutes; that was our quickest time,” said Steve Neylon, a registered nurse in the Cardiac Catheterization Lab. “It seems like 14 minutes, 17 minutes, 20 minutes is the norm around here.” Mr. Neylon said Dr. Zirafi recognized in 2005 the opportunity for paramedics to electronically transmit EKG readings from the field to the emergency department. “She’s as good, if not better, than most cardiologists,” he said. “She does it all. She’ll throw on her scrubs and open up arteries. She’s not staying in her office writing prescriptions.” Another way Dr. Zirafi has helped streamline the door-toballoon process was to eliminate the various “silos” patients were shuffled between — such as the emergency room — before reaching the catheterization lab. Dr. Zirafi also coordinates case reviews and education sessions as co-chairwoman of the hospital’s Cardiac Services Quality Support Team. She chairs the cardiac operations committee. She also was one of the interventional cardiologists who pushed for more cardiac surgery and high-risk catheterization capabilities, which led to the construction of the hospital’s heart center in 1999.
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INSIDE
HEALTH CARE HEROES LUNCHEON
Allied health PAGE H-2 ■ Health care advocate PAGE H-3 Nurse PAGE H-4 ■ Physician PAGE H-5 ■ Volunteer PAGES H-6, H-7 Champions of corporate wellness PAGES H-8, H-9 ■ Finalists PAGE H-10
This year’s winners and finalists will be honored at a luncheon on May 18 at the InterContinental Hotel. For more information and to purchase tickets, visit http://www.crainscleveland.com/hchtix.
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ALLIED HEALTH STACIE BECK Executive director Crossroads Hospice Nomination emphasis: Palliative care FROM THE NOMINATION: s executive director of Crossroads Hospice, Stacie Beck heads the Valley View-based office, one of 10 the company operates around the country that specialize in providing patientcentered end-of-life medical and spiritual care for the terminally ill and their families. Co-workers say Ms. Beck is known for dedication to patient
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care regardless of their ability to pay and a dedication to excellence and community education, which she shows by speaking regularly in the community and serving as a resource for the public on hospice and health care subjects. A registered nurse from the University of Akron who earned a Baldwin-Wallace College health care MBA, Ms. Beck is certified in hospice and palliative care. Earlier in her career, she started and sold Seniors Health Advantage, which provides in-home assistance to senior citizens.
Congratulations Lynda Corea ! A hero to Lifebanc and the 110,000 people waiting for organ transplants.
She is active with B-W’s MBA alumni group and is a member and past president of the Solon chapter of Rotary International. She also serves on the professional advisory council of The Gathering Place, which provides support and education for people and families touched by cancer, and is a member of the Cuyahoga Valley Chamber of Commerce. She previously served three years on the board of the Solon Chamber of Commerce. During her tenure at Crossroads Hospice, she helped lead the office through the Ohio certification process, heading an organization with more than 100 employees and an annual budget exceeding $10 million, and she boosted its patient census by 100% over the last year. At Crossroads, she has organized a professional advisory board for the office and emphasized support for surviving family members during and after a patient’s death. “Stacie’s commitment to patient care and comfort is her primary objective,” said the nomination, which also made note of her strong leadership qualities.
ADRIANNE SHIMEK Director of Rehabilitation Montefiore Home/ Cleveland Clinic Nomination emphasis: Physical rehabilitation FROM THE NOMINATION: drianne Shimek, director of rehabilitation for the Montefiore Home/Cleveland Clinic, changed the culture
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lifebanc.org
Congratulations
FROM THE NOMINATION: s a fitness instructor at The Renaissance, a continuing care retirement community in Olmsted Township, Maggie Langley has motivated independent living residents to improve their mobility, balance and confidence. The program’s results speak to Ms. Langley’s own strength of character. Attendance at the facility’s fitness programs has doubled under her leadership because Ms. Langley facilitates an environment in which residents feel comfortable exercising among peers, no matter their endurance levels. “Initially, Maggie’s classes sat quietly in their chairs during instruction,” according to the nomination. “She worked to ‘loosen up’ participants both literally and figuratively.” Residents since have eschewed chairs for elastic bands and weight balls and are at ease discussing their progress and challenges.
Ms. Langley encourages participants to focus on what they can do, not what they can’t, and she is attentive to each individual’s needs. “The quieter you are, the harder I make you work,” she is quoted as saying, according to the nomination form. Her goal is to continue gaining knowledge in fitness for older adults and to incorporate new ideas to keep exercise fun and safe. “All the knowledge in the world is not helpful if you can’t relate well to people,” Ms. Langley said in the nomination form. “You can learn about teaching exercise, but you must also learn how to relate to people and provide individualized service.” Ms. Langley’s accomplishments in the fitness arena don’t stop there. As fitness manager at Fairview Recreation Center, Ms. Langley initiated various challenges such as the “Biggest Loser City Edition” in 2008. The weight loss contest between Rocky River and Fairview Park resulted in participants losing a total of 758 pounds.
of her department when she took over by providing an encouraging, positive environment. “Adrianne Shimek is an exceptional leader who is strongly business minded but people centered first,” the nomination said. “She is innovative and has created new product lines, including an outpatient wheelchair clinic and a sleep apnea program, that provide financial benefit but with the concern for bringing important services to patients foremost in her mind.” The wheelchair clinic launched with Health Aid of Ohio assists clients with new wheelchairs, cushions and other upgrades that increase their ability to remain mobile and participate in the community. The service also is offered to patients at home who cannot make it to the clinic for services. The sleep apnea lab provides services for patients at home rather than at a testing lab, which enables patients to receive the
respiratory equipment and other measures that ensure quality sleep, ultimately decreasing the risk and incidence of other health issues from congestive heart failure to diabetes. As a leader, Ms. Shimek has strengthened her team by providing additional training in staff meetings, encouraging staff to find creative solutions to problems and holding monthly meetings to celebrate staff achievements and birthdays. Ms. Shimek also volunteers at multiple levels. She leads two weekly exercise classes to encourage wellness among her co-workers, and she encourages individuals to take steps to improve their health. Furthermore, she volunteers with the Juvenile Diabetes Research Foundation, the Leukemia/ Lymphoma Society and Ronald McDonald House. She also speaks at area senior centers to provide therapeutic tips for aging well and various diseases.
MAGGIE LANGLEY Fitness coordinator The Renaissance Nomination emphasis: Geriatric work
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R E D E F I N I N G H E A LT H C A R E
Case Western Reserve University School of Medicine applauds our faculty for their dedication to improving health in our community. casemed.case.edu
We’re proud of
Josephine Jones, MPA, RN A health care hero to patients and families in Lake County and neighboring communities. 2889-4/11
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HEALTH CARE ADVOCATE WILLIAM CONSIDINE President, CEO Akron Children’s Hospital Nomination emphasis: Pediatrics FROM THE NOMINATION: hroughout his career of more than 30 years as president and CEO of Akron Children’s Hospital, William Considine has steered the expansive children’s hospital with his “missionover-margin” management philosophy. Mr. Considine has been a tireless advocate for providing the best health care for children regardless of an ability to pay, and his passion for helping young people has inspired the hospital’s entire staff. Under his leadership, Akron Children’s has grown into the largest pediatric health care provider in Northeast Ohio; it has more than 85 locations, including the Mahoning Valley’s Beeghly Campus, a freestanding children’s hospital with a 32-bed inpatient unit. In 2010, the system served more than 600,000 patients. When Mr. Considine joined the hospital in 1979, its gross revenue hovered at $27 million; by 2010, that number grew to more than $780 million. Mr. Considine and his wife, Rebecca, in 2009 pledged $1 million to the hospital to establish the
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Rebecca D. Considine Clinical Research Institute, which will enable the hospital to conduct research into prevention and treatment of pediatric illnesses and to provide support for the education and training of research staff. Research has been one of the core elements of the hospital’s mission under Mr. Considine’s watch, and several advancements have been made during his tenure. For one, in 2005, the hospital developed a new procedure that allows an implantable cardioverter defibrillator to be used in children as small as 22 pounds. Also, in 2004, the hospital became the first pediatric hospital in the world to own an intraoperative MRI to pinpoint brain tumors.
JOSEPHINE JONES Director of behavioral medicine Lake Health Nomination emphasis: Behavioral medicine FROM THE NOMINATION: n just three years, Josephine Jones transformed the attitudes and actions of Lake Health and its surrounding agencies regarding the treatment of patients with behavioral health needs. Ms. Jones accepted the newly created position of director of behavioral medicine because she recognized the need for skilled and timely care for emergency department patients with mental issues
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and substance abuse problems. The emergency department at Lake Health typically had focused on the physical needs of patients, while those who needed a behavioral health assessment had to wait. So, Ms. Jones developed the rapid response behavioral health team, which tends to patients without urgent medical needs but who require an immediate need for a mental health evaluation. To support the effort, Ms. Jones applied for and received a $630,000 grant by detailing in a 113-page report how she planned to develop staff, contain costs, share resources and establish an
integrated system of services that emphasize prevention, early intervention, clinical best practices and recovery. Ms. Jones also strengthened the links with Lake County’s behavioral health and law enforcement communities, and she is a leading advocate in support of building a behavioral health crisis stabilization center. Besides those initiatives, she worked with the emergency department to develop a suicide screening tool and authored a hospital-wide suicide assessment policy. A relative testimonial included in Ms. Jones’ nomination lauded the fact that a patient was linked with a social worker who assisted with the appropriate steps following a suicide attempt.
GAIL MCPEAKE Director, health services Koinonia Homes Inc. Nomination emphasis: Adult disabilities FROM THE NOMINATION: ail McPeake listens with both her ears and her eyes. When the nurse discovered that 45 of the 64 people in a section she oversees at Koinonia Homes Inc. were nonverbal, she developed a picture communication book to help them describe how they feel, what to expect at medical appointments and body parts that hurt. And her work to improve communication with individuals who have intellectual and/or developmental disabilities doesn’t stop there. She wrote a resource book that describes more than 100 common chronic diagnoses in layman’s terms for use when caring for such individuals. The resource book was presented at an industry conference, and the possibility exists for publication for use across the country. It is not only to those she serves that she listens. Ms. McPeake also solicits input and feedback from staff, the nomination said. She uses powerful, positive language in her interaction with others; a common phrase to her team is, “We couldn’t have accomplished the goal without you.” Listening is only part of her contribution. Ms. McPeake also spends time as a DJ at dances and walks, raising money to support those with disabilities. “Gail models the behavior she wants to see from others,” the nomination said. “It’s not hard to want to achieve excellence when with Gail.”
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Life and Disability products underwritten by Anthem Life Insurance Company. Anthem Blue Cross and Blue Shield is the trade name of: In Colorado and Nevada: Rocky Mountain Hospital and Medical Service, Inc. In Connecticut: Anthem Health Plans, Inc. In Indiana: Anthem Insurance Companies, Inc. In Kentucky: Anthem Health Plans of Kentucky, Inc. In Maine: Anthem Health Plans of Maine, Inc. In Missouri (excluding 30 counties in the Kansas City area): RightCHOICE® Managed Care, Inc. (RIT), Healthy Alliance® Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and certain affiliates administer non-HMO benefits underwritten by HALIC and HMO benefits underwritten by HMO Missouri, Inc. RIT and certain affiliates only provide administrative services for self-funded plans and do not underwrite benefits. In New Hampshire: Anthem Health Plans of New Hampshire, Inc. In Ohio: Community Insurance Company. In Virginia: Anthem Health Plans of Virginia, Inc. trades as Anthem Blue Cross and Blue Shield in Virginia, and its service area is all of Virginia except for the City of Fairfax, the Town of Vienna, and the area east of State Route 123. In Wisconsin: Blue Cross Blue Shield of Wisconsin (“BCBSWi”), which underwrites or administers the PPO and indemnity policies; Compcare Health Services Insurance Corporation (“Compcare”), which underwrites or administers the HMO policies; and Compcare and BCBSWi collectively, which underwrite or administer the POS policies. Independent licensees of the Blue Cross and Blue Shield Association. ® ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. OH_CrainsCleve_050211
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NURSE IRENE FITZGERALD Clinical manager, community hospice Holy Family Hospice Nomination emphasis: Hospice/ end-of-life treatment FROM THE NOMINATION: hether it’s a funny story, a supportive word or a home-baked, specially decorated cake, Irene Fitzgerald supports her staff in the overwhelming experience of caring for the dying. Described as a nurse who has
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KAREN TATTER Maternity nurse MetroHealth Medical Center Nomination emphasis: Maternity care FROM THE NOMINATION: aren Tatter has done a lot for parents in Northeast Ohio. In addition to having served as a maternity nurse at MetroHealth Medical Center for 24 years, Ms. Tatter has created several programs aimed at helping new parents. She runs childbirth classes at
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the “enthusiasm of an adolescent” and one who keeps things in perspective, Ms. Fitzgerald is an “exceptional example of going above and beyond” and balances the needs of the Holy Family Hospice team with those of patients and families. “Compassionate” aptly describes her. Ms. Fitzgerald’s work week doesn’t end on Friday: She has covered patient on-call hours in
addition to her regular schedule, attends wakes and funerals of deceased patients and volunteers at organizational events. She aims when possible to grant patients’ wishes, such as a taste of Ben & Jerry’s ice cream, and works to exceed her staff’s needs. She designed and structured staff in-services to keep them current on new hospice trends and guidelines, and with the same purpose in mind, she takes continuing
MetroHealth and developed a program at the hospital to assist patients during and after childbirth. Much of her work goes beyond MetroHealth’s walls: She created a “Daddy Boot Camp” class at MetroHealth and has helped replicate the program at seven other local hospitals and at the county jail. Fathers who participate often recommend the classes to friends and family members. Some even come back to teach other participants.
Ms. Tatter also runs parenting classes for pregnant inmates at the jail and is helping a local judge create a family court to help families with domestic violence issues and other needs. Colleagues describe her as a creative, hard-working and funloving person who inspires others to follow her lead, according to the nomination form. “Though she’s quite modest about her work, she’s quick to share the successes of the new parents in her classes. She boasts about her patients’ achievements and their newfound affection for
education courses. Additionally, Ms. Fitzgerald helps find ways to reduce for patients’ families the burden of care, perhaps with massages from the facility’s volunteer massotherapist or by sending a volunteer to sit with a patient to allow families a breather. “Irene spreads the message of dignity and respect of life to everyone she encounters, even if they are not involved in hospice,” the nomination said. “It is ingrained in her spirit and in her heart.”
“(Ms. Tatter) is quick to share the successes of the new parents in her classes. She boasts about her patients’ achievements and their newfound affection for parenting.” parenting,” the nomination said. “It’s this passion to help others succeed that prompts her coworkers to go the extra mile. But her affect on others doesn’t stop there.”
2010 WINNERS A list of winners from last year’s Health Care Hero awards: ■ Volunteer: Dr. Nicholas Marko, Cleveland Clinic ■ Allied Health: Beth Shapiro, Hospice of the Western Reserve ■ Physician: Dr. Chester Ho, Louis Stokes Cleveland VA Medical Center ■ Advancements in Health Care: Dr. Joseph Baar, University Hospitals Case Medical Center ■ Employer Achievement for Wellness: Herbruck Alder ■ Nurse (Non-Hospital): Adriana T. Whelan, The Free Medical Clinic of Greater Cleveland ■ Nurse (Hospital): Michele Reali-Sorrell, Huron Hospital ■ Health Care Advocate (Individual): Helen Moss, The Helen Moss Breast Cancer Research Foundation ■ Health Care Advocate (Organization): Voices for Ohio’s Children
Congratulations to Stacie Beck!
LYNNE YURKO Director of clinical operations for surgery, orthopedics and burn MetroHealth Medical Center Nomination emphasis: Burn treatment and care FROM THE NOMINATION: ynne Yurko turned what was supposed to be a six-week stint in MetroHealth Medical Center’s burn unit into a career and a personal passion. Ms. Yurko, a registered nurse, has spent 36 years in the burn unit, where she serves as an inspiration to both patients and colleagues. She was supposed to be transferred to MetroHealth’s coronary care unit six weeks after taking the job, but she soon found that she loved forming personal bonds with burn patients and helping to ease their pain, be it through treatment or personal attention. The nomination form says Ms. Yurko “has been a leader in the MetroHealth Burn Unit practically since she arrived — even when she didn’t hold a leadership position.” Her dedication inspires other nurses to “go the extra mile for their patients, and to always look for and develop ways to improve care,” the form states. Ms. Yurko pursues her passion in other ways, too: She launched a web site, burntalk.com, to provide the community with information on burn prevention and treatment; she gives presentations on those topics at industry events; and she participates in winter and summer burn camps for children. She also has helped conduct research related to music therapy and pain management, wound care for burns and patient management. Those accomplishments helped Ms. Yurko win the 2011 Curtis P. Artz Distinguished Service Award. The award is the highest honor that the American Burn Association gives to members who are not physicians.
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Winner of the Health Care Hero award in Allied Health. Stacie exemplifies Crossroads’ mission to provide excellence in hospice care. As executive director, she motivates and drives our staff to care for patients and families, of the greater Cleveland area, at the highest level every day. We are proud to have Stacie as a member of our team. Thank you for your unwavering dedication.
and
Health Care Heroes, to Our Nation’s Heroes! www.CrossroadsHospice.com 216-654-9300
Louis Stokes Cleveland Department of Veterans Affairs Medical Center www.cleveland.va.gov Find us on Facebook!
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PHYSICIAN DR. BRUCE COHEN Director, pediatric neurology Akron Childrenâ&#x20AC;&#x2122;s Hospital Nomination emphasis: Neurology FROM THE NOMINATION: itochondrial disease can cause loss of motor control, muscle weakness, gastrointestinal disorders, cardiac disease, respiratory problems and can make those afflicted highly susceptible to infection. It affects about one in 4,000 children in the United States, according to the Mitochondrial Disease Action Committee, a Medford, Mass., nonprofit that provides information and testing on mitochondrial diseases. Dr. Bruce Cohen has become a pre-eminent expert on this hard-to-diagnose malady. â&#x20AC;&#x153;There are very few doctors in the world with as much clinical expertise and leadership in the field of mitochondrial disease as Clevelandâ&#x20AC;&#x2122;s own Dr. Bruce H. Cohen â&#x20AC;&#x201D; and even fewer are as tireless and caring,â&#x20AC;? wrote Darcy Zehe, president of the Northeast Ohio Chapter of the United Mitochondrial Disease Foundation, in nominating Dr. Cohen. Ms. Zehe, who also is a partner in the Breehl, Traynor & Zehe marketing firm, speaks from firsthand knowledge. It was Dr. Cohen who diagnosed mitochondrial disease, often frustratingly hard to pinpoint, in her son, Nicholas. Dr. Cohen in April joined the medical staff at Akron Childrenâ&#x20AC;&#x2122;s Hospital as director of the department of pediatric neurology. He joined the Akron hospital from the Cleveland Clinic, where he held appointments in neurosurgery and pediatrics and was chief of pediatric surgery. He is a graduate of the Albert Einstein College of Medicine of Yeshiva University, Bronx, N.Y. He also has been elected by his peers into leadership positions, including president of the Mitochondrial Medicine Society and Professors of Child Neurology. Said another parent of a child with mitochondrial disease, Chuck McGoarty, in the nomination form: â&#x20AC;&#x153;Dr. Cohenâ&#x20AC;&#x2122;s passion for the possibility of a cure makes our trips to his office something to look forward to â&#x20AC;&#x201D; something strange to say about a necessary activity in dealing with a disabled child.â&#x20AC;?
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DR. SARA STEIN President/CEO Stein Wellness Centers (Opening May 2011) Nomination emphasis: Obesity/bariatrics
DR. SARAH FRIEBERT Director Haslinger Family Pediatric Palliative Care Center, Akron Childrenâ&#x20AC;&#x2122;s Hospital Nomination emphasis: Pediatric cancer FROM THE NOMINATION: r. Sarah Friebert is remembered by one family for taking the time to sit with a pediatric patient while his parents stepped out for some much-needed fresh air. â&#x20AC;&#x153;Through all of the phone calls, questions, worries and concerns, there has never been a moment where I felt that they were not right there with us. I am so grateful to Dr. Friebert and the palliative care team for doing what they do best â&#x20AC;&#x201D; taking care of children and their families,â&#x20AC;? said the letter from the patientâ&#x20AC;&#x2122;s family, which was included in the nomination form. Dr. Friebert is the director and founder of the Haslinger Family Pediatric Palliative Care Center at Akron Childrenâ&#x20AC;&#x2122;s Hospital. Contrary to public perception, palliative care isnâ&#x20AC;&#x2122;t just for patients with life-threatening illnesses such as cancer. Dr. Friebert and her team also provide case management and consultation to families of children with complex medical needs who are often cared for by many different providers. In eight years, the center served more than 1,300 families. Patients have been referred by almost every subspecialty of pediatrics available at Akron Childrenâ&#x20AC;&#x2122;s, have ranged in age from prenatal to 68 years (Akron Childrenâ&#x20AC;&#x2122;s is the regional burn center and cares for adult patients as well), and have come from 44 counties and eight states. Dr. Friebert and her team of specialists are nationally recognized for their contribution to improving life for the families they serve â&#x20AC;&#x201D; as evidenced by the fact that the center was selected in 2008 as a Palliative Care Leadership Center through the Center to Advance Palliative Care in 2008. In 2010, Dr. Friebert became the first female president of Akron Childrenâ&#x20AC;&#x2122;s Hospital medical staff. That same year, Akron Childrenâ&#x20AC;&#x2122;s also honored Dr. Friebertâ&#x20AC;&#x2122;s work by creating the first endowed chair for pediatric palliative care services in the nation. Named in her honor, she is serving as the first chair holder.
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FROM THE NOMINATION: r. Sara Stein might be an effective, innovative leader and wellversed in multiple aspects of health care, but a book the doctor wrote on obesity proves that she is so much more. â&#x20AC;&#x153;She had opened up her heart, bared her body and exposed her soul as someone who had struggled with lifelong obesity, and who treated obesity, combined it with medicine, physiology and psychiatry, and served up pages of healing,â&#x20AC;? the nomination said. Dr. Stein, author of â&#x20AC;&#x153;Obese from the Heart,â&#x20AC;? was the director of the obesity clinic at Kaiser Permanente, and she is in the midst of opening the Stein Wellness Center in Woodmere. It is the first of several centers she intends to open, and it is slated to begin operations in May. Using an evidence-based approach to obesity, Dr. Stein has worked to develop alternative approaches to losing weight that are more effective for many patients. Generally, her methods help patients avoid the causes of stress that make the body gain weight, while focusing on ensuring that the body has the nutrients it needs to be healthy â&#x20AC;&#x201D; a key to weight loss. â&#x20AC;&#x153;In terms of obesity, Dr. Stein was the person to see and be inspired by. She lost 100 pounds herself, as did her husband, and wrote an award-winning book about the experience of obesity and how to begin to change,â&#x20AC;? the nomination said. â&#x20AC;&#x153;She told a painful story with pride and teaching purpose because she knew it would help others. With patients, staff, colleagues, or anyone who asks, she will painstakingly review their lifestyle in order to find small easy changes that are sustainable and easily incorporated into weight loss.â&#x20AC;? In 2010, Dr. Stein was awarded the Kaiser Permanente Humanitarian Award for Community Service for her work on obesity. She also extends her care and understanding of obesity into social media, with 4,000 people who follow her on Twitter and 460 on Facebook.
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Akron General congratulates
Health Care Hero finalist
Beverly Bokovitz
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Believe Senior Vice President, Chief Nursing Officer Akron General Medical Center
A special salute to all other finalists being recognized.
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VOLUNTEER LYNDA COREA Volunteer Lifebanc Nomination emphasis: Organ donation advocacy FROM THE NOMINATION: ynda Corea has lived a life that only a handful of people in the United States have experienced. Ms. Corea’s son, Mike, received a liver donation when he was just 13 years old. Years later — days prior to his graduation from college — Ms. Corea’s son was killed as a result of an accident. Amid the tragedy, the Corea
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family honored Mike’s decision to be an organ and tissue donor. “Since that accident, Mike’s story of how he was saved by an organ donor and then how he saved others has been told countless times,” the nomination said. “Lynda in her humble manner will tell you that she is just the storyteller. But she is more, much more.” Ms. Corea has been a volunteer, mentor, contributor and spokeswoman for Lifebanc since she began her service in 2007. “She has educated thousands regarding the power they have to
save lives by becoming registered organ, eye and tissue donors,” the nomination said. “In turn, these educational efforts have influenced countless people to register their decisions to become donors for the first time.” Ms. Corea volunteers for Lifebanc in three ways — leading the Legacy Garden for the Gift of Life Walk and Run; recruiting registered donors at various events; and facilitating Donor Family Grief Support Groups. A few years ago, the Corea family also created the The Michael Corea Memorial Scholarship. Each year, at least one $1,000 scholarship is awarded to a recipi-
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ent, living donor or transplant candidate. “Through Lynda’s actions and words, she inspires other parents
whose children were donors in that something good can come from something so tragic,” the nomination said.
DR. GARY S. HOFFMAN Volunteer physician The Free Medical Clinic of Greater Cleveland/ Cleveland Clinic Nomination emphasis: X-ray diagnostics to underserved patients
capacity for delivering quality health care to the growing uninsured and underinsured community,” the nomination said. Dr. Hoffman formerly served as director of physician volunteers at the Cleveland Clinic. His professional tenure with Cleveland Clinic, which spans nearly two decades, includes leadership roles such as chairman of the Department of Rheumatic and Immunologic Diseases. He also is the founder of the Cleveland Clinic Center for Vasculitis Care and Research and is currently the Harold C. Schott Professor of Rheumatic and Immunologic Diseases for Cleveland Clinic Lerner College of Medicine of Case Western Reserve University. “Dr. Hoffman demonstrates genuine compassion toward the patients he treats at The Free Clinic, as evidenced by his tireless efforts in launching the X-ray clinic to ensure accessibility of radiology services for patients who would otherwise lack appropriate alternatives,” the nomination said. “He is a stellar example of a community physician in the truest sense.”
FROM THE NOMINATION: or nearly three years, Dr. Gary S. Hoffman has been working as a volunteer physician at The Free Medical Clinic of Greater Cleveland. Dr. Hoffman joined the volunteer corps in July 2008 when he initiated a monthly rheumatology clinic. Recently, he was instrumental in launching the organization’s X-ray clinic, which for the first time offers Free Clinic patients access to onsite diagnostic imaging services. Dr. Hoffman promoted his most recent initiative by securing in-kind support from the Cleveland Clinic and by recruiting a number of volunteer professionals to donate their services. “Dr. Hoffman is an extraordinarily dedicated and compassionate physician who continually champions The Free Clinic’s cause and has significantly improved our
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VOLUNTEER WALTER OSWALD Volunteer Hospice of the Western Reserve Nomination emphasis: Hospice services FROM THE NOMINATION: t 80 years old, Walter Oswald — or Ozzie as he is referred to by his colleagues at the Hospice of the Western Reserve — is known as the go-to person for jobs many are unwilling to do. Mr. Oswald, a Cleveland Heights resident, has been a hospice volunteer for the past 12 years, having started with the organization due to his desire to “give back” after his father received hospice care 20 years ago. “Ozzie’s quick wit and sense of humor combined with his calming presence leaves all who encounter him feeling better than they did before,” the nomination said. “Not only do hospice patients benefit greatly from Ozzie, but he is a delight and welcome ray of sunshine to the hospice staff who so deeply appreciate him.”
A
“(Mr. Oswald’s) quick wit and sense of humor combined with his calming presence leaves all who encounter him feeling better than they did before.” Mr. Oswald is known for going above and beyond — grocery shopping, errands, light maintenance, cleaning and helping patients clean out their attic so that they can leave their affairs in order are all in a day’s work. Recently, he worked on a months-long project helping a legally blind caregiver sort through loads of paperwork and periodicals that had accumulated over time as his vision failed. Mr. Oswald visited week after week, chronologically organizing bills, making discard and action piles, and routinely taking 100 pounds of old papers and magazines to the recycling bin. In addition to his volunteer work at Hospice of the Western Reserve, Mr. Oswald maintained a part-time
job until 2010. He also is a frequent presenter at volunteer education classes where he conveys the sense of dignity patients feel when they have a clean bathroom and inspires the new volunteers to contribute in kind. “Countless patients and families have benefitted from his willingness to do some of the less glamorous tasks that are so desperately needed,” coordinator of volunteers Sharon Richman said in the nomination. “Unfortunately, many of our patients don’t have family or friends available or capable of helping to get these chores accomplished.”
SUE SANVIDO Volunteer, Pet Pals University Hospitals Case Medical Center Nomination emphasis: Pet/patient therapy FROM THE NOMINATION: ue Sanvido believes that man’s best friend can help ease some of the anxiety associated with hospital stays. Ms. Sanvido has been volunteering at University Hospitals Rainbow Babies & Children’s Hospital in the Pet Pals program since the program began in 1993. As one of three initial pet therapy volunteers, she was instrumental in helping to develop the program at a time when the idea of animals
S
having therapeutic value for hospitalized patients was fairly novel. “She has worked tirelessly to educate hospital staff and the community alike on the health benefits of therapy dogs and to address many of the concerns of having dogs in the hospital,” the nomination said. Since its beginning, the Pet Pals program has grown from three volunteer-dog teams visiting patients in UH Rainbow Babies & Children’s Hospital to 78 volunteer-dog teams (and a pony) visiting patients throughout the UH Case Medical Center campus, and at the psychiatric unit at UH Richmond Medical Center and the
EMPLOYEE
more than a goal, it’s a lifestyle!
CLEVELAND’S HEALTHIEST EMPLOYERS MEDICAL MUTUAL is a proud nominee
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UH Seidman Cancer Center at Chagrin Highlands Health Center. As a Pet Pals volunteer, Ms. Sanvido — who also works full time, often traveling for business — participates in a great number of community events, giving up her evenings and Saturdays to share the program with others. In addition, she helped in transitioning the program between departments, and she aids in fundraising, training, mentoring and evaluation. “She is passionate about what she does, loves sharing her knowledge with others and works hard to ensure the Pet Pals program maintains high quality, patient safety standards and an excellent reputation,” the nomination said.
Visit MedMutual.com.
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BENDIX COMMERCIAL VEHICLE SYSTEMS LLC Elyria
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D
iane Shields isn’t a teacher, but when it comes to the wellness program at Bendix Commercial Vehicle Systems in Elyria, she sees her role as one of an educator. Bendix, a supplier of air brake and filtration systems to the heavyduty commercial vehicle industry, since 2003 has been “on a journey to educate” employees about how they can live healthier lifestyles, said Ms. Shields, the company’s vice president of human resources. Two years ago, Bendix implemented “personal health assessments” in which employees answer questions about issues such as nutritional habits and physical activity. Based on those questionnaires, employees receive a confidential health status report, and the
CHAMPIONS OF CORPORATE WELLNESS
company receives an aggregated report on the major health risk factors for its work force. (Bendix has about 450 employees in Elyria.) Ms. Shields said the company has used that data to tailor its wellness offerings to the needs of the work force, such as programs aimed at weight management and reducing cholesterol. She said that with two
years of data, there’s “some clear, positive momentum” in creating a healthier work environment. Bendix has seen steady declines in claim utilization as a result of the wellness program, Ms. Shields said, and its health care-related spending per employee has dropped below national averages. The company has an on-site fitness center and healthy vending machine choice, among other things, and this year is placing a special focus on nutrition and weight loss. The key to making the wellness initiative a success, Ms. Shields said, is being “proactive and positive” in encouraging employees to take advantage of programs the company offers. As health care continues to dominate the political and economic agenda, companies increasingly will see comprehensive wellness programs as “almost a requirement” for helping to contain costs, Ms. Shields said.
benefit discount incentive program, which means that employees enrolled in Donley’s health benefit plan can earn a 10% savings on their insurance premium through wellness participation, health risk assessment and annual physicals. The program also has allowed Donley’s to receive a 3% benefit renewal discount through ERC Health every year since the program’s inception. In February 2009, Donley’s even opened an on-site fitness center, which is free to all employees and their families. “At lunchtime, basically all of our equipment is in
use,” Ms. McClain said. Participation incentives for the wellness program and its events include the benefit premium discount, as well as free lunches, gift certificates, cash, PTO days, and various other wellness-related prizes. Donley’s recently teamed up with Blue Sky Green Fields to offer employees an organic produce delivery program. “The most rewarding result of Donley’s Wellness Program has been the change in our employees,” the company wrote in its assessment survey. “Employees openly discuss health, fitness and nutrition with their co-workers and families.”
DONLEY’S INC. Cleveland
O
riginally established in 2000, Donley Inc.’s wellness program was intended to benefit the general contracting firm’s field and office employees by offering programs that enhance personal health and well-being. More than a decade later, the program has continued to grow under the guidance of wellness coordinator Katie McClain, who is a member of the Northeast Ohio Wellness Council and the Healthy Ohio Regional Business Council. In 2005, a new name and logo was introduced for the program: D Lifestyle — Building a Better Life. D Lifestyle also launched Donley’s
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he Hylant Group practices what it preaches. While the 75year-old business insurance brokerage promotes the value of a healthy work force to it clients and assists them in creating and managing wellness programs, it also has a well-regarded health and wellness program for its own staff of 600 in 12 offices in five states, including its 71 workers in Northeast Ohio. “It is our goal to create a culture of wellness in the workplace that is not only sustainable, but effective and has measurable outcomes,” the company reported in its assessment survey for Health Care Heroes. “Based on our (health risk assessment) data as a company, we are developing programs to address our top risks of hypertension, obesity, poor nutrition and sedentary lifestyles.” In part because of this approach to health and wellness, in 2009 and 2010 Business Insurance named Hylant one of the best insurance companies for which to work. Said the publication: “What makes the company a great place to work? Hylant’s employees are the most valuable asset in the organization and they feel it.”
Crain’s and Business Insurance are part of Crain Communications Inc. Hylant company policy gives employees access to wellness programs during work hours, on-site fitness centers or other wellness activities, flexible work schedules and employee access to healthy food options. It does biometric screenings, which typically includes checking cholesterol levels, blood pressure and blood glucose levels, as well as health risk assessments that help employees evaluate their health risks and quality of life. It also offers walking clubs, stress management programs and online health courses. Its Independence office also recently was renovated to include a mothers’ quiet room for nursing mothers. For 2011, according to its assessment survey, the company hopes to expand its wellness initiatives to reach 75% of its employees, provide at least one new wellness initiative per quarter and hold monthly wellness meetings.
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CHAMPIONS OF CORPORATE WELLNESS
GROWING
MELIN TOOL CO. Cleveland
W
hile many of the wellness efforts at Melin Tool Co. in Cleveland are health-insurance driven, that doesn’t make them any less effective in generating a genuine interest in healthy lifestyles among employees. The wellness point program at Melin currently has a 90% participation rate, according to Rob Wise, the company’s operations manager. The program, for which ERC Health was a driving force, allows employees to collect points that are then tabulated and used to reduce the amount an individual pays for insurance premiums. “We pass along some of the
10 ideas to advance Northeast Ohio
Publish date: June 6 savings,” Mr. Wise said of the financial benefits of the wellness initiative. Some of the programs sponsored by the company include on-site wellness coaching, an annual health day, free gym memberships, a fruit delivery program, holiday weight challenge and walking groups. There also is a wellness coach
TCP INC. Aurora
C
aroline Oldsey has turned the corporate wellness program at TCP Inc. into something of a variety
show. Ms. Oldsey, human resources director for the maker of energyefficient light bulbs, likes to change things up each year to get the company’s 225 employees in Aurora excited about participating in the decade-old wellness program. One year, for instance, TCP set a goal for employees to achieve 45 “wellness points” — for getting dental checkups, taking a smokingcessation class, playing on a soccer team, etc. — and used them as a factor in employee compensation. Employees who reached 45 points would get 100% of their planned salary increase; employees who didn’t reach the goal got 80%. TCP this year has put its Aurora employees into four teams competing
CLEVELAND+
for wellness points — and a $30,000 cash prize to be shared by the employees whose team accumulates the most points. “It takes creativity,” Ms. Oldsey said of annual tweaks to the TCP wellness program. “We’re always looking for new ways to do things.” Ellis Yan, president and CEO of TCP, is an avid runner who believes a healthier work force “brings a lot of energy” to the company, Ms. Oldsey said. TCP now has a nonsmoking campus and offers lowcost, healthy smoothies on site. There has been a clear financial benefit to TCP as a result of the wellness program. Ms. Oldsey joined the company seven years ago and said the com-
who regularly is available to meet with employees, and a wellness council of employees representing all departments. Ultimately, Mr. Wise said Melin’s employees have embraced the program. “The financial carrot is out there,” Mr. Wise said. “But once they get their feet wet, they really jump into this stuff.”
pany’s health insurance premium that year rose 19% from the prior year. But in the past three years, premium increases have stayed in the single-digit percentages, including one year with no increase. While TCP’s human resources staff spends a lot of time on the wellness program, she said, “Any company can do it. You just have to put your mind to it and execute it.”
Community & industry leaders share their outlook on • Manufacturing • Economic Development • Education • Biotechnology • Arts & Culture
• Sustainability • Regionalism • Architecture • Real Estate Development • Immigration
Join us for a look at the future Ad close May 26 216.522.1383 • Cleve-Ad@crain.com
CONGRATULATIONS to our Health Care Heroes
HOW THEY WERE SELECTED The Healthiest Employer awards program, which was used to determine this year’s Champions of Corporate Wellness, utilizes an online assessment tool that measures wellness programming in six categories:
■ culture and leadership commitment ■ foundational components ■ strategic planning ■ communication and marketing ■ programming and interventions ■ reporting and analysis
Laura Matthews Finalist Health Care Advocate
Congratulations Walter “Ozzie” Oswald for being our Health Care Hero
Christine Zirafi, MD, FACC Winner Advancement in Health Care
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MEDICAL DIRECTOR
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As Parma Hospital celebrates 50 years of caring for the community, it’s the vision and commitment of heroes like these that has helped establish the hallmark of excellent, personalized care patients and their families have come to know at Parma Hospital, and will continue to experience for years to come.
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2011 HEALTH CARE HEROES FINALISTS ■ Accenture ■ Dr. Michael R. Anderson, University Hospitals Case Medical Center
■ Mary Jane Dawe, Rocky River Senior Center
■ Dr. Amy Hise, Case Western Reserve University School of Medicine
■ Dr. Jonathan Miller, University Hospitals Case Medical Center
■ Christine Rose, University Hospitals Case Medical Center
■ joAnne de Hamel, University Hospitals Case Medical Center
■ Human Arc
■ Dr. Charles Modlin, Cleveland Clinic
■ Beverly Bokovitz, Akron General Health System
■ Dr. Michael DeGeorgia, University Hospitals Case Medical Center
■ InfoCision Management Corp.
■ Deanna Mountcastle, Huron Hospital, a Cleveland Clinic hospital
■ Dr. Eric Roter, Kaiser Permanente Ohio
■ Janet Briggs, Louis Stokes VA Medical Center
■ Patricia DePompei, University Hospitals Case Medical Center
■ Dr. Thomas Brugger, Beech Brook
■ Dr. Michael Devereaux, University Hospitals Case Medical Center
■ Buckingham, Doolittle & Burroughs LLP ■ Alicia Carlucci, Marymount Hospital School of Nursing
■ Mary Alice Jarosz, The Village at Marymount ■ Dr. Robert Kellermeyer, Aultman Hospital
■ Jan Murphy, Fairview and Lakewood hospitals
■ Dr. Jeffrey Schelling, The MetroHealth System ■ Jim Schoch, Fairview Hospital
■ Katherine Nagy, Akron General Health System
■ Richard Schwalberg, Menorah Park Center for Senior Living
■ Neace Lukens Inc.
■ Sherwin-Williams
■ Dr. Robin Kimiko Avery, Cleveland Clinic
■ Dr. Henry Ng, The MetroHealth System
■ Dr. Andrew Sloan, University Hospitals Case Medical Center
■ MaryAnn Nicolay, Diabetes Association of Greater Cleveland
■ Southwest General Health Center
■ Employee Benefits International
■ Dr. A. Gus Kious, Huron Hospital, a Cleveland Clinic hospital
■ Dr. Kristen A. Englund, Cleveland Clinic
■ Dr. Michael K. Koehler, UHMP Gastroenterologist Associates
■ George Drapcho, Varbros LLC ■ Eaton Corp. ■ Patricia Ellins, Beyond Fitness
■ Dr. George E. Kikano, Case Western Reserve School of Medicine
■ Elizabeth Nolan, Women’s Diagnostic Center of Cleveland Inc.
■ Rochelle Stone, Mobile Meals Inc. ■ Dr. Holly S. Thacker, Cleveland Clinic
■ Dr. Randall Cebul, Case Western Reserve School of Medicine
■ ERC
■ Lake Health
■ Dr. Beverly O’Neill, Euclid Hospital, a Cleveland Clinic hospital
■ Dr. Richard Fratianne, The MetroHealth System
■ Dr. Jonathan Lass, University Hospitals Case Medical Center
■ Dr. Carl Orringer, University Hospitals Case Medical Center
■ Dr. Roger Chaffee, OPEN M Free Health Clinic
■ Dr. Hiroyuki Fujita, Quality Electrodynamics LLC
■ The Center for Families & Children, Pharmacy Team
■ Dr. Hillard Lazarus, University Hospitals Case Medical Center
■ Dr. Krzysztof Palczewski, Case Western Reserve School of Medicine
■ Union Hospital
■ Chelko Consulting Group
■ Geauga County
■ City of Parma
■ Dr. Stanton Gerson, University Hospitals
■ Dr. Katherine B. Lee, Cleveland Clinic Foundation
■ Parker Hannifin Corp.
■ University Hospitals Geauga Rapid Care Project
■ Dr. Lee Ponsky, University Hospitals Case Medical Center
■ University Hospitals Vision 2010
■ Cleveland Indians Baseball Co. ■ Cleveland Metroparks ■ Dr. Marc Collin, The MetroHealth System ■ Dr. Gregory Cooper, University Hospitals Case Medical Center ■ Cuyahoga County ■ Glinda Dames-Fincher, Kincaid’s Kindred Spirits Inc., Sickle Cell Support
■ Ann Gillett, The MetroHealth System ■ Dr. James M. Goldfarb, University Hospitals ■ Arun Gosain, Rainbow Babies & Children’s Hospital ■ GrafTech International ■ Hattie Larlham ■ Dr. Richard Hill, Recovery Resources
■ Dr. Li Li, Case Western Reserve School of Medicine ■ Main Street Gourmet
■ Radisphere National Radiology Group
■ Laura Matthews, Parma Community General Hospital
■ Debbie Ramicone, Therapy Partners
■ Mary McDonnell, Cleveland Clinic
■ Dr. Pamela L. Redden, Northeast Ohio Neighborhood Health Centers
■ Medical Mutual of Ohio ■ Gretchen Mettler, University Hospitals MacDonald Women’s Hospital
■ The Alpha Group Agency
■ Vitamix Corp. ■ Aloise Weiker Gref, NorthCoast Health Care Management Services ■ Dr. Charles Wellman, Hospice of the Western Reserve ■ Westfield Insurance
■ Lula M. Robinson, American Red Cross of Greater Cleveland
■ Christine Woo, Department of Veterans Affairs
■ Dr. Ellen Rome, Cleveland Clinic
■ YMCA of Greater Cleveland
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Apartments: Developers bullish on market’s present, future continued from PAGE 1
creating residential rentals is simple. “There is huge apartment demand in the city now,” Mr. Maron said. A combination of factors is awakening local apartment development despite the region’s stagnant population and low rents compared with other markets — two issues that historically have dogged the Northeast Ohio construction industry. First, occupancy is at its highest point in more than a decade. The Northeast Ohio Apartment Association’s monthly vacancy survey of 20,000 suites owned or managed by participating members fell to 3.4% the first week of March, the latest period available, a statistic unrivaled since a 3.8% vacancy rate in June 2000. The current rate is well below the 11% vacancy peak in January 2003, when low interest rates and easy mortgage terms were turning renters into homeowners, at least for a time. Likewise, concessions by property owners are down. Jordan Goldberg, senior vice president of Beachwood-based Goldberg Cos., said the free rent for a month or two that was a common inducement for renters in 2009 almost has disap-
peared. The company’s 9,000-unit portfolio is 96% occupied, compared with 94% two years ago. The upscale offerings on which Goldberg prides itself, with amenities such as pools, fitness centers and social centers, have regained their luster as the recession eased and renters became more secure and willing to pay higher rents. The Marcus & Millichap real estate brokerage estimates rental concessions will drop below the 10-year average this year and that average rents in the Cleveland-Akron area will rise 2.2% in 2011 to $699 monthly. Mr. Goldberg said his company is in the hunt for new apartment sites in the region, and is weighing asking local municipalities to rezone attractive sites to multifamily use from office. The company hopes to add more than 300 suites this year at sites Mr. Goldberg isn’t ready to disclose because it has not yet sought government approvals for them. Like other large, established apartment owners, Goldberg is picking up the pace of development at home while it has been building apartments out of town.
Product development With better rental fundamentals, lenders also are willing to lend for new apartment developments by strong developers. Unlike for-sale housing, which is tough to finance, David Swindell, vice president and partner in WXZ Development Co. of Fairview Park, said apartment construction lending is available. Mr. Swindell said lenders will lend money for well-conceived projects with 15% equity from developers, although others see 30% down payment requirements. Both percentages are far less than the equity required for other types of commercial development. WXZ is in final negotiations for a ground lease with University Circle Inc., the nonprofit development group for the East Side neighborhood that’s home to academic, cultural and health care institutions, to build 59 rental units on Hazel Drive in a $10 million project. “There is not a lot of new rental product out there,” said Mr. Swindell, who sees University Circle as a strong submarket. “Competing rentals in nearby suburbs are older, and newer product is usually on the
periphery of the area.” At the opposite end of the spectrum from pricey projects on scarce urban sites are new rentals by Beachwood-based Redwood Capital Management. Redwood builds and rents single-story, two-bedroom apartment homes with attached garages that passersby might mistake for condominiums. “We don’t have pools or party centers and our residents do not have to pay for them,” said Steve Kimmelman, Redwood’s owner. “We think it’s very attractive for people to rent without someone above them or below them.” The single-story design makes the rental properties fit areas that have had recent new-home growth and are glutted with unsold home sites. Mr. Kimmelman has won rezoning to multifamily in such cases in Green and Olmsted Falls.
New growth for Redwood Redwood has contracted for Pride One Construction of Medina to build units in new rental complexes in Cuyahoga Falls and North Ridgeville as well as additional units on a site adjoining its justcompleted, 100-unit Emerald Ridge
Luxury Apartments in Green. Projects in Pickerington and Oregon, Ohio, also are afoot. Redwood likes to build units in no more than 50-suite phases because that reduces equity requirements, which eases the ability to win construction and permanent financing, Mr. Kimmelman said. The approach also allows Redwood to stop construction immediately if leasing slows. All told, Redwood plans to add a total of 300 suites in five locations over the next 12 months, surpassing 100 units in 2009. Ralph McGreevy, executive vice president of the Northeast Ohio Apartment Association, said his members believe they have weathered the storm of the dour real estate market and see the worst behind them. Many more owners, from out of town as well as locally, are looking to build in the region, he said. In a sign of the shift from the American dream of home ownership, Mr. McGreevy noted that regional apartment owners reduced their vacancy levels over last winter, which traditionally has been a lost period for renting units. “We’re looking at a new paradigm in this industry,” he said. ■
Cloud: Installation ease benefits users Deposits: Investors hesitant continued from PAGE 1
mid 2008, he said only about 7% of new customers were opting to use OnBase Online. Most potential customers, he added, are at least asking about OnBase Online. “Even if they don’t necessarily want it, they want the option,” Mr. McClellan said. Huntington Bancshares Inc. is among the companies pushing to use more cloud-based software. The banking company, which is based in Columbus but has a large presence in Northeast Ohio, in March signed an agreement to begin rolling out Office 365, an online version of Microsoft’s popular Office software, said chief information officer Zahid Afzal. Huntington is one of more than 100,000 organizations that signed up to try an early version of Office 365, which is scheduled for a formal release later this year. Mr. Afzal said Huntington uses other online software, too, such as sales and marketing tools provided by Salesforce.com, a San Francisco company that has helped make cloud software popular. “This is on everybody’s agenda,” Mr. Afzal said. However, customer financial data will remain on the company’s own servers for security purposes, he said.
Out of the closet Online software is just one part of a broader trend called cloud computing, which refers to the delivery of any computing service, including data storage and processing, via the web. It is, however, the biggest part in terms of market size, and it will keep growing, according to Forrester Research. A report the research services firm released last month states that worldwide review from online software will hit $21.2 billion in 2011 and expand to $92.8 billion in 2016. Companies of all sizes use online software because it allows them to save money on upfront licensing
fees and instead pay to lease the software, said Stephen Hujarski, director of information technology for ASW Global LLC, a company in Mogadore that operates warehouses nationwide. The online software also allows client companies to avoid the cost of buying and maintaining servers needed to run the programs, and it gives them the ability to access the software from anywhere, Mr. Hujarski said. “The big thing today is mobility,” he said. It is even more popular among small and midsize businesses, which often don’t have the infrastructure to buy, implement and maintain their own software, Mr. Hujarski said. One of those small businesses is ASW Global. The company three
“The part that would go on a server normally is no longer in my closet. It’s in someone else’s closet” – Craig Kahn, founder and managing attorney, Kahn & Associates LLC years ago finished implementing online software that helps manage its payroll and staff. About 18 months ago a subsidiary of ASW Global that sells software for attorneys started selling an online version of the software, which was developed by a company in Florida. Another example is Kahn & Associates LLC. The law firm, which employs six people in Cleveland, uses Salesforce.com and online versions of Microsoft’s Exchange email system and Intuit Inc.’s QuickBooks accounting software, said founder and managing attorney Craig Kahn. In addition to other benefits, using online software has helped him avoid buying and maintaining new servers, Mr. Kahn said.
“The part that would go on a server normally is no longer in my closet. It’s in someone else’s closet,” he said.
A switch that saves Cloud software also is relatively easy to install and upgrade, said Michael Kimmel, director of information technology for the Cleveland Institute of Art. To illustrate why, he noted that the college began using several programs in the Google Apps suite of software products in January 2008 — just three months after he took the position at CIA. Now the school’s 500-plus students receive email through Google’s online Gmail system, and students and faculty alike use online Google programs that are similar to popular Microsoft programs such as Word and Excel. The school, which serves more than 500 students, has rolled out several other cloud software programs in the last few years. For instance, it replaced Blackboard — collaboration software that many colleges use to help faculty and students communicate — with an online product called Schoology earlier this year. The switch should help the school save $100,000 per year on licensing and support costs, Mr. Kimmel said. Yet though he’s a huge fan of cloud software, Mr. Kimmel said it has its limitations. Some applications have been programmed to continue running when disconnected from the Internet, but some, including Google Apps, are not “offline friendly,” he said. The Cleveland Institute of Art also isn’t ready yet to switch to an online enterprise resource planning system, partly because it contains sensitive student data, Mr. Kimmel said. Years from now, however, the college likely will give online ERP systems a second chance. “It will definitely be a player the next time we look,” he said. ■
continued from PAGE 3
year ended Dec. 31, 2010. Growth in deposits at the 74-yearold institution during 2010 was the greatest it ever has seen in a single year, CEO Mike Losneck said. He attributes the increase to depositors feeling “jaded” toward banks. There’s not a single explanation for the deposit growth, but one is seemingly unanimous: The recession changed consumer behavior.
Caution rules the day People are saving more, especially in light of climbing energy and gas prices, and they’re charging less to credit cards, which leads them to funnel more cash to the bank, said Jack Kleinhenz, principal and chief economist of Kleinhenz & Associates Ltd. in Cleveland. Plus, overall salaries have been rising and there’s been a reduction in employment taxes, so people have more to deposit, and “the logical place — especially in these times — is to put it first in a deposit account,” Mr. Kleinhenz said. “While the stock market continues to grow and there is money moving into the market, people are cautious,” he said. PNC’s Mr. Barnhart agreed. Among many consumers and businesses, “there is still a hesitancy to make a lot of investment right now,” he said. But some say the reluctance is thawing. Joe Arnold, founder and president of Foundation Wealth Advisors LLC in Westlake, said he’s seeing people look for options outside of lowinterest bank accounts. “Some of them, yes, are kicking themselves that they didn’t get back in (the market) sooner,” Mr. Arnold said. Recent deposit growth isn’t driven exclusively by existing customers adding to their stashes of cash. At Fifth Third, for example, average balances per account in this area didn’t increase significantly yearover-year for the bank, Mr. Kelsheimer noted. Instead, growth
has been driven by new customers. Mr. Kelsheimer noted that in times like these, when mergers and acquisitions among banks occur, people tend to diversify their banking relationships, causing “money in motion between institutions.” PNC’s Mr. Barnhart said new products the bank launched late in 2010 likely contributed to its impressive growth: The bank grew its checking account customers by a net 56,000 in the first quarter of this year, a 75% increase over its net new growth in all of 2010.
Balancing act When loan demand remains soft — as many say it does — mounting deposits can pose a challenge. Eaton Family Credit Union, for one, cut its deposit rates, or member dividend rates, in the first and second quarters of 2011 because it’s sitting on $4 million in excess cash, Mr. Losneck said. “To be dropping the rate is not typical for us,” he said. “Our loans are growing, but they’re not growing at the same pace as our deposits.” At Liberty Bank N.A. in Twinsburg, chairman, president and CEO Bill Valerian has noticed a higher rate of accounts closing — specifically longer-term certificates of deposit — following recent years of hefty influx. “People are chasing a higher rate,” he said, and Liberty Bank hasn’t increased rates. Instead, it’s allowing the runoff of deposits because it has more money on hand than it’s able to lend. “We’re losing money on it (the added liquidity) every day,” Mr. Valerian said. PNC’s Mr. Barnhart predicts the phenomenon of deposits growing because people put more cash into banks only will last for so long. “People are starting to think about investing,” he said, which will dampen deposit growth and will leave banks “fighting every day for customers.” ■
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THEINSIDER
THEWEEK APRIL 25 - MAY 1 The big story: Cleveland Mayor Frank Jackson said the city must cut its work force by up to 400 employees by the end of May as a result of planned reductions in the state’s support to cities. Mayor Jackson said that under the two-year state budget proposed by Gov. John Kasich, the city will lose $35.7 million in state support by the end of 2012. To balance the city’s $512 million budget for the rest of 2011 and to prepare for 2012, Mayor Jackson said, the city must make 350 to 400 job cuts.
Solid strategy:
Aleris International Inc. emerged from Chapter 11 bankruptcy proceedings less than a year ago. Now, the parent company of the aluminum processor and recycler is laying the groundwork for an initial public offering of common stock. Aleris Corp., the parent of Aleris International, filed a registration statement with the Securities and Exchange Commission in connection with a proposed IPO. The number of shares to be offered and the price range for the offering have not yet been determined.
Dutch treat: Lexi-Comp Inc., a company in Hudson that provides drug information and medical reference content for hospitals, agreed to be acquired by Philadelphia-based Wolters Kluwer Health, which is a unit of Wolters Kluwer, a global information services provider headquartered in Holland. Terms of the deal weren’t disclosed, but Lexi-Comp’s 150 employees in Hudson will remain in place, as will the company’s management.
Collecting applications: A changing of the guard is in the offing at Applied Industrial Technologies Inc. The distributor of bearings and industrial parts said David L. Pugh, its chairman and CEO, has informed the company’s board that he will retire by Applied Industrial’s next annual shareholders meeting, which is slated for October. Mr. Pugh, 62, also will step down from the board at the same time. Northern exposure: The University of Akron is venturing into Cuyahoga County as its trustees approved a deal that would let the school operate a satellite location in Lakewood. The 11,000-square-foot satellite will be at the Bailey Building.
Nonprofit shift: One nonprofit group’s loss is about to become another’s gain. The YWCA Greater Cleveland announced that Margaret A. Mitchell has been named the organization’s president and CEO, effective May 11. Ms. Mitchell will join the YWCA from Big Brothers and Big Sisters of Greater Cleveland, where she has been president and CEO since 2007.
Sign of the times: As expected, the Cleveland school board voted to eliminate another 105 jobs to help offset the district’s projected $74 million budget deficit over the next two academic years. The cuts include 61 central office employees. The move came after a decision earlier in April to lay off 702 employees, which included 643 teachers, and to close seven schools.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Splashy start in Miami for McDonald Hopkins ■ The McDonald Hopkins law firm is continuing its push into Florida with a highprofile hire who will head its new Miami office. The Cleveland-based law firm said Raquel “Rocky” Rodriguez, who served as general counsel to former Florida Gov. Jeb Bush and most recently was a partner at McDermott Will & Rodriguez Emery LLP, has joined McDonald Hopkins as managing member of the Miami office. Ms. Rodriguez also will serve as the first female member of the law firm’s board of directors. “We recognize the importance of Miami as a strategic business market,” said Carl J. Grassi, president of McDonald Hopkins. He said Ms. Rodriguez’s combination of “business acumen, government experience, litigation expertise and depth of knowledge in both U.S. and international client issues will be a solid foundation for enhancing the firm’s expertise in the South Florida market.” McDonald Hopkins credits Ms. Rodriguez during her tenure with Gov. Bush for playing a significant role in engineering a $310 million economic incentive grant that convinced California’s Scripps Research Institute to establish a big research center in Palm Beach County, Florida. McDonald Hopkins, with more than 130 attorneys in five cities, said the Miami office
initially will consist of two attorneys. Its office in West Palm Beach, Fla., has grown to 11 lawyers today after opening in 2004 with four attorneys. — Mark Dodosh
Advisory jury delivers blow to FDIC in AmTrust Bank case ■ A 12-member advisory jury returned a unanimous opinion last week that the Federal Deposit Insurance Corp. did not meet its burden of proof in contending that AmFin Financial Corp. committed to maintaining the capital of failed AmTrust Bank. Because it was an advisory jury, the parties to the case in U.S. District Court in Cleveland were asked to submit findings of fact and conclusions of law by May 27. Sometime thereafter, Judge Donald C. Nugent will issue a final order. The jury’s findings are significant to AmFin, said Christopher Meyer, an attorney with Squire, Sanders & Dempsey who represents the company in its bankruptcy case. AmFin, the former holding company of AmTrust, filed for Chapter 11 bankruptcy protection in November 2009, only days before the FDIC took over AmTrust Bank. The FDIC sued AmFin in April 2010 for $518 million, alleging AmFin failed to honor a commitment to keep the Cleveland bank capitalized. AmFin countered that it never made such a commitment. “This (FDIC) litigation has been the single biggest issue in the (bankruptcy) case,” Mr. Meyer said. “It won’t be done until it’s done, but we will begin focusing on other things.” An FDIC spokesman said the agency does
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COMPANY: LTS Scale Co., Twinsburg PRODUCT: SEI (Super Econo) indicator
Excerpts from recent blog entries on CrainsCleveland.com.
The company, a designer and manufacturer of precision mobile scales and weighing systems, says the SE1 was created “to compete against the time-consuming operation of taking everything to a remote floor scale.” It’s designed for in-house material handling, supplier validation, and shipping and receiving functions, LTS Scale says. The product uses a carriage-mounted scale base paired with a next-generation indicator, according to the company. LTS Scale says the SE1 is aimed at businesses including shipping and receiving, air freight, automotive, chemical and cleaning, inventory control, and warehousing. The company also says the SE1 is “completely field-serviceable” and is made with “common parts that are easy to install.” For information, visit www.LTSscale.com.
weatherhead
KeyCorp sees small business lending as key to recovery ■ KeyCorp was mentioned prominently in a Wall Street Journal story that said small business lending and the use of existing lines of credit “are showing faint but intelligible signs of recovery.” An uptick in the two forms of lending “could help businesses expand and reduce unemployment, which are crucial to a broader economic recovery,” The Journal reported. “Commercial and industrial lending, the most widely tracked measure of businessloan demand, had already improved at the end of last year, and growth continued for the second quarter in a row.” The newspaper noted that at Cleveland-based Key, loans backed by the U.S. Small Business Administration posted an 11% year-overyear gain in the first quarter, and other small business lending showed a similar rise. “For the first time in a long time … applications and approvals are up,” Maria Coyne, head of business banking at Key, told The
Weatherhead’s Part-Time MBA program ranked #14 in the nation. – Businessweek, “Best Part-Time MBA Programs” Weatherhead’s Executive MBA program ranked #16 among schools in the United States. Worldwide, the program ranked #21. – Businessweek, “Best Executive MBA Programs”
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not comment on pending litigation. — Michelle Park
Tribe season ticket sales trail off, but not as badly ■ Yes, the Indians are last in attendance in Major League Baseball in the early stages of 2011, at 13,163 per game as of last Thursday, April 28. Yet while no one would classify the team’s relatively low season ticket sales as a success, the Indians appear to have stemmed the tide a bit. The Indians confirmed a Plain Dealer report that their full-season equivalent sales — the combination of full-season and half-season packages and other mini-plans — are at 7,500. That’s down 6% from 2010, when they sold 8,000 FSEs. But that falloff is minimal compared to prior declines: The 2010 figure was down 32% from 2009, when they sold 11,700 FSEs, and that number was down 22% from 2008, when — after nearly reaching the World Series in 2007 — they sold 15,000 season ticket equivalents. The decline in this year’s decline resulted from even steeper discounting this offseason, including a bleacher season ticket promotion for $9 a game; spokesman Curtis Danburg said the bleacher option accounted for 35% of the team’s new sales. In addition, the Indians extended to all new and renewing season ticket holders incentives including a free suite rental, two free tickets in the club section (where all food, fancy or not, is free) and free membership to the fine-dining Terrace Club. — Joel Hammond
Journal. She said growth is driven by debt consolidation, equipment purchases and commercial real estate and, in many cases, reflects new demand.
The buzz is good for a Cleveland fashion incubator ■ Cleveland made the cut in a story from Chicago public radio station WBEZ-FM, 91.5, about the growth of fashion industry incubators in the Midwest. Chicago, not surprisingly, has the most activity, but Cleveland is a player. “Valerie Mayen, who was a contestant on Season 10 of ‘Project Runway,’ is the founder of Buzz and Growl, an incubatorlike program in Cleveland slated to open this summer,” according to the story. The main goal of Buzz and Growl is to provide designers with space and professional equipment. Ms. Mayen said people associate fashion with runways and overseas production, but for Cleveland, that’s not a realistic goal. “We’re hoping that we can help designers to grow, to start their own small businesses that are legitimately providing their full-time income,” Ms. Mayen said.
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