Crain's Cleveland Business by Crain's Cleveland Business

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$1.50/JUNE 21 - 27, 2010

Vol. 31, No. 25

BE THERE OR BE SQUARE Restaurants warm to newest social media tool as one more ingredient in effort to further develop customer loyalty By KATHY AMES CARR kcarr@crain.com

or children, Four Square is a simple game in which four players stand in four squares carved by chalk on concrete and bounce to each other a ball that must stay in bounds. For restaurant owners, Foursquare is a social media game that has the poten-

tial to earn them a bounce in business by giving incentives to users who frequent their establishment. Local restaurant owners say they are thinking outside the box — or square — by using Foursquare as a customer loyalty program that rewards visitors with discounts based on the number of times they visit. See FOURSQUARE Page 12

MMPI turns up marketing for Cleveland mart Chicago developer pitches product dealers on project, while letters of intent pile up INSIDE: How companies at a Chicago trade show view the planned project here. Page 20

By JAY MILLER jmiller@crain.com

CHICAGO — The intensity of the marketing for the new $425 million convention center and medical merchandise mart was kicked up a notch last week. During the first days of last week, MMPI Inc., the complex’s developer, rolled out the concept to health care products dealers who came to Chicago for NeoCon 2010, a leading trade show for the contract furniture business. The show is held annually at the Merchandise Mart, MMPI’s crown jewel trade center. Then on Wednesday, Samantha Fryberger, director of communications for Positively Cleveland, said her organization, which markets the

city as a tourism destination and for nonmedical trade shows, had commitments for at least 10 shows. With a groundbreaking for the Cleveland complex set for October, MMPI pitched the Cleveland center to a group of about 40 furniture dealers with major product lines targeting hospitals, doctors’ offices and other medical facilities on Tuesday, the middle day of the three-day show. The 40 dealers, who MMPI has not named, were offered a significant amount of free rent to take permanent showroom space at the medical See MART Page 20

INSIDE Leaving on a (new) jet plane

KR IST EN WIL SO N

Nextant Aerospace LLC, a 3-year-old company based at the Cuyahoga County Airport in Richmond Heights and led by James Miller (right), is finding buyers for its 400NEXT aircraft. The plane is a remake of the Beechcraft 400, and now seats eight and can fly farther on less fuel than its predecessor. Read Jay Miller’s story on Page 3.

ILL US TR AT ION

JESSE KRAMER

By improving energy efficiency, local firms dodge FirstEnergy fee Customers face higher bills as utility takes on demand to cut usage

A few of FirstEnergy Corp.’s Ohio customers won’t have to pay a new fee intended to finance the utility’s energy efficiency programs. So how’d they get out of it? By putting their own energy efficiency programs in place. Five companies with operations in Northeast Ohio already have received state approval that will allow them to

forgo paying the fee for a given period of time, and a few dozen other businesses and organizations in FirstEnergy’s Ohio territories have applied for the same exemption. The fee — a result of a 2008 state law that requires FirstEnergy and other investor-owned utilities to cut total energy usage by 22% over the next 15 years — could end up being

By CHUCK SODER csoder@crain.com

large, according to energy consultants in Ohio. It would start out at .12 cents per kilowatt hour for the smallest commercial customers in FirstEnergy’s Cleveland Electric Illuminating Co. territory, which covers much of Northeast Ohio, according to a FirstEnergy proposal that has yet to be approved by the Public Utilities

Commission of Ohio. Customers buying in bulk would pay less than .07 cents per kilowatt hour, and rates in the Ohio Edison territory would be even lower. The rates FirstEnergy’s commercial customers pay for electricity vary but are generally lower than the rates it charges homeowners, which range between 12 cents and 13

cents per kilowatt hour. Over the years, however, the efficiency fee will go up, said Ellen Raines, director of external communications for FirstEnergy. FirstEnergy will attempt to find the least expensive ways to help its customers cut how much electricity they use, but eventually the utility will have to take more expensive measures if it is to cut usage by 22%. “The expectation is that we would See FEE Page 21

NEWSPAPER

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SPECIAL SECTION

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CrainsCleveland.com/30thanniversary

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CRAIN’S CLEVELAND BUSINESS

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HEALTHY DIFFERENCES

COMING NEXT WEEK

It costs $3.03 per hour, on average, to provide health insurance benefits to management-level and professional employees, more than three times the cost of those for service-sector workers. In March, the average cost for health insurance benefits in private industry was $2.08 per hour. Employer costs for those benefits were significantly higher for union workers than for nonunion. Here’s the breakdown of employer costs per hour, by industries and by regions:

Investing Guide We profile several investors and consider how the economy has affected their financial strategies, plus a look at how health care reform legislation impacts the investment market, company performances and more.

REGULAR FEATURES Best of the Blogs .........23 Big Issue .....................11 Classified ....................22 Editorial ......................10 Going Places ...............14

JUNE 21-27, 2010

Letter..........................10 List: Highest paid CEOs.19 Reporters’ Notebook....23 The Week ....................23 What’s New..................23

Industry

Cost

Management, professional and related

$3.03

Natural resources, construction and maintenance

2.49

Production, transportation and material moving

2.34

Sales and office

1.87

Service

0.92

All industries, average

2.08

Northeast

2.40

Midwest

2.21

South

1.78

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

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Shannon Mortland (smortland@crain.com) Health care and education Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Arielle Kass (akass@crain.com) Finance and legal Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Marketing coordinator: Laura Franks (lfranks@crain.com)

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CRAIN’S CLEVELAND BUSINESS

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Midtown project attempt to ‘resettle’ city Without committed tenants, Geis’ planned $20M Euclid Tech Center will require unique financing By STAN BULLARD sbullard@crain.com

Fred Geis sees his group’s effort to develop a $20 million office/ warehouse building in Cleveland’s Midtown neighborhood oriented to medical and tech tenants as more than a real estate development. Indeed, Mr. Geis, one of two brothers running the Streetsborobased Geis Cos., describes the project

as part of his personal mission to “resettle Cleveland.” Meanwhile, the city of Cleveland is trying a novel tack to get the proposed Euclid Tech Center financed. Even before the credit crunch, lenders were reluctant to fund a project such as the one Mr. Geis is proposing. He wants to build the project on a speculative basis, without tenants committed to it before the project wins crucial develop-

ment loans. The city’s financing strategy stems from using a $10.7 million U.S. Department of Housing and Urban Development Section 108 Loan as the first mortgage, essentially, for the project. Cleveland City Council on June 7 approved the loan application and a $250,000 grant from the city’s Vacant Property Initiative. Chris Warren, Cleveland regional economic development director, said the proposed HUD loan would allow the project to be eligible for funds from New Markets Tax Credits, a federal program that allows

lenders to real estate and job-creating businesses in qualifying urban areas to receive a valuable federal income tax credit for doing so. Another loan has to be in place for a project to qualify for financing from the new market tax program. Moreover, Mr. Warren said, the city’s economic development department came up with a masterstroke for the project. The Euclid Tech Center will use the nonschool portion of property taxes produced by the project — which typically goes into tax increment financing for infrastructure associated with new developments — to guarantee the

THE WEEK IN QUOTES

Teams follow dynamic ticket pricing model Indians consider strategy that allows daily changes

— Michelle Venorsky, management supervisor and social media counselor at Warrensville Heights-based Marcus Thomas. Page One

— Mark Watson, president of the regional network of Akron Children’s Hospital. Page 9

“It is a tighter market than it was two years ago. … Everyone, especially the Catholic schools, is competing more than it seems they were two years ago.” — Patrick Britton, director of admissions, Walsh Jesuit High School, Cuyahoga Falls. Page 15

“Experience in a foreign language really gives them a leg up in the world ... especially because more businesses have become international operations.” — Grace Gorman, foreign languages department chairwoman, St. Vincent-St. Mary High School, Akron. Page 18

See MIDTOWN Page 22

INSIGHT

“A free appetizer or discount for a check-in is a small investment, but you’ve earned incredible loyalty, and users then become your marketers by sharing their experience.”

“As the landscape changes and the health care (reform) plan becomes more defined, we are trying to make sure ... we’re ... successful as this paradigm shift starts.”

repayment of the HUD loan. This approach, he said, allows the project to avoid the cost of a tax increment financing bond issue. For Mr. Geis’ part, he downplays the current credit crunch as the reason for the city’s financing help. Instead, he sees the issue as the relative unwillingness of lenders to fund urban projects compared with similar projects he and his brother, Greg, have developed for decades in the city’s suburbs at the family-owned Geis Cos. development and construction concern. However, Messrs. Geis and Warren

By JOEL HAMMOND jmhammond@crain.com

JESSE KRAMER

Nextant Aerospace LLC CEO James Miller said he expects the company’s business of rebuilding light jets to grow amid technological advancements in the aviation industry.

AIRCRAFT REMAKES TAKE OFF Richmond Heights’ Nextant Aerospace looks to reach new heights by reconstructing light jets By JAY MILLER jmiller@crain.com

hey’re building jet airplanes in Richmond Heights these days. Well, maybe “stripping down and rebuilding to like-new condition” would be the more accurate description. Whatever the definition, 3-yearold Nextant Aerospace LLC has begun selling its 400NEXT twinengine, eight-seat aircraft and finding buyers willing to plunk down about $3.9 million on a like-new turbojet that flies farther and on less fuel than the plane it once was. See NEXTANT Page 20

A sunny, 80-degree day in April. A phenom rookie pitcher making his second career start. Mark McGwire’s steroidenhanced home run chase, and later, Barry Bonds’ pursuit of Mr. McGwire. All games that could be considered “premium,” where home teams likely could charge much more than other, less attractive dates. Pro sports teams, following in the footsteps of airlines and hotels charging more for prime dates and locations, now have the capability to do just that, and a few are taking advantage — and more soon will join the fray. It’s called dynamic pricing, and it’s in full effect at the San Francisco Giants’ AT&T Park and the Dallas Stars’ American Airlines Center. Both of those teams use an algorithm and software developed by Austin, Texas-based Qcue, a company to which the Indians also have spoken about implementing their pricing system at Progressive Field. The San Francisco Business Times in February reported the Indians would use dynamic pricing this year as a test run in Progressive Field’s upper deck, though an Indians spokesman said that publication jumped the gun; the Indians were close to pulling the trigger for this season, but backed off as the season approached. How it works: Qcue’s system allows teams to plug in many factors — weather, See DYNAMIC Page 13

HOW IT WORKS Using Austin, Texas-based Qcue’s software, the San Francisco Giants are able to factor in many variables when setting prices daily. For example: ■ Date: Memorial Day, May 31 ■ Opponent: Divisional rival Colorado Rockies ■ Pitching matchup: San Francisco’s twotime Cy Young award winner Tim Lincecum vs. Colorado’s 9-0 Ubaldo Jimenez, who earlier in the season had thrown a no-hitter ■ Weather: 66 degrees, partly sunny ■ Price change: For infield reserved, for example, from $17 to $25

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JUNE 21-27, 2010

Tax credit work fuels global X By ARIELLE KASS akass@crain.com

In its first years in business, employees at tax strategies firm global X spent much of their time fighting with the government. “Every time you take money from the government, they get upset,” partner Drew Sparacia said. “We were tired, beat up.” But one project in Michigan — converting a dilapidated building into a home for unwed mothers with addiction problems, and using tax credits to help finance the work — changed the course of the firm’s future. Suddenly, the firm saw a direction in the form of tax credit work that

could keep their jobs challenging, but would allow projects to be done that would benefit the community. With government approval, no one was fighting with them any more. “Projects were creating jobs, they were increasing property values,” Mr. Sparacia said. “They help the greater good. It makes it easier to sleep at night.” The firm has 15 employees, 12 of them in Cleveland, and has just expanded into Atlanta with two employees in an office there. Mr. Sparacia said the Atlanta office eventually will house four or five employees, and he plans to open a similarly sized Chicago office next year. One employee is housed in

Columbus, and there is a satellite office in East Lansing, Mich., that is staffed out of Cleveland. The company also is considering adding an office in Los Angeles. And for every few new people in offices across the country, one or two new people is needed in Cleveland, where the firm is headquartered in the Historic Edwin Hotel that it rehabilitated, partner Nancy Amstadt said. “It really is helping Cleveland,” she said. “It’s adding people here.” The firm was involved in financing the rehabilitation of the Barley House restaurant on West Sixth Street in Cleveland, and The Westin Book Cadillac Hotel in Detroit. The firm is involved in financing the aquarium that’s been proposed in the old Powerhouse on the West Bank of the Flats. Currently, it has three projects in the works in Ohio, including putting together the financing to transform the empty 1222 Prospect Ave. building across from the Edwin Hotel building into a restaurant. The company moved from the 200 Public Square building a year and a half ago because the tower “didn’t fit the image of what we do,” Ms. Amstadt said. Tom Boccia, a Cleveland partner at accounting and consulting firm Novogradac & Co., said he thinks the impact that projects done with historic tax credits have on this community are “significant.” “I don’t think they could have gotten done without it,” he said of many projects financed with the credits. But Mr. Sparacia said for all the good that could be done with historic tax credits — when investors buy tax credits from nonprofits that are looking to fund construction projects — most of global X’s work is done in other states, particularly in Michigan. Both Mr. Sparacia and Mr. Boccia said that’s at least in part because Ohio’s program is less robust than the programs in some other states. Indeed, it hasn’t been funded at all for the coming year. Both state and federal tax credits are available and can be used for everything from rehabilitating an old building to making a movie. The firm deals with a wide variety of credits, Mr. Sparacia said, both in selling them to investors and advising owners of the tax credits on what to do with them. And Mr. Boccia said because traditional lending remains slow, nonprofits and developers continue to look to tax credits to pave the way to funds that might not be otherwise available. “As long as Congress and the president decide to extend these credits, I think there’s room for growth in the industry,” Mr. Boccia said. “The next tier of banks, regional banks, have started to look at this investment.” Mr. Sparacia is pinning his firm’s growth on the idea that while there are a number of individuals that do some work with tax credits, many firms know certain pieces of the process, but not all of it. Now, more than 90% of the firm’s business deals with tax credits, he said. ■

Volume 31, Number 25 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

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

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JUNE 21-27, 2010

Area manufacturers have their say on new Max Hayes Suggestions aimed at attracting students, better preparing them for industrial world By DAN SHINGLER dshingler@crain.com

Max Hayes High School, slated for a $46 million reconstruction project, is getting some support and input from local manufacturers and other businesses who want their suggestions to be heard before the school is redesigned and rebuilt over the next three years. The school at Detroit Avenue and West 46th Street will remain open while its replacement is built on 13 acres farther west in the Detroit

Shoreway neighborhood. â&#x20AC;&#x153;The incoming freshmen this September will be the first graduating class of the new Max Hayes High School,â&#x20AC;? noted John Colm, president of Cleveland-based Wire-Net, a manufacturing advocacy group working to support the school. Consultants retained by Wire-Net are suggesting some nontraditional practices for the school. For instance, why keep a student in an algebra class for a full year if the student can master the subject in less time? Or why not bring in real welders,

machinists and other skilled tradespeople to evaluate studentsâ&#x20AC;&#x2122; hands-on work, rather than just teachers? â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re even looking at things like an extended (school) day â&#x20AC;&#x201D; or extended weeks or extended years,â&#x20AC;? said Charlie Mojkowski, a consultant on the project. The suggestions are designed to make the school more attractive to students and to make its students more attractive to businesses that might hire them. There is a lot riding on the project. Not only has Max Hayes, with about 550 students, been one of the only public schools in Cleveland to increase enrollment in recent years, itâ&#x20AC;&#x2122;s also envisioned as a major training center for area manufacturers and

other businesses that say they increasingly have trouble finding skilled workers â&#x20AC;&#x201D; especially younger ones.

Looking at the big picture Consultants from San Diego-based Big Picture Learning and New Orleansbased Concordia presented their findings last Tuesday, June 15, to a group of about 90 representatives of major Northeast Ohio industry groups. The group of business and industrial participants met in May to hammer out their initial suggestions for Concordia and Big Picture. From those, Big Picture put together recommendations that the group will refine before it presents its final recommendations to the district

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this summer. The hope is that the recommendations can be integrated into the schoolâ&#x20AC;&#x2122;s redesign. The project is being paid for with a combination of funds from the state and local district that already have been earmarked for the project and time is of the essence, Mr. Colm said. It is intended to take a school built in the 1950s â&#x20AC;&#x201D; and meant to train students to fix cars or work in yesteryearâ&#x20AC;&#x2122;s mills and factories â&#x20AC;&#x201D; and turn it into an institution that prepares students to work in robotics, hightech welding, automobile design and other professions of the future. Mr. Mojkowski, a senior associate for Big Picture, presented the findings to groups representing the manufacturing, transportation, design/ construction and information technology industries and offered a list of recommendations: â&#x2013; Open enrollment so the school is available to all students â&#x2013; Close partnerships with area businesses â&#x2013; Mentoring programs involving adults who work in fields relative to the schoolâ&#x20AC;&#x2122;s curriculum â&#x2013; A flexible design that would allow all or parts of the school to be easily reconfigured for different uses â&#x2013; Online learning opportunities â&#x2013; Health, nutrition and fitness programs and facilities for students â&#x2013; English language services for students with another native language â&#x2013; Out-of-school, hands-on learning experiences In short, build a school that prepares students for real-world work by putting them in a professional culture that exposes them not only to new skills, but to adults and businesses from which they can also learn, Mr. Mojkowski said.

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The recommendations generally were well received by those in the audience. Crainâ&#x20AC;&#x2122;s Cleveland Business was invited to attend the event but agreed not to quote participants by name in order to preserve the candor of the meeting. Participants were particularly happy with suggestions that students interact with working adults and get first-hand experience in local businesses. They were, however, a bit skeptical about an open enrollment policy that would open the school to any and all students, and some suggested that the school have entrance requirements to select the best students. Too many times, manufacturers say, they already see students coming to them who need remedial training in areas such as basic math and English. They also were concerned that better students might be slowed down by their lagging counterparts if classes are geared toward the slowest learners. But those subjects canâ&#x20AC;&#x2122;t be left untaught, Mr. Mojkowski said, because students of the school will have to pass the same standardized tests as all other high school students in order to graduate. And a system that lets students learn at their own pace, the way many online colleges do now, could ensure that some students donâ&#x20AC;&#x2122;t slow down others, Mr. Mojkowski said. After the meeting, participants left Big Picture with another batch of suggestions and tweaks, which will be incorporated into the recommendations before they are presented to the school board in August. â&#x2013;

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Building own rep a snap for young Osborne Just 31, developer’s son has bevy of deals on his plate By STAN BULLARD sbullard@crain.com

Most real estate developers start small and build their way up to major projects in a gradual process. But Lance Osborne, the 31-year-old scion of the Lake County family whose name is synonymous with realty development, has the ability to swing for the fences with big deals while also going after Lance Osborne the singles and doubles most developers must hit to make their way up. Consider two of the recent items on Mr. Osborne’s plate. The last week of May, he and his father, developer Michael E. Osborne of ME Osborne of Mentor, had back-to-back meetings at the International Council of Shopping Centers’ annual convention in Las Vegas. There was no booth like those of Developers Diversified Realty Corp. of Beachwood and Forest City Enterprises Inc. for these two. Just meetings. The two were pitching plans for a proposed 600,000square-foot big-box shopping center they want to develop on 70 acres the elder Osborne owns near Interstate 71 in Brunswick. Lance Osborne says there is little to discuss about the big-box center until the two sign tenants for it.

However, the project has Medina County and the federal government’s stimulus program in its corner. The proposed “Shops of Brunswick” is authorized to issue federal recovery bonds for a total of $16 million for infrastructure such as streets, water lines and sewers and construction, and $10 million toward building the structures in the $114 million project, according to Christopher Jakab, Medina County administrator. While assistance to a retail project is controversial in some corners because the projects often are unpopular due to the traffic they attract and the increased competition for existing retailers, that was not the case in Medina. “If the project proceeds, it will create 220 construction jobs and 678 jobs in the center,” Mr. Jakab said, and aid Medina County school districts, which receive sales tax support. While Lance Osborne said he benefits from growing up going to jobs with his dad, he adds a strong résumé to the mix. After graduating from Babson College near Boston with a major in finance, he spent four years at two big-league Boston realty outfits, Beacon Capital Partners and AEW Capital Management. Mr. Osborne said he grew tired of spending all his time in investment meetings, and while Boston is “a terrific city, it’s not home.” So five years ago he came home to start Osborne Capital Group, pursuing some projects for its own account and others with his father. His other projects are much smaller. In one, he bought and reconfigured the former Alpha Plaza in Highland Heights as Shoppes at Alpha Place. The project

consisted of demolishing a service station at the southern edge of the plaza at Wilson Mills Road to add small shop space. The developer reconfigured the balance of the center to add new tenants such as Panera Bread and Discount Drug Mart. “Now the sum is worth more than the parts,” Mr. Osborne said. NAIOP Northern Ohio, the Northeast Ohio chapter of the real estate trade group, in May named the project its retail development of the year for 2010. Other recent projects include installing a tiny 8,700-square-foot neighborhood center on a former gas station site at Euclid Avenue and SOM Center Road in Willoughby. Another deal is hairier, working with the lender to re-tenant and upgrade the half-empty NorthMark office building in Willoughby. Steve Passov, a principal of the Mayfield Heights-based Kowit & Passov realty brokerage, said Mr. Osborne developed a reputation among retail brokers as a doer. “ He finds opportunities because he’s at work from early in the morning and still calling me late at night,” Mr. Passov said. Thanks to his family’s financial strength, Lance Osborne has to spend less time developing equity sources for projects than other retail developers growing from recent startups, said Keith Hamulak, a retail specialist at CB Richard Ellis. His family connections also yield all-important land positions, as in Brunswick. For Mr. Osborne’s part, he speaks of the small deals with more detail than the big one in Brunswick. “With the market the way it is, for the next couple of years, these are probably the best opportunities,” he said. ■

CRAIN’S CLEVELAND BUSINESS

Optimism prevails at ‘de-risked’ Forest City By STAN BULLARD sbullard@crain.com

Despite the recession and credit crunch, things are looking up at Forest City Enterprises Inc., the big Cleveland-based real estate owner and operator. Multiple executives sounded upbeat at its annual meeting June 16 at the Ritz-Carlton Hotel Cleveland, a big shift from the last two years. “We’ve come a long way, folks,” Charles Ratner, Forest City CEO, told fellow board members and the audience. Specifically, he cited the construction launch of the Barclays Center at its Atlantic Yards development in Brooklyn, N.Y. Additionally, recent job cuts, asset sales and joint ventures to pare debt have reached the point, he said, the company has “de-risked” its balance sheet. Short term, he expects a surge in major developments around the nation due to pent-up demand. “No new stuff has started the last two years, and no new stuff will be started for two years,” Mr. Ratner said, referring to the two years it will take to get megaprojects launched. “There will be a period in this country when there will be opportunities to grow and develop new opportunities.” Long term, Mr. Ratner said, U.S. population growth and the increasing movement of population to cities will create opportunities for new development in urban areas, which fits Forest City’s game plan. He was even upbeat on housing: “We may never see 2 million housing starts again. But we (as a country) can’t live on 500,000 starts a year. That is what we feel good about.” As he closed the session, Albert Ratner, Forest City co-chairman, called for questions, got none and observed that was OK. Noting the firm celebrates its 50th anniversary as a public company this year he said, “We used to be so insecure we planted questions in the audience. We don’t feel so insecure now.” ■

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Credit unions fretting over potential loss of card fees Slashing interchange charges may force service’s elimination By ARIELLE KASS akass@crain.com

Credit unions locally and nationwide are on the defensive, worried about an amendment to the proposed financial services bill they say would eliminate a large portion of their fee income, if passed. The Durbin amendment — proposed by U.S. Sen. Richard Durbin, D-Ill. — calls for a reduction in interchange fees, or the amount of money retailers pay for transactions done with credit or debit cards. Those fees cover the cost of credit and debit card systems, credit unions officials say, and reducing the money they receive might make credit unions unable to offer those services. That could mean the elimination of free debit cards for credit union members, or the end of debit cards altogether at some credit unions. While banks also would be affected by the amendment, credit unions, which have smaller membership

bases than the nation’s largest banks, are claiming they would be uniquely impacted by the proposal. As such, thousands took to Washington, D.C., two weeks ago to lobby for the defeat of the legislation. Russ Fisher, CEO of PEF Federal Credit Union in Highland Heights, was one of those who went to protest the amendment. He said that credit union generally collects $3,000 a month in interchange fees, and would have to find another source for that income if the money was reduced. “Because we’re so small, we don’t have other sources of income that can easily absorb interchange fees,” he said. “This is big.” Mr. Fisher said PEF has 2,500 members; at least 500 of them carry debit cards. He said he worries that he will lose those members if the convenience of a debit card is taken away. Then, he said, the credit union cannot be competitive with banks. “It puts us at a disadvantage,” he said.

Time for an interchange John Magill, senior vice president for legislative affairs for the Madison, Wis.-based Credit Union National

Association, said retailers pay roughly 1.5% of a purchase in interchange fees. Some of that money goes to the issuer — a credit union or bank — some goes to the processor, such as Visa, and some is kept by the retailer. Those fees are meant to pay for maintenance of the card system, fraud and other losses. Under the new proposal, fees would be reduced drastically to cover only the cost of the transaction itself. Mr. Magill said that could cost credit unions between $35 and $50 per card per year. Sen. Durbin’s intent, Mr. Magill said, was to exempt smaller institutions like credit unions and only change the fees for large banks. But he said that was not done in the amendment, the objective of which was ostensibly to pass the cost savings of merchants on to consumers. While the legislation targets institutions larger than $10 billion, Ohio Educational Credit Union CEO Jerome Valco said a two-tiered system would not work because there would be no incentive to pay smaller institutions more than larger ones. There is no prohibition on altering the fees for smaller organizations, he said. Mr. Valco said the interchange fees are about 5% of his total gross

revenue, or $380,000 a year. Mike Losneck, CEO of Eaton Family Credit Union in Euclid, said between debit and credit cards, 17% of the Eaton Family’s income comes from those fees. Most credit unions that offer both credit and debit cards said they make a slight profit on their credit card offerings, but just break even on debit cards. The impact to Eaton Family would be “pretty significant” if the interchange fee amendment goes through, Mr. Losneck said. He said loss of interchange fees would inhibit him from being able to pay members a dividend and might make free checking and free debit cards a thing of the past. Mr. Losneck said he would not object to the reduction of interchange income if it would mean that merchants would take responsibility for the fraud and other costs of doing business with plastic. Rita Haynes, CEO of Faith Community United Credit Union in Cleveland, also said she would like merchants to take responsibility for some of the cost of the system. “I feel it’s unfair to the credit unions because large banks can control it and the merchants should pay their fair share,” she said. “We could be locked out. They could just not accept (our) debit cards.”

Loss leaders? Julia Gee, CEO of Community United Credit Union in Strongsville, said if the legislation does pass,

she will have to re-evaluate her fee schedule or offer less-favorable loan rates in order to keep debit cards as an option. “If we don’t offer it, they will go elsewhere,” she said. “You have to take something away to give something back.” Bryan Boyko, manager of United Telephone Credit Union in Rocky River, said the credit union does not currently offer debit or credit cards, but had been in the late stages of researching what to do to offer the service when the amendment was added. He has a list of vendors, he said, but tabled the process because of the possibility that the venture would not break even. Emerald Group Credit Union CEO John Martin said debit cards would be a loss leader if fee reductions go through, used to keep members from decamping to other institutions where the convenience is offered, but a money-loser for the credit unions. While credit unions don’t mind breaking even on checking accounts and debit cards because they mean members look to them for more profitable car loans or mortgages, Mr. Martin said, a loss of the interchange fees would mean that his institution would lose 3% of its income. Mr. Martin said he would make up that money with usage fees, or minimum balance fees on checking accounts. “It’s just going to be crippling to the industry,” he said. “It’s going to change the way we do business.” ■

Lawsuit deluge may result if workplace bullying bills pass By JUDY GREENWALD Business Insurance

Employers should prepare for a flood of litigation if states approve legislation making it easier for employees to sue over workplace bullying, observers warn. Anti-bullying bills were approved by the senates of the New York and Illinois legislatures this year, but the legislation stalled in their respective houses. Observers expect, however, that anti-workplace bullying legislation will be reintroduced next year in those states and elsewhere, and some say eventual passage is likely. Bullied workers can use existing laws to sue their employers under various causes of action, including sexual, gender, religious and disability discrimination laws. In addition, they can seek relief under federal Occupational Safety and Health Administration regulations. But, the legislation’s proponents say, these laws still exclude many, if not most, instances of workplace bullying. Opponents to the legislation, however, say the term bullying often is vaguely defined and could be inappropriately applied to a variety of behavior, including a lost temper or justifiable terminations or reprimands. Workplace bullying is widespread, according to a widely quoted 2007 survey by Utica, N.Y.-based market research firm Zogby International, which was commissioned by the Bellingham, Wash.-based Workplace Bullying Institute. According to the

survey, 37% of workers have been bullied, 72% of bullies are bosses and 62% of employers ignore the problem. David C. Yamada, a professor at Suffolk University Law School and director of the New Workplace Institute, both in Boston, said most anti-bullying legislation, including the measures that failed to win passage in New York and Illinois, is based on a model he developed in 2002 called the Healthy Workplace Act, which has been updated several times since. Many observers expect eventual passage of anti-bullying legislation in some states. Legislation is expected to be introduced in at least a dozen states next year, said Gary Namie, the Workplace Bullying Institute’s co-founder and a supporter of the legislation. “I think we’re on the precipice” of success, Mr. Yamada said. But Jonathan T. Hyman, a partner with law firm Kohrman Jackson & Krantz P.L.L. in Cleveland, said such legislation would hamstring employers because “they’ll be afraid of being sued if they are being too harsh.” It could result in “employees having the potential to run the workplace because every petty slight or annoyance is going to be trumped up into this idea of bullying,” he said. ■ (Judy Greenwald is a senior editor at Business Insurance, a sister publication of Crain’s Cleveland Business.)

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Better incorporating satellite offices tops Akron Children’s agenda By SHANNON MORTLAND smortland@crain.com

Akron Children’s Hospital doesn’t plan to be all things to all people, but it is forging partnerships and expanding its footprint to reach more residents across the region. It’s all part of the succession plan of William Considine, who has been president of Akron Children’s for 30 years and who plans to retire within the next five years. Recently, Grace Wakulchik was named the health system’s chief operating officer and Mark Watson was appointed president of the regional network. The two are part of Akron Children’s ongoing strategic planning process to boost its revenue and patient roster, as well as tie together its 80 locations — many of which have come online in recent years. “As the landscape changes and the health care (reform) plan becomes more defined, we are trying to make sure our strategic plan stays developed to make sure we’re going to be successful as this paradigm shift starts,” Mr. Watson said. For starters, Akron Children’s is looking for ways to get people off the main campus unless they absolutely must be there. The hospital soon will move more treatments and services that don’t require a hospital visit to its community locations, said Ms. Wakulchik, who has been with Akron Children’s since 1992 in various capacities. “Instead of deploying the emergency room in the community, we want to provide more after-hours

care in primary care offices so families can seek care that may not be an emergency,” she said. Physicians “will refer families back to Children’s only for surgeries that really can’t be supported in the community.” To accomplish this, the hospital’s satellite offices likely will be open longer hours and on more days of the week, Mr. Watson said. In addition, Akron Children’s in October plans to open an outpatient center with three operating rooms at its Beeghly Campus in Boardman, Ms. Wakulchik said. However, none of these efforts will work without electronic medical records, which will enable doctors throughout the system to share patient medical records online. Mr. Watson is overseeing the implementation of that system, which he said will be completed in March 2012. Akron Children’s will try to tie all its locations and affiliates together through continued Lean 6 Sigma efficiency training for its employees. The hospital has used those practices over the last two years to increase efficiency in many of its departments, ultimately saving $6.2 million last year, Mr. Watson said. The savings helped propel the hospital system back to a profitable status in 2009 after an operating loss of $98,000 in 2008. Electronic medical records and lean practices have become increasingly important for Akron Children’s as it partnered with other local health providers and opened more community offices in recent years. For instance, last year Akron Children’s began working with Aultman Hos-

pital in Canton to provide pediatric pulmonary and neurology services there. In May, a pediatric cardiologist from Akron Children’s began seeing patients at Aultman, Mr. Watson said. Fostering even more collaboration is Akron Children’s Air Bear helicopter service, which has been more successful than anticipated,

Ms. Wakulchik said. Air Bear delivered 560 patients to Akron Children’s last year and the hospital turned down more due to weather, she said. Because of all the new locations and services Akron Children’s is providing to a larger patient base, the hospital is recruiting physician specialists for the main campus and

community locations, Ms. Wakulchik said. Mr. Watson said about 45 already have been recruited and the hospital is looking for about 50 more in areas such as endocrinology, orthopedic surgery and pediatric ophthalmology. He also said Akron Children’s is working to make sure care levels are the same in every office. ■

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PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Reality check

mericans usually talk a good game about “the deficit,” but they rarely mean it. So it was striking to see the U.S. Senate last week make a rare move toward fiscal restraint, rejecting a $140 billion jobs bill and then taking up a version that would trim $20 billion by, among other things, cutting back on unemployment pay. To be sure, this is restraint brought on by escalating political pressure to reduce deficit spending. The Democrats didn’t have 60 votes for their version and needed to make cuts to try to win over swing Republicans — including Sen. George Voinovich — as well as some moderate members of their own party. (A final vote on a compromise measure from Finance Committee Chairman Max Baucus of Montana still hadn’t been taken as of midday last Thursday, June 17.) To achieve the scaled-back spending, the Senate was looking at measures that include extending unemployment benefits but cutting them by $25 per week and providing a more limited reprieve in Medicare fee cuts for doctors. The compromise approach on jobless benefits would save about $6 billion. It seems reasonable, painful though it will be to those still without a job. Economic recovery is under way, but unemployment remains at 9.7 % nationwide, and it’s in double digits in Ohio and many other states. By any measure, that’s extraordinarily, and unacceptably, high. It would be counterproductive in this stillfragile recovery to deny the extended unemployment benefits to those who need them. Doing so wouldn’t make jobs appear; it would only make people without jobs even poorer, further hurting areas hard hit by unemployment. But voters and, increasingly, officials in Washington, D.C., realize the country’s credit card is well beyond maxed out, requiring a change in long-ingrained spending habits. We need something of a Goldilocks-style step back from deficit spending — not so fast that it imperils the recovery, but not so slow as to become meaningless. The Baucus measure is a good start down that road. There are signs this can be done. For instance, a June 3 report from the National Governors Association and the National Association of State Budget Officers shows the states have cut aggregate spending by $74.4 billion, or nearly 11%, since the recession took hold in 2008. (The report can be found at www.nga.org/Files/pdf/FSS1006 .PDF.) States are required to balance their budgets, of course, but Washington should take note of how it’s done. Budget cutting isn’t pleasant or easy, especially when we get to the part where big entitlement programs — Social Security, Medicare, Medicaid and the like — are involved. But it’s necessary over the long term to contend with the mounting national debt, a concern no doubt exacerbated by the scary debt problems in Europe. Reality is hitting home, hard, that our country’s approach to taxing and spending has long been out of whack. Cutting $20 billion from a $140 billion bill is only the start of a long process that’s going to require many difficult decisions.

FROM THE PUBLISHER

Fudge’s ethics resolution solves little

support of 20 members of the Congrest’s always interesting when the sional Black Caucus. The resolution calls national media pay attention to the for the severe restriction of the Office of goings-on in our neck of the woods, Congressional Ethics, an independent but, like any such exposure — be office that investigates the kind of sham it local or national — sometimes it’s “fact-finding” vacations to the Caribbean flattering and other times embarrassing. that has been at times a problem for Rep. An example of the flattering attention Fudge’s predecessor and others in was a bunch of recent visits by national Congress. food critics who have declared Rep. Fudge’s resolution that Cleveland-area chefs are BRIAN would prohibit the release of producing the highest-quality TUCKER most investigative reports cuisine — as good as (gasp!) prepared by the OCE and stop New York but at a percentage of the office from starting its own the price tag. investigations, absent a sworn But then there was a tidbit complaint filed by an individual recently from The New York with personal knowledge of Times, that got picked up by the alleged wrongdoing. rest of the national news Rep. Fudge claimed her resoorganizations, that wasn’t so lution was needed because the positive for us here on the OCE had undertaken investigations that North Coast. And, sadly, the person at its had unfairly damaged the reputations of center was U.S. Rep. Marcia Fudge of House members. Cleveland. The Office of Congressional Ethics is The first-term congresswoman, a run by a former federal prosecutor and is Democrat who holds the seat once occuoverseen by an independent board. After pied by the late Stephanie Tubbs Jones, it completes its inquiry, it submits findings introduced what could only be considered to the House Committee on Standards of an anti-ethics resolution that won the

Official Conduct, which rules on whether any House rules have been violated. What seems to bother those opposed to the OCE is that it has the authority to release to the public its investigative findings, irrespective of whether the House committee determines any rules have been violated. It seems to me that no one who has followed Congressional ethics rules need be worried about such things, and that the public’s right to know should indeed include potential ethics problems among those they elect to high office. No independent ethics panel should be dissolved unless there is ample proof it is concocting false investigations. In other words, the fact that the OCE releases its findings can also be the evidence that can undo it if the office is proven to be harassing members who have done no wrong. I wonder whether Rep. Fudge is working to line up votes for this resolution? Can you imagine having that vote on your record come election time? Don’t the Democrats already have their hands full in this era of incumbent endangerment? ■

LETTER

Incorporate area immigrant entrepreneurs ■ In seeking to lure a Chinese light bulb maker to town, Cleveland leaders revealed both a vision and a blind spot. Cleveland Mayor Frank Jackson and his team should be given credit for recognizing the tremendous opportunity in attracting foreign direct investment, or FDI, and the new jobs that it provides. According to a 2008 report by the U.S. Chamber of Commerce, foreign firms employed more than 5.3 million U.S. workers through their U.S. affiliates and have indirectly created millions of additional jobs. More than 30% of direct hires are in manufacturing. In Ohio, 600 foreign-based corporations from 28 countries are operating 1,000 facilities, employing about 180,000 people. One exciting new trend is the rise in the annual number of foreign invest-

ment projects in the U.S. renewable energy sector, jumping from four in 2003 to over 40 in 2008. In its eagerness to attract a foreign company offering energy-saving light bulbs, however, City Hall officials fell into traps that may have been avoided had they tapped the cultural resources at their fingertips. When Mayor Jackson’s administration waded into unfamiliar waters to partner with an LED light bulb company in Ningbo, China, no one thought to talk with Chinese-American entrepreneurs and professionals living in Northeast Ohio. These individuals are eager to assist the city in helping identify appropriate partners in China, supporting the due diligence and generally advising on a culture that dates back to 5,000 B.C. and

has only opened up in recent decades. As reported by Crain’s Cleveland Business, local immigrants were not viewed as a resource. Consider the story’s contents: “‘Why weren’t we informed; we could have helped you?’ asked Hong Kongborn immigration attorney Margaret Wong. “Ms. Wong made the statement last Thursday evening, May 20, in the Red Room, a conference room attached to Cleveland Mayor Frank Jackson’s office at Cleveland City Hall. She was there with a group of local small business owners, clergy and other civic leaders invited by the mayor to a meeting to enlist their support in his effort to bring Chinese lighting manufacturer SunpuOpto Semiconductor Co. to the city. See LETTER Page 11

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Letter: Embrace immigrant work ethic continued from PAGE 10

“Ms. Wong was asking chief of staff Ken Silliman why the mayor, who was not present, hadn’t sought the assistance of people such as her and the others in the room sooner in his attempt to make Cleveland the U.S. beachhead of Sunpu-Opto, a maker of energy-efficient LED lighting. “Mr. Silliman didn’t have a ready answer.” The answer may be that immigrants are often not viewed in the region as a valuable resource that can support the region’s business development — as people with the skills to help Northeast Ohio navigate the language, cultural and market barriers abroad. This must change. Yes, it is important that the city and the region aggressively pursue foreign direct investment, not only with passion, but also with skill, networks and on-the-ground experience. To make these efforts successful, however, leadership should look to leverage the foreign-market experience of our immigrant entrepreneurs and innovators, particularly in relation to China and India, where booming economies, mounting foreign currency reserves and relationship-based business cultures create unique opportunities and challenges. Cleveland’s Immigrant-Americans, some of whom enjoy business and governmental relationships in the homeland that go back generations,

are eager to be a partner in revitalizing the city and the region. They are in a unique position to help us capture our share of the $245 billion of foreign direct investment streaming into the U.S, to ramp up our exports to global markets where 95% of the world’s consumers live, and to attract the world’s best and brightest innovators, entrepreneurs and professionals driving the New Economy. There is precedent in leveraging ethnic and global networks for local development Northeast Ohio’s Jewish community, which enjoys extensive business, family and social ties in Israel, has helped the region attract tens of Israeli companies in recent years. What is needed now is a bold regional plan to take this formula for success to scale, particularly targeting markets such as China, where the government is encouraging its businesses to expand into the United States. The path to this global journey, however, should begin with a few short steps at home, such as launching a multipurpose International Welcome Center, which will help the region build a bridge to the world. The Welcome Center will not only provide a much-needed platform to coordinate local resources for attracting foreign direct investment, but it will also help educate the region on why the development of a global culture is an economic necessity and on what steps we can

all take to welcome and partner with international resources, such as the immigrant talent living right now in Northeast Ohio. This is the conundrum. How do we recruit and welcome foreign companies, their executives and their families if we do not fully value our existing immigrant entrepreneurs and innovators? How do we attract foreign direct investment when overseas companies are feared as job-takers? In responding to the dichotomy of not welcoming immigrants while trying to lure foreign companies to Cleveland, Anne O’Callaghan, founder of the Welcome Center in Philadelphia, said in her City Club of Cleveland speech last year, “Do the region’s leaders think that foreigners should just stay in the homeland but still wire you their money?” Northeast Ohio’s immigrant community is rich in technology, entrepreneurship, global market knowledge and new wealth. To make a credible push to attract foreign companies that can establish manufacturing, research and corporate headquarters in Northeast Ohio, and to in-source thousands of new jobs, the region can take a bold step forward by partnering with immigrants already here and put out the “welcome mat” for those who may arrive tomorrow. Richard Herman Attorney Cleveland

Babcock & Wilcox will use clean energy in Missouri project Babcock & Wilcox Power Generation Group Inc. in Barberton said it has signed a contract to replace a coal-fired boiler on the University of Missouri campus with a biomass boiler that will generate steam and electricity from clean, renewable biomass fuel. The power generation group, a subsidiary of Babcock & Wilcox Co., will design, engineer and supply a 150,000 pound-per-hour, bubbling

ON THE WEB Story from www.CrainsCleveland.com. fluidized bed boiler designed to burn chipped hardwoods and various local opportunity fuels near the university campus, the company said. The new boiler will be retrofit within the university physical plant’s existing structure. Richard L. Killion, president and chief operating officer of Babcock &

Wilcox Power Generation Group, called the University of Missouri work an “important, trend-setting project.” The university’s decision to use wood and wood waste as fuel also will result in lower sulfur dioxide emissions and less ash for disposal than a typical coal-fired plant, Mr. Killion said. Engineering work is under way in Barberton, and boiler delivery is scheduled for summer 2011.

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Foursquare: App provides way to interact with customers continued from PAGE 1

“We offer a free beer for every 10th visit, and we’ve had between 10 and 15 people redeem that offer,” said Jonathon Sawyer, chef and owner of The Greenhouse Tavern, which began offering the discount in early April. With Foursquare, users check in to a location through a smart phone app, which lets all their friends know where they are. Customers who achieve the highest number of check-ins are dubbed the “mayor” of that location and receive discounts or other promotions if the operation offers those incentives.

Mr. Sawyer said since the East Fourth Street eatery established an account for the location-based service, about 430 people have checked in. Earlier this year, Taste in Cleveland Heights began offering discounts through Foursquare, and since then, a handful of restaurants have signed on, including AMP 150 and Reddstone, both in Cleveland. Phoenix Coffee is exploring its use, which could compete at another level with coffee chain Starbucks, which currently offers $1 off a Frappuccino to the mayors of each of its stores. While the number of local restaurants employing Foursquare as a

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customer loyalty tool is small, social media experts say more chefs are inquiring about it because of its marketing and revenue potential. “A free appetizer or discount for a check-in is a small investment, but you’ve earned incredible loyalty, and users then become your marketers by sharing their experience,” said Michelle Venorsky, management supervisor and social media counselor at Warrensville Heights-based Marcus Thomas.

Check it out Ms. Venorsky said the average social media user is connected to 500 to 600 people through Twitter and Facebook. Each time a Foursquare user checks into a place, that information is shared with all those followers, which offers exponential exposure. “I think it will continue to grow as restaurateurs see it as a cost-effective way to get the word about,” said Ms. Venorsky, who also blogs about the local food industry at Cleveland Foodie.com. Indeed, Foursquare has enabled Chef Ellis Cooley to connect with patrons of AMP 150 at the Cleveland Airport Marriott. This is especially important to Mr. Cooley, who moved

last year from Miami to open his restaurant in October, because it gives him a chance to connect with customers, which would be tough to do for a chef tethered to a fledgling business. Mr. Cooley only dedicates about five to 10 minutes of his day to checking Foursquare, but it’s an investment that he believes pays off as he becomes more immersed in Northeast Ohio’s food culture. “I’m meeting people that I otherwise wouldn’t know,” said Mr. Cooley, who tries to personally greet each user who checks in. “Increased communication leads to increased business, and that translates to more loyal customers.” Dan Young, owner of Clevelandbased DXY Solutions, a mobile app developer, said Foursquare users also can see a participating restaurant’s discounts through the app if they are located within a certain vicinity of that establishment, and may gravitate toward the place with the promo. “So if I’m at East Fourth Street, I’ll see The Greenhouse Tavern’s check-in specials come up,” said Mr. Young, who is mayor of that eatery. Becca Meyers, marketing and events manager of Reddstone, said until recently she was hesitant to get on board with Foursquare because she wasn’t sure there were any benefits to the service. The potential boon for business, however, prompted Ms. Meyers in early June to set up an account for the Battery Park pub.

“It’s a good way to communicate and develop relationships with customers,” she said. Foursquare not only has the ability to foster relationships but also presents a greater potential for businesses to directly track a return on investment in social media, which some industry critics say Facebook and Twitter fail to do, at least when it comes to generating revenue.

Barriers to entry Even as hype percolates over Foursquare’s potential to generate new and repeated business, social media industry observers and chefs say the service also presents challenges and even drawbacks. Messrs. Cooley and Sawyer each said they currently are training their staffs not only on how to accommodate Foursquare check-ins but educating them on what it even is. “We’re working on developing a Foursquare menu” that lists each discount according to the number of check-ins, Mr. Cooley said. Meanwhile, some restaurants barely can maintain adequate web sites, let alone dedicate the resources and time to the social media service. But while some social media tools are not appropriate for all businesses, Ms. Venorsky said she is confident that Foursquare has the ability to influence a large number of local restaurants within the year. “When it comes to restaurants, I can make a blanket statement and say, ‘It does make sense for you,’” she said. ■

BRIGHT SPOTS Bright Spots is an occasional feature in Crain’s, highlighting positive developments in the Northeast Ohio business community. To submit information, e-mail managing editor Scott Suttell at SSuttell@crain.com. ■ There’s hope for those among us who don’t enjoy cutting the grass. Students at Case Western Reserve University on June 5 won their second straight Autonomous Robotic Lawnmower Competition in Dayton, sponsored by the Institute on Navigation. CWRU’s robot edged along an L-shaped fence, slowed up, then mowed around a moving stuffed dog. Team CWRU Cut — pronounced “Crew Cut” — topped the field of 14 competitors from Alabama, California, Canada, Florida and Ohio. The university said that to improve on the 2009 model, the CWRU Cutters “replaced an expensive Light Detection and Ranging System (LIDAR), a remote optical system that uses scattered light to determine distance and other properties of targets — in this case, grass.” In its place, they used inexpensive cameras and a student-developed computerized vision system, said Cutters adviser Roger Quinn, a professor of mechanical and aerospace engineering. The system uses algorithms to make sense of color and texture, distinguishing lawn from everything

else. Using cameras trimmed $7,000 from the cost of the equipment, Professor Quinn said. ■ The First Tee of Cleveland, a local chapter of an international nonprofit that uses golf to help youths develop strong character and life-enhancing values, has named Patricia LoPresti as its new executive director, effective July 1. Ms. LoPresti will provide overall strategic direction to First Tee’s full-time staff and volunteers and will guide program participants, who range in age from 8 to 18, through First Tee’s Life Skills Curriculum. Ms. LoPresti comes to the job with years of business experience as sales manager, vice president and president/CEO of A. LoPresti & Sons, a family-run food service distributor. She also has served as a board member for numerous charitable and community organizations, including Catholic Charities, Health and Human Services, Cleveland; Heather Hill Hospital and Rehabilitation Center; and Share Our Strength Hunger Network. The avid golfer says she’s looking forward to the new job. “I feel very strongly about the work of The First Tee and the impact the program can have on our youth,” Ms. LoPresti said in a statement. “I am firmly committed to expanding and advancing the mission of the organization throughout Greater Cleveland.” Ms. LoPresti’s hiring follows the retirement of Doris Evans, who was named the chapter’s first executive director in 2004.

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Dynamic: Model protects season tickets ABSOLUTE AUCTION continued from PAGE 3

marquee players, postseason implications and statistical milestones, real-time sales, prices on secondary sellers such as eBay and StubHub, and time until the event, in addition to typical factors such as seat location and promotions. â&#x20AC;&#x153;Ticket prices are teamsâ&#x20AC;&#x2122; lowesthanging fruit,â&#x20AC;? said 28-year-old Barry Kahn, the CEO and co-founder of Qcue who holds a Ph.D. and a masterâ&#x20AC;&#x2122;s degree in economics from the University of Texas at Austin and a bachelorâ&#x20AC;&#x2122;s degree in applied engineering physics from Cornell. â&#x20AC;&#x153;They set their prices six to nine months in advance, when they have no idea what is ahead of them. This system allows teams to optimize value and revenue.â&#x20AC;? Mr. Kahn said the Giants and Stars have reported 5% to 7% gains in ticket revenue, and Qcue expects five to 10 more teams to implement dynamic pricing by the time NHL and NBA seasons start. Mr. Kahn would not say whether the Indians are one of them; the NHLâ&#x20AC;&#x2122;s Columbus Blue Jackets also have studied it, but arenâ&#x20AC;&#x2122;t implementing it any time soon, according to spokeswoman Karen Davis.

â&#x20AC;&#x153;(Teams) set their prices six to nine months in advance, when they have no idea what is ahead of them.â&#x20AC;?

mism, saying, â&#x20AC;&#x153;The system is very flexible â&#x20AC;Ś and in an environment where everyone is looking for the best possible value, dynamic pricing will truly benefit both our team and fans.â&#x20AC;?

â&#x20AC;&#x201C; Barry Kahn, co-founder and CEO, Qcue

Protect your best customers

ticket revenue for the game. â&#x20AC;&#x153;In the past, we only know history, not whatâ&#x20AC;&#x2122;s going to happen moving forward,â&#x20AC;? said Giants managing vice president of ticket sales and service Russ Stanley. â&#x20AC;&#x153;Games that looked bad when the schedule came out look good now, and vice versa. This allows us to sell more tickets than we would have had we not been able to determine the market for specific games.â&#x20AC;? Mr. Stanley cited the Indiansâ&#x20AC;&#x2122; game June 13 against ballyhooed Washington Nationals rookie pitcher Stephen Strasburg as a perfect example of how dynamic pricing helps. Sure, the Indians drew 32,876, double their season average, but Mr. Stanley said the Indiansâ&#x20AC;&#x2122; boost in ticket revenue could have been higher had they been able to adjust prices. The Indians before last season implemented a pricing system that incorporates some of these variables, but their â&#x20AC;&#x153;value pricing,â&#x20AC;? while taking into account opponents, mostly factors in time of the year and day of the week. This year, the Indians have three categories: prime (23 games, mostly Friday and Saturday nights from June on), value (42 games, including three games each in May against the Tigers and Reds) and super value (16 games before Memorial Day). â&#x20AC;&#x153;Just like anything, weâ&#x20AC;&#x2122;re always looking for innovative ways to improve our business,â&#x20AC;? Indians director of communications Curtis Danburg said. â&#x20AC;&#x153;Dynamic pricing is a unique industry trend that we continue to evaluate.â&#x20AC;? The Stars tried dynamic pricing in a limited capacity this past season, and Qcue spokeswoman Cybele Diamandopoulos said the Stars will â&#x20AC;&#x153;expandâ&#x20AC;? their dynamic pricing options for this season. When the system was introduced at the American Airlines Center in Dallas, Stars president Jeff Cogen expressed opti-

By the bay The Giants tried dynamic pricing in a limited capacity in 2009, and found enough success with it to introduce it across AT&T Park for 2010. Memorial Day proved a perfect example: The Rockies were in town and the stars aligned two-time Cy Young award winner Tim Lincecum of the Giants with Coloradoâ&#x20AC;&#x2122;s Ubaldo Jimenez, who, after throwing a fourhit shutout to beat San Francisco 4-0, was 10-1 with a 0.78 earned run average. (Mr. Jimenez threw a no-hitter earlier this season.) After the Giants told Qcueâ&#x20AC;&#x2122;s software that it was a 66-degree, clear day featuring two of the gameâ&#x20AC;&#x2122;s best pitchers and divisional rivals, the team raised prices across the board. For instance, infield reserve seats went from $17 to $25 on the day of the game. Considering the game exceeded AT&Tâ&#x20AC;&#x2122;s capacity â&#x20AC;&#x201D; 42,465 showed up, and AT&T Parkâ&#x20AC;&#x2122;s capacity is listed as 41,915 â&#x20AC;&#x201D; the Giants were able to take in a significant boost in

What about season ticket holders? Wonâ&#x20AC;&#x2122;t they be alienated if they bought their tickets for one price and later, if the Giants or Indians have tanked, the team sells the same tickets for less than season ticket holders paid? Qcue has solved that problem, the Giantsâ&#x20AC;&#x2122; Mr. Stanley says. The Giants, in printing their season tickets, list different prices on each ticket, rather than splitting up, say, an $8,100 plan evenly over 81 home games. So if a first-row seat in April is $60 for a season ticket holder, the Giants will set their Qcue software to not price those seats for anything less than $61, ensuring season ticket holders get the best deal. â&#x20AC;&#x153;We set that floor so they remain our most valued customers,â&#x20AC;? Mr. Stanley said. â&#x20AC;&#x153;If we lost season ticket holders doing this, that would be dumb. The dynamic pricing revenue would be small compared to what weâ&#x20AC;&#x2122;d potentially lose if we upset season ticket holders.â&#x20AC;? Richard Sheehan, a University of Notre Dame economist, said he suggested in his 1996 book, â&#x20AC;&#x153;Keeping Score: The Economics of Big-Time Sports,â&#x20AC;? that â&#x20AC;&#x153;teams were leaving potentially large amounts of money on the table by charging the same price for all tickets.â&#x20AC;? But, he said, there are differences in sports dynamic pricing that make it more difficult. â&#x20AC;&#x153;Customers have more information about how many tickets have been sold previously, allowing them to guess or strategically time their ticket purchases,â&#x20AC;? Mr. Sheehan said. â&#x2013;

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CRAIN’S CLEVELAND BUSINESS

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GOING PLACES Michael J. Faremouth and John A. Studdard to principals.

JOB CHANGES EDUCATION KENT STATE UNIVERSITY’S DIVISION OF DIVERSITY, EQUITY AND INCLUSION: Judith Brooks to faculty recruitment and retention manager; Belinda Duncan to equal opportunity and diversity training manager; Geraldine Hayes Nelson to assistant vice president, pipeline initiatives and diversity programming.

ENVIRONMENTAL PARTNERS ENVIRONMENTAL CONSULTING INC.: Stephan W. Ryder to director, due diligence services.

FINANCIAL SERVICE LINSALATA CAPITAL PARTNERS:

HEALTH CARE SUMMA WESTERN RESERVE HOSPITAL: James Angiulo to director, information technology and services.

HOSPITALITY RITZ-CARLTON, CLEVELAND: Amy Cosgrove Olson to senior sales manager.

MANUFACTURING EATON CORP.: David Schwieterman to director, FSC Supplier Process. POLYONE CORP.: Julie A. McAlindon to vice president, marketing.

JUNE 21-27, 2010

RPM BUILDING SOLUTIONS GROUP INC.: Randall J. Korach to president.

Glenda Terrell to account supervisor; Lindsey Cohen to account executive; Rachel Wilkens to assistant account executive.

MARKETING BROKAW: Steve McKeown to creative director.

THUNDER::TECH: Andrea Aber to account coordinator; Joe Cola to graphic designer.

HIGHLAND PUBLIC RELATIONS: Ashlee Webb to graphic designer.

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HOME TEAM MARKETING: Patrick Flynn to account manager. KARCHER GROUP: Jeff Heath to IT customer support technician; Nicole Hagy to marketing communications specialist. MARCUS THOMAS LLC: Jody Sadler to director, connections planning and media; James Gough to associate creative director; Justin Weese to studio artist; Leigh Ring to interactive designer; Kristina Marshall to junior integrated producer;

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FIRST TEE OF CLEVELAND: Patricia LoPresti to executive director. JEWISH FAMILY SERVICE ASSOCIATION OF CLEVELAND: Kim Jones to manager of clinical services, Care at Home. LAKE COUNTY YMCA: Carolyn Tippie to finance director.

SERVICE CARBON VISION LLC: Brian Dalisky to project finance manager; Brandon Miller to solar project manager; Renee

Anderson to vice president, controller.

BOARDS AGNON SCHOOL: Orry Jacobs (BDC Advisors LLC) to president. AKRON CHILDREN’S HOSPITAL: Medical staff — Dr. Sarah Friebert to president; Dr. Jeffrey Hord to vice president; Dr. Douglas Hackenberg to secretary-treasurer.

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AKRON GENERAL HEALTH SYSTEM: F. William Steere (Steere Enterprises Inc.) to chairman. CLEVELAND METROPOLITAN BAR ASSOCIATION: Michael N. Ungar (Ulmer & Berne LLP) to president; Barbara K. Roman to presidentelect; Carter E. Strang to vice president; Jonathan B. Leiken to vice president, membership; Albert A. Vondra to treasurer; David R. Watson to secretary.

AWARDS AMERICAN BAR ASSOCIATION: Marvin L. Karp (Ulmer & Berne LLP) received the 2010 Michael Franck Professional Responsibility Award.

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CLEVELAND METROPOLITAN BAR ASSOCIATION: Ian Friedman (Ian N. Friedman & Associates LLC) received the Honorable William K. Thomas Professionalism Award. INTERNATIONAL ASSOCIATION OF BUSINESS COMMUNICATORS, CLEVELAND CHAPTER: Kimberly St. John-Stevenson (Saint Luke’s Foundation) received the 2010 Communicator of the Year Award. UNIVERSITY OF AKRON: Raymond K. Lee (Country Pure Foods) received the Dr. Frank L. Simonetti Distinguished Business Alumni Award from the College of Business Administration Alumni Association.

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UNIVERSITY SCHOOL: Dan T. Moore III received the 2010 Alumni Graduate Award. YWCA GREATER CLEVELAND: April Miller Boise (Thompson Hine LLP), Tara Broderick (Planned Parenthood of Northeast Ohio), Cathy Kilbane (American Greetings), Janice Murphy (Fairview Hospital and Lakewood Hospital), Geri Presti (Forest City Enterprises), received the 2010 Women of Achievement Awards.

RETIREMENT RPM BUILDING SOLUTIONS GROUP INC.: Jeffrey L. Korach on June 1, after 13 years of service.

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

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JUNE 21-27, 2010

INSIDE

18 FOREIGN LANGUAGE OFFERINGS ARE WIDENING TO INCLUDE ARABIC, CHINESE AND OTHERS.

EDUCATION PREPANDPAROCHIAL

GREENING THE CLASSROOM As students grow more aware of environmental issues, schools adapt curricula By AMY ANN STOESSEL astoessel@crain.com

orror. Anger. Frustration. That’s how Magnificat High School science teacher Heidi Paul described her environmental science students’ reaction to news of the oil spill in the Gulf of Mexico. “They feel like their hands are tied,” said Mrs. Paul, who just completed her first year teaching the environmental science course at the all-girls school in Rocky River. The course taught by Mrs. Paul — who jokingly is referred to as “Mother Earth” — is just one example of the many initiatives taking place in Northeast Ohio’s private and parochial schools to incorporate at the high school level the topics of sustainability and environmental stewardship. At Magnificat, three sections of 75 students See GREENING Page 17

BACK TO SCHOOL What some Cleveland-area private and parochial high schools are incorporating into their curricula to address sustainability and the environment: ■ Magnificat High School, Rocky River: one year into an environmental science course that includes studies in carbon cycles, air pollution and other topics. ■ Gilmour Academy, Gates Mills: will introduce a course in environmental

science literacy, which will include natural resources, biodiversity and connecting human actions with the environment. ■ Notre Dame-Cathedral Latin, Chardon: as part of its strategic plan, has a goal of building awareness of and creating a systematic approach to sustainability. ■ Andrews Osborne Academy, Willoughby: The school has developed a biodiesel course.

Private schools face tough sell when pursuing potential students By SHANNON MORTLAND smortland@crain.com

Marketing campaigns, more questions from parents now the norms

hoga Falls. “It is a tighter market than it was two years ago,” he said. “Everyone, especially the Catholic schools, is competing more than it seems they were two years ago.” Many parents want to know what they’ll get for their money, when they could send their children to a high-performing public school for free, Mr. Britton said.

atrick Britton has witnessed the shift over the past two years. Private schools used to be able to sit back and wait for students to walk through the doors but now they must actively pursue new students and find creative ways to keep existing students, said Mr. Britton, director of admissions for Walsh Jesuit High School in Cuya-

“You really need to describe your product,” added Jerry Jindra, vice president for institutional advancement at Padua Franciscan High School in Parma and an independent marketing and development consultant for various Northeast Ohio Catholic schools. He instructs private schools to first figure out who they are and then embark on marketing and

branding campaigns to spread the word about the school. Though the message differs, the methods of delivery are largely the same. The bottom line: Print advertising and large mailings to the general public are out, personalized and online messaging are in. “We have moved toward a pretty hyper-personal recruiting process,” Mr. Britton said.

Walsh has dropped text-heavy booklets in favor of smaller brochures with lots of photos, short quips and a directive to go to the web site, he said. Google ads and YouTube videos also are being considered instead of traditional print ads, he said. “Long, lengthy things people don’t seem to be reading as much,” Mr. Britton said. “With all the different news sources that exist, you’re really only going to get their See SELL Page 16

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JUNE 21-27, 2010

EDUCATION

Sell: Population loss adds to challenge Hathaway Brown’s fall continued from PAGE 15

attention for a split second.”

Getting personal Walsh is tailoring its recruiting efforts to the student, he said. For example, if a prospective student shows an interest in the band, they might be sent a ticket to an upcoming concert at Walsh, he said. University School, which has campuses in Shaker Heights and Hunting Valley, has taken a more personal approach with parents during the recruitment process, said Stephen Murray, headmaster of University School. For instance, the school will create course work on a study topic of the parents’ choice to “let them get a feel for what it’s like to attend University School,” he said. Prospective parents also can meet the teachers and attend meetings in the homes of existing parents to find out more about the school before enrolling their children, he said. Hathaway Brown in Shaker Heights is touting its ability to teach students to make a difference in the world and handle a rigorous curriculum, while also having fun and making friends, said Terry Dubow, director of communications and marketing for Hathaway Brown. “The most important thing is to make sure your word-of-mouth is strong,” he said. Mr. Dubow said recruiting is getting harder for private schools since Northeast Ohio’s population is dwindling as people move away and couples are having fewer

“(Private) schools really need to start being creative ... and give (students) a worthwhile experience.” – Patrick Straffen communications coordinator, Trinity High School children. “You have to deploy your full arsenal of marketing,” added Michelle Rowley, director of marketing and development at Andrews Osborne Academy in Willoughby. For Andrews, that includes offering campus tours, personal outreach, using international consultants to attract students from abroad and scheduling open houses for parents, she said. Print advertising has been replaced by online ads and social media and networking, she said. It’s the same story at Trinity High School in Garfield Heights, which is using social media and e-mail to reach students and parents when they’re not attracting students from Catholic elementary schools nearby, said Patrick Straffen, Trinity’s communications coordinator.

Getting the word out Trinity hopes to set itself apart with its Pre-Professional Internship Program, which was launched last year. Under the program, students in 10th, 11th and 12th grades attend school four days a week and use

Hats off to the Laurel School Class of 2010!

the fifth day to participate in internships in fields such as health care and graphic design, he said. “(Private) schools really need to start being creative and come up with ways to not only attract students but give them a worthwhile experience,” Mr. Straffen said. Then the schools — Catholic schools especially — need to start talking about their accomplishments and why they’re still a viable option, Mr. Jindra added. Marketing hasn’t been a strong point for local Catholic schools and, as a result, their enrollment has suffered, he said. Last year, schools that are part of the Catholic Diocese of Cleveland had a combined enrollment of 50,681, down 11% from 57,100 in 2005, said Kathleen O’Brien, director of educational services for the Diocese. Mr. Jindra doesn’t see the marketing landscape changing much in the near future for Catholic schools because either they don’t understand the value of marketing or they say they can’t afford to market the school. “You might as well sell the desks and turn off the lights if you believe you can’t afford to market,” he said. “It’s not so much increasing enrollment but keeping the kids you have.” Catholic schools could take a tip from other private schools by embracing marketing, Mr. Jindra said. “Catholic schools have got to learn how to brand and market themselves,” he said. “The return on investment is survival.” ■

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Call 216.464.0946 www.LaurelSchool.org Girls Kindergarten–Grade 12 Coed Pre-Primary

event to promote more collaborative innovation Summit will feature professionals from many fields By AMY ANN STOESSEL astoessel@crain.com

athaway Brown School is striving this fall to not only promote new ideas but a new way of thinking. The Education Innovation Summit, which will be held Nov. 4 through Nov. 6 at the Shaker Heights school, is being envisioned and promoted as a springboard for future progress in education. The goal is not only for educators to share practical ideas with one another, but for professionals from all fields to exchange information on creating a culture of innovation. “Schools aren’t always the most innovative of places,” said Bill Christ, Hathaway Brown head of school. “We have the potential to be think tanks.” Mr. Christ believe this will be the first summit of its kind for independent schools like Hathaway Brown, and he said the aim is to create a “hybrid experience,” bringing together participants not only from independent schools but from business, industry and the private sector. “It’s often the case schools don’t talk to each other very much,” he said. The hope is there will be 400 people attending the summit. Mr. Christ said Hathaway Brown traditionally has been a school that looks to be a leader in girls’ education. “We’ve challenged ourselves to be on the cutting edge,” he said. The school is using half of a $250,000 matching grant from the Edward E. Ford Foundation to fund the summit. The remaining portion of the grant is being used to support three focus centers within the school’s Institute for 21st Century Learning, an initiative that builds off the core curriculum to focus on key 21st-century topics such as global citizenship and environmental studies. Also important to Mr. Christ is to share and highlight to those attending the conference the innovation that is happening in Northeast Ohio. “The idea to hold a summit was sparked by all the exciting new ideas that are being rolled out in Cleveland,” he said. The Edward E. Ford Foundation, based in Portland, Maine, and founded in 1957, awards grants solely for independent secondary education. Robert Hallett, the foundation’s executive director, said throughout the organization’s history it largely has been reactionary in its grantmaking. The Educational Leadership Initiative grants, such as the one received by Hathaway Brown, broke from the foundation’s traditional philosophy, focusing instead on more forward-thinking and broadly impactful programs. Mr. Hallett said the hope of the program is to encourage independent

Event’s roster has big names In addition to schools participating from as far away as Hawaii and California, there also is a full slate of presenters on tap for the event. The keynote speaker will be Daniel Pink, former speechwriter for Vice President Al Gore, and author of New York Times bestsellers “A Whole New Mind: Why Right-Brainers Will Rule the Future” and “Drive: The Surprising Truth About What Motivates Us.” Other presenters include: ■ Chris Coburn, executive director of Cleveland Clinic Innovations ■ Liz Coleman, president of Bennington College in Vermont ■ Fred Collopy, information systems chair, The Weatherhead School of Management, Case Western Reserve University ■ Susan Goldberg, editor of The Plain Dealer ■ Jane Healy, educational psychologist, teacher and author of “Different Learners” ■ Jessica Jackley, cofounder of kiva.org, the world’s first peer-to-peer microlending site ■ Charles Michener, former senior editor at Newsweek and The New Yorker ■ John Nottingham and John Spirk of product invention and development group Nottingham-Spirk ■ Richard Ogle, author of “Smart World: Breakthrough Creativity and the New Science of Ideas” ■ Michael Ruhlman, culinary expert, Iron Chef America judge and author of “The Elements of Cooking: Translating the Craft for Every Kitchen” ■ Baiju Shah, president and CEO of BioEnterprise schools to play a role in the larger education conversation. “We wanted to be part of something bigger,” he said. Since they first were awarded in 2008, a dozen $250,000 Educational Leadership Initiative grants have been awarded. Hathaway Brown was one of five schools nationwide selected in the program’s first year, and the only school in Ohio to have received such a grant. “There’s always going to be a need for a place called school,” said Mr. Hallett, noting that while innovation often is thought of as technological advancement, it has much broader implications. “The (Hathaway Brown) summit is a place for a lot of people to come together to see if there’s any common ground,” Mr. Hallett said. ■

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EDUCATION

Greening: Students more knowledgeable continued from PAGE 15

elected this year to take the junior-level environmental course, which was three years in the making and covered such subjects as the economics of developing countries, the carbon cycle, the Earth’s biomes, air pollution and nonrenewable fuels. “What we want them to do is to take this all to heart,” said Mrs. Paul, who added that parents have commented on changes in their children’s behavior. “They grasp something, and it means something to them and they just want to go with it.” Gilmour Academy science teacher Jeffrey Klein believes high school environmental curriculums are undergoing a transformation of sorts, becoming more formalized. “I feel that environmental science has taken on a more holistic approach,” Mr. Klein said. Next year, the Gates Mills school will offer an environmental science literacy class, which will include an examination of natural resources, biodiversity and connections between human actions and the environment. “The goal is literacy,” Mr. Klein said. “I want them to be able to understand the political and social decisions that impact their lives and the environment.”

Classes getting greener Mr. Klein and others in the field,

including Francis Eberle, executive director of the National Science Teachers Association in Arlington, Va., point to the College Board’s Advanced Placement Environmental Science course as proof of the incorporation of environmental education at the high school level. AP Environmental Science first was offered in the 1997-98 academic school year. In 2000, just 939 schools nationwide offered exams in the course, but by 2009 that number increased nearly fourfold, to 3,232 schools giving the tests. Notre Dame-Cathedral Latin School in Chardon is one school that is looking at ways to more fully integrate the concept of sustainability into its curriculum and mission. In fact, a systematic approach to the school’s sustainability efforts has been included as part of the school’s strategic plan for 20102015, said NDCL president Sister Jacquelyn Gusdane. Sister Gusdane — who was selected to travel to Japan as part of an exchange for the United Nations’ Decade of Education for Sustainable Development — said a number of sustainability initiatives already are taking place at the school, some of which originated from a May 2009 summit sponsored by Fairmount Minerals. “For over a year now, we have been involved in trying to gain a

PHOTO PROVIDED

Vera Xiao (left) and Jill Wollenberg are measuring vegetable oil for Andrews Osborne Academy’s biodiesel course. true understanding of becoming a sustainable school in a sustainable world. We are still ‘new kids on the block’ as we seek to identify the essential components and concepts for our students,” Sister Gusdane wrote in an e-mail. “In our new strategic plan, our focus is to build an awareness of and provide a systemic approach to NDCL’s sustainability initiative.” Oftentimes, student interest drives the inclusion of electives with an environmental focus, as was the case at Andrews Osborne Academy, where a course in biodiesel is taught.

The advanced class examines the alternative fuel’s advantages and disadvantages, its organic chemistry component and economic implications, both good and bad, said Jim Barbarich, who teaches at the Willoughby school. At least 40 gallons of the alternative fuel are produced a week as a result of the course, and the fuel then is used to operate equipment on campus during the warmer months. Mr. Barbarich said the biodiesel — made by the students and created from an oil source such as animal fat or vegetable oil — also is being considered for use in the school’s bus fleet. “The societal impacts are always discussed — both positive and negative,” Mr. Barbarich said. As a result, he said the students see that “biodiesel isn’t the best fuel, but it’s a great intermediary” until a better solution is found. “They’re a lot more knowledgeable and understanding on the different topics than I was growing up,” Mr. Barbarich said.

Down to earth Dawn Wrench, director and founder of the Student Environmental Congress, said while many young people are concerned about the environment, in some ways the growing awareness of issues has created the feeling that the problems are bigger than any of the students’ efforts. “It seems like they don’t think they’re making a difference,” Ms.

FYDFM

Wrench said. Ms. Wrench’s environmental education program, which is operated as part of the Earth Day Coalition, a Cleveland-based nonprofit environmental education organization, reaches between 400 and 500 students annually and works each year with an average of 15 schools, both public and private. Ms. Wrench also serves as this area’s regional director for the Environmental Education Council of Ohio. In that capacity, she said she has been receiving more inquiries, and she agrees that environmental science is making its way into the classroom. “The thing is a lot of (the classes) are still so academic based,” said Ms. Wrench, stressing there remains a need to connect the issues back to the community. Such relevancy and real-life applications actually help drive environmental discussions into science classes in general, said the National Science Teachers Association’s Dr. Eberle. “It is an area that I think is in the public consciousness,” he said, “so it’s woven into the school context.” Regardless of how or in what way environmental issues are integrated, Gilmour’s Mr. Klein said it is a subject that many students take to heart. “It’s not just peripheral textbook knowledge,” he said, noting that they learn by example from parents, adults and teachers. “It’s not just what you say, it’s what you do.” ■

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Kristina Collins

Katrina Feldkamp

Tatiana DuBose-Butler

Ashley Grimes

Erin Kelley

Andrea Mitchell

National Merit Finalist Case Western Reserve University

National Merit Finalist Fordham University

National Merit Commended Student National Achievement Scholarship Finalist Plain Dealer Senior Standout Harvard University

National Merit Commended Student National Achievement Scholarship Finalist Emory University

National Merit Commended Student University of Connecticut

National Merit Commended Student The Ohio State University

Scholarships and awards received by 79% of the Class of 2010 total $10.7 million

Colleges and Universities accepting the Class of 2010 University of Akron Alfred University Arizona State University University of Arizona Art Academy of Cincinnati Ashland University Baldwin-Wallace College Barry University Boston College Boston University Bowling Green State University Bradley University Brown University Butler University Canisius College Carnegie Mellon University Case Western Reserve University Catholic University of America Central State University College of Charleston University of Cincinnati

Clemson University Cleveland Institute of Art Cleveland State University Coastal Carolina University University of Colorado at Boulder Columbia College Columbia University University of Connecticut University of Dayton DePaul University Drexel University Duquesne University Eckerd College Edinboro University of Pennsylvania Elon University Embry-Riddle Aeronautical University Emory University Fairﬁeld University Fisk University Fordham University

Franciscan University of Steubenville Gannon University The George Washington University Georgetown University Hampton University Harvard University High Point University Howard University Illinois Institute of Technology Indiana University at Bloomington Indiana University at Pennsylvania Indiana Wesleyan University John Carroll University Kent State University Lake Erie College Lakeland Community College Lawrence University Lincoln University Loyola Marymount University Loyola University Chicago

Loyola University Maryland Loyola University New Orleans Marietta College Marquette University Mercyhurst College Miami University University of Miami Michigan State University University of Michigan Mount Union College New York University University of North Carolina at Charlotte Northeastern University Northwestern University Notre Dame College of Ohio Ohio Dominican University Ohio Northern University The Ohio State University The Ohio State University, Lima The Ohio State University, Mansﬁeld

The Ohio State University, Marion Ohio University Ohio Wesleyan University Pennsylvania State University, University Park University of Pittsburgh University of Pittsburgh at Bradford Princeton University Providence College Purdue University Rochester Institute of Technology University of Rochester Saint Anselm College Saint Leo University Saint Louis University Saint Mary’s College Saint Michael’s College University of San Francisco Savannah College of Art and Design

Sierra Nevada College St. Bonaventure University St. John’s University Stonehill College Syracuse University University of Tennessee, Knoxville Thiel College University of Toledo Ursuline College Valparaiso University Villanova University Washington and Jefferson College Washington University in St. Louis University of Washington Wellesley College Wheeling Jesuit University William Woods University Wittenberg University The College of Wooster Xavier University Xavier University of Louisiana

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JUNE 21-27, 2010

EDUCATION

As world gets smaller, foreign language offerings grow Schools add subjects such as Chinese, Arabic to expand students’ opportunities to diversify By KATHY AMES CARR kcarr@crain.com

s the United States increasingly becomes part of the global community, Northeast Ohio’s prep and parochial schools are among those expanding foreign language programs to include less-traditional offerings such as Arabic and Chinese. “By offering more languages, we are showing appreciation for a shrinking world,” said Josephine O’Hara, department chairwoman of world languages at Magnificat High School, which in 2009 added Chinese and Arabic. Prep and parochial schools also acknowledge the marketing potential that comes along with offering courses in emerging foreign languages. According to the Ohio Foreign Language Association, schools do not have to offer

a foreign language; rather, it is at their discretion to do so. However, prospective students and parents know that proficiency in a foreign language can bolster college and career opportunities. “Experience in a foreign language really gives them a leg up in the world because they are more marketable for jobs, especially because more businesses have become international operations,” said Grace Gorman, foreign languages department chairwoman at St. Vincent-St. Mary High School in Akron, which offers Russian and Chinese among other more common languages.

Spread the word Educators say foreign languages are a critical part of a student’s education; therefore, it’s necessary to continue developing or revamping programs as the world’s economy evolves.

For example, St. Vincent-St. Mary in 2003 added Russian to its foreign language department program and this past school year began offering Chinese. Some students gravitate toward Russian and now Chinese because they enter ninth grade already having a command of either French or Spanish, both of which are offered beginning in kindergarten at nearby St. Hilary School. “After the fourth year of the Russian program, we looked at incorporating Chinese,” Ms. Gorman said. “China is such an emerging world power. We cooperated with (Walsh Jesuit High School in Cuyahoga Falls) because it coincidentally began offering the language, too.” Therefore, Ms. Gorman said the program’s Chinese teacher, HuiYing Lee, splits her time between Walsh and St. Vincent-St. Mary. Meanwhile, the Akron parochial school also hopes to expand its study abroad program by offering students the chance to visit China. “We do programs in Paris, Normandy, St. Petersburg and

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Su-Jane Chen teaches students in Chinese I at Magnificat High School in Rocky River. Moscow,” Ms. Gorman said. “We’re exploring our options with cities such as Beijing.” Similarly, Magnificat in Rocky River plans to augment its Spanish and French student exchange programs with opportunities in China and in Arabic-speaking countries. Even though enrollment in these new courses is much lower than its language counterparts — Magnificat in the fall will have 400 students in Spanish, 100 in French and 25 each in Chinese and Arabic — Ms. O’Hara is optimistic these numbers will climb.

It’s not all Greek Some schools have thought about expanding their programs, but aren’t there yet. St. Ignatius High School in Cleveland — Northeast Ohio’s largest parochial school, according to Crain’s 2010 Book of Lists — currently offers Latin, Greek, French and Spanish. While the school has discussed expanding its language offerings, it likely won’t happen in the near future, said Joe Zebrak, languages department chair. “A lot if it has to do with personnel,” he said. “If we add something, we have to subtract something.” But for those schools that are

adding new languages, student recruitment presents its own set of challenges, foreign language program coordinators say. For one, students are intimidated by the complex alphabet and characters associated with Chinese and Arabic. Other reasons students tend to shy away from these courses are because of parental influence, or they already have language training under their belts and want to continue studying that culture. University School, which has campuses in Hunting Valley and Shaker Heights, for example, introduces Spanish at the lower level, exposing students through fifth grade to the nation’s second-most spoken language. At the middle-school level, those students either can continue on or pursue French or Latin. Chinese and Greek are offered in ninth through 12th grades, said Elizabeth Chois, a Spanish teacher. No matter the language learned, Ms. Chois said early exposure enhances intercultural communication skills. “Even if they don’t know German, but speak more than one language and end up doing business in Germany, it shows another level of cultural understanding,” she said. ■

COMINGUP 2010 CFO of the Year nominations coming up This October, Crain’s will recognize the region’s top financial officers for their strategic leadership and outstanding fiscal management during the deepest recession in a generation. How has your CFO’s vision and direction positively impacted your operation’s success and viability in an ever-changing economy? New for 2010: The Lifetime Achievement Award, recognizing a current or former senior financial executive who has honorably represented his or her company/organization with exemplary performance and leadership throughout his or her career.

Visit www.CrainsCleveland.com /cfonominate to nominate your CFO for this prestigious award.

Emerald Awards nominations also open Profits. People. Planet. The window to nominate individuals and companies for our 2010 Emerald Awards is now open. Is your company or organization a champion of sustainability? Do you know an individual whose leadership is making a difference in our region? Tell Crain’s how their commitment to the triple bottom line is building a better and brighter Northeast Ohio. Download entry forms and find additional program details at www. CrainsCleveland.com/emerald.

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

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HIGHEST PAID CEOS RANKED BY 2009 COMPENSATION Executive (Age) Company

Total compensation 2009 2008

% change

Salary

Bonus

Anthony J. Alexander (58) FirstEnergy Corp.

$12,441,092 $14,951,454

(16.8)

$1,159,615

$4,555,568

$1,206,000

$5,459,829

$60,079

$1,006.0

-25.0

David L. Pugh (60) Applied Industrial Technologies Inc.

$9,896,063 $4,980,626

98.7

$945,000

$1,432,220

$7,456,328

$62,515

$42.3

-55.7

Glenn M. Renwick (54) Progressive Corp.

$9,128,036 $8,379,982

8.9

$750,000

$7,500,012

$798,750

$79,274

$1,057.5

Alexander M. Cutler (58) Eaton Corp.

$8,536,007 $10,077,836

(15.3)

$973,248

$5,099,874

$575,000

$1,732,144

$155,741

$383.0

-63.8

Henry L. Meyer III (60) KeyCorp

$8,152,386 $6,727,549

21.2

$1,642,731

$1,247,483

$2,142,000

$3,036,920

$83,252

($1,335.0)

Donald E. Washkewicz (59) Parker Hannifin Corp.

$8,110,109 $16,132,069

(49.7)

$1,116,500

($1,281,862)

$2,732,940

$1,933,120

$3,446,355

$163,056

$508.5

-46.4

James L. Hambrick (55) The Lubrizol Corp.

$7,973,810 $7,900,810

0.9

$969,288

$225,863

$2,060,534

$1,030,144

$1,676,138

$1,906,371

$105,472

$500.8

Christopher M. Connor (53) Sherwin-Williams Co.

$7,495,810 $5,064,207

48.0

$1,268,986

$2,147,367

$1,918,725

$1,684,000

$476,732

$435.8

-8.6

Darrell Webb (52) Jo-Ann Stores Inc.

$7,484,533 $2,507,416

198.5

$875,000

$4,400,011

$400,002

$1,750,000

$9,282

$50,238

$66.6

204.1

Paul G. Greig (54) FirstMerit Corp.

$5,907,300 $4,854,513

21.7

$731,088

$250,000

$1,599,992

$113,246

$2,833,715

$379,259

$82.2

-31.2

Richard K. Smucker (61) The J.M. Smucker Co.

$5,592,717 $5,526,500

1.2

$761,000

$15,220

$2,578,162

$1,369,800

$789,273

$79,262

$266.0

56.1

Joseph A. Carrabba (57) Cliffs Natural Resources Inc.

$5,350,667 $4,473,295

19.6

$750,500

$2,728,150

$1,328,306

$461,699

$82,012

$205.1

-60.2

W. Nicholas Howley (57) TransDigm Group Inc.

$5,006,110 $1,574,400

218.0

$577,500

$525,000

$1,595,367

$2,308,243

$162.9

22.4

A. Malachi Mixon III (69) Invacare Corp.

$4,843,901 $4,262,316

13.6

$1,106,000

$912,279

$1,029,895

$1,327,200

$333,162

$135,365

$41.2

18.1

Timothy P. Smucker (65) The J.M. Smucker Co.

$4,832,870 $3,284,536

47.1

$761,000

$15,220

$2,419,405

$1,369,800

$174,024

$93,421

$266.0

56.1

John M. Stropki (59) Lincoln Electric Holdings Inc.

$4,604,784 $4,788,903

(3.8)

$736,667

$1,434,766

$797,581

$858,144

$760,993

$16,633

$48.6

-77.1

Thomas W. Swidarski (51) Diebold Inc.

$4,594,850 $4,707,187

(2.4)

$750,000

$1,158,000

$1,177,440

$921,000

$474,000

$114,410

$26.0

-70.6

Marc A. Stefanski (55) TFS Financial Corp.

$4,359,053 $2,710,274

60.8

$1,080,000

$148,988

$1,116,280

$1,244,664

$443,156

$75,071

$250,894

$14.4

-73.6

Richard L. Kinzel (69) Cedar Fair LP

$4,098,185 $4,159,864

(1.5)

$1,300,000

$1,196,000

$1,500,000

$58,126

$44,059

$35.4

520.9

James W. Griffith (56) Timken Co.

$3,960,155 $6,083,880

(34.9)

$985,580

$430,408

$1,024,717

$1,419,000

$100,449

($134.0)

Stephen D. Newlin (57) PolyOne Corp.

$3,823,505 $7,772,341

(50.8)

$860,000

$312,547

$275,559

$1,720,000

$516,552

$138,847

$67.8

Alfred M. Rankin Jr. (68) Nacco Industries Inc.

$3,488,334 $1,966,167

77.4

$1,138,798

$552,245

$665,388

$554,168

$473,137

$104,598

$31.1

Craig S. Shular (57) GrafTech International Ltd.

$3,446,396 $2,415,104

42.7

$583,083

$1,115,880

$585,200

$1,049,921

$18,253

$94,056

$12.6

-93.7

Richard J. Hipple (57) Brush Engineered Materials Inc.

$3,424,083 $2,028,746

68.8

$674,650

$168,450

$1,377,633

$705,932

$413,829

$49,034

$34,555

($12.4)

Zev Weiss (43) American Greetings Corp.

$3,270,983 $1,972,072

65.9

$921,460

$674,302

$233,126

$921,459

$449,453

$71,183

$81.6

Walter M. Rosebrough Jr. (55) Steris Corp.

$3,212,140 $1,281,202

150.7

$745,593

$638,988

$508,744

$1,265,250

$53,565

$128.5

16.1

Kevin M. McMullen (49) Omnova Solutions Inc.

$3,017,506 $1,584,886

90.4

$657,523

$648,932

$1,383,764

$297,994

$29,293

$26.2

Joseph M. Gingo (64) A. Schulman Inc.

$2,966,022 $2,295,622

29.2

$768,600

$250,000

$1,476,310

$395,719

$75,393

($2.8)

Frank C. Sullivan (48) RPM International Inc.

$2,672,473 $3,849,757

(30.6)

$825,000

$621,549

$849,700

$275,000

$10,587

$90,637

$119.6

150.7

Jeffrey I. Friedman (58) Associated Estates Realty Corp.

$2,350,077 $2,160,421

8.8

$487,479

$690,758

$971,267

$72,918

$127,655

$5.8

-82.9

Steven L. Gerard (64) CBiz Inc.

$2,291,121 $2,539,145

(9.8)

$675,000

$179,810

$308,000

$442,800

$420,190

$265,321

$31.4

3.3

Robert G. Ruhlman (53) Preformed Line Products Co.

$2,234,614 $2,152,017

3.8

$650,000

$284,614

$23.4

32.5

Edward F. Crawford (70) Park-Ohio Holdings Corp.

$2,199,042 $4,483,340

(51.0)

$687,500

$959,750

$85,534

$466,258

($5.2)

Thomas M. O'Brien (43) TravelCenters of America LLC

$1,993,415 $1,727,440

15.4

$300,000

$1,175,000

$515,915

$2,500

($89.9)

Joseph M. Scaminace (55) OM Group Inc.

$1,992,934 $4,418,691

(54.9)

$917,600

$231,923

$606,163

$5,009

$232,239

($17.9)

Ronald E. Weinberg (68) Hawk Corp.

$1,887,087 $2,699,343

(30.1)

$778,846

$591,960

$193,706

$322,575

$6.4

-69.4

Samuel F. Thomas (58) Chart Industries Inc.

$1,640,395 $2,063,827

(20.5)

$550,000

$137,597

$370,969

$545,812

$36,017

$61.0

-22.7

John C. Orr (59) Myers Industries Inc.

$1,569,300 $3,808,460

(58.8)

$725,000

$81,166

$38,134

($0.7)

Martin Ellis (44) Agilysys Inc.

$1,550,564 $1,249,451

24.1

$392,396

$218,500

$317,904

$177,493

$122,969

$321,302

$3.5

James F. Kirsch (52) Ferro Corp.

$1,332,569 $2,856,314

(53.3)

$711,031

$362,500

$73,295

$112,700

$73,043

($42.9)

Rank

Company net Nonequity Change in All other income 2009 Stock awards Option awards incentive plan pension value compensation (millions)

Source: Company proxy statements. 2009 net income and net income % change provided by Capital IQ, a Standard & Poor's business, www.capitaliq.com. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.

Company net income % change from 2008

RESEARCHED BY Deborah W. Hillyer

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JUNE 21-27, 2010

Nextant: Jet aircraft market expected to rebound continued from PAGE 3

Today, six planes in various stages of dismantling and rebuilding sit in a 22,000-square-foot hangar next door to company headquarters at Cuyahoga County Airport in Richmond Heights. Nextant president James Miller said the company already has orders for these six. Nextant took the first plane up on its maiden flight at the end of February and expects to begin delivery of the planes in the first half of 2011, once the plane passes 300 hours of airborne testing and wins certification of airworthiness from the Federal Aviation Administration. The 400NEXT is built on the airframe of the Beechcraft 400A, a popular light jet that first hit the market in the early 1980s. Mr. Miller said he believes the company’s target of selling 120 of the planes over the next 10 years is “on the low side” of the program’s potential, even though the market for jet aircraft is sluggish now. But he said the market runs and cycles, and it will return. He also pointed out there is a fleet of roughly 600 of this model plane still flying, as well as 180 Jayhawks, the military version of the aircraft. Those planes, and others like it, he said, will become obsolete as the FAA develops the next-generation air traffic control system that will replace ground-based radar and communications systems with GPS tracking and low-orbit satellitebased communications. “The current airplanes are illequipped to take advantage of the next-generation airspace,” he said. “This airplane was state-of-the-art in the late 1970s and early 1980s.” The 400NEXT will have the latest of this avionics equipment.

Everything old is new again Industry observers say other

fact book. At the moment, Nextant has only 10 of its own employees, though it has 50 engineers working on contract. Mr. Miller expects the number of employees to grow in six months to 25, as the program moves from development to production.

Navigating a rough market

JESSE KRAMER

The 400NEXT is built on the airframe of the Beechcraft 400A, which was popular in the early 1980s. companies tried similar rebuilding programs in the 1980s and 1990s with some success and that Nextant’s program could win a solid spot in the industry. “It’s a good idea,” said Stephen Pope, editor of Business Jet Traveler, a Midland Park, N.J., publication covering business aviation, the major market for light jets like the 400NEXT. “Taking an airplane like the Beechcraft 400, an older airplane, modernizing the cockpit, giving it new engines and putting a new interior in, what it does, it gives you a really modern airplane at a pretty low acquisition price,” Mr. Pope

said. He said a comparable new plane would cost about $7 million. Nextant buys used Beechcraft jets and strips them down to skin and bones, replacing engines, landing gear and fuel pumps. “All the things that can fail,” Mr. Miller said. “We reduce the airplane down to about what it was like when it was one-third of the way down the assembly line.” Mr. Miller said the airframe — the structural components including the fuselage, wings and skin of an airplane — has a very long life and need not be replaced. The 400NEXT is a small jet. Its cabin is less than five feet across

and four feet nine inches from floor to ceiling in the center aisle. It’s configured to seat a maximum of eight passengers — Mr. Miller points out that the lavatory seat comes with a seatbelt — though it more typically would carry four passengers. It has LED lighting in the cabin, a telephone and a galley that can be stocked with beverages and snacks. The like-new plane extends the range of the Beechcraft 400 from 1,300 nautical miles to over 2,000 nautical miles and reduces fuel consumption by 32% for a typical flight, with a slight increase in cruising speed, according to a company

Mart: MMPI confident tenants will fill facility in ’13 continued from PAGE 1

mart, a four-story glass building that will rise above the underground convention center at St. Clair Avenue and Ontario Street. The new complex will be divided into a convention center that will include temporary exhibit space and the medical mart, which will house permanent showrooms and sales offices for major health care products dealers. At a press briefing at NeoCon Tuesday morning, MMPI senior vice president Mark Falanga said the company has signed letters of intent for 12 conventions and 24 medical mart showroom spaces for the new complex.

Gaining momentum Though the complex isn’t scheduled to open until 2013, Mr. Falanga told Crain’s Cleveland Business in an interview after the press briefing that if the company can convert the three dozen letters of intent it already had for conventions and space in the medical mart to signed contracts, that would be enough for the company to feel comfortable opening the center in 2013. Of the 40 dealers pitched, Cleveland-based MMPI spokesman David Johnson said last Friday that the company already has one additional signed letter of intent, the first non-binding step MMPI is using to fill the medical mart. MMPI now has 25 signed letters of intent for showroom spaces at the medical mart, he said. The stepped-up marketing push follows announcements late last month about land

acquisition and space planning for the new trade show complex. At a May 20 meeting of the Cuyahoga County commissioners, the commissioners announced they finally had an agreement to purchase the last piece of land they needed for the new trade show complex, the Sportsman’s Restaurant. At the same meeting, MMPI unveiled the tentative space plans for the project and said it expected to break ground in October. Those announcements triggered the stepped-up marketing effort. At the NeoCon show, Mr. Falanga said the company was pleased with the commitments it has so far, though he believes the pace will pick up once ground is broken this fall. “In terms of the critical mass, if we opened today and, let’s say that every letter of intent we have turns into a signed contract — 25 permanent showrooms and 12 shows the first year — that’s enough to open the place,” Mr. Falanga said during an interview in his fourth-floor Merchandise Mart office. “We think we’re going to have more than that by 2013, and I think the more realistic this project gets to the manufacturers and to trade show organizers, the better our ability will be to get them to commit.”

Targeted pitch NeoCon attracts 700 furniture dealers and 50,000 buyers, and this year, for the first time, MMPI grouped together dealers who sell into health care markets. A themed “Healthcare Pavilion” was created in temporary exhibit

space on the eighth floor of the 11-story Merchandise Mart. “We have 125 companies (at the NeoCon show) that market into the health care area,” Mr. Falanga said. Mr. Falanga and MMPI president Chris Kennedy were pleased by the turnout of health care furniture dealers at NeoCon. They said that the turnout is all the more impressive because the temporary exhibit space on the seventh and eighth floors of the 70-yearold Merchandise Mart doesn’t measure up to newer convention center space, the kind they will be marketing in Cleveland. However, Mr. Falanga said the dealers set up temporary shop at the Merchandise Mart because they like being associated with the well-appointed permanent showrooms, the same situation that he believes will make the Cleveland center attractive. The pitch to come to Cleveland that MMPI made to those 40 health care exhibitors included a proposal that would give them a year’s free space for every year of paid lease space to which they agree. “Should we agree on a lease in the coming months, we will provide a lease incentive equal to the term of your lease, essentially providing you with a free space to showcase your product, utilize as a regional sales office, and grow your business in the health care industry,” the letter states. The letter doesn’t say how much MMPI will be charging to lease space, and the company has declined to discuss details of its conversations with potential tenants. ■

Nextant is one of a group of companies linked to Kenn Ricci and his Directional Aviation Capital, a private investment firm based in Richmond Heights. In addition to Nextant, Direction Aviation’s investment portfolio includes Flight Options LLC, the fractional aircraft operator, and Corporate Wings and Cutter Aviation Inc., which provide aircraft maintenance and support services at airports. Being part of that corporate family may be an asset for Nextant, since the Beechcraft jets are a significant part of Flight Options’ fleet of 100 aircraft and the Flight Options mechanics are familiar with the aircraft. “There are a lot of synergies,” Mr. Miller said. Mr. Pope and others believe this is a good time to be in the market buying used airplanes, since prices are down as much as 50% from highs two years ago. The flip side, though, is that potential buyers aren’t buying right now. “I think (the 400NEXT) is really good,” said Tom Crowell Jr., president of Jet Brokers Inc., a jet aircraft broker based in Chesterfield, Mo. “It’s just that the market is in such terrible shape right now, that I don’t know if their timing is right. “But they’re smart business people, and they’ve been around for a while,” he said. “If they would have come out with this in 2008, they probably would have done a couple hundred of them by now. That’s not an exaggeration.” ■

Attendees mum, but generally positive Few executives from several of the firms with product lines targeting the health care market would speak specifically last week at the furniture trade show NeoCon about discussions they have had with MMPI about coming to the Cleveland mart. But, generally, they spoke positively about project. Executives at Herman Miller Healthcare, an arm of the giant Zeeland, Mich.-based Herman Miller Inc. contract furniture manufacturer, have met with MMPI officials but have not made any commitment. “At this point in time, we’re not comfortable with any kind of commitment,” said Mollie Everett, a senior health care program manager. “But we are going to re-evaluate when they are further along with the planning for their space.” Kyle Williams, vice president and general manager of Nurture by Steelcase, said in an e-mail that his firm has had discussions with MMPI. Nurture is a line of furniture for hospitals, laboratories and doctors’ offices produced by Steelcase Inc., a leading office furniture supplier based in Grand Rapids, Mich. “Nurture and Steelcase have had a very good relationship with the Cleveland Clinic for a number of years, and we have been closely following the proposed development of the Cleveland Medical Mart,” he wrote. “We will continue to evaluate this project in the near future,” he said. — Jay Miller

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CRAIN’S CLEVELAND BUSINESS

Fee: Standards for waiver approval likely to stiffen in future continued from PAGE 1

have to make larger investments to meet the goals,” Ms. Raines said. She wouldn’t say how big the fee might become. However, Mike Brakey, principal of energy consulting firm Brakey Energy of Shaker Heights, expects the fee to become a sizable part of customers’ energy bills. “It could vastly drive up costs for everyone,” Mr. Brakey said.

The exceptions Well, maybe not everyone. Progressive Corp. of Mayfield Heights is one of the five Northeast Ohio companies that already has received confirmation that they won’t have to pay the fee right away. The auto insurer expects to be exempt from the fee for at least three or four years, based on the measures it already has put in place, said Greg Dolence, manager of facilities engineering for Progressive. Those measures included replacing T-12 fluorescent lights in some of the company’s buildings with more efficient T-8 lights and retrofitting some of its air-handling units so that cool, external air can be used for air conditioning. Mr. Dolence noted that Progressive was going to pursue the improvements even if there was no way to avoid the fee. “It’s the right thing to do. It’s good for us. It’s good for the environment,” he said. The other area companies that have been approved to avoid the fee are all manufacturers: Lubrizol Corp. of Willoughby, Automated Packaging Systems Inc. of Streetsboro, Polychem Corp. of Mentor and PCC Airfoils LLC of Beachwood. Many area companies and organizations have submitted improvements to the Public Utilities Commission of Ohio but have yet to be approved. For instance, steelmaker ArcelorMittal applied after replacing its electrocoating line at the company’s Cleveland plant with a hot dip galvanizing line that uses 66% less electricity. Likewise, MetroHealth Medical Center expects to save 4% on its overall electric bills and avoid paying the fee for at least four years after

ON THE WEB

Story from www.CrainsCleveland.com.

Hoffman Group buys Middleburg Heights insurer Insurance agency The Hoffman Group has purchased Belgrave Insurance Agency. The owner of the threemember Belgrave firm, which was in Middleburg Heights, has joined The Hoffman Group. Two other employees did not come to the new firm. “We are looking forward to working with the Belgrave Insurance Agency clients,” Jeff Phillips, senior vice president at The Hoffman Group, said in a statement. “We believe we can bring them value by offering additional carriers and coverages from which to choose.” The Hoffman Group has three offices, in Berea, Medina and Elyria, and 43 employees.

retrofitting its light fixtures and replacing its cathode ray tube monitors with flat screens in 2006. To be eligible for the exemption, improvements must have been completed after Dec. 31, 2005. Cuyahoga Community College applied for exemption as well, citing improvements it made to its lighting, heating and plumbing systems in its filing with the commission. The college estimates it will save $30,000 to $40,000 each year for several years should it get the commission’s approval, on top of what it will save in electricity costs, said Blair Bosworth, executive director of plant operations. However, the filing process has been a pain because

“(FirstEnergy’s energy efficiency fee) could vastly drive up costs for everyone.” – Mike Brakey, principal, Brakey Energy the commission is still tweaking the program, Mr. Bosworth said. “To say it was frustrating would be an understatement,” he said.

Ambitious goals The commission previously told applicants that they could forgo the fee entirely if they cut energy use by 22% — the same percentage reduction FirstEnergy must achieve among

all its Ohio customers. Once the commission finishes refining the requirements, they likely will not be as generous, said Kim Wissman, director of the commission’s energy and environmental department. The commission is concerned that making it too easy to avoid the fee would leave utilities’ efficiency programs underfunded, Ms. Wissman said. It’s unlikely, however, that the commission will change requirements so much that the program no longer is appealing to energy users, she said. “I don’t think you’re going to see anything that takes a 180 degree turn,” she said.

A lot of companies, particularly manufacturers, have shown interest in the program, but many still are hesitant to spend the money to improve their energy efficiency, said Tom O’Brien, a lawyer who works on a contract basis with Bricker & Eckler LLP of Columbus. Like Mr. Brakey of Brakey Energy, Mr. O’Brien expects the efficiency fee to lead to a dramatic increase in costs. Most FirstEnergy customers, however, won’t care until the fee shows up on their bills, Mr. Brakey said. “Ninety-nine percent of the general population will just wonder ‘what happened’ when they get this charge,” he said. ■

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Midtown: Geis eyes better Cleveland continued from PAGE 3

both emphasized the project will not be a go without a $3.5 million grant from the state’s Job-Ready Sites Program. They expect a decision on the state grant later this summer. If the state approves the grant, it would clear the way for construction to begin in the latter part of the year. Mr. Geis said the project will provide flex office space — space that can serve as offices and warehouse or assembly space with garage doors for truck entry — in the city.

Contact: Phone: Fax: E-mail:

and former commercial mortgage broker Jim Doyle — acquired in 2008, Mr. Geis puts the project in big-picture terms. “I have two T-shirts,” Mr. Geis said. “I have one that says, ‘I have fun in my job.’ The other says, ‘Let’s resettle Cleveland.’ We’ve got the suburbs pretty well covered. I want to see the city of Cleveland flourish. The city of Cleveland has a war chest. The city of Cleveland and MidTown Cleveland are great partners to have in this process.” MidTown Cleveland is the nonprofit development corporation

“We hope to help growing companies produced in incubators around here so they have space available and the city will not lose them to low-cost flex buildings constructed in the suburbs in the 1990s,” Mr. Geis said. “The city needs market-rate real estate competitive with low-cost space in the suburbs or out of state.”

Committed to the city While the proposed Euclid Tech Center will occupy a vacant site at 6700 Euclid Ave. that Mr. Geis and several partners — the Coyne family

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Western universities and the health care institutions “is sure to produce enough demand to carry a little building.” Little — depending on your point of view — but important. Jeff Pesler, assistant director of MidTown, said there has been no commercial construction of the Euclid Tech Center’s scale along Euclid since the headquarters of Applied Industrial Technologies Inc. rose in 1997. Mr. Pesler said the Euclid Tech Center is the first construction project to take shape under the “Health-Tech Corridor,” a publicprivate partnership designed to land biomedical and technical companies in the Midtown area. ■

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LEGAL NOTICE PUBLIC ANNOUNCEMENT The Board of Education of the Cleveland Heights-University Heights City School District (the “District”) is seeking Letters of Interest from entities interested in the lease of the former Millikin Elementary School Property located at 1700 Crest Road, Cleveland Heights, Ohio 44121, in Eastern Cuyahoga County (the “Property”). Entities interested in leasing the Property may obtain from the District at the address set forth below its Request for Letters of Interest detailing the procedures for submitting a Letter of Interest. Letters of Interest should be submitted to the District at the address set forth below not later than 12:00 noon Eastern Standard Time on Friday, August 6, 2010. Letters of Interest received after this date and time will not be accepted.

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Requests for Letters of Interest may be obtained from, and Letters of Interest should be delivered to: Stephen A. Shergalis, Director of Business Services Cleveland Heights-University Heights City School District 2155 Miramar Boulevard University Heights, OH 44118 Phone: 216-371-7171 x 2004 Fax: 216-397-3685 The District will select the entity proposing a re-use of the Property the District deems to be in the District’s best interest and in accordance with the procedures set forth in the Requests for Letters of Interest.

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THEINSIDER

THEWEEK JUNE 14 - 20 The big story: Cuyahoga County commissioners expect to decide in the next few weeks whether to divert part of the county’s bed tax from Positively Cleveland, the regional convention and visitors bureau, to help pay for the operation of the planned convention center and medical merchandise mart. Positively Cleveland has e-mailed its members a draft of a letter and is asking them to urge the commissioners to protect the bureau’s share of the bed tax. The bed tax is a 4.5% tax on money spent on hotel rooms in the county, and it generates $11 million a year. Positively Cleveland ends up with less than half of the $11 million, but the tax accounts for more than 80% of the nonprofit’s $5.2 million annual budget.

Upping the ante: Mining company Cliffs Natural Resources Inc. increased its cash takeover bid for Toronto-based Spider Resources Inc. to 16.5 cents (Canadian) per common share from 13 cents, provided Spider terminates its previously announced merger agreement with Montreal-based KWG Resources Inc. Spider’s board of directors called Cleveland-based Cliffs’ offer a “Superior Proposal,” as defined in Spider’s merger agreement with KWG. Under the merger agreement, KWG has until today, June 21, to match Cliffs’ bid. Thrown for a loop: Amusement park operator Cedar Fair Entertainment Co. said in a June 17 Securities and Exchange Commission filing that its chief operating officer has resigned. The resignation of Jacob T. Falfas was effective June 12. The two-sentence filing did not state a reason for Mr. Falfas’ resignation. His resignation came four days after Cedar Fair’s largest shareholder was able to get two new directors on the company’s board. On the money: The Fund for Our Economic Future voted to award up to $5.32 million to regional initiatives aimed at improving Northeast Ohio’s economic competitiveness. Six one-year grants were made to regional nonprofit economic development groups working to grow and attract companies. Each grant recipient must hit performance milestones to receive the full grant amount. The recipients receiving the largest grants are JumpStart, the entrepreneurial assistance organization, at $1.3 million, and BioEnterprise, which helps grow bioscience and health care companies, at $1.1 million.

Howdy, partner:

The Cleveland Clinic entered a research agreement with a Michigan company founded by Roger Newton, who helped discover the world’s best-selling drug, Lipitor. Through the agreement, the Clinic and Esperion Therapeutics of Plymouth, Mich., will work together to study how to develop therapies based on “good” HDL cholesterol. The Clinic previously collaborated with an earlier incarnation of the company on research related to how HDL can be used on patients with heart problems.

This and that: American Greetings Corp. refinanced its existing $350 million revolving credit facility and repaid the balance outstanding under its $99 million term loan. The Brooklynbased greeting card giant said the amended and restated credit facility will continue to permit borrowings up to $350 million and will mature June 11, 2015. … Nordson Corp. agreed to sell its graphic arts-related UV curing business to Baldwin Technology Co. of Shelton, Conn. Terms of the sale of Nordson UV Ltd. were not disclosed. Westlakebased Nordson, a maker of automated spraying equipment, said the divested business is “immaterial” to its consolidated results.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Dental school smiles over revised curriculum ■ Case Western Reserve University’s dental school is implementing the final parts of its new curriculum. The curriculum was overhauled for the first time in decades and began to be slowly implemented four years ago, said Dr. Jerold Goldberg, dean of the dental school. Now the largest parts of the curriculum are ready to be put into action, he said. One of the most popular programs added in recent years was the dental sealant program, in which first-year dental students put sealants on the teeth of Cleveland children. The program worked well and dental students loved it, so the dental school has been adding more experiential learning throughout the dental school curriculum and has been putting lectures on the back burner, Dr. Goldberg said. Dental students now learn mostly by participating in individual and group projects and the school uses a Sustar hands-on approach to teaching dental students how to run their own practice — a subject that was ignored in the past, he said. The sealant program has been expanded to care for the child’s whole family under a pilot project launched in the 2009-2010 school year at the dental school. In the 2010-2011 school year, the dental school will implement a program in which students will learn how chronic diseases and pharmacology affect the dental care of older people. Students also will begin performing research in the next two school years, all of which was book work in the

past, Dr. Goldberg said. “We are clustering the curriculum around the clinical experiences they are going to have in the near term,” he said. — Shannon Mortland

Machining company’s cannons let Fredon ring ■ Mentor-based Fredon Corp. has given nine more would-be machinists a start on their new careers. Each year, the company takes a group of area youths and teaches them how to do some basic machining in a project it calls Cannons of Fredon. When the program is over, each participant has made their own bronze and aluminum cannon using Fredon’s machine shops and with help and training from its employees. “It’s been a very successful thing,” said Fredon CEO Roger Sustar, who said more than 300 area students have completed the program since it began in 1992. Participants pay $12, which goes to the Boy Scouts, and Fredon supplies the materials, machines and employees. Many of the students come through the Scouts, but Mr. Sustar said any local student is free to participate in the program. (The cannons do not actually fire, incidentally.) Fredon benefits as well: The company has six employees that came through the Cannons of Fredon program, including one who has been with the company more than 10 years. “The kid that’s teaching the students on Saturday was from the first class,” Mr. Sustar said. Yep — “first class” pretty much sums

WHAT’S NEW

BEST OF THE BLOGS

COMPANY: Vitamix, Cleveland PRODUCT: The Quiet One blender

Excerpts from blog entries on CrainsCleveland.com.

The words “quiet” and “blender” don’t usually occupy the same sentence. But Vitamix says its new premium blender “provides unparalleled sound reduction, exceptional blends for a consistently superior product and significantly improved speed of service.” The Quiet One was created specifically for coffee shops and high-end bars. Vitamix says independent third-party testing shows the blender operates at 18 decibels below its closest competitor in a key test: making a milkshake. “Through extensive research and gathering of feedback from the industry’s largest coffee-bar chains, we identified a need to preserve the integrity of the front-of-the-house environment,” says Anthony Ciepiel, vice president of marketing and sales for Vitamix. A door-seal design, coupled with patentpending floating technology, reduces vibration transmission and improves airflow, Vitamix says. The combination “dramatically reduces the amount of sound produced during blending” without compromising quality. The company says an enclosure cuts cleaning time while eliminating the need to disassemble the whole machine and remove screws. Visit www.Vitamix.com/TheQuietOne.

Looks like all that money spent will be worth it

Send new product information to managing editor Scott Suttell at ssuttell@crain.com.

■ Diversified industrial company Eaton Corp. of Cleveland is among the companies participating in a revival of hiring of new MBA graduates, according to a piece in The Financial Times. According to surveys conducted by the Graduate Management Admission Council from mid-February to mid-March, The Financial Times reported, 55% of companies said they planned to hire business school graduates, 5% more than last year. And it has been even busier in April and May, say recruiters. “In the past three months we’ve started actively recruiting MBAs,” Casey Rasata, university relations manager at Eaton, told the newspaper. “Business is back significantly for several of our markets and regions around the world and we find ourselves with many open positions. Like a lot of companies, we were conservative in the fall and into January and February, but we now have jobs that we would like to fill.” The Financial Times said Eaton this year plans to hire 15 MBAs and 10 summer interns to its leadership development program. Last year, Eaton hired only one full-time employee and just four interns.

KeyBank exec drives Straight Talk Express of financing ■ Maria Coyne, head of KeyBank’s Business Banking in Cleveland, offered some sound advice as an expert quoted in a Wall Street Journal piece on financing a growing business.

it up. — Dan Shingler

Cleveland marketing firm helps Illinois go mad ■ Home Team Marketing of Cleveland has teamed with the Illinois High School Association to bring March Madness back to high school. The company will assist the IHSA — which says it is the originator of the term — with maintaining the content of and marketing the association’s MarchMadness.org web site. In its new form, the site will include interactive brackets, state-by-state previews, video highlights, rankings and more for state high school basketball tournaments across the country. Home Team Marketing is in the process of securing five to seven corporate partners for the project, all of which will pay into seven figures for those rights. In turn, the corporate founders — Home Team president Pete Fitzpatrick says the company is pitching categories such as wireless, apparel and insurance companies, along with quick-service restaurants, among others — will be featured on the web site and on site at all 50 state tournaments. That presence will include print ads, public address announcements and TV ads. “I’ve been in the marketing world a long time, and the deliverables here are in excess of what they’d get with colleges and the pros,” Mr. Fitzpatrick said. Home Team Marketing, which places its clients at high school athletic events nationwide, this month opened its sixth office, in Chicago, and also has offices in Dallas, Charlotte, Detroit and Denver. It now employs 40 across those offices. — Joel Hammond

“Sometimes a growing business might have enough capital to fund an expansion or improvement outright. But the owner might seek out financing to ensure there’s enough money on hand to cover any unexpected business expenses that arise,” The Journal said. Ms. Coyne told the newspaper that it’s always a calculated risk to take on debt, so if you are considering it, you need to make sure the benefits are worth it. And she cautioned that loans aren’t for the unprepared: “If you lend someone money who’s not ready for it, or who doesn’t have a plan for it, then in many cases you are just hastening their failure.”

In Seattle, Forest City can find you a room with a view ■ Forest City Enterprises Inc. is in charge of renting some landmark Seattle houses. SeattlePI.com reported that the first of 26 homes in Seattle’s Discovery Park, in the middle of a historic military fort, now is available for rent to civilians. The butteryellow, four-bed, four-bath, three-fireplace Cape Cod colonial house, built in 1904, is going for $3,995 a month. “We call it the Admiral’s house,” said Michael Nanney, a vice president at Forest City, which co-owns the homes with the Navy. Mr. Nanney said the Cape Cod home — the only single-family residence on what’s known as “Officers’ Row” — has traditionally housed the commander of the U.S.S. Abraham Lincoln strike group. The historic district currently houses families of officers stationed at Naval Station Everett. As those families move to new housing closer to the base, the homes are going on the rental market. Mr. Nanney expects all the homes will be for sale as condos next year.

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BMW 2010 750Li xDrive

bmwusa.com 1-800-334-4BMW

The Ultimate Driving Machine®

test drive is all it takes to understand why the all-new 7 series is BMW’s flagship.

1099*/month

for 36 months or Purchase interest rate starting at 0.9% for 24 months

2010 Quattroporte Gray with Scarlet interior • Heated 14-way pwr driver/front passenger EXTERIOR FEATURES • Air compressor & tire inflation kit bucket seats -inc: 3 position driver's seat memory • Bose surround sound system • 18" aluminum wheels • Multimedia system -inc: 7" screen, navigation • Power sunroof w/30GB hard drive, CD/MP3 player, voice control, INTERIOR FEATURES RDS tuner, steering wheel audio controls, aux input, USB input • Poltrana Frau leather upholstery

Introducing the all-new BMW 7 Series. BMW’s engineers aren’t much for patting themselves on the back. They prefer to roll up their sleeves and treat past accomplishment as mere stepping stones. This inexhaustible effort led to the creation of our most majestic vehicle yet -- the all-new BMW 7 Series. Take, for example, the interior. By stretching the wheelbase, we created a supremely grand cabin that features the most head and legroom in its class*. Of course, this comfort didn’t come at the expense of exhilaration. Our engineers also included a V-8 with twin-turbo technology that delivers a truly breathtaking drive. The all-new BMW 7 Series -- a vehicle for those who never stand still.

BMW Ultimate Service™ Pay nothing. 4 years/50,000 miles. The most comprehensive maintenance plan (including wear and tear items) in its class.**

BMW Cleveland • 6135 Kruse Dr. • Solon • 1-866-210-6710

MSRP $134,225

Call for Nick Beljin for more details

MASERATI OF CLEVELAND 6137 KRUSE DR. • SOLON • 1-866-210-6707

www.BMWCleveland.com * Monthly lease payments of $1099 for 36 months. $6424 due at signing includes first month’s payment, $3,500 down payment, $1100 security deposit and $725 bank fee. Excludes tax, title, license, registration ees and a documentary service charge. Lease financing subject to credit approval. Dealer contribution may affect terms. Mileage charges of $.25 per mile for miles driven in excess of 10,000 miles per year. Includes all factory incentives. Expires 6-30-10. See participating BMW centers for details and vehicle availability. ** Ultimate Service covers all factory recommended maintenance on all MY 2006 vehicles and newer vehicles, as determined by the Service Level Indicator, for 4 years or 50,000 miles, whichever comes first. Exclusions from coverage: gasoline, gasoline additives, windshield washer additives, tires, wheels, wheel alignment, tire balancing and rotation. All work must be performed by an authorized BMW center. See the Service and Warranty information booklet for more details and specific terms, conditions and limitations. ©2010 BMW of North America, LLC. The BMW name, model names and logo are registered trademarks.

THE OWNERSHIP EXPERIENCE IS JUST AS STUNNING. 11-17maseratiAAA.indd 1

1/14/09 2:21:56 PM

8 to Choose from Low mileage service loaners STARTING AT $28,900

>> EXPERIENCE THE ALL-NEW JAGUAR XJ AT JAGUAR CLEVELAND OR VISIT JAGUARCLEVELAND.COM

JAGUAR CLEVELAND

LAND ROVER SOLON

6137 KRUSE DR.• SOLON • 1-866-210-6707

6137 KRUSE DR., SOLON (440) 542-0601

* Jaguar Platinum Coverage includes all factory recommended scheduled maintenance for five years of 50,000miles, whichever occurs first. Wear and tear items are limited to brake pads, brake dics, brake fluid changes and wiper blade inserts based on factory specified wear limits or intervals. All work must be performed by an authorized Jaguar dealer. For complete details on Jaguar Platinum Coverage, including warranty and maintenance coverage and exclusions, please visit your local Jaguar dealer or JaguarUSA.com. ©2010 JAGUAR LAND ROVER NORTH AMERICA LLC

davis automotive group inc. 6135 Kruse Dr. • Solon • (440) 542-0600 • www.DavisAutomotive.com