Crain's Cleveland Business

Page 1

20100614-NEWS--1-NAT-CCI-CL_--

6/11/2010

3:05 PM

Page 1

$1.50/JUNE 14 - 20, 2010

Vol. 31, No. 24

Land prices land in the dumper Wealthy investors, individuals seize chance to add terra firma as economy soils values By STAN BULLARD sbullard@crain.com

With housing and commercial development continuing at low ebb as the recession and real estate credit crunch linger, prices for Northeast Ohio land have collapsed almost across the board.

IT outfits see reboot in client spending By CHUCK SODER csoder@crain.com

Ganesh Iyer’s customers have been a lot more generous so far this year. The CEO of Vertex Computer Systems Inc. is one of several information technology executives in Northeast Ohio who say local companies have been spending noticeably more on IT this year. The effect has been particularly pronounced at Vertex, a Twinsburg company that provides custom software and IT consulting to businesses. The company’s sales during the first quarter were up by more than 30% compared with the first quarter of 2009, which Mr. Iyer said was a particularly slow year because of the recession. Sales for the second quarter, which still isn’t over, have been good, too, said Mr. Iyer, who declined to release revenue figures. Those increases say something not only about Vertex, but also about the willingness of its customers — most of whom are in Ohio — to spend money on IT. “It has been a dramatic turnaround since the beginning of January,” Mr. Iyer said. Other information technology companies that serve local businesses and organizations agreed that since

Aside from national homebuilders and industrial users, the list of land buyers in the market is short. It consists of couples who buy lots for dream homes or developers and wealthy investors who can buy land to hold it for an indefinite period, experts say. Both share the ability to pay cash as banks eschew

the risks of speculative building or lend so little on land that buyers choose to self-finance. Consider the unlikely but pleasant fate of 30 acres on Otten Road in North Ridgeville. Shannon and Michael Sedivec set out in 2005 to buy the farmland from an estate. They feared it would go to a homebuilder, and development would reduce the value of their colonial on 10 acres nearby. Originally, the parcel was marketed to homebuilders with an asking price

THE POWER OF FOES

of $800,000. The couple bought it recently for $400,000 cash. “We want to keep it green so it doesn’t become home to a development at (a density of) 100 homes per 50 acres,” Mrs. Sedivec said. “We want to keep it for family, a place where we can spend time together and have rabbits and animals for the kids.” The Sedivecs plan to sell a parcel each to two of Mr. Sedivec’s brothers and another to a neighbor. They’ll

INSIDE Browns on right track After a tumultuous 2009 season and an eventful offseason, the Browns appear to have their sea legs beneath them. The team reports season tickets are being renewed at a rate above 90%, a figure likely higher after this weekend’s Select-a-Seat at Cleveland Browns Stadium. Read Joel Hammond’s story on Page 7.

See LAND Page 20

Teams across major pro sports use opponents’ popularity to their advantage to put fans in seats

By JOEL HAMMOND jmhammond@crain.com

W

ith Washington Nationals’ phenom pitcher Stephen Strasburg scheduled to make his second career start in Cleveland, the Indians last Thursday unveiled a regional advertising campaign to promote this past weekend’s series against the Nats. Not that they had to: After Mr. Strasburg, in his Major League debut last Tuesday against Pittsburgh, struck out 14 in seven innings, the Indians sold 3,000 tickets in 16 hours on Wednesday for his slated Sunday appearance. The Indians, who as of last Thursday were last in the majors in attendance at 15,467 per game, expected their second-biggest crowd of the season yesterday, aside from an Opening Day sellout. The ad blitz featuring Mr. Strasburg follows a time-honored sports promotional ploy of playing up the appearance of top-flight opponents and rivals’ marquee stars in order to market your own franchise. For poor-performing teams, seizing such opportunities provides a desperately needed boost at the gate.

ILLUSTRATION KRISTEN WILSON

See POWER Page 21

24

See IT Page 20

0

NEWSPAPER

71486 01032

6

SPECIAL SECTION

SMALL BUSINESS Energy audits now big business as companies, homeowners seek savings ■ Page 13 PLUS: HIRING STRATEGIES ■ GRAND OPENINGS ■ & MORE

CrainsCleveland.com/30thanniversary

20100614-NEWS--2-NAT-CCI-CL_--

2

6/10/2010

4:13 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

LOOK INTO THE CRYSTAL BALL

COMING NEXT WEEK

The economy still has human resources executives worried, but it has been surpassed by concern about the costs of employee rewards and finding/retaining talent. So finds accounting and consulting firm Deloitte in a survey of 292 HR executives nationwide. Their top concern was the rising cost of “total rewards,� which in addition to wages and salaries includes health and retirement benefits, training and development programs, and paid leave. Here’s what executives identified as their most significant challenge over the next three years:

Prep and parochial education Hot topics such as sustainability and environmental responsibility have made their way to high school campuses, including Andrews Osborne Academy (pictured), where students can study the complexities of biodiesel.

Concern Rising cost of total rewards

REGULAR FEATURES Big Issue .....................11 Classified.....................22 Editorial .......................10 Going Places................12 Letter ..........................11

JUNE 14-20, 2010

List: Private companies ...........................18-19 Personal View ..............10 Reporters’ Notebook ....23 What’s New ..................23

Percentage 24%

Shortage/retention of qualified talent

23

Uncertain economic conditions

18

Tax/regulatory requirements

13

Managing rewards risks

7

Global work force complexities

6

Other

5

Changing work force demographics

4

3D3@G 0CA7<3AA 6/A / AB=@G B3:: CA G=C@A — Âľ=c` ZWbbZS ZO\RaQO^W\U PcaW\Saa Wa\¸b a] ZWbbZS O\g[]`S EVOb abO`bSR ]cb Oa be] Ucga eWbV O ^WQYc^ ^ZO\bW\U aV`cPa Wa \]e O ! ^S`a]\ S\bS`^`WaS ES SdS\ aSZZ ZO\RaQO^S aQcZ^bc`Sa 4]` a][S `SOa]\ bVS U`c[^g UO`U]gZS ]\S Wa O V]b aSZZS` <]e eS \SSR []`S POQYV]Sa O\R T]`YZWTba /\R O eOg b] [OYS Wb OZZ VO^^S\ Âś

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Shannon Mortland (smortland@crain.com) Health care and education Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Arielle Kass (akass@crain.com) Finance and legal Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Marketing coordinator: Laura Franks (lfranks@crain.com) Advertising sales director: Mike Malley (mmalley@crain.com) Account executives: Adam Mandell (amandell@crain.com) Dirk Kruger (dkruger@crain.com) Nicole Mastrangelo (nmastrangelo@crain.com) Dawn Donegan (ddonegan@crain.com) Business development manager & classified advertising: Genny Donley (gdonley@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Production manager: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Graphic designer: Kristen Wilson (klwilson@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com) Circulation manager: Erin Miller (emiller@crain.com) Customer service manager: Brenda Johnson-Brantley (bjohnson-brantley@ crain.com) 1-877-824-9373

Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director

/b 4WTbV BVW`R 0O\Y SdS`g PcaW\Saa PO\YW\U `SZObW]\aVW^ PSUW\a eWbV O Q]\dS`aObW]\ EVS`S g]c R] []ab ]T bVS bOZYW\U O\R eS ZWabS\ BVS\ ]\QS eS c\RS`abO\R g]c` PcaW\Saa O\R g]c` \SSRa eS USb b] e]`Y /\R Oa eS PcWZR g]c` Âż\O\QWOZ a]ZcbW]\a eS [OYS ac`S b] YSS^ g]c W\d]ZdSR 0SQOcaS acQQSaa W\ PcaW\Saa Wa `O`SZg OQVWSdSR OZ]\S

G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year, $59; 2 years, $102. Outside of Ohio: 1 year, $102; 2 years, $180. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136

:Sb¸a VOdS O Q]\dS`aObW]\ Ab]^ W\ g]c` Z]QOZ 4WTbV BVW`R 0O\Y QOZZ ca Ob &%% !!! #"' ]` dWaWb #! Q][

Audit Bureau of Circulation

4WTbV BVW`R 0O\Y ;S[PS` 4271

20100614-NEWS--3-NAT-CCI-CL_--

6/11/2010

2:51 PM

Page 1

JUNE 14-20, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

3

INSIGHT

Law grads’ job prospects ebb with economy Locally, aspiring attorneys open to other opportunities as employment rate slides By ARIELLE KASS akass@crain.com

A.J. SISCO/UPI

A boat travels May 29 through heavy oil at the site of the BP Deepwater Horizon oil leak in the Gulf of Mexico.

ADDRESSING A MESS Wooster firm mobilizes effort to aid in oil spill cleanup with own technology By CHUCK SODER csoder@crain.com

W

hen news broke that the Deepwater Horizon drilling rig had exploded, Stephen Spoonamore was in Houston meeting with a few oil industry executives who, judging by the flames, figured that oil from the ocean’s floor probably was gushing into the Gulf of Mexico. Before the meeting was over, the CEO of ABSMaterials Inc. already was thinking about sending the Wooster company’s first water purification machine to the region to help clean up the aftermath. ABSMaterials last week was preparing to send that machine to a contaminated water treatment field in Galveston, Texas, where it will be leased by a division of drilling products and services company M-I Swaco. ABSMaterials aims to start the machine this Tuesday, June 15, and if it works as planned the company within days could start building more of the machines near its Ohio headquarters, Mr. Spoonamore said.

LEFT: Paul Edmiston, chief science officer of Wooster-based ABSMaterials Inc., designed Osorb, which purifies water pulled from oil and gas wells. BELOW: The company hopes its water purification machine can aid in the oil spill cleanup. PHOTOS PROVIDED

As 2010 law school graduates are framing their diplomas and are preparing to enter the working world, the profession is reporting that employment rates for the class of 2009 were the lowest in more than a decade. The latest data from the National Association for Law Placement show that nine months after graduation, lawyers minted in 2009 had an employment rate of 88.3%, a rate that has decreased for two consecutive years. In 2007, the employment rate was 91.9%, and it was just under 90% in 2008. The employment rate last year was the lowest since 1996. In addi-

tion, the employment numbers include an increase in the number of graduates engaged in part-time and short-term work, as well as more grads taking jobs at the schools they had attended. Jennifer Blaga, director of career planning at Cleveland-Marshall College of Law at Cleveland State University, said the employment rate for her class of 201 students in 2009 was 84.8%, though she cautioned that not all students report whether they have found jobs. Normally, the school has between 60% and 70% of students employed at graduation. For the class of 2010, Ms. Blaga said she hoped to hit 50%, though the employment figures at graduation were closer to 40%. See LAW Page 21

THE WEEK IN QUOTES “We want to keep it green so it doesn’t become home to a development at (a density of) 100 homes per 50 acres.We want to keep it for family, a place where we can spend time together.”

“We show them the software and in five minutes they say, ‘Holy cow, that is awesome.’” — Mark Woodka, CEO, OnShift. Page 4

— Shannon Sedivec, landowner, North Ridgeville. Page One

See WATER Page 20

“Cap and trade ...is not going to lower electric rates in all probability.”

“I was high on Christmas cookies. I wrote the business plan on ... a holiday card envelope.”

— Sean Smith, general manager, GreenStreet Solutions of Oakwood Village. Page 13

— Kimberly Martinez, CEO, Bonitas International. Page 17

Communities propel efforts for economical energy upgrades By JAY MILLER jmiller@crain.com

Special improvement districts would tie long-term payments to investment

Capitalizing on recent changes in state law, some Cleveland-area communities are banding together to offer property owners cheaper ways to finance energy-saving improvements to their properties. The planned advanced energy special improvement district, or SID, would let property owners pay for energy-efficiency projects the same way they pay for new sidewalks or sewers — through a bond issue tied to a special property tax assessment

that could be levied for as much as 30 years — rather than by tying up their own credit capacity. “It’s lowering the price of clean energy through creative financing,” said Tom Bullock, Ohio representative of the Pew Environment Group, a national environment and conservation group and the Lakewood city councilman who introduced the legislation in that city. The city of Lakewood last Monday, June 7, became the first

community to introduce SID legislation. Other communities that are members of the First Suburbs Consortium Development Council are preparing similar legislation, said Nathan Kelly, director of planning and economic development for Lakewood and chairman of the development council, which is a forum for efforts to develop and redevelop 16 inner-ring suburbs. The city of Cleveland also is considering legislation to join the SID.

The low-cost financing that will be available through a SID is needed because renewable energy systems have high upfront costs but longterm paybacks. Without long-term SID financing, a property owner who takes out a traditional loan for photovoltaic solar panels or a geothermal heating and cooling system could pay the full capital cost of the improvement over just a few years and but then sell the property years before the investment

pays off in long-term energy cost savings. The long-term goal is to reduce reliance on fossil fuels and to reduce utility bills. Some of the legislation’s supporters believe it puts Ohio in the forefront of states helping property owners convert to alternative energy by giving the property owners access to low-cost, long-term financing. “Property owners can take advantage of how government finances all of their sidewalks, roads, sewers and things of that nature,” said Raymond See SID Page 20

20100614-NEWS--4-NAT-CCI-CL_--

4

6/11/2010

CRAIN’S CLEVELAND BUSINESS

10:18 AM

Page 1

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

OnShift system takes on scheduling troubles Nursing home customers avoid OT, fill gaps By CHUCK SODER csoder@crain.com

It’s no wonder Eli Coury describes OnShift Inc.’s scheduling software as “the bomb.” Mr. Coury, CEO of BHP Management LLC, said the three Northeast Ohio nursing homes he runs are spending about 20% less on nurses and nursing assistants because of the Cleveland company’s software, which has helped the homes keep their staff levels even and avoid

almost all overtime costs. OnShift, founded in 2007 as StaffKnex, has sold its software to 55 customers, mostly nursing homes, and ramped up its sales and marketing in an effort to secure 200 customers by the end of the year, said CEO Mark Woodka. OnShift, which employs 17, is starting to target nursing home chains as opposed to individual facilities, and is testing its software in a local community hospital. In a few years the company will start pursuing

business in other shift-based industries, he said. “We’re going to grow as aggressively as we can,” Mr. Woodka said. So far, customers have been quick to adopt the software, he said. It tells them how many hours employees have worked, which allows them to avoid scheduling people who would need to be paid overtime. It also includes a communications system that can blast out e-mails, text messages and phone calls to employees when a shift needs to be filled on short notice. That capability helps nursing homes quickly find replacements who won’t rack up overtime. Most nursing homes use software spreadsheets or paper to manage schedules, Mr. Woodka said. A representative from the American Association of Homes and Services for the Aging said she could not find someone who could speak to whether that’s true, but Mr. Coury and a second OnShift customer agreed that such software is not prevalent. “We show them the software and in five minutes they say, ‘Holy cow, that is awesome,’” Mr. Woodka said.

Dinner party inspiration OnShift founder Gene Groys has run into those situations himself. He described how one customer stopped him 15 minutes into his typical software demonstration and said he would buy the product. Mr. Groys wanted to start a company based around social media technology for mobile phones after leaving his job as director of mobile content and billing for American Greetings’ mobile division in late 2006. Soon thereafter, however, a friend of his who is a nursing home administrator asked Mr. Groys at a dinner party if he somehow could use text messaging to help nursing homes fill empty shifts. Mr. Groys refocused his efforts after learning more about that problem. Every state requires nursing homes and hospitals to keep a certain number of nurses and nursing aides on staff depending on how many patients they serve throughout the course of a day, and each state has rules dictating the minimum amount of time staff should spend caring for each patient. OnShift in October raised $1.3 million from two local venture capital firms, Early Stage Partners and Glengary LLC. As a result, the company has hired three more sales people and is expanding its marketing efforts. Previous investors include nonprofit venture development organization JumpStart, North Coast Angel Fund LLC and four individuals, including Mr. Woodka and local entrepreneur Charles Stack. Early Stage Partners, which invested $1 million in OnShift, liked the company’s management team as well as its approach of selling webbased software on a subscription basis, said managing partner Jonathan Murray. The best thing about OnShift, however, was that it had many happy customers, Mr. Murray said. “Our rationale was very simple: Customers were buying,” he said. ■

Volume 31, Number 24 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 © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

20100614-NEWS--5-NAT-CCI-CL_--

6/10/2010

1:28 PM

Page 1

The cost of benefits is soaring

Making it harder to keep expenses down

And the quality of your plan up

But change is in the air

SIMPLY UNUM Employees want choices. You need cost stability and predictability. Simply Unum® offers it all. The key is our multiple funding options—employer paid, employee paid or our new Benefit CreditsSM model, which allows you to allocate a fixed dollar amount to each employee—helping keep costs in line year over year. And thanks to our single online platform, administering group and voluntary benefits couldn’t be simpler. To learn more, call your broker, Unum representative or visit unum.com/simplify. SIMPLE ADMINISTRATION ° EMPLOYEE EDUCATION ° BENEFIT AND FUNDING OPTIONS '%&% Jcjb <gdje# 6aa g^\]ih gZhZgkZY# Jcjb ^h V gZ\^hiZgZY igVYZbVg` VcY bVg`Zi^c\ WgVcY d[ Jcjb <gdje VcY ^ih ^chjg^c\ hjWh^Y^Vg^Zh# >chjgVcXZ egdYjXih VgZ jcYZglg^iiZc Wn i]Z hjWh^Y^Vg^Zh d[ Jcjb <gdje# H^bean Jcjb bVn cdi WZ VkV^aVWaZ ^c Vaa _jg^hY^Xi^dch# CH&%"%&%

20100614-NEWS--6-NAT-CCI-CL_--

6

6/11/2010

2:51 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

RPM subsidiaries’ bankruptcy placement may end headache Insightful legal solutions that help our clients find time to hit the links

Medina firm chained to Bondex’s ongoing asbestos liabilities By DAN SHINGLER dshingler@crain.com

The attorneys at McDonald Hopkins are on a mission to solve the business and legal issues that interfere with your work-life balance.

Attorneys on a Mission

ÂŽ

Your mission is our mission. We never lose sight of it.

A business advisory and advocacy law firm 600 Superior Avenue, East, Suite 2100, Cleveland, OH 44114 216.348.5400 Carl J. Grassi

Shawn M. Riley

President

Cleveland Managing Member

Chicago • Cleveland • Columbus • Detroit • West Palm Beach www.mcdonaldhopkins.com

The words “bankruptcy� and “RPM International� are as welcome a combination as oil and seawater, but Medina-based RPM nonetheless has plunged two of its subsidiaries into Chapter 11 bankruptcy proceedings in an effort to snuff out an ongoing firestorm of product liability lawsuits. RPM chief executive Frank Sullivan said the Sullivan company took the step all for a product called Bondex, a wall repair product that was made until 1977 — nine years after RPM bought Bondex International, the company that produced it. Bondex was sold to do-it-yourselfers, who mixed it into a paste like plaster. It never had more than a 1% share of the market for wall repair products, but it’s been producing most of RPM’s headaches for years now. In the last eight years alone, Mr. Sullivan said, RPM has paid out more than $600 million in asbestos claims related to Bondex — a product with sales of less than $500,000 a year when it was produced. About 60% of all new asbestos plaintiffs name Bondex, and by proxy RPM, in

HEALTH CARE SUPPLY CHAIN MANAGEMENT y ¨Â?›¥™¤ ž§Â›­ §Âž §­ª  ¥Â&#x; ¤¹ ÂŞÂ?Â&#x;Â™ÂŞÂœÂ?Âœ Â™ÂŚÂœ ¤§ŒÂ&#x;eÂŤÂŹÂ™ÂŚÂœÂĄÂŚÂ&#x; ­¨¨¤¹ › Â™ÂĄÂŚ ¨ª§Â&#x;ª™¼

their lawsuits, yet no employee of Bondex or RPM has ever come down with an asbestos-related illness, Mr. Sullivan said. Little wonder RPM chafes more than a little under what has become a $1 billion burden. In addition to what it’s actually paid out in claims, RPM also has set aside $400 million in reserves to cover future lawsuits. Enough was enough, Mr. Sullivan said he finally concluded. On May 31, RPM put both Bondex and its holding company, Specialty Products Holding Corp., into bankruptcy proceedings with a Chapter 11 filing in Delaware.

Gimme shelter “We were continuing to make payments into the tort system on a percentage of claims that was way disproportionate to the amount of claims we could have had. ...I think we were under the assumption they were going to get better and, in hindsight, naively believed they would reflect out minimum exposure (to causing asbestos illnesses) through a small product line,� Mr. Sullivan told Crain’s. The problem, he said, was that as other asbestos-related companies disappeared after the 1980s, RPM became one of the last entities left for plaintiffs to sue. Suddenly, Mr. Sullivan said, everyone with an asbestos-related illness seemed to remember buying Bondex, and RPM’s asbestos payments went from about $200,000 a year to tens of millions of dollars annually. The bankruptcy filing doesn’t remove RPM from any further payments, but it at least will enable the company to pay one definable amount, into a court-approved trust, and finally know that the matter is behind it, Mr. Sullivan said. The strategy is sound — and Congress specifically wrote the section of the bankruptcy code that RPM is using for companies hit by asbestos lawsuits, said Scott Opincar, a partner at the Cleveland law firm McDonald Hopkins who specializes in bankruptcy work. “They’ll be in one forum, with one judge, with laws that are designed to protect companies,� Mr. Opincar said. “So it’s a very friendly forum.�

Striving for closure The process should bring some certainty and closure to the situation for RPM, Mr. Opincar added. “Once the (bankruptcy) plan is confirmed and the trust is established, they know on a going-forward basis that ongoing claims are 830& VXSSO\ FKDLQ PDQDJHPHQW VSHFLDOLVW %HWKDQ\ *XDOLWHUL D SURJUDP JUDGXDWH

• Industry guidance—leading health care executives helped design the program and provide ongoing advice • Rigorous curriculum—a collaboration of the schools of business and pharmacy

Pittsburgh, PA

going to be covered by the trust,� he said. Determining how much money must be put into the trust won’t be easy or quick, and in a best-case scenario, based on similar cases, RPM estimates it will take 18 months. But while that’s happening, all current cases against Bondex and its holding company are put on hold, effectively shielding RPM from any further losses in state courts. How much RPM will need to put into the trust is a big unknown, but in the worst of situations it can’t be more than the book value of Bondex and Specialty Products Holding Corp., said RPM chief financial officer Robert Matejka. RPM even could get back some of the $400 million reserve it set up for future lawsuit losses. That money will go with the two companies into Bankruptcy Court and will be fought over by lawyers from each side as they get the court to settle on a number for the new trust. The move immediately will affect RPM in two ways, analyst Saul Ludwig said in a June 7 report on the matter. It will improve RPM’s cash flow by about $50 million and RPM will not be able to book earnings from Specialty Products Holding Corp. or its subsidiaries. The $50 million is the difference between the approximately $75 million RPM has been paying in asbestos claims each year and the $24 million in earnings that were expected for this year from units of Specialty Products Holding Corp. Specialty Products’ other holdings, including Cleveland-based Day-Glo Color Corp., RPM Wood Finishes and Dryvit Systems, will not be affected by the filing, though their earnings will not pass through to RPM during the reorganization, Mr. Sullivan said.

Long journey ahead Mr. Ludwig, an equity analyst for Northcoast Research Partners in Cleveland, was recommending that clients buy RPM’s stock following the Chapter 11 filing, but noted in his report that there’s a long road ahead for the company. “We’ve tried to make the steps to resolution simple and understandable,â€? Mr. Ludwig wrote, “but this is anything but a simple process. It will be a long, tedious and tensionfilled journey, but whatever the final amount of the trust, it would end forever the uncertainty and cash outlays for asbestos payments by RPM.â€? And that, Mr. Sullivan said, is exactly what RPM hopes to get out of the case. â–

RETAIL / WHOLESALE / COMMERCIAL

Learn more ™š§­ ÂŹÂ Â? ÂŞÂ?Â&#x;¥§ŒĂ…ÂŤ §¨ €Â?™¤ {™ªÂ? ‹­¨¨¤¹ { Â™ÂĄÂŚ ɪΪÂ&#x;Â?ÂĽÂ?ÂŚÂŹ ¨ª§Â&#x;ª™¼ Â™ÂŚÂœ ÂĄÂŹÂŤ Â&#x;ÂŞÂ™Âœ­Â™ÂŹÂ?ÂŤd ›§ŒÂ™Â›ÂŹr

Dr. John Mawhinney, CPIM, CTL 412.396.1774 • mawhinney@duq.edu

www.duq.edu/business

1-877-551-TIRE (8473) ww.XTIREX.com 2 locations serving NE Ohio for over 50 years

"Xchange For The Better" COMPLETE AUTOMOTIVE & TRUCK SERVICES FOR ALL CARS, TRUCKS, VANS, SUV, LT/MED TRUCK SPECIALIZING IN TIRES, WHEELS, BRAKE, SUSPENSION, FRONT END, & UNDERCAR SERVICES ALL BRANDS & SIZES, OVER 10,000 TIRES & WHEELS IN STOCK

20100614-NEWS--7-NAT-CCI-CL_--

6/11/2010

10:22 AM

Page 1

JUNE 14-20, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

7

Browns’ strong season ticket renewals suggest renewed hope New exec says rate above 90%; customer service a priority By JOEL HAMMOND jmhammond@crain.com

It took a new team president, a very public legal battle with former general manager George Kokinis, a $1,701 water bottle and two (more) new quarterbacks, but it appears the Browns may have weathered the worst of the storm. According to new senior vice president of business development Jim Ross, season ticket renewals were above 90% ahead of the Selecta-Seat event this past Saturday, June 12, at Cleveland Browns Stadium. At that event, potential customers were invited to tour the stadium and look at available seats throughout the upper deck and club section. Similar events previously have been done by other teams, but it’s a first for the Browns. Given the invectives directed toward the team three-quarters through last season when it was 111, Browns officials are pleased with the renewal rate. Yet the team still has “some work to do,” Mr. Ross said: There were a “couple thousand” seats available Saturday for full and mini season-ticket plans; that’s aside from the 4,000 to 5,000 tickets the team reserves for singlegame and group sales. Plus, according to Mr. Ross, there’s an awareness factor at play: He said there is a perception — or at least there was one before last season when the team’s sellout struggles were well-documented, with blackouts a real possibility for the first time since the team returned in 1999 — that fans couldn’t buy season tickets. “Part of this is to let people know that tickets still are available,” said Mr. Ross, who’s just seven weeks into his job after leaving the New York Yankees, where he held the same title. (As a bonus for Clevelanders, while Mr. Ross said the Browns job gave him an opportunity to move into the NFL, he also “wanted to live in Cleveland, and I mean that sincerely.”)

On their toes It’s been a busy six months in Berea. Crain’s Cleveland Business last November reported growing disdain among season ticket holders toward the team because of poor play and what some deemed subpar customer service. Three weeks later, the Browns began advertising “ticket service representatives,” described in an online job advertisement as being “responsible for developing and maintaining strong relationships with Cleveland Browns season ticket holders,” among other functions. Mr. Ross said five new ticket-office employees have been brought on board, and now each season ticket holder has his or her own account representative. “Customer service has been a huge point of emphasis for us, for all the reasons you can imagine,” Mr. Ross said. In March, the Browns took an unprecedented step in today’s NFL, where rising prices are the norm: They offered some former season ticket holders the chance to come back without repaying their personal seat licenses, which can range from $375 to $1,500. (All seats at Cleveland Browns Stadium, except for those in the Dawg Pound (east end zone), require a PSL.) That’s not to mention the hiring of team president Mike Holmgren, who has been visible in the community and in the media, taking over for coach Eric Mangini in those roles. Yet amid all the turmoil, the Browns report a renewal rate percentage “into the 90s” and strong response in the 10 days since the team began advertising Saturday’s event, according to Mr. Ross.

struggles, said Mark Rosentraub, a former Cleveland State professor and now the endowed chair of the department of sport management at the University of Michigan. Portfolio.com, in a study released last December, reported that the Cleveland-Elyria-Mentor is badly oversaturated for its three pro

sports teams, based on a formula it called “total personal income.” Mr. Rosentraub said Cleveland anymore is “not quite a three-team market.” “It’s not surprising (the Browns) are doing better than you’d expect,” Mr. Rosentraub said. “Combine the Indians’ struggles, a new (team president), some exciting moves

and it not being that difficult to turn it around in football, and it’s not surprising.” Still, Mr. Rosentraub said, the Select-a-Seat event “is the right idea.” “The recession still has its grips on the market, and it’s them getting out in front of their customers, being aggressive,” he said. ■

Lending to small businesses is a #1 priority for us

Time to be aggressive Two Cleveland-area ticket brokers contacted by Crain’s reported similar activity, with many calls to buy for the coming season, though Scott Merk of Merk’s Tickets in Brook Park said he’s seeing many customers want out of their club seat obligations. Mr. Ross would say only that there has been “attrition” in that area, where access to an indoor bar and seating area is a selling point, especially in the winter. Working in the Browns’ favor is football’s popularity and the Indians’

At U.S. Bank, we realize that the success of small businesses like yours drives the American economy. That’s why your success is a #1 priority for US. To help you succeed, we’ve developed a variety of flexible business solutions designed to keep cash flowing and businesses growing. And, it’s backed by the expertise and stability of one of America’s strongest banks. •

Working Capital Lines of Credit

•

Owner & Investment Real Estate

•

Treasury Management Services

•

Payment Solutions

Achieve.

Visit your local U.S. Bank today and we’ll help you get the type of financing solution you need to grow your business.

Learn how our alumni engage at: www.csuohio.edu/alumni

Dave Bozak Business Sales Manager 216-896-1032

ANTHONY BAKALE PARTNER, COHEN & COMPANY, LTD CLASS OF ‘82

Mark Rowland Business Sales Manager 216-623-9274

Bill Larion Client Manager Team Leader 216-623-9276

usbank.com All applications are subject to normal credit approval. Call your business banking expert for current rates and terms. Standard fees apply. Refinance of existing U.S. Bank business loans are excluded. Member FDIC.

20100614-NEWS--8-NAT-CCI-CL_--

8

6/11/2010

4:05 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

Set your network free. Your business will follow!! Advanced Service provider in Network Security,Network Integration & Server upgrade and maintenance To schedule a network evaluation or learn more about OpenNet Solutions, visit www.OpenNetSolutions.com or call (216) 752-5344

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

Developers soon to be booked N.C. firm, Snavely in lead to carry out Univ. Circle hotel By STAN BULLARD sbullard@crain.com

Empowering women since 1871, Ursuline charges students to grow and develop their values. Ursuline is a place where expressing yourself is encouraged and finding your voice is a requirement. In the likeness of the Ursuline’s heroic founder, each student is inspired to shape a unique, personal vision.

ursuline.edu 1 888 URSULINE

CreatingValue.

A joint venture consisting of Snavely Development Co. of Chagrin Falls and Concord Hospitality Enterprises Co. — a hotel company in Raleigh, N.C., that formerly was based in Mentor — is the prime candidate to build a proposed hotel at University Circle in Cleveland. That’s the word from three sources familiar with the talks. The sources declined to be identified because they are not authorized to discuss the project publicly. Chris Ronayne, president of University Circle Inc., a nonprofit that promotes development of the East Side neighborhood of cultural, educational and health care institutions, said in an e-mail that his group is close to selecting a developer for the hotel. However, he said he cannot identify the potential developer because the parties involved all signed nondisclosure agreements. Peter Snavely, president of Snavely, and Grant Sabroff, Concord Hospitality senior vice president for development, also declined comment. University Circle Inc. and University Hospitals began the process of selecting a developer for the hotel in fall 2008 on land they control at Cornell Road and Euclid Avenue. If Snavely and Concord Hospitality

Manufacturing firm Hawk has eyes on development in India By DAN SHINGLER dshingler@crain.com

What do You Value? Maybe it’s advice from a tax professional year-round, or having personal advisors who are experts in your industry. Perhaps it’s access to tools to help your business succeed.

We Value that too. 216.241.3272 or www.meadenmoore.com

land the deal, it will put Snavely in a hotel deal for the first time since the family-owned company built more than 30 hotels in the 1980s. It sold its hotel holdings in the 1990s to focus on commercial, condominium and residential land development. Concord Hospitality continues to own two hotels in Northeast Ohio, although it moved to Raleigh in 2003. Concord has grown as a hotel management and development concern and now operates 65 hotels in the United States and Canada. One of the sources said Braun & Steidel Architects of Akron did preliminary designs for the group’s bid. The firm has designed more than a dozen hotels for Concord Hospitality. A spokesman for Braun & Steidel refused to discuss whether it is working on the University Circle project. Another local developer said he was disappointed his proposal did not come out on top but that he still

They need brakes and clutches in India, too, and that’s why Clevelandbased Hawk Corp. plans to build a plant in the rapidly developing nation. Hawk will begin with a plant near the city of Chennai in southeast India, said president Christopher DiSantis. He said the infrastructure in that area is some of the best in India, and it’s near some of Hawk’s existing customers there. Hawk makes brake and clutch components, as well as other friction materials for products ranging from heavy equipment and aircraft to high-performance vehicles. In India, Hawk’s chief end markets are the mining and agricultural sectors. More specifically, Hawk sells to the heavy equipment makers, such as Caterpillar and Komtasu, that serve those markets, Mr. DiSantis said. It can meet their needs better, as well as sell to other large manufacturers operating in India, by setting up its own production operation in the country. “They’re not investing for the sake of investing. They’re investing for the sake of their customers,” said analyst Eli Lustgarten, who follows Hawk for Longbow Research, a firm in Independence that provides investment research for institutional investors. Mr. Lustgarten said companies around the world are trying to streamline and localize their supply

chains — especially after those supply chains were stressed and sometimes failed in the recent economic downturn — and Hawk is taking advantage of that trend. The company already makes products in China, where Hawk has had a plant since 2000, and likely has the know-how and wherewithal to follow suit in India, he said. Hawk has been studying the India market closely and likely will buy land for its plant later this year, Mr. DiSantis said. Then, it will spend another year or so building its plant. Plans have not been finalized, but Mr. DiSantis estimated the plant would be 40,000 square feet, employ about 50 people and cost between $5 million and $10 million. Hawk has done its homework, including finding suppliers and testing about a half-dozen of them ahead of time. “We do audits, and we have them make some parts for us here in America first,” Mr. DiSantis said. Hawk will hit the ground with about 10 customers already in India, but it hopes to pick up more as its operation there matures. That’s a model more American companies are following, Mr. DiSantis said. “In the ‘90s, it was different. Everyone was going to these low-cost countries and trying to figure out how to lower the cost of items they could ship back to the U.S. market,” he said. “Now, the product’s not meant to come out of there. It’s made there and meant to stay in that market.” ■

believes in the site. Dick Pace, owner of Cumberland Group in Cleveland, said University Circle Inc. notified him more than a year ago that he was out of the running. “I’ve been interested in that site for years. You’re within walking distance of a great art museum and a great orchestra,” said Mr. Pace, who noted that he did a class project on potential redevelopment of the parcel at Cornell and Euclidwhen he was working on an architecture degree at the University of Michigan in the 1970s. David Sangree, president of the Hotel & Leisure Advisers consultancy in Lakewood, said he believes a hotel would do well there because nearby institutions would generate demand. Even with developer MRN Ltd. of Cleveland working nearby on restoring the former Tudor Arms on Carnegie Avenue as a hotel, he said, there is demand for both. ■

ON THE WEB

Story from www.CrainsCleveland.com.

Simbionix settles patent lawsuit Immersion Corp. of San Jose, Calif., has settled the patent infringement litigation it initiated two years ago against Simbionix USA Corp. in Cleveland. Immersion, a developer of technology that looks to bring the feel of human touch to digital devices, said Simbionix has entered into a nonexclusive licensing agreement with the company. Simbionix makes simulation and training products for medical professionals. Immersion said the settlement resolves issues outstanding between the two companies. Terms of the settlement are being kept confidential. “This positive development is definitive validation of our licensing strategy and strengthens the value of our intellectual property,” said Craig Vachon, Immersion senior vice president and general manager, in a statement. Simbionix CEO Gary Zamler said in a statement that the agreement “lets us get past the cost and distraction of dispute, and allows us to focus on our continued record growth and acceptance of Simbionix products by the simulation industry and professional societies and medical training centers around the world.”

20100614-NEWS--9-NAT-CCI-CL_--

6/10/2010

1:28 PM

Page 1

You can pull ideas out of

thin air.

Shouldn’t you be able to send files while you talk?

Get Simultaneous Voice and Data for Small Business and work the way you’ve always wanted to. Now there’s nothing you can’t do. Send an email to a client mid-conversation. Open the web to prove your point. Text your partner as you seal the deal. All without ever hanging up. See what’s possible by visiting your local AT&T store or att.com/simultaneous. And amaze yourself with what you can do on the nation’s fastest 3G network.

1-800-423-2965

ATT.COM/SIMULTANEOUS

$

99

99*

BlackBerry® Bold™ 9700 smartphone. Ready for Simultaneous Voice and Data on the nation’s fastest 3G network.

*After $100 mail-in AT&T Promotion Card rebate. Requires new 2-year service agreement on eligible voice and $30/mo data plan.

VISIT A STORE

3G not available in all areas. BlackBerry® Bold™ 9700 Offer: Price before AT&T Promotion Card and 2-year contract is $199.99. Allow 60 days for debit card fulfillment. Card may be used only in the U.S. Is valid for 120 days after issuance date but is not redeemable for cash and cannot be used for cash withdrawal at ATMs or automated gasoline pumps. Card request must be postmarked by 9/10/10 and you must be a customer for 30 consecutive days to receive card. While supplies last. Offer ends 7/31/10. Offer valid only for new CRUs. Subject to credit approval. Phone Return Policy/Early Termination Fee: No Early Termination Fee (ETF) if service cancelled within 30 days of purchase, but up to $35 Restocking Fee may apply for returned devices. Thereafter, the ETF will be up to $325 if purchasing certain specified equipment (check www.att.com/equipmentETF for list) or up to $150 for other equipment. Independent agents may impose additional equipment-related charges. Sales tax calculated on un-activated price of handset. Early Termination Fee subject to change. Coverage not available in all areas. See map at www.wireless.att.com or visit store for details. Offer valid only for new Corporate Responsibility Users (CRU) associated with a business contract. © 2010 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other AT&T marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. BlackBerry,® RIM,® Research In Motion,® SureType,® SurePress™ and related trademarks, names and logos are the property of Research In Motion Limited and are registered and/or used in the U.S. and countries around the world.

20100614-NEWS--10-NAT-CCI-CL_--

10

6/10/2010

4:17 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Night move

R

emember when you were in your early teens and your parents would tell you they wanted you home by midnight because nothing good happens after 1 o’clock in the morning? Well, members of the state Legislature proved this month that your parents were right. The proposed constitutional amendment Ohio voters passed last Nov. 3 that cleared the way for casino gambling in Ohio gave members of the General Assembly six months to approve legislation setting the ground rules for regulating and operating the casinos. Yet despite that lead time, Ohio lawmakers missed by a few hours the June 3 deadline by which they were to have enacted that bill. One thing legislators didn’t miss, however, was an opportunity to use the cover of darkness during the wee hours of June 4 to approve a bill that provides a generous state income tax deduction for people who suffer gambling losses. The deduction could have served as an inducement for Ohioans to do their gambling in state had the tax break been limited to gambling losses at Ohio casinos. But the language of the one-sentence line creating the deduction says it applies to “any loss from wagering transactions that is allowed as an itemized deduction under section 165 of the Internal Revenue Code and that the taxpayer deducted in computing federal taxable income.” That means losses at casinos in Las Vegas, or Reno, or Detroit, or anywhere else a casino or race track operates. Why legislators would relinquish millions of dollars in potential tax revenue in a state that will face tremendous budget pressure for years to come is anyone’s guess. Ours is that they’re doing favors for some high-roller friends. And it will be the average guy who pays.

Sharper image

S

core another plus for the use of collaboration as a way to build our regional economy. That’s our view of the announcement this month that Philips Healthcare, a worldwide leader in production of medical imaging systems, will invest $33 million in a new Global Advanced Imaging Innovation Center at University Hospitals Case Medical Center in Cleveland. The medical center will work with Philips, which bases its computed tomography and nuclear medicine businesses in Highland Heights, under a five-year partnership to research and test medical imaging products the company is developing. Another $5 million to support the center will come from the state through its Third Frontier program. The diagnostic imaging field is a strength of Northeast Ohio’s advanced manufacturing sector, with Hitachi Medical Systems America Inc. also headquartered here. The creation of the innovation center should only enhance the job-creation potential of this key contributor to the health of our region.

FROM THE PUBLISHER

Someone now must police the police

R

tell me that it was a checkpoint “to ecently, my wife and I took our ensure safety on the holiday weekend son and a friend of his to the and to make sure that people are wearing movies. It was a quiet Friday their seat belts and haven’t been drinking.” evening in Medina and a perfect Now, apparently my face betrayed my time to see “Iron Man 2.” But it wasn’t sentiments because he said something just any Friday. like, “You seem irritated, sir.” I said that You see, it was the Friday of the he was right, but I didn’t go any further. Memorial Day weekend, and as we drove The old adage about newspaper south on state Route 3 just publishers was that “you don’t outside the city limits, we were BRIAN argue with people who buy surprised to see a bunch of TUCKER ink by the barrel.” Well, you flashing police lights. most certainly don’t argue with Thinking it was an accident, I people wearing guns. stopped the car, expecting to be It’s indisputable that people waved on after seeing whatever driving under the influence of mishap had caused the backup. drugs or alcohol should incur With one teenage driver in the the appropriate penalties, and household and another coming that efforts to combat the probsoon, my wife and I always lem have made our roads and fear the worst when we see the highways safer. flashing police lights. Like many other It’s just that this felt like a scene out of communities, Medina has had its share a Cold War movie. It was like the scenes of traffic fatalities of young people, the in movies about the old Soviet Bloc most recent of which were a brother and countries, or, for that matter, the Middle sister on their way to school. East and other war-torn places across So imagine my surprise when the the globe today. It just didn’t feel quite officer walked up to our car. I rolled American. down the window and he proceeded to

Now, I have great respect for police officers in general, and praise them for taking the risks they do to protect society. But this, on a quiet, rural road on a Friday evening? This just didn’t seem right, and it seemed to leave too much subjective power in the hands of the officers manning this checkpoint. Heck, just using that word “checkpoint” doesn’t seem appropriate to me in our country. Well, now our state Supreme Court has taken it a step further by ruling — in a stunning 5-1 decision, by the way — that Ohio police officers can arrest drivers for speeding based on nothing more than “unaided visual estimation” of that driver’s speed. No radar needed; no proof other than the officer’s word and a certificate from some training academy. What a crock. Every one of the justices other than Terry O’Donnell, who correctly dissented, ought to be ashamed. Remember their names — Maureen O’Connor, Paul Pfeifer, Judith Ann Lanzinger, Robert Cupp and Evelyn Lundberg Stratton. Eventually, you will be given the chance to vote on their future. ■

PERSONAL VIEW

Recycling river dredgings could be answer By CHARLES E. HERDENDORF

W

ith plans by the ClevelandCuyahoga County Port Authority to ship dredged sludge to a quarry on Kelleys Island rejected recently by the Ohio Environmental Protection Agency, it is time to consider an opportunity that could save millions, remedy the costly problem of dredging the Cuyahoga River and at the same time create a profitable business. Traditionally, the U.S. Army Corps of Engineers has dredged the Cleveland harbor and river free of cost to local government. That service is no longer available and now the community must bear one-third of that cost, or in this case, $133 million.

Dr. Herdendorf is professor emeritus of geological sciences and director of F.T. Stone Laboratory at Ohio State University, where he was founding director of the Ohio Sea Grant College Program and the Center for Lake Erie Area. Furthermore, the Corps and the community are having a difficult time deciding where to create a confined disposal facility, or CDF, which is essentially the creation of a land mass from the dredged materials. Burke Lakefront Airport was built in this manner. To complicate the port authority’s problems even more, Corps officials have notified Gov. Ted Strickland that if the Cuyahoga River is not dredged in the next few years the inability of vessels to

navigate the river will have a serious impact on the region’s economy. To keep Cleveland’s heritage as a Great Lakes port alive, a fresh approach is needed. We must view “dredging” as a recyclable resource rather than waste. Such an approach could yield multiple beneficial uses for dredged material, save millions of tax dollars and create profitable enterprises. All of this presents opportunities for innovation in the form of a different method of dredge disposal, one that would be less expensive, more environmentally friendly and even profitable while creating jobs. The concept is to develop a 20-acre dredged management processing facility in the vicinity of the Clark Avenue bridge. This facility could See VIEW Page 11

20100614-NEWS--11-NAT-CCI-CL_--

6/10/2010

1:32 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

JUNE 14-20, 2010

11

THE BIG ISSUE What should the state do to plug an expected budget deficit next year?

In business, the right banker makes all the difference

JEREMY BORGER

COLLEEN COTTER

CHRISSY GREEN

Cleveland

Lakewood

Bedford

You could probably walk through any government building and tap every third person on the head and get rid of them.

We have to look ahead at increasing taxes and cutting spending. We can’t shy away from the idea that we need more revenue. It can’t just be about cutting, but no doubt there are areas where we can cut.

Rather than building new things, focus on revitalizing old buildings. They need to prioritize. Our schools are falling apart. What about our children?

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

Meet Four Difference Makers: Sean Richardson President & CEO, Northcoast 25 years of banking experience

RTA reignites downtown transit center idea By STAN BULLARD sbullard@crain.com

New grants and a new strategy have exhumed the Greater Cleveland Regional Transit Authority’s long-buried idea for a transit center west of Public Square in downtown Cleveland. Neighborhood opposition and lack of money vetoed the concept in 1998, when RTA proposed the transit center as part of what is now the Health Line bus-rapid project on Euclid Avenue. Essentially shortterm bus terminals, transit centers serve as places for buses to pull off the streets during long layovers and locations for passengers to switch buses under roof. The center would be a western counterpart to the Stephanie Tubbs Jones center that RTA is building near Cleveland State University on the eastern end of downtown.

Transit centers in other cities serve as parts of multiple-use projects that can include parking garages as well as residential, retail or office space. With such an idea in mind, the Northeast Ohio Areawide Coordinating Agency recently awarded RTA a $75,000 Transportation for Livable Communities Initiative grant to study potential sites and designs for the center in the Warehouse District. The nonprofit Downtown Cleveland Alliance also contributed $10,000. RTA and the Historic Warehouse District Development Corp. last month formed a committee to select a consultant to perform the study, said Maribeth Feke, RTA director of programming and planning, who also serves on the development corporation’s board. She said the study would establish a transit center plan that would spur economic activity on vacant or under-

utilized parcels in a manner consistent with the neighborhood. “We want to work with whatever works in the Warehouse District,” Ms. Feke said. Although RTA has no funds for the center, federal grants are available that prioritize projects promoting economic development. Councilman Joe Cimperman, whose Ward 3 includes downtown, said he wants to support the project, but much depends on how RTA incorporates neighborhood views. “From the 30,000-foot level, it’s great,” he said. “The devil is in the details.” Tom Yablonsky, executive director of the Historic Warehouse District and vice president of the Downtown Cleveland Alliance, said the plan could help a mixed-use project win financing in the difficult lending environment and incorporate designs of long-ago demolished buildings in the district. ■

LETTER

View: Refinement has value China policies continued from PAGE 10

be built at the ArcelorMittal steel mill, where there is available land. This location is ideal because the river’s current loses velocity here as it encounters a greater depth, dumping a large portion of sediment before it moves downstream and clogs the navigation channel. This portion of the river could also be dredged well below the depth necessary for navigation to, in effect, create a sediment trap. The overdredging, particularly in the fall, would be important to trap spring runoff and eliminate the need to dredge during the fish migration and spawning season. Once in operation, this scheme could either eliminate extensive dredging of downstream areas or permit dredging of the entire navigation channel to a depth of 27 feet. This would reduce the handling cost associated with the current practice of unloading up to 20% of bulk cargo at the river mouth before traveling upstream to the steel mill. Sediment dredged from the river would be spread over the 20-acre site to dry and then be screened to remove sand and gravel, which could be used commercially in the making of concrete, beach nourishment or other specialized fill needs. Material

high in organic content can be composted for mulch purposes. Most of the sediment will be finegrained, inorganic silt particles that can be utilized for landfill, brownfield cover, and when mixed with steel mill slag, for stream bank restoration. Recent inquires by the Corps of Engineers indicate that there are markets for such material. As markets grow, a state-of-the-art processing facility could be constructed utilizing dredging cranes mounted on existing rail tracks alongside the navigation channel. A dredged materials process facility for the New Jersey/New York Harbor demonstrates this concept can work and be financially sound. In Cleveland, such a facility could be up and running by 2014, precluding any future need for confined disposal facilities in the harbor. While this processing facility would entail a startup cost, it would certainly only be a fraction of the estimated $300 million cost to create a confined disposal facility in the lake. The processing facility would generate a return on the community’s investment. Implementation of this plan for the beneficial use of dredged material would be a tremendous step forward in a journey to revitalize our waterfront. ■

make global trade dicey ■ Can the New World Order and Liberty coexist? As we continue to increase our participation in international trade — or the New World Order, as George Bush Sr. made public in 1990 — we must evaluate how this affects our values as Americans. Our founding fathers promoted Liberty as being more important that wealth. Our largest trading partner, China, is a communist nation. Its federal government has a large stake in every business. Its citizens have very few liberties and some of the lowest wages in the world. Their government rules with an iron fist. We need to ask ourselves and our elected representatives if this is the kind of world we really want to build. In the short run, the profits from this cheap labor are very enticing, but are we sacrificing something much bigger in the long run? Dave Black Willoughby

216.802.6565

Jan Focke Senior Vice President, Commercial Banking Manager 25 years of banking experience 216.694.5683

Dwight Clark Senior Vice President, Business Development 32 years of banking experience 216.802.6518

Dan Waldeck Senior Vice President, Commercial Banking Team Leader 22 years of banking experience 216.802.6585

FirstMerit is proud to welcome these four market leaders to our commercial team. We take the “people” part of “businesspeople” very seriously. Adding these outstanding people will continue to put FirstMerit further from our competition and closer to our people.

firstme rit. co m

20100614-NEWS--12-NAT-CCI-CL_--

12

6/10/2010

1:32 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

LLC: Frank Legan to partner.

GOING PLACES

HEALTH CARE

JOB CHANGES

FINANCE

ARCHITECTURE

FIFTH THIRD PRIVATE BANK: James Schmitz to senior vice president, director, Investment Advisors Division.

THENDESIGN ARCHITECTURE: Michael E. Wellman to project manager.

EDUCATION KENT STATE UNIVERSITY: Greg Jarvie to vice president, Enrollment Management and Student Affairs; Richard E. Rubin to associate provost for extended education.

WWW.CRAINSCLEVELAND.COM

FIRSTMERIT CORP.: David A. DeMichael to senior vice president, commercial banking; Pat Rositani to vice president, business banker; Eric Stropkay to portfolio manager.

FINANCIAL SERVICE CEDAR BROOK FINANCIAL PARTNERS

AKRON CHILDREN’S HOSPITAL: Lisa Aurilio to vice president for patient services and chief nursing officer. CAMBRIDGE HOME HEALTH CARE: Brian Li to account representative. CARE ALLIANCE HEALTH CENTER: Lisa Thomas to chief operating officer. PARMA COMMUNITY GENERAL HOSPITAL: Dr. Steven Fulop to medical staff, Spine Center.

JUNE 14-20, 2010

SUMMA WESTERN RESERVE HOSPITAL: Jill Hiner to vice president, finance and CFO.

LEGAL BUCKLEY KING: Matthew Bradford to associate; Dianne V. Foley to practice leader, employment law practice.

Wellman

Jarvie

Rubin

Schmitz

Li

Bradford

Foley

Bonitz

DiMarco

GALLAGHER SHARP: Mark D. Thompson to associate.

MANUFACTURING PHILPOTT RUBBER CO.: Stacy Bonitz to corporate controller.

MARKETING DONER: Jennifer Deutsch to executive vice president and general manager, Cleveland; Beth Lazzaro to brand leader. HITCHCOCK FLEMING & ASSOCIATES INC.: Jason Kelly to team leader/account supervisor; Amy Weiser to media buyer/planner. TRIO CREATIVE DESIGN STUDIOS: Christine Gurgul to design assistant.

NONPROFIT KOINONIA HOMES INC.: Diane Beastrom to president, CEO; Jody Curry to vice president, institutional advancement and communications; Nancy Disbrow to vice president, human resources; Demetrius Hammett to vice president, programs and organizational learning; David Laubenthal to vice president, physical resources; Carol Morton to vice president, finance.

SERVICE CORPORATE UNITED: Katie Virtue to manager, category development.

BOARDS KOINONIA HOMES INC.: Ethan McPeake to chair, fund development committee.

Your doctors. Your hospitals. Health Insurance for Your Business. SummaCare’s network includes the doctors and hospitals your employees want to see. With SummaCare, your employees have access to more than 50 of the region’s finest hospitals, including the Cleveland Clinic Health System, University Hospitals and Summa Health System. Plus, our network includes nationwide coverage that follows your employees wherever they may reside or travel. To learn more about SummaCare, call your agent today or visit www.summacare.com.

AWARDS AMERICAN ADVERTISING FEDERATION CLEVELAND: Kayleigh Fitch (Sweeney) received the Rookie of the Year Award. AMERICAN SPINAL INJURY ASSOCIATION: Dr. Anthony F. DiMarco (MetroHealth Medical Center and Case Western Reserve University) received the Apple Award. BOY SCOUTS OF AMERICA: William Lloyd Garrison received the Silver Buffalo Award for Distinguished Service to Youth. CAMBRIA SUITES: Frank Crisafi and David Crisafi (Ceres Enterprises LLC) received the Premier Alliance Award. THE FULBRIGHT SCHOLAR PROGRAM: Sister Jacquelyn Gusdane (Notre Dame-Cathedral Latin School) received a Fullbright Scholar Award to Japan.

RETIREMENT ELIZA JENNINGS BOARD OF TRUSTEES: Margot Gilbert, after 40 years of service.

Send information for Going Places to dhillyer@crain.com.

20100614-NEWS--13-NAT-CCI-CL_--

6/10/2010

3:14 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

JUNE 14-20, 2010

13

SMALL BUSINESS

INSIDE

16 TAX TIPS: FIRMS RETHINK CLASSIFICATION AMID CHANGES.

ENERGY AUDITING FIELD POWERS UP Local firms find opportunity as businesses, homeowners look to be more efficient By CHUCK SODER csoder@crain.com

A

growing number of businesses want to help you scoop up what the head of the U.S. Department of Energy has described as fruit hanging so low it might as well be on the ground. Energy auditors working in the region say they have seen a big increase in interest in cutting energy usage, and many, such as Geauga County resident Mark Cannella and his colleagues at Pro Energy Consultants, are positioning themselves to meet that demand. Mr. Cannella has conducted home energy audits since the mid-1990s, but two years ago he and a few executives with expertise in franchising formed the company to train other auditors, selling them the rights to market themselves under the Pro Energy brand. See AUDIT Page 16

THEINTERVIEW ROBERT HATTA Vice president of entrepreneurial talent JumpStart

A

ccording to the June 2010 Small Business Economic Trends report from the National Federation of Independent Business, small businesses are starting to show some signs of optimism. Hatta As part of that attitude shift, 14% plan to create new jobs,

which translates to a seasonally adjusted net 1% of owners when taking into account those who plan to reduce employment levels. For those who are looking to hire, finding the right person can be a daunting and overwhelming experience. Robert Hatta, vice president of entrepreneurial talent for JumpStart, a nonprofit that invests in early stage companies in Northeast Ohio, recently took the time to answer questions

regarding hiring strategies. Q: Describe your current role at JumpStart. A: For context, nationally, the topperforming 1% of high-growth companies create about 40% of new jobs in any given year. And since 1980, all net new job creation has been generated by firms less than 5 years old! So it really matters to all Northeast Ohioans that we have startups in our region that have the innovative products, investment capital and talent needed to become these great companies —

creating lots of jobs along the way. These are the sort of companies we support at JumpStart. Along with a breakthrough innovation that has significant market potential, successful startups need money and a great team. I help with the great team part. I advise equitybacked, high-growth companies in Northeast Ohio on their talent strategies, then provide them with services and resources to help them execute those strategies. My goal is to help them save money, save time and increase the likelihood of successful hiring.

Q: How important is it to the success of a company to bring on the right employees with the right talent? A: An idea without execution is just a dream. So, along with money and a great idea, the right entrepreneurial talent is critically important. Moreover, the demands of rapidly transforming an idea into a sustainable, growing, profitable business that creates wealth for its founders, employees and investors requires a specific skill set. Getting the right See HATTA Page 14

20100614-NEWS--14-NAT-CCI-CL_--

6/10/2010

2:15 PM

Page 1

14 CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

SMALL BUSINESS NORTHEAST OHIO REGIONAL SEWER DISTRICT

SMALL BUSINESS ENTERPRISE PROGRAM

GRANDOPENINGS ERIE ENERGY CONSULTING GROUP LLC P.O. Box 770287 Lakewood 44070 www.kwhreduction.com Erie Energy Consulting Group was founded by Lee Krost and Christopher Balson. For commercial and government entities, Erie Energy provides energy audits of lighting and utility services, retrofit and new LED lighting products and solar photovoltaic systems. In any state with deregulated electric and gas, Erie Energy can offer competitive bids on utility services. Homeowners also may contact the firm regarding its solar photovoltaic system product line.

Here’s the sign you’re looking for. We’re expanding our small-business opportunities to provide economic benefits for the region and help local companies grow! If your company is a small construction or engineering company or a provider of goods or professional services, we invite you to apply for our SBE program.

216-543-0177 sales@kwhreduction.com

THE MCMANUS AGENCY 60 Public Square, Suite 109 Medina 44256 www.mcmanusagency.com The McManus Agency specializes in commercial insurance, including niche industries such as motor sports, aviation and long-haul trucking customers. It also specializes in clients with high-value homes, vehicles and umbrella limits, and it offers life and annuity products. Firm president Ryan McManus began his

Hatta continued from PAGE 13

APPLY & LEARN MORE at neorsd.org/sbe

talent is the difference between failure and success. Q: What’s the best way to go about finding the right talent for a

Cedar Point is the perfect place for a company outing! It’s affordable, and easy to plan too. We do all the work for you. So your only job is to have fun! No matter how big your group is, we can plan a fun-filled day for everyone. Plus, for Group Events we offer a wide variety of tasty meal options. And at Cedar Point, you only pay for members of your group that show up! There’s also the Good Any Day Program where employees can purchase a discounted park ticket to use any day all season long. You can even set this up online for free, and make things even easier. So pick something everyone will love and come to Cedar Point. Sandusky, OH Go to cedarpoint.com/groups for details and pricing info. Or call 1-800-448-2428.

career working for Benfield Group in Connecticut, and after moving back to Ohio, he engaged in retail insurance sales for Oswald Cos. His father, Roger McManus, is the firm’s director of operations, and he has more than 30 years in property and casualty insurance, having held various leadership positions at Westfield Insurance, including president and chief operating officer. Phone 330-723-7374 Fax 330-723-6494

OUTDOOR LIGHTING PERSPECTIVES OF NORTHERN OHIO P.O. Box 501 Chagrin Falls, OH 44022 www.OutdoorLights.com Outdoor Lighting Perspectives of Northern Ohio is owned and operated by Tim Bickett, and it is part of an international franchise network of outdoor lighting specialists. The company designs, installs and maintains outdoor lighting and holiday lighting systems for residential and commercial properties. Its energy efficient copper lighting fixtures are manufactured in Nashville, Tenn., and the company offers a full line of LED fixtures as well as a new lighting control automation system. Mr. Bickett previously owned and operated Bickett Property Development Company, a

company’s mission? A: Finding the right talent first requires that you know what you’re looking for. At JumpStart, we look for what we call “adaptive excellence.” Someone with “adaptive excellence” has the initiative to take on new challenges, adapts quickly, and achieves excellent results time after time. I talk more about adaptive excellence and provide tips on how to spot it on my blog at http://blog.jumpstartinc .org/index.php/archives/author /robert-hatta. Next, you need to understand the unique personal characteristics that define your company’s culture. In a startup, you’re spending 60-80 hours a week with a small team. Therefore, it’s critical that everyone share similar values (personal and professional) and vision. Finally, you need to determine the technical skills required to execute your strategic objectives. What is most important, however, is that you seek to find people that have the required technical skills and have adaptive excellence and fit into your company’s culture. Q: Is it best to match “person to job” or “job to person”? A: So long as you have a good understanding of the type of person you are looking for, it doesn’t matter if you match a person to a job or a job to the person. What’s important is that you are flexible and opportunistic when really talented entrepreneurs or specialists present themselves. And, if you’ve got an exciting and innovative company, that will happen a lot. Q: How does a company create a recruiting and hiring strategy? A: An effective hiring strategy starts with the strategic objectives of the

home renovation business. 440-686-1352

ELITE ATHLETE 8495 Mulberry Road Chesterland 44026 www.eliteathleteohio.com Elite Athlete is an integrated training facility, offering weight, speed and agility training to correlate to specific sports techniques. “There is a great demand by aspiring athletes — certainly of all ages, but especially teens who show great potential — to have access to very specific and focused training,” said Lisa LaBanc, owner of Elite Athlete and mother of two teen boys. In addition to sportsspecific offerings for football, basketball, baseball and hockey, Elite Athlete is offering a program based on NFL-style combines; various youth programs that focus on form, body awareness, speed and balance; personal weight training; coaching clinics; and boot camps. Phone 440-729-4400 Fax 440-729-4401 To submit a new business, send the following information by e-mail to Amy Ann Stoessel at astoessel@ crain.com: business name; address; city and ZIP; web site; brief description of business; business phone number; business fax number; business e-mail address; and date that business opened. Call 216-771-5155 with questions.

business. You also need to understand the funding necessary to execute against these milestones. Start budgeting for these costs now so that you can manage your existing cash or seek additional funding to support your future hiring needs. In the budgeting process, it’s critical to understand market compensation for top entrepreneurial talent. How much in cash, performance bonus and equity will you need to part with in order to attract the right talent? Is the skill set you’re looking for so unique that you’ll need to bring in an executive recruiter? With these questions answered and a clear profile of the type of person you are looking for, you will have a higher likelihood of a relatively quick and successful hiring process. Q: Should a business owner continually scope out prospective talent even when there are not current positions available? A: In the same way that it’s best to look for a new job before you need one, it’s best to look for talent before you have a pressing need. One of the most common issues we see is that entrepreneurs don’t set out to find talent until many months after the hiring need is clear. It then takes months to find the right person and a few more to get them up to speed. To be fair, entrepreneurs may not have the money to hire at that moment. However, entrepreneurs should identify their hiring needs early, understand the profile of the person you want in your business and start meeting talented people as an ongoing exercise. The good news is that there are a lot of talented people out there right now, hungry for an opportunity to help an entrepreneurial company grow quickly and succeed.

20100614-NEWS--15-NAT-CCI-CL_--

6/10/2010

1:32 PM

Page 1

JUNE 14-20, 2010

WWW.CRAINSCLEVELAND.COM

CRAIN’S CLEVELAND BUSINESS 15

SMALL BUSINESS

Treasurer must re-evaluate cash management

T

here is a change in the focus of cash management, in which the treasurer’s role has evolved into a strategic asset in an organization. The treasurer as a strategic asset means that the approach to cash management needs to be planned. Back-to-basics concepts are a core component of strategic cash management. Many companies have been conditioned to have cash inflows directly tied to cash outflows. However, treasurers need to look at these functions independently. Addressing these functions separately will help put treasury in a strong position in the years to come. The first step is to develop a goforward plan — a blueprint for an organization’s cash management strategy. With this plan, companies can evaluate payables, receivables and banking relationships. This process will afford companies a more effective approach to workingcapital management. Here are some actions your business can take: ■ Evaluating receivables: First, evaluate your business’ current client payment terms. Be cognizant of the payment terms in place since aging receivables have a significant impact on a firm’s success and its bottom line. Review current payment terms for each client. See if there are ways to incentivize for timely payments. Another option is to tighten the payment time frame and offer discounts to those clients who adhere to those terms. Some companies also offer trade discounts for customers who pay electronically. There are a variety of options, but it is critical to select one that will benefit your company the most. Also, survey your clients to get their perspective on what payment channel is best for them. Discuss the payment options that are available, and find one that is a win/win for both parties. Finally, evaluate your invoicing process. Consider the following: How do you invoice? How frequently do you invoice? What are your current payment terms? Can these be improved? Are you currently granting credit extensions? The answers to these questions will allow you to develop a receivables strategy that is all encompassing and ensures that the receivables process is efficient. ■ Evaluating payables: Take a moment to ask yourself these questions: Do you treat your clients in a better or worse manner than your suppliers treat you? Do you look to your payables problems and processes to provide guidance and improvements to your receivables process? Synergy between the receivables and payables processes is vital. One of the critical components of an efficient payables function is to have an understanding of vendor payment vehicles. Each vendor will vary with payment options, but make sure the ones selected are the most effective for your business. Next, look at the payment channels your suppliers have established. How can you ensure your vendors are receiving your payments on a timely basis? Do they only offer mail-in payments? If so, are these payments sitting in a lockbox? Is ACH a payment option? It is important to understand what channels currently

MATTHEWWYNER

ADVISER are available to you. During these conversations, learn where you sit on that company’s supply chain. You do not have to

be a multibillion dollar company to receive strong payment or trade terms. Sometimes, the most powerful companies are those that have a record of timely payments. Also examine how you are being invoiced. Is it mailed, and an electronic distribution method would be more effective? Detail how your company wishes to be invoiced and discuss with your vendors. By reviewing the invoicing process, you are providing them with the confidence that your payment will be made in a timely fashion, based on the agreed-upon terms and channels.

■ Evaluating bank relationships: As a result of the financial crisis, more businesses are taking a closer look at their current banking relationships. A strong financial institution is important to weathering any future financial storm that may arise. Companies should develop an evaluation process for selecting its bank. Items to analyze include: credit ratings reports, market capitalization, investment in technology, product offerings and capital ratios. Working with a bank in a strong position can help your business better position itself. Bankers can

offer options and solutions that meet your business’ needs. Discuss with them the cash management products and services available. If they cannot assist, ask them for suggestions of those who can. After coming out of this most recent financial crisis, we have learned that planning is crucial. The bottom line is to be consistent across the board. Use the same evaluation measures for your receivables and payments processes. If you do, you gain a complete picture of your cash management structure and solid positioning to move forward. ■ Mr. Wyner is senior vice president, business banking executive, Greater Cleveland District for KeyBank.

A SECOND OPINION SAVED US *

TIMES ARE TOUGH, BUT WE’RE STILL GOING, and a Citizens Bank Second Opinion helped us get there. After examining every aspect of our business, a Citizens Banker found ways we could save more money, be more efficient – for our business and personal accounts. Make time to meet with a Citizens Banker. To schedule your Citizens Bank Second Opinion, CALL 800-946-2264 or go online to CITIZENSBANKING.COM/OPINION.

* Results may vary depending on your business situation.

20100614-NEWS--16-NAT-CCI-CL_--

6/10/2010

1:31 PM

Page 1

16 CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

SMALL BUSINESS

Tax changes present challenges

T

he upcoming expiration of long-standing tax cuts, along with tax increases associated with the recent health care legislation, have triggered much discussion around an issue that has become significantly more complicated: What type of business entity will provide the business and its owners with the lowest aggregate tax bill? Advisers often have recommended that a new business be set up as a limited liability company. This has been good advice — LLCs, along with partnerships and S corporations, offer a high degree of tax efficiency, in large part because there is no tax paid at the business level. Instead, the income of the business and the tax bill resulting from that income is passed through to the owners. The tax rates on owners are, however, going up. Beginning in 2011, the highest marginal tax rates for individuals in all likelihood will be over 40% after taking into account the phaseout of certain deductions. Owners of limited liability companies, partnerships and S corporations certainly will see higher tax bills next year if their income is at the higher levels. These increases have not (yet) been proposed for corporations, leading some owners to consider terminating the S corporation elections for their business, or, for businesses operated as LLCs or partnerships, converting to a corporation. The termination of an S corporation election and the conversion of an LLC or partnership to a corporation are generally tax-free events. After such conversion, the business, at certain income levels, might be subject to tax rates that are signifi-

CARLGRASSI

TAX TIPS cantly lower than if the business had remained an LLC or S corporation. This rate differential, however, only favors a corporation if profits are not distributed as dividends. If a business generates sufficient cash flow to pay dividends, a corporation likely will continue to be the least tax efficient way of doing business. Without any sort of legislative action, beginning in 2011, dividends will be taxed at ordinary income rates. This could mean that income distributed from a corporation would be subject to two levels of tax with both levels approaching or exceeding a 40% rate. In addition to these increases, the benefits of the recent health care legislation were funded in part with a Medicare tax of 3.8% imposed on investment income, including dividends, of people earning more than $250,000 (for couples filing jointly). This problem is compounded when a business owner sells the corporation in an asset sale, in which case both the corporation and the shareholder recognize separate levels of gain. Although a sale of stock will eliminate the corporate-level tax on the transaction, recent health care legislation provides that the gain on

the sale of corporate stock is subject to the additional Medicare tax. The sale of equity of a partnership or S corporation is not subject to this tax. So what is a business owner to do? The key factors in being prepared for future changes in the tax rules include the ability of the business owner to accurately forecast the performance of the business and maintain as much flexibility as possible. Accurate forecasting means determining what is likely to happen with the business over time. If the owner can determine with confidence that the business will generate significant cash flows and the business owner intends to keep the company for the foreseeable future, eliminating the entity-level tax by operating the business as a LLC or S corporation would be an attractive option. If the business plan is to reinvest the profits back into the business to facilitate growth and sell the company stock in five years, the lower corporate rates start to look attractive. Converting a corporation back to an LLC or partnership is taxed as though the corporation sold all of its assets at fair value and distributed the proceeds to its owners — a potentially significant taxable event. Entrepreneurs establishing a business entity may still be better off setting up the new business as an LLC. If individual rates do in fact exceed corporate rates and it appears that this tax structure will be in place for some time, a conversion to a corporation can be done to take advantage of the lower rates. ■ Mr. Grassi is a member and president of McDonald Hopkins LLC.

Audit: Field may grow as more people economize continued from PAGE 13

Since then, they’ve sold 59 Pro Energy franchises in 30 states, including one in Summit County. They expect to bring a Medina County franchise on board soon. Energy auditing, he said, is an “emerging market” that could grow even faster should the federal government pass the Home Star Energy Retrofit Act. The “cash for caulkers” bill, which passed the U.S. House of Representatives by a 246-161 vote on May 6, would give homeowners a 50% rebate on energy efficiency improvements to their homes, capped at $3,000. Those who conduct an audit and implement a large number of improvements can get up to $8,000.

ately busy,” but Mr. Smith said he expects demand for audits to keep growing. He noted how Congress over the past year has been talking about implementing a “cap and trade” program that would set a national limit on carbon emissions produced by manufacturers and utility companies and would force big polluters to buy credits from other companies if they cannot cut their emissions. “Cap and trade, whatever comes to pass, is not going to lower electric rates in all probability,” Mr. Smith said. Al Tibbs, owner of C.L.I. Group LLC in Eastlake, which provides energy audits for homeowners and businesses, said he’s seen a growing

“We knew there was going to be a need ... for energy efficiencies.” – Chris Balson founder, Erie Energy Consulting Group LLC Interest in energy efficiency already is growing among consumers, businesses and government agencies, several auditors said. The Home Star bill, however, would provide another big boost to the industry, Mr. Cannella noted. “It would be the biggest energy efficiency program yet,” he said.

Getting into the game Chris Balson and Lee Krost formed the Erie Energy Consulting Group LLC about a year ago and started selling their consulting services to businesses in January. Forming the Northeast Ohio company was a big departure for the two men: They both used to work for AT&T, but now they analyze businesses’ utility bills and help them replace lights used in warehouses, factories and parking lots with more efficient light-emitting diodes. They soon plan to start helping businesses and residences install solar panels. In addition to simply wanting to start their own business, Messrs. Balson and Krost wanted to get into the energy auditing industry because they saw growing demand. “We knew there was going to be a need … for energy efficiencies,” Mr. Balson said. GreenStreet Solutions of Oakwood Village is relatively new, too. Retail natural gas provider Vectren Source, part of Evansville, Ind.-based Vectren Corp., formed the provider of home energy auditing services in October 2009 to capitalize on the growing interest in cutting energy costs and carbon emissions, said Sean Smith, GreenStreet general manager. They located the company in Northeast Ohio because of the cold weather and the desire to give it independence from its parent company, Mr. Smith said. GreenStreet’s six auditors and technicians use some techniques common to home energy audits. For instance, they hang a fan in a home’s entrance to blow air out of the house, which allows them to determine how well insulated a home is, and they use infrared cameras to figure out where air is getting in, in addition to other techniques. The company has been “moder-

number of companies getting into energy auditing and an increased interest in energy efficiency. The recession, however, has made people hesitant to pay for big home improvements, and the credit crunch has made it more difficult to get loans for such projects, Mr. Tibbs said. “People don’t want to spend the money to do it,” he said.

Power plays Larry Zarker, CEO of the Building Performance Institute in Malta, N.Y., said he’s worried that consumer demand for audits might not be keeping pace with the number of people entering the field. For instance, the organization in 2009 certified 4,647 home energy auditors and other experts in home energy use, up from 1,353 in 2008. The Home Star legislation could boost demand, though, he added. Regardless, energy efficiency projects are good for the country, Mr. Zarker said: They create jobs, help people save money and reduce pollution. “Secretary (Steven) Chu at the Department of Energy said this isn’t low-hanging fruit; this is fruit lying on the ground,” said Mr. Zarker, playing off the energy administrator’s quote. Membership in the Association of Energy Engineers in Atlanta, which certifies residential and business auditors and other energy experts, grew to 12,000 from 8,000 over the past 18 months, said executive director Albert Thumann. However, Mr. Thumann is more optimistic than Mr. Zarker about demand for auditors. Government agencies increasingly are requiring that buildings be audited; businesses are more interested in retrofitting existing buildings to meet the U.S. Green Building Council’s Leadership in Energy and Environmental Design standards; and the number of government incentives for consumers to make their homes more efficient is growing, Mr. Thumann said. “In the next five years we’re not going to have enough qualified people to do what has to be done,” he said. ■

20100614-NEWS--17-NAT-CCI-CL_--

6/11/2010

10:23 AM

Page 1

JUNE 14-20, 2010

CRAIN’S CLEVELAND BUSINESS 17

WWW.CRAINSCLEVELAND.COM

SMALL BUSINESS

Newbury ID jewelry maker makes name for itself Bonitas International’s revenue accelerates as product demand grows By KATHY AMES CARR kcarr@crain.com

A

Newbury-based business that enables women to dress up their employee IDs and conference credentials with beaded jewelry has become a decorated operation in its own way. Bonitas International continues to bolster sales and staff despite a tough economy, and it projects growth to continue as demand increases for its line of products that substitute the drab shoelace holder or metal clip to which an ID is attached. “There’s a significant market out there for these products,� said Kimberly Martinez, CEO and cofounder of the firm started in 2003. Further, the company each year since 2006 has earned recognition from American Express and a nonprofit supporter of women entrepreneurs for its status as a womanowned entity that earns at least $1 million in revenue. The idea for the business that creates jewelry to accessorize ID badges stems from a 2002 party that Ms. Martinez attended with her sister-in-law, Lisa Harrington. Ms. Martinez that year had lost her job in the travel industry following the Sept. 11, 2001, terrorist attacks, but she saw the time as an opportunity to initiate her own business venture. When she thought of her sister-inlaw’s talents making jewelry, the idea clicked into expanding the business beyond a home-based operation. “I was high on Christmas cookies,� Ms. Martinez said. “I wrote the business plan on the back of a holiday card envelope.� Seven years later, with Ms. Harrington as the lead designer, Bonitas is on track to post revenues of $4 million this year, which would be a 48% increase in revenue from the $2.7 million it earned in 2009.

Bonitas, which outsources production, is working to expand its product line and broaden its supplier base; the company also designs eyeglass beads. Bonitas’ flagship BooJee Beads line includes fashion lanyards, beaded ID necklaces and retractable badge reel jewelry. The accessories are sold online and at more than 4,000 retail stores.

Ms. Martinez said she is working on introducing the products — which on average cost $10 to $15 — into drug store and office supply chains. Meanwhile, the company in 2009 added three staff members — bringing to 15 the current number of employees PHOTO PROVIDED — after it became Geauga County’s first recipient of about $18,000 in federal stimulus funds for new hires, said Tom

McGuinness, One-Stop manager of the Geauga Ashtabula Portage Partnership, which administers the federal Workforce Investment program for the three counties. Based on recent growth and new opportunities, Ms. Martinez said her goal in five years is to be a $35 million company, a target Mr. McGuinness said seems achievable. The firm in 2006 also was included as part of “Make Mine a Million $ Business,� an initiative through American Express Open and Count Me In for Women’s Economic Independence that is committed to helping post-startup women entre-

preneurs grow million-dollar firms. Bonitas reached $1.78 million in sales the following year and currently is among 38 other companies to have received the award since then. According to the Center for Women’s Business Research, 28.2% of U.S. businesses are owned by women, but only 3% of womenowned firms have revenues of $1 million. “Let’s be frank — when you start your business, your family and friends have to say they believe in you and your dream,â€? Ms. Martinez said. “To have our potential recognized and celebrated by a company like (American Express) Open only served to fuel our beliefs that we could make the million-dollar dream happen.â€? â–

'REATüTHINGSüHAPPENüWHENüü YOUüMEETüATüAü&AIRMONT For more than a century, Fairmont Hotels & Resorts has brought people face to face for legendary meetings in unforgettable settings. Whether you’re looking to make history or simply to offer your clients an unrivaled experience, trust Fairmont to deliver seamless service, state-of-the-art meeting spaces and top value—making your work that much easier. &ORüMOREüINFORMATION üPLEASEüCALLü ü ü ü üü E MAILüCRAINS FRHI COMüORüVISITüFAIRMONT COM

IN BRIEF ■THE WORLD IS THEIR OYSTER: InterChez Logistics Systems Inc., a third-party logistics firm, has relocated within Stow, purchasing a 10,000-square-foot building to house its operation, which also includes InterChez Global Services Inc. and InterChez Translation Services. InterChez Logistics Systems and InterChez Global Services Inc. assist businesses in shipping, receiving, tracking, planning and processing freight within North America and worldwide. InterChez Translation Services helps customers communicate in more than 100 languages. ■GOING FOR RIDE: Chagrin Falls resident Dan Matsko recently acquired the Greater Cleveland territory of Chauffeurs4hire from Mark Bagnoli, founder of the firm out of Youngstown. Chauffeurs4hire is a mobile concierge service in Lake, Geauga, Cuyahoga and Lorain counties, providing 24-hour transportation by a chauffeur in one’s own car.

ov e r a c e n t u ry o f l e g e n da ry m e e t in g s

World War II Conferences of the Allies at Fairmont Le Château Frontenac, QuĂŠbec, 1943–1944

Drafting the United Nations Charter at The Fairmont San Francisco, 1945

John Lennon and Yoko Ono’s Bed-in for Peace at Fairmont The Queen Elizabeth, MontrÊal, 1969

G7 International Economic Summit at Fairmont Le Château Montebello, QuÊbec, 1981

Photo: The Plaza, A Fairmont Managed Hotel, New York

20100614-NEWS--18-NAT-CCI-CL_--

18

6/11/2010

10:17 AM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

LARGEST PRIVATELY HELD COMPANIES RANKED BY ESTIMATED 2009 REVENUES

Company Address Rank Phone/Web site

Estimated revenue (millions) 2009

2008

Number of local employees

Year founded

Type of business

Top executive

1

Aleris International Inc. 25825 Science Park Drive, Suite 400, Beachwood 44122 (216) 910-3400/www.aleris.com

$3,000.0

$5,900.0

300

2004

Aluminum rolled products and extrusions, aluminum recycling and specification alloy production

Steven J. Demetriou chairman, CEO

2

Medical Mutual of Ohio 2060 E. Ninth St., Cleveland 44115 (216) 687-7000/www.medmutual.com

$2,000.0

$2,000.0

1,969

1934

Health insurance

Richard A. Chiricosta president, CEO

3

Westfield Group One Park Circle, Westfield Center 44251 (330) 887-0101/www.westfieldgrp.com

$1,444.0

$1,640.0

1,415

1848

Insurance, banking and related financial services

Robert J. Joyce chairman, CEO, Westfield Group Leader

4

Swagelok Co. 29500 Solon Road, Solon 44139 (440) 248-4600/www.swagelok.com

$1,300.0

$1,300.0

3,600

1947

Designer and manufacturer of advanced fluid system products

Arthur F. Anton president, CEO

5

Safeguard Properties LLC 7887 Safeguard Circle, Valley View 44125 (216) 739-2900/www.safeguardproperties.com

$602.3

$410.8

796

1990

Mortage field services company

Alan Jaffa CEO

6

The Carter Lumber Co. 601 Tallmadge Road, Kent 44240 (330) 673-6100/www.carterlumber.com

$583.0

$628.0

451

1932

Building materials retailer

Neil Sackett president, CEO

7

The Davey Tree Expert Co. 1500 N. Mantua St., Kent 44240 (330) 673-9511/www.davey.com

$562.1

$595.8

534

1880

Tree services, grounds maintenance, and consulting services for the residential, utility, commercial, and government markets

Karl J. Warnke chairman, president, CEO

8

Edgepark Medical Supplies 1810 Summit Commerce Park, Twinsburg 44087 (330) 963-6996/www.edgepark.com

$562.0

$479.6

947

1928

Home delivery of specialty medical supplies

Ron M. Harrington president, CEO

9

Squire, Sanders & Dempsey LLP 127 Public Square, Suite 4900, Cleveland 44114 (216) 479-8500/www.ssd.com

$540.0

$580.0

378

1890

Global legal service provider

Frederick R. Nance, regional managing partner; David Goodman, Cleveland managing partner

10

Discount Drug Mart Inc. 211 Commerce Drive, Medina 44256 (330) 725-2340/www.discount-drugmart.com

$530.6

$551.7

1,585

1968

Retail drugstore, mail-order pharmacy

Parviz Boodjeh chairman

11

Bendix Commercial Vehicle Systems LLC 901 Cleveland St., Elyria 44035 (440) 329-9000/www.bendix.com

$520.0

$650.0

408

1930

Leading developer and supplier of active-vehicle J. McAleese safety technologies, air brake charging and control Joseph president, CEO systems and components

12

Transtar Holding Co. 7350 Young Drive, Walton Hills 44146 (440) 232-5100/www.transtar1.com

$450.0

$450.0

200

1975

Manufactures and distributes automotive transmissions, transmission replacement parts, refinishing products, coatings

Gregory W. Gyllstrom president, CEO

13

Fred W. Albrecht Grocery Co. 2700 Gilchrist Road, Akron 44305 (330) 733-2263/www.acmestores.com

$400.0

$400.0

1,435

1891

Retail grocery and pharmacy stores

Steve Albrecht president

FIND OUT WHY YOU DESERVE PLANTE & MORAN for your accounting, tax, and business consulting needs. Visit yes.plantemoran.com Dan Hursh, Partner, 216.274.6519

14

Fairmount Minerals 11833 Ravenna Road, Chardon 44024 (440) 285-3132/www.fairmountminerals.com

$398.7

$526.2

572

1986

Headquartered in Chardon, one of the largest industrial sand producers in the United States

Charles D. Fowler, president, CEO William E. Conway, chairman

15

Ohio CAT 3993 E. Royalton Road, Broadview Heights 44147 (440) 526-6200/www.ohiocat.com

$365.0

$462.0

740

1945

Caterpillar engine and equipment distributor, Ohio, Northern Kentucky and Southeastern Indiana

Kenneth E. Taylor president

16

Majestic Steel USA Inc. 31099 Chagrin Blvd., Suite 150, Cleveland 44124 (440) 786-2666/www.majesticsteel.com

$354.0

$537.0

200

1979

National distributor of prime galvanized steel coils and sheets

Dennis Leebow president, CEO

17

Baker Hostetler 1900 E. Ninth St., Suite 3200, Cleveland 44114 (216) 621-0200/www.bakerlaw.com

$330.0

$319.0

424

1916

Legal services

R. Steven Kestner, national executive partner; Hewitt B. Shaw, Cleveland office managing partner

18

Anderson-DuBose Co. 6575 Davis Industrial Pkwy., Solon 44139 (440) 248-8800/www.anderson-dubose.com

$329.0

$323.0

100

1991

Distribution of food, paper and beverage products

Warren E. Anderson president

19

Cleveland Construction Inc. 8620 Tyler Blvd., Mentor 44060 (440) 255-8000/www.clevelandconstruction.com

$307.5

$337.5

802

1980

Commercial building contractor

Jon D. Small president

20

Cleveland Browns(1) 76 Lou Groza Blvd., Berea 44017 (440) 891-5000/www.clevelandbrowns.com

$235.0

$220.0

NA

1946

Professional football team

Randolph P. Lerner owner

21

Garland Industries Inc. 3800 E. 91st St., Cleveland 44105 (216) 641-7500/www.garlandco.com

$229.3

$198.5

508

1895

Manufactures roofing, flooring, coatings, sealants and maintenance systems for commercial, industrial and institutional buildings

David Sokol president, COO

22

Dave's Supermarkets 5300 Richmond Road, Bedford Heights 44146 (216) 763-3200/www.davesmarkets.com

$228.2

$228.5

962

1935

Supermarkets

Daniel Saltzman president

23

Donley's Inc. 5430 Warner Road, Cleveland 44125 (216) 524-6800/www.donleyinc.com

$204.0

NA

160

1892

Design/builder, construction manager and general contractor, self-performs concrete construction

Malcolm M. Donley president, CEO

24

Thompson Hine LLP 127 Public Square, Suite 3900, Cleveland 44114 (216) 566-5500/www.thompsonhine.com

$183.1

$196.5

342

1911

Legal services

April Miller Boise, partner-in-charge David J. Hooker, managing partner

25

The Ruhlin Co. 6931 Ridge Road, Sharon Center 44274 (330) 239-2800/www.ruhlin.com

$181.4

$136.8

160

1915

Building, industrial and heavy civil construction and James L. Ruhlin construction management services president, CEO

26

Famous Enterprises Inc. 109 N. Union St., Akron 44304 (330) 762-9621/www.famous-supply.com

$178.0

$229.0

300

1933

Distributor of HVAC, plumbing, PVF, industrial, building products and training

Marc Blaushild president, CEO

27

InfoCision Management Corp. 325 Springside Drive, Akron 44333 (330) 668-1400/www.infocision.com

$172.2

$173.0

2,290

1982

Contact center solutions for Fortune 100 companies and smaller businesses. Inbound and outbound marketing for nonprofit, religious and political organizations

Carl Albright president, CEO

20100614-NEWS--19-NAT-CCI-CL_--

6/11/2010

10:16 AM

Page 1

JUNE 14-20, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Estimated revenue (millions)

Company Address Rank Phone/Web site

2009

2008

Number of local employees

Year founded

Type of business

Top executive

19

28

Cleveland Indians Baseball Co.(2) 2401 Ontario St., Cleveland 44115 (216) 420-4487/www.indians.com

$170.0

$181.0

166

1901

Professional baseball team

Lawrence J. Dolan owner, CEO

29

Cavaliers Operating Co. LLC(3) 1 Center Court, Cleveland 44115 (216) 420-2000/www.nba.com/cavaliers

$159.0

$159.0

350

1970

Professional basketball team

Daniel Gilbert owner

30

Family Heritage Life Insurance Co. of America 6001 E. Royalton Road, Suite 200, Broadview Heights 44147 (440) 922-5200/www.familyheritagelife.com

$152.2

$138.3

93

1989

Provider of life and supplemental health insurance

Howard L. Lewis president, CEO

31

The Millcraft Paper Co. 6800 Grant Ave., Cleveland 44105 (216) 441-5500/www.millcraft.com

$150.0

$180.0

66

1920

Wholesale distribution and conversion of fine paper Katherine M. Mlakar and paper board chairman

32

State Industrial Products Corp. 3100 Hamilton Ave., Cleveland 44114 (216) 861-7114/www.stateindustrial.com

$125.0

$122.4

285

1911

Manufactures and distributes specialty chemicals, cleaning solutions, equipment, maintenance products

33

K & D Group Inc. 4420 Sherwin Drive, Willoughby 44094 (440) 946-3600/www.thekdgroup.com

$115.0

$110.0

410

1984

Owns and manages 12,000 apartments throughout Karen M. Harrison-Paganini, president Greater Cleveland, Akron and Canton Douglas E. Price, CEO

34

AdvizeX Technologies LLC 6480 Rockside Woods Blvd. S., Suite 190, Independence 44131 (216) 901-1818/www.advizex.com

$114.0

$118.0

39

1975

Information technology provider of e-services, mission critical, enterprise management solutions

Alfred A. Traversi president, CEO

35

Fortney & Weygandt Inc. 31269 Bradley Road, North Olmsted 44070 (440) 716-4000/www.fortneyweygandt.com

$113.2

$136.8

170

1978

National account general contractor, serving commercial, retail, hospitality, institutional and multi-family markets

Robert L. Fortney president

36

Panzica Construction Co. 739 Beta Drive, Mayfield Village 44143 (440) 442-4300/www.panzica.com

$106.1

$110.0

100

1956

General contractor, construction management, design/build

Anthony M. Panzica president, CEO

37

Stevens Engineers & Constructors Inc.(4) 7850 Freeway Circle, Suite 100, Middleburg Heights 44130 (440) 234-7888/http://stevensec.com

$104.5

$162.2

127

1970

General contractor, heavy industrial engineering and construction management services

Thomas A Snyder chairman

38

NACSCORP 528 E. Lorain St., Oberlin 44074 (440) 775-7777/www.nacscorp.com

$100.9

$90.7

95

1963

Distributor of books and general merchandise products to collegiate retailers

Kurt Schoen president, COO

39

Apple American Group 6200 Oak Tree Blvd., Suite 250, Cleveland 44131 (216) 525-2775/www.appleamerican.com

$95.3

$99.1

2,462

2001

Casual dining

Bob Durrin market president

40

Wolff Bros. Supply Inc. 6078 Wolff Road, Medina 44256 (330) 725-3451/www.wolffbros.com

$77.8

$96.6

232

1965

Wholesale electrical, plumbing, HVAC, lighting and cabinetry

Howard E. Wolff president, CEO

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Revenue from Forbes, NFL Team Valuations, Sept. 2, 2009. (2) Revenue number from Forbes, The Business of Baseball, April 7, 2010. (3) Revenue number is from Forbes, NBA Team Valuations, Dec. 9, 2009. Employee number is for Cavaliers Holdings LLC. (4) Previously Stevens Painton Corp.

Harold Uhrman CEO

RESEARCHED BY Deborah W. Hillyer

Committed to Helping Our Clients Attain Their Goals Real Estate/Construction John Funk, Director of Real Estate Practice

Property is as unique as its owner. Our clients benefit from our depth of industry knowledge and our commitment to offering personalized attention and insightful solutions. The knowledge of a trusted advisor can make the difference between a strong or shaky foundation. The Maloney + Novotny Real Estate Practice combines a wealth of experience with a passion for understanding the ever-changing landscape involved in property development, ownership and management.

210 attorneys • 40 areas of practice • 12 offices ralaw.com

Roetzel & Andress’ entrepreneurial philosophy encourages our attorneys to understand our clients’ businesses, embrace their goals and recommend innovative approaches to achieve those goals. With over 130 years of experience, Roetzel & Andress offers sound legal counsel to a broad spectrum of clients locally, regionally and internationally. We partner with our clients to serve as trusted advisors and extensions of their management teams.

A

+ Business Advisors and Certified Public Accountants

+ Cleveland 216.363.0100 Canton 330.966.9400 Elyria 440.323.3200 maloneynovotny.com

L E G A L

P R O F E S S I O N A L

A S S O C I A T I O N

One Cleveland Center, Ninth Floor • 1375 East Ninth Street • Cleveland, OH 44114 • 216.623.0150 222 South Main Street • Akron, OH 44308 • 330.376.2700 Akron Cincinnati Cleveland Columbus Fort Lauderdale Fort Myers Naples New York Orlando Tallahassee Toledo Washington, D.C.

For daily on-line updates, sign up @ CrainsCleveland.com/Daily

20100614-NEWS--20-NAT-CCI-CL_--

20

6/11/2010

2:01 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 14-20, 2010

Land: Price cuts reflect abundance of available land continued from PAGE 1

keep one parcel for themselves. “We’ll build a ranch home there when we want to downsize,” she said. “It kills my husband that this site has rolling terrain, a pond and beautiful trees, while our home is on a flat farm field where we’ve spent $20,000 planting trees.”

Cash is king The sale reflects the condition of the market, according to Cliff West, a vice president of the Colliers Ostendorf-Morris brokerage who handled the transaction. “Usually I sell to developers or municipalities, even a year and a half ago,” Mr. West said. “Now it’s individuals who can pay cash. Individuals will buy residential land because they can use it, while you cannot market commercial land to them.” Mr. West said he is seeing land going for prices lower than he has ever seen before — what he calls depression rates. “I tell anyone who has land that they should not sell now unless

they have to,” Mr. West said. But oftentimes, they must sell — to raise cash for bills or to try to avoid defaulting on a loan. He estimates residential land is 20% to 40% off its peak from 2005, a range others echo. Gary Stouffer, the owner of Stouffer Realty in Fairlawn who has had a sideline of brokering land for builders for years, is agog over how low residential land prices have become. Here is how one of Mr. Stouffer’s agents advertises 88 acres in Medina County’s York Township: “Great property for development. In area of new developments. Priced to sell. You will never find such an outstanding value.” The asking price for that site is about $427,000 — half of what it was five years ago, before the housing market plummeted, Mr. Stouffer said. The property is so attractive that Mr. Stouffer said he hopes he can find a partner with the cash to buy it. With a silent investor, he bought 50 lots earlier this year at a stalled

IT: Companies less restrained about spending for upgrades continued from PAGE 1

the start of the year, IT sales among their Northeast Ohio clients for the most part have been up. Sales in the technology division at business services firm Skoda Minotti are up by a double-digit percentage so far this year compared with the like period last year, said Jeff Beller, IT and telecommunications consultant for the Mayfield Village firm. Though it is typical for the division to grow, Mr. Beller said much of the sales increase was due to a greater willingness to spend among Skoda Minotti’s clients, most of which are in Northeast Ohio. But most companies are “still a little cautious,” he said. “They’re not buying the Cadillac. They’re getting the Chevy, because that’s all they need,” he said.

‘Signs of life’ Brad Nellis, president of the Northeast Ohio Software Association, said he’s not yet ready to report that IT spending on the whole is on the increase, noting how executives of a software company he talked with last week told him they’ve lined up lots of potential clients that are interested but are hesitant to make purchases. However, Mr. Nellis noted that nine of the 11 people who have responded so far to the organization’s first-quarter economic survey, which the group only recently sent out, have said that the first quarter was “better” or “much better” than the previous quarter and the first quarter of 2009. “There’re definitely some signs of life,” Mr. Nellis said. Ted Wallingford, co-founder and lead consultant of Best Technology Strategy LLC in Elyria, said he’s been selling more equipment in the region over the past several months, though he’s yet to see much of a pickup in interest in consulting services. The equipment demand is partly because Microsoft in October released Windows 7 and has stopped servicing some older operating systems. Some of the demand, however, can be

attributed to the economy — and because companies can’t put off upgrades forever, Mr. Wallingford said. “People held off on them so long that you’re starting to see failures — physical breakdowns,” he said. A few Northeast Ohio companies and institutions confirmed that IT spending has started to return to normal at their organizations. Transfer Express Inc. in Mentor, which makes printed products for clothing manufacturers, this year is going forward with a $40,000 disaster recovery project it delayed because of the downturn, said Bob Brooks, chief information officer for Transfer Express. The project amounted to about 10% of the company’s 2009 IT budget, he said.

Staffing starts a turnaround Hiring in the IT department at University Hospitals Health System has picked up after slowing down in 2009, said Mary Alice Annecharico, senior vice president and chief information officer. Some discretionary projects at UH were spared last year, however, because the hospital system saved money by bringing its IT staff in-house in January 2009. “That was during a part of the recession when we really needed to preserve cash,” Ms. Annecharico said. The mood regarding IT spending at Electronic Merchant Systems of Independence “was pretty conservative” in 2009 but is returning to normal, said Leslie Pochaukas, the company’s chief information officer. IT staffing was one area the company cut. “We’re in the process of adding the first person we’ve added in three years, probably,” Ms. Pochaukas said. Other companies in Northeast Ohio have started buying more hardware again, said Jason Taylor, president of MCPc’s Great Lakes region, which has a heavy concentration of customers in northern Ohio. MCPc’s sales in the Great Lakes region were down in 2009, but sales have grown in 2010, Mr. Taylor said. ■

“The small, regional builders are out of the market. They will only buy when they have a presale or will send their client to buy it.” – Ryan Sommers, operator, sublotsforsale.com Brimfield Township home development for about $1 million; he estimates the property would have cost $3 million five years ago. Although he trimmed the asking price for individual lots to $40,000 from $60,000, he has only sold one. “Even with a discount,” Mr. Stouffer said, “it’s not selling like hotcakes.” Ryan Sommers, an accountant in Concord who operates a web site called sublotsforsale.com, said he used to sell lots in subdivisions he was involved in to builders. Now, however, he primarily is handling sites for banks that have repossessed them or partnerships that are in turmoil and need to unload land.

“The small, regional builders are out of the market,” Mr. Sommers said. “They will only buy when they have a presale or will send their client to buy it.” The closer that lots are to established areas, he said, the more they retain their value.

Deals of a lifetime Industrial land, due to scarcity and the ability of manufacturers to obtain bank financing, has maintained its value. Otherwise, experts say, asking prices for office and retail land are sliding. Even parcels that commercial developers once drooled and dueled over are seeing big cuts in prices. For example, CB Richard Ellis recently began marketing 33 acres in Independence that its brokers describe as “priced to sell” at $112,000 per acre. The land last sold for $285,000 an acre seven years ago. David Browning, managing director of CB’s Cleveland office, said the price cuts reflect the availability of what he estimates is a 20-year supply of office-zoned land near the Rock-

side Road office market, which has seen little building for years. Duke Realty Corp., the Indianapolis-based real estate developer, has been offering the site for sale as part of its five-year quest to exit the Cleveland market. Mr. Browning said the real estate market is so thin, pricing for each offering often depends on “the story” behind it — from location to the strength or motive of the seller. However, the downturn gives some once-in-a-lifetime opportunities. A Madison Village couple recently bought an empty home site next door to their home for $20,000 — half of what the prior owner, whose dreams of a new home came to naught, paid in 2004. “In 2005, when we moved in, I looked at the trees on the lot next door and said, ‘Boy, that would be cool to have.’ But the builder of our subdivision was selling lots at $60,000 apiece,” said the Madison man, who asked not to be identified. “Now we’ve protected our investment and our privacy — at no economic risk.” ■

Water: Tech outfit eyes new market mixed under the right conditions. The machine can process a max“They’re already discussing how to imum of 100 gallons of liquid per scale it up, or alternatively to build 10 minute, which is just a fraction of or 12 of them,” said Mr. Spoonamore, what other machines at the field in who did not disclose the value of the Galveston can process. lease agreement. However, Mr. SpoonThe machine originally amore said he believes ABwas designed to purify SMaterials’ machine will water pulled from oil and gas prove particularly effective wells by using Osorb, a glassbecause of Osorb, which like material that absorbs was developed by chief sciall sorts of compounds. ence officer Paul Edmiston, Because of the Deepwater who also is an associate Horizon incident, the comSpoonamore professor of chemistry at pany had to push back the college of Wooster. agreements it had with, ironically, BP, “Our material appears to do it and three other customers that better than what’s out there,” Mr. intend to try out the machine on Spoonamore said. “produced water” from a few of their The company, founded in 2008, wells. still expects that its biggest target For this incident, however, the market will be the treatment of company decided to alter the maproduced water from oil and natural chine so that it also could pull oil gas wells. It also is targeting the from the hard-to-break emulsions, surface water treatment market as which form as oil and water are

continued from PAGE 3

well as other uses for the technology. Using Osorb to break down emulsions would be a new market for ABSMaterials, and Mr. Spoonamore said he expects that usage to lead to more business for the company. “We probably will have other people ask us about breaking emulsions,” he said. The company last March raised $2.5 million from the North Coast Angel Fund, venture development group JumpStart Inc., strategic partner Fontz Drilling Inc. in Wooster, a New York venture capital firm and various individuals. It is using the money to expand research and development, production, marketing and sales. That same month, it opened a twoperson Houston sales office to target customers in the oil and gas industry, but Mr. Spoonamore said the company is committed to staying in Northeast Ohio. ■

SID: Commercial projects likely to take priority continued from PAGE 3

Headen, a Cleveland partner with the Columbus-based Bricker & Eckler law firm, which helped the legislature craft SID legislation. “Using the same financing available to government, you’re able to aggregate these projects to a sufficient size that you’re able to issue a bond,” Mr. Headen said. In addition, Mr. Headen said, homeowners, businesses and other property owners may be eligible for state and federal tax credits — and even rebates — of as much as 30% of the cost of installing energy-efficient equipment.

Expanding opportunity This is the first time Ohio law will allow multidistrict SIDs on scattered sites. Until now, special improvement districts were used by contiguous property owners in a single community to provide additional streetscape improvements

and maintenance, such as the downtown Cleveland SID. The General Assembly included in the state budget bill passed last year provisions for energy SIDs that limited the SIDs to only solar energy improvements. But before any SIDs were created by that legislation, the June 4 passage of Senate Bill 232 expanded the SID law to other energy-efficiency technologies, including biomass, gasification, geothermal and wind. “It’s exciting to us that the legislation has been expanded from a financing perspective,” said Andrew Watterson, chief of sustainability to Cleveland Mayor Frank Jackson. “It gives more opportunity to the SID.” This first round of advanced energy SID financing likely will emphasize commercial over residential projects, said the city of Lakewood’s Mr. Kelly, if only because it will be easier to round up qualifying commercial projects, which will have higher price

tags than home energy improvements. “If we need to get to $5 million for the first bond issue, it’s easier if we get 10 projects at $500,000 rather than 400 projects at $10,000,” Mr. Kelly said. He said the SID will issue its bond through the Cleveland-Cuyahoga County Port Authority. Mr. Kelly said legislation should pass in enough communities over the next few months to allow the SID to sell its first bond before the end of 2010. The cost of any energy project financed under the SID will be repaid by a special assessment on the property’s twice-yearly tax bill. The First Suburbs group comprises Bedford, Bedford Heights, Berea, Brooklyn, Brook Park, Cleveland Heights, Euclid, Fairview Park, Garfield Heights, Lakewood, Parma, Parma Heights, Shaker Heights, South Euclid, University Heights and Warrensville Heights. ■

20100614-NEWS--21-NAT-CCI-CL_--

6/11/2010

2:02 PM

Page 1

JUNE 14-20, 2010

OPPONENTS’ PULL LeBron James’ effect on NBA crowds is a prime example of how teams can get a boost from their opponents. Take a look at the NBA’s bottom five in attendance this past season, and how games in which the Cavaliers visit far surpass those teams’ average crowds.

Team

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Average

vs. Cavs

% increase

New Jersey Nets

13,103

17,536*

33.8%

Sacramento Kings

13,254

16,407

23.8

Memphis Grizzlies

13,485

16,325

21.1

Indiana Pacers

14,202

18,165*

27.9

Philadelphia 76ers

14,224

19,975*

40.4

* — TWO-GAME AVERAGE

Power: Right tone prevents misgivings from home team continued from PAGE 1

“You sell what the market wants to buy, and right now it wants to buy Stephen Strasburg, to buy LeBron James,” said Bill Sutton, the NBA’s vice president of team marketing from 2000 through 2006. “I don’t think it reflects negatively” on the home team, Mr. Sutton said. “Look at the NBA; every team had a mini plan with the Cavs in it.” Examples abound: The Indians in 2009 drew an average of 30,065 for four games at Progressive Field against the New York Yankees, a 33.7% increase over their season per-game average of 22,492. Mr. Strasburg, while blazing his way through the minor leagues, raised attendance collectively 86% in four minor-league road starts. Likewise, the Cavaliers were the NBA’s second-best draw on the road this past season — behind Kobe Bryant and the Los Angeles Lakers — and Mr. James was the driving force behind that surge. Teams throughout the league promoted his arrival, similar to a former No. 23 in the NBA.

in July is far more valuable to the team than an April weeknight series against Kansas City, for instance; hence, field box seats that sold for $25 against the Royals are going for $70 against New York.

Know when to say when That’s not to say there isn’t a fine line to walk. Mr. Kahler said among the considerations in employing such strategies are home players’ reactions to their second-fiddle status. “We’d pitch it as, ‘Come see Mark Price take on Michael Jordan,’ not, ‘Come see Michael Jordan,’” Mr. Kahler said. “It’s a bit of an issue with the general manager, coach and players, but our position was that it’s our job to fill the arena or stadium: ‘We know over time you guys are going to be great, but we have to have people come out and see it.’” The New Jersey Nets haven’t always walked the right side of the line. Behind notorious outside-ofthe-box thinker Brett Yormark, their chief executive, the Nets ran inventive — and at times ridiculous —

Law: Graduates flock to small firms continued from PAGE 3

“The market’s really, really tight,” she said. “It’s hard to employ an attorney when they’re not really an attorney until they’re sworn in in November.” Ms. Blaga said Cleveland State law graduates are better off than some because they often are looking for jobs at smaller firms, many of which did not face the same challenges that large law firms have over the past three years, when new hires often were deferred for several months and attorneys were laid off. “We’re thrilled to death with our 2009 numbers,” Ms. Blaga said. “We’ll hopefully hold our own.”

Making ends meet While the 2009 NALP Employment Report and Salary Survey noted that an increasing number of law schools were boosting their employment figures by offering graduates positions at their alma maters, Ms. Blaga — herself a Cleveland-Marshall graduate, albeit in 1994 — said that is not the case at Cleveland State. In 2009, 1.2% of graduates had jobs in academia; 55.6% entered private practice, with slightly more than half of those graduates working in firms with two to 10 attorneys. Just over 21% of ClevelandMarshall graduates were working at firms with more than 100 attorneys within nine months of graduating. Barbara Weinzierl, director of the office of career planning for the University of Akron School of Law, said her school also does not create jobs for graduates. One 2009 graduate was hired as the interim assistant director of admissions and student affairs, but Ms. Weinzierl said the job was an open position and the student applied for it. According to

NALP, 69% of all academic jobs were considered temporary. “We don’t do what many law schools are doing, hiring people for six weeks,”Ms. Weinzierl said. “We are not one of those schools (that) does that.” At the 192 law schools that responded to the NALP survey, academic employment rose to 3.5% in 2009 from 2.3% in 2008. James Leipold, NALP’s executive director, said the academic hires were one piece of the “underlying weakness” the employment figures hid. More than 40% of the law schools reported that they provided jobs for graduates on campus and, including judicial clerkships, nearly 25% of all jobs for graduates were temporary. Students are finding jobs because, with law school debt, they have to, Mr. Leipold said. But they are not necessarily practicing lawyers or taking jobs that will last. “It speaks to folks stringing things along to make ends meet,” Mr. Leipold said.

Flexibility required Meg Matejkovic, associate dean for external programs at Akron, said some graduates are finding jobs in a tough market because they are less wedded to the idea of working at a law firm with their law degree. Instead, some graduates are becoming in-house counsel or taking positions in areas such as human resources, where they still use their “lawyerly skills,” Ms. Matejkovic said. Added Ms. Weinzierl: “Employers are realizing lawyers have a lot of skills others may not have. They’re more open to considering those who have a legal background.” In 2008, 82.1% of Akron’s 148 law

graduates were employed nine months after graduation. Like at Cleveland-Marshall, just over half the graduates worked in firms with two to 10 attorneys. The school’s 2009 numbers were the same as the national average, with 88.3% reporting they were employed nine months after graduating. Rachel Pelaia, a spokeswoman at the Case Western Reserve University School of Law, said that school’s employment rate has always exceeded the national average. In 2008, 95.6% were employed nine months after graduating. The national average then was 89.9%. The school did not provide 2009 numbers by deadline last week. In 2008, 47.4% of the school’s graduates entered private practice; Ms. Pelaia said the majority were at large firms, though she did not specify the percentage. CWRU’s relatively large career services offices, with five attorneys, is one of the reasons for its high rate of placement, she said. While Ms. Pelaia acknowledged that the difficult economy makes it harder for law school graduates to find jobs, she said she was “confident” that CWRU graduates would have opportunities. “The office is still working to find employment throughout a challenging economy,” she said. “We’re continuing to push to get our students employed.” Robert H. Rawson Jr., interim dean of CWRU’s law school, said in an e-mailed statement that he has seen a “slight increase” in students pursuing public interest and judicial clerkships. “In this economy it is even more important that we do everything we can to help our graduates find employment,” he said. ■

“You sell what the market wants to buy, and right now it wants to buy Stephen Strasburg, to buy LeBron James. I don’t think it reflects negatively (on the home team). ... Every (NBA) team had a mini plan with the Cavs in it.”

promotions in the midst of their 1270, 2009-2010 season. Those included a “10 is enough” campaign, in which the team sold 1,000 $10 tickets and gave season ticket holders two extra seats to their 11th game, after the Nets started 0-10. That promotion was fine, said Mr. Sutton, the former NBA executive who now teaches at the University of Central Florida and consults through Bill Sutton & Associates. The Nets’ deal later in the season, though, left plenty to be desired from a marketing standpoint. The team offered 10-game packages that included games against the Cavs, Lakers and Heat; fine enough, right? As part of the package, though, the Nets gave away a reversible jersey: One side featured young Nets stars such as Devin Harris or Brook Lopez, and the other featured Mr. James, Mr. Bryant or the Miami Heat’s Dwyane Wade. “To me, that was too blatant,” said Mr. Sutton, a Pittsburgh native and Pirates season ticket holder. “The Yankees came to Pittsburgh in 2008 for the first time since the 1960 World Series, and the Pirates played it up perfectly: It wasn’t, ‘Come see A-Rod.’ It was, ‘Come see the Yankees for the first time since ’60.’” ■

CONGRATULATIONS

– Bill Sutton, sports marketing professor, University of Central Florida; former vice president of team marketing, NBA “We leveraged Michael Jordan as well as anyone could,” said Jim Kahler, formerly vice president of sales and marketing for the Cleveland Cavaliers and now executive director of the center for sports administration at Ohio University. Mr. Kahler said pitching the opponent “is almost a necessary evil.” The Cavs, for example, would use the Chicago Bulls’ popularity as an opportunity to develop relationships with new customers, Mr. Kahler said. Want to bring a group to see the Bulls? Fine, but you have to buy another group ticket package for another, non-Bulls game. Tad Carper, the Cavs’ vice president of communications, said in a voice mail that the Cavs — who sold out all 41 home games this past season — at present don’t use tactics spotlighting opponents. Of course, they’ve had for the last seven seasons a player who currently enjoys the status of the league’s two-time reigning MVP. By contrast, the Indians’ Mr. Danburg said the team’s opposition plays a vital role in its marketing and its value-based ticket pricing, which assigns different prices to different games. The Indians’ coming series against the Yankees

21

congratulates our partner

M. PATRICIA CULLER on being named

2010 DISTINGUISHED ESTATE PLANNER by the Estate Planning Council of Cleveland

200 Public Square, Suite 2800 Cleveland, Ohio 44114-2316 phone: 216.621.0150 fax: 216.241.2824 hahnlaw.com Cleveland Akron Columbus Naples Fort Myers Indianapolis

CELEBRATI NG 90 YEARS OF DEDI CATED CLI ENT S ERVI CE

20100614-NEWS--22-NAT-CCI-CL_--

22

6/11/2010

3:29 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s, highlighting positive business news in Northeast Ohio. To submit information, please e-mail Scott Suttell at SSuttell@crain.com.

first in Northeast Ohio, will be located between Crate & Barrel and Joseph Beth Booksellers. Charming Charlie displays its merchandise by color instead of category. It sells fashion jewelry, handbags, belts, scarves, hair accessories and eye wear in an upscale atmosphere targeted to “teens and women of all ages.” The chain was founded in 2004. Charming Charlie stores feature about 7,000 pairs of earrings and a similarly large assortment of necklaces, bracelets and other goods.

■ Legacy Village is about to launch a charm offensive. The upscale lifestyle center in Lyndhurst announced that fashion accessories retailer Charming Charlie will open a 10,000-squarefoot store in late summer. The store, the Texas-based chain’s

Contact: Phone: Fax: E-mail:

■ Not a fan of service fees on event tickets? Of course you aren’t.

Recognizing that, concert promoter Live Nation has announced “No Service Fee June,” which eliminates the service fees on tickets for all shows this month at Blossom, Nautica and Time Warner Cable Amphitheatre at Tower City. “No Service Fee June” stays in effect until June 30. ■ Graphic design and marketing communications firm turn SiGnal of Concord Township was among the winners in the 2010 American Web Design Award competition conducted by Graphic Design USA, a trade journal for the design industry. Two web banner ads that turn SiGnal did for Wiseco Piston of Mentor were selected as winners.

JUNE 14-20, 2010

Bill Sintic, turn SiGnal owner and creative director, worked with designer Anthony Arms on the ad campaigns. Results of the design competition are at www.gdusa.com. ■ Two Chagrin Falls High School students, Elizabeth Burl and Olivia Kuenzi, are traveling to Clermont Ferrand, France, this week to study materials science and engineering in a lab-based program taught exclusively in French. ASM Materials Education Foundation in Geauga County, part of ASM International, selected the students for a full scholarship to the program. They will participate with 15 French high school students and three students from Germany at the ASM

REAL ESTATE

Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com

Materials Camp, which has helped more than 5,100 high school students explore physical science and engineering during the past decade. Students compete for full ASM Foundation scholarships based on academic achievement and career interest. Additional financial and technical support is provided by the Cleveland-based French-American Chamber of Commerce (Northern Ohio Chapter). ASM International is a membership society of engineers, scientists, researchers and technicians who work in industry, academia and government research lab. It provides technical information, professional development education and conferences to materials scientists and engineers.

Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card

INDUSTRIAL SPACE Industrial and Office Spaces to Fit Any Need! 216.520.1200 • www.crescorealestate.com

CRESCO real estate Available Office Space

LEASE / OWNERSHIP OPPORTUNITY - Cleveland / I-90 eastern suburbs - 45,000 sf of office - visible at I-90 - office/education/redevelopment - Rico Pietro, SIOR SUBLEASE OPPORTUNITY - attached parking - full floor - 19,322 sf - below market rates $13.50/sf as-is - term thru 8/31/2014 private offices or open areas - Patrick Reardon, SIOR WESTLAKE OFFICE BUILDING FOR SALE - investor/user opportunity - attractive medical/general office - 9,436 sf - convenient to I-90 - John Glasstetter, SIOR 4,500 SF MIXED USE BUILDING FOR SALE OR LEASE - Fleet Avenue & I-77 - excellent condition! - $295,000 or $12.00/sf - Tom West, SIOR

Available Industrial Space INVESTMENT OFFERING - Brooklyn Distribution Center - 823,483 sf - craned manufacturing/warehouse complex on 53.18 acres - currently 59% occupied - George Pofok, SIOR, Joe Barna, SIOR or Eliot Kijewski FREMONT - 143,400 sf on 9 acres - 28’ to 31’ clear - 10 DK’s / 1 DI - air rotation - yard for 32 trailers - highway access - Joe Barna, SIOR or George Pofok, SIOR FOR SALE SOUTHEAST - 95,964 sf on 6.37 acres - existing office - 21 docks - 1 DI - many recent improvements - good freeway access - Bob Garber, SIOR or Matt Beesley, SIOR

FOR SALE - Solon - 35,000 sf single tenant - modern facility - great condition - 4,500 sf office area - 18’ clear - 1 DI - 5 Docks - great headquarters building - Matt Beesley, SIOR, Bob Garber, SIOR, Simon Caplan, SIOR or Eliot Kijewski I-77 / I-480 - freestanding crane building - 33,000 sf on 3.81 acres with 10 ton crane - dock - drive-ins - new offices - outside storage - Fred Christie, SIOR SOLON, OHIO - user/investor opportunity! - 29,950 sf building with long term tenant in 19,975 sf - great location - 2,000 sf of office - 1.94 acres - for sale or lease - Simon Caplan, SIOR, Eliot Kijewski, Bob Garber, SIOR or Matt Beesley, SIOR EXCELLENT ACCESS - 15,000 sf - heavy power - sprinkler - 2 docks - 1 drive-in - near I-71/480 - for sale - Armand Aghajanian AIRPORT AREA - units available from 2,464 sf to 11,737 sf - competitive rates - docks/drive-ins - 16’ clear - Pamela Bertovich GREAT OFFICE/WAREHOUSE SUBLEASE - (thru 11/30/2011) - Lear Ind. Park, Avon longer lease terms available - competitive below market rates - Ken Anderson BEREA - auto/bus repair - ready for operation - equipment included - for sale or lease - additional income generated from other tenants - must see - Kevin Kelly

Crain’s Cleveland Business Online Property Search Powered by LoopNet, No. 1 in Commercial Real Estate online Looking for property?

Selling or leasing a property?

www.CrainsCleveland.com/LoopNet

Contact Genny Donley at 216-771-5172 gdonley@crain.com

CRANE BUILDING Perry, Ohio For Lease. 40,000 sq. ft. including Offices. 4 Overhead cranes, 7 ½ to 35 ton.

440-259-5200, ext. 3270

REAL ESTATE AUCTION

Real Estate Auction July 15, 2010, 11:00 AM

6 Interstate Commercial Sites I-90 at SR 528, Madison OH

OFFICE SPACE

1

6

2

FOR SALE OR LEASE

Cleveland/Shaker Hts. Historic AmTrust building, N. Moreland & Larchmere. 1,000 s.f. to 8,000 s.f. from trendy & modern to well appointed & distinguished. Free parking • Kitchen Facilities • Large Training Room/Classroom Space • Conference Room. For additional information contact

3 4

5

Auction Conducted In Cooperation With:

www.globalcommercialre.com Call Paul Bambeck, 330-260-0191 or Neil Sawicki, 440-255-5552 Or visit our web sites.

OFFICE/WAREHOUSE SPACE

Fairmount Properties 216-514-8700

Bambeck Auctioneers Inc.

BUSINESS CONDO OFFICE/WAREHOUSE

Parma Brick Office Building for Sale

For daily on-line

1800 SqFt. $73K OAKWOOD at I-271

Investor or User Opportunity 10 Suites. 6000+ sq. ft. Well Maintained.

440-439-5686

Call Ben – 440-667-3735

www.bambeck.com

updates, sign up @ CrainsCleveland.com/Daily

CLASSIFIED BUSINESS SERVICES

FLYNN ENVIRONMENTAL For Assessments

(800) 690-9409 www.flynnenvironmental.com

Asphalt, Concrete, Crack Filling, Sealcoating and Line Striping Commercial and Residental. Fully Insured - member of Angies List. Quality work at affordable prices

Landerhaven The Detail People 440.449.0700

ExecutiveCaterers.com

ATTENTION BUSINESS SERVICE OWNERS! Submit your business card to promote your service and receive a SUBSTANTIAL DISCOUNT off your ad price.

Contact Genny Donley at 216.771.5172

216-328-1322

BUSINESS OPPORTUNITY

BUSINESS FOR SALE

NOTICE OF BUSINESS OPPORTUNITY

FOR SALE Daisy Hill Greenhouses & Florists

The Cleveland Airport System of the City of Cleveland is soliciting proposals from qualified persons and firms interested in providing for-hire point-to-point shuttle service, including supplying and maintaining the shuttle vehicles, to and from Cleveland Hopkins International Airport and selected locations in northeast Ohio. Interested parties may obtain a copy of the Request for Proposal, free of charge, under the Business Information section at www.clevelandairport.com; by calling (216) 265-6086; by written request addressed to Procurement Section, Department of Port Control, 5300 Riverside Drive, P. O. Box 81009, Cleveland, Ohio 44181-0009 or by e-mail to dcartellone@clevelandairport.com.

www.buckeyesurface.com

Proposals are due by 4:00 p.m. EDT Friday, July 16, 2010.

SPORTS & ENTERTAINMENT

Looking for brains?

Indians Private Loge Share our Home Plate suite for the Indians! Perfect for your special event!

Please call Jen at 614-218-3884 www.SuitePartners.com

Call Crain’s! Call Genny Donley for Special Executive Recruitment rates!

(216) 771-5172

Owner retiring from long-established greenhouse, garden center and florist business located on 5 acres in Daisy Hill Farms, Hunting Valley. Turnkey operation includes 40,000 square feet of greenhouses, with additional temporary houses, multiple storage and retail sales areas. Historic property includes 3-bedroom colonial house and beautiful lake views. Contact: Terri

Weintraub - Daisy Hill Greenhouses 440-247-4422 or 216-346-2093 tweintraub@roadrunner.com

WANTED: Your subscription to Crain’s Cleveland Business To sign up call toll-free at 1-888-909-9111 or on-line @ CrainsCleveland.com Click on “Subscribe Now.”

20100614-NEWS--23-NAT-CCI-CL_--

6/11/2010

3:58 PM

Page 1

JUNE 14-20, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

23

THEINSIDER

THEWEEK

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

JUNE 6 – 13

KeyBank takes students for a ride

County to keep extending hand to young companies

Global view: Ferro Corp. said it’s investing in

■ Some banks teach financial literacy in local schools. KeyBank is going another route. The Cleveland-based bank is working with The Mid-Ohio School, a driver training school run out of the Mid-Ohio Sports Car Course in Lexington, Ohio, to teach teens safe driving and to increase awareness of proper driver training. The program will occur at eight schools in four markets — Cleveland, Columbus, Indianapolis and Toledo. Locally, the program will be held at Kenston High School in Chagrin Falls on June 23 and at Lorain County Community College on June 24. The program, called Key to Safe Driving, is a condensed version of the Mid-Ohio School’s defensive driving program, and will include classroom instruction and practice in wet braking and emergency lane changes. They also will learn about the dangers of texting or talking on a cell phone while driving. Bill Koehler, president of KeyBank’s Great Lakes Region, said while the program “will touch nearly 900 student drivers, its impact can be much greater by raising awareness among teens about the importance of driving responsibly and by raising awareness among parents about the importance of proper training for young drivers.” For information, visit www.KeyToSafeTeen Driving.com or call 877-793-8667. — Arielle Kass

■ Cuyahoga County has committed another $450,000 to a loan program that helps budding area entrepreneurs get off the ground. The money will be loaned out through the New Product Development and Entrepreneurship Loan Fund, which is administered by the Cleveland-based manufacturing advocacy group Magnet. Those with an idea for a new product — or a young company with products already in development — have until July 16 to submit applications, said Magnet product development support specialist Megan Tomsik. Since it was started in 2005, the program has lent about $4 million to 60 companies in Northeast Ohio. Those companies, in turn, have attracted another $25 million in private investments and created 185 jobs, Magnet reports. The county’s contribution to the program has fallen off a bit because it has had to deal with budget issues, Ms. Tomsik said. But some of the first companies to receive the loans are now profitable and are paying their loans back, she said, so the program should become self-sustaining. — Dan Shingler

WHAT’S NEW

BEST OF THE BLOGS

its photovoltaic technology operations in the Far East as part of what the maker of specialty chemicals called “a wide-ranging plan to support growth in the Asian marketplace.” Ferro’s existing technology center in Suzhou, China, is undergoing expansion to meet increased demand from solar cell manufacturers in China. Ferro also said its new Advanced Technology Center in Taipei, Taiwan, should be completed by the end of 2010 and will be equipped with solar cell printing and firing equipment.

Paying the price: Parma Community General Hospital paid $40,000 in a settlement with the U.S. Department of Justice for allegedly receiving kickback payments from St. Jude Medical Inc., a heart device manufacturer in St. Paul, Minn. The Justice Department forced St. Jude to pay $3.75 million. Norton Healthcare Inc., a health system in Louisville, Ky., paid $133,300. The Justice Department said Parma Community and Norton were paid an undisclosed amount of kickbacks for purchasing heart device equipment from St. Jude. Parma Community released a statement that said it “properly documented and reported the transactions of St. Jude’s rebate program and believed it was in compliance with all federal regulations.” Floor it: RPM International Inc. in Medina said its Performance Coatings Group acquired Hummervoll Industribelegg AS, a supplier and installer of industrial flooring systems based in Norway. The maker of coatings and sealants did not say what it paid for Hummervoll, though it does expect the acquisition to be accretive to earnings within one year. It put the Norwegian company’s annual sales at $11 million.

The voice of experience: CFBank hired the former head of National City Bank’s northeast region to lead its commercial banking operation. Timothy R. Fitzwater, 62, will be responsible for the Fairlawn bank’s business clients. Mr. Fitzwater retired as president and CEO of National City’s northeast region after working for the bank for more than 35 years, including as head of lending in that region.

New look: Vita-Mix Corp., the Cleveland-based maker of high-end blenders and food mixers, is mixing up its marketing efforts. Vita-Mix introduced a new logo and branding initiative, which the company calls “the first such endeavor in more than 20 years.” A new tagline, “Plug Into the Movement,” reflects what Vita-Mix said is “the essence of the rebranding initiative and the company’s vision: to improve the vitality of people’s lives by liberating the world from conventional food and beverage preparation boundaries.” This and that:

The Cleveland-based Westlake Reed Leskosky architecture firm formed what it described as a strategic alliance with Lehrer Architects LA of California. The alliance gives Westlake Reed’s existing Los Angeles office a higher profile and underlines the firm’s association with a well-known, Los Angelesbased architect. … Venture development group JumpStart Inc. received a $1 million grant from the Richard J. Fasenmyer Foundation of Fairlawn. The grant is the first that the foundation, founded in 1991, has given under its new philanthropic mission of supporting entrepreneurship and free enterprise. … The Cleveland-Cuyahoga County Port Authority approved $75 million in low-cost financing for the Cleveland Museum of Art’s next phase of expansion. The museum is in the midst of a $350 million renovation and expansion initiative that started in 2005 and should be completed in 2013.

To keep up with local business news as it happens, visit www.CrainsCleveland.com.

He’s here, he’s there, he’s everywhere ■ Kevin Piunno, a longtime office broker in Northeast Ohio, is working the downtown

Excerpts from blog entries on CrainsCleveland.com.

Smart phones are driving us to — hey, new e-mails!

COMPANY: Summit Instruments, Akron PRODUCTS: IdentiCal interchangeable sensors Summit Instruments says the sensors, available in single-axis accelerometer and rate gyro versions, simplify management of calibration data and remain extremely accurate in demanding environments. The IdentiCal sensors have standardized offset and gain, Summit Instruments says, which eliminates the need to enter new calibration data each time a subsequent sensor is installed. Enhanced accuracy features result in just 0.5% typical variance over temperature and time, the company says. Accuracy analysis includes offset gain, and nonlinearity. Testing under extreme conditions has verified the sensors’ performance in all types of environments, including the -40 °C to +85 °C temperature range, Summit Instruments says. Connector options include convenient terminal tubes as well as a traditional D-sub connector. For information, visit www.summit instruments.com. Send new product information to managing editor Scott Suttell at ssuttell@crain.com.

■ Like millions of Americans, Akron resident Neil Erickson loves his smart phone and other gadgets. And like many of his fellow citizens, he acknowledges they make it more difficult to concentrate. Mr. Erickson, 28, who is studying computer engineering, was among the people The New York Times talked with to flesh out a Times/CBS News poll that shows 30% of people 45 and under say their devices are making it harder to focus their thoughts. “It’s distracting, but you never know if something is going to be important,” he told The Times of his smart phone usage. He added, “I suppose I could cut down on checking e-mail and phone use, but I probably won’t.” Among the poll’s other findings: Almost 40% check work e-mail after hours or on vacation, and 33% said they can’t imaging living without their computers.

In lobbying on financial reform, it’s clear who has the edge ■ Sen. Sherrod Brown was among the many voices in a long Rolling Stone piece about the increasingly long odds of passing financial regulatory reform. Reporters Matt Taibbi, a consistent critic of the behavior of Wall Street banks, reported the usual process of chipping away at key legislation “is not taking place with its customary dispatch, despite a full-court press by Wall Street. The financial-services industry has reportedly flooded the Capitol with more than 2,000 paid lobbyists; even

Cleveland office market again — and a whole lot more — due to landing a job with Miami-based Optima International Group. Mr. Piunno said he joined Optima from a brokerage post with King Group in Cleveland because it “was an incredible opportunity,” in part because he will oversee leasing for Optima’s 4 million-square-foot portfolio in multiple markets around the country — all while working out of downtown Cleveland. Mr. Piunno’s new title is director of leasingUS operations, said Denise D’Ettorre, Optima’s Cleveland property manager. The Optima conglomerate hails from industrial roots in the Ukraine and owns One Cleveland Center and 55 Public Square here. — Stan Bullard

Philly investment firm drops anchor in Beachwood ■ Hirtle Callaghan, a Philadelphia-based investment company that also provides outsourced chief investment officer services, has opened a Northeast Ohio office. For now, the office in Beachwood has only one person, Timothy J. Curtiss. Mr. Curtiss has been the CEO of Liquid Resources of Ohio and two other startups this decade, and he has worked in securities and investments for nearly 30 years. Jonathan Hirtle, CEO of Hirtle Callaghan, said the firm has $22 billion in assets under management, including $2.8 billion in Cleveland, with 54 clients. Peter Holway, the firm’s regional managing director in Pittsburgh, is a Westlake native who has been doing business in Cleveland for years. “We have many loyal and important clients in Cleveland,” he said. — Arielle Kass

veteran members are stunned by the intensity of the blitz.” Sen. Brown told Mr. Taibbi, “They’re trying everything.” Rolling Stone noted that Wall Street’s army “is especially imposing given that the main (really, the only) progressive coalition working the other side of the aisle, Americans for Financial Reform, has been in existence less than a year — and has just 60 unpaid “volunteer” lobbyists working the Senate halls.”

Progressive goes with the Flo into TV marketing history ■ Flo — you know, the star of Progressive Corp.’s winningly bizarre ads — has become “the most recognizable mascot on television, the successor to the Geico gecko, Juan Valdez and the Pillsbury dough boy.” So said The Daily Beast in a story that featured an interview with Stephanie Courtney, the actress who plays Flo, and attempts to explain the character’s popularity. “Flo is a blast of unironic helpfulness and pleasantries in this age of snark, economic uncertainty, and fractured everything,” wrote The Daily Beast’s Nicole LaPorte. Bill Cowen, the PR program director at Villanova University, told the web site that Flo “gives us a break from the day-to-day news — and there’s not a lot of good news out there.” Ms. Courtney offered some colorful tidbits, too. For instance, her favorite Flo ad is the one featuring the guy with the man bag. Also, some Flo fans were so alarmed at the sight of what they perceived to be Ms. Courtney’s baby bump that they wrote letters to Progressive inquiring whether she was pregnant. She’s not.

20100614-NEWS--24-NAT-CCI-CL_--

6/10/2010

1:33 PM

Page 1

Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.