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Buyers in the market for condos Lower interest rates, job growth foster townhome sales By STAN BULLARD sbullard@crain.com

Both newer condominium properties and well-established townhouse communities are seeing something they haven’t seen for a long time: buyers, and lots of them. The oversupply of condos and townhouses that resulted from last decade’s housing boom and subsequent recession gradually is reversing

Next up for Horseshoe: Keep them coming back By JAY MILLER jmiller@crain.com

With the opening crush of business behind them, the managers of the Horseshoe Casino Cleveland on Public Square now can turn to the real work of casino operators. “Our business is marketing,” said Marcus Glover, senior vice president and general manager of the casino, in a telephone interview. He was referring to the critical effort gaming companies make to keep gamblers — especially the affluent ones — comGlover ing back and, as important, not spreading their business around to other casino operators. The Horseshoe casino’s top executive would not say how much the casino will spend to attract this business. However, industry sources say it’s common for a casino to plow back an amount equal to about onefifth of its gross revenue into keeping the customers coming. “As a percentage of gaming revenue (a casino) will probably spend 20% to 22% of that on the total marketing

itself. Consider Stonebridge Plaza, a 108-unit condo complex in Cleveland’s Flats that opened in 2007. After selling 40 units that year, developer K&D Group began renting the empties when the housing market tanked and promptly filled the glass-walled building, at 1237 Washington St. Now, David Sharkey, vice president of the Progressive Urban Real

INSIDE:

Stalled Avenue Tower condos could become rental properties. Page 3

Estate brokerage, which markets Stonebridge, said the developer is pulling about five units from the rental market, renovating them, and offering them for sale as condos once more. Mr. Sharkey said Stonebridge has closed four condo sales so far this

year “and we have six more pending.” “We went from no one looking at a condo for purchase to people scrambling for them,” said Mr. Sharkey, who noted that condo sales at Stonebridge already are past last year’s levels. Mr. Sharkey is not alone in observing the uptick. Last year, WXZ Development of Fairview Park acquired Beachcliff Row, a dead-in-the-water townhouse project in Rocky River, from its lender. WXZ has sold four townhouses in the last 13 months

INSIDE Prime real estate deal sparks intrigue Lakewood Country Club on June 8 sold about 10 acres of tree-laden property, located near the future headquarters of American Greetings, in Westlake. Witness names in investor documents match those of some AG executives. PAGE 6.

See CONDOS Page 6

A BOOST FROM BONES BUSINESS Researchers, companies build on area’s orthopedics expertise By TIMOTHY MAGAW tmagaw@crain.com

ortheast Ohio must be drinking its milk, because the region’s orthopedics industry is growing up to be big and strong. Experts say the surge in activity in the field, which focuses on the study of the human musculoskeletal system, is due largely to the melding of the region’s expertise in advanced materials and health care. See BONES Page 18

INSIDE THE INDUSTRY A sampling of Northeast Ohio companies focusing on the orthopedics industry: ■ APTO Orthopedics, Akron ■ AxioMed Spine Corp., Garfield Heights ■ RSB Spine LLC, Cleveland ■ OrthoHelix Surgical Designs Inc., Medina ■ Integra LifeSciences, Medina (spinal implant unit)

See HORSESHOE Page 18

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CRAIN’S CLEVELAND BUSINESS

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Avenue Tower condos could become rentals Sale of remaining units in prominent stalled project would satisfy lenders By STAN BULLARD sbullard@crain.com

MCKINLEY WILEY

Jones Day attorney Ted Grossman has a New Guinea headhunter’s statute in his office in downtown Cleveland. “I thought it appropriate for a litigator’s office,” he says.

KING OF THE COURT Jones Day attorney with impeccable record adds Macy’s case to list of high-stakes lawsuits for big-name clients By MICHELLE PARK mpark@crain.com

e says he isn’t as superstitious as baseball players, but Ted Grossman once got rid of a gray suit because things didn’t seem to go well when he wore it. Fortunately for the Cleveland litigator’s suit collection and his big-name clients, cases tend to be won when Mr. Grossman and his team are trying them. More than three decades into his career, Mr. Grossman has

never — ever — lost a case for his clients, which include national companies such as Bayer HealthCare, Wendy’s/Arby’s, and, more recently, Macy’s. These are big-stakes cases, and Mr. Grossman, 62, a partner at Jones Day, thrives on them. “I like it — trial, itself,” he said. “The doors close, your phone can’t ring, no one can interrupt you. You’re in intellectual combat. It’s terrific. There’s nothing else like it. See COURT Page 10

STILL UNDEFEATED Jones Day lawyer Ted Grossman, who never has lost a case, most recently sued Martha Stewart’s company on behalf of department store chain Macy’s. The suit alleges that

Martha Stewart Living Omnimedia, by planning to sell its merchandise at JCPenney stores, is violating an exclusivity agreement. Other big clients for which Mr. Gross-

man has won cases include: ■ Bayer HealthCare ■ Arby’s/Wendy’s ■ R.J. Reynolds ■ FirstMerit Corp.

The latest chapter in litigation over the long-stalled Avenue Tower condominium project in downtown Cleveland calls for its sale to a joint venture that would operate the condos as rental properties. That game plan is a big switch from court decisions earlier this year that would have led to the 10-story tower going to sheriff’s sale to satisfy defaulted construction debts. Instead, two parking lots earmarked for potential future phases still would go to auction to satisfy one debt, while the project’s 57 unsold condominiums would be sold to a partnership to satisfy others. The proposed acquirer, dubbed “Avenue District Investors,” includes Tim Zaremba, an apartment-owning

brother of Avenue builder Nathan Zaremba; construction contractor Tony Panzica, and industrial-office developer Fred Geis. A proposed “global settlement” before Cuyahoga County Common Pleas Court Judge John O’Donnell follows a Feb. 10 decision declaring the project in default and lenders entitled to foreclose. The judge requested lenders to draft a motion in order to consign all the unsold parts of the property at 1201 St. Clair Ave. to auction. Under the new plan, Avenue District Investors would pay $6.8 million for the 57 condominiums that they would operate as high-end rental properties. Proceeds from the sale of condo units would be divided to satisfy a $15.5 million loan from KeyCorp’s Key Community Development See AVENUE Page 7

THE WEEK IN QUOTES “In many ways, we’re getting close to being recognized as having one of the strongest growing consortiums in orthopedics.”

“If you’re a (Caesar’s) player you’ll probably have three or four offers to go to Las Vegas (in your email) today.”

— Walter Horton, vice president for research and dean of graduate studies at the Northeast Ohio Medical University in Rootstown. Page One

— Andrew Klebanow, a principal in Gaming Market Advisors in Las Vegas. Page One

“Only a certain proportion of the public school work force (is) interested in working here.”

“I do think that schools overall are finding it necessary to bolster their financial aid budgets.”

— The Rev. William Murphy, president of St. Ignatius High School. Page 11

— Mark J. Mitchell, vice president, School and Student Services, National Association of Independent Schools. Page 11

INSIGHT

Consultant calls friendship with JumpStart exec ‘professional’ By CHUCK SODER csoder@crain.com

Columbus firm has say in how much money local group gets from state

The managing principal of a downstate consulting firm that influences how much money entrepreneurship organization JumpStart Inc. receives from the state has what he calls a “professional friendship” with a key JumpStart executive. Ted Bernard, the head of Invantage Group in suburban Columbus,

said he does not see his relationship with JumpStart’s Michael Mozenter as a conflict of interest. Neither do the state of Ohio and Ray Leach, CEO of JumpStart, which assists and invests in startup companies in Northeast Ohio. Mr. Leach sees the two men’s relationship as a professional one.

“Ted’s not Mike’s brother-inlaw,” Mr. Leach said. BizLogx LLC, a consulting firm founded by Mr. Mozenter, hired Mr. Bernard on a contract basis twice in the mid-2000s while Mr. Mozenter headed BizLogx, Mr. Bernard stated in an email sent to Crain’s.

The two men also know each other through Temple Israel synagogue in Columbus, Mr. Bernard said, noting that their terms on Temple Israel’s board overlapped at one point. They have met for coffee a few times, but otherwise do not spend time together, he said. Mr. Mozenter, who wrote a rec-

ommendation for Mr. Bernard on his LinkedIn.com profile, provided similar information in an email sent to Crain’s through a JumpStart spokeswoman. “I have known Ted for some years, we’ve done some work together in the past and I think he is a smart guy, but we do not hang out together socially,” Mr. Mozenter stated in the email. Mr. Mozenter See JUMPSTART Page 7

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Garfield Heights staffing agency expands as personnel needs grow By MICHELLE PARK mpark@crain.com

Champion Personnel System Inc. has gotten a start on plans to grow to 12 locations by early next year from the four it has operated for more than a decade by opening offices last month in Strongsville and Mentor. All told, opening eight locations and hiring the 30 to 35 recruiters needed to staff them will represent an investment of roughly $1 million for the recruiting firm based in Garfield Heights, CEO Robert Schepens said.

Mr. Schepens said the added offices will position Champion to be closer to clients who are hiring and closer to the candidates those clients want. “Northeast Ohio may not sound to the rest of the world like a large geographical area, but it is to people who live here,” Mr. Schepens said. “With the price of fuel going up and salaries not necessarily going with that, people have an inclination to work closer to home. Companies have an inclination to hire workers who are closer to work.” Staffing agencies here and nation-

wide have been growing for more than a year as hiring has picked back up. Crain’s reported last month that Alexander Mann Solutions Corp., a global provider of personnel services, is recruiting people for what may grow to be a 300-person office in Cleveland. Cleveland-based Nesco Resource this year has opened a new location in Toledo and plans to add three more in Ohio by year-end after opening 14 offices nationwide over the last 18 months, according to Tim McPherson, president. The company also acquired four staffing firms in Ohio, Pennsylvania and New York in 2011, and is exploring several more acquisitions, Mr. McPherson said. Also, according to Mr. McPherson, the company’s 2012 revenues January through May were up more than 50% over the year-earlier period, and the company’s revenues have grown by more than 100% in the past two years. Nesco has eight locations in Northeast Ohio. Independence-based Alliance Solutions Group has added offices in Elyria and Upper Sandusky this year and just signed a lease for a Green Township location, which is slated to open in August, a spokesman said. The firm also launched in recent weeks Alliance Military Placement Solutions, which will serve veterans. Alliance will have six locations in Northeast Ohio when the Green office opens. As for Champion, which was founded in 1964 and has offices in Twinsburg, Middlefield and North Olmsted in addition to Garfield Heights, it has its sights on expansion in Chardon, Cuyahoga Falls, Elyria, Lorain, Richfield and the near West Side of Cleveland, Mr. Schepens said. It made Mentor one of the first new locations because it was asked to, he noted. “We had at least a dozen clients who said, ‘We really want you to be out here,’” Mr. Schepens said. “It was easy for us to move out there because we had a client base built.” Champion has doubled to six recruiters in its executive search division, which hires C-level executives and other management for clients, Mr. Schepens said. The firm also plans to launch in the next 60 days a new iteration of its website that’s more compatible with Apple products, including the iPad. That upgrade will mean better quality images and quicker refresh, he said. “More employment is being sought on phones and iPads than ever before, and part of the judgment that a person and even a client (makes) about the servicing organization (is): What kind of presentation is made?” Mr. Schepens said. ■

Volume 33, Number 24 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the third week of May and fourth 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 © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

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CRAIN’S CLEVELAND BUSINESS

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Businesses say public financing programs not dependable Furniture stalwart, food service firm fault tax abatements, grants for thwarting plans By JAY MILLER jmiller@crain.com

State and local governments have made great strides in recent years in sharing the cost of cleaning up abandoned properties so that businesses can expand in urban areas such as Cuyahoga County, where many developable commercial and industrial sites have environmental hazards. But weaving public financing tools, such as tax abatements and tax credits, into development plans can have pitfalls, as two local businesses have discovered. It appears an administrative decision based on a murky state tax abatement program was critical in the planned closing, after 196 years in business, of Taylor Cos. of Bedford, a maker of office chairs. Likewise, the limbo state of a competitive state program for environmental cleanup money may force TriMark SS Kemp, a Cuyahoga Heights food service industry supplier, to move, perhaps as far away as Pittsburgh. In the latter case, though, a glimmer of hope remains after the General Assembly passed, and Gov. Kasich

signed, legislation that provided more money for the program, which is designed to help businesses put so-called brownfield properties to new use.

Taxing issue Jeff Baldassari, Taylor president and CEO, said the recession was a factor in his company’s demise. However, he said the loss of an expected $850,000 in savings from a 10-year tax abatement, and the time spent trying to secure the benefit, also played a key role. The state tax break was predicated on an environmental cleanup and the removal of a concrete foundation on a 10-acre site in Bedford that had been home to a Brush Wellman clutch and brake parts plant. The cleanup required Taylor to excavate a 1,200-square-foot area containing lead- and coppercontaminated soil to a depth of two-and-a-half feet and replace it with clean fill, according to a 2008 Ohio Environmental Protection Agency press release. Mr. Baldassari lauds the Ohio EPA for how it promptly certified the cleanup, which he thought was the last substantive decision needed to clinch the abatement. So, he was baffled when the state tax department, in 2008 during the administration of former Gov. Ted Strickland, would not accept the EPA’s judgment and, as a result, did not notify county tax officials of the full value of the abatement.

“I share a concern that the tax abatement law for brownfields was certainly not a model of clarity.” – Joseph Koncelik, attorney, Frantz Ward LLP Mr. Baldassari said years of pursuing the matter legally took its toll financially and emotionally on him and the company. “They are hanging a carrot out there, and we were relying on that,” he said. “I could handle the economy (and) the credit crisis, but when you’re relying on your government to follow through on their promise … it creates a toxic environment.” The company failed to win most of that tax abatement because of a legislative screw-up, said Joseph Koncelik, a Cleveland attorney and former director of the Ohio EPA. Mr. Koncelik said the law passed by the General Assembly only allows the state tax department to reduce taxes for roughly a year’s worth of cleanup work, and it cannot abate taxes for the value of new construction on a property, even though the construction was possible only after the property owner cleaned up the site. “With others, I share a concern that the tax abatement law for brownfields was certainly not a model of clarity,” Mr. Koncelik said. “It needs to be reformed.”

Clean Ohio mess TriMark SS Kemp, a food service supply company, was the victim of a rush of applicants for the last approved round of grant money from a popular program. The Clean Ohio program, financed by an expiring 2008 bond issue, has provided grants to assist in the demolition of abandoned commercial buildings and the environmental cleanup of contaminated soil. The program has won support on both sides — urban and rural — of the legislative aisle. Rural areas of the state no longer are eager to have manufacturers and warehouses gobble up valuable farmland, and older urban communities want to convince existing businesses to expand in place. Outgrowing its existing office and warehouse on Willow Parkway, TriMark SSKemp looked to expand or relocate. An easy solution would have been to move the operation to a business park that was uncontaminated farmland just a few years ago. However, president Mark Fishman knew a move would disrupt business and cost Cuyahoga Heights one of its largest taxpayers. So, he settled on a $3.5 million expansion of the company’s office and warehouse on a property next door. But that expansion was contingent on winning $1.4 million in state grant money to clean up the property. The brownfield program, run by the Ohio Department of Develop-

ment, is nearly a decade old and its renewal was widely expected. However, the Kasich administration wanted to move the program to the new JobsOhio development nonprofit and avoid another bond issue. The catch is, that transition has been held up by litigation over whether the state’s liquor tax revenue can be used to fund JobsOhio’s operations. And the holdup has created a problem for TriMark SS Kemp, which was bypassed by the Department of Development when the latter last month awarded $19 million to 11 other cleanup projects. So, Mr. Fishman has begun thinking about alternatives, which include moving the operations to Pittsburgh, where TriMark runs another plant. Last week, Mr. Fishman learned that the midterm budget bill passed by the General Assembly included more brownfield cleanup money. However, exactly how and when that money will be available has yet to be resolved. A spokeswoman for the Ohio Department of Development said last Thursday, June 14, that application material might be available in a few weeks and that grants would be awarded in the fall. Mr. Fishman isn’t sure that timeline will help him. “It’s enticing to know the money is out there, but we don’t know how to try to get hold of it,” he said. “We’re out of time and exploring other options.” ■

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

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Ambiguity surrounds land deal Condos: Sales outpace Country club sells site near planned HQ of American Greetings to FSW Properties By STAN BULLARD sbullard@crain.com

A scarce commodity in Northeast Ohio â&#x20AC;&#x201D; big-buck real estate intrigue â&#x20AC;&#x201D; is afoot near the planned American Greetings Corp. headquarters site at Westlakeâ&#x20AC;&#x2122;s Crocker Park

complex. Lakewood Country Club on June 8 sold about 10 acres for $1.4 million to FSW Properties LLC. The tree-rich site abuts the site of the future American Greetings headquarters and two associated parking garages at Crocker Parkâ&#x20AC;&#x2122;s south end. FSW is not new to the neighborhood. On the other side of Crocker Road from the HQ site, the same group last February acquired Westlake Corporate Park and last August bought adjoining land in deals that totaled $11 million, according to Cuyahoga County land records. Ohio corporate records shed little

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light on FSW. However, witness signatures on FSWâ&#x20AC;&#x2122;s incorporation document offer some clues about who may be behind the entity. One signature belongs to a James Wilson, which is the same name as American Greetingsâ&#x20AC;&#x2122; manager of treasury operations; he declined comment. Another witness is Christine Rosenow; the person with that name at American Greetingsâ&#x20AC;&#x2122; legal department did not return a message left last Friday, June 15. Deeds send all the property tax bills to the address of the Roetzel & Andress law firm at One Cleveland Center. Several FSW deeds indicate the preparer was Suzanne Saganich, a Roetzel partner, whose name is also on many land documents for American Greetings filed at the county. As would any attorney, Ms. Saganich declined to identify FSW and asked, â&#x20AC;&#x153;What difference does it make, anyway?â&#x20AC;? She said her name is on thousands of land documents. Meantime, three calls to Patrice Sadd, an American Greetings spokeswoman, were not returned. Nancy Lesic, who handled public relations for the company on its headquarters site search and its plan to exit Brooklyn, said she would check into the purchases. She did not return three subsequent emails by Friday. The president of Lakewood Country Club, attorney Albert Adams, said he does not know the identity of the buyer of the clubâ&#x20AC;&#x2122;s excess land. He said land sale proceeds will help fund the replacement of its clubhouse with a more familyfriendly complex on substantially the same site as its 1920-vintage clubhouse. â&#x2013;

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single-family home deals continued from PAGE 1

Mary Spenthoff, Pulteâ&#x20AC;&#x2122;s Medinaand has nine more under contract. based sales manager for Ohio, said â&#x20AC;&#x153;It has been successful beyond interest rates are so low they are our expectations,â&#x20AC;? said Jim Wymer, pulling prospective buyers out of CEO of WXZ. â&#x20AC;&#x153;We are looking at apartments as they calculate the building on the remainder of the cost of owning a unit at less than site we acquired with Beachcliff their rent. Row. We have Moreover, the room for 16 more Pulte locations townhouses.â&#x20AC;? benefit from job Statistics growth in Akron from the Northand in Cleveern Ohio Relandâ&#x20AC;&#x2122;s eastern gional Multiple suburbs and at Listing Service University Cir(NORMLS) bear cle, Mr. Barbee out the resursaid. gence, with the â&#x20AC;&#x153;We have increase in condo seen lots of relosales on a percations in PepPULTE GROUP centage basis per Pike from exceeding single- A kitchen in a townhome model in the professionals,â&#x20AC;? family home sales Pointe at Sterling Lakes in Pepper Pike Mr. Barbee said. so far this year. Welcome back, boomers Through the end of May, condo Although interest rates have been sales climbed 28% to 1,296 listings low for years, WXZâ&#x20AC;&#x2122;s Mr. Wymer from 1,009 in the like period last said it is clear buyers now are year. In May alone, condo sales rose embracing mortgage rates in the 3% 31%, to 356 listings from 272 in May range as a reason to move ahead 2011. with a real estate investment. By contrast, single-family home Another factor Mr. Sharkey and sales were up 18% to 12,046 listings others cite is that the empty nesters through May this year from 10,224 â&#x20AC;&#x201D; people whose children have in last yearâ&#x20AC;&#x2122;s like period. In May, moved out â&#x20AC;&#x201D; are shedding their home sales rose 24%, to 3,083 units larger single-family homes and are from 2,486 in May 2011. back in the market again. Pulte feels the effects A less tangible factor in Cleveland, Mr. Sharkey said, is a more The rise in townhouse and condo positive attitude about the city and sales is rippling throughout the its future, thanks partly to sustained region, something apparent to Pulte manufacturing growth and the Homes, the Bloomfield Hills, Mich.advent of casino gaming and its based homebuilder active in the many jobs downtown. Ohio market with townhouse develHowever, Mr. Sharkey noted opments in Pepper Pike and in buyers are predominately bargain Copley, an Akron suburb. hunters, so prices are increasing â&#x20AC;&#x153;We have certainly seen a resurlittle. The damped-down prices gence,â&#x20AC;? said Tony Barbee, president may keep developers and builders of Pulteâ&#x20AC;&#x2122;s Cleveland and Indianapolis from launching too many for-sale division. condo and townhouse projects. Mr. Barbee estimates sales in the The volume of listings in the condo category are up 35% so far this year, category reflects the absence of new although the company does not properties, as the number of new reveal specific sales by communilistings declines. NORMLS estities. In Pulteâ&#x20AC;&#x2122;s case, its townhouse mates the number of such listings projects range from Pointe at Sterdeclined 10% in May to 578 new listling Lakes in Pepper Pike, selling in ings from 638 in May 2011, with the $270,000 range, to Montrose year-to-date new listings falling by Park in Copley, where units sell in almost the same percentage. â&#x2013; the $170,000 range.

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JumpStart: $20M at stake for entrepreneurial initiatives continued from PAGE 3

is president of the Community Advisors division at JumpStart, where he works to help other regions across the country figure out ways to create jobs through entrepreneurship.

Significant dollars at stake Decisions by Mr. Bernard’s firm could have a big impact on JumpStart’s future. Invantage Group regularly reviews proposals that companies and other organizations submit when applying for money from the Ohio Third Frontier program, an initiative designed to grow the state’s economy through investments in technology. The consulting firm is in the process of reviewing proposals from JumpStart and other groups that are seeking grants from the Third Frontier’s Entrepreneurial Signature Program, which funds organizations that provide services to entrepreneurs. The Third Frontier Commis-

sion usually funds proposals recommended by third-party reviewers such as Invantage Group, though the body occasionally decides not to follow the recommendations. A lot of money is at stake: The commission last August set aside a record $40 million to fund the program for two years starting July 1. JumpStart has applied for a total of $20 million. The organization would use $9 million to fund existing programs, and it would pass $6 million along to 16 other Northeast Ohio organizations that support entrepreneurs. JumpStart and similar organizations in other regions of Ohio would use the other $5 million to fund statewide initiatives. For now, the future of the Entrepreneurial Signature Program is hazy. The commission has yet to award any of the $40 million because the state has been reviewing the program to make sure it provides the best possible return to taxpayers, state

Avenue: Loans accessible for rental conversions continued from PAGE 3

New Markets Investment Fund and a $12 million note from what is now PNC Corp. Mr. Panzica has assumed a role in the new ownership group after his Panzica Construction Co. of Mayfield Heights released a claim for $2.7 million in unpaid but disputed construction bills on the project. Panzica Construction’s lawsuit in 2010 for foreclosure to satisfy the debt set the table for lenders to join the action. Judge O’Donnell told lawyers for the parties in a pretrial conference last Tuesday, June 12, that he is likely to approve the proposed settlement. However, he said he remains “open-minded” about it. The judge has scheduled another pretrial conference for 3:45 p.m. on June 29. He said he wants to have a public hearing in order to give other parties an opportunity to voice opinions on the proposed settlement in case they have not been contacted earlier in the litigation.

Family affair Operating the condos as rentals is a natural for Tim Zaremba, who owns Zaremba Management Co., which has more than 4,000 rental apartments throughout the region and in Chattanooga, Tenn., according to the company’s website. The pact would give Zaremba Management, which has a portfolio of primarily suburban properties, a quick entry to the downtown apartment market. Tim Zaremba has focused on apartments and offices while Nathan Zaremba has concentrated on home-building; the latter has erected hundreds of homes and townhouses in the suburbs and was at the forefront of efforts to build housing in the city of Cleveland. Nathan Zaremba, Avenue District’s original developer, will handle the final construction of units that were left unfinished when the project ground to a halt in 2010. Another five units purchased by homeowners will remain condos as the other suites become rentals. Key Community Development also would receive proceeds from the sale of a parking lot on the east

side of the building and another on the south side of St. Clair Avenue because it provided loans for the purchase of those properties from the city of Cleveland, according to court documents. Michael O’Donnell, the courtappointed receiver for the properties, said the parties had broken off negotiations early in the year but reopened them sometime after the February court actions. The lawyers for the parties contacted him in late May with the proposed settlement terms he submitted to the judge. The receiver and the judge are not relatives.

Units should go Part of Michael O’Donnell’s proposed global settlement indicates why the units will become rental condominiums rather than going on the market for sale singly: The lenders preferred their sale for use as rentals because loans are available to buy such properties but not to finish troubled condominium developments. A spokeswoman for the city of Cleveland, which sold the properties to Mr. Zaremba to put housing on sites emptied by urban renewal decades ago, said it declined comment until the June 29 hearing. Messrs. Panzica and Geis did not return a call each for comment. Joseph Marinucci, president of Downtown Cleveland Alliance, said getting the Avenue project out of limbo will be helpful for people who own units in the tower and will help advance plans to market the surrounding area as downtown’s NineTwelve District. “Adding rental units to downtown Cleveland is a plus,” Mr. Marinucci said. “Rental demand is high in downtown Cleveland. They will be able to fill those without any problem.” However, the idea of auctioning the parking lots presents some continued ambiguity for the area. “The Avenue District was created with the idea these would be development sites,” Mr. Marinucci said. “We hope the new owners will embrace that. When the auction occurs, we will reach out aggressively to the new owners to work with them.” ■

officials said last month. The officials said the commission and its advisory board would receive recommendations regarding the proposals when they meet on June 27. When Invantage Group applied to become a Third Frontier evaluator for the Ohio Department of Development, the firm disclosed that it had worked with BizLogx, which among other things formerly reviewed Third Frontier proposals, according to Mr. Bernard and department spokeswoman Katie Sabatino. They also both noted that Mr. Mozenter leads JumpStart’s Community Advisors division, which receives no Third Frontier money; it’s financed through federal and philanthropic grants that include money to cover administrative costs.

Conflicting conflict views Though Mr. Mozenter’s division is financed separately, the relationship between the two men still appears to create a conflict of interest, said Michael Hoffman, executive director of the Center for Business Ethics at Bentley University in Waltham, Mass. Judging by information provided to him by Crain’s, Dr. Hoffman, who does not know the two men, said that if he were in Mr.

Bernard’s position, he might have a hard time making a decision that could hurt Mr. Mozenter’s employer. “You want to avoid these kinds of professional relationships and feelings of obligation,” he said. Kenneth D. Pimple, director of teaching research ethics programs at Indiana University’s Poynter Center, said he doesn’t believe the relationship significantly would bias the grant review process. However, even though Mr. Bernard alerted the Ohio Department of Development about the relationship, he also should tell the Third Frontier Commission, Dr. Pimple said. Then, commission members — who have not been informed of the relationship by Mr. Bernard or the Department of Development — could choose a separate evaluator if they’re uncomfortable or if they see signs of bias in Invantage Group’s reviews. “Or the board could decide, ‘This looks like an impartial review,’” he said.

BizLogx connections A few JumpStart critics recently have voiced concern to Crain’s about JumpStart hiring Mr. Mozenter in the first place. In May 2010, a few months before

Mr. Mozenter joined JumpStart, BizLogx recommended that the Third Frontier Commission give the nonprofit $4.4 million to fund two of its proposals, which BizLogx ranked first and second out of 10 that were submitted. The consulting firm also suggested the commission not fund two other JumpStart proposals. JumpStart hired Mr. Mozenter that August and later hired two people he recruited to join JumpStart Community Advisors: BizLogx colleague Stephen Berger and former Ohio Department of Development executive John Griffin. Mr. Leach, JumpStart’s CEO, said BizLogx’s recommendations had nothing to do with why Mr. Mozenter was hired. Mr. Leach said he reached out to about a dozen people, including Mr. Mozenter, in June 2010, after learning that the organization would receive a federal grant to fund the program he now leads. Mr. Leach said he didn’t know Mr. Mozenter at the time but knew that he played a big role in shaping the Third Frontier program, which helped him stand out. “Mike’s a big thinker that has spent many years thinking about how to execute a statewide strategy,” he said. ■

Honoring distinguished Northeast Ohio Human Resources professionals 2012 Lifetime Achievement award winner Thomas Hopkins, Senior VP, Human Resources, The Sherwin-Williams Co. A 31-year Sherwin-Williams veteran, Mr. Hopkins has led many of the strategic initiatives that transformed how the company recruits, develops and promotes its employees. During his tenure, Sherwin-Williams has become a significant global enterprise with a diverse workforce, a pioneer in work force safety and has expanded its commitment to the communities in which employees live and work.

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JUNE 18 - 24, 2012

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

All wet

t may not take an invasion of Asian carp into the Great Lakes to kill Lake Erie. Republican lawmakers in Ohio just might do the job instead with the bill the Legislature passed last month that puts a high ceiling on the amount of water that businesses can withdraw from Lake Erie and the waters that feed it. Gov. John Kasich became a party to this bit of recklessness in signing the bill, which is far more liberal than measures passed in Michigan, New York and Pennsylvania to limit water withdrawal rates from the Great Lakes. The governor doesn’t like to read newspapers, but his press office loves to issue press releases in which he comments on the virtues of legislation he signed. There was no such fanfare June 4, when Gov. Kasich put his signature to the water bill without a public ceremony. Perhaps Gov. Kasich is embarrassed by what members of his majority party devised to comply with the Great Lakes Compact, an agreement among eight states and two Canadian provinces to protect the water resources of the Great Lakes basin. If he isn’t, he should be. Yes, the governor turned away a previous version of the water use bill that set even higher levels for daily water withdrawals — 5 million gallons from Lake Erie, 2 million gallons from rivers and streams that feed the lake and 300,000 gallons from highquality streams. But the improvement between what he rejected and what he accepted is the difference between terrible and just plain bad. The original bill put forth by state Rep. Lynn Wachtmann was a baldface sop to big users of water, of which his business — Maumee Valley Bottlers Inc. — is one. Rep. Wachtmann might not be a fox in the watershed henhouse. But, as a board member of the International Bottled Water Association, the Republican from Napoleon wouldn’t be our first choice for gaining an objective opinion about whether the final version of the bill strikes a balance between the interests of big water users and the parties that are concerned about Lake Erie’s long-term health. As it stands, the bill allows businesses to withdraw over a 90-day period an average of up to 2.5 million gallons a day from the lake without a permit. That’s a withdrawal rate 25 times higher than the three aforementioned states. Businesses also can withdraw an average of up to 1 million gallons a day from rivers and streams whose waters eventually flow into the lake. These are big numbers, and they drew a concerned response from Marc Smith, senior policy manager with the National Wildlife Federation, who said the bill the governor signed “does not achieve the balance as required under the (Great Lakes) Compact.” “As Ohio’s neighbors take steps to implement water protections, Ohio has gone in the other direction,” Mr. Smith said. Summer recess for the Legislature is here, but it isn’t too late once lawmakers go back into session for them to reconsider what they’ve done. We’d love to see the measure amended in a way that is in keeping with the spirit of the Great Lakes Compact, which is to protect for centuries to come the most precious of our natural resources, the fresh waters of our Great Lakes.

FROM THE PUBLISHER

Dailies suffer, and democracy is next

Dealer, is owned by Advance — are safe he natives are restless in The Big from such drastic changes. Easy, and the sad part is that very It may strike you as odd that the likely it is a classic case of “too publisher of a business newspaper that little, too late.” competes with dailies for both news and Last month, Advance Newspapers, the advertising sales is sounding an alarm. It owner of the 175-year-old Timesshouldn’t, because I’m concerned with Picayune, announced it would cut back far more than the financial well-being of its print production of the daily newspaCrain’s Cleveland Business; I’m per to three days a week. That worried about the very future of same day, similar announcements BRIAN our republic. Nothing — no were made at three Advance- TUCKER political radicals, no terrorists, no owned Alabama newspapers global warming patterns — in Birmingham, Mobile and poses such a grave threat as the Huntsville. siege under which the daily Stunningly, Postmedia just newspaper industry suffers. four days later said it will end Without daily newspapers, Sunday editions of its daily newsthere is no Associated Press, the papers in Calgary, Edmonton not-for-profit cooperative that and Ottawa. enables the sharing across the So, business is so bad that one globe of news stories. No AP, no free company drops the Sunday paper in its place to find that news on the Internet. national capital. Another cuts back to “I’ll just go find that on the web” will no three days in a state capital. Advance longer be an easy answer for those disalso has scaled back its Ann Arbor News, dainful of the economic crisis assailing now mostly a website, AnnArbor.com. daily newspapers. Northeast Ohio should hold its collecAnd, if there is no newspaper in your tive breath and hope that our region’s town, don’t think the void will be filled dailies — the largest of which, The Plain

by radio and TV news programs. My friends in that business admit that a huge chunk of their news content comes from rewriting newspaper stories. Politicians — those in the model of Frank Russo and Jimmy Dimora — would have a field day without the scrutiny of newspaper reporters. And, how often do you attend a city council meeting in your community? Apathy aside, you probably believe that if something really big happens, you’ll read about it “in the paper.” Crain’s succeeds in our market because there is a need for professionally written and edited business news and analysis. A consumer can’t simply “go to the web” and find it for free because it just isn’t there (for free). You need to be a subscriber to access our newspaper’s stories on the web. And if you rely solely on our robust e-newsletters, you’re missing some of our most valuable content. I hope Warren Buffett, who has begun buying up daily newspapers, is astute in this contrarian move. You don’t want to be like the folks in Ann Arbor who wish for their daily newspaper back. That just won’t happen. ■

THE BIG ISSUE Do you think Cavs fans still should be upset with LeBron James, or does many Clevelanders’ disdain for him reflect poorly on our city as a whole?

BUD STANNER

BILL HOHMANN

CRAIG MARTIN

KARINOIR MALLORY

Cleveland

Rocky River

Cleveland

I think the fan base in Cleveland is probably somewhat split — those who are upset and those who accept it. I don’t think it makes us look particularly bad.

What happens in sports shouldn’t be a reflection on the city.

I think he has become one of the most hated athletes, and it’s not just us. I feel like everybody that understands the situation knows that our frustration and the way we vilified the guy was kind of justified.

I don’t think anyone should be upset with him. It’s his career. It makes us look just like him.

➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.

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Unsatisfactory analysis of patient satisfaction data ■ On Page 2 of your June 11 issue, there is a tiny “factlet” that simply cannot be allowed to pass without comment. Surely there is a typo in the chart that accompanies the brief paragraph, “The Customer’s Always Right.” The conclusion that is cited is one that we would all love to believe: “Simply put, hospitals that get better grades for patient experience are more profitable than those with low grades.” Seems logical. As someone who has devoted his professional career to not only providing bestin-class medical outcomes but also a patient experience that would compete well with any customer service company, I have a strong vested interest in this being true. However, are we really to believe that a 0.6% difference in patients reporting a satisfactory experience is the difference between being in the top quartile versus the second? Indeed, is it truly possible that a 2.1% difference in patient experience is all it takes to plummet from the top to the bottom quartile? This is silly. Even if patient satisfaction surveys had enough accuracy to be a useful metric (they don’t), there simply aren’t enough hospitals in the entire United States to produce a study with the statistical power to find such miniscule deltas statistically significant. Seriously, 0.2% between the second and third quartiles and THIS is what determines your profitability? Which is a bummer for us, of course. We’re running around 99% on that satisfactory experience thing. Darrell E. White, M.D. President SkyVision Centers

LETTERS Contrarian views ■ I’d like to comment on two items that appeared on the editorial pages of the June 11 issue of Crain’s. First, I am shocked that the publisher of a business newspaper would be as happy about taxpayerfunded competition in the real estate market as Brian Tucker appears to be in his commentary, “An education on town-gown relations,” about real estate development going on around Kent State University. Beating up on the capitalist and market-participant landlords is fine, but don’t use my tax dollars to do it. And don’t call yourselves a business newspaper. You’re replacing the aristocracy of money with the aristocracy of “pull.” Second, the “letter to the editor” from Mike McManus heaps yet more praise of compromise in politics — a theme expounded upon by Mr. Tucker in his May 14 commentary, “Yet another defeat for political reason.” This position reflects a lack of understanding of the true nature and role of government, which is never to provide, but always to deny. Our rights are negative; to be free “from” and almost never free “to.” With individual freedom, the free “to” is up to each and every one of us. You can compromise when discussing from which citizens to take and to which citizens to give. But you cannot compromise on life, liberty and the pursuit of happiness. William C. Ferry Rocky River

COMING UP Crain’s breakfast set for June 21 Crain’s continues its 2012 Ideas at Dawn business breakfast series this Thursday, June 21, with a panel discussion on a demographically diverse work force. The breakfast, sponsored by Kent

CRAIN’S CLEVELAND BUSINESS

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State University, will feature panelists from KSU, FedEx International and Eaton Corp. For more information and to register, visit www.CrainsCleveland .com/breakfast.

GOING PLACES JOB CHANGES

MANUFACTURING

ARCHITECTURE

TRANSTAR INDUSTRIES INC.: Ben DePompei to chief human resources officer and vice president, corporate human resources.

DAVID SOMMERS & ASSOCIATES: Michael Kessel to project designer.

FINANCIAL FIFTH THIRD BANK, NORTHEASTERN OHIO: Michael Diasio and Daniel Zielaski to vice presidents, business banking relationship managers; Joseph Calabrese to vice president, treasury management officer. FIRSTMERIT CORP.: Daniel P. Crawford to chief investment officer and Robert Leggett to senior investment strategist, FirstMerit Wealth Management Services.

Diasio

Zielaski

Calabrese

Callanan

DePompei

Yurkschatt

NONPROFIT HATTIE LARLHAM: Amy Cannon to manager, Hattie’s Doggie Day Care & Boarding. SUSAN G. KOMEN FOR THE CURE, NORTHEAST OHIO: Michelle Wohlfeiler to development marketing manager. UCP OF GREATER CLEVELAND: Colleen Bennett to director of human resources.

UNIVERSITY HOSPITALS AHUJA MEDICAL CENTER: John G. Morikis to vice chair.

FINANCIAL SERVICE

STAFFING

GLENMEDE: Linda Olejko, Tracy Jemison II and Robert Siewert to managing directors.

DIRECT CONSULTING ASSOCIATES: John Yurkschatt to project manager, health care IT practice.

UNIVERSITY HOSPITALS CASE MEDICAL CENTER: Chris Hyland to vice chair.

RETIREMENT SOLUTIONS: Thomas J. Armagno to administrative assistant.

INTEGRITY TECHNICAL SERVICES INC.: Jim O’Neil to vice president, sales and marketing; Chris Deinlein to recruiter/company field representative; Bill Booker to IT recruiting specialist; Allen Gross to engineering recruiter.

UNIVERSITY HOSPITALS GEAUGA MEDICAL CENTER: George Taylor to vice chair.

SS&G: Matthew Mussig to associate. SS&G HEALTHCARE SERVICES LLC: Beverly Gruden to billing specialist. WESTERN RESERVE VALUATION SERVICES LLC: Daniel P. Callanan to director and shareholder.

UNIVERSITY HOSPITALS REGIONAL HOSPITALS (BEDFORD AND RICHMOND): Mark J. Plush (Energy Focus Inc.) to chair; Maryann Correnti and Mary Jo Boehnlein to vice chairs.

BOARDS UNIVERSITY HOSPITALS: Sandra Pianalto to vice chair.

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

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ON THE WEB

Story from www.CrainsCleveland.com.

Associated Estates buys N.C. apartments Associated Estates Realty Corp. said it has acquired The Apartments at the Arboretum, located in Cary, N.C., a suburb of Raleigh, and it’s working on closing a second purchase in that city. The real estate investment trust that specializes in apartments said the 205-unit property was built in 2009 and is located minutes from Research Triangle Park. The average monthly rent per unit is approximately $1,200, and the property’s occupancy rate is 92%. The average unit size is 1,073 square feet at the property, which originally was developed as a condominium. Associated Estates also said it has waived due diligence on The Park at Crossroads, a 344-unit property built in 2006, also in Cary. The property was not listed for sale.

WWW.CRAINSCLEVELAND.COM

JUNE 18 - 24, 2012

Court: Grossman described as ‘bright ... thorough’ continued from PAGE 3

“I didn’t just want to be a litigator — I wanted to have cases that mattered to my clients,” he said. Tobacco companies including R.J. Reynolds, a perpetual Jones Day client, and Philip Morris had $800 billion to lose when Mr. Grossman argued an appeal on their behalf in 2009 in the largest class action in American history. Brought on behalf of 60 million consumers who argued they’d been defrauded into believing light cigarettes were safer, the case was decertified as a class action suit — a win for the companies. Mr. Grossman also won decertification of a class action for FirstMerit Corp. The case was brought by victims of a local Ponzi scheme who alleged the Akron-based bank, which was the institution used by the scam artists, should have known better. More recently, Mr. Grossman and his team sued Martha Stewart’s company on behalf of Macy’s, alleging that Martha Stewart Living Omnimedia is violating an exclusivity agreement with Macy’s by planning to sell merchandise at JCPenney. An injunction hearing is scheduled for July 13. To date, two of Mr. Grossman’s wins have been named National

Law Journal top 10 litigation victories of the year.

Three years turn into 27 Mr. Grossman knew from a young age that this was what he wanted — to try cases and argue appeals. A New York City native, he earned his bachelor’s degree and law degree at Cornell University in 1971 and 1974, respectively. Itching to get into a courtroom, he joined the U.S. Department of Justice in 1980. In his 4½ years as trial and appellate counsel with the Justice Department, he handled 60 cases that went to hearing, defending almost every federal department and agency. In his first trial as lead counsel, he defended the Department of Commerce when Cook County, Ill., sued, insisting it had been undercounted in the 1980 U.S. Census and subsequently cheated out of more money and an additional congressional seat. The three-week trial ended with the case being dismissed — a win for the Department of Commerce — and started the streak that continues today. Years after that win, Mr. Grossman turned down a partnership offer from a New York firm to become an associate at Jones Day in Cleveland.

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His father-in-law thought he was nuts, but he had his reasons: He knew Jones Day lawyers understood litigation and did work that’s national in scope. So, Mr. Grossman moved his wife, Linda, and their two sons to Northeast Ohio in 1985, figuring they’d give it three years and see if they liked it. Twenty-seven years later, his wife and he are still here.

Cooler head prevails A headhunter statue greets visitors at the door of Mr. Grossman’s Cleveland lakefront office. “I thought it appropriate for a litigator’s office,” he said. But taking heads isn’t exactly the style of Mr. Grossman, who’s calm and confident in court, said Scott Meece, BayerHealth’s general counsel and senior vice president. “He’s very bright, he’s very thorough,” said Mr. Meece, whose company has hired Mr. Grossman to handle cases with lots of money at stake and significant risk of negative publicity. “He doesn’t need the theatrics that some use.” Once, a widow, who had cried more than once on the stand while being cross-examined by Mr. Grossman during a tobacco case involving her husband’s lung cancer, sought out Mr. Grossman afterward and shook his hand, said Jones Day partner Mark A. Belasic, who was within earshot when she did. “She said, ‘I thought you would be my worst nightmare, but you were tough and fair,’” recalled Mr. Belasic, who has tried cases alongside Mr. Grossman. “That just doesn’t happen.” And though trial lawyers are known for being hot-headed, Mr. Belasic said he’s “almost never seen Ted get mad.” During the same trial, it was revealed during a deposition that an

associate accidentally copied only one side of every two-sided page. “I remember thinking … ‘What did this guy do?’” Mr. Belasic recalled. “I would have thought the associate would have been in for a serious chewing out.” Mr. Grossman told the jury that they had a technical difficulty and he would circle back later. “The only thing Ted says (to the associate, now a Jones Day partner) was, ‘I assume that will never happen again,’” Mr. Belasic said. “And that was the end of it.” It’s a compelling example of the value Mr. Grossman places on teamwork. “In big litigation like this, it’s impossible for one person to handle the case,” Mr. Grossman said, noting that it’s not atypical for there to be hundreds of thousands of pages of documents to review and dozens of witnesses to depose. “One person can’t possibly digest all of the material and work with all the witnesses.”

Magnificent obsession Mr. Grossman calls his unbroken record of victories a “good run, not just for me, but for the teams that I won with.” The success is the result of hard work hashing out ideas as a team, thinking through scenarios and developing battle plans that work. “It pays to be obsessive,” he said. “As cases progress toward trial, it’s hard for me to think about other things. My wife tells me I don’t listen to her enough as I get closer to trial. I find myself up late at night, thinking about the case. “The thought of losing is one of the drivers that keeps me awake at 1 a.m.,” he said. “If and when my time comes (to lose), I expect I’ll be very disappointed … and I’ll learn a lot.” ■

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INSIDE

13 INTERNATIONAL BACCALAUREATE PROGRAMS, BOTH RIGOROUS AND EXPENSIVE, A FOCUS AT SOME AREA SCHOOLS.

EDUCATION PREPANDPAROCHIAL

Schools call need-based assistance a priority Finding balance with tuition hikes is difficult By AMY ANN STOESSEL astoessel@crain.com

MARC GOLUB

Carolyn Wanzor last year moved from a public school to Magnificant High School, an all-girls school in Rocky River.

BENEFITS GO BEYOND PAY While compensation may lag public schools, private teachers often find autonomy rewarding By KATHY AMES CARR clbfreelancer@crain.com

fter more than 20 years teaching in public schools, Carolyn Wanzor last year accepted a position to impart her knowledge of physics at Magnificat High School in Rocky River. Despite the small pay cut that accompanied her lateral move, Ms. Wanzor said her first year working at the private school has been the best experience in her 26year educational career. Her prior teaching gig at a local public high school included each day teaching six different science classes — from astronomy to biology

— and she said it was a laborious task preparing curricula for each subject. “Now I’m teaching just physics, and I feel like I can spend more time with the students,” she said. Ms. Wanzor’s experience is a microcosm of the modern public school teacher reality of heightened responsibilities, longer class preparation time and in many cases less time with students as reductions in government funding force districts to do more with less. Even though state and local districts have been rocked by earthquakes in the form of teacher layoffs, attrition and See BENEFITS Page 12

PUBLIC VS. PRIVATE Many teachers at private schools make less than their public school counterparts, but private school officials say independence and more time with students — unlike the burdens placed on public schools teachers these days — make up for the difference. Ohio public school teachers’ average salaries increased about 12%, reaching $56,715, from 2005 to 2011, according to StateImpact Ohio. National data accounting for inflation shows that public school workers’ salaries increased only about 2% from 2005 to 2010. Meanwhile, the average national salary for independent school teachers increased about 15% from 2005 to 2011, to $51,629, according to the National Association for Independent Schools. But Stephen Murray, the headmaster of University School, said private school staff members are lured by empowerment to structure their schedules. “People who choose to work at a private school are looking at longer hours and lower pay, but they’re still highly qualified and want to make a bigger impact on the younger people,” Mr. Murray said. — Kathy Ames Carr

t’s not cheap to attend a private school, and for many families the schools’ annual tuitions — which can reach into the tens of thousands of dollars — seem out of reach. That shouldn’t be the case, though, say Northeast Ohio private and parochial school administrators, whose institutions make a substantial commitment to providing needs-based financial aid. And it’s a commitment that they say became even more important and necessary during and since the recession’s peak years. According to the National Association of Independent Schools, between 2006-07 and 2011-12, NAIS schools grew by nearly 55% the total amount of needs-based financial aid offered to students. The number of students who received financial aid grew by 36%, based on a core sample of schools. “I do think that schools overall are finding it necessary to bolster their financial aid budgets,” said Mark J. Mitchell, who is the organization’s vice president of School and Student Services, an NAIS service that provides third-party financial aid needs assessments to about 2,000 schools. Mr. Mitchell said that while requests have leveled off, there definitely was a spike in financial aid applications during the recession, especially in 2009-10. Northeast Ohio’s private and parochial schools reported similar increases, many noting that new need appeared among families who had not previously received aid. One financial aid administrator even predicted that more higherincome families applying for aid is the biggest change on the horizon. Jerry Jindra, vice president of institutional advancement at Padua Franciscan High School in Parma, said six or seven years ago, aid requests at his co-educational Catholic high school totaled roughly $500,000; today, that need is more than $1 million. “That jump happened very quickly, and it certainly was exacerbated by the economy,” he said, noting that the school can’t cover half that need. See AID Page 15

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Benefits: Private school teachersâ&#x20AC;&#x2122; tenures become longer other cost-cutting moves, Northeast Ohioâ&#x20AC;&#x2122;s private and parochial schools say they havenâ&#x20AC;&#x2122;t felt large tremors from the shaky ground of their public sector counterparts. For now, the worlds are marginally colliding due to new economic realities. Still, there are public school instructors who are shifting to the arena of private and parochial institutions, particularly those that are hiring as some schoolsâ&#x20AC;&#x2122; enrollments grow. While salary growth among public schools remains modest at best, comparative position salaries at private and parochial schools are in some instances 30% lower and remain a consideration for recruitment. Like public schools, independent and religious institutions are working hard to tamp down the rising cost of health care and benefits, which are being passed on to staff members. But private and parochial school administrators say teachers are rewarded with peripheral benefits such as more autonomy over their schedules and curricula, a deeper

connection with students and alignment with a schoolâ&#x20AC;&#x2122;s mission. â&#x20AC;&#x153;Only a certain proportion of the public school work force (is) interested in working here,â&#x20AC;? said the Rev. William Murphy, president of St. Ignatius High School in Cleveland. â&#x20AC;&#x153;People are attracted to our school because of our Catholic and Jesuit mission.â&#x20AC;?

Does it pay? According to StateImpact Ohio â&#x20AC;&#x201D; a collaboration of NPR, WCPN and other media channels â&#x20AC;&#x201D; the average salary of an Ohio public school teacher increased about 12%, to $56,715, between 2005 and 2011. The average salary nationwide for independent school teachers increased about 15% during the like period, to $51,629, according to the National Association for Independent Schools, which represents private schools such as Laurel School in Shaker Heights and University School in Hunting Valley. The salary figures for both public and independent schools donâ&#x20AC;&#x2122;t

take into account inflation. National data that account for inflation show just a 2% increase between 2005 and 2010 for public school workersâ&#x20AC;&#x2122; salaries. But the nature of an independent school is appealing to teachers who want the flexibility to create and shape their curricula and work with highly motivated students, said Ann Klotz, head of Laurel School. She noted, however, that employees have been asked to contribute more toward health insurance, and the school has adjusted its contributions to staff retirement accounts. Stephen Murray, headmaster of University School, said while there may be a 10% to 12% difference in pay compared with public school teacher salaries, staff are empowered to structure their schedules. Public school teachers, meanwhile, often are bound by union parameters, although members are afforded certain protections, which help buoy workload and pay. â&#x20AC;&#x153;People who choose to work at a private school are looking at longer hours and lower pay, but

CLASS OF 2012

YALE CARLETON D ICKINSON PRINCE TON GEORGETOW N BROWN VASSAR STANFORD EMORY LEHIGH DUKE COR NELL WESLEYAN B ATES OBERLIN KEN YON TRINITY WAK E FOREST DEN!SON HAWKEN READY.

G E T RE A DY. H AW K E N . E D U

continued from PAGE 11

theyâ&#x20AC;&#x2122;re still highly qualified and want to make a bigger impact on the younger people,â&#x20AC;? Mr. Murray said.

Benefits add up The average school teacherâ&#x20AC;&#x2122;s pay at Saint Joseph Academy in Cleveland is about 25% to 30% less than in public schools, said president Mary Ann Corrigan-Davis, and next year will yield â&#x20AC;&#x153;a big increaseâ&#x20AC;? in benefits costs. But, classroom management is much easier, and teachers have a close relationship with students, she said. Further, â&#x20AC;&#x153;the lines of communication are so open that administration has a personal relationship with teachers,â&#x20AC;? Ms. Corrigan-Davis said. Similarly, the average teacherâ&#x20AC;&#x2122;s salary at Magnificat High School is about 25% to 30% less than that of a public school teacher, and the administration is â&#x20AC;&#x153;very up frontâ&#x20AC;? with that comparison when candidates interview for a position. â&#x20AC;&#x153;They say, â&#x20AC;&#x2DC;I know that,â&#x20AC;&#x2122;â&#x20AC;? said president Sister Carol Anne Smith, who said the school is adding four positions. â&#x20AC;&#x153;They talk about the intangibles of working here, like faith. We have a strong reputation for professional support. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve never experienced someone not interested in a position because of salary in my 20 years being here,â&#x20AC;? Ms. Smith said. St. Edward High Schoolâ&#x20AC;&#x2122;s teachers are drawn to the schoolâ&#x20AC;&#x2122;s Catholic mission, and even though the Lakewood institution works hard to remain competitive with health insurance, other perks propel staff and help differentiate it from other

institutions. For example, St. Edâ&#x20AC;&#x2122;s this year was certified as an International Baccalaureate World School, which is a rigorous, global academic curriculum, president Jim Kubacki said. The schoolâ&#x20AC;&#x2122;s educators also can apply to a fund to have the cost of a masterâ&#x20AC;&#x2122;s degree or doctorate financed. Teachers who work in the local parochial schools are holding tight as available public school teaching positions become harder to attain. Kathleen Oâ&#x20AC;&#x2122;Brien, director of catechesis and professional development for the Catholic Diocese of Cleveland, said the number of teachers leaving the diocese is down considerably â&#x20AC;&#x201D; 109 left during the 2006-07 school year, while only nine teachers left during the 2010-11 school year. â&#x20AC;&#x153;Usually the younger teachers will spend three years with us, then leave and go to the public schools for better pay and benefits,â&#x20AC;? Ms. Oâ&#x20AC;&#x2122;Brien said. â&#x20AC;&#x153;That suggests to us that people are wanting to stay in their positions. The public schools arenâ&#x20AC;&#x2122;t hiring.â&#x20AC;? Indeed, Abbey Houlas was content with her part-time job as a teacher at a local middle school, but when a full-time special education intervention specialist position opened up two years ago at Beaumont High School in Cleveland Heights, she took it. â&#x20AC;&#x153;I was happy before, but positions opened rarely in the district I was in,â&#x20AC;? she said. â&#x20AC;&#x153;I feel like I have more job security here. I know a lot of teachers (in public schools) who are uneasy.â&#x20AC;? â&#x2013;

CONGRATULATES

ALL THE YOUNG WOMEN OF THE CLASS OF 2012

Members of this class have received more than $18.2 million in merit-based scholarships and have been accepted to more than 119 colleges and universities across the country. Excellence in the Education of Women Since 1890 3430 Rocky River Drive, Cleveland, OH 44111 Â&#x2021; ZZZ VMD RUJ

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Service projects inspire students Volunteer experience helps develop awareness By EILEEN BEAL clbfreelancer@crain.com

n August, Grace Corrigan is headed to college in Denver, where she’ll major in biology and environmental issues. Her interest in the environment was fueled by both her studies at Magnificat High School and by an immersion learning trip she and her classmates took last summer to Durán, Ecuador, a working-class suburb of Guayaquil, Ecuador’s largest city. During the trip, the students were exposed to the day-to-day lives of the residents of Durán, and came to value clean, drinkable water. “You read about Ecuador in National Geographic,” she said, “but it’s not till you get there, till you step into the shoes of the poor and vulnerable there, that you realize how different their life is compared to yours.” Grace and her classmates weren’t dropped unprepared into Durán. For four years, along with collegeprep academic courses, they were immersed in the school’s campus ministry program, which includes participation in religious activities, retreats and service projects. The aim of the program, which

blends classroom-based instruction on civic and social issues with openended discussions and community volunteer experiences, is threefold: awareness-raising that leads to understanding that leads to action. “It really opens your eyes to the things outside your bubble — the nice life you have, the resources you have, the opportunities you have — and makes you grateful. And it really makes you understand that, to those to whom much is given, much is expected,” Grace said. “Once you’ve experienced that kind of learning and thinking there’s no way to unlearn it,” she added. That, says Moira Clark, dean of student life and formation at Magnificat, is the program’s ultimate goal. “You can be educated,” she adds, “but not connected to your own moral agency and the power you have to contribute to society … to make a difference.”

Knowing better = doing better At local private schools, social awareness programs are woven into the curriculum. They go by many names: service learning, social-emotional learning, community-based learning, social engagement, campus ministry,

PHOTO PROVIDED

Grace Corrigan visited Ecuador last year through Magnificat High School. tikkun olam (repairing the world), immersion learning, civic engagement. And, not surprisingly, faith-based schools tend to have the longestrunning formal programs. “They fit under the school’s umbrella of mission and values,” explained Diane Lavin, a teachercoordinator at The Agnon School in Beachwood, a Jewish school founded in 1969 for preschoolers through eighth-graders. Whether they are in faith-based or secular schools, social awareness programs, especially in the upper grades, have a strong academic component. Activities such as research and writing; open-ended discussions of

community and global issues that encourage analysis, critical thinking and reflection; comparing and contrasting of current and past events; and experiential field trips all build awareness and understanding of community challenges and societal issues, says Arin Miller-Tait, the director of the civic engagement program at Gilmour Academy in Gates Mills. “They are based in courses — in economics and urban studies and the religious studies curriculum — that develop the knowledge and competence to see … and the socialemotional understanding to act,” she said.

Andrews Osborne Academy in Willoughby. Increasingly, programs are introducing students to careers in community service through externships and volunteer placements with community agencies and facilities, economic development organizations, and art and culture groups. Citing the recent unit her students did on nonprofits, Ms. Miller-Tait explained that a lot of the students were surprised that you get paid when you work at a nonprofit. “They thought the only option was volunteering,” she added with a chuckle.

The head-heart connection

The cost of social awareness

And all, especially in the lower grades, have equally strong service components — volunteering as tutors, landscaping community senior centers, building homes in foreign countries, raising funds for local and global environmental issues — that enable students to apply what they are learning in the classroom to address and often solve real-world problems. Both components “work hand in hand, providing students with the academic background to understand what they are doing and developing the kind of selfawareness and social awareness that cultivates service and promotes personal ownership and a sense of community,” says Tasha Thompson, a middle school history teacher and lead faculty member for the service-learning program at

Given the impact social awareness programs are intended to have on students, they often don’t put a strain on schools’ budgets. Overseas trips can be costly, but Mrs. Clark said programs “that resonate with the mission are valued, so funding — from endowments and donations — will always be available for these kinds of opportunities for the students.” And the low cost is partly due to the dedication of the teachers doing the programs. “Most are doing them because they love them,” Ms. Miller-Tait said. As for the students, they buy into the academic study, classroom discussions and service projects wholeheartedly, Mrs. Thompson said, because, “these are the kinds of things that help them mature.” ■

BEAUMONT WOMEN EXCEL! Academic Excellence – the essence of a Beaumont education: 29 seniors received the President’s Award for Academic Excellence. 23 received the State of Ohio Honors diploma. Early college acceptances received to Georgetown, Boston College, Fordham University, Case Western Reserve University, and Notre Dame University.

84% OF THE CLASS OF 2012 HAS EARNED SCHOLARSHIPS AND AWARDS IN EXCESS OF $9.8 MILLION. 100% WILL ATTEND ONE OF 50 COLLEGES OR UNIVERSITIES NATIONALLY. ACHIEVEMENT Members of the Class of 2012 are National Merit Scholarship Program Finalists, National Merit Scholarship Program Commended Students, and National Achievement Scholarship Program Outstanding Participant recipients. These graduated seniors earned awards in SCIENCE at the Northeast Ohio Science & Engineering Fair, Western Reserve District 5 Science Day and State Science Day… MUSIC WCLV Northeast Ohio Music All Stars, OMEA Honors Choir Festival…ATHLETICS 26 Senior Scholar Athletes… District level in Cross Country and Swimming & Diving… #2 seed in Soccer… Final Four at the State level in Volleyball… DRAMA Excellent Rating at the Ohio Thespian Conference… ART in the Scholastic Art & Writing Competition: 1 Gold Key, 5 Honorable Mentions… LANGUAGE winner in the 2011 National French Honor Society Creative Writing Contest, First Place in the AATF East Central National French Week Essay Contest, National Latin Award Winners at Summa and Maxima Cum Laude levels… SERVICE collectively, the Class of 2012 provided 17,770 hours of service to the greater Cleveland community and through mission trips to Honduras and El Salvador. BEAUMONT WOMEN EXCEL!

A Catholic School In The Ursuline Tradition Educating Women For Life, Leadership And Service 3301 North Park Blvd., Cleveland Heights, OH 44118 | 216.321.2954 | BeaumontSchool.org

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IB curricula rigorous â&#x20AC;&#x201D; and expensive Popular International Baccalaureate system has fans and critics By TIMOTHY MAGAW tmagaw@crain.com

t. Edward High Schoolâ&#x20AC;&#x2122;s top brass believes so strongly in a burgeoning education movement that it likely spent six figures to bring it to the all-boys Catholic school in Lakewood, and it recruited an administrator from more than 2,000 miles away to help build its academic framework. In March, St. Edâ&#x20AC;&#x2122;s became the first Catholic high school in the region to be certified as an International Baccalaureate World School. IB is by no means a new concept as it was conceived in the late 1960s in Geneva, Switzerland, for children of diplomats. Since then, the program has spread to more than 3,000 schools, though it has its critics. Simply put, IB is a rigorous academic curriculum that can be imple-

mented across all grades. Itâ&#x20AC;&#x2122;s offered to a schoolâ&#x20AC;&#x2122;s brightest students and void of multiple-choice tests. It instead embraces in-depth research and writing projects that emphasize the â&#x20AC;&#x153;highest level of critical thought,â&#x20AC;? according to Gregg Good, the St. Edâ&#x20AC;&#x2122;s administrator hired two years ago from Phoenix to build the schoolâ&#x20AC;&#x2122;s IB program. At St. Edâ&#x20AC;&#x2122;s, students will have the option of pursuing an IB diploma â&#x20AC;&#x201D; something that IB proponents say college admissions officials look at favorably. â&#x20AC;&#x153;We always say to our students that this is what leaders do,â&#x20AC;? said Dr. Good, a 21-year veteran of the IB program and now St. Edâ&#x20AC;&#x2122;s executive vice president. During the 20-month IB authorization process, dozens of St. Edâ&#x20AC;&#x2122;s teachers â&#x20AC;&#x201D; some going as far as Paris and Vancouver â&#x20AC;&#x201D; were trained by IB educators. For that training, St. Edâ&#x20AC;&#x2122;s budgeted about $2,000 per teacher. Plus, the school conducted a feasibility study and paid a hefty application fee. â&#x20AC;&#x153;You donâ&#x20AC;&#x2122;t become an IB school just because you want to become

an IB school,â&#x20AC;? said Dr. Good, who now acts as the schoolâ&#x20AC;&#x2122;s principal. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s expensive.â&#x20AC;?

A costly enterprise Dr. Good wouldnâ&#x20AC;&#x2122;t say what St. Edâ&#x20AC;&#x2122;s paid to bring the program to the school. He noted it could cost as much as $150,000 over the first two years for a school or district to train 10 or 15 teachers and earn the IB designation. St. Edâ&#x20AC;&#x2122;s sent more than 40 for training around the world. That cost burden has dashed the dreams of many public districts looking for the designation and forced others to seek innovative ways to jump-start the program. Westlake City Schools, for one, is looking to join forces with the Avon Lake and Berea school districts to offer the IB diploma program to qualified high school students, perhaps at a shared facility. Independently, the Westlake district already is in the process of earning IB status at its elementary schools. â&#x20AC;&#x153;We hooked up with those schools to examine how can we offer this together as a group (at the high school level),â&#x20AC;? Westlake

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NOW THEY LEAVE AOA PREPARED TO MAKE THEIR MARK ON THE WORLD AND BEYOND! Andrews Osborne Academy Graduates Are Attending These Excellent Universities and Colleges Case Western Reserve, Savannah College of Art and Design, Parsons The New School for Design, Michigan State University, University of California - Los Angeles and San Diego, The Ohio State University, Syracuse University, Loyola University Chicago, Auburn University, School of the Art Institute of Chicago, Rensselaer Polytechnic Institute, Washington State University, Penn State University, New York University, Emory University Otterbein University, Georgia Institute of Technology The George Washington University

IT ALL S SAY R E B M THE NU â&#x20AC;˘ 52 Graduates â&#x20AC;˘ 6 Countries, 8 States and 47 Ohio Cities â&#x20AC;˘ â&#x20AC;˘ 281 Acceptances at 117 Colleges and Universities â&#x20AC;˘ 100% Continue to Universities or Colleges â&#x20AC;˘ â&#x20AC;˘ 70% Awarded Merit Scholarships â&#x20AC;˘ $7.1 Million in Scholarships â&#x20AC;˘ 35 National and State Awards in Science, Humanities, Mathematics, Music, Thespian, Foreign Language, Equestrian â&#x20AC;˘ $QGUHZV 2VERUQH $FDGHP\ Â&#x2021; 0HQWRU $YHQXH :LOORXJKE\ 2+ Â&#x2021; Â&#x2021; DQGUHZVRVERUQH RUJ

schools superintendent Dan Keenan said. â&#x20AC;&#x153;If all three participate, we could share the cost.â&#x20AC;? Meanwhile, Rod Armstrong of the Stow-Munroe Falls school board voted against allowing Indian Trail, an elementary school in Stow, to go forward with seeking IB designation. While the vote ultimately passed, the board limited Indian Trail as the districtâ&#x20AC;&#x2122;s only school permitted to seek IB designation. â&#x20AC;&#x153;My contention is we did not need to spend the money,â&#x20AC;? Mr. Armstrong said. â&#x20AC;&#x153;Besides added training teachers have to go through, IB dictates what we have to have in our curriculum. I feel itâ&#x20AC;&#x2122;s not necessarily aligned with the core knowledge coming through in the next couple years in certain areas.â&#x20AC;?

There are critics Beyond saying the program is too costly, a paramount criticism of IB is that itâ&#x20AC;&#x2122;s somehow un-American or drafted to instill Marxist values in the nationâ&#x20AC;&#x2122;s youth because of its deep roots in multicultural themes. Others suggest the Advanced Placement program â&#x20AC;&#x201D; which, like IB, is recognized with course credits by many of the nationâ&#x20AC;&#x2122;s elite colleges â&#x20AC;&#x201D; is a far better option. Mr. Armstrong said such criticisms were hotly debated in Stow, and some parents threatened to pull their children from schools looking to offer the program. In fact, he contends a more appropriate approach would be to take the best practices of the districtâ&#x20AC;&#x2122;s highest performing schools rather than outsource the work to IB. â&#x20AC;&#x153;Why wouldnâ&#x20AC;&#x2122;t we just do the work ourselves and make our curriculum the best-in-class curriculum?â&#x20AC;? Mr. Armstrong said. â&#x20AC;&#x153;Why would we go out and pay for this?â&#x20AC;? IB proponents contend the claims the program is un-American are misguided and that themes emphasizing multiculturalism are what students need to be competitive in a global economy. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a lot more interconnected today than we were 20 years ago,â&#x20AC;? said Richard Bischoff, vice president for enrollment management at Case Western Reserve University. â&#x20AC;&#x153;And if

IN WITH THE IB CROWD According to the International Baccalaureate program, there are 30 schools in Ohio with IB programs. Those with programs in Northeast Ohio are: â&#x2013; Aurora High School, Aurora â&#x2013; Boulevard Elementary School, Shaker Heights â&#x2013; Eastwood Elementary School, Oberlin â&#x2013; Firestone High School, Akron â&#x2013; Langston Middle School, Oberlin â&#x2013; Oberlin High School, Oberlin â&#x2013; Prospect Elementary School, Oberlin â&#x2013; St. Edward High School, Lakewood â&#x2013; The Montessori High School at University Circle, Cleveland â&#x2013; Shaker Heights High School, Shaker Heights SOURCE: THE INTERNATIONAL BACCALAUREATE

you fast-forward 20 years, weâ&#x20AC;&#x2122;ll be even more interconnected.â&#x20AC;?

So, why do it? Dr. Good said parochial schools throughout the country are facing enrollment declines, and St. Edâ&#x20AC;&#x2122;s investment in the IB program is another way to get a leg up on its competition, in addition to best preparing its students academically. He also noted the buzz about the schoolâ&#x20AC;&#x2122;s quest to become an IB school has helped grow its enrollment numbers and helped it lure even brighter students. The program, he said, also could be used to help market St. Edâ&#x20AC;&#x2122;s to international students as the school explores the possibility of boarding students over the next few years. Moreover, some in the education industry consider the IB designation a stamp of approval of sorts. That was the case for the Montessori High School at University Circle, a private school that received the IB label shortly after opening four years ago. With tuition hovering at about $18,000 for nonboarding students, parents had to know their children would receive a quality education, according to Victoria Broer, the outgoing head of school. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a relatively well-understood international and national curriculum,â&#x20AC;? Ms. Broer said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s sort of a way to say weâ&#x20AC;&#x2122;re serious.â&#x20AC;? â&#x2013;

Urban Community School provides primarily low-income children from Clevelandâ&#x20AC;&#x2122;s near west side with an individualized, innovative, and challenging education. Founded and sponsored by the Ursuline Sisters of Cleveland, UCS is an ecumenical school in the Catholic tradition. 4909 Lorain Ave. Cleveland, OH 44102 216-939-8330

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Aid: Schools work to raise more revenue through other sources continued from PAGE 11

One of the greatest challenges for private and independent schools is finding the balance between increasing tuition and the need for financial aid. Simply put, the higher tuition goes, the more families will need financial aid. Nationally, the median tuition for NAIS independent day schools in 2011-12 for first grade was $18,720, and the median tuition for 12th grade was $21,995. For the same time period, 22.4% of students enrolled in NAIS member schools received need-based financial aid; the average grant was $12,877. To address that balance, Mr. Mitchell said many schools are working to find other sources of revenue. For example, more are turning to summer programs, finding ways to reuse their physical grounds or generating revenue from intellectual property, such as curricula. Padua commits almost all of its efforts in the annual fund to financial aid, and it’s a call that has been heard by alumni and supporters, Mr. Jindra said. While at one time it was easier to raise funds for bricks and mortar vs. individual student needs, the tide has turned with the economy’s shift. “As soon as 2009 rolled around there was this great awareness,” he said. “Suddenly they appreciated the need for financial aid.” Still, Mr. Jindra said, the reality is that parents are making sacrifices to send their children to Padua, which on its website lists 2011–2012 tuition at $8,975, including all academic fees. But many are willing to do so because of the value they see in a private education. “They’re not only well-prepared, but they take with them benefits to pay for the next step,” said Mr. Jindra, illustrating his point with the statistic that four out of five seniors graduate Padua with a college scholarship. “In a sense, you get what you pay for.”

Alumni connections Schools generally fund needsbased financial aid through their operating budgets, endowments and the generosity of alumni and community members. Last month, Andrews Osborne Academy in Willoughby, for example, was the recipient of $50,000 from Dworken and Bernstein Co. LPA. The funds — intended to be used for financial aid and scholarships at 357-student co-ed pre-kindergarten through 12th-grade school — are part of the Ohio Lawyers Give Back program, which distributes unclaimed class action settlement funds to various causes. The donation was a boost for Andrews Osborne, which has been working to build up its small endowment since its formation in 2007 through the merger of Andrews and Phillips schools, said Charles Roman, head of school. In a typical fiscal year, Andrews Osborne awards financial aid to 30% to 33% of its student body. Financial aid, as well as scholarships and tuition remission, equate to approximately 16% of the school’s operating funds annually. For newly established Andrews Osborne, which in the past year

hired a full-time development director, fundraising is an effort that includes both re-establishing its identity and reconnecting with the alumnae of the formerly allgirls’ Andrews School. “We want them to know the school is still for them,” he said. “They realize that we’re taking care of their old home.”

“We want (alumnae) to know the school is still for them. They realize that we’re taking care of their old home.” – Charles Roman head of school, Andrews Osborne Academy

Motivating factors At Hathaway Brown School in Shaker Heights, alumnae ties are equally as important. Indeed, it’s not unusual for an alumna who once received financial aid to

come to the school wanting to give back to the same cause, according to Sarah Liotta Johnston, director of admission and financial aid.

“Women are great at the human side of the experience,” she said. “That sisterhood does exist.” In addition to annually awarding about $3.9 million in financial aid, Hathaway Brown has set up what is known as the Serendipity Fund to assist with student expenses beyond tuition, such as a trip overseas or even to pay for a prom dress. It annually awards about $35,000 from that fund. But why go to such efforts to help students who couldn’t otherwise pay? Independent and parochial schools see financial aid as part of

their missions, as well as an essential component to building a student body that’s reflective of what’s happening outside the institution’s walls. “We want the population here at Hawken to reflect the real world. … The real world is a diverse place,” said Heather Daly, director of admission and financial assistance at Hawken School, which has awarded $5.3 million in primarily need-based assistance for 2012-2013. “It is a commitment,” she said. “It is important to us that we have a real cross-section of the world.” ■

Best of luck to the Class of 2012 as they embark on the next part of their journey. Whether she chooses a college that’s down the hill or one that’s halfway across the globe, each Hathaway Brown graduate ﬁnds the campus that’s right for her. For generations, HB alumnae have brought their unparalleled intelligence, unbridled enthusiasm, strong character and thirst for knowledge to historic Ivy League institutions, top public and private universities, specialized conservatories, and small liberal arts colleges in the United States and abroad.

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CLASSOF2012SNAPSHOTS

e asked some of the regionâ&#x20AC;&#x2122;s private and parochial schools to share a snapshot of their 2012 graduating classes, including scholarships received, college plans and other interesting facts. Here are some of their responses: â&#x2013; St. Ignatius High School, Cleveland, 370 graduates: Scholarship dollars for the class totaled $29.1 million for four years, beginning with the 2012-2013 school year. Nearly 100% of the class is going on to college: 73 will go to Jesuit schools, including Georgetown University; 39 to Catholic institutions, including the University of Notre Dame; and 72 to private, nonsectarian schools. Students will attend such schools as the Massachusetts Institute of Technology and Johns Hopkins, Rice, Stanford and Yale universities. In addition, 171 will head to public schools, including McGill University in Montreal. Graduates will attend the U.S. Air Force and Naval academies. â&#x2013; Walsh Jesuit High School, Cuyahoga Falls, 212 graduates: At Walsh Jesuit, 77% of the class received college merit scholarships, totaling

$20.4 million. Of the top 10 students in the class, four have plans to attend Ohio State University. Also of note: 33% will attend Jesuit or Catholic school. â&#x2013; Padua Franciscan High School, Parma, 227 graduates: Paduaâ&#x20AC;&#x2122;s graduates, 97% of which will be attending two- or four-year programs, have been offered a total of $17.3 million in nonrepayable offers, which includes grants and scholarships. Two students have enlisted directly into the military â&#x20AC;&#x201D; one Army and one Marine Corps â&#x20AC;&#x201D; with two additional students earning ROTC scholarships through John Carroll and Ohio universities. Two students are pursuing junior hockey programs. The school has just more than 20 students who will attend Ohio State University, including its valedictorian and salutatorian. In addition, 20% will continue their Catholic education. One graduate was accepted to the University of Notre Dame, another will travel west and attend Arizona State University. Two received scholarships to attend the Cleveland Institute of Art. â&#x2013; St. Edward High School, Lakewood, 209 graduates: The

class earned 350 merit-based scholarships worth $11.2 million. St. Edâ&#x20AC;&#x2122;s reports it is the only parochial school in Northeast Ohio to have a student accepted to Harvard University in the past two years. Also, in the past two years it has had a student accepted to every Ivy League school, as well as West Point and the Naval and Air Force academies. â&#x2013; Magnificat High School, Rocky River, 186 graduates: Among the students in the 54th graduating class, 71% were offered $13.5 million in college scholarships. â&#x2013; Lake Catholic High School, Mentor, 191 graduates: Lake Catholic grads will attend 48 different schools; 82% received scholarship money totaling $11.1 million. Among the graduates, 99% plan to attend college. Of the two remaining students, one will join the military and another will pursue a film-making internship. One of the schoolâ&#x20AC;&#x2122;s graduates will attend the Air Force Academy, while another will attend the University of Notre Dame. â&#x2013; Holy Name High School, Parma Heights, 158 graduates: Holy Name grads earned $8.3 million in merit-based scholarships, which were awarded to 47% of the class. After graduation, 99% will attend post-secondary

institutions (with about 53% heading to public and 47% private), while 1% plans on entering the military or work force. â&#x2013; St. Vincent-St. Mary High School, Akron, 154 graduates: At St. Vincent-St. Mary, 67% received partial or full scholarships, both academic and athletic. The scholarship offers were worth $13.6 million. Of the graduates, 96.5% plan to attend college: 1% is going to out-of-state to schools; 58.8% to public schools; and 23.5% to private colleges. Three students are going into the military and one is going to an acting conservatory. â&#x2013; Cleveland Central Catholic, Cleveland, 114 graduates: At Cleveland Central Catholic, 86% of graduates are headed to a two- or four-year college; 3.5%, the military; 3.5%, a trade or technical school; and 7%, the work force. Twenty-five students received scholarship offers totaling about $2 million. â&#x2013; Hawken School, Gates Mills, 113 graduates: At Hawken, 37% of graduates received merit scholarships, worth more than $1.2 million. The entire class has plans to go on to college. About 26% will go to a public university, and about 25% will go to an in-state college or university. â&#x2013; University School, Shaker Heights, 109 graduates: Forty-five seniors, or 41% of the graduating class, received at least one merit scholarship. The total amount in merit scholarship money awarded to this class over four years equals $2.4 million. Of the 109 seniors, 107 will be attending a four-year college. Two seniors have decided to forgo college to play junior hockey. The class is headed to 67 different colleges in 27 states and Washington, D.C. Two stu-

Hats off to the Laurel Class of 2012! Congratulations to the following fine colleges and universities which will welcome Laurel girls who Dream. Dare. Do.: Boston Conservatory, Bucknell University, Carleton College, Carnegie Mellon University, Case Western Reserve University, Centre College, University of Cincinnati, University of Cincinnatiâ&#x20AC;&#x201C;Architecture, Cleveland State University, College of Charleston, College of William and Mary, The College of Wooster, Colorado College, Connecticut College, Cornell University, Cornell Universityâ&#x20AC;&#x201C;Architecture, Dartmouth College, DePaul University, Duquesne University, Elon University, Fordham Universityâ&#x20AC;&#x201C;Honors, Georgetown University, The George Washington University, Hiram College, Hobart and William Smith Colleges, John Carroll University, Kenyon College, Lafayette College, Lehigh University, Massachusetts Institute of Technology, Miami University, University of Michiganâ&#x20AC;&#x201C;School of Kinesiology and Honors, University of Mississippi, The Ohio State University, The Ohio State Universityâ&#x20AC;&#x201C;Mount Leadership Society Scholar, Honors, International Scholar and School of Music, University of Oxford, Rice University, University of Rochester, University of St. Andrews, St. Johnâ&#x20AC;&#x2122;s College, St. Olaf College, Sewanee: The University of the South, Smith College, University of Southern Californiaâ&#x20AC;&#x201C;School of Cinematic Arts, Syracuse University, Syracuse Universityâ&#x20AC;&#x201C;Architecture, Tulane University, Vassar College, University of Vermont, University of Virginia, Washington University, Wellesley College, Wesleyan University, University of Western Ontario, Williams College, Xavier University

We were honored to help inspire you to fulfill your promise and to better the world. We canâ&#x20AC;&#x2122;t wait to see what you accomplish! Girls Kindergartenâ&#x20AC;&#x201C;Grade 12 Coed Pre-Primary Call 216.464.0946 www.LaurelSchool.org Laurel School â&#x20AC;˘ One Lyman Circle â&#x20AC;˘ Shaker Heights, Ohio 44122

dents will attend college in Canada. The list of colleges includes: four Ivy League schools, nine flagship state universities, 25 liberal arts colleges and 11 colleges Newsweek/Kaplan term â&#x20AC;&#x153;New Ivies.â&#x20AC;? Two students have signed national letters of intent, but six overall will compete at the NCAA Division I level while 17 plan to compete at the NCAA Division III level. â&#x2013; Laurel School, Shaker Heights, 66 graduates: Two graduates will study abroad â&#x20AC;&#x201D; one at the University of St. Andrews in Scotland and one at the University of Oxford. The majority of the Class of 2012 will attend college out of state and, of those, most will attend private colleges and research universities. Three graduates are enrolled in architecture programs; and three graduates will be attending music conservatories or music programs. One graduate will study screenwriting at the highly selective University of Southern Californiaâ&#x20AC;&#x2122;s School of Cinematic Arts. â&#x2013; Andrews Osborne Academy, Willoughby, 52 graduates: Andrews Osborne reports that 36 of its grads received scholarships, or 70% of the class. Scholarships amounted to $7.1 million, which averages $136,538 per AOA senior. The entire Andrews Osborne class has plans to attend college (it is a requirement of the school that in order to receive a diploma all seniors must have been accepted and plan to attend a four-year college or university). â&#x2013; Hathaway Brown, Shaker Heights, 77 graduates: At Hathaway Brown, 13% of students will attend public schools, while 87% will attend private. The entire class has plans to attend college, with 13% attending in-state institutions and 87% out of state.

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20120618-NEWS--17-NAT-CCI-CL_--

6/14/2012

3:11 PM

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JUNE 18 - 24, 2012

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

WWW.CRAINSCLEVELAND.COM

LARGEST NONPROFITS RANKED BY 2012 EXPENSES

Name Address Rank Phone/website

Expenses 2012 Expenses 2011 (millions) (millions)

Total revenue 2011 (millions)

Income from private support

Income for program services

2011 fund balance (thousands) Purpose

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

$134.2

$128.3

$129.0

2.0%

97.0%

($36.9)

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

$98.0

$92.3

$92.0

3.6%

84.8%

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

$96.6

$92.7

$94.4

32.9%

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

$68.3

$67.1

$66.2

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

$68.0

$66.8

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

$57.6

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

8 9

Top local executive

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

Ronald Hill CEO

$42,300.0

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

William E. Finn CEO

84.3%

$69,300.0

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

Patrick Gareau president, CEO

43.8%

94.6%

$28,982.7

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

Steven Raichilson executive director

$66.4

99.0%

87.0%

$348,720.0

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

Stephen H. Hoffman president

$58.1

$57.5

59.0%

95.9%

The Cleveland Foodbank works to ensure that everyone in our communities has the nutritious food they need every day

Anne Campbell Goodman president, CEO

$50.0

$49.1

$58.3

49.9%

63.4%

$853,968.5

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

David Franklin director

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

$48.8

$47.5

$44.8

96.0%

85.0%

$162,556.0

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

Gary Hanson executive director

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

$47.0

$46.9

$45.2

3.0%

86.2%

$15,300.0

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

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

$43.5

97.3%

87.0%

$32,430.8

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

William Kitson president, CEO

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

$42.5

$47.2

$48.3

5.0%

88.0%

$23,236.9

PEP helps troubled and troubling children learn and grow

Frank A. Fecser CEO

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

$42.4

$41.6

$57.0

96.0%

87.0%

$89,047.0

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

Art Falco president, CEO

Guidestone 202 E. Bagley Road, Berea 44017 (440) 234-2006/www.guidestoneohio.org

$40.8

$37.5

$38.9

11.4%

84.5%

$16,640.2

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

Richard R. Frank president, CEO

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

$39.0

$37.8

$38.3

1.0%

96.0%

$12,690.0

Community corrections programs and chemical dependency treatment

James J. Lawrence president, CEO

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

$38.8

$36.7

$36.6

13.0%

86.1%

$36,953.5

To give as many people as possible the Sobol Jordan opportunity to be healthy, educated, independent Sharon president, CEO and connected.

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

$37.8

$35.6

$38.2

8.0%

89.0%

$31,293.0

To provide a comprehensive system of health care and wellness services to seniors on campus and throughout the community

Lauren B. Rock president, CEO

Judson Services Inc. 2181 Ambleside Drive, Cleveland 44106 (216) 721-1234/www.judsonsmartliving.org

$34.4

$34.6

$35.7

77.0%

91.0%

$7,383.0

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

Cynthia H. Dunn president, CEO

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

$33.7

$21.8

$22.6

65.3%

75.5%

$16,887.4

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

Dennis J. Kresak president, CEO

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

$32.8

$31.1

$30.0

16.0%

87.0%

$28,000.0

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

Dennis Allen CEO

Stein Hospice Service Inc. 1200 Sycamore Lane, Sandusky 44870 (419) 625-5269/www.steinhospice.org

$32.5

$29.5

$30.3

$6,186.4

Provides hospice and palliative care to patients and families in Erie, Ottawa, Huron, Seneca, Sandusky, Brown and Lorain counties

Jan Bucholz CEO

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

$29.1

$26.3

$27.4

7.0%

85.0%

$14,431.2

Preparing people with barriers to employment for a brighter future

Robert E. Comben Jr. president, CEO

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

$27.2

$20.6

$23.3

100.0%

80.0%

$3,758.4

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

Howard S. Russell president, CEO

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

$27.0

$22.8

$24.2

94.4%

76.4%

$94,700.2

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

Terry Stewart president, CEO

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

$26.7

$25.4

$26.6

91.0%

93.0%

$10,109.4

To provide food to charitable agencies that feed Daniel R. Flowers people in need in eight counties president, CEO

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

$25.6

$41.3

$41.9

70.0%

95.0%

$21,357.0

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

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

$25.4

$23.1

$23.6

1.1%

89.0%

$479.8

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

$25.4

$25.5

$26.1

13.0%

89.0%

$35,396.5

To advance the emotional well-being of children, Debra Rex youth and families by providing behavioral health CEO and educational services

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

$25.0

$23.8

10.0%

93.0%

$12,915.0

To promote responsible living and positive T. Miller change in troubled children through partnerships James president, CEO with families and communities

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

$24.3

$22.4

$26.4

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

$23.5

$23.9

$24.6

55.0%

75.0%

$2,550.8

Robert S. Curry executive director

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

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

Susan Bichsel president, CEO

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

This list of 501(c)(3) status nonprofit organizations is an approximate compilation of the largest organizations in Northeast Ohio. Universities, colleges, foundations and hospitals were excluded. Information is supplied by the organizations 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.

RESEARCHED BY Deborah W. Hillyer

20120618-NEWS--18-NAT-CCI-CL_--

6/15/2012

1:49 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 18 - 24, 2012

Bones: Field expected to boom Horseshoe: Marketers see value by investing in loyal customers continued from PAGE 1

Basically, Northeast Ohio is good at building stuff and then sticking it inside people to fix their ills. That’s how it was characterized by Dr. Thomas Graham, chief innovations officer at Cleveland Clinic Innovations, the health care juggernaut’s business development arm. Dr. Graham, who also is the Clinic’s vice chairman for orthopedic surgery, said the orthopedics field “is a very big tent.” “A lot of people can convene in it, and I think that’s very exciting when engineers can speak to surgeons, therapists and investors.” The region’s growth in orthopedics is accelerating so quickly that the Clinic’s annual innovations conference, scheduled for Oct. 29-31, is focused on the field and aptly is titled, “Innovative to the Bone.” Evidence of the growth is seen in the Austen BioInnovation Institute in Akron earlier this year spinning out its first company, APTO Orthopaedics. A consortium of local hospitals and universities — dubbed the “orthopedic research cluster” — also continues to draw money for research and faculty hires from the state’s Third Frontier technology development program. “In many ways, we’re getting close to being recognized as having one of the strongest growing consortiums in orthopedics,” said Walter Horton, vice president for research and dean of graduate studies at the Northeast Ohio Medical University (NEOMED) in Rootstown, one of the cluster’s members. “We have significant clinical care, significant research funding and significant innovations.”

It’s in our bones While it seems as if there’s been a flurry of activity in Northeast Ohio in orthopedics over the last two or three years, the region’s roots in the field go back decades, according to Baiju Shah, president of BioEnterprise Corp., a Cleveland nonprofit that assists health care companies in the region. Mr. Shah said the region’s success in orthopedics was best recognized by AcroMed Corp., a Cleveland-area startup that specialized in spinal implants. Depuy Inc., a subsidiary of Johnson & Johnson, acquired the company for $325 million in 1998 and eventually moved it to Massachusetts. However, a chunk of AcroMed’s talent pool remained in Cleveland, planting the seeds for further growth in the field. For one, entrepreneurs Chuck Birchall Jr. and James Kuras, both former AcroMed employees, formed AxioMed Spine Corp., a spinal implant company in Garfield Heights that continues to

draw venture dollars. The company recently secured $5 million in equity financing to close a $20 million Series D financing round. Randy Theken, another Northeast Ohio entrepreneur, also harnessed some of that former AcroMed talent in his founding of a handful of spinal implant companies throughout the 1990s that he organized under the Theken name. Integra LifeSciences Holdings Corp. of Plainsboro, N.J., bought the companies in 2008 but, unlike Depuy, kept them in the region to retain the existing talent, according to Mr. Theken. Even with the heap of existing talent, local research institutions are leveraging state dollars to draw new experts to the region. Using Third Frontier money, NEOMED recently hired skeletal biologist Fayez Safadi from Temple University in Philadelphia, whom Dr. Horton said brought with him $2 million in federal research money. The medical university also recruited Rebecca German, a biologist, from Johns Hopkins University in Baltimore to join the orthopedic research cluster. The University of Akron, a recognized leader in polymer science and biomaterials, is looking to apply more of its research to orthopedics, said Ajay Mahajan, associate dean for research at its College of Engineering. Dr. Mahajan already has supervised a team of students that go by the business team name “Telkesis” that developed a type of spinal implant he contends could open a market worth a “couple hundred million dollars.”

We’re growin’ old Given that people are living longer and refusing to slow down in their golden years, experts say the development of technologies to mend broken bones and aching joints is only going to accelerate. The U.S. Department on Aging, for one, expects the population over 65 years old to balloon from 40 million people in 2010 to as many as 55 million by 2020. Dr. Stephen Fening, the Austen BioInnovation Institute’s director of orthopedic devices, said hospitals are trying to grow their orthopedic services in anticipation of a surge of baby boomers. However, he said there’s a need to continue building the region’s research capabilities in orthopedics — one of the reasons for the birth of the institute. In the last year alone, Dr. Fening said the Austen BioInnovation Institute has generated more than 60 inventions in orthopedics. “Where we will make our mark is in translational orthopedic research, which is research that impacts patients rapidly,” he said. ■

continued from PAGE 1

and advertising effort,” said Andrew Klebanow, a principal in Gaming Market Advisors, a gaming industry consulting firm based in Las Vegas. Rock Ohio Caesars LLC, a partnership of Dan Gilbert’s Rock Gaming LLC and Caesars Entertainment Corp., has not directly disclosed a revenue estimate, but an April casino fact sheet estimated the Horseshoe Cleveland will generate $100 million in gaming tax revenue for a full year’s operation. Because the tax rate was set at 33% in the state ballot initiative that created the casinos, the tax figure suggests gross revenue of $300 million in 2013 and beyond, which would put the marketing budget at about $60 million.

The Total package Mr. Glover said the casino will be using its own events, such as poker tournaments, and promoting events and attractions in Cleveland to bring people downtown and to the casino. Since the casino has limited food service and offers no entertainment, David Gilbert, president and CEO of Positively Cleveland, the local convention and visitors’ bureau, said he believes the casino and its marketing effort will benefit downtown restaurants, night spots and hotels. Where the pencil meets the balance sheet is a sophisticated marketing effort that focuses intensely on keeping players coming back — not just to the Cleveland casino but to Caesar’s worldwide network of 52 casinos. “Our efforts are twofold — talking to Total Rewards members and introducing the wider market to the Horseshoe Casino Cleveland, Total Rewards and Caesars,” Mr. Glover said. Total Rewards? The wider market? For the uninitiated, that is the way casino operators segment their customers. Total Rewards members are the 40 millionplus people around the world, including 150,000 within a 150-mile radius of Public Square, who have signed up for the Caesar’s loyalty program. The program operates like a supermarket loyalty program that entitles shoppers to discounts in exchange for providing the casino with detailed information about what casino games members play and how much they bet. The “wider market” is the newbies and transient gamblers. The focus, however, will be on Total Rewards members.

“The Pareto Principle holds very true for casino gaming,” Mr. Klebanow said. The Pareto Principle is named after an early 20th century Italian economist who argued that, in many situations, 80% of the value comes from 20% of a given population. In the case of the casino business, Mr. Klebanow said, the 20% are the Total Rewards members.

Loyalty counts Mr. Klebanow said a significant portion of the marketing budget goes directly into what he called “player reinvestment,” which is based on the gambling activity recorded on a Total Rewards card. He said if a casino operator’s analysis suggests a given player averages, say, $200 a visit, the casino will expect to return, or “reinvest,” 20% to 25% of that amount to the player in perks. Those perks carefully are calibrated to offer the greatest rewards to the most avid and regular players. “They find opportunities to encourage (casino) players to come check out the new facility in Cleveland but also to explore the city (by going) to the Rock and Roll Hall of Fame or PlayhouseSquare,” said Jennifer Kulczycki, a Rock Gaming spokeswoman. For example, when the Cleveland Browns play the Pittsburgh Steelers this fall, Total Rewards members in Pittsburgh might be offered a free hotel room or admission to the Rock Hall. The assumption, of course, is the cardholder will spend some time over that weekend at the casino. At the extreme end, Mr. Glover said the casino paid for the airfare and hotel room costs for 150 Total Rewards VIPs over a weekend in early June just to acquaint them with the new casino — and to reward them for their loyalty to Caesar’s. Mr. Klebanow wasn’t surprised. “I don’t think you’ll find an industry that is as generous as or more aggressive in fostering that loyalty than you will in the casino industry,” Mr. Klebanow said. “If you’re a (Caesar’s) player you’ll probably have three or four offers to go to Las Vegas (in your email) today.” Caesar’s operates 10 casinos in Las Vegas, each appealing to a different kind of customer. He said the Caesar’s program is among the best in the industry. “Total Rewards is a very compelling package of benefits,” he said. “It forces a lot of other casino companies to find new ways to compete.” ■

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6/15/2012

4:02 PM

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JUNE 18 - 24, 2012

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THEINSIDER

THEWEEK JUNE 11 - 17 The big story: The Cleveland Clinic and Ohio University will invest a combined $49 million to open a medical school campus at the Clinic’s South Pointe Hospital in Warrensville Heights. The campus will be an extension of Ohio University’s Heritage College of Osteopathic Medicine and will be targeted at addressing the shortage of primary care physicians in Ohio. The first class of 32 medical students is expected to begin in July 2015, as long as the college’s accrediting bodies sign off on the initiative. Best intentions: Panther Expedited Services Inc., a shipping and logistics firm based in Seville, agreed to a sale to an Arkansas-based freight transportation and logistics company. Arkansas Best Corp. plans to purchase Panther from New York-based private equity firm Fenway Partners LLC for $180 million. All of Panther’s debt will be repaid as part of the transaction. Master of new domains?:

A Cleveland company that controls the “.jobs” top-level Internet domain name aims to win rights to seven new domain names and has formed some big alliances intended to help it administer them. Second Generation Ltd. said a holding company, Second Genistry LLC, applied for the rights to seven Internet domain names that don’t exist today: .med, .casino, .hot, .career, .realtor, .realestate and .home. Among its allies are the Cleveland Clinic, the National Association of Realtors and Rock Gaming LLC, majority owner of the Horseshoe Casino Cleveland.

The need for speed: The National Science Foundation chose Cleveland as one of 25 cities that will participate in a national partnership meant to spur the development of software programs that take advantage of ultra-fast Internet speeds. The local effort will be led by OneCommunity, a Cleveland nonprofit that offers highspeed Internet access and IT services to governments and nonprofits in Northeast Ohio.

A cool half-million: Horseshoe Casino Cleveland officials announced that nearly a halfmillion guests came through the new casino’s doors in its first month of operation. The casino opened on Public Square May 14 to long lines of hope-filled gamblers. Horseshoe Cleveland general manager Marcus Glover said the lines “have been replaced by a steady buzz of excitement.” The casino said it has booked more than 4,800 room nights at downtown Cleveland hotels, many through the Total Rewards membership program of Caesars Entertainment Corp., the co-owner of the casino. Looking up: Local information technology companies are doing well, they’re hiring, and they expect the next 12 months to be even better, according to the results of the Northeast Ohio Software Association’s first-quarter survey. A record 87% of the 98 respondents said they expect business to improve over the next 12 months, up from 83% in the fourth quarter of last year and 77% in the first quarter of 2011. The 87% figure is the highest recorded since NEOSA started conducting the survey five years ago. Global view: Akron-based A. Schulman Inc. entered into a 50-50 joint venture agreement with National Petrochemical Industrial Co. of Jeddah, Saudi Arabia, a subsidiary of Alujain Corp., to produce polypropylene compounds together. The joint venture is planning to build a polypropylene compounding plant in Yanbu, Saudi Arabia, where it expects to begin production by the end of 2014.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Here’s a line on the Waterfront Line

the Flats was a booming entertainment district. — Jay Miller

So much for the voice of experience

Forest City reaps payoff from casino

■ Mutual fund companies may owe their success more to luck than to their managers’ experience, according to a study coauthored by a John Carroll University professor in the latest issue of the Journal of Applied Finance. Gary Porter, an associate professor of finance at John Carroll’s Boler School of Business, and Jack Trifts, a professor at Bryant University in Rhode Island, report that solo fund managers — those who manage funds individually, rather than with a team — tend to get worse at their jobs the longer they practice them. In the study, Drs. Porter and Trifts report that solo mutual fund managers with 10 or more years of experience are likely to have a poorer performance the longer they manage. Also, those with 10 or more years of experience are most likely to have had their best success in their first three years. The study examined the relationship between performance and tenure of 289 fund managers and 355 actively managed funds. “These guys don’t have crystal balls,” Dr. Porter said. He said the lesson he relays to his students from the study is the importance of diversifying their investments among several managers, or to invest in index funds, which he noted are growing in popularity. “For most investors, that’s probably the best way to go,” Dr. Porter said about index funds. “The fund managers would argue against that.” — Timothy Magaw

■ If you saw trains running on the Waterfront Rapid Transit line last week, you can thank the U.S. Marine Corps. And if you like the orphaned transit line, be ready to thank ■ At the Tower City Center office-retail the folks at the Ernst & Young complex, the opening of the accounting firm and the Tucker Horseshoe Casino Cleveland in Ellis law firm. the attached Higbee Building Michael Schipper, RTA’s has created a “tremendous deputy general manager for increase in traffic count in the engineering and project shopping center,” said David management, said the transit LaRue, CEO of Cleveland-based agency is planning to reopen Forest City Enterprises Inc., on the Waterfront line on a regua June 8 conference call with lar basis once that new Flats investors and security analysts. East Bank office building, Fielding a question about which will house those two the casino’s impact on Forest firms, opens next spring. The City’s financial results, Mr. building had its topping-off LaRue said the company is evalFILE PHOTO/MARC GOLUB ceremony June 6. uating who the casino cusThe Flats East Bank office tomer is and the best way to building will bring as many as 3,000 employserve them. ees to the area of rapid transit stop at West “We don’t have a strong handle on that 10th Street and Main Avenue, and Mr. Schipyet,” Mr. LaRue said, as the casino has been per said RTA will refurbish the stop in anticopen less than a month. ipation of more passengers. RTA figures He was more enthusiastic about some of those folks will use the line, espethe impact of casino patrons on 3,000 parking cially because the lakefront municipal parking spots Forest City controls at the complex. lot is only two stops to the east of the new “There has been a robust increase in building. parking counts,” Mr. LaRue said. For several years, the line has operated Last Thursday, officials with Horseshoe only on weekends and for special events Casino Cleveland announced that nearly a such as last week’s Marine Week and for half-million guests came through the new Cleveland Browns games. The 2.2-mile line casino’s doors in its first month of operaopened in 1996, coinciding with the city’s tion. The casino opened May 14. — Stan bicentennial celebration and at a time when Bullard

WHAT’S NEW

BEST OF THE BLOGS

THE COMPANY: EYE Lighting International, Mentor THE PRODUCT: Additions to its Cera Arc ceramic metal halide lamp family

Excerpts from recent blog entries on CrainsCleveland.com.

The maker of lamps, luminaires and related lighting products said the new additions to its Cera Arc ceramic metal halide lamp family — the 220W, 230W and 270W models — “produce a bright, white light and are energyefficient, with efficacy rated up to 117 Lumens per watt.” EYE Lighting’s 230W and 270W models “can achieve significant energy savings by dimming with a Metrolight SmartHID electronic ballast,” the company said. They operate in the vertical burn position and are open-fixture rated, according to EYE Lighting. The 220W model operates in the horizontal burn position and is rated for enclosed fixtures. All models feature lumen maintenance up to 95%, and the 30,000 hours of life reduces maintenance costs,” EYE Lighting says. The Cera Arc lamp family models “are ideally suited for retail, grocery stores, gyms, parking lots, roadways, sidewalks, area lighting, flood lighting, factories and warehouses,” the company says. They have been recognized with three IES (Illuminating Engineering Society) Progress Report awards. For information, visit www.eyelighting.com. Send information about new products to managing editor Scott Suttell at ssuttell@crain .com.

Heart surgery is easy; 140-character advice is hard ■ Doctors generally have been cautious adopters of social media. But an Associated Press story, which featured comments from Dr. Steven Nissen of the Cleveland Clinic, asserted that “a new breed of physicians is texting health messages to patients, tracking disease trends on Twitter, identifying medical problems on Facebook pages and communicating with patients through email.” So far, according to the largely anecdotal story, the numbers are Nissen small. However, “from the nation’s top public health agency, to medical clinics in the heartland, some physicians realize patients want more than a 15-minute office visit and callback at the end of the day,” according to the AP. Dr. Nissen, a cardiologist in his 60s, tells the AP he’s hardly a member of “the Twitterati.” But he recently led a live Twitter chat about issues including heart failure and cholesterol problems. “This was an opportunity to use a different communication channel to find an audience to talk about heart health,” Dr. Nissen said. The downside? “We dumb it down,” he told the AP. “It’s very challenging for physicians, primarily because the messages that we have are not conducive to 140 characters. If you ask me a question, you’re likely to get a five-minute answer.”

Cleveland and Las Vegas are starting to look alike ■ Forbes.com offered some hope for homeowners and labeled Cleveland the top

“turnaround metro” for home prices. Overall, the most recent monthly Trulia Price Monitor was nothing special; asking prices on for-sale homes were unchanged in May month over month, seasonally adjusted. But because prices rose in February, March and April, “prices remain 1.6% higher in May than one quarter ago, and most of the country has seen price increases: 86 of the 100 largest metro areas had quarter-over-quarter price increases in May, seasonally adjusted,” according to the story. Trulia’s data also showed that asking prices have remained steady or risen in eight of the past nine months. The story identified “turnaround metros” in which prices turned up in the last few months (February to May 2012) after falling substantially in the preceding 12 months (February 2011 to February 2012). Cleveland is one of six metros where prices rose more than 2% in the latest quarter, seasonally adjusted, after falling more than 8% in the preceding year. The others are Las Vegas, Milwaukee, Seattle, Tacoma and Toledo.

These 12 have a number of good stories to pursue ■ A Kent State University senior is getting a taste of big-time Washington journalism. The Washington Post launched a project called The 12, which the paper said is aimed at keeping track of campaign issues across swing states. The site is powered by Tumblr and will be populated by student journalists at 12 universities nationwide. Ohio’s representative is Justin LaGore, who directs Kent State’s student media mobile development team and coordinates social media efforts for the school’s integrated newsroom.

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6/14/2012

3:10 PM

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The all-new BMW 6 Series Gran Coupe

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