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INSIDE

SPECIAL SECTION

GROWING CLEVELAND+ Local leaders share ideas to brighten NE Ohio’s economic prospects

here would you like to see the region in 20 years, and how would you get it there? That’s exactly the question we posed to 10 of Northeast Ohio’s leaders. On subjects ranging from biotechnology and economic development to arts and culture and education, all shared in their own words their visions for the future and the steps we need to be taking now to get there. For more on Growing Cleveland+, see this week’s special section, Pages 17-23.

Local franchisee raises the bar Two recent strategic growth investments are enabling Independencebased Apple American Group LLC, the largest franchisee of Applebee’s Neighborhood Grill and Bar, to modernize its stores, and position it to acquire and build more. Read Kathy Ames Carr’s story on Page 5.

FitzGerald, mayors to address poaching County exec to use development fund as incentive for cities to refrain from soliciting businesses By JAY MILLER jmiller@crain.co

NE Ohio manufacturers: No place like home Positive outlook reigns, contrary to U.S. trend By DAN SHINGLER dshingler@crain.com

INSIDE: WIRE-Net survey reveals broad optimism. Members share sales projections and key issues facing their businesses. Page 29 kinks, not demand for vehicles, and he expects growth soon will resume. Nationwide, the storm clouds around manufacturing are no joke. From recent federal job numbers to the vaunted Institute for Supply Management’s monthly report on manufacturing activity, signs point to at least a slowdown in U.S. manufacturing, See OUTLOOK Page 29

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NEWSPAPER

Welcome to Oz. While the nation’s manufacturers are warning of Kansas-like headwinds, their Northeast Ohio counterparts say they’re still walking down the yellow brick road to

further growth. “I’m optimistic. From right here, I see growth ahead of us. Things will improve — I believe that,” said Randy Solganik, owner of City Plating in Cleveland. Mr. Solganik’s company does zinc plating of steel parts, mainly for automakers. He was going gangbusters until the Japanese earthquake and tsunami in March disrupted supply chains and reduced output at some of his automotive customers. But Mr. Solganik said he believes the slight slowdown is purely because of supply chain

Cuyahoga County Executive Ed FitzGerald plans to meet this Thursday, June 9, with the county’s mayors to talk about putting together an anti-poaching agreement designed to reduce the financial damage inflicted when a business is lured from one community to another within the county. Nathan Kelly, deputy chief of staff for Mr. FitzGerald, said the county has no specific legislation in mind and wants to hear ideas from the mayors. But he said the county has a general idea of what it hopes to get communities to support. “It will be an agreement that (communities) are not going to actively solicit (businesses) from one another,” Mr. Kelly told Crain’s Cleveland Business. “We intend to link some county FitzGerald programs to participation with an anti-poaching agreement.” Mr. FitzGerald put it more bluntly at a meeting with Crain’s editorial board last week. “If you want the benefit of our $100 million, you need to join,” he said he would tell communities. “There has to be some kind of incentive or disincentive to stop them from (poaching).” The county executive was referring to his plan to create a $100 million economic development fund. He plans to issue bonds to create the kitty and pay off the debt with savings that are beginning to come from his reorganization and shrinking of county government. County government cannot prevent a business from choosing to move from one community to another, as American Greetings Corp. recently did when it decided to leave its world headquarters in Brooklyn for a new building that will be constructed for it at Crocker Park in Westlake. It’s also hard to stop bidding wars among cities for businesses and the jobs, especially during down economic periods when local tax revenues sag. See POACH Page 28

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COMING NEXT WEEK Lights, camera and potential for action We’ll analyze the opportunities afforded the area’s small employers by the burgeoning film industry in Cleveland. Three films are set to be shot in Northeast Ohio over the next few months.

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WEAKNESS IN NUMBERS There’s a supply-and-demand lesson to be drawn from new government wage data: If you’re in a job that a lot of other people do, you’re probably not going to be paid well. The data look at the 15 largest occupations (as measured by the number of employees) and found that only three — general and operations managers, registered nurses and elementary school teachers — had average wages above the U.S. all-occupations average of $44,410 a year. Employment in the 15 largest occupations ranged from about 1.5 million (heavy and tractortrailer truck drivers, as well as elementary school teachers) to 4.2 million (retail salespeople).

Category

Annual wage* Category

Operations managers

Big Issue ..............11 Classified ..............30 Editorial ................10 Going Places ........16 Letter....................11

List: Largest nonprofits......26-27 Personal View........10 Reporters’ Notebook..31 What’s New............31

$113,000

Annual wage*

Administrative assistants

$32,000

67,720

Office clerks

28,240

Elementary school teachers

54,330

Laborers/freight movers

25,710

ALL OCCUPATIONS

44,410

Retail salespeople

25,000

Heavy truck drivers

39,450

Janitors/cleaners

24,560

Bookkeeping clerks

35,340

Stock clerks

23,790

Customer service reps

32,780

Waiters

20,790

Registered nurses

REGULAR FEATURES

JUNE 6 - 12, 2011

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

* — DATA AS OF MAY 2011

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JobsOhio plan envisions regional partners State would give private development groups such as Team NEO roles in securing businesses By JAY MILLER jmiller@crain.com

Regional economic development organizations such as business attraction group Team NEO would see their clout grow under the new JobsOhio program of Gov. John Kasich. In a presentation last month to

the Third Frontier Commission, the administration laid out a plan to create what it described as the JobsOhio Network. JobsOhio would contract with key regional economic development agencies to act as deal-makers. The regional groups would put together incentive packages for companies looking to expand or to bring operations to

Ohio and would collaborate with JobsOhio to arrange financing. The approach would represent a significant change in the way the state handles economic development. The creation of the JobsOhio Network is a recognition that regions, not counties or cities, are the basic units of the sub-economies in the state. It’s also an acknowledgement that the state is too far removed from the business development needs of the hundreds of towns across Ohio and in the past has moved too slowly to help them.

This decentralization has the potential to remake the economic development landscape in the state. It elevates the status of a half-dozen regional organizations, giving them new and greater influence in their regions over how the financial resources are deployed of JobsOhio and of the state’s Third Frontier program. JobsOhio is the nonprofit organization Gov. Kasich pushed through the General Assembly that would become the lead agency for job creation and economic development

in the state. The Third Frontier is a state-financed initiative targeting investments in technology. “JobsOhio and the governor both feel that a strong regional presence is critical to the overall economic success of the state,” Gov. Kasich spokesman Rob Nichols said in an email. “Not only do the regional partners provide expertise on a particular region and its history, they also have the vast experience of business attraction and retention in their region’s industry strengths See PARTNERS Page 28

Old Arcade ripe for bargain shoppers as auction awaits Languishing property’s value set at $11.5M; city, county may be among lenders on the hook

FOTOLIA

INSIGHT

TROUBLE LURKS IN SHADOWS 2011 foreclosure numbers suggest improvement, but observers fear more problems ahead due to continued unemployment NOT WHAT THEY SEEM

By MICHELLE PARK mpark@crain.com

hen it comes to the state of the home mortgage market, what may appear to be a light at the end of the tunnel instead could be a freight train barreling ahead from the other INSIDE: A look at side. the number and At first blush, the numbers are scope of past-due and non-accruing downright encouraging. The loans at a handful number of residential forecloof area institusures filed in the first four tions. Page 24 months of 2011 fell 20% in Cuyahoga County from the year-ago period and 29% in Summit County. Both counties also saw the number of new foreclosure cases in all of 2010 decline to their lowest point since 2005. What’s more, national figures released in midMay by the Mortgage Bankers Association indicate See SHADOWS Page 24

Foreclosure data from Cuyahoga and Summit counties, from Jan. 1 through April 30 and, in parentheses, for the full year:

Year

Cuyahoga (total)

2011

3,691 (pace: 11,073)

2010

4,621 (12,050)

2009

3,918 (13,417)

2008

4,921 (13,742)

2007

4,954 (13,968)

Year

Summit (total)

2011

1,009 (pace: 3,027)

2010

1,420

2009

1,613

2008

1,582

2007

1,549

SOURCES: CUYAHOGA COUNTY COURT OF COMMON PLEAS; SUMMIT COUNTY CLERK OF COURTS

When the Old Arcade in downtown Cleveland opened in 1890 at 401 Euclid Ave., one of the nation’s first enclosed shopping centers catered to the burgeoning city’s wealthy with floors of retail shops and office space. Now the property, a landmark listed on the National Register of Historic Places, promises to be bargain city unless a crop of potential buyers crazed by the prospects of a new casino and convention center in town bids up the Arcade’s price at a pending but still-unscheduled Cuyahoga County sheriff’s sale. A recently completed appraisal for the sheriff’s office establishes the market value of the Arcade, which is home to a 203-room Hyatt hotel and retail space, at just $11.5 million. Under auction rules, the minimum

CRAIN’S FILE PHOTO

By STAN BULLARD sbullard@crain.com

bid would be two-thirds of that figure, or $7.75 million. Before the Arcade was renovated See ARCADE Page 25

THE WEEK IN QUOTES “Maybe I seem to be impatient. But in the past when I’ve been too patient, I’ve been disappointed.” — Umberto P. Fedeli, president of The Fedeli Group and the largest shareholder of LNB Bancorp Inc. Page 12

“It’s amazing how so many in sports — and not just athletes — are so naïve to think they can post to social media, without a filter, and expect no recourse.” — Dominic Litten, leader of interactive marketing at Point to Point Inc. in Beachwood and founder of the Cleveland Social Media Club. Page 14

“To be recognized for excellence in the future, we have to be excellent now.” — Nathan Kelly, deputy chief of staff for development, Office of Cuyahoga County Executive Ed FitzGerald. Page 21

“Over the next 20 years, Northeast Ohio must make sustainability a focus of our growth and development to ensure a strong, thriving community.” — Chuck Fowler, CEO, Fairmount Minerals. Page 23

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Cliffs adds space at downtown HQ Staff at 200 Public Square now numbers 300 By STAN BULLARD sbullard@crain.com

Cliffs Natural Resources Inc. has set a course to become the largest tenant at 200 Public Square in downtown Cleveland by leasing two recently emptied floors in the 41story building and subleasing another from PNC Bank. Combined with Cliffs’ existing global headquarters on floors 33, 34 and part of 32, the new space on floors 30 and 31 and subleased space on floor 5 give the company nearly 200,000 square feet in the building. It leased 70,000 square

feet when the big iron ore producer moved its global headquarters to the building in 2008, said Brian Boehmcke, managing director of the tower’s owner, Harbor Group International of Norfolk, Va. The added office space makes fast-growing Cliffs the largest tenant in the one-time headquarters of the former BP America. Huntington Bank will occupy 100,000 square feet in the structure this fall under a 2008 lease that gave it signage rights on the skyscraper. Huntington’s sign went up last Friday, June 3. The Cliffs name also will go on the outside of the building’s atrium

after city approval is obtained, Mr. Boehmcke said. Following two major acquisitions, Cliffs’ headquarters staff has grown to 300 from about 100 a year ago. It numbered 60 when Cliffs moved in to 200 Public Square, said Pat Persico, its senior manager of public relations. Management wanted all its employees together in a single location, Ms. Persico said. Moreover, Cliffs recently reorganized into groups by operating, sales, marketing and administrative functions. That structure suits its evolving global growth plans, she said. Cliffs plans to vacate in coming months its remaining offices at 1100 Superior Ave., where it had been headquartered and where its lease ends in 18 months. Plans call for Cliffs employees to unite at 200 Public Square in early 2012.

Committed to Cleveland Cliffs did not consider leaving downtown and likes the 200 Public Square building and its location, Ms. Persico said. “We feel that as a Cleveland company we want to be in the hub,” she said. Robert Roe, managing director of Jones Lang LaSalle’s Cleveland office, said he and tenant rep Andrew Coleman examined available buildings and construction options for Cliffs before the plan for 200 Public Square solidified. “They’ve been growing so fast, it’s been hard for their real estate to keep up,” Mr. Roe said. The key part of the transaction was that Management Recruiters International left the 30th and 31st floors in March for offices at 65 Erieview Plaza.

Space tightens up Alex Jelepis, the Grubb & Ellis senior vice president who handles 200 Public Square leasing for Harbor Group, said Cliffs was pitched on the space quickly, but demand for toptier space is such that the real estate brokerage also was showing space to other prospective tenants. “They were smart not to let this opportunity slip by,” Mr. Jelepis said. “When other companies start looking for space to expand and it’s not available, Cliffs is covered.” Mr. Jelepis noted the expansion by Cliffs fills the last big gaps left in the office tower by the oil giant BP’s exit a decade ago. “We’re no longer available to large users,” he said. “We can no longer do multifloor deals. We might be able to put together 30,000 square feet with partial floors.” None of the parties would disclose Cliffs’ rental rate. Mr. Jelepis said the building markets the space for $24.50 to $25 a square foot. The lease commitments by Cliffs at 200 Public Square mean the 1 million-square-foot building soon will be 90% occupied, Harbor Group’s Mr. Boehmcke said. ■

Volume 32, Number 23 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: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

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New investments give local Applebee’s franchisee room to grow Independence owner of 270 locations also able to continue renovations By KATHY AMES CARR kcarr@crain.com

Applebee’s largest franchisee is looking to capitalize on two new investments that will enable the Independence-based company to continue updating and growing its chain restaurant portfolio. Apple American Group LLC in early May received what it termed two “very large” investments from private equity firms Weston Presidio LLC and Goldman Sachs Capital Partners. Those investments will facilitate the company’s plans to modernize all its restaurants and acquire and build even more, said Apple American Group chairman and CEO Greg Flynn. “We’ll continue Flynn to build new restaurants anywhere that make sense and are always looking at acquisition opportunities,” Mr. Flynn said. He declined to specify the size of the investments. Apple American Group, which Mr. Flynn founded in 1998, owns and operates 270 Applebee’s Neighborhood Grill and Bar Restaurants throughout 11 states, including Ohio. It posted sales of $665 million in 2010. Mr. Flynn said the company, which employs 16,000, is on track for more than $700 million in sales this year. “This is a well-run group, and they know how to operate,” said Malcolm Knapp, who heads a New York firm that bears his name and provides consulting services to clients in the foodservice industry. “Apple American has always been very strong in executing programs because they implement the fundamentals well,” Mr. Knapp said.

Third bite of the Apple Sean Honey, partner of Weston Presidio, which has offices in Boston and San Francisco, said Apple American’s strong leadership team and financial performance drove his firm’s latest investment — its third in Apple American since 2005. “We are investing again because of the (potential for) significant growth ahead through acquisition and development, and the strength of the Applebee’s brand and how it is positioned for the future,” Mr. Honey said. Mr. Honey also declined to specify the size of the infusions, but said his firm’s investments have ranged from $10 million to $75 million. Calls and emails to Brad Gross, managing director of Goldman Sachs Capital Partners, went unanswered. Mr. Flynn said the recent investments will enable Apple American Group to accelerate its restaurant renovation plan, which began about two years ago.

So long, knickknacks Apple American Group so far has renovated 70 of its eateries as part of a corporate initiative to revitalize the neighborhood grill and bar brand. The restaurant chain has been working to update its interiors by moving

away from cluttered walls of knickknacks and adopting a contemporary look that includes modern art, a collage of photos with local elements, new carpeting and sleek bar areas. Each restaurant remodel costs $100,000 to $350,000, and Apple American expects to have all its stores renovated by 2014, Mr. Flynn said. Mr. Flynn said his stores are not deterred by the emphasis in some markets — including Northeast Ohio — on eating at locally owned and operated establishments. “We’re focused on engaging with the communities, too, and do that by participating with local schools and charities,” he said. “We are a neighborhood bar and grill.” Mr. Knapp, the consultant, said

he believes the Apple American operation will continue to see growth because of Applebee’s’ strong financial performance in the casual dining sector. Its domestic systemwide, same-restaurant sales for the first quarter rose 3.9% compared with the like period in 2010. “Applebee’s is outperforming the casual dining sector,” said Mr. Knapp, who tracks U.S. restaurant sales, which for the casual dining sector were up 2.7% in the first quarter compared with the like period in 2010. Applebee’s, the largest casual dining chain in the world, has more than 1,990 restaurants operating in 49 states, 15 countries and one U.S. territory. ■

PHOTO PROVIDED

Independence-based Apple American Group LLC is updating its portfolio of Applebee’s restaurants with local flavors, like this example in Stow.

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Vadxx Energy oil fuels potential for large-scale growth Firms seeks first facility, production partner By DAN SHINGLER dshingler@crain.com

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Vadxx Energy of Cleveland is a little closer to proving that alchemy can be commercially viable, as the company has signed up a marketer to begin selling the petroleum it plans to make out of old tires and other throwaway items. From the incubator at the Manufacturing Advocacy and Growth Network, or Magnet, in Cleveland, Vadxx founder and CEO James Garrett has been working on his black art. Itâ&#x20AC;&#x2122;s a way to take oil back out of tires, plastics, vinyl products and other items that were made with oil but are now sitting in landfills. Heâ&#x20AC;&#x2122;s doing it in the lab, he said, and now is shopping for a site at which to base his first commercial facility. â&#x20AC;&#x153;We are making oil â&#x20AC;&#x201D; but weâ&#x20AC;&#x2122;re

â&#x20AC;&#x153;I could see a scenario where ... this thing takes off like a hockey stick.â&#x20AC;? â&#x20AC;&#x201C; Dave Crain, director of entrepreneurial services, Magnet not making it in large quantities yet,â&#x20AC;? Mr. Garrett said, cautioning that the really big news will come only after heâ&#x20AC;&#x2122;s reached that key milestone. For now, Mr. Garrett is moving incrementally toward that goal and has signed up Houston-based RB Products to market his oil. The two companies jointly announced their affiliation last month, with RB planning to market oil from Vadxxâ&#x20AC;&#x2122;s first commercial facilities when they are established. RB sells specialty petrochemical products that it guarantees for purity and content. Vadxx will provide crude oil with low-sulfur content, and RB will market and sell that oil to refiners and other customers, the two companies said in announcing their arrangement. In the meantime, Mr. Garrett is working to get his first production partner lined up â&#x20AC;&#x201D; something he said he hopes to announce early this summer. That partner likely will be a landfill, tire-refuse facility or other handler of waste that has lots of plastic, rubber or other oil-based trash to process, Mr. Garrett said.

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Each Vadxx machine cost about $3 million to build and can produce up to 80,000 barrels of oil a year, Mr. Garrett said. He said he hopes to install as many as 20 of them at large landfills, in joint ventures with the landfill operators. Once in place, Vadxx would operate the equipment and sell the oil. Depending on the arrangement, the landfill owner could get revenue from the production of oil as well, while at the same time freeing up

landfill space and eliminating the need to handle and store tires. Mr. Garrett said he hopes he will sign a contract with a large refuse company this summer. If he does, he might be well on his way to success, said Dave Crain, director of entrepreneurial services at Magnet. Mr. Crain said he thinks Vadxx has a distinct advantage over competitors, who are working on systems that cost as much as $50 million. The Vadxx system lowers the capital investment a partner must make, reduces the risk of the project and might enable Vadxx to move forward quickly, he said. â&#x20AC;&#x153;I could see a scenario where they cautiously move forward with three or four facilities, shake all the bugs out, and then this thing takes off like a hockey stick,â&#x20AC;? Mr. Crain said. That would be fine with Mr. Garrett, who said things already are moving ahead more quickly at his company than they were just last year. â&#x20AC;&#x153;A year ago, we didnâ&#x20AC;&#x2122;t know if it worked,â&#x20AC;? he said. â&#x20AC;&#x153;Now, (the system) produces oil routinely.â&#x20AC;?

Lofty goal For its part, RB hopes Vadxx can meet its goal of producing 10 million barrels of oil a year by the end of this decade â&#x20AC;&#x201D; a goal Mr. Garrett also said is realistic. The high-quality oil the process produces is sought after by refiners and the production method fits in with RBâ&#x20AC;&#x2122;s goal of increasing the companyâ&#x20AC;&#x2122;s role in recycling and sustainable practices, RB president Ray Rice told Crainâ&#x20AC;&#x2122;s in an email. If the two companies are correct in their predictions, large sums of capital will be raised and spent â&#x20AC;&#x201D; not only to build production facilities, but to put in place an infrastructure to deal with larger and larger amounts of oil. â&#x20AC;&#x153;The beginning volumes will be shipped by truck and by rail car,â&#x20AC;? Mr. Rice said. â&#x20AC;&#x153;With the increasing awareness of this technology, the development of infrastructure to separate feed material and the addition of more units through out the country, we anticipate (needing) a larger gathering point from which large amounts of crude can be moved by bulk barge or pipeline.â&#x20AC;? But Mr. Garrett said he built his business model around a price of oil thatâ&#x20AC;&#x2122;s far lower than todayâ&#x20AC;&#x2122;s prices of about $100 a barrel â&#x20AC;&#x201D; so the market will support such investments once he begins producing oil in large quantities, he predicts. â&#x2013;

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Court reporting academy heading to Independence By STAN BULLARD sbullard@crain.com

The Cleveland Academy of Court Reporting is bound for Independence in a move that’s a loss for downtown Cleveland but also fills a big hole in the suburban office market. Thanks to a long-term lease for the academy, which currently is located at 2044 Euclid Ave., the lights will go back on in the office building at 6400 Rockside Road after an affiliate of Omni Properties Co. of Pepper Pike acquired it with plans to convert the structure to classrooms. The new building owner is Omni Rockside II LLC, an investor group led by Tom Finley, an Omni partner, and Howard Moss, an Omni vice president. It acquired the 34,000square-foot building for $2.3 million May 27, according to Cuyahoga County land records. The seller is Premier Farnell Corp. of Leeds, England, which moved its Premier Newark Electronics Division to Richfield more than a year ago. Mr. Finley said Omni Rockside was able to strike the deal because it timed the acquisition of 6400 Rockside with wooing the academy to the property in Independence via a 10-year lease. Mr. Moss said Omni was in the market for acquisitions on Rockside because it is happy with the 6505 Rockside Woods Boulevard building

it bought a year ago and believes the Rockside Road corridor offers longterm strength due to its central location, although double-digit vacancy rates have dogged the office market there the past few years. “Taking an empty building and adding a tenant fits our goal of finding chances to create value,” he said. Value, indeed. Land records show Premier Farnell paid $2.9 million for the building in 1996. Mr. Moss said Omni plans to update heating and cooling systems, add landscaping and expand the parking lot. The proprietary school will outfit and maintain its classrooms and offices itself, he said. The Cleveland Academy of Court Reporting is part of the Miami Jacobs Co. unit of Delta Education Group of Virginia Beach, Va., which operates 34 such proprietary schools for a variety of disciplines. In a written statement, the academy said it would more than double its space with the move, planned for October, and would gain free parking as well as maintain access to public transportation. Lynn Mizanin, the school’s director, said in the statement that the new space will provide room for two medical labs, a courtroom, student and faculty lounges and classrooms. The school also trains students in 17 other areas from accounting to security work. ■

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JUNE 6 - 12, 2011

Westlake marketing outfit experiences own rebranding By CHUCK SODER csoder@crain.com

Metrics Marketing Group LLC has a lot more resources at its disposal than it did a year ago. The Westlake company joined forces with a direct mail marketing business and a private equity firm last August, when a holding company owned by Kirtland Capital Partners in Beachwood bought the database marketing and digital marketing services firm for an undisclosed price. In April, both Metrics Marketing and the direct mail company, Northwest Mailing Service of Chicago, began using the holding company’s new brand name in marketing

materials. Each now refers to itself as “a Precision Dialogue company.” Combining the two businesses under one company and one brand allows them to offer their customers a longer list of services, said Todd Thompson, who is one of three Metrics Marketing partners who now hold shares in Precision Dialogue. The parent company technically is called NWMS Co., and its CEO, Tom Ragen, is based in Chicago. Precision Dialogue’s goal is to provide customers with all the marketing services they need, Mr. Thompson said. As it pursues that goal, the parent company likely will buy more companies over the next few years, he said.

For now, though, Mr. Thompson is happy to have access to Northwest Mailing Service’s letter printing plant and direct mail marketing expertise, not to mention the financial resources of Kirtland Capital. That access to capital already is driving growth at Metrics Marketing, which employs 70 people, all but four of whom work in Westlake. Mr. Thompson noted that Metrics Marketing has hired five people over the past three months in an effort to beef up its ability to build and support online purchasing systems based on Magento, which he described as one of the fastest-growing e-commerce platforms in the world. Metrics Marketing is one of two

Metrics Marketing Group uses eye-tracking technology to show clients what elements of an advertisement catch the eye of their customers. FILE PHOTO/ JASON MILLER

Ohio companies that Magento Inc. has designated as a “Gold Partner.” The other is in Cincinnati. “We would not have been able to

build out this e-commerce capability without doing the deal,” Mr. Thompson said.

Expansion in mind Demand for digital marketing services and analytics-driven database marketing — which involves analyzing information about customers to target them with timely, relevant advertisements — is on the rise, helping boost sales at Metrics Marketing, Mr. Thompson said. He would not give revenue figures but said sales have been rising steadily for years. “We expect to see that trend continue,” he said, adding that the company also is expanding its database marketing capabilities. Metrics Marketing has added more than 20 people to its staff since January 2010, when it employed fewer than 50. It employed about 25 in November 2008, when the company formed through a merger of two closely knit Westlake companies — THMG and Precision Dialogue, which inspired the name of the new parent company. The new Precision Dialogue plans to continue expanding Metrics Marketing’s staff in Westlake, said Jim Foley, a partner with Kirtland Capital Partners.

Drumming up suitors Kirtland Capital wasn’t the only suitor interested in Metrics Marketing. During the three years leading up to the acquisition, three potential buyers made unsolicited offers to acquire the Westlake company. In September 2009, Metrics Marketing hired investment banking firm Brown Gibbons Lang & Co. to help it attract more offers. The Clevelandbased investment banking firm, which advises companies on mergers and acquisitions, connected Metrics Marketing with Kirtland Capital, another Brown Gibbons client. Kirtland was one of six companies that submitted offers for Metrics Marketing through Brown Gibbons. Kirtland bought Northwest Mailing Service in 2009 and was in the hunt for companies that could build off the Chicago company’s assets, said Mr. Foley, who helps oversee Precision Dialogue for the private equity firm. It was a coincidence that Kirtland bought a company so close to its Beachwood headquarters, though Mr. Foley said Kirtland liked that Metrics Marketing wasn’t far from Chicago. Kirtland also liked the experience, vision and enthusiasm shared by Metrics Marketing’s partners, Mr. Thompson, Dan Rose and Jonathan Hill, Mr. Foley said. Plus, the private equity firm liked the Westlake company’s expertise in digital marketing, campaign management and database analytics, Mr. Foley said. Kirtland had been planning to buy multiple companies to gain all those capabilities, he said. “As opposed to having to buy three companies, you get them all in one,” he said. ■

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Together. It Starts Here.

Here is where steel starts. Here is where Cliffs Natural Resources Inc. (NYSE: CLF, Paris: CLF) furthers it’s position among the world’s top iron ore producers. Here is where acquiring Consolidated Thompson Iron Mines Limited boosts Cliff’s capacity to help meet the burgeoning demand for steel everywhere. Together. It starts here.

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JUNE 6 - 12, 2011

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Check it out

little outside scrutiny never hurt any organization that receives public money. In the case of the MetroHealth System, that scrutiny is long overdue. Cuyahoga County Executive Ed FitzGerald continues to follow the right instincts in deciding to take a close look at how the county-subsidized hospital goes about its business. Mr. FitzGerald told Crain’s editorial board last week that about a halfdozen county employees — led by David Merriman, special assistant to the county executive — are checking out MetroHealth’s financial reports and contracting procedures, as well as its human resource policies. An objective of that effort is to provide the new county council with information to determine the appropriate subsidy for MetroHealth, which will get $36 million in county money in 2011. The push to examine the hospital system’s business operations comes amid reports that MetroHealth awarded more than $7 million in no-bid contracts over a 12-month period to consulting firm Booz & Co., the former employer of MetroHealth CEO Mark Moran. Those news reports have raised broader questions about MetroHealth’s procurement practices. Mr. Moran maintains that MetroHealth has received its money’s worth from Booz’s work through improved operating effiencies within the health system. He notes that MetroHealth has gone from a money-losing operation to one that turned a profit of $27 million last year. Mr. Moran may be right; Booz might be worth every dime MetroHealth has paid the consultant. But Mr. FitzGerald and the county council see a bigger issue here: The contracting processes for an entity such as MetroHealth that receives a boatload of public money should be as open and above suspicion as possible. That way, taxpayers can be confident cronyism and sweetheart deals aren’t driving its business decisions. “They have to accept that they are a public entity,” Mr. FitzGerald said last week of MetroHealth. “They need to be more transparent.” Mr. FitzGerald went so far as to say that MetroHealth officials “need to do a mini-version of what the county is doing.” The inference is that MetroHealth’s reputation would benefit from an introspective process aimed at promoting greater transparency in its operations. In the new post of county executive, Mr. FitzGerald has learned what it’s like to run what he calls “a discredited organization.” He readily admits that it’s hard to establish trust with the public after years of corruption and inefficiency in county government. His legitimate concern is that if taxpayers question the workings of MetroHealth as an institution, then they may not vote in favor of the county health and human services levy, which next appears on the ballot in spring 2012. And a thumbs down for the levy not only would hurt MetroHealth, but also other agenices that depend on revenue the levy generates. That’s a road we hope no one will need to go down. MetroHealth officials may find the scrutiny by the county hard to swallow. But, if they’re willing to embrace change, it should do their institution good.

FROM THE PUBLISHER

Tressel leaves behind a losing legacy

siege. All because its coach, who heretoike so many native Ohioans, I’ve fore had been known for his emphasis been a Buckeyes fan all my life, on integrity, put his desire to win even though I didn’t attend the ahead of his own principles and the rules university. Not unlike the young designed to keep student-athletes just kids in small towns across Michigan, that — students. Texas, Florida, Pennsylvania and all the The university is likely to get hit hard other states known for big-college athletic by the NCAA ruling because its coach success, I wore scarlet and gray garb, tried to cover up what he knew especially during the big games. of his players’ infractions. He After the reign of OSU foot- BRIAN finally resigned in light of those ball coach John Cooper, I was TUCKER indiscretions, and OSU probably relieved when the university will suffer the loss of bowl reached out to Youngstown State appearances and perhaps a to hire Jim Tressel as successor. significant amount of football And true to his promise, Coach scholarships. Tressel has beaten his biggest No one but Jim Tressel ever rival, Michigan, nine times out can really answer as to why he of 10, has had great postseason did this, why he put the won-loss success and — most importantly record of him and his team — has raised the academic rankahead of everything else. But it will be ings of his athletes to a level rare among Ohio State and its fans that now will pay big-time college football programs. the price, likely for a long time. It is perhaps that last achievement **** that is the only thing untainted now in SO DAN GILBERT WANTS to knock the Tressel era. With the revelations of down a historic building and build an players selling bowl jerseys and rings, elevated skyway to his “temporary” casino and now the investigation into car deals, planned for the former Higbee departthe university and its program are under

ment store building. As much as I love historic buildings, I also want the casino to succeed. That’s in the best long-term interests of Cleveland, and I say that as a former opponent of the whole Ohio casino plan. But the voters decided, and now we must do all we can to ensure its success as we move toward a time in the city’s history — with the construction of the new convention center and medical mart, the casino and the new office building/hotel complex in the Flats — that could be transformational for Cleveland. I wish the skyway, proposed from the parking garage across Ontario Street to the Higbee building, wasn’t seen as a necessary part of this project. Any police officer will tell you a city’s streets are safer in direct proportion to the number of people walking on them. But older folks make up a big part of a regional casino’s potential customer base, and they’re not going to want to brave icy streets in our winter months. In this instance, we might have to take the bad with the good. ■

PERSONAL VIEW

Ford journey symbolic for manufacturers By ANDREW E. DOEHREL

t’s easy to be cynical about the future of American manufacturing if you don’t know the facts. For years, pundits and the media have focused on job losses — particularly here in the Midwest — and on our inability to compete globally. While the future seemed bright for industries such as technology, biotech and the service sector, it looked bleak for manufacturing. But as recent U.S. employment figures show, the manufacturing sector is surging again, adding jobs at an impressive clip. That’s why I was interested to hear what Ford CEO Alan Mulally had to say when he visited the Ohio Chamber of Commerce annual meeting last month. There is no question Ford has staged an

Mr. Doehrel is president and CEO of the Ohio Chamber of Commerce. astounding turnaround and appears to be stronger than ever after the economic crisis, but is this just another part of the roller coaster ride of manufacturing in America? More than 60 years ago, Ford Motor Co. opened its first manufacturing plant in Ohio. Since then, the company has become a fixture in our state’s economic landscape, with major manufacturing facilities in the Cleveland area, Sharonville and Lima. It was clear from Mr. Mulally’s remarks that Ford is committed to building on that legacy by competing globally and by fighting, as he said, “for the heart and soul of manufacturing in America.”

Most importantly, his “manufacturing matters” message hit home here in Ohio, where Ford employs more than 7,000 people, supports over 700 suppliers, invests over $2.5 billion into our economy every year and contributes millions more to charitable causes. While it’s clear that Ford has enjoyed a great deal of success in recent years, today it faces new and significant challenges. First, let’s remember recent history. Ford and the other domestic automakers faced likely extinction just four years ago. In 2007 and 2008, the company lost a combined $17.5 billion. Taking necessary action, Ford mortgaged its assets to finance its future and implement a turnaround plan, which positioned the company to be competitive in today’s See VIEW Page 11

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

WWW.CRAINSCLEVELAND.COM

THE BIG ISSUE Do you think local governments such as Cleveland or others in the region are living within their means or spending out of control?

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I live in Lakewood, and I think theyâ&#x20AC;&#x2122;re doing well, and I havenâ&#x20AC;&#x2122;t seen any problems. ... I donâ&#x20AC;&#x2122;t have any complaints. Theyâ&#x20AC;&#x2122;re doing their job.

My answer to that would be that Iâ&#x20AC;&#x2122;m from the private sector where weâ&#x20AC;&#x2122;re doing more with less â&#x20AC;Ś and now they need to do more with less.

Theyâ&#x20AC;&#x2122;re always spending out of control. Thatâ&#x20AC;&#x2122;s just how we are as a society. We always spend more than we have.

I think theyâ&#x20AC;&#x2122;re spending out of control. Theyâ&#x20AC;&#x2122;re getting richer and the poorer are getting poorer. Theyâ&#x20AC;&#x2122;re stepping on the little man.

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Small businesses hurt by taxes, fees â&#x2013; I read your May 16 editorial, â&#x20AC;&#x153;Quit playing,â&#x20AC;? and take huge issue with it. Your take that the commercial activity tax is set too low is way off base. The institution of the CAT was predicated on the basis of relieving much of the burden on companies such as Ford and pushing it across the spectrum of small business (like my small homebuilding business). Prior to the CAT, my company paid under $3,000 in tax to the state at the company level. Since the CAT was fully instituted, I have been paying between $9,000 and $13,000 per year. For several years the personal property tax and the CAT were both due as the state phased in the CAT. Government spending grew in spite of the fact that the gains in revenue during the phase-in were fleeting (under former Gov. Bob Taft). At the time that they were debating the CAT, I spoke to the representative that sponsored the bill, and she told me that the Legislature was changing the tax code to be able to attract more diverse and bigger businesses to the state. I told her that Iâ&#x20AC;&#x2122;d suck it up if it would do that, since more businesses in the long run mean more construction overall. We discussed that the CAT rate could be raised without a vote of the people,

LETTER and she assured me, at that time, that the Legislature had it figured out. We have lost over 400,000 jobs in this state since 2000; raising taxes on businesses isnâ&#x20AC;&#x2122;t going to create jobs. Government, like every bureaucracy and like a gas from high school physics, expands to fill the available space. It is the nature of a bureaucracy to expand to a point at which it becomes unsustainable. We are there. Locally, statewide and nationally. At every level, government has to look at itself and make hard choices, just like we in the business community have had to do the last five years. Government cannot provide everything to everybody forever. It isnâ&#x20AC;&#x2122;t reasonable to expect it to do so. The battle over the next few years is critical to our future as independent businesses. Do we and our employees benefit from our sleepless nights and hard work, or do our profits go to the government at some level for redistribution? Truthfully, that is the issue. Because, between local, state and federal taxes, my company pays over $500,000 in taxes and fees on gross receipts (not

View: Uphill climb continues continued from PAGE 10

global auto industry. An important part of that plan was restructuring its agreements with all stakeholders. Working together, Ford and the United Auto Workers adopted a labor agreement that proved instrumental in helping the company improve its competitiveness and return to profitability. As a result of the agreement reached in 2007 and modified in 2009, Ford has been able to bring new work into its U.S. plants. This benefits Ford, the UAW, the companyâ&#x20AC;&#x2122;s employees and all of the communities where Ford has a presence. But even today, Ford continues to carry a heavy debt load and faces increasingly fierce competition from

beyond the industrial Midwest. The company still has a labor cost gap when compared with other automakers in the area. Although the disparity is significantly lower than it was five years ago, the fact that a gap exists at all puts Ford at a long-term competitive disadvantage. Whatâ&#x20AC;&#x2122;s clear is that Ford needs to continue looking for ways to work with its stakeholders to improve the companyâ&#x20AC;&#x2122;s competitiveness. The old way of doing business, which did not take into account the demands of a new, globally competitive environment, simply wonâ&#x20AC;&#x2122;t work anymore. The success of Ford, its employees and the hundreds of suppliers right here in Ohio depend on it. â&#x2013;

profits) of under $5 million counting sales taxes, property taxes, income taxes, CAT taxes, payroll taxes, recordation fees, conveyance taxes and so on. The fact is, government took about as much as my companyâ&#x20AC;&#x2122;s entire annual payroll combined. So, please donâ&#x20AC;&#x2122;t say we arenâ&#x20AC;&#x2122;t paying enough. If thereâ&#x20AC;&#x2122;s an issue, itâ&#x20AC;&#x2122;s that they arenâ&#x20AC;&#x2122;t spending what we send them already with due care. Robert H. Myers President Myers Homes South Russell

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JUNE 6 - 12, 2011

Seeking further growth, Fedeli may up LNB stake 560,714 shares. According to that filing, Mr. Fedeli is open to upping his investment further if he believes LNB management can produce results and if the company is receptive to his ideas. Management, he wrote, must address immediately three major issues: ongoing credit problems, “lack of any real revenue growth” and rising costs. Mr. Fedeli didn’t state in the document or during a recent interview what amount of additional investment he’s willing to make in LNB. “I’m willing to invest money that could be used for more capital so they don’t have to do something incredibly dilutive to shareholders,” he said, citing as two concerns the bank’s loan losses and the $25

While acknowledging stock’s value, insurance magnate wants representation on bank board By MICHELLE PARK mpark@crain.com

Umberto P. Fedeli is rattling LNB Bancorp Inc.’s cage again. LNB’s largest shareholder on May 12 filed a document with the Securities and Exchange Commission in which he expressed his willingness “to take a more substantial role in the company to further accelerate the company’s growth,” and “to do so … may seek to place a representative on the board.” Mr. Fedeli filed his first SEC

March 2011

Schedule 13D regarding LNB, the parent of Lorain National Bank, last August; then, as now, he said he isn’t seeing a sense of urgency by management to improve the company’s performance. Mr. Fedeli, president of The Fedeli Group, a business insurance brokerage in Independence, in the past 60 days increased his LNB stake by a percentage point to 7.11% by buying 45,800 shares for more than $257,000. According to Mr. Fedeli’s latest SEC filing, his ownership in LNB now totals

March 2011

February 2011

million it still retains in funds from the federal Troubled Asset Relief Program, or TARP. “I’m only willing to do that if I have input,” Mr. Fedeli said. LNB and Lorain National Bank president and CEO Daniel E. Klimas said the company is “certainly always open to an individual buying shares of our company,” and remarked that Mr. Fedeli must have some confidence in its performance if he continues to invest. Mr. Fedeli acknowledged that he believes the bank’s shares are a value relative to their price to book value and price to potential earnings.

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February 2011

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Umberto Fedeli, the president of business insurance brokerage The Fedeli Group and an activist shareholder in LNB Bancorp Inc., the parent company of Lorain National Bank. specific suggestions from Mr. Fedeli that go beyond generic commentary such as “we need to improve our performance.” “At this point, Mr. Fedeli has not provided any specific suggestions for what he’d like us to do differently in terms of how we operate the bank,” Mr. Klimas said. While he said he’d have suggestions for cutting costs, Mr. Fedeli maintains it wouldn’t be fair to make them without seeing inside information. “Listen, maybe they’re working on all these things,” he said. “The results haven’t shown up. I’m saying, when do they show up? When do things get better? “Maybe I seem to be impatient,” he added. “But in the past when I’ve been too patient, I’ve been disappointed.”

“I think we do our best to listen to (Mr. Fedeli’s) concerns ... as we do all our shareholders.” – Dan Klimas, president and CEO, Lorain National Bank

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Also in his filing, Mr. Fedeli again aimed criticism at the company board, charging that it’s too big and that its members aren’t invested enough. (As of March 9, 2011, the company’s 19 directors and executive officers owned a combined 10.88% stake in LNB.) New this time around, Mr. Fedeli suggested that current board member Thomas P. Perciak — the mayor of Strongsville who formerly led Strongsville Savings Bank — be appointed executive chairman of the board. James R. Herrick, who leads Liberty Auto Group, is the current chairman. Though Mr. Herrick is a great businessman, Mr. Fedeli said, he would prefer the “phenomenal” ex-CEO of a community bank lead the board. But from Mr. Klimas’ vantage point, Mr. Herrick has helped drive improved performance at LNB. “Jim has been identified by his fellow board members as the person who is most qualified to be the board chair,” he said. Asked whether he planned any action following Mr. Fedeli’s filing, Mr. Klimas said he wasn’t sure, though he noted he’s always willing to meet with him. “Mr. Fedeli is a large shareholder. … I respect his perspective on the company, and I think we do our best to listen to his concerns and his recommendations and his guidance, as we do all our shareholders,” he said. ■

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Hiring still Change to HIPAA aimed at stagnant, but improving patient knowledge evaluation of how information is shared tools popular Plan more strictly governs e-record accounting By ED FRAUENHEIM Workforce Management

By JOSEPH CONN Modern Healthcare

Companies are giving employment testing high marks these days. Despite a still-tepid hiring climate, spending on assessments of job candidates and existing employees rose about 20% last year, according to vendors in the field. Josh Bersin, president and CEO of research firm Bersin & Associates in Oakland, Calif., estimates the global market for assessment tools and consulting to be between $1.5 billion and $2 billion annually. Mr. Bersin attributes increased interest in testing partly to the rise of software systems that let employers create detailed profiles of employees and plan their development. Other reasons for the uptick include the high volume of applicants in the weak job market, a push for globally consistent recruiting and promotion methods, and the need for legally defensible hiring practices. Employment assessments can range from online exams for a specific computer skill to personality tests intended to predict customer service prowess to extensive evaluations of potential executives. A study published last year by consulting firm Rocket-Hire found about twothirds of companies use some form of pre-employment assessment tools. Timken Co. in Canton hopes assessments will help the producer of bearings and steel make smarter hiring choices. “We really are trying to improve the quality of hire,” says Candice Young, a talent acquisition specialist at Timken. Timken has rolled out an online assessment for U.S. applicants interested in hourly positions. Among other things, it covers math skills and attention to detail. ■

The U.S. Health and Human Services Department’s Office for Civil Rights has posted proposed changes to rules regarding the disclosure of patients’ health information that could give patients more insight into how their information is shared. The 95-page proposed rule puts forth changes to the privacy regulations under the 1996 Health Insurance Portability and Accountability Act, otherwise known as HIPAA. The Civil Rights Office has enforcement authority for the HIPAA privacy rule and said the proposed rule reflects changes mandated by the Health Information Technology for Economic and Clinical Health Act, or HITECH, which are part of the American Recovery and Reinvestment Act of 2009. However, the Civil Rights Office noted that it also is looking to exercise the “more general authority” granted to it through the Health and Human Services Department under HIPAA itself. The rule comes less than two weeks after audit reports by the department’s inspector general’s office took to task the Civil Rights Office, the Centers for Medicare and Medicaid Services and the Office of the National Coordinator for Health Information Technology on what the inspector general found to be lagging efforts to enforce HIPAA security provisions and promote health information security. HITECH added to HIPAA requirements establishing how patients could find out how their medical records were used and shared. Under HITECH, covered entities using electronic health record systems are required to be able to account for — and report to patients about, at their request — disclosures of personal medical records, including those related to patients’ treatment, payment and other health care operations.

Ed Frauenheim is a senior editor with Workforce Management, a sister publication of Crain’s Cleveland Business.

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marriage, saying, “Legal or not, it will always be wrong.” The list goes on. “It’s amazing how so many in sports — and not just athletes — are so naïve to think they can post to social media, without a filter, and expect no recourse,” said Dominic Litten, leader of interactive marketing at Point to Point Inc. in Beachwood and founder of the Cleveland Social Media Club. “Everyone loves the benefits of social media — more fans, more opportunities, brand-building — but then the athletes/handlers/team management are incredulous when thoughts and opinions are perceived negatively, as if no one explained the downside,” Mr. Litten said.

Pro athletes in hot water without social media filter But some find that, if done right, activity helps branding By JOEL HAMMOND jmhammond@crain.com

Pro athletes have used social media, especially Twitter, to connect with fans, media and their peers in new ways. And they increasingly have used those outlets to stick their feet in

their mouths — or cause their bosses to grit their teeth. Cleveland Cavaliers forward J.J. Hickson drew the ire of many Cavs fans last week for congratulating former Cavalier LeBron James on his team’s victory over Dallas in Game 1 of the NBA Finals. Cleveland Browns cornerback Eric

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Teams can benefit greatly from their players’ increased accessibility with fans, and accordingly, Cleveland’s three professional organizations take steps to advise and monitor their players’ social media activity. Major League Baseball and the NFL and NBA each have rules governing when players and coaches can tweet, and they generally prohibit such activity in the hours leading up to games and until postgame media sessions are complete. Each team takes it further, though. The Indians have been praised nationally for their activist approach to social media, which perhaps most importantly includes the three most visible members of the organization — manager Manny Acta, president Mark Shapiro and general manager Chris Antonetti — on Twitter. Players, too, communicate there: closer Chris Perez, first baseman Matt LaPorta and a newcomer, reliever Tony Sipp, are among them. While acknowledging there is only so much control the team has over the online comments of its personnel, spokesman Curtis Danburg said Indians give a formal presentation during spring training about social media. He declined to offer details about what is discussed, but said management advises players to think of the potential repercussions of anything they send to followers. “Despite having more control there really is not that much difference to what they say on Twitter than what they say in an interview with the media,” Mr. Danburg said. Indians pitcher David Huff, who has yo-yoed between Class AAA

Columbus and the Indians over the past two seasons, last July was a candidate to be recalled to the majors. Then a tweet from @DHuff11 said, “Just got called up for a spot start … against the Detroit Tigers.” Mr. Huff said someone else had tweeted the information from that account, but the damage was done. He didn’t make the start; instead, fellow youngster Jeanmar Gomez pitched seven innings for the victory. Asked if Mr. Huff’s situation served as a teaching point for the organization and other players, Mr. Danburg replied, “Yes.”

… and the players The period of the NFL lockout aside, the Browns routinely advise players about the pitfalls of social media, but encourage them to engage fans, said spokesman Neal Gulkis. Right now, the Browns and other teams can have no communication with their players, so the team couldn’t have prevented the tweet about Mr. Butler’s firing — or reprimanded Mr. Wright for it — even if it wanted to do so. Messrs. Cribbs and Wright are just two of a gaggle of Browns on Twitter; others include Colt McCoy, Scott Fujita and Joe Haden. Mr. Cribbs, though his status as a fan favorite never was in doubt, has used Twitter to his advantage. First, he took to the web during his tense contract negotiations last offseason. Now, during the lockout, he occasionally holds trivia contests and continues communicating with his fans. “My advice is that you’re an ambassador for the game, and to always remember that,” said J.R. Rickert, Mr. Cribbs’ agent and president and CEO of National Sports Management in New York City, which also represents All-Pro tackle Joe Thomas. “With Josh, there’s not a lot of hand-holding that needs to go on,” Mr. Rickert said. Generally, area athletes have avoided social media controversies such as those affecting Messrs. Mendenhall and Bush. Nearly the entire Cavaliers roster is on Twitter; that includes Baron Davis, J.J. Hickson and Daniel Gibson. “We do advise them, but it’s a very personal form of communication, so we keep that in mind,” spokesman Tad Carper said. “We work with our players to encourage their use of social media in a way that works for them.” ■

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BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s highlighting positive developments in the Northeast Ohio business community. It’s available each week at CrainsCleveland.com. Send information for Bright Spots to managing editor Scott Suttell at ssuttell@crain.com. ■ The Evergreen Cooperative Laundry project in Cleveland was recognized as the best community development project in the United States by a committee of the National Development Council, the nation’s oldest economic development organization. The council last month announced the top four winners of the NDC Academy 2011 Project Showcase, a special feature of the group’s biennial conference showcasing economic and community development projects nationwide. Evergreen won in the community development category. The three other winners are from Louisiana, Massachusetts and South Carolina. The categories in which they won are affordable housing, creative financing and job creation. The National Development Council said submissions came from cities and communities across the nation in “unprecedented numbers.” There were 24 finalists — six in each of four categories — that were chosen to compete for top honors at the NDC Academy. ■ Corporate Screening Services Inc. of Middleburg Heights has expanded by 25% its office space in the Interstate Plaza complex. The company, which conducts pre-employment screening and background investigations for employers, said it increased its space in the building, 16530 Commerce Court, to nearly 5,000 square feet from about 3,900. Increased hiring activity from clients sparked the office expansion. The additional space will be filled by the company’s growing information technology department. In addition, Corporate Screening recently added 1,400 square feet of office space in Tampa. Corporate Screening also continues to run a 12,800-square-foot operations center in Middleburg Heights. ■ These aren’t great times for the real estate business, but the Eleven River luxury townhome development in Rocky River reports sales are going swimmingly. The $10 million private community of 11 townhomes on the shores of the Rocky River reports it has sold all five residences in its first phase, and two contracts are out for signature in the second phase. The project’s developer is Andrew Brickman, and his partners are Justin Campbell and Nate Barrett of Abode Living. When complete, the project will consist of two buildings housing 11 residences. The south building is under construction and nearly sold out. Construction on the north building will begin shortly. ■ It’s not quite McDonald’s territory, but Hyland Software of Westlake recently reached a significant milestone — securing its 10,000th customer.

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Hyland, a producer of enterprise content management software, said the honor went to Glen Raven Inc., a North Carolina company that makes performance fabrics. Glen Raven started as a family-owned cotton mill. As the company grew to include multiple Hyland locations, its accounts payable department was replicated across the locations with different invoice processing systems. To support the effort to streamline its accounts payable operations, Glen Raven chose Hyland’s OnBase ECM software. A.J. Hyland, president and CEO of

Hyland Software, said, “While this milestone demonstrates what Hyland and its partner network have already accomplished, it’s even more representative of what we’re capable of achieving in the future. With that, I look forward to number 10,001 and beyond.” ■ Corporate United, a group purchasing organization in Westlake, has moved to a new office in the western suburb to accommodate its growth. The new office at 24651 Center Ridge Road, Suite 527, has 6,800 square feet, which spokeswoman Kate Torok said is more than double the size of its previous home. It’s more than triple the size of the

office Corporate United took in 1997 when the business moved out of the home of its founder, Gregg Mylett. Corporate United now has 183 member companies, many of which are based in Northeast Ohio. The companies have a combined $600 billion in revenue and 2 million employees. ■ OnShift Inc. of Cleveland, a provider of staff scheduling and shift management software for the health care field, landed a big new client in The Ensign Group of Mission Viejo, Calif., a provider of skilled nursing care, rehabilitative care services, hospice care and assisted-living services. The Ensign facilities selected OnShift “to help manage their labor costs by preventing overtime and controlling staffing levels to main-

tain compliance with regulations,” according to a statement from OnShift. “We saw a significant opportunity to leverage technology to streamline our client facilities’ staffing processes and information,” said Tyler Douglas, vice president of information systems for Ensign Facility Services Inc., which provides back-office support and IT functions to the health care facilities. The first facility to use OnShift “was up and running in 13 days and has reduced overtime to 1%,” according to OnShift. Mark Woodka, CEO of OnShift, said Ensign’s “approach to labormanagement support — from their bigger- picture integration strategy to day-to-day implementation within client facilities — will provide significant savings and even more time for staff to spend on care.”

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GOING PLACES

NONPROFIT

JOB CHANGES

HEALTH CARE

CONSTRUCTION

HOPE MEDICAL SERVICES: Brenna Mannion to lab processor.

PROJECT AND CONSTRUCTION SERVICES INC.: John Evans to graphic designer; Chuck Naegle to lead project superintendent; Erin Shanahan to project engineer.

DISTRIBUTION JENNE INC.: Ken Fabozzi to vice president, U.S. sales. PARTS ASSOCIATES INC.: Craig Harvieux to director of marketing and product development; Danielle Laci to fluid product line manager.

PRIORITY HOME HEALTH CARE INC.: Patrice Bates to data entry.

INSURANCE

NEIGHBORHOOD HOUSE ASSOCIATION: Connie Osborn to president, CEO.

CUSTOM BROKERS INSURANCE: Margaret Herthneck to sales executive.

WESTERN RESERVE COMMUNITY DEVELOPMENT CORP.: Sabrina Waytes to executive director.

HYLANT GROUP: Tracey Jaycox to client executive.

SERVICE

MEDICAL MUTUAL OF OHIO: Mark Pencek to director of member engagement.

ENGINEERING

LEGAL

INTEGRATED ENGINEERING CONSULTANTS INC.: Gerald Takacs to mechanical department manager.

TUCKER ELLIS & WEST LLP: Paul W. Smith to associate.

FINANCIAL SERVICE

MOEN INC.: Mark Knurek to director of marketing and product development, Commercial Business Unit.

CREEKSIDE FINANCIAL PARTNERS LLC: Jessica Silver to client manager; Susan Valerio to office manager. HW&CO.: Donna Jenkins to staff accountant; Connie Stepich and Susanna Thompson to executive assistants. KPMG LLP: Nicholas A. Canitano to managing director.

DOMESTIC VIOLENCE AND CHILD ADVOCACY CENTER: Linda Dooley Johanek to CEO; William P. Eyman to COO; Julie DelGado to CFO; Jay P. Gardner to director of development and communication.

AQUA DOC: Brock S. Cosic and Julie E. Thompson to biologists. SKODA MINOTTI PROFESSIONAL STAFFING GROUP: Andrew Devore to managing director, professional staffing.

TECHNOLOGY

MANUFACTURING

ONOSYS ONLINE ORDERING: Brittany Gonzalez to communications coordinator; Becki Cooper to account manager.

TELECOMMUNICATION

MARKETING KNOTICE: Shannon White to production artist; Corey Farrow to junior network administrator; Andi Bordick to onboarding specialist; Sandie Hampton to account executive.

DCT TELECOM GROUP: James Fox to senior account manager.

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SERVICE TO CHILDREN: Carolyn Brodie (Kent State University) to vice president/president-elect. ACADEMY OF MEDICINE OF CLEVELAND AND NORTHERN OHIO: Dr. Lawrence T. Kent (University Hospitals and Case Western Reserve School of Medicine) to president.

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GROWING CLEVELAND+ 10 leaders shine the light on regionâ&#x20AC;&#x2122;s opportunities Karen Gahl-Mills Arts and culture

Brad Whitehead Regionalism

e asked 10 of the areaâ&#x20AC;&#x2122;s leaders to share with us their thoughts on ways to grow the Cleveland+ region. Each was posed the same question and asked to relate it to his or her area of expertise:

Paul Westlake Jr. Architecture and design

Where would you like to see the region in 20 years, and how would you get it there?

Development

Jack Schron Jr.

Dr. Frank L. Douglas

Manufacturing

Biotechnology

Ann K. Mullin Education

Chuck Fowler Sustainability

Radhika Reddy Immigrants

John J. Ferchill

Nathan Kelly Economic development

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MANUFACTURING

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JACK SCHRON JR.

DR. FRANK L. DOUGLAS

President, Jergens Inc.

JUNE 6 - 12, 2011

here is a popular phrase that in order to add true value, one needs to “grow it, mine it or make it.” In Northeast Ohio, we have many companies that are focused on one or more of these three facets of business; but, the one most often associated with our region is that of “make it” and more particular, the manufacturing sector. During the last few years, many have thought that the United States, and in particular Northeast Ohio, no longer makes things. Going to the local retail store, people see mainly foreign-made goods and conclude that manufacturing is gone from our region. This change has been based on a public demanding lower retail pricing with resulting increases in foreign-made goods. Though many in retail — in response to this public demand — have moved to selling a high number of foreign-made goods, the reality is Northeast Ohio is still a leading manufacturing region. A quick check will find leading businesses in our community making products for the fields of medicine, automotive, aerospace, defense and energy. Even with the strength of our region’s still-vibrant manufacturing, there is one factor needed to support the sector, one that is eroding and will ultimately mark the end for our region’s historical manufacturing strength if it is not given attention. The item of ultimate importance for Northeast Ohio’s manufacturing sector is not the adoption of the latest, greatest technical equipment or a supportive tax code or even the availability of raw materials. The key to the success of our region’s manufacturing future is a trained work force that’s ready to tackle the products and processes of tomorrow’s manufacturing. For the last few decades, we have failed to focus on manufacturing work force readiness in education and society in general. We have downplayed the importance of the manufacturing work force and suggested we all will be part of the service economy. All one needs to do is to travel to India or China to see the huge operations of outsourced accounting, computer and telephone service centers to see how easy it is to move service-sector jobs. On the other hand, a walk-through of most any of today’s Northeast Ohio manufacturing operations will reveal more technology being deployed than in those companies we often call “high-tech.” During a tour of a modern area production facility, one will find computers everywhere, driving all aspects of production; machine tools working to .0001 of an inch; lasers being used to cut, mark and join materials; automation improving the assembly process; and many more pieces of applied technology. Touring groups of educators often are heard remarking, “So this is where trig, geometry and algebra are being used!” With this as a background, what does the future hold for manufacturing, and how should Northeast Ohio prepare for it? We must come to grips with the work force needs for this future. The growing work force demand is for individuals who want to use their brains and their hands. The technical equipment being used today costs hundreds of thousands of dollars, requires dedicated individuals who understand these computerized tools and know what they can do with these precise pieces of equipment. Some of the schools that are responding to the growing need for technicians are Auburn Career Center in Painesville, Cuyahoga Valley Career Center in Brecksville, Polaris Career Center in Middleburg Heights and Max Hayes

High School/ Academy. Though the first three have excellent facilities, Max Hayes soon will break ground on the region’s first new state-ofthe-art career center with support for the manufacturing work force. The Max Hayes program long has been seen as critical by a group supportive of manufacturing called WIRE-Net. WIRE-Net has supported work force development not only at the Max Hayes public school level but also within its manufacturing membership sector. WIRE-Net started on Cleveland’s West Side only to see the demand for its services grow throughout the region. Another group that recognizes the critical nature of work force development has been Magnet. Magnet, a group focused exclusively on manufacturing, through its Ambassador Program, aims to link those working in manufacturing with educators, parents and students in an effort to support the work force of the future. In recognition of the need for the work force to be driven by innovation of product and process improvement, under Magnet’s leadership, with support of WIRE-Net, a program has been launched called the Partnership for Regional Innovation Services to Manufacturers, or PRISM. PRISM provides a glimpse of how the manufacturing work force of the future will constantly be required to innovate on the products they make and the processes they use. There is little place in the manufacturing work force of the future for individuals who are not actively engaged in concepts like PRISM or in continually improving an operation. Even with all the external support, the individual manufacturer must take an active role in shaping their work forces. It is not enough to rely on external service providers; a business must actively promote work force development through active learning. The learning tools today such as online instruction, apprenticeships, paid tuition programs and on-the-job training, all contribute to improvement of that company’s work force. If a company expects its work force to grow, there is no excuse for not taking an active role in making it happen. Also recognizing these changes, those in government who help to shape the future have started to put forth work force changes. It was only a few years ago that the area work force boards listened to the desires of those seeking assistance and presented programs and training to support those individuals. The former director of the Employment Connection, Larry Benders, who is now economic director for Cuyahoga County, now asks what the employer needs from the work force and how could government help provide it. This simple change to demand driven vs. supply driven should also be the standard for the manufacturing work force for Northeast Ohio. There is no doubt that the demand and innovation in the work force will change as new equipment and processes are brought online. Referring again to China, the new precision equipment making medical, aerospace and high-level automobile parts is being run by degreed engineers, those with associate degrees and technicians. They understand that the manufacturing work force is an important, good paying part of their strategic economic plan. They have realized how important it is to make things for the benefit of their economy. There are many jobs that are support- and service-oriented. But, in order to add substantial wealth to the economy and support the work force of tomorrow, Northeast Ohio must add and transfer value by “growing, mining or making.” ■

President and CEO, Austen BioInnovation Institute in Akron

he future for biotechnology holds tremendous potential for improving lives and the economy, but much work still needs to be done. Our region’s biosciences sector has the potential for more growth during the next two decades if we continue to capitalize on our regional strengths and exploit the opportunities in those areas where vital work is still needed. Today, we possess the power to rapidly increase our knowledge of the molecular mechanisms that sustain life. This ability to generate dynamic information at an everrapid speed provides us with the hope that we will be able to develop cures or treatments for many diseases that plague our neighbors, while simultaneously decreasing the cost and burden of ailments. Unfortunately, while the speed of information increases, the cost of generating this clinically relevant scientific knowledge has not decreased at a similar pace. More problematic is the significant gap between

Today, we possess the power to rapidly increase our knowledge of the molecular mechanisms that sustain life. the information collected and our executable knowledge. One of the most visible evidences of this mismatch is in the path to fully realize the benefit of personalized medicine. This customization of care carries with it the notion that we soon will be able to find the right drug for the right patient at the right time. It is more likely that any disease will have a finite number of variations and that one will be able to find biomarkers — be they physical,

ARTS AND CULTURE KAREN GAHL-MILLS Executive director, Cuyahoga Arts & Culture

or spring break 2031, we get a real treat — our grandniece, Emma, is coming to stay with us. She’s 7 and lives in Strongsville, a community that is known for its excellent arts-infused school curriculum. Though she could have stayed home and gone to a great arts camp all week at her school, she specifically asked to stay with us for a few days so that she could experience the hustle and bustle of downtown Cleveland. Her mother drops her off at our loft overlooking Playhouse Square on a Sunday evening, and Emma gets out her “wish list” of activities for the next few days: eat at a fancy restaurant, take a watercolor class and enjoy Lake Erie. First thing Monday morning, we set out for adventure. Because it’s raining, we decide that it’s a good day to explore the offerings at the Cleveland Cultural Center, in the old Cleveland Trust Building at East Ninth Street and Euclid Avenue. The Cleveland Museum of Art and MOCA Cleveland both have learning annexes there, which are used by many of the region’s cultural institutions to provide arts learning services in a central location. On this particular day, the Foluke Cultural Arts Center is offering a watercolor class that is just her speed, and while Emma paints, I find myself a cup of coffee at the Rotunda Café, the proceeds from which go toward supporting the Cultural Center’s mission.

The rain clears up, and we decided to walk through the mall, passing the convention center, to the Metroparks’ Lakefront Reservation, a beautiful park that is part of the Browns Stadium parks and recreation complex. The streets are crowded with tourists making the same spring break journey, but we aren’t deterred, and since we’re not in a hurry, we linger on our walk, enjoying the whimsical light sculptures that decorate the route. We are hungry, though, so we stop at one of the city’s many high-end food trucks for lunch. Emma loves Mexican food, and we indulge in tacos and tamales made right before our eyes with ingredients grown by local students, part of the Cleveland Botanical Garden’s ongoing Green Corps program. This project has provided so much operating income to the Garden that it is now open seven days a week and is free of charge. We arrive at the park to find it brimming with activity. A ranger is leading a nature walk; a stage is set up, and a sign says that artists from the Creative Workforce Fellowship will be leading a folk dancing class at the top of the hour; and families and business people alike are enjoying picnics. Emma is overwhelmed — what to do first?! Two hours later, we’re both tired, and so we take the bus back to our apartment and take a nap. When it’s time for dinner, the only transportation that we need is the elevator. PlayhouseSquare is not only the home to great

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biochemical or imaging attributes — that uniquely describe each disease variant and thus allow for a tailored treatment for which the patient’s disease belongs. While personalized medicine holds much promise, many critics decry the slow pace at which it is becoming the norm. Currently, we have few examples of where a drug was specifically developed against a biomarker that identified a subset of patients with a specific form of a disease. How can this be, given the tremendous breakthroughs in scientific discovery and advancements in patient care during the past few decades? There are a multitude of reasons that are embedded in the present limitation of the science, present gaps of knowledge, regulatory hurdles and costs. Another important contributor is the lack of appreciation of the opportunities presented by identifying and working in precompetitive areas — a space where an entire sector has common problems that cannot be solved by any single individual or firm. Such common problems present hurdles to innovation and progress. A simple example of a precompetitive area is that of understanding the roles of the many molecules that enable tumor cells to escape normal control over the ability of the cells to multiply, to grow

housing and great theater — it’s also become an anchor of Cleveland’s restaurant district. We are able to find Emma’s fancy restaurant simply by stepping outside of our front door and into the restaurant associated with the Cleveland Culinary Institute, an affiliate of Tri-C. Emma likes it because it has an outdoor patio from which she can observe the excitement of PlayhouseSquare at night; I like it because its mission is to support young people in their careers as budding chefs and restaurateurs.

Public funding for the arts has been a catalyst for fueling (downtown Cleveland’s) resurgence. We had a great day, and with the exception of our meals, all of this cultural activity was entirely free of charge, thanks to the region’s more than 20-year commitment to public funding for arts and culture. Public funding provides sustaining support to the region’s important arts and cultural institutions, and returns dividends to its citizens every day in the form of expansive programming, great public art and support for regional collaborations that extend beyond the borders of the city. Downtown Cleveland has become a vibrant place to be, and public funding for the arts has been a catalyst for fueling its resurgence. Tomorrow perhaps we’ll spread our wings a little farther and go for a bike ride along the Towpath Trail, which connects Cleveland to Akron, or maybe take a walking tour of the historic Old Brooklyn neighborhood. There are so many great arts and cultural options throughout the region, it’s hard to choose. But we’ll figure that out tomorrow morning, over breakfast at one of the many great cafés in Ohio City or Tremont. ■

beyond defined borders or to live beyond their preprogrammed life span. Another example is that of finding biomaterials that will form platforms that are compatible with living tissue, or a living system, in which appropriate cells could be deposited to help rebuild skin or bone. This is not only a materials problem, but one needs to understand how to recapitulate the right environment, including the right growth factors, that will both enable these cells to survive, divide and differentiate into the right types of cells and in the right order to form the right layers and structure. The problems provide opportunities for us to work in the precompetitive space because not only is the science complex, but solutions require many disciplines.

So why is all of this relevant for Northeast Ohio? Quite simply it means jobs and economic growth. According to a 2010 report by Battelle and the Biotechnology Industry Organization, total employment in the U.S. bioscience sector reached 1.42 million positions in 2008 with continued positive growth displayed at a time when other private sector employment experienced a downward trajectory. In Ohio, there are 1,628 bioscience/biotechnology companies of which more than 500 are medical laboratory and diagnostic imaging companies. These companies are clustered in Ohio because of the many research-intensive universities and institutions that provide scientists and resources that generate discoveries and often companies. One way to

CRAIN’S CLEVELAND BUSINESS further increase the attraction of companies to Northeast Ohio is through the formation of precompetitive collaborative groups to tackle many of the vexing scientific problems that continue to produce this mismatch of data generation and knowledge deficit. Through the formation of precompetitive collaboration among academia, industry and government, more fundamental problems would be solved in Northeast Ohio, leading to new companies being created as well as the migration of existing companies here. One such public-private-philanthropic collaboration that is starting to pay dividends is the Austen BioInnovation Institute in Akron. Announced in 2008, the partnership was created by very different institutions — University of Akron,

Northeast Ohio Medical University, Akron Children’s Hospital, Akron General Health System, Summa Health System — and supported by the philanthropic John S. and James L. Knight Foundation. The goal is to leverage the university’s polymer and biomaterials strengths with the musculoskeletal biology and orthopedic expertise of the medical organizations to innovate product solutions for patients with orthopedic and wound healing problems. This young collaboration already has had many successes that are benefitting patients. My vision for Northeast Ohio is that it becomes the precompetitive collaborative capital of the world and as a result attracts talent and companies that continue to improve the health and economy of our region and country. ■

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ARCHITECTURE AND DESIGN

Westlake Reed Leskosky won a design-build competition to renovate the historic Wayne Aspinall Federal Building in Grand Junction, Colo. The project will be the first National Register landmark in the U.S. to be renovated as a Site Net Zero Energy Facility. This is a rendering of the lobby designed by the firm.

PAUL WESTLAKE JR. Managing principal, Westlake Reed Leskosky would like to see the region branded by design quality, with contemporary new buildings and landscapes of significant design, complementing existing landmarks revitalized to new purpose. The development of an important school of design teaching urban planning, architecture and landscape in Cleveland (perhaps in University Circle) would impact design firms and the quality of design in the region by stimulating discourse and attracting and retaining designers. The region would be confident about the ability of local studios to achieve design excellence, leading to enhanced opportunities and experiences and cultivating a strong design community. Because the region has much investment embodied in infrastructure and buildings, but has experienced a decline in population, it would be wise to adapt existing assets while encouraging infill development and increased density in targeted areas. We should also provide open

space — parkland and recreational amenities — that restore the “forest city” within dense, mixed-use neighborhoods and urban districts. Before we develop new assets, we should strengthen and guarantee the sustainability of existing assets. The core of the region is the urban center of Cleveland. It is most important that this area be developed with mixed uses that create vitality and invite use and visitation. This urban core, and emerging redevelopment of the convention center and downtown area, must be connected to the lake, upheld as a defining asset of the city. The region’s previous impact on its resources in terms of diminishing water and soil quality must be surpassed by its ability to restore environmental quality; this is a critical responsibility, as Cleveland is situated in a water resource system that comprises one-third of the fresh water in the world. The region’s legacy of innovation must be channeled into environmental entrepreneurship. Our designers should demonstrate

and contribute to, the 21stcentury global economy. This new model must confront with honesty what it will take to bring our students to where they need to be, while simultaneously redefining what and how students learn. This work must occur within the larger context of students’ too-often troubled environments, the core city’s need to attract and retain residents and

t the risk of repeating nearly 30 years of commentary on the state of public education in America, I would like to see the region demonstrate to the public a reimagined model of education — a new way of schooling — so that our students can make the kind of breakthroughs in performance required to compete in,

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means of achieving environmental excellence and operating efficiency, celebrated nationally as examples for achieving energy conservation and independence. ■ Who should lead such efforts? Because many buildings involve governmental initiatives (city of Cleveland, Cuyahoga County, city of Akron, Summit County), foundation involvement (Cleveland Foundation, Gund Foundation), and nonprofit leadership (Greater Cleveland Partnership, University Circle), these influential entities should develop a manifesto of performance criteria that guides all projects within their stewardship or receiving their support. These objectives may include measures of sustainable design, use of locally sourced materials and demonstrable innovation. Measures could include Leadership in Energy and Environmental Design, or LEED, Gold minimum or high-performance green building criteria of the U.S. General Services

Administration that underpins projects funded by the American Recovery and Reinvestment Act. Other institutions that have considerable impact to lead such initiatives include universities and major health care institutions. ■ How can these efforts be moved forward? These efforts can be moved forward by convening leadership noted above, developing a manifesto of design objectives as a prerequisite for their support and involvement and communicating these objectives. We need to intercept emerging projects and publish results of demonstration projects, communicating data and performance metrics in a transparent manner through a well-managed web site. ■ What structures are needed? Structures are needed that engender governmental and institutional collaboration and operating synergies. We need fewer structures but with larger boundaries, transcending the current divisions of govern-

EDUCATION ANN K. MULLIN Senior program officer, The George Gund Foundation the region’s demand for top-quality talent. This reimagination must challenge long-held beliefs about education: ■ Why does school still operate

only nine months per year, despite decades of evidence about the accumulated loss of learning over the summer? ■ Why must schools start at 8 in

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ment and institutions. Much as the Idea Center at PlayhouseSquare embodies the collaborative resources of broadcast and arts education, we need structures that house efficient, consolidated governmental entities. Much as the new Power of Three project incorporating the Allen Theatre merges the interests of the Cleveland Playhouse, Cleveland State University and PlayhouseSquare, we need shared facilities that dramatically reduce operating costs and increase density of use. This is at the very heart of sustainability and allows institutions to concentrate focus on their missions and sustain the quality of life of our region. Much as the Kohl Building at the Oberlin Conservatory of Music invites participation and use by all facets of the college, conservatory and jazz studies as well as the community of Oberlin, we need educational structures that foster interdisciplinary learning and invite collaboration in educational insti-

the morning and end at 2:30 in the afternoon, sending children home to three hours of unsupervised time? ■ Why do we insist that children learn in exactly the same amount of time, and then pass them from grade to grade even if they haven’t mastered the subject? ■ Why must schooling only take place in buildings and classrooms that are isolated from each other and the world? Globalization and technology, the need for 21st-century knowledge and skills and standards-driven education require that we approach education differently than in the past. It is not too much to ask, then, that by 2031 education really does look different. The traditional high school experience — which still follows 1906 guidelines from the Carnegie Foundation for the Advancement of Teaching — would give way to a portfolio of smaller standalone schools, campus models and schools housed within other institutions. Some schools might be opened and managed by districts; others opened and operated by third-party entities — universities, cultural institutions, social service agencies and charters. Students in these schools should have real connections to the larger community and use the city and (virtual) world as their campus. College- and career-ready expectations, rigorous curriculum and instruction and integrated technology should be the norm for all students. Elementary and middle schools should be organized in ways that

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tutions and their communities. We need well-equipped collaborative research facilities that transcend institutional boundaries. We need libraries and community facilities that provide universal access to information and discourse. We need public access to the waterfront, parks and open space. We need structures with rich, intelligent infrastructures that allow for flexibility of interpretation and use, as 30- to 100-year-old buildings transcend their original programs and must adapt to change. ■ If I could design one dream project, what would it be and where? Westlake Reed Leskosky is currently in construction of a dream project. We won a design-build competition to renovate the Wayne Aspinall Federal Building in Grand Junction, Colo., for the GSA. This project is of historic importance as it will be the first National Register landmark in the United States to be renovated to a Site Net Zero Energy Facility. We believe that the building may in fact become “utility” as a result of innovation in energy efficient design. The project achieves President Barack Obama’s 2030 challenge of Federal Buildings achieving net zero energy — 20 years ahead. A dream project would be to create such a demonstrative project in Northeast Ohio — that would combine multiple governmental entities into a compact arrangement with comparably low to no annual energy consumption, using a maximum of local resources (design, labor and materials). This structure would facilitate governmental collaboration and efficiency, demonstrate innovation in energy conservation and waste reduction, provide an example for the private sector and establish new performance standards for buildings in the region. ■

allow teachers to play to their strengths across classrooms and subject areas and engage students in a rigorous, flexible and masterybased curriculum. High-quality preschool programs for 3- and 4-year-olds should be offered in every school to boost physical, social/emotional, behavioral, cognitive and academic achievement for young children entering kindergarten. We should see innovation at all levels, with some schools experimenting with radically different approaches. A few schools might run from mid-afternoon through late in the evening to accommodate students’ employment and family responsibilities and even teens’ sleep and activity patterns. Residential models might target homeless students and parenting teens. Some schools might meet intensive needs of specific students: recent immigrants or juvenile offenders. Still others might address students’ interests with specialized programming or focus in particular academic areas. All schools should be rigorous, relevant, personalized and collegeoriented. All schools should have control over resources — people, time and money — in exchange for accountability for student performance. All schools should have discarded the traditional school calendar and school day. Above all, schools should break the one-size-fits-all mold and experiment and adjust as necessary. None of this can be accomplished without the most compe-

CRAIN’S CLEVELAND BUSINESS

ECONOMIC DEVELOPMENT NATHAN KELLY Deputy chief of staff for development, Office of County Executive Ed FitzGerald

n 20 years, the region will be known as a region of opportunity for businesses and communities to flourish. It will be known as a region robust with exports of materials, manufactured goods, health care and cultural influence. We will be a region known for importing newcomers and investment, while supporting homegrown innovation and education. To be recognized for excellence in the future, we have to be excellent now. The first step is the realization that excellence surrounds us. Our cultural, medical and philanthropic institutions are second to none. Our infrastructure, industry and work force remain a foundation for growth at any time. We are especially poised to capitalize on the emerging new economy that is based on innovation and production. We must collaborate to build a region that capitalizes on both our excellent assets and the opportunity that comes with a larger economy in transition. Governments must collaborate to be more efficient, reduce sprawl and eliminate the practice of competing with one another for the businesses already in the region. As County Executive Ed FitzGerald has

tent and inspiring principals and teachers in our schools. They must believe and be able to demonstrate that they can change the trajectory of students’ lives. Principals need appropriate resources to provide the teaching and learning conditions where their staff can thrive. They need to be instructional leaders who understand, model and evaluate high quality teaching; who build collaborative learning environments and are held accountable for results. Teachers need environments in which they are not isolated, but rather surrounded and supported by colleagues who share and pursue the same common goal — higher student achievement. They need time and flexibility to evaluate student data in real time to guide instruction; work in large and small groups with students; engage in school-based, data-driven professional learning; mentor and observe peers; research relevant topics; and interact more proactively with students’ families. The 21st-century global economy demands that our students be prepared to engage in a complex world. In 2031, an essential responsibility of our schools, then, would be to build students’ critical thinking across disciplines, inspire their creativity and innovation, and ensure they have excellent interpersonal and communication skills across diverse cultural and socio-economic environments. This will provide them with the competitive edge in their neighborhoods and around the world. ■

said, “Stop competing against each other and start competing against the world.” That collaboration will strengthen public sector efforts to improve the infrastructure and investments that accelerate human capital development and the private sector’s ability to accelerate job growth. Collaboration extends to embracing the ideas that share these pages — none of them will be successful if they are pursued exclusively. Superior architecture, fostering arts and culture, attracting newcomers, strengthening and growing our region’s industries also can benefit from uniting toward one shared vision for the region. Much of that shared vision is embodied in Cuyahoga County’s first “Five-Year Economic Development Plan,” submitted by the county executive to the County Council just last week. That plan is the result of countless hours and contributions from the region’s economic development leaders, practitioners and skilled volunteers from throughout Cuyahoga County’s transition process, including the recent contributions of the newly formed Economic Development Commission.

We must collaborate to build a region that capitalizes on both our excellent assets and the opportunity that comes with a larger economy in transition. The plan acknowledges the significance of those other important initiatives, establishes some shortand long-term economic development goals and describes a few approaches the county will use to get us there. One key approach is to establish a local fund for the exclusive purpose of investing in economic development opportunities with direct job creation. In harmony with a more relevant set of resources, the fund differs from previous county tools by using local resources for local priorities, rather than exclusively using state and federal resources — and their rules — for economic development. Sourced from existing county

revenues, the fund will provide a funding source to Cuyahoga County businesses to assist in entrepreneurship, new product development and to accelerate commercialization in the region’s growing business clusters. Those businesses need a place to grow. The county will continue to improve its role in identifying and preparing sites that are ready to meet companies’ expansion and relocation plans. By acquiring, assembling or remediating properties and readying them for future development, we can reverse the trend of losing businesses that are in search of immediately available suitable sites and swiftly respond to outside businesses’ search for the same. This approach responds to a future need of developing around existing infrastructure and transportation to reduce costs and impact. Easing the ability to grow in Northeast Ohio leverages the businesses and industries that already are here, translating to organic business growth, new jobs and new skills. Where there’s a need for new skills, there’s a need for human capital development. Another approach of the plan is a commitment to developing a work force that meets today’s and tomorrow’s business needs. That starts at the earliest stages by investing in early childhood education, supporting formal education and later training opportunities to prepare county residents for meaningful, available jobs. We have to measure and report our progress, to be transparent to residents and businesses alike. If we follow a plan to collaborate, invest, innovate and educate, we will be easily known as the region of excellent opportunities for businesses and communities to flourish. ■

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IMMIGRANTS RADHIKA REDDY Partner, Ariel Ventures LLC; Founder, Ariel International Center

he world is becoming smaller and more connected, and it is important for Northeast Ohio to establish itself as a truly global region — recognized around the world as a center of health services, renewable energy and other Third Frontier-targeted industries, such as advanced materials, biomedicine, fuel cells, medical imaging, photovoltaics and sensors. Immigrants have contributed greatly to our past growth, and I’d like to see more immigrants establishing bases in Northeast Ohio, creating a global mosaic of people and businesses from different countries with rich cultural heritages and working together for a shared regional vision, while retaining their unique cultures and backgrounds. I envision a developed lakefront and active downtown communities, with globally diverse people working, living and entertaining in vibrant walkable neighborhoods with lakefront access, such as those found in Chicago. I also envision the Cleveland+ area hosting global trade missions,

trade shows, intercultural events and celebrations of various nationalities at places like the convention center, medical mart, University Circle area and the Ariel International Center, leveraging our cultural diversity, world-class institutions, universities, museums, orchestra and other assets in our Cleveland+ region. We can convert the Cleveland+ area into this recognized global region and global mosaic of people by leveraging, aligning and connecting our area’s people and assets to the region’s best advantage. ■ Our PEOPLE are one of our greatest resources and advantages. The region is culturally diverse, with more than 117 nationalities represented in its population. The members of these nationalities often maintain connectivity between their home countries and Northeast Ohio, making them a key resource for identifying companies and people to attract to this region. First-generation immigrants, such as myself, often become entrepreneurs. They identify opportuni-

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GROWING CLEVELAND+ ties and establish businesses, are very hard-working and, since they have a two-country perspective, often are able to identify new opportunities for synergy, collaboration and exchange between their two countries. Once established, they generally like to integrate and become part of their new country, and once successful, they want to give back to the community that embraced them and made them feel at home. The Cleveland+ region should actively market itself abroad through its various immigrant nationality groups and public-private channels and create an environment to make immigrants feel welcomed and comfortable. We can establish business incubators and offices for international businesses, such as the Ariel International Center that we have created, that could serve as hubs for the growth of international businesses. Creating a fund to invest in immigrant entrepreneurs can help launch new international businesses. We also can attract global

he region has experienced an unprecedented loss in population over the last 20 years. You need to go no further than note that the state of Ohio has lost four congressional seats in this period of time. People are not leaving because of lifestyle factors such as weather, entertainment, public and private schools. They are citing the lack of consistent job growth in the area. In turn, employers with open jobs are unable to find workers with the appropriate skill sets and open positions remain unfilled.

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companies as well as Ph.D.s and doctors who are innovating at universities and hospitals, providing them space in an international incubator like the Ariel International Center. Such a location offers shared international services and resources, helping them innovate, commercialize and export their products, tapping into their own and Ohio’s connections in foreign countries. International students who come to Cleveland are another key people resource, sometimes coming here on a single-year scholarship, like I did, and then having to return if they are unable to pay the balance of their tuition. I came to the United States on a one-year Rotary International Scholarship to do my MBA, and almost returned to India since there was no financing available to foreign students. Fortunately, I was able to get a job two weeks before I was scheduled to leave, so I was able to stay here, complete my studies, obtain a green card followed by citizenship and estab-

JOHN J. FERCHILL Chairman and CEO, The Ferchill Group This information only highlights the daunting task ahead for the region. The Ferchill Group is currently developing in four similar Midwest-

BRAD WHITEHEAD President, Fund for Our Economic Future

rom challenges come opportunities. The structural fiscal crisis facing local and state government opens an important window for change and progress in Northeast Ohio that can power our region’s emerging economic transformation. Massive deficits, service cuts and failed school levies don’t have to be the story of our region’s future. Instead, our region’s future can be about innovation, education and longterm sustained economic growth. How can we get there? Would $1 billion a year help? What if you were told that a billion dollars a year is available to Northeast Ohio to pay for a college education for every graduating senior, to hire more great teachers or increase research at our universities? And at the same time we could preserve the heritage

lish my business. To support international students and keep them here and committed, we could establish a small pool of funds to provide loans or scholarships that would allow these students to complete their education and encourage them to settle in this region. ■ Our LOCATION is another resource, being connected to the federal Interstate Highway System via I-90, served by two of the biggest Midwest rail carriers and linked to the Port of Cleveland. With highway, rail and water access and situated to serve a large part of the U.S. population and business sector, the region is ideally positioned for international businesses to locate their North American headquarters, manufacturing or distribution centers. An international trade district can be established to encourage international companies to locate here, and the strengths of the region can be promoted through public channels (Ohio offices abroad, state and local trade missions) and through private channels. We can build upon the clusters

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of our communities, reduce our environmental impact and improve the health of our core cities. It sounds too good to be true, but such opportunity exists! It is found through sensible regional collaboration. Regionalism already has shown us the power to grow new industries and support a new breed of entrepreneur. We are learning that in the world of government, regionalism is NOT a political ideology; it is a prudent fiscal strategy. We often blame the fiscal crisis on a tired story about an aging Rust Belt economy that has undermined government’s ability to raise revenues. But that narrative is thankfully outdated. Our economy is larger than ever with new industries creating jobs and profits. Greater Cleveland’s unemployment rate has generally been below the national

ern regions. The most successful areas all have one development agency in charge of aiding the development process. By consolidating the various

average for almost three years and, more recently, the Brookings Institution reports that we have been among the top third of metropolitan economies in terms of growth. Our fiscal crisis is exacerbated by two more fundamental challenges: Land use policies that create a crippling growth gap and government fragmentation that fosters redundant infrastructure and misdirected investments. The growth gap is the difference between population and physical growth. The concept is simple: When the region’s population grows 1% but developed land increases 60% over a few decades, big problems result. Consequences include soaring infrastructure costs, higher taxes, decreased services, hollowed-out core cities, racial isolation, environmental degradation and far fewer dollars for the education, innovation, job creation and business attraction critical to our region’s future. The exodus from our region’s core communities began decades ago and continues; we require costly new roads, sewers and public buildings — all to serve the same number of people. And that is just the public costs; private sector players — banks, electric utilities, grocers — have to add capacity to meet a fixed demand. Add government fragmentation to the mix and we achieve collective fiscal insanity. Across Northeast Ohio’s 16 counties, 868 separate government entities spend $20 bil-

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already established, such as Asia Town and University Circle. A significant immigrant population has been coming into Asia Town. This cluster can be strengthened and connected through establishing further identity, and connecting downtown to Asia Town to University Circle through lakefront and near lakefront development. I’d like to see a Chinese arch built near the entrance to Asia Plaza (East 30th Street), and an Indian arch built near the Ariel International Center on East 40th Street coming in from the lakefront. I’d encourage the establishment of Asian and other international businesses, restaurants and retail, to help establish Asia Town as a destination for Asian visitors and immigrants, such as the Chinatowns in San Francisco and New York. Lakefront development from downtown through University Circle also can link the convention center and medical mart and downtown activity to the growing Asia Town, Midtown and the University Circle area through the cultural gardens, cultural institutions, health care institutions and the universities. ■

SUSTAINABILITY CHUCK FOWLER CEO, Fairmount Minerals

ver the next 20 years, Northeast Ohio must make sustainability a focus of our growth and development to ensure a strong, thriving community. By its definition, sustainability is about the responsible use of resources — social, environmental and economic — to meet our needs today while sustaining the ability of future generations to meet their own needs. During the next two decades, our region would benefit from integrating the concepts of sustainability into regional planning, finding ways to support economic development through targeted

public incentives — that is, state, city, county — it becomes much easier to compete for new companies and new jobs. These situations have allowed us to complete developments in excess of $200 million in the Detroit and Pittsburgh areas. We are currently moving forward in that same manner in Chicago. In our experience, regional cooperation has been the catalyst for job growth. The enormous amount of intellectual capital that populates this area — whether it is development, legal and tax expertise, manufacturing technology, health care scientific knowledge or many other types of technology — needs to be utilized more than it currently is.

Our other resources, such as health care expertise, innovative manufacturing technology, energy innovations and NASA technology should be expanded with unified governmental support, not bipartisan rhetoric about economic classes. All classes are helped with additional jobs. Finally, the organizations that populate this area, such as the Greater Cleveland Partnership, JumpStart, BioEnterprise and Downtown Cleveland Alliance, are considered the best models, on a national level, of entities that promote and inspire economic development. We need to promote this nationally, and connect people to their services locally. ■

lion a year to run themselves. That’s one government for every 4,000 citizens and more than 10% of the region’s economy! Combined, the growth gap and government fragmentation lead to local government spending that is growing at a rate 70 times faster than the population. How did we get in this pickle? Old government structures pit communities against one another and provide powerful incentives for people and businesses to move outward. Blight inexorably follows and the cycle repeats. Public officials face calls to seek growth by any means — including luring a company from one jurisdiction to another. As a result, more infrastructure must be supported by a relatively fixed population. Of course, government costs money. Fragmented government with duplicative services costs even more. A dollar spent on redundancy is a dollar not invested in education and innovation. Government collaboration is a powerful antidote to the growth gap and the inefficiencies of fragmentation. Several elected officials and other business, philanthropic and civic groups at the local, regional and state levels already have begun work on solutions. If we really got serious about government collaboration, we could generate that magical $1 billion figure. Cutting our present level of government spending by 5% generates $1 billion in savings. One billion

dollars buys a lot of education, innovation or a reduced tax burden. Anyone in the private sector who has had to cut a budget knows finding 5% savings is very achievable. But in the public sector, making those changes involves thousands of decisions, small and large — from sharing 911 dispatch centers to developing new land use policies. The good news is we’ve learned that change is possible. The Fund for Our Economic Future’s experience with the EfficientGovNow government collaboration contest shows the public is ready, as are many government officials. Collaborative efforts by the 20 project finalists are projected to yield nearly $2 million in savings in the first year and more than $7.4 million long term. The fiscal crisis — fueled in part by decreased state funding — creates an opportunity to build upon those promising collaboration efforts and drive dramatic change now. Let’s engage in a regional public dialogue to frame our choices and develop creative solutions to close the growth gap and free up the resources to invest in our future. The status quo is NOT a viable fiscal option. Together, we can forge a new era of collaboration that can generate significant savings to protect vital services and ensure that our communities invest in innovation and education that will create jobs and keep Northeast Ohio competitive in the global economy. ■

investments in community and environmental assets and, in turn, leveraging the assets of a flourishing business community that is encouraged to both “Do Good” and “Do Well.” To achieve this vision of regional sustainability, we must start by harnessing the energy associated with the Sustainable Cleveland 2019 movement. Using the Appreciative Inquiry summit model to help drive discussion about regional strengths and opportunities, we have been able, as a community, to define our sustainability priorities. We are exploring topics as diverse as energy efficiency, local foods and clean water, and enthusiastic individuals are collaborating to make progress on our long- and short-term goals. Rather than focus on the challenges in our region, this approach helps us search for opportunities. For instance, how can we use the

CRAIN’S CLEVELAND BUSINESS cold, windy weather to generate clean, renewable wind energy off of Lake Erie — and how might a renewable energy industry drive economic development in a region known for manufacturing? For Fairmount Minerals, Appreciative Inquiry has enabled our organization to meet nearly 100% of our sustainability goals and save over $6 million in 2010. The second most effective strategy for achieving a more sustainable region will require creating the conditions to support and encourage sustainable businesses. We need only to compare the relative growth of cities such as Chicago, San Francisco and Austin, each home to some of the world’s most sustainable and successful companies, to that of our fellow Rust Belt cities to understand the dynamic between strong communities and strong businesses. This does not necessarily mean Northeast Ohio must find a way to bring today’s most sustainable companies to our region — rather, we must help the established businesses here build the competencies to grow and evolve their sustainability practices and support entrepreneurs who will launch sustainable businesses. With Cuyahoga County’s new economic development fund, we might consider channeling resources to companies that can demonstrate strong sustainability performance. Another major opportunity for

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Northeast Ohio will be collaboration through byproduct synergy. This “waste-to-market” concept helps create new revenue or savings for organizations by putting their waste to use as a raw material for another organization or industry. The positive economic impact is strengthened by the environmental benefit of eliminating a landfill-bound waste stream. The creation of the Ohio By-Product Synergy Network is a good first step, but our region has an opportunity to lead in this space by bringing civic and business leadership together to champion and facilitate the effort. We also must come together to raise awareness of sustainability issues. Highly visible projects such as wind turbines on Lake Erie, employee volunteer projects and solar panels at Progressive Field help elevate our collective consciousness of sustainability. Over the next 20 years, our region must be courageous, tackling sustainability projects that may not meet traditional thresholds for payback periods but offer inspiration value. The more we see sustainability in action, the more inclined our community will be to embrace those ideals. At Fairmount Minerals, we are rooted in a commitment to our people, our planet and our prosperity. We are proud to be part of Northeast Ohio and look forward to a future made brighter, bolder and stronger because of it. Do Good. Do Well. ■

PANY D M O C YOUR TINGUISHE E T A N N O M I R A I N’S D I S I T I O N S F O R C D R E CO G N AW A R

EMERALD AWARDS - Champions of Sustainability Entry Deadline: July 15 www.CrainsCleveland.com/Emerald

CFO OF THE YEAR - Northeast Ohio’s Leading Financial Officers Entry Deadline: August 12 www.CrainsCleveland.com/CFO

Tell your story to the Northeast Ohio business community. There’s no charge to enter. Questions? Call 216-771-5182

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CRAIN’S CLEVELAND BUSINESS

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JUNE 6 - 12, 2011

Shadows: Rise in adjustable-rate terms could have effect continued from PAGE 3

the number of mortgage loans delinquent 90 days or more now has declined for five consecutive quarters and is at its lowest level since early 2009. But Guhan Venkatu, an economist with the Federal Reserve Bank of Cleveland, warns that those favorable comparisons likely don’t foreshadow what lies ahead for the mortgage business. If anything, he and others with ties to the mortgage market expect to see an increase in foreclosures in the not-too-distant future. “We know there’s a huge stock of loans just about to move into the foreclosure process,” Mr. Venkatu said. There’s agreement among these observers that the rate of foreclosures won’t abate in a big way without significant improvement in the job market. Whereas many foreclosures in the past three or four years were the result of extending the wrong home loans to the wrong people, those involved in the foreclosure process say many of today’s defaults are caused by long-term unemployment. Mark Seifert, executive director of

s u n i se jo

P lea

Empowering and Strengthening Ohio’s People, or ESOP, which is one of the largest foreclosure prevention agencies in the country, estimates 80% to 85% of people coming in these days for debt counseling are unemployed or underemployed. Those who began foreclosure counseling totaled 376 in April 2011 — down 29% from April 2009, but up 27% from April 2010. “The typical homeowner we’re seeing is changing, but (foreclosure volume) is not decreasing,” Mr. Seifert said. “Today, we’re not seeing much if any predatory lending. Most of that has washed through the system.”

GOING NATIONAL A look at past-due and non-accruing loans at some financial institutions doing business in Northeast Ohio:

Bank

March 2011

% of loans

March 2010

% of loans

4.75 million

16.7%

5.69 million

18.0%

Huntington National Bank

483,001

6.6

972,858

12.5

Third Federal Savings and Loan

247,134

3.4

253,391

3.9

KeyBank NA

222,360

5.6

241,763

5.7

FirstMerit Bank NA

79,195

8.7

39,608

4.7

First Federal of Lakewood

14,593

2.0

10,918

1.6

Park View Federal Savings Bank

13,874

9.9

19,099

11.5

Lorain National Bank

10,580

11.3

11,314

10.4

PNC Bank

Anticipating a rise

SOURCE: SNL FINANCIAL

Another reason foreclosures are expected to rise is the number of distressed properties, also called the shadow inventory, entering the market, Mr. Venkatu said. Those added properties put downward pressure on home prices, which can trigger additional foreclosures as more homeowners find they must exit their mortgages not through sale, but through foreclosure. “This issue is going to be with us in many ways to come,” Mr.

Venkatu predicted. “There’s still a lot of healing yet to be done in the housing sector.” Safeguard Properties is counting on it. The Valley View company, which maintains defaulted and foreclosed properties mostly for the country’s largest mortgage servicers, announced last month it will add 70 new employees to its existing 875. It’s doing so, in part, because it expects foreclosures will increase,

Yo invited to tour a Majestic You’re Masterpiece in Strongsville, Ohio M Ma Please join us for wine, cheese and a rare opportunity to tour this exquisite estate. Sunday, June 12, 2011 3:00 p.m. – 7:00 p.m. RSVP required for admittance.

said Alan Jaffa, Safeguard’s CEO. The halt in foreclosures caused by the controversy over so-called robosignings — where bank personnel charged with signing foreclosure papers did not personally verify all of the information contained in those documents — won’t last forever, he said. “Those floodgates are about to begin opening,” he said.

McMansions could be next Mr. Seifert of ESOP said he also sees the potential in the next nine to 12 months of interest rates moving higher, which would result in a revision upward of rates on various adjustable-rate mortgages — a change he predicts would cause another wave of borrowers to struggle. Those rate hikes, he said, typically cause payments to rise 30% to 50%. “We seem to forget that there were a lot of bad loans that were being made in 2006, 2007, 2008,” Mr. Seifert said. “Those loans are still out there. “The wave will not be the central city,” he added. “They’ll be in the suburbs and outer-lying areas. It’ll be the McMansions out in Westlake.” An interactive poll of homeowners released last Thursday, June 2, by the IBOPE Zogby International polling organization highlights the financial pressures many people still find themselves under despite an economy in recovery. Of the nearly 1,500 adults surveyed May 20-23, the poll found 37% have cut back on normal expenses such as food, transportation and home maintenance so that they can make their monthly mortgage payments. The poll also revealed 29% of the respondents are either very concerned (8%) or somewhat concerned (21%) about their ability to make their mortgage payments.

Ohio still has issues This majestic masterpiece estate residence inside the private gates of Chase Moor in Strongsville offers meticulous appointments perfect for “The Entertainer” and for those where only the very best will do. The inviting opulent residence of nearly 20,000 square feet was custom built in 1999 and has 5 Bedrooms, 6 Full and 2 Half Baths, a Library, a Study and a Lavish First-floor Master Suite. The luxurious estate’s fabulous design creates a perfect flow between Kitchen, Family Room, Living Room and Dining Room opening to terraces overlooking expansive woodlands and lakes. Nothing but the finest materials and craftsmanship were used to create this stunning estate home situated on over three acres. Listed Exclusively By Frank Petras and Sue Mayher. Realistically priced at $2,899,900. Please RSVP to Frank Petras or Sue Mayher.

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Among the 50 states and the District of Columbia, Ohio ranked 10th in initiated foreclosures and 11th in delinquencies as of the end of the first quarter, the Mortgage Bankers Association reported. In Ohio, 8.32% of mortgage loans were at least 30 days delinquent at the end of the first quarter, down from nearly 10% in the fourth quarter. That rate was not seasonally adjusted; according to the Mortgage Bankers Association, delinquency rates normally decline from the fourth quarter to the first quarter due to a variety of seasonal factors. One reason for the drop in delinquent mortgages is loan modifications, said Lisa Nelson, senior policy analyst for the Cleveland Fed.

Another is the movement of delinquent loans through the foreclosure process.

Better, if not great In another case where appearances are deceiving, past-due mortgages were up year-over-year at FirstMerit Bank in Akron and First Federal of Lakewood, according to data provided by the banks to the Federal Deposit Insurance Corp. But executives with both of the institutions said the acquisition of other banks in 2010 is a big reason their past-due numbers rose. If acquisition numbers are excluded, FirstMerit mortgage delinquencies actually were down about 10% in late March compared to late March 2010, and loans in the foreclosure process were down about 20%, according to Tom Finnegan, president and CEO of FirstMerit Mortgage, a division of the Akron-based bank. The same is true of the entire portfolio that FirstMerit services, which includes mortgages it has sold but still handles that aren’t reflected in the FDIC data. The so-called robo-signing controversy didn’t impact FirstMerit, so its foreclosure drop can’t be attributed to any moratorium it imposed on itself, he said. “We’re starting to see the beginnings of what you would see in a modest economic recovery,” he said. “It’s not great yet, but it’s certainly better than what we would have been talking about a year ago at this time.” Mr. Finnegan attributed much of the improvement to the bank’s willingness to work with borrowers.

We can work it out Likewise, Thomas J. Fraser, executive vice president and chief operating officer of First Federal of Lakewood, said the thrift’s increased outreach to homeowners once they’re past the 15-day payment grace period has helped push 90day delinquencies and foreclosures lower. The thrift has averaged two loan modifications a month this year, Mr. Fraser said. It averaged five a month in 2010, seven a month in 2009 and two a month in 2008. And whereas First Federal was processing three foreclosures per month during 2010, it has processed two a month this year, Mr. Fraser said. “Our preference is to find a way to keep the borrower in the house,” he said. “If we have a borrower that’s willing to work with us, and we can craft a solution to keep them in their home, we’ll figure out some way to do that.” ■

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WWW.CRAINSCLEVELAND.COM

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

Arcade: Propertyâ&#x20AC;&#x2122;s location offers hope for sale continued from PAGE 3

in a $60 million project in 2000, developer LNR Properties shelled out $9.5 million for the landmark. At that time, there was no hotel, but rather oodles of empty retail and office space in a building city officials considered demolition fodder if its glass top went unrepaired. Charlotte-based Bank of America, which in 2009 instituted the foreclosure proceedings that are leading to the auction, can seize ownership of the Arcade from current owner Related Cos. of Chicago if bids do not exceed the $14.3 million it sued to collect on the loan it extended for the propertyâ&#x20AC;&#x2122;s renovation. Bank of America also can let the property sell for less. Other lenders for the project stand to lose millions unless the successful bidder pays more than Bank of Americaâ&#x20AC;&#x2122;s first mortgage. The potential losers include Cuyahoga County, which loaned $2 million for the renovation, and the city of Cleveland, which loaned $1 million.

â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s tough to value ... this kind of mixed-use landmark.â&#x20AC;? â&#x20AC;&#x201C; Alec Pacella, investment specialist, NAI Daus How the foreclosure auction will play out is tough to call, real estate insiders say. However, they expect the property to garner interest because nearby construction of the Cleveland Convention Center and Medical Mart and the planned Caesars Horseshoe Casino Cleveland should lift the hotel marketâ&#x20AC;&#x2122;s fortunes. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a unique building,â&#x20AC;? said David Sangree, president of the Hotel & Leisure Advisors consultancy in Lakewood. â&#x20AC;&#x153;If the buyer gets it at the right price, they could operate it profitably. However, since the Hyattâ&#x20AC;&#x2122;s management agreement will survive the foreclosure, (the new owner) cannot change to another brand such as a Westin or Holiday Inn. But there is definitely room to grow (revenues.)â&#x20AC;?

Lynch in Westlake shows the hotel generated $7 million in gross cash flow in 2010 with occupancy of just 61%. Revenue per available room was $63 a night, a statistic that reflects unsold rooms and discounts to the Hyattâ&#x20AC;&#x2122;s stated rate of $109 to $150 nightly. With little revenue from the hotel, the Arcade lost $2 million in 2009 and $3 million in 2010, according to the appraisal. Crainâ&#x20AC;&#x2122;s reviewed the appraisal last week in the office of Cuyahoga County Common Pleas Judge Nancy Margaret Russo, who is handling the foreclosure case. Alec Pacella, an investment specialist at the NAI Daus real estate

brokerage in Beachwood, said the property is hard to size up because so few properties are selling. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s tough to value typical shopping centers or office buildings, much less this kind of mixed-use landmark,â&#x20AC;? Mr. Pacella said. He said any buyer also will need deep pockets because lenders would provide little to finance a distressed purchase. At the same time, the propertyâ&#x20AC;&#x2122;s location is a winner. â&#x20AC;&#x153;That baby is smack dab between the Medical Mart and the casino,â&#x20AC;? Mr. Pacella said. Property owners with nearby operations may value it because they could gain management efficiencies.

GET DAILY NEWS ALERTS FROM CRAINâ&#x20AC;&#x2122;S !

Judge Russo is ready to roll

Hyatt declined comment on the pending auction, although it emphasized it continues to operate the hotel and will do so after the foreclosure ends. A Bank of America spokeswoman did not provide comment by Crainâ&#x20AC;&#x2122;s deadline last week. Judge Russo said in an interview that she hopes the case moves forward quickly to final resolution. She said if Bank of America does not file with the court by this Friday, June 10, a document a requesting the sheriff sale, the case will be subject to a policy in her court to dismiss it. â&#x20AC;&#x153;It is important to the community. I donâ&#x20AC;&#x2122;t want it to languish.â&#x20AC;? â&#x2013;

â&#x2013; The Morning Roundup: A collection of the dayâ&#x20AC;&#x2122;s business news from Ohioâ&#x20AC;&#x2122;s daily papers â&#x2013; Breaking news alerts â&#x2013; Daily headlines: A collection of Crainâ&#x20AC;&#x2122;s-produced news and blogs â&#x2013; Small Business Report: A weekly guide to small business news

Faster payroll has its merits.

â&#x20AC;&#x2DC;Smack dabâ&#x20AC;&#x2122; in a good spot An appraisal of the Arcade by appraiser and realty agent John

TRACKING THE ARCADE The Old Arcade in downtown Cleveland, after a winding road through foreclosure started in 2009, recently was appraised for $11.5 million. A look back at the siteâ&#x20AC;&#x2122;s troubles: April 2009: Property owner Arcade LLC â&#x20AC;&#x201D; a joint venture of real estate developer Related Midwest Co. and Hyatt Hotels Corp., both of Chicago â&#x20AC;&#x201D; defaults on a loan for $14.3 million.

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Late 2009: Charlotte-based Bank of America, after extending that renovation loan, begins foreclosure proceedings. Oct. 2010: Cuyahoga County Common Pleas Court Judge Nancy Margaret Russo rejected Bank of Americaâ&#x20AC;&#x2122;s attempt to sidestep continuing the repayment of $6 million in tax increment financing (TIF) bonds used to help pay for a makeover of the century-old Arcade as a Hyatt. SOURCE: CRAINâ&#x20AC;&#x2122;S REPORTING

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

WWW.CRAINSCLEVELAND.COM

JUNE 6 - 12, 2011

LARGEST NONPROFITS RANKED BY 2011 EXPENSES

Name Address Rank Phone/web site

Expenses 2011 Expenses 2010 (millions) (millions)

Total revenue 2010 (millions)

Income from private support

Income for program services

2010 fund balance (thousands) Purpose

Top local executive

Western Reserve Area Agency on Aging 925 Euclid Ave., Suite 600, Cleveland 44115 (216) 621-8010/www.psa10a.org

$135.3

$125.8

1.0%

98.0%

($13.6)

To enhance the ability of older persons to maintain high levels of health, productivity and independence

Ronald Hill CEO

Catholic Charities Health and Human Services 7911 Detroit Ave., Cleveland 44102 (216) 334-2900/www.clevelandcatholiccharities.org

$101.3

$99.4

$99.3

37.0%

85.0%

$104,460.0

To provide leadership in the health and human service fields in the counties that comprise the Catholic Diocese of Cleveland

Patrick Gareau president, CEO

Hospice of the Western Reserve 17876 St. Clair Ave., Cleveland 44110 (800) 707-8922/www.hospicewr.org

$97.8

$89.0

$97.5

14.2%

86.5%

$52,319.6

To provide palliative comfort care for people with serious illness, support for their caregivers and bereavement services

William E. Finn CEO

Menorah Park Center for Senior Living 27100 Cedar Road, Beachwood 44122 (216) 831-6500/www.menorahpark.org

$66.0

$67.2

$65.6

43.2%

97.8%

$24,865.3

A not-for-profit Medicare/Medicaid-certified health care provider that operates residential and outpatient services

Steven Raichilson executive director

Jewish Community Federation of Cleveland 25701 Science Park Drive, Cleveland 44122 (216) 593-2900/www.jewishcleveland.org

$60.0

$57.0

100.0%

90.0%

$318,289.0

Allocates funds to social service, religious and educational organizations in Cleveland and worldwide

Stephen H. Hoffman president

Cleveland Foodbank 15500 S. Waterloo Road, Cleveland 44110 (216) 738-2265/www.clevelandfoodbank.org

$55.2

$56.2

$57.3

54.0%

93.0%

$3,140.9

To alleviate hunger by providing food and support to community organizations that feed the hungry

Anne Campbell Goodman president, CEO

The Cleveland Museum of Art 11150 East Blvd., Cleveland 44106 (216) 421-7340/www.clevelandart.org

$50.5

$50.4

$78.0

44.0%

51.0%

$753,794.7

One of the world's comprehensive art museums and one of Northeast Ohio's principal civic and cultural institutions

David Franklin director

The Musical Arts Association 11001 Euclid Ave., Cleveland 44106 (216) 231-7300/www.clevelandorchestra.com

$48.4

$42.4

$40.1

40.0%

84.0%

$135,024.0

To provide inspirational experience by serving the art of music at the highest level of artistic excellence

Gary Hanson executive director

Visiting Nurse Association of Ohio 2500 E. 22nd St., Cleveland 44115 (216) 931-1300/www.vnaohio.org

$46.9

$51.3

$51.1

4.2%

91.7%

$17,509.0

Comprehensive home health care services M. Zangerle throughout Northeast Ohio since 1902, including Claire president, CEO hospice and personal care aides

Positive Education Program 3100 Euclid Ave., Cleveland 44115 (216) 361-4400/www.pepcleve.org

$46.5

$47.3

$48.6

4.0%

88.0%

$22,063.8

Helping troubled children successfully learn and grow through integrated special education and mental health services

Frank A. Fecser CEO

United Way of Greater Cleveland 1331 Euclid Ave., Cleveland 44115 (216) 436-2100/www.uws.org

$42.5

$44.5

98.0%

87.0%

$35,004.0

Private funder of health and human services in Greater Cleveland; a leading convener and solution provider for social services

K. Michael Benz president, CEO

PlayhouseSquare 1501 Euclid Ave., Suite 200, Cleveland 44115 (216) 771-4444/www.playhousesquare.org

$42.2

$41.5

$47.7

10.0%

89.0%

$73,689.0

To operate the performing arts center and help restore and develop the PlayhouseSquare district

Art Falco president, CEO

SOUND SOLUTIONS FOR NOT-FOR-PROFITS Contact Tim Novotny + tnovotny@maloneynovotny.com + 216.363.0100

Name Address Rank Phone/web site

Expenses 2011 Expenses 2010 (millions) (millions)

Total revenue 2010 (millions)

Income from private support

Income for program services

2010 fund balance (thousands) Purpose

Top local executive

Oriana House Inc. P.O. Box 1501, Akron 44309-1501 (330) 535-8116/www.orianahouse.org

$38.8

$34.3

$34.6

2.0%

96.0%

$11,800.0

Community corrections programs and chemical dependency treatment

James J. Lawrence president, CEO

Montefiore One David N. Myers Parkway, Beachwood 44122 (216) 360-9080/www.montefiorecare.org

$36.4

$34.9

$34.8

8.0%

84.0%

$28,159.9

To provide a comprehensive system of health care and wellness support services to older adults

Lauren B. Rock president, CEO

Judson at University Circle 2181 Ambleside Drive, Cleveland 44106 (216) 721-1234/www.judsonsmartliving.org

$34.6

$34.0

$37.1

84.0%

92.0%

$8,286.3

To provide programs and living options for individuals taking responsibility for their successful aging

Cynthia H. Dunn president, CEO

Berea Children's Home & Family Services 202 E. Bagley Road, Berea 44017 (440) 234-2006/www.bchfs.org

$34.4

$33.5

$32.8

10.0%

89.0%

$14,037.6

To equip and empower children and families to reach their potential and become contributing members of a strong community

Richard R. Frank president, CEO

Center for Families and Children(1) 4500 Euclid Ave., Cleveland 44103 (216) 432-7200/www.c4fc.org

$32.2

$29.6

$30.0

12.0%

73.0%

$36,353.5

Changing lives and communities through client service, advocacy and collective action

Sharon Sobol Jordan president, CEO

Hattie Larlham 7996 Darrow Road, Suite 10, Twinsburg 44087 (800) 233-8611/www.hattielarlham.org

$31.9

$30.6

$31.1

16.9%

88.4%

$29,200.0

To provide care for 1,500 children and adults with developmental disabilities

Dennis Allen CEO

Cleveland Housing Network 2999 Payne Ave., Room 306, Cleveland 44114 (216) 574-7100/www.chnnet.com

$26.6

$34.4

$35.3

63.0%

91.0%

$21,023.0

To develop affordable housing for low- to moderate-income families and provide home ownership opportunities

Robert S. Curry executive director

Vocational Guidance Services 2239 E. 55th St., Cleveland 44103 (216) 431-7800/www.vgsjob.org

$26.5

$25.0

$25.3

8.0%

87.0%

$13,487.3

Preparing people with barriers to employment for a brighter future

Robert E. Comben Jr. president, CEO

Akron-Canton Regional Foodbank 350 Opportunity Parkway, Akron 44307 (330) 535-6900/www.akroncantonfoodbank.org

$25.4

$25.1

$25.3

82.0%

91.0%

$9,300.2

Provide food to charitable agencies that feed people in need in eight counties

Daniel R. Flowers president, CEO

Beech Brook 3737 Lander Road, Cleveland 44124 (216) 831-2255/www.beechbrook.org

$25.4

$25.5

$24.3

8.0%

92.0%

$31,765.1

To advance the emotional well-being of children, youth and their families by providing behavioral health, permanency and educational services

Debra Rex CEO

Wesleyan Senior Living 807 West Ave., Elyria 44035 (440) 284-9000/www.villageliving.com

$23.9

$24.3

$24.6

55.0%

75.0%

$2,277.2

To provide quality housing and services to aging Mike Rogan adults president, CEO

Koinonia Homes Inc. 6161 Oak Tree Blvd., Suite 400, Independence 44131 (216) 588-8777/www.koinoniahomes.org

$23.8

$22.5

$22.7

1.0%

88.0%

$1,885.0

Koinonia provides residential and day support Beastrom and vocational and career services to individuals Diane president, CEO with developmental disabilities

Volunteers of America of Greater Ohio 8225 Brecksville Road, Suite 206, Cleveland 44141-1362 (440) 717-1500/www.voago.org

$22.8

$19.4

$20.9

66.0%

71.0%

$15,416.8

Spiritually based human services organization providing social services that promote selfsufficiency and foster independence

Dennis J. Kresak president, CEO

Jewish Family Service Association of Cleveland(2) 3659 S. Green Road, Suite 322, Beachwood 44122 (216) 292-3999/www.jfsa-cleveland.org

$22.6

$22.3

$23.1

21.0%

85.0%

$405.5

Community-based services and home care for people with mental disabilities, older adults, and families affected by domestic violence and homelessness

Susan Bichsel president, CEO

20110606-NEWS--27-NAT-CCI-CL_--

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JUNE 6 - 12, 2011

Name Address Rank Phone/web site

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

WWW.CRAINSCLEVELAND.COM

Expenses 2011 Expenses 2010 (millions) (millions)

Total revenue 2010 (millions)

Income from private support

Income for program services

2010 fund balance (thousands) Purpose

Top local executive

The Village Network P.O. Box 518, Smithville 44677 (330) 202-3802/www.thevillagenetwork.org

$22.6

$22.5

$22.1

4.0%

96.0%

$7,462.5

To promote responsible living and positive T. Miller change in troubled children through partnerships James executive director with families and communities

The Rock and Roll Hall of Fame and Museum Inc. 1100 Rock and Roll Blvd., Cleveland 44114 (216) 781-7625/www.rockhall.com

$22.5

$21.1

$28.3

96.1%

76.1%

$93,573.6

The Rock Hall educates visitors from around the world about music's impact on our society

Terry Stewart president, CEO

Christian Healthcare Ministries Inc. 127 Hazelwood Ave., Barberton 44203 (800) 791-6225/www.christianhealthcareministries.org

$21.1

$18.6

$18.7

100.0%

97.0%

$1,127.0

To glorify God, show Christian love and experience God's presence as Christians share each other's medical bills

Rev. Howard S. Russell executive director

YMCA of Greater Cleveland 2200 Prospect Ave., Suite 900, Cleveland 44115 (216) 344-0095/www.clevelandymca.org

$20.5

$17.9

$20.7

88.3%

87.3%

$19,209.8

To put Christian principles into practice through programs and services that build healthy spirit, mind and body for all

Glenn Haley president, CEO

Laurel Lake Retirement Community 200 Laurel Lake Drive, Hudson 44236 (330) 650-0681/www.laurellake.org

$20.1

$19.5

$22.3

94.0%

89.0%

$15.0

To enhance the quality of life for adults by encouraging wellness, self-determination and independence

David A. Oster executive director

Ohio Aerospace Institute 22800 Cedar Point Road, Brook Park 44142 (440) 962-3000/www.oai.org

$19.2

$17.1

$17.3

6.0%

93.0%

$8,434.8

Enhance and expand Ohio's aerospace capabilities through research and technology partnerships, education and training

Michael L. Heil president, CEO

Akron Summit Community Action Inc. 55 E. Mill St., Akron 44308 (330) 376-7730/www.aksumcom.org

$19.2

$21.7

$22.1

1.6%

88.3%

$2,667.8

Work towards ending poverty in Akron and Summit County through wide range of assistance programs

Malcolm J. Costa president, CEO

Coleman Professional Services 5982 Rhodes Road, Kent 44240 (330) 673-1347/www.coleman-professional.com

$18.9

$18.1

$18.9

35.0%

69.0%

$4,107.8

Behavioral health and rehabilitation programs W. Burns that improve the lives of individuals, families and Nelson president, CEO businesses

Goodwill Industries of Greater Cleveland and East Central Ohio Inc. 408 Ninth St. SW, Canton 44707 (800) 942-3577/www.goodwillgoodskills.org

$18.2

$17.9

$19.9

The Salvation Army of Greater Cleveland 2507 E. 22nd St., Cleveland 44115 (216) 861-8185/www.salvationarmycleveland.org

$15.5

$15.0

$15.1

55.0%

86.0%

$968.5

ASM International 9639 Kinsman Road, Materials Park 44073 (440) 338-5151/http://asmcommunity.asminternational.org

$15.5

$13.5

$13.6

85.0%

100.0%

$19,011.9

World's largest society of professionals in applications/research of materials, supplying technical publications and education

Kendal at Oberlin 600 Kendal Drive, Oberlin 44074 (440) 775-0094/www.kao.kendal.org

$14.9

$14.1

$15.8

94.0%

97.0%

$13,767.4

Kendal at Oberlin is a continuing care retirement Barbara W. Thomas community offering older adults a vibrant CEO lifestyle

New Avenues to Independence Inc. 17608 Euclid Ave., Cleveland 44112 (216) 481-1907/www.newavenues.net

$13.5

$12.8

$12.9

4.0%

85.0%

$3,056.7

To help individuals with disabilities become more Thomas M. Lewins independent executive director

The Benjamin Rose Institute on Aging 11900 Fairhill Road, Suite 300, Cleveland 44120 (216) 791-8000/www.benrose.org

$13.5

$12.1

$13.0

24.0%

71.6%

$113,071.0

To advance the health, independence and dignity Richard Browdie of older adults by raising the standards for president, CEO quality of care

United Way of Summit County 90 N. Prospect St., Akron 44304 (330) 762-7601/www.uwsummit.org

$12.0

$11.9

$11.8

100.0%

85.0%

$16,500.6

We improve lives by mobilizing community resources to advance the common good

Robert Kulinski president

Cleveland Museum of Natural History 1 Wade Oval Drive, Cleveland 44106 (216) 231-4600/www.cmnh.org

$11.9

$11.8

$11.6

53.0%

84.0%

$131,894.1

To inspire, through science and education, a passion for nature, the fostering of health and leadership to a sustainable future

Evalyn Gates executive director, CEO

Child Guidance & Family Solutions 312 Locust St., Akron 44302-1878 (330) 762-0591/www.cgfs.org

$11.9

$11.6

$11.9

20.0%

86.0%

$4,356.0

To help mend the lives of children, families and adults suffering from emotional and mental disorders

Elaine M. Harlin president

JumpStart Inc. 737 Bolivar Road, Suite 3000, Cleveland 44115 (216) 363-3400/www.jumpstartinc.org

$10.5

$9.4

$13.5

60.0%

84.0%

$15,234.4

Economic development in Northeast Ohio venture development organization

Raymond T. Leach CEO

United Cerebral Palsy of Greater Cleveland 10011 Euclid Ave., Cleveland 44106 (216) 791-8363/www.ucpcleveland.org

$10.4

$9.8

$9.6

8.6%

94.0%

$9,485.1

Physical, occupational and speech therapies for children with disabilities along with residential, vocational and assistive technology services

Patricia S. Otter president, CEO

Recovery Resources 3950 Chester Ave., Cleveland 44114 (216) 431-4131/www.recres.org

$10.4

$9.1

$9.7

30.0%

81.0%

$7,494.9

Helping people triumph over mental illness, alcoholism, drug and other addictions

Debora A. Rodriguez president, CEO

Lutheran Metropolitan Ministry 1468 W. 25th St., Cleveland 44113 (216) 658-4638/www.lutheranmetro.org

$9.5

$8.9

$11.8

47.0%

85.0%

$5,542.5

To promote shalom, justice and right Fredrich relationships, through service and advocacy with Carol president, CEO those oppressed and forgotten

Great Lakes Science Center 601 Erieside Ave., Cleveland 44114 (216) 694-2000/www.greatscience.com

$9.0

$9.1

$8.8

33.0%

80.0%

$44,643.2

To stimulate interest and increase understanding Linda Abraham-Silver of the sciences with a particular emphasis on the president, CEO Great Lakes region

SAW Inc. 1275 Lakeside Ave. E., Cleveland 44114 (216) 861-0250/www.sawinc.org

$8.8

$9.3

$8.9

100.0%

$2,608.9

To provide employment, training, career growth and support for people with developmental disabilities

Teresa D. Lowery executive director

University Circle Inc. 10831 Magnolia Drive, Cleveland 44106 (216) 791-3900/www.universitycircle.org

$8.7

$7.8

75.0%

92.1%

$35,322.1

To make University Circle a premier urban district and world-class center of innovation in health care, education and arts and culture

Chris Ronayne president

Help Foundation Inc. 3622 Prospect Ave. East, Cleveland 44115 (216) 432-4810/www.helpfoundationinc.org

$8.5

$7.4

$8.3

6.0%

84.3%

$8,100.0

Provides residential and support services to children and adults with mental retardation and developmental disabilities

Daniel J. Rice executive director

Magnet 1768 E. 25th St., Cleveland 44114 (216) 432-5300/www.magnetwork.org

$8.3

$8.4

$8.2

49.0%

83.0%

$6,698.8

To support, educate and champion manufacturing in Northern Ohio

Daniel E. Berry president, CEO

American Red Cross, Greater Cleveland Chapter 3747 Euclid Ave., Cleveland 44115 (216) 431-3010/www.redcross-cleveland.org

$8.1

$7.6

$7.9

96.7%

85.0%

$11,798.4

Disaster relief, emergency military communications, international tracing and services, job training, health and safety training

Mary-Alice Frank CEO

Legal Aid Society of Cleveland 1223 W. Sixth St., Cleveland 44113 (216) 687-1900/www.lasclev.org

$8.1

$8.8

$9.2

60.0%

85.0%

$7,462.7

To provide high-quality legal services to lowincome clients in five Northeast Ohio counties

Colleen M. Cotter executive director

Cleveland Play House 8500 Euclid Ave., Cleveland 44106 (216) 795-7000/www.clevelandplayhouse.com

$6.7

$7.6

$10.1

27.0%

68.0%

$14,904.1

To inspire, stimulate and entertain diverse audiences in Northeast Ohio by producing plays and theater education programs

Kevin Moore managing director

Crossroads 8445 Munson Road, Mentor 44060 (440) 255-1700/www.crossroads-lake.org

$6.5

$6.3

$6.6

6.6%

85.5%

$6,828.5

Crossroads is a non-profit behavioral health organization that serves children and families

Michael E. Matoney CEO

College Now Greater Cleveland(3) 200 Public Square, Suite 3820, Cleveland 44114 (216) 241-5587/www.collegenowgc.org

$6.1

$6.0

$5.5

77.0%

88.0%

$8,278.0

To increase college attainment through college access and success advising, financial aid counseling and scholarship services

Lee A. Friedman CEO

Western Reserve Public Media 1750 Campus Center Drive, Kent 44240 (330) 677-4549/www.westernreservepublicmedia.org

$5.3

$5.7

$5.5

70.0%

72.0%

($220.2)

Western Reserve Public Media provides noncommercial public television and lifelong learning services to residents in Northeast Ohio

Trina Cutter president, CEO

To improve the quality of life and employment opportunities for people in the communities we serve

Ken Weber president, CEO

A religious organization that provides an array of Major Ricardo Fernandez human services to help improve the quality of life divisional commander in Greater Cleveland

This list of 501(c)(3) status nonprofit organizations is an approximate compilation of the largest organizations in Northeast Ohio. Universities, colleges, foundations and hospitals were excluded. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. (1) Numbers include the affiliation with West Side Ecumenical Ministry. (2) Dollar figures are for fiscal year ended June 30, 2010. (3) Formerly Cleveland Scholarship Programs Inc.

Stanley C. Theobald managing director

RESEARCHED BY Deborah W. Hillyer

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CRAIN’S CLEVELAND BUSINESS

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JUNE 6 - 12, 2011

Partners: Regional groups may be industry clusters continued from PAGE 3

— that can only enhance our ability to market Ohio. “Further, given the size of our state, JobsOhio wouldn’t have the capacity to do business with all 88 counties without the help of regional partners,” Mr. Nichols wrote.

A rendering of American Greetings’ new headquarters planned at Crocker Park in Westlake.

A look at the partners

PHOTO PROVIDED

Poach: Stronger cities may resist continued from PAGE 1

However, anti-poaching agreements, policed by a higher level of government with some financial leverage to give them teeth, are seen as deterrents to predatory business attraction practices.

A bit of quid pro quo Mr. FitzGerald said signing off on an anti-poaching agreement would be a prerequisite when a community seeks county money to help finance a new development or to clean up a building site within its borders. The plan likely will face resistance from communities with strong balance sheets — and developable land — but will be supported by most cities that expect to rely on state and county financial aid to strengthen their business bases. Summit County has had an antipoaching agreement since 2009 that is signed by two-thirds of the county’s cities, said Jason Dodson,

chief of staff to Summit County Executive Steven Pry. Mr. Dodson said it has been used only a handful of times, but he believes it helped losing communities avoid a steep drop in income tax revenue and even has stopped some intra-county movement. “If you have a business in Akron and you attract it six miles away to Barberton, what type of economic development are you really doing?” Mr. Dodson said. “You’re not creating new jobs.” Mr. Kelly said the Cuyahoga County plan will differ from the Summit County agreement because it will not include tax sharing. In Summit County, the community gaining a business agrees to share the income tax revenue it gains with the community that is losing the company. The FitzGerald administration does not believe there is support at present for revenue sharing among the county’s mayors.

Pro, and con Though no one is accused of poaching American Greetings, Mayor Richard Balbier of Brooklyn said he’d welcome such an agreement. “Even before all this happened, I supported an (anti-poaching) agreement,” he said. “This way, you wouldn’t be pitting one city against the other; I’m heavily in favor of it.” Mayor Balbier said he has spoken with many of the county’s mayors and believes most would support such an agreement. “There’s probably a half-dozen not in favor of it, and those are the ones that have (developable) land,” he said. “The vast majority agree upon it.” Mayor Dennis Clough of Westlake, which landed American Greetings, isn’t ready to jump on the bandwagon. “Westlake put a lot of money into its infrastructure and quality of life,” he said. “Why shouldn’t we reap the dividends on that investment? ■

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Besides Team NEO, an 8-year-old organization that focuses on attracting business to Northeast Ohio, the Kasich administration has identified four similar regional organizations with which it expects to team up. They are the Cincinnati Business Committee, the Columbus Partnership, the Dayton Development Coalition and the Toledo Regional Growth Partnership. The administration also plans to include a group to be called the Appalachia Business Committee, which is still in formation. Earlier administrations had 12 one-person regional economic development offices stationed in state office buildings around Ohio. The regional partners that would be part of the JobsOhio Network are private sector organizations with different structures. While Team NEO has focused its energies on marketing Northeast Ohio to businesses outside the state that have no existing local operations, other organizations have broader mandates. Some assist existing businesses that are seeking to grow and some have pots of money akin to venture capital funds they use to provide financial assistance. The Toledo Regional Growth Partnership, for example, has created Rocket Ventures, a venture fund that in 2010 invested $2.3 million in 16 technology-based companies. The Dayton Development Coalition, the organization James Leftwich led before he was recruited to be director of the state’s Department of Development earlier this year, receives both public and private money and recently has added retention and expansion of existing regional businesses to its role in attracting new companies to the Miami Valley. While each organization would

“The goal of all of this is to get faster response.” – Tom Waltermire, CEO, Team NEO focus on a geographic region, the JobsOhio plan also contemplates the network partner organizations serving as centers for expertise in specific industry clusters. Team NEO, according to the Third Frontier presentation, would focus on biotechnology and health care. The Dayton Development Coalition would specialize in the advanced materials and aerospace.

Need for speed Tom Waltermire, CEO of Team NEO and a member of the Third Frontier Advisory Board who attended the JobsOhio presentation in Columbus May 24, said the Kasich administration “realized that instead of working through regional economic development officials scattered around the state, they thought since JobsOhio was being formed as a private organization that they should explore the possibility of working through these private sector organizations that existed in the major regions of the state. “The goal of all of this is to get faster response and take advantage of the fact that the economic development groups in the field are in contact with a greater number of businesses than any single representative could be,” Mr. Waltermire said. Exactly how the network partners would collaborate with JobsOhio — and what authority they might have to offer financial incentives — hasn’t been fleshed out, in part because the organizations still must be formally vetted through the Third Frontier Commission’s request for proposal process to serve as regional partners. Mr. Nichols, the governor’s spokesman, said the regional groups initially would be able to offer businesses grants from the Third Frontier, “but other funding sources will supplement their efforts in the future.” Some incentives, such as the state job creation tax credit, still would require state approval. ■

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CRAIN’S CLEVELAND BUSINESS

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Outlook: Capital investment slowdown a possibility continued from PAGE 1

which for the last year has been a leader in the economic recovery. But here in Northeast Ohio, the outlook is much different. To see the stark contrast, take a look at the news coming out of Washington, D.C., and Cleveland on June 1. On that day, The Washington Post ran the headline “U.S. economy, manufacturing slowdown the latest sign the recovery is faltering,” while a news release from the Cleveland-based manufacturers’ group WIRE-Net proclaimed, “Manufacturers’ forecast reveals continued optimism.” There’s some hard evidence to back up the latter outlook. WIRE-Net polled 134 of its more than 350 members just before making its June 1 announcement, and there was broad-based optimism, said executive director John Colm. At a time when sales already were up substantially from a year ago, 71% of the survey respondents predicted sales growth of 5% or more over the next 12 months. That’s an improvement over even the first quarter of this year, said Mr. Colm, when the nation was abuzz with talk of a “manufacturing recovery” — and only 66% of WIRE-Net’s survey participants predicted they would grow sales by 5% or more. On the hiring front, WIRE-Net’s survey revealed more optimism. Not only did about 60% of those polled say they had increased their number of full-time employees so far this year, but 57% say they will continue to hire through the rest of 2011. Only a single company reported it would be reducing its headcount.

Right place and time WIRE-Net’s members tend to be smaller, privately owned manufacturers, but some larger Northeast Ohio companies are expressing optimism as well. Major steelmakers, such as Timken Co. in Canton and U.S. Steel in Lorain, have announced big expansions in Northeast Ohio based on their expectations of further growth as they make steel for natural gas exploration and other uses. In Strongsville, Momentive Performance Materials is expanding so it can meet what it says is increasing demand for its specialty ceramics, which go into plastics and semiconductors. When those companies expand, they create work for untold numbers of smaller firms, which provide their customers with equipment, hardware, construction materials and the expertise and labor to make those projects happen. In Solon, Carlisle Brake and Friction, formerly Hawk Corp., says it’s still seeing strong demand for its friction products, which go into brakes, clutches and other components on heavy-duty trucks, equipment and high-performance automobiles. From his perch atop that company, president Chris Koch makes observations about why at least some Northeast Ohio manufacturers might be bucking the trend if there’s a slowdown nationwide. “It very much depends on which industries and markets you are in,” Mr. Koch said. For example, he said, if you are selling to the oil and gas industry or to companies involved

in infrastructure development in China, you probably are enjoying a very good year. “But if you’re in construction and you’re only in North America, it’s not going to be a good year,” Mr. Koch predicts. Fortunately, he added, Carlisle is involved in international mining, heavy construction, agriculture and high-performance automotive parts. It’s also selling to companies such as Eaton Corp. that have a big presence in China and other developing markets. As a result, Mr. Koch said, his company’s first-quarter sales were $111 million, up 52% from the first quarter of 2010. “The megatrends in China and the emerging markets are driving that growth,” he said. “We are hugely glad we’re a global player right now.”

Making stuff that makes stuff That’s true of many Clevelandarea manufacturers, which don’t make consumer items so much as goods for other large, often global manufacturers. Some also are involved in large capital expenditure projects, such as Drabik Manufacturing in Cleveland, a machine shop that makes heavy-duty equipment for steel mills and other large industrial customers. Its work often is planned out months in advance — unlike an automotive supplier with short lead times — and once a project is begun, it’s generally completed, said president James Drabik. “We’re still busy,” Mr. Drabik said, noting that he’s working to provide equipment for numerous plant expansions in the United States. But those tied to auto, such as Mr. Solganik of City Plating, also are optimistic, as are auto-related companies generally, said Pete Paras, owner of Parts Associates Inc., a Cleveland-based industrial supply house. Mr. Paras sells just about every type of nut, bolt, washer, grommet, hose or other industrial item imaginable to just about every industry there is. “It’s interesting that the people who are now the most optimistic are in automotive,” he said. “We just visited some auto guys in Detroit and they were all very optimistic.” That’s a change from years, or even decades, past when companies tied to the U.S. auto industry seemed perpetually to face either waning demand for their products or demands for price cuts by automakers with a host of suppliers from which to choose. Today, that supply network is smaller and tighter — and any demand for cars means work for those still standing in that industry. “I do believe automotive is going to continue to grow from here,” Mr. Solganik said. “I cannot believe that sales numbers are going to go back down. I just don’t see it. People need cars. They have to have cars.”

Inside the silver lining Still, not everyone is so giddy that they are paying no attention to the man behind the curtain, with some observers saying the region needs to be concerned about a slowdown in manufacturing nationwide. For instance, Mr. Drabik said his long-term view reveals there is a

FEELING GOOD A WIRE-Net survey released June 1 revealed broad optimism among the 134 respondents. A sampling: Identify the single-most important issue facing your business today:

Issue Sales growth

What percent change in sales revenue do you anticipate in the next 12 months?

% 27.0%

Change

Cost of raw materials

23.0

Increase more than 10%

Labor skills/availability

17.2

Increase 5% to 10%

31.7

Taxes

9.0

Increase up to 5%

14.6

Financing

8.2

Stay the same

11.4

Global competition

6.6

Decrease up to 5%

0.8

Cost of energy

4.9

Decrease 5% to 10%

1.6

International competition

4.1

slowdown in capital investment ahead. Customers are telling him that while they’re still investing today, they are less sure they’ll continue to expand their capacity and build new plants in 2012, and some are warning him of a slowdown next year. But even manufacturers who concede business has slowed are, in general, happy. The slowdown has

39.8%

SOURCE: WIRE-NET

been slight, they say, and business still is much improved over the past few years. That’s the view of Monica Toth Lakota, whose family owns Universal Grinding Corp. in Cleveland. The 50-employee shop does precision grinding, generally for parts used by other manufacturers serving markets such as automotive, aerospace, medical equipment and food

processing. “We were real busy in the fourth quarter of 2010 and then, in 2011, the floodgates opened up and it’s been just nuts,” she said. The pace has slowed a little over the past month or so, but Ms. Lakota said she isn’t worried. “I think if were running at a 10 before, we’re running at a nine now. We’ve just come up for air a little bit,” she said. “It’s dropped off a hair, but certainly not anything that’s making anyone scratch their head and say, ‘Oh wow, what happened?’ It’s more like you finally have time to scratch your head, so you can get caught up on things.” Going forward, Ms. Lakota said she and her company are working through today’s backlog and are not yet worrying about next year’s order flow. “After 18 years of being in sales and marketing and trying to lay out forecast and shadows and all sorts of fancy reports for my boss, here’s what I know: I have absolutely no visibility. You just have no idea, none,” she said. She concludes with some advice: “It’s feast or famine. Make hay when the sun shines.” ■

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Marketing Coordinator Publication Information: Founded in 1989, Plastics News is a weekly business newspaper for plastics industry executives and is the flagship of the Plastics News Global Group of publications. PN's English- and Chinese-language online news services and e-mail products deliver breaking news, multimedia reports, features, detailed rankings, economic data and materials pricing to readers around the world. Its events and conferences address industry issues and provide networking opportunities. Job Responsibilities: • Coordinate conference websites and setup of events using RegOnline system. • Production and design of sales and promotional material including: htmls, fact sheets, direct mail, sell sheets, competitive analysis, brochures, print advertising, PowerPoint’s. • Help to coordinate conference/events sponsorship details • Work with the Sales team in preparation for sales presentations: compiling market research efforts. • Involved in media kit preparation and updates. • Responsible for webinar/webcast promotions. • Some administrative responsibilities will be required • Other duties as assigned

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THEINSIDER

THEWEEK MAY 30 - JUNE 5 The big story: Cleveland State University trustees signed off on a deal to allow a private developer to build a $50 million, 308-unit housing complex on the north side of the university’s campus. The university will lease 6.8 acres to Polaris Real Estate Equities, a developer in Gates Mills, to build the mixed-use housing complex, known as Campus Village, off Chester Avenue between East 21st and East 24th streets for students and non-students. The idea is to create a neighborhood on university property flush with housing and retail options to further Cleveland State’s transition into a residential, rather than commuter, campus.

To a smaller future: Agilysys Inc. agreed to sell a big part of itself and announced a change at the top of its management. Agilysys entered into a definitive agreement to sell its Technology Solutions Group for $64 million to OnX Enterprise Solutions of Toronto. Agilysys will be a much smaller company following the transaction, as the Technology Solutions Group accounted for $474 million of its revenue in the fiscal year that ended March 31, or about 70% of its revenue last year. Agilysys also said Martin Ellis, whom the company described as the architect of its multiyear restructuring, will step down as president and CEO “to pursue other career interests.” It was not more specific. Seize the moment: Columbus-based Momentive Performance Materials plans to grow at its Strongsville manufacturing plant, where it will begin a $5.8 million expansion June 10. That’s the day the company will break ground on 6,000 square feet that will house new equipment, which will produce boron-nitride ceramics. The company reports it also will hire 10 people as part of the effort to increase capacity at the plant. Momentive says it’s seeing increased demand for the specialty ceramics it makes in Strongsville. Team’s a hit: The Cleveland Indians’ early season success has drawn a major corporate player into the team’s sponsorship fold. BP now is the team’s official fuel provider, and benefits for fans are two-fold: Customers who pump more than 10 gallons at any of 215 participating Northeast Ohio BP stations receive a scratch-off ticket, which will reveal a code. After registering five of those codes at BPIndiansBaseball.com, fans receive a voucher for two free mezzanine tickets for a future game. BP also now holds naming rights to batting practice at Progressive Field, and it will select early-arriving fans for on-field access at home games through Sept. 30.

New boss needed: Less than a year after the company changed hands, there was a sudden changing of the guard at Associated Materials LLC, the big producer of exterior building materials based in Cuyahoga Falls. Associated Materials said CEO and director Tom Chieffe is leaving the company “to pursue other interests.” It was not more specific. The company said current director and former CEO, Dana Snyder, was named interim CEO while the company looks for a full-time leader.

Finnish the job: Downtown Akron will be a beachhead in the United States for a Finnish startup company. Helsinki-based wireless technology provider 7signal will put a sales office and network operations center in the Akron Global Business Accelerator. 7signal, started in 2006 by former Nokia employees, provides wireless local area network systems for health care providers and critical medical devices in a hospital setting. It expects to have 20 employees in Akron within two years.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

A dubious, and extremely expansive, Who’s Who

than one entry indicates, to have been a business that was the subject of a search warrant as investigators sought documents related to public officials or public agencies. In another listing, a public official was included because of a newspaper report that questioned a high salary. — Jay Miller

■ At the ballpark, game program vendors long have pitched their product by saying, “You can’t tell the players without a scorecard.” Well, the county corruption scandal now has a scorecard. The Citizens Reform Association of Cuyahoga County, a feisty, 2-year-old group formed as the county scandal was boiling over, has put together a 63-page report titled, “Who’s Who in the County Crisis.” It’s a compendium of 406 individuals and more than 100 companies that have been brushed by any one of a handful of scandals. The association pored over reams of documents — ranging from subpoenas, search warrants and indictments to articles in Crain’s, The Plain Dealer and even the Cleveland Jewish News — to cull the names of anyone who even had a single mention in them, regardless of whether they were accused or suspected of wrongdoing. Former Cuyahoga County Commissioner Jimmy Dimora and former county auditor Frank Russo, who’ve been the focus of a probe by the U.S. Attorney’s office into bribe-taking, lead the list. But former county recorder Patrick O’Malley also is included. He was convicted of illegal hiring practices and felony pornography before federal investigators swooped down on the offices of Mr. Dimora and Mr. Russo in July 2008. It’s an impressive list, but one with a low threshold for inclusion. It’s enough, as more

■ A policy paper from a Cleveland nonprofit argues that the plan proposed by Gov. John Kasich to privatize Ohio’s economic development operation shortchanges the state. The report from the Center for Community Solutions, a social service think tank, states that the Kasich plan to use liquor profits to fund the private, economic development nonprofit JobsOhio underestimates future profits from liquor sales in arriving at a present value for the liquor profits. The governor’s proposal has JobsOhio paying the state $1.2 billion to lease Ohio’s liquor profits for 25 years. JobsOhio would issue bonds to pay off the state upfront. It would use the net proceeds of the liquor profits, which it estimates at $100 million a year, to make loans, grants and investments to attract new businesses to the state and to help existing Ohio businesses grow. Report author Jon Honeck, the center’s Columbus-based director of public policy and advocacy, contends that $1.2 billion is not a fair present value for the future profits. Although it does not suggest an alternative present value for the liquor profits, the

WHAT’S NEW

BEST OF THE BLOGS

COMPANY: Tremco Commercial Sealants & Waterproofing, Beachwood PRODUCT: ExoAir 230 Fluid-Applied Vapor-Permeable Air Barrier Membrane

Excerpts from recent blog entries on CrainsCleveland.com.

Tremco Sealants says the ExoAir 230, the newest addition to its air barrier systems line, is designed to provide flexibility for designers and greater assurance of protection in the event of a fire. ExoAir 230 is a monolithic, synthetic vapor-permeable air barrier membrane that seals exterior, above-grade walls from air infiltration/exfiltration, Tremco Sealants says. It also serves as a “weather-resistive barrier to keep water out yet remaining permeable to the passage of water vapor to prevent moisture from being trapped within the wall.” The company says air infiltration “takes a tremendous toll on a building and its occupants.” Energy demands increase as heated or cooled air escapes. Moisture droplets in the air can condense and collect in the walls, leading to deterioration of structural members and poor indoor air quality. ExoAir 230 is formulated to resist temperatures up to 240 degrees Fahrenheit and to surpass ASTM E 84 testing for flame spread and smoke development along with other components with which it may be used. For information on the product, visit www.TremcoSealants.com.

Another view of liquor profits’ worth

Here’s a shock: Early warning on financial crisis unheeded ■ A new book about the financial crisis makes the case that a former Federal Reserve Bank of Cleveland researcher was one of the first people to raise a red flag about the problems that would lead to the serious recession of 2008. The book is “Reckless Endangerment: How Outsized Ambition, Greed and Corruption Led to Economic Armageddon,” and it’s co-written by Gretchen Morgenson. Ms. Morgenson recently was interviewed on NPR’s “Fresh Air” and shared the story of the former Cleveland Fed official, Walker Todd. Ms. Morgenson noted that in 1991, in the wake of the savings and loan crisis, Congress was working on a law to beef up the FDIC’s ability to take over failing institutions. In the writing of the law, Ms. Morgenson said, former U.S. Sen. Chris Dodd introduced an amendment that enabled insurance companies, brokerage firms and nonbank financial companies to tap into the Federal Reserve’s special powers in time of crisis. No one took particular notice of this except for Mr. Todd, who was a research fellow at the Cleveland Fed. “He thought this was fascinating, because the law that this was buried in was supposed to … restrain the ability of financial companies to harm the taxpayer and to create losses that would be funded by the taxpayer,” Ms. Morgenson says. “So it was counterintuitive. It was a paradox to Walker Todd that this small thing was inserted into the bill.” Despite a “buzzsaw of criticism from the Federal Reserve Board in Washington,” Mr.

report estimates those profits could total between $6.5 billion and $12.7 billion over 25 years, depending on the rate of liquor sales growth and inflation. The Kasich administration’s plan is based on liquor profits totaling $5.7 billion over 25 years. The administration plans to use $700 million of the lease proceeds to secure existing bonds that had been supported by liquor profits. “The financing structure for JobsOhio appears to be needlessly complicated,” the report states. “The $500 million for the (general revenue fund) estimated to result from the transfer fills a large hole in the (fiscal year) 2012 budget, but falls well short of full compensation to the state for the loss of future liquor profits.” — Jay Miller

Now, if the governor had a medical degree … ■ New Cuyahoga County Executive Ed FitzGerald took a jab at Gov. John Kasich as he recently kicked off in Shaker Heights what is planned as a series of monthly town hall-style meetings throughout the county. Asked why he would be paying the county’s new medical examiner, Dr. Thomas Gilson, $225,000 — more than any other public official — the county executive said Dr. Gilson, currently deputy chief medical examiner for Connecticut, would restore the reputation and national accreditation to the county coroner’s office. Then he added, “Yes, he’s going to make more than Gov. Kasich, but he’s going to do a better job.” — Jay Miller

Todd and the Cleveland Fed wound up publishing a paper about this episode. Mr. Todd discovered the provision had been inserted by the financial services companies at their request.

Among bus innovators, Cleveland is in the lead ■ A new report from the Institute for Transportation and Development Policy identified Cleveland as one of the five-best cities in the United States for bus-based transportation. Cleveland and the four other cities — Eugene, Ore., Las Vegas, Los Angeles and Pittsburgh — stand apart due to their commitment to bus rapid transit, which reinvents what buses can do for transit riders by making buses more like light rail, but at a fraction of the cost. The report said the RTA’s HealthLine “has dedicated bus lanes, off-board fare collection, and at-level boarding, and has resulted in average time savings of 12 minutes from endto-end of the route. Ridership is up 60% as compared to the bus line that previously served the corridor.”

What do they teach kids in Shaker Heights? ■ Shaker Heights native Andy Borowitz has a way of livening up corporate events. At a fundraiser at the American Museum of Natural History in New York, Mr. Borowitz spoke about his childhood in Shaker Heights, “where arts education was deemed more important than sex education, a philosophy he agreed with,” The Wall Street Journal said. “This meant that growing up, he thought menopause ‘was the break prostitutes take between clients.’ Later he learned the real definition.”

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