Crain's Cleveland Business

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Hospitals set to share e-records Statewide partnership rolls out system to exchange patient data

By CHUCK SODER csoder@crain.com

The next time you visit a new doctor, don’t be surprised if he or she already knows you have a family history of heart problems and has a copy of that blood test you had done on the other side of town.

After years of talk, hospitals and private practice doctors across North-

east Ohio are starting to share patient records electronically.

A total of 50 Ohio hospitals — including 15 in the northeast quadrant of the state — have signed contracts with the Ohio Health Information Partnership saying they will implement software designed to let them share patient data and test results with other participating health care providers. Nearly 200

private practice doctors are on board, too.

The three big hospital systems in Cleveland — the Cleveland Clinic, University Hospitals and the MetroHealth System — have yet to sign up. However, the Ohio Health Information Partnership is in discussions with all three, said Dan Paoletti, CEO of the partnership, which two years ago received nearly

Osbornes hope sale of shale leases eases woes

INSIDE

INSIDE: A list of the Northeast Ohio hospitals that plan to share electronic health records with each other and other members of the Ohio Health Information Partnership. Page 8 $15 million in federal stimulus money and another $2 million in matching state funds to create a health information exchange for health care providers throughout most of Ohio.

“The bigger you are, the more

Rite of election year: TV ads will be plentiful Estimates on political ad spending in the Cleveland market range from $30 million to $50 million. PAGE 3

See RECORDS Page 8

POST-BUILDING BOOM, A BUST? As big-ticket Cleveland projects wind down, construction trades anticipate slower period

3 of duo’s oil and gas companies are bankrupt

By STAN BULLARD sbullard@crain.com

L

ast month, workers at both Ernst & Young Tower in Cleveland’s Flats and the Cleveland Medical Mart and Convention Center celebrated installing structural steel at the highest point on both buildings.

Substantial work remains on the two big-ticket construction jobs, but when that work is done, the region’s building business will enter a new — and far less active — phase.

Timothy McCarthy, business manager for Ironworkers Local 17, already sees some of that transition. Only a few of the 200 ironworkers who last year flocked from other parts of the nation to Cleveland for the big projects remain here. Even so, the 900member local remains at full employment through year’s end with varied work in Northeast Ohio.

“Then we’re going to have a soft

By DAN SHINGLER dshingler@crain.com

The shale gas business taketh away, and the shale gas business giveth back.

That, at least, is the hope of Richard and Gregory Osborne, the father-son duo from Mentor with companies in various industries, including a handful in the business of conventional oil and gas drilling. The two are counting R. Osborne on the sale of oil and gas leases in Pennsylvania to help solve the bankruptcy woes for three of their oil and gas companies.

“It’s exciting stuff,” said Gregory Osborne, who has been working on the sale of the leases.

The Osbornes have received court permission to auction on Aug. 16 oil and gas leases for drilling rights on 8,000 acres their companies control in Pennsylvania. The sale is to raise money to pay off roughly $30 million in debt owed to RBS Citizens NA and its local banking subsidiary, Charter

See BUILDING Page 10

Workers place a steel beam on the highest point of the Flats East Bank office tower last month.

STAN BULLARD

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See OSBORNES Page 17

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Entire contents © 2012

by Crain Communications Inc. Vol. 33, No. 26

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

INSIGHT

THE WEEK IN QUOTES

VC funds backed by state top goals

“This is not a year I would look forward to replacing vehicles and equipment.”

— Jane Snavely, president, Snavely Management Co. Page One

“If you’re a maverick and you’ve got an enormous ego and you’re only concerned about yourself, I’m sure there are plenty of firms that would have you, but we won’t. We’ve got a low jerk quotient here.”

— Jeffrey J. Casto, chairman and CEO, Roetzel & Andress.

Page 6

“It’s almost a rebranding, a refocusing. It will really say what we do. That’s what everyone is so excited about. When I talk to the business community, they say, ‘Stan, it’s a no-brainer.’”

— Stanley Silverman, dean, the University of Akron’s Summit College, which is considering a name change. Page 11

“The trick is you have to take some of that take-home pay and put it somewhere.

Even if it’s not generating anything for you, it’s building your net worth.”

— Mark Stratis, senior financial planner, Szarka Financial.

Page 14

3

Ohio Capital Fund firms invest a lot in state; a few skirt rule

By CHUCK SODER csoder@crain.com

NEWSCOM/STEVE BENNETT ILLUSTRATION

Get used to this sight: Campaign ads on TVs in the Cleveland area and across the state ahead of November’s presidential election.

ON THE AIR, EVERYWHERE It’s that time of year: As November approaches, expect to be bombarded with TV advertising related to Obama/Romney race

By JAY MILLER jmiller@crain.com

I

f you think you’re inundated by political television ads now, just wait until fall.

Spending estimates for political campaigns in Northeast Ohio — from the presidential race between Barack Obama and Mitt Romney to the Rocky River school levy, if its campaign can afford it —

are ranging from $30 million to $50 million. The political ads are likely to blanket prime viewing time on broadcast television stations and could crowd out some business advertisers and even some political advertisers at the tail end of the ballot, especially those with budgets too small to pay premium rates.

See ADS Page 12

THE COST OF A CAMPAIGN IS GOING UP Estimates for Northeast Ohio television advertising related to November’s presidential election are ranging from $30 million to $50 million, according to industry executives.

That would top previous spending for a presidential election year and 2010’s hotly contested gubernatorial

race.

According to the Wisconsin Advertising Project, candidates spent about $21 million in the Cleveland TV market in 2008. Meanwhile, in 2010, candidates spent $28.2 million, according to the Kantar Media/Campaign Media Analysis Group.

A few of the 25 venture capital funds that received money from the Ohio Capital Fund probably won’t end up investing half of it in Ohio, as required by state law.

If judged as a group, however, they blow that requirement away.

Using money from the taxpayerCohn backed Ohio Capital Fund and other investors, the 25 venture capital funds have invested $188 million in 66 Ohio companies as of March 31. That’s more than four times what they would have invested by now if all the funds did nothing but meet the bare-minimum, 50% requirement, said Paul Cohn, managing director of the Ohio Capital Fund, which aims to create jobs while making money on its investments.

Granted, several of the 25 funds are based in Ohio and might have made in-state investments without financing from the Ohio Capital Fund.

However, even the out-of-state funds, when analyzed as a group, easily beat the minimum requirement for in-state investments, though a few individual funds are expected to fall short of the goal.

Mr. Cohn argues that the investments have helped the Ohio companies attract an additional $341 million in the form of co-investments and follow-on financing. The businesses include drug developers, medical device makers, software firms and communications technology companies.

“Over $500 million has been invested in 66 companies in Ohio, See FUNDS Page 7

FirstEnergy seizes on many Chicago ’burbs’ shift to bulk buying

By STEVE DANIELS Crain’s Chicago Business

Akron utility outmaneuvering its more established Windy City competitors

FirstEnergy Corp. has stomped into the backyard of Chicago-based Exelon Corp. and snatched the business of more than half the households in suburbs that have struck bulk contract deals to provide cheaper electricity to their residents.

The retail supply unit of Akronbased FirstEnergy has won deals to supply power to 63 of the 110 municipalities in Commonwealth Edison Co.’s northern Illinois service territory since the local governments began

buying in bulk last year. FirstEnergy Solutions has agreements to serve 52% of the 760,393 households in these communities. Among its victories: Aurora, now Illinois’ secondlargest city, with nearly 49,000 households.

Meanwhile, Exelon’s retail supply business, Constellation Energy Resources LLC, has won just three competitions, amounting to 4% of those households. The lion’s share is in Evanston, with nearly 31,000

households.

In addition to FirstEnergy, three other suppliers have accumulated more market share than Constellation in the frenzied suburban powerbuying binge that has taken place since voters in more than 150 metro Chicago communities backed referendums in March allowing their municipal officials to buy electricity on their behalf.

The result is surprising, because Exelon’s recent $7.9 billion acquisi-

tion of Baltimore-based Constellation Energy Group Inc. was predicated in large part on using it to make Exelon a stronger retail power player.

Constellation, the rationale went, would give Exelon more outlets for the power generated by its large nuclear fleet than just wholesale markets, where ultra-low prices are pinching the plants’ profit margins.

FirstEnergy has a similar strategy but has proven far more aggressive than Exelon in pursuing municipal

business, both in its home state and now in Illinois, even if it means lower prices. FirstEnergy supplies power to 400 communities in Ohio, more than half the municipalities that have gone forward with bulk power-buying.

“The idea of municipal aggregation is new to Illinois,” a FirstEnergy spokeswoman said. “It’s not new to states like Ohio. We’ve had it for 10 years at least.”

In no hurry In a statement, Constellation expresses no concern about its slow See CHICAGO Page 12

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JULY 9 - 15, 2012

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Just a start

W

e don’t know whether his choice of words was intentional. However, Cleveland Mayor Frank Jackson nailed it last week when he said the bill Gov. John Kasich had just signed into law to transform the operations of the Cleveland school district would “ensure an opportunity for quality education for all of our children.”

The bill itself doesn’t guarantee students will receive a quality education. Instead, it affords an opportunity to provide the city’s young people with the education they deserve.

It is wonderful that Mayor Jackson, school district officials, the Cleveland Teachers Union, charter school operators, business leaders and state lawmakers from both sides of the aisle could agree on legislation that breaks ground in how the Cleveland schools will operate and how the district’s money will be spent.

But, in the end, Cleveland’s Plan for Transforming Schools is just that — a plan. And the signing of a bill that allows for the plan’s implementation doesn’t mark the finish line for dramatic change in how education is delivered in Cleveland, but rather it is a starting point.

A co-sponsor of the bill reinforced that very point last week.

“It does not self-execute,” said state Rep. Ron Amstutz, a Republican from Wooster. “It will do nothing without the people of Cleveland picking it up and taking it forward.”

Part of “taking it forward” will involve Cleveland voters passing an operating levy that likely will be on the ballot this November. The city’s voters last approved an operating levy in 1996.

The transformation plan helps give more voters a vested interest in the levy’s passage by allowing the district to share property tax revenue with select charter schools, where many Clevelanders have chosen to enroll their children. But it still is going to take a chorus of supportive voices to put the levy over the top in a city where the budgets of many families are extremely tight.

State Sen. Nina Turner, another co-sponsor of the bill, hit the right notes last week when she was asked about the levy issue.

“People are concerned whether or not they can afford to pass a levy,” Sen. Turner said. “My answer back to my constituents is, we can’t afford not to.”

It is a refrain that the people who will run the levy campaign should repeat over and over and over.

Mayor Jackson recognizes that education remains the great equalizer and the only reliable means for young people to escape the cycle of poverty that too many Clevelanders have known. He also knows his constituents’ willingness, or lack thereof, to invest in the city’s most precious natural resource — its children — will be a key determinant of whether Cleveland rises or falls over the next 20 years.

It is why the mayor has fought with passion and perseverance to give as many young people as possible access to quality schools. He and a coalition of diverse interests are paving the way to provide them with brighter futures. The community must not miss the opportunity to do its part.

FROM THE PUBLISHER

Health care model still is not healthy

W

because this is actually a tax, and the e now have the decision, the penalty for not having insurance will be “law of the land,” an Afforddelivered by the Internal Revenue Service. able Care and Patient ProAha, cheered the Republican partisans, tection Act that will change who treat the word “tax” as the equivaradically America’s health care system — lent of a four-letter slur. They’re eager — perhaps the most significant piece of at least if you believe the strategists and social legislation in a couple of generaspin doctors — to use the word as a tions or more. weapon in the coming elections Or do we? to strengthen their position on Mitt Romney, the Republi- BRIAN Capitol Hill, and maybe even cans’ presumptive presidential TUCKER the White House. candidate, and other GOP leaders Democrats, largely supportive howled after the Supreme of the health care law, were Court decided to let stand the elated by the decision and its legislation, which was passed in potential for changing the social the high-energy, early days of landscape and delivering on a Barack Obama’s presidency. long-sought agenda item. They They pledge to repeal it and will trumpet it as a victory for plan to use Chief Justice John the president and try to make it Roberts’ characterization of the a campaign advantage in the fall. law as a weapon as elections approach.

Not so fast, everybody. Despite the After all, in his opinion, the chief Supreme Court ruling, many believe this justice avoided the messy question of health care reform law will be a moving whether requiring all Americans to buy target, and (as with most such sweeping health insurance was a violation of the legislation) the devil will be in the details. constitution’s commerce clause. No, it I think we’ll be reading — and hearing — will not be, the chief justice declared,

about health care reform for months, if not years, to come.

And that’s just fine by me. Something intelligent has to be done to fix our health care system, despite all the claims about its world-leading reputation. It’s clear we cannot afford the current model, which has been built upon the shoulders of employers across the land.

Health care costs have increased by multiples of the inflation rate for years now, and we have been unable to do anything but complain. We know it’s unsustainable, but nobody wants to accept less — not the patients, not the doctors, not the lawyers, not the hospital administrators, not the insurers … no one.

Absent a single-payer system, this law is our best chance to make substantive change. If the critics win its repeal, we’ll see if they come up with a system that’s better. As it has been, we’ve been burdening our business owners and bankrupting people who lose a job and then suffer serious health problems.

That’s just not the America I know and love.

■

PERSONAL VIEW

Budget review to save state $113 million

By TIMOTHY S. KEEN

A

n unprecedented, top-to-bottom review of state agency operations and programs, launched

by Gov. John Kasich only months after passage of his jobs budget in 2011, has produced hundreds of commonsense reforms that reduce the cost of government and revitalize Ohio’s ability to keep and attract jobs.

By challenging his cabinet agencies with this review, the governor has broken a long tradition in which state government waited two years between biennial budgets to analyze agency spending, programs and policies in such detail. He was also determined that this would not be an exercise in mechanical acrossthe-board cuts, but rather a thoughtful,

Mr. Keen is the director of the Ohio Office of Management and Budget. deliberate process that would carefully weigh the specific needs of each state agency and the citizens it serves.

The result has been the most thorough budget and policy review, outside of Ohio’s traditional two-year budget-setting cycle, that I have experienced during my more than 25 years of involvement in state budgeting. And it’s starting to pay important dividends for every Ohio taxpayer.

To begin with, the governor and his cabinet directors identified ways to cut more than $113 million from agency budgets in the next fiscal year, while making significant changes that streamline government operations and improve delivery of services.

Many of the reductions and reforms — including those focused on state health care and human services programs — have been enacted by the Legislature in House Bill 487, the Management Efficiency Plan, which was signed

by Gov. Kasich on June 11.

Additional legislation incorporates other mid-biennium reforms affecting education, energy policy, tax reform, work force development, veterans’ services and cost-saving tools for local governments and schools.

The Management Efficiency Plan includes hundreds of reforms to reduce costs and streamline government programs. A few examples demonstrate the wide range of these reforms: ■ Merging the Ohio School Facilities See VIEW Page 9

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CRAIN’S CLEVELAND BUSINESS

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THE BIG ISSUE The state’s film tax credit has attracted several studios to make movies in Ohio. Is it a worthwhile investment?

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com

DAVID PERSE

JILL GROSS

MIKE ZIDAR

JIM SCHIEFERSTEIN

Cleveland

Wakeman

Avon

Strongsville

Yes. One, I think it does create some notoriety or PR benefit for the city of Cleveland. … And the second is I do think it engenders activity that spurs other economic activity.

I do, because I think it brings a lot of perspective to the city. It lets people see that we’re not as bad as they might think we are and it brings money to the city.

Absolutely. I mean, anything that brings in more commerce, more money, sales taxes, whatever — I think that it’s essential.

Absolutely. I think it brings a lot of excitement to Cleveland, as well as publicity. The whole thing with ‘The Avengers,’ that was the talk of the town for months.

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

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CRAIN’S CLEVELAND BUSINESS

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JULY 9 - 15, 2012

31-year vet in top spot at Roetzel Expansions of energy, health care practices priorities for law firm

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A self-described “lifer” of Roetzel & Andress is now the law firm’s top executive.

Effective July 1, Jeffrey J. Casto — who began his 31-year career at the Akron-based firm as a litigation associate in 1981 — became chairman and CEO, replacing Timothy J. Ochsenhirt, who held the position since 1985 and will move into a strategic client development role.

As firm president since 2008, Mr. Casto was responsible for implementing the strategic vision and direction set by the chairman and CEO. Now, he’s setting the direction for Roetzel, which operates 11 offices and employs more than 200 attorneys.

Mr. Casto, 57, aims to dig deeper in markets where the firm has expanded recently — namely Chicago and Washington, D.C. — and to expand certain practices. Among

them are health care and energy, given all that has transpired in the health care sector and all that’s expected to occur relative to the Utica shale play.

Roetzel is in acquisition talks with firms that practice in those areas, Mr. Casto Casto said, noting that he would anticipate the firm would grow under his leadership both by acquisition and other expansion.

“We don’t have a particular size metric that we want to get to,” he said. “I think bigger is better than smaller, because you have more depth and diversity.”

Like others in his field, Mr. Casto predicts “a lot more consolidation in the legal profession.”

“It is very, very clear that law firms that are not properly managed can disappear in a heartbeat,” he said, citing how Dewey & LeBoeuf LLP, a New York law firm that employed more than 1,300 attorneys, filed for bankruptcy in late May and will be liquidated.

Bob Blackham, Roetzel national practice group chair who has worked closely with Mr. Casto, is confident that Roetzel is in good hands.

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“He is the most logical choice to succeed Tim in the firm,” Mr. Blackham said of Mr. Casto. “No one knows the firm better than he does.

“I don’t think there’s a significant decision made within the last 10 years that he wasn’t a part of,” Mr. Blackham added. “I expect that from a cultural standpoint, he’ll be a very stringent guardian of what we’ve been able to perfect here. I think he’ll just bring a different form and sense of energy to the organization.”

Mr. Casto attributes Roetzel’s strength to its frugal financial ways — it never has taken on debt to expand, he said — and to its people and the way they collaborate to serve clients, rather than engaging in turf wars for origination credit.

“It’s very important for us as we grow … to grow with the right kind of people,” he said. “If you’re a maverick and you’ve got an enormous ego and you’re only concerned about yourself, I’m sure there are plenty of firms that would have you, but we won’t. We’ve got a low jerk quotient here.”

■

Chicago • Cleveland • Columbus • Detroit • Miami • West Palm Beach

A plan to create a multimilliondollar resort with a hotel and homes on the grounds of the long-defunct Chippewa Lake Amusement Park has come to naught, so the site in southern Medina County is about to go for a whirl in the way-back machine.

Ownership of the 95-acre site that sits along Ohio’s largest natural inland lake is on the verge of reverting to Chippewa Lake Properties Inc., a unit of Continental Business Enterprises Inc. of Walton Hills. The company owned the property from 1969 until 2008, when it sold the land to Foundations Commercial LLC, a group of California- and Arizonabased real estate developers. Foundations planned to remake the park, which closed in 1978, into a healthoriented resort called “Chippewa Landing,” but the plan became a casualty of the recession.

A June 14 Medina County Sheriff’s sale that would have returned the park to Chippewa Lake Properties must be repeated; court records stated that all the parties in the foreclosure case involving the property did not receive appropriate notice of the sale.

Chippewa Lake Properties had stood to recover the property with a bid of $1.86 million at the aborted sheriff sale in order to satisfy a loan — now valued at $3.8 million with interest — that it had extended to the resort developers when the land was sold. The sheriff’s sale would have concluded the foreclosure case, which began last Sept. 8. Judge Christopher J. Collier of Medina County Common Pleas Court declared in April that Foundations had defaulted on the note.

The do-over sale is scheduled for the county’s August foreclosure auction at 9 a.m. Aug. 23, according to the Medina sheriff’s office.

Medina land records show Foundations paid $3.15 million for the parcel in March 2008, when it began its resort development quest. Medina County appraisers for the sheriff assigned a current value of $2.8 million to the property, where amusement park rides have deteriorated and multiple buildings have succumbed to fires over the years.

John Oberholtzer, a Medina attorney who represented Foundations, said his client had tried several means to develop the land but “all were unsuccessful because of the inability to secure funding.”

“The first mortgage holder (Chippewa Lake Properties) ran out of patience,” Mr. Oberholtzer said.

“If any money appears, this all goes away. I doubt if any will appear.”

Lynda Bowers, a Lafayette Township trustee who has followed the fate of the former amusement park because 80 of its 95 acres are in the township, speculated that if Chippewa Lake Properties recovers its deed, it will renew efforts to sell the property.

“They’ve always tried to sell it, and I assume they will try to sell it again,” Ms. Bowers said.

David Browning, managing director of CBRE Group Inc.’s Cleveland office, said Foundations originally had a source of offshore money to develop the property, but that dried up with the economy. His real estate brokerage handled the original sale to the out-of-town group.

“The truth is, this is a very unique property because of the lake,” Mr. Browning said. “How many pieces of property are there like that in Northeast Ohio?”

“This is a very unique property because of the lake. How many pieces of property are there like that in Northeast Ohio?”

– David Browning, managing director, CBRE Group Inc.’s Cleveland office

The forest for the trees Ms. Bowers said Gary Sills, an investor in Newport Beach, Calif., who was involved with the hotel component of the resort project, “kept saying if they could wait out the economy, they would be OK.” “They went down roads a lot of people would have never pursued for the project,” Ms. Bowers said.

David Sangree, president of the Hotel & Leisure Advisors consultancy in Lakewood, said Mr. Sills and partner Al DeVaul had concepts for the site, such as a wellness center and spa, that would have taken advantage of the beautiful lake.

“It was as much the economy as that no new hotels were being funded” that stalled the project, Mr. Sangree said. Some progress was made: Ms. Bowers said some trees that needed to be taken out were cut down, and some of the weed-covered rides also were removed. She noted the township’s zoning board put in place planned unit development zoning that will allow the site to be developed more easily next time.

Mr. DeVaul, a Phoenix-based developer involved in the project, refused to discuss the stalemate and referred a reporter to Mr. Oberholtzer.

Mr. Sills did not return three calls.

Louis Trolli, president of Continental Business Enterprises and the public representative of Chippewa Lake Properties, could not be reached for comment last week, according to an assistant. Michael Laribee, a Medina attorney for Chippewa Lake Properties in the foreclosure proceeding, did not return three calls.

■

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Funds: Investments have in-state mandate continued from PAGE 3

which far exceeds the state’s expectations,” Mr. Cohn said.

‘Nice gains’ emerge Most members of the Ohio House of Representatives apparently like the Ohio Capital Fund, too.

By a 91-6 vote, the House in May passed House Bill 511, which would add $100 million to the $150 million “fund of funds.” The bill now awaits a vote in the Ohio Senate.

If the bill doesn’t pass, the fund won’t make many more investments.

The 6-year-old investment vehicle has awarded $130 million to the 25 venture capital funds, which have invested $84 million so far. The Ohio Capital Fund likely will invest another $5 million in some of its current funds.

If the investments don’t pay off fast enough, the Ohio Capital Fund would use the other $15 million to help make payments on the bonds issued to create the fund, Mr. Cohn said. If that money is exhausted, it would pay off its debt with tax money.

Mr. Cohn said he doesn’t expect that last scenario to happen. Based on valuations set by the 25 venture capital funds and analyzed by independent auditors, the value of the Ohio Capital Fund’s portfolio last fall surpassed the dollar amount it had invested to that point.

The portfolio’s estimated value has continued to rise since then, partly because the underlying funds have sold off some of their portfolio companies, producing $16 million in revenue for the Ohio Capital Fund.

One of the more lucrative exits was cardiovascular drug developer Blue Ash Therapeutics LLC of Cincinnati, Mr. Cohn said.

“We’re starting to see nice gains,” he said.

requirements, the Ohio Capital Fund may require all out-of-state applicants to hire an investment manager to look for deals in Ohio, Mr. Cohn said. As it stands, venture capital funds that don’t meet the requirement aren’t likely to get more of the state’s money, he said.

The threat of being cut off from future financing usually should prevent venture capital funds from ignoring the rule, especially in today’s economy, said Mark Heesen, president of the National Venture Capital Association in Arlington, Va. “In this type of environment, keeping your limited partners happy is critical,” he said.

Modest job creation The 66 Ohio companies in the

Ohio Capital Fund portfolio have added 776 jobs in Ohio since receiving investments from the underlying funds, which invested money from both the Ohio Capital Fund and their other limited partners.

Mr. Schiller argues that the job figure isn’t impressive, considering that the Ohio Capital Fund has invested $84 million so far. If the fund loses money and the companies don’t add more employees, those jobs will cost roughly $108,000 each, he said.

That dollar figure will come down if the companies keep growing: They added 160 employees in Ohio during the first quarter of 2012, according to Ohio Capital Fund statistics.

The companies employed 2,300 people in the state as of March 31. ■

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Not everyone thinks the Ohio Capital Fund is perfect. Among them is Zach Schiller, research director for Cleveland-based Policy Matters Ohio, a think tank that aims “to create a more prosperous, equitable, sustainable and inclusive Ohio,” according to its mission statement.

Mr. Schiller said the Ohio Capital Fund needs to implement a clawback mechanism that would allow it to get its money back if the venture capital funds it invests in don’t meet the requirement to invest half of the money in Ohio. A House amendment that would have added a clawback provision failed to pass.

Two out-of-state funds — run by Globespan Capital Partners, of Boston and Palo Alto, Calif., and Columbia Capital Equity Partners, which has offices in Alexandria, Va., and Waltham, Mass. — received a total of $5.5 million from the fund, but they haven’t made any investments in Ohio and are not expected to meet the in-state investing requirement. A third, Radius Ventures of New York, which employs former Cleveland Clinic CEO Floyd Loop as a venture partner, is at risk of missing the 50% mark.

“We should be trying to regain those funds,” said Mr. Schiller, who testified on the matter in front of the Ohio House in May. Instituting a clawback provision would be “unrealistic,” said Mr. Cohn, who noted that the venture capital funds in question are performing well financially. Such a provision would make it harder for funds that receive Ohio Capital Fund money to raise money from other sources, he said.

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Records: ‘Real time’ data allow better diagnosis, treatment continued from PAGE 1

difficult the decision is,� Mr. Paoletti said.

The ability to look up information quickly on new patients should help doctors make better decisions, especially in the emergency room, where they often don’t have time to run tests or get results from another hospital. The health information exchange, which is called CliniSync, also is intended to help providers avoid filling out duplicate forms and running duplicate tests, which should save money.

The Ohio Health Information Partnership eventually wants to link its exchange with another exchange in the Cincinnati area and then with other systems being put together in other states. However, as long as large numbers of local health care providers join the exchange, participants will get plenty of value out of it, Mr. Paoletti said. “We can make a huge impact on costs and really help patients,� he said.

Working out the bugs By the end of 2012, the partner-

ship expects 50 hospitals to be sharing data through CliniSync, which is based on software made by a Salt Lake City company called Medicity.

St. Rita’s Medical Center in Lima is the only hospital that is ready to share information now, but several others are close. For example, Southwest General Hospital in Middleburg Heights expects to start sharing data by the end of July.

The Ohio Health Information Partnership covered most of the cost of the implementation, though Southwest did pay Cerner Corp. — a company in North Kansas City, Mo., that makes its electronic health record system — to help alter the interface of the system to communicate with CliniSync, said Terri Rini Barber, vice president of support services and chief information officer for the hospital.

For the past three months, Southwest has been sending test files to make sure there are no bugs in the system, Ms. Barber said.

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the three hospital systems are paying doctors a subsidy to adopt electronic health record systems and to join the health information exchange.

Six practices consisting of about 40 doctors have signed up so far, Ms. Barber said.

Compared to other information technology projects she’s worked on, Ms. Barber said, the implementation has gone particularly well. “This one — knock on wood — has been smooth sailing so far,� she said.

Fee for all Private practice doctors who join CliniSync already can receive test results and use secure email and referral management tools at no charge. Next year, CliniSync plans to release software for doctors who want to access the exchange through their electronic health record systems.

They’ll pay a monthly maintenance fee for that program.

Participating hospitals must pay ongoing fees, too. The partnership would not disclose the size of the fees because of contractual agreements, but a few hospital officials said they will pay a small amount for every patient they discharge.

The fees — which the partnership says are needed to support CliniSync after its grant money runs out — are one reason why MetroHealth didn’t immediately sign on, said Dr. David Kaelber, chief medical informatics officer at MetroHealth.

The health system is considering joining CliniSync, Dr. Kaelber said.

For now, though, it shares medical records for free with the Cleveland Clinic, Kaiser Permanente’s Northeast Ohio offices and other health care providers that use electronic health record systems made by Epic

Systems Corp. of Verona, Wis. MetroHealth doctors apparently love the system: Those who responded to a MetroHealth survey said that, when they have used the Care Everywhere system, they ordered fewer tests 75% to 85% of the time and almost always delivered more efficient care.

The system also has helped Dr. Kaelber, who is an internist and pediatrician. He described how he sent home a patient who came in at the end of the day with abdominal pain after seeing that the patient recently had a CT scan and blood tests that came back normal. The results were new and the patient hadn’t yet seen them, Dr. Kaelber said, adding that he otherwise would have admitted him overnight. “It’s all in real time,� he said.

E-RECORDS ROSTER These 15 Northeast Ohio hospitals plan to share electronic health records with each other and other members of the Ohio Health Information Partnership.

The partnership two years ago received nearly $15 million in federal stimulus money and another $2 million in matching state dollars to create a health information exchange for health care providers in every region of Ohio except the Cincinnati area. ■Akron General Medical Center, Akron — Contracted ■Alliance Community Hospital, Alliance — Contracted ■EMH Elyria Regional Medical Center, Elyria — Contracted ■Lodi Community Hospital, Lodi — Contracted ■Mercy Allen Hospital, Oberlin — In Progress ■Mercy Medical Center, Canton — Contracted ■Mercy Regional Medical Center, Lorain — In Progress ■Parma Community General Hospital, Parma — Contracted ■Samaritan Hospital, Ashland — Contracted ■Southwest General Health Center, Middleburg Heights — In Progress ■St. Elizabeth Boardman Health Center, Boardman — Contracted ■St. Elizabeth Health Center, Youngstown — Contracted ■St. John Medical Center, Westlake — Contracted ■St. Joseph Health Center, Warren — Contracted ■St. Vincent Charity Medical Center, Cleveland — Contracted

Time to share MetroHealth eventually will need to share records electronically with other providers if it wants to meet the federal government’s growing list of “meaningful use� standards, which describe how providers should use electronic health record systems.

Hospitals and doctors’ offices that meet the standards receive incentive payments from Medicare and Medicaid.

Mercy Regional Medical Center in Lorain and Mercy Allen Hospital in Oberlin are scheduled to start exchanging records through CliniSync by the end of August. Sami Othman, who is regional information technology director for those two hospitals and two others owned by Catholic Health Partners, described the decision to join the exchange as a “no-brainer� given the impact it will have on patients. “At the end of the day, that’s what matters most,� he said.

Other Cleveland- and Akron-area hospitals that have signed up include St. Vincent Charity Medical Center in Cleveland, St. John Medical Center in Westlake and Akron General Medical Center.

University Hospitals hasn’t joined CliniSync because it is in the final stages of setting up a system intended to allow it to share electronic health records with UH-owned hospitals and doctors’ offices, said Darby Dennis, vice president of clinical systems for UH. The hospital system

SOURCE: THE OHIO HEALTH INFORMATION PARTNERSHIP

also might connect another 2,000 independent physicians that are affiliated with UH. Then it could connect all of them to CliniSync or another exchange, Ms. Dennis said. “Everyone’s going to have to be connected at some point,â€? she said. â–

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Debate is great, but JumpStart article Ohio lures polymer expo unfairly alludes to unethical activity

By GINGER CHRIST gchrist@crain.com

■ As the chairperson of the JumpStart board and on the board’s behalf, I am writing in response to a recent article regarding JumpStart in Crain’s Cleveland Business.

We recognize and appreciate that Crain’s regularly objectively covers technology startup companies supported by JumpStart and its partners in Northeast Ohio. That’s part of the reason we are disappointed that Crain’s chose to run the June 18, Page 3 story, “Consultant calls friendship with JumpStart exec ‘professional.’”

We believe it is absolutely healthy for everyone in the community to discuss ways in which Northeast Ohio could improve supporting entrepreneurs. In fact, we always welcome discussion regarding JumpStart’s efforts and regularly consider and work to help more entrepreneurs in new and different ways. A great example of this is JumpStart’s role in helping to bring to Cleveland the Goldman Sachs 10,000 Small Businesses Initiative, which supports small business owners and entrepreneurs.

In the most recent article in Crain’s, however, implications were made that JumpStart might be doing something ethically wrong, and we believe this type of criticism is altogether different. As board members active in supporting an organization we know is doing significant work for the benefit of Northeast Ohio, we consider this hint of impropriety to be an affront to the JumpStart board, supporters and team.

We believe the facts related to JumpStart’s efforts speak for themselves. JumpStart has won multiple Ohio Third Frontier awards by delivering on the goals that the state has desired. In that work, JumpStart has provided thousands of hours of technical assistance to more than 400 entrepreneurs, invested more than $25 million directly in 64 techbased startups, and continues to work to expand support available to entrepreneurs across the region.

LETTERS Though many JumpStart client companies still are early in their development, they contribute significantly to the region’s economy.

Collectively, JumpStart clients have raised more than $470 million in capital, created and retained 1,350 direct jobs, and generated $240 million in total revenues. They also generated in excess of $12 million in local and state taxes in 2011 alone.

We are confident that companies such as Juventas, ABSMaterials, Echogen, OnShift, Embrace Pet Insurance, Knotice and CardioInsight, among others, are actively contributing to our region’s economic transformation.

The JumpStart board wants the JumpStart team to fully focus on fulfilling its core mission of assisting entrepreneurs and improving Northeast Ohio’s economic outlook.

Doug Weintraub JumpStart board chair and serial entrepreneur

Museum part of MidTown’s revival ■ Having been with the Dunham Tavern Museum for more than 30 years, I can confirm that Brian Tucker’s assessment in his June 26 column, “MidTown’s new look hard to believe,” is spot-on.

In the 1980s, our board made a commitment to begin acquiring land on our block to help stabilize the neighborhood and protect our Cleveland landmark building, which is listed on the National Register of Historic Places. Some parcels we bought for $500, and others were given to us. (Yes, free land.) No one thought much of the area.

Recently, we purchased from RTA the 6611 Euclid property consisting of a blighted structure and 2.2 acres of land. This time, we had to pay $500,000 for land. This acquisition nearly completes our

View: Return to stability continued from PAGE 4

Commission and the state Architect’s Office into a new Facilities Construction Commission will lower costs, align related authority and consolidate resources within a single agency to oversee all the state’s nontransportation construction.

■ After an in-depth review of laws and policies affecting its programs, the Department of Developmental Disabilities made numerous recommendations for improvement that help the department and its localagency partners provide better, more efficient services.

■ Combining Department of Natural Resources programs for recycling, litter prevention and scrap-tire regulation with similar efforts in the Ohio EPA will eliminate costly duplication and provide more efficient efforts to protect Ohio’s environment.

These and other efficiencies from the Mid-Biennium Review build on reforms contained in Gov. Kasich’s Jobs Budget, the state’s biennial operating budget passed in June 2011.

That budget returned Ohio to a

sound fiscal footing by closing a projected $7.7 billion structural imbalance and setting aside $247 million last year in the Budget Stabilization Fund (Ohio’s “rainy day” savings account, which held just 89 cents at the end of 2010).

Ohio’s return to fiscal stability has not been lost on outside observers.

All three national credit-rating agencies now give Ohio a “stable” credit outlook. This improved confidence is not only an indicator of budget stability, but also directly impacts the willingness of the markets to purchase bonds issued by the state of Ohio, thereby lowering future borrowing costs.

The Mid-Biennium Review marks a crucial turning point for Ohio.

What had been an every-other-year cycle of budget and program review is now a continuous, business-like process aimed at restraining the growth of state spending, improving services for Ohio taxpayers and enhancing the climate of economic competitiveness and job growth in our state.

■

ownership of the entire block and will provide more than six acres of green space in a dense urban core.

Historically, it re-unites land that was once owned by the Dunhams, bought in 1824, which they sold off through the years as the area became residential. The purchase also incorporates the entire 412-foot Euclid Road (Avenue) frontage. The original property had a depth of 1,400 feet, all the way back to today’s Hough Avenue, much of which was sold off over years.

We recently started demolition of the building. While tearing down a building doesn’t necessarily signify progress, what will emerge in the form of the Dunham Greenspace will have a tremendous impact on the Cleveland Health-Tech Corridor.

It will provide an appropriate setting for the historic tavern; will be a place of relaxation for the thousands who live, work and visit the area; and will be a catalyst for further economic development with a significant multiplier effect for dollars invested.

William F. Ruper President, board of trustees Dunham Tavern Museum

For the next two years, Ohio will be the site of a new convention for the polymer industry.

Columbus was chosen to host the first — and second — Global Polymer Innovation Expo by RAPRA Limited U.S., a nonprofit economic development group for the polymer sector.

Laura Woods, president of RAPRA, said Ohio was chosen for its high concentration of polymer companies. The state has 1,150 rubber and plastics businesses that employ more than 81,100 people, according to JobsOhio, the state’s privatized economic development agency.

The expo will be Aug. 26 to 29 at Battelle Hall at the Hyatt Regency in Columbus and is projected to attract 650 to 800 attendees.

The convention in the future could be held outside Ohio — or even outside the country — but there is a strong case for it to remain here.

“It would be hard to move out of Ohio because of the regional support,” Mrs. Woods said.

In addition to the polymer companies operating in Ohio, RAPRA also has been assisted by business support groups NorTech, Team NEO

and PolymerOhio as well as the state government. She said there already are discussions about eventually hosting the expo or another industry event in Cleveland.

The expo will focus on the six key areas of growth of PolymerOhio’s Ohio Polymer Strategy Council: conductive and electronic polymers, polymer nanocomposites, high-performance polymers, bio-based polymers and feedstocks, degradable and recyclable polymers, and direct digital manufacturing.

The event already has more than 35 confirmed exhibitors and a number of local and national speakers, including Surendra Chaula, head of Goodyear Tire & Rubber Co.’s external science and technology group.

Kerry Christopher, senior manager of communications for Goodyear, said it makes sense for Goodyear to have a role in the expo.

“We thought based on the audience that they’re seeking that it would be a good opportunity for us to network and continue to tell our innovation story,” he said.

In addition to Goodyear, Ashland Inc., A Schulman, ARDL, Cisco Systems, Thogus, Makuta Technics Inc. Polymer Diagnostics and Veyance Technologies will be exhibitors.

■

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Veteran CBRE broker to lead Building: Private projects still lacking Colliers’ new NE Ohio efforts continued from PAGE 1

By STAN BULLARD sbullard@crain.com

After nearly two years of scouring Northeast Ohio for a leader in the Cleveland market, Colliers International has found one in Brian Hurtuk, a real estate veteran Hurtuk and first vice president of CBRE’s Cleveland office.

Mr. Hurtuk said the “potential for ownership, to manage, to build something from the ground up” were the reasons he left CBRE July 1 to open the door for Colliers in Cleveland in concert with Richard Schuen and Shenan Murphy, the owners of the Colliers firms in Columbus and Cincinnati, respectively. “It’s an opportunity I could not turn down,” he said.

Northeast Ohio has lacked the Colliers name and its international platform since the New York-based brokerage and its longtime Cleveland affiliate, Ostendorf-Morris Co., parted ways in August 2010.

Mr. Hurtuk said he has been in the top five or 10 revenue-producing CBRE brokers repeatedly since joining

the firm in 2003. He previously did development, acquisition and leasing work for Amsdell Cos. and entered the business at Ostendorf-Morris.

“I cut my teeth in industrial at O-M. I’m excited to use some of those contacts again as manufacturing rebounds in our region,” Mr. Hurtuk said. He focused on office brokerage at CBRE; there, he managed its work representing leasing of the downtown office buildings owned by Cleveland-based Forest City Enterprises Inc. and of Penton Media Center, which is owned by Optima Management Co. of Miami Beach.

He also has served as president and board member of the NAIOP Northern Ohio trade group.

Mr. Murphy, the CEO and principal of Colliers’ Cincinnati office, said the firm expects to add several agents to its new Cleveland office — at a yet-to-be determined building — within a few months.

“Mr. Hurtuk understands our culture and can take our vision to the market,” Mr. Murphy said.

■

period, I believe,” Mr. McCarthy said.

From the owners’ and managers’ side of the construction table, the outlook is the same. After the big jobs end, pickings will get slim unless bank financing becomes more widely available. Competition for smaller contractors will intensify as big builders seek smaller jobs to keep working.

Tony Panzica, president of the Construction Employers Association of Cleveland and CEO of Panzica Cos. in Mayfield Village, said he expects the industry to slow after companies finish interior work at the downtown projects and the new Eaton Corp. headquarters in Beachwood.

“Two or three megaprojects do not make an industry,” Mr. Panzica said. “A small group of contractors is employed. The construction economy would be growing if we had 100 projects in the $5 million to $10 million range rather than three that total that.”

Missing from the construction market, Mr. Panzica said, is the depth that comes with smaller projects, such as suburban office buildings and shopping centers.

‘Private side’ not so fine Construction statistics are starting

to reveal what lies ahead for builders and workers alike.

McGraw Hill Construction reports that through the end of May this year, contracts for future construction in the Cleveland-Elyria-Mentor Metropolitan Statistical Area fell to $427 million, down 60% from $1.1 billion in the like period of 2011.

Likewise, McGraw Hill’s estimate issued June 28 of future construction contracts in the Akron MSA plunged 62%, to $108 million through May this year from $283 million in the first five months of 2011. Expected drops in nonresidential construction spending of 72% and 82% in the Cleveland and Akron markets, respectively, should more than offset upticks in the long-suffering residential market.

Barry Miller, a partner and chair of the construction group at the Benesch Friedlander Coplan & Aronoff law firm, said he sees the market for the next year as flat and trending downward. Looking past the next 10 months, fewer large construction projects are on the horizon than in the recent past.

“The private side is still struggling to add projects,” Mr. Miller said.

“Flats East Bank Neighborhood (which includes Ernst & Young Tower) is the only major privately financed (multitenant) project out there.”

than it has been, but we’re not finding many opportunities” because many projects can’t secure financing.

The skinny on jobs The effect of the big projects remains a factor in the market — for now.

For instance, Turner Construction Co. of Cleveland will employ about 500 workers this fall as subcontractors begin work on interior finishes at the Medical Mart. On the flip side, about 2,000 workers packed their bags at the Horseshoe Cleveland Casino, where $125 million went into recasting the Higbee Building from a former department store into a haven for gamblers.

Combine a seasonal uptick in hiring with the winding down of the casino project and construction employment stayed flat in the Cleveland MSA, according to a just-released analysis of U.S. Census Bureau statistics by the Associated General Contractors trade group.

Employment grew 1%, or 200 jobs, to 32,000 jobs at the end of May from 31,800 in May 2011.

In contrast, the addition of 1,600 construction jobs in the Akron MSA hiked the category 14% as employment swelled to 12,800 this May from 11,200 in May 2011.

Although the general contractors group reports census data that also include mining and logging as well as construction, the increase in Summit County is due largely to construction, said Connie Krauss, the county’s director of community and economic development. A variety of projects, from Goodyear Tire & Rubber Co.’s new headquarters to projects associated with the University of Akron and Kent State University, account for the job rise.

Can’t bank on the banks

Character.

Accomplishment.

Perseverance.

Women of Note In a special publishing section and luncheon event, Crain’s Cleveland Business will applaud our region’s women of excellence.

2012 Tickets on Sale Now

At Snavely Management Co. in Willoughby, the company has been able to hang on to two employees it added thanks to projects 18 months ago that received federal stimulus money. However, the outlook is such that president Jane Snavely said she is being “very conservative.”

“This is not a year I would look forward to replacing vehicles and equipment,” Ms. Snavely said.

Snavely mostly is working on retirement communities and multifamily construction, Ms. Snavely said.

“It’s great news that vacancy is low in apartments and there is room for them to grow in our urban market,” she said.

However, there remains a general lack of bank-financed private projects. Ms. Snavely said her company is preparing to start work on a stillunannounced commercial project and is bidding on another, though she would not identify either. They are the first private projects she has found in the past two years — and she is overjoyed to see them.

Likewise, Doug Leohr, president of Pride One Construction Inc., said the market for projects in the range of $3 million to $10 million is “stronger

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Things have been worse Against this backdrop, Mr. Panzica expects to see more subcontractors and general contractors fail during the next few years, joining several that went out of business the last few years. In his case, he’s reaching to find opportunities and diversify.

Mr. Panzica said that’s why he’s pursuing a $120 million office, apartment and retail project in University Circle with Coral Co. of Cleveland.

While the going may be tough, the depression-like years of 2009 and 2010 give companies in the building business a new perspective.

At least now there are some shopping center developments and headquarters for American Greetings Corp. and Diebold Inc. on the horizon.

Improved office leasing also has boosted work redoing offices.

■

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CRAIN’S CLEVELAND BUSINESS

11

UA seeking branch in a unique spot

GOING PLACES JOB CHANGES

On campus, that is, by converting career college

AUTOMOTIVE MAYFIELD COLLISION CENTERS: Mark Alfieri to location manager and Shawn Fleming to repair process manager, South Euclid.

By TIMOTHY MAGAW tmagaw@crain.com

CONSTRUCTION

Brandt

BEACON MARSHALL COS.: Gregory A. Koss to director of operations.

director.

EDUCATION CLEVELAND METROPOLITAN SCHOOL DISTRICT: Michelle N. Pierre-Farid to chief academic officer.

ENGINEERING CIVIL & ENVIRONMENTAL CONSULTANTS INC.: Kevin A. Egan to staff consultant.

FINANCE

Baltas

Friedman

FAHLGREN MORTINE: Sarah Lack to account associate.

NONPROFIT MINORITY BUSINESS DEVELOPMENT AGENCY BUSINESS CENTER CLEVELAND: Raland Hatchett to executive director.

STEIN HOSPICE: Susan Figula to director of market development.

TEAM NEO AND LEVIN COLLEGE OF URBAN AFFAIRS, CSU: Daila Shimek to managing director, research department.

FEDERAL RESERVE BANK OF CLEVELAND: Iris Cumberbatch to vice president, public affairs.

WIRE-NET: Rick Dawson to manager, membership development.

OHIO COMMERCE BANK: Maynor Lopez to network administrator.

STAFFING

FINANCIAL SERVICE

AREA TEMPS INC.: Cindy Miller to corporate recruiter/sales trainer.

CM WEALTH ADVISORS: John A. Koch Jr. to partner.

BOARDS

PEASE & ASSOCIATES INC.: Melissa Gallop to supervisor, tax; Jessica Chatal and Melissa Collins to staff accountants, tax; Steve Owen to staff accountant, CFO services.

CLEVELAND MARSHALL LAW ALUMNI ASSOCIATION: Ian M. Friedman (Friedman & Frey LLC) to president.

RICHTER & ASSOCIATES INC.: Celeste Rininger to clinical consultant.

SS&G: Dusty Walulik to associate, human resources.

SS&G HEALTHCARE SERVICES LLC: Lisa Hunt to billing specialist.

EDEN INC.: Catherine RoscoeHerbert to vice president; Therese Sweeney-Drake to secretary.

AWARDS AMERICAN COLLEGE OF TRUST AND ESTATE COUNSEL: Erica McGregor (Tucker Ellis LLP) was elected a Fellow.

COMFORT KEEPERS OF CONCORD: Susie M. Pike to sales and marketing coordinator.

AMERICAN SOCIETY OF CIVIL ENGINEERS CLEVELAND: Frank Greenland (Northeast Ohio Regional Sewer District) received the Civil Engineer of the Year Award.

METROHEALTH AND CASE WESTERN RESERVE UNIVERSITY: Christopher P. Brandt, M.D., to inaugural chair holder, Richard B. Fratianne Professor of Surgery.

ARNOLD P. GOLD FOUNDATION: Leonard Calabrese, D.O., (Cleveland Clinic Lerner College of Medicine) received the Leonard Tow Humanism in Medicine Award.

HEALTH CARE

INSURANCE OSWALD COS.: Steven J. Baltas to vice president.

LEGAL BAKER HOSTETLER: Edmund W. Searby to partner.

MARKETING BROKAW: Amie Becker to media

NATIONAL AIR TRANSPORTATION ASSOCIATION: Kenneth Ricci (Flight Options LLC) received the William A. Ong Memorial Award.

NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES: Kyle Dreyfuss-Wells (Northeast Ohio Regional Sewer District) received the President’s Award.

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

Industrial supplier moves 2 offices Bearing DistribuThe Justice, ON THE WEB Story from tors Inc., a ClevelandIll., branch www.CrainsCleveland.com. based industrial dismoved to Burr tributor and supplier, has relocated Ridge, Ill. and also is a full-service two of its offices. stocking location.

The company, which has 174 Grace Wagner, a BDI spokesbranches worldwide, moved its person, said the two branches were Cleveland West branch and its moved to “achieve better logistics Justice, Ill., branch. within their specific market.” Each The Cleveland West branch, branch employs seven people, all of previously on West 137th Street, on whom were relocated to the new June 30 moved to 6749 Eastland sites.

Road, Unit E, in Middleburg Heights.

Locally, BDI operates five offices, The new site is a full-service including its headquarters.

— Ginger Christ stocking location.

The University of Akron in the next few years may have a new branch campus, but it won’t be far from its main hub in downtown Akron.

Indeed, it’s on the main campus.

University officials are exploring the option of converting Summit College — the university’s in-house career and technical college that serves about 5,140 students — into an official branch campus of the university.

Also, officials are looking to change the name of the oft-misunderstood academic unit in hopes of better marketing the college to prospective students and businesses in the community. One of the options is to rename the college the Summit College of Technology and Applied (or Professional) Studies.

“It’s almost a rebranding, a refocusing,” said Summit College dean Stanley Silverman. “It will really say what we do. That’s what everyone is so excited about. When I talk to the business community, they say, ‘Stan, it’s a no-brainer.’”

While the name change could come as early as this fall, designating the college as a branch campus would require a little more legwork.

Jim Petro, chancellor of the Ohio Board of Regents, and the Higher Learning Commission, one of the university’s accrediting bodies, would have to sign off on the measure.

While branch campuses are by no means a novel concept, the idea of having one embedded on a university’s main campus is an idea university officials admit is a bit unusual.

The University of Akron’s only official branch campus, for instance, is Wayne College in Orville, a 30mile hike from the university’s main campus.

State law defines a branch campus as an academic program that serves “a community other than the community wherein is located the main campus of such university.” University officials interpret “community” as not hinging on geographic location but rather a “community of learners” or type of student.

The move would alter the way the university compares itself to others within the state. For example, Kent

State University’s seven branches report their enrollment numbers and other performance metrics independent of the main campus in Kent.

“By taking this step, it allows the statistics of the university to be more comparable to other public universities, so that when we look at how we compare, we don’t have, in a sense, a community college buried within a main campus,” said Mike Sherman, the university’s provost and chief operating officer.

Also, the move could offer Summit College more flexibility in terms of tuition pricing. Currently, its bachelor’s degrees are priced identically to others in the university. As a branch campus, Mr. Silverman said Summit potentially could lower the price tag for its bachelor’s degree offerings.

The restructuring of Summit College is part of a larger dialogue taking place at the university about how to best tackle university president Luis Proenza’s ambitious strategic plan to grow universitywide enrollment by 2020 to 40,000 students from the current 30,000.

Summit College is a key piece of Dr. Proenza’s “pathway” concept to expand the number of ways students filter through the university, according to Dr. Sherman.

■

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Ads: Presidential campaign spending targeted at local level continued from PAGE 3

â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re looking at over $30 million spent in the Cleveland market in September, October and the first few days of Novemberâ&#x20AC;? up to the Nov. 6 Election Day, said Bill Applegate, vice president and general manager of WOIO-TV and WUAB-TV. â&#x20AC;&#x153;Political advertising will be overwhelming in the weeks leading up to the election,â&#x20AC;? Mr. Applegate said.

Media buying firm Harmelin Media of Bala Cynwyd, Pa., is projecting an even higher political advertising estimate for the Cleveland market â&#x20AC;&#x201D; $50 million, which is likely to be the most spent in any Ohio TV market.

Ohio is considered up for grabs by the presidential candidates.

Their campaigns, and the powerful and well-heeled political action committees â&#x20AC;&#x201D; Super PACs â&#x20AC;&#x201D; that support them, already have been hitting viewers with their ads in the Cleveland television market, which stretches from Ashtabula to Sandusky east to west and from Lake Erie to Mansfield north to south. Some observers are saying Ohio has supplanted Florida as â&#x20AC;&#x153;ground zeroâ&#x20AC;? for the battle for the presidency. â&#x20AC;&#x153;Ohio has been central for the last two or three presidential elec-

tions, and thatâ&#x20AC;&#x2122;s not going to change,â&#x20AC;? said Travis Ridout, associate professor of political science at Washington State University and co-director of the Wesleyan Media Project, a research center at Wesleyan University in Middletown, Conn., that tracks and analyzes political advertising. â&#x20AC;&#x153;There will be more money in Ohio this time around because there is more money out there,â&#x20AC;? Mr. Ridout said.

Besides the presidential contest, a seat to represent Ohio in the U.S. Senate also is up for grabs. That job now is held by Democrat Sherrod Brown, who faces a challenge from Republican Josh Mandel, Ohioâ&#x20AC;&#x2122;s state treasurer.

Up, up, up In 2008, the last presidential election year, candidates spent about $21 million in the Cleveland TV market, according to the Wisconsin Advertising Project, the predecessor of the Wesleyan project. In 2010, when the governorâ&#x20AC;&#x2122;s race topped the ticket in Ohio, candidates spent $28.2 million, according to the Kantar Media/Campaign Media Analysis Group. Kantar Media is a New Yorkbased ad tracking service.

The ad spending includes the candidatesâ&#x20AC;&#x2122; campaigns, the political parties and the spots from the Super PACs and other issue groups that have the bucks behind them to enter the fray.

Despite their national scope, the presidential campaigns spend most of their television money on local ads in targeted swing states rather than buying expensive network time that blankets the nation. Campaign ads that appear during network news and entertainment programs are those allocated to the local stations.

The heaviest spending will come from the presidential campaigns that consider Ohioâ&#x20AC;&#x2122;s 18 electoral votes critical to victory.

Kantar Media calculated that the presidential campaigns and their related political action committees

by June 17 already had spent $9.3 million in the Cleveland television market â&#x20AC;&#x201D; and $781,180 in the June 11-17 week alone. The same research pegged spending in the Columbus TV market at $4.9 million.

The same organization looked at city-by-city ad buys by the Obama campaign and two independent groups â&#x20AC;&#x201D; Crossroads GPS, which supports Mr. Romney, and Priorities USA Action, an Obama Super

INTRODUCING

PAC â&#x20AC;&#x201D; in the first 12 days after the last Romney competitor, Rick Santorum, dropped out of the running on April 12. Cleveland was second among all cities nationwide, with 528 spots from the three groups. Only Tampa, at 537 spots, had more.

The Cook Political Report, in a wrapup of the 2008 presidential election, said the Cleveland media market saw more political ads â&#x20AC;&#x201D; 29,689 â&#x20AC;&#x201D; in October of that election year than any other television market in the country. That figure represented 23.4% of all the ads that ran on local broadcast television stations that month.

Crowded out?

While that sounds like only every fourth ad a viewer sees will be a political ad, the willingness of the campaigns to pay premium prices will crowd year-round advertisers out of prime local viewing periods such as news programs and whatâ&#x20AC;&#x2122;s called the access period â&#x20AC;&#x201D; the time slot after the national news but before the networkâ&#x20AC;&#x2122;s prime-time shows that begin at 8 p.m. most days.

In addition, political advertisers will hurt many advertisers who buy what is called pre-emptable space at a discount. An advertiser can place ads at the pre-emptable rate, knowing that an advertiser with a bigger budget â&#x20AC;&#x201D; a heavily bankrolled presidential campaign or Super PAC, for example â&#x20AC;&#x201D; can swoop in and take over the space at a premium price. â&#x20AC;&#x153;A lot of advertisers buy pre-emptable time at discount rates,â&#x20AC;? said Brook Spectorsky, president and general manager of WKYC-TV, Channel 3. â&#x20AC;&#x153;When people book the business we warn them that itâ&#x20AC;&#x2122;s going to be an extremely active political time, and they could be crowded out.â&#x20AC;?

Federal Communications Commission regulations require televi-

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sion stations to offer the official political campaigns â&#x20AC;&#x201D; but not the Super PACs â&#x20AC;&#x201D; their lowest available rate, though the campaigns can choose to pay a higher, non-preemptable rate.

Shifting focus Rates are not yet set for the busy fall season, but the presidential campaigns already are buying much high-priced local TV ad time.

In a late-June/early-July ad buy, the Obama for President campaign ordered $348,750 in ad time on five Cleveland television stations â&#x20AC;&#x201D; WEWS-TV, Channel 5; WJW-TV, Channel 8; WKYC-TV, Channel 3; WOIO-TV, Channel 19, and WUABTV, Channel 43. As an example of its purchases, the campaign spent $104,625 on 124 ad spots on WJW, paying as much as $4,000 for 30 seconds of local ad time during prime time and as little as $325 for spots running during weekday afternoons.

During the same time period, the Mitt Romney for President campaign spent $242,525 on a group of similarly priced ads at four stations.

Because the well-financed presidential campaigns and their PACs will be able to buy up so much time, local political campaigns will be challenged when it comes to TV advertising. â&#x20AC;&#x153;People are going to have to rethink the way they do campaigns,â&#x20AC;? said Brian Wright, vice president of Melamed Communications LLC in Beachwood.

The adjustments could include using less effective cable television ads, online media and even more knocking on doors. â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;ve got to be organized and ready earlier than ever,â&#x20AC;? said Galen Schuerlein, vice president of Burges & Burges Strategists of Euclid, which primarily runs issue campaigns. â&#x20AC;&#x153;We just know weâ&#x20AC;&#x2122;re going to have to focus on other means.â&#x20AC;? â&#x2013;

Chicago: Competitors doubt FirstEnergyâ&#x20AC;&#x2122;s muni strategy continued from PAGE 3

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start in Illinois. â&#x20AC;&#x153;Municipal aggregation is new to Illinois and the market will develop over time,â&#x20AC;? the company said. â&#x20AC;&#x153;Constellation is and will be an active, competitive and disciplined market participant.â&#x20AC;?

In Mount Prospect, Ill., which this month gave FirstEnergy a two-year contract to supply its 21,952 households, Constellationâ&#x20AC;&#x2122;s bid was 0.5 cents per kilowatt-hour, or 10%, higher than FirstEnergyâ&#x20AC;&#x2122;s, according to Dave Strahl, assistant village manager. Of five bidders, Constellationâ&#x20AC;&#x2122;s price was the highest.

Constellationâ&#x20AC;&#x2122;s bid â&#x20AC;&#x153;was ridiculous,â&#x20AC;? Mr. Strahl added. â&#x20AC;&#x153;They werenâ&#x20AC;&#x2122;t even close.â&#x20AC;?

In a June 5 meeting with analysts, Exelon executives said they thought competitors were lowballing their bids to win municipal business in Illinois. â&#x20AC;&#x153;We have won some share of government aggregation, but quite frankly, weâ&#x20AC;&#x2122;re seeing some very aggressive prices, a lot of times prices below what we see (as) the market-based fair cost to serve,â&#x20AC;? said Kenneth Cornew, CEO of the Constellation unit.

Mr. Cornew also questioned the value of winning local-government business. â&#x20AC;&#x153;It isnâ&#x20AC;&#x2122;t a customer making a decision to switch,â&#x20AC;? he said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a municipality negotiating on their behalf. â&#x20AC;Ś I donâ&#x20AC;&#x2122;t know that thatâ&#x20AC;&#x2122;s the same lifetime value proposition as really going and acquiring a customer, providing a differentiation in service and maintaining that customer on a long-term basis.â&#x20AC;?

The FirstEnergy spokeswoman countered: â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t enter into agreements where weâ&#x20AC;&#x2122;re not making some profit on them.â&#x20AC;?

However, Mount Prospectâ&#x20AC;&#x2122;s Mr. Strahl backed Mr. Cornewâ&#x20AC;&#x2122;s point about the lack of loyalty when governments act as a go-between.

The northwest suburb, he said, will rebid the FirstEnergy contract when it expires in two years. And, as the incumbent, FirstEnergy wonâ&#x20AC;&#x2122;t get the chance to match a better offer. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re not going to get any advantage,â&#x20AC;? Mr. Strahl said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s too big a number.â&#x20AC;? â&#x2013; Steve Daniels is a senior reporter with Crainâ&#x20AC;&#x2122;s Chicago Business, a sister publication of Crainâ&#x20AC;&#x2122;s Cleveland Business.

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13

SMALL BUSINESS

INSIDE

14 TAX TIPS: CREDITS MEANT TO STIMULATE EXPANSIONS.

SOCIAL MEDIA SMILING ON DENTISTS They’re using sites to communicate with current patients, open doors for new ones

By ALYSSA LENHOFF clbfreelancer@crain.com

I

JANET CENTURY

Julie Corbin, who runs Whispering Pines Dental in Lorain, says of the office’s Facebook use: “Many of our patients only see us every six months, and Facebook provides us a good way to stay connected.”

n early June, Dr. Julie Corbin went to an art festival at Crocker Park and purchased an abstract oil painting with vivid reds and a landscape scene. The next day, she hung it in an examination room in her Lorain dental office and within a few hours, her patients were talking about it.

None of them had been in the office.

Instead, they had seen the painting on Facebook. And their conversations took place on the social media site where Dr. Corbin, the 31-year-old who operates Whispering Pines Dental, hangs out to chat with patients about their teeth, the weather, the Indians or, in this case, art.

One patient commented, “It looks like gums without teeth.”

Dr. Corbin fired back: “Supposed to be a field of poppies. Yours fits better.”

Another patient joined in: “It’s an awesome juxtaposition for the monochrome and sterile looking torture room that you call a dentist chair. Looks good!”

Dr. Corbin is among a growing number See DENTISTS Page 15

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NAVIGATE HEALTHCARE 20325 Center Ridge Road, Suite 708 Rocky River 44116 http://navigatehealthcare.com/ Navigate Healthcare’s purpose is to help people navigate the health care system. It aims to help make a diagnosis less frightening by guiding

clients through second opinions and providing medical research to make sure they are at the best medical institution for their disease. Founder Valerie Kay created the venture as a result of her own experiences. Ms. Kay remembers the feeling of wanting to call 911 for help from her hospital room because she felt ignored.

Navigate Healthcare is an advisory organization that advocates for clients, while educating and communicating with patients and their loved ones. It serves individuals and families as independent health care advocates whether they are in an inpatient or outpatient setting. It collaborates with health care providers to manage proper communications so that conflict

is avoided and to ensure that doctors’ orders are being implemented. As educators and health information specialists, they work to prepare and plan ahead with Navigate members.

Phone 216-513-1655 Fax 440-925-7863 info@navigatehealthcare.com To submit a new business, send the following by email to Amy Ann Stoessel at astoessel@crain.com: business name; address; city and ZIP; website; brief description of business; business phone number; business fax number; business email address; and date that business opened.

20120709-NEWS--14-NAT-CCI-CL_--

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14 CRAIN’S CLEVELAND BUSINESS

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JULY 9 - 15, 2012

SMALL BUSINESS

New credits encourage business expansions

I

n a valiant effort to address Ohio’s persistent unemployment, the state has given business owners some good cause to reconsider their growth prospects.

The state Legislature has approved and Gov. John Kasich signed into law tax breaks and other incentives meant to reward companies for creating jobs.

Those of greatest interest to small businesses include a tax credit for companies that put vacant commercial properties to work and another credit for companies that employ more telecommuters.

House Bill 18 provides a tax credit to any business that chooses to put to good use an otherwise abandoned or vacant property. The law authorizes a grant equal to $500 per employee to a company that occupies a building or piece of property that has been vacant for a year.

The bill rewards companies that increase their payroll by hiring new full-time employees or that employ either 50 employees or 50% of its Ohio employees at the vacant facility.

PETERDEMARCO

TAX TIPS To qualify for the $500 grant, an employee must be employed full time at the vacant commercial space and must have caused the company’s total payroll to increase as a result of leasing or purchasing the space.

They will not qualify if they are employed more than 60 days before the company secured the property, but they must be employed for a full year and must earn at least minimum wage. An employer may qualify for the grant only once, but there is no limit to the number of qualified employees for whom the employer can claim the grant.

In a separate law, House Bill

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327, the Legislature established a refundable job creation income tax credit for companies with telecommuting or home-based employees.

The credit can be claimed against commercial activity tax, corporate franchise tax, personal income tax and the insurance premiums tax, with some restrictions about how each type of tax can be credited.

The bill establishes a six-year trial period during which the Ohio Tax Credit Authority may grant job creation tax credits to employers based on employees who work from their Ohio-based homes and whose pay rate is at least 131% of the federal minimum wage. That means an hourly wage of $9.50.

Employers are not eligible for the credit until the total number of employees they have added after the law is enacted reaches 200.

Employers applying for the credit must not address both home-based employees and other employees in the computation of income tax revenue for the purposes of the same tax credit agreement.

The company would need to apply separately to receive credit for a given project that includes both home-based and non-home-

based employees.

The law also requires state officials to study the effect of the at-home tax credit over the six years, no doubt to determine if it has the intended effect of stimulating job growth.

In addition to the credits for expansions involving vacant properties and telecommuters, the Legislature also passed a motion picture tax credit to inspire filmmakers to consider Ohio locations for their productions and an incentive to inspire private-sector projects in local communities to spruce up and occupy vacant properties.

It remains to be seen whether the incentives will have a meaningful impact on Ohio’s economy, but it demonstrates the creativity that Ohio’s leaders are applying to try to jumpstart the economy.

Any small business owner that was perhaps teetering on an expansion plan should take note of the incentives and consider their potential impact.

■ Peter A. DeMarco is vice president and director of tax services for the regional accounting and business consulting firm of Meaden & Moore, headquartered in Cleveland.

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he All-American Soap Box Derby is as much a piece of Americana as apple pie.

The first event was held in 1934 in Dayton. However, the race moved the following year to Akron, where it has run every year since, with the exception of four years during World War II. This year is the event’s 75th anniversary, with the FirstEnergy All-American Soap Box Derby featuring boys and girls ages 7 to 17 who have designed and assembled wood and fiberglass gravitypowered cars from kits.

More than 500 finalists from 230 races are expected to compete in the finals on July 21 in Akron.

Leading the organization is Joseph W. Mazur, who took over as the derby’s top officer in March 2011. Prior to joining the All-American Soap Box Derby, Mr. Mazur spent a portion of his career with SMG, a facility management company, and he founded the JW

Mazur Group, a consulting firm for strategic planning, entertainment and facility management.

As for this year’s derby, Mr. Mazur described it as a time of “rebuilding and moving in the right direction.” Indeed, he said multiple assets are being brought back to the event, including the re-establishment of a museum.

■ Daily must-read? I read several online news sites (cnbc.com, ohio .com, cleveland.com, cantonrep .com, vindy.com, toledoblade.com) ■ Who do you admire and why?

My father. He was a great role model. He worked very hard but because he loved what he did he never worked a day in his life.

■ Career advice you wish someone would have given you?

The importance of volunteering and giving back to the community.

■ What skill do you wish you had?

I wish I had a greater ability to put all of my thoughts in written form.

■ If you could have lived in any time in history, when would it have been? I like the present. I could not imagine living any time other than today.

BUILDING YOUR NETWORK

The Middlefield Banking Company www.middlefieldbank.com 888-801-1666 > Ê"vwViÊÊ{{ä ÈÎÓ £ÈÈÈÊUÊ7iÃÌÊÊ{{ä ÈÎÓ n££ÎÊUÊ >À` ÊÊ{{ä ÓnÈ £ÓÓÓ >ÀÀiÌÌÃÛ iÊÊÎÎä xÓÇ Ó£Ó£ÊUÊ > ÌÕ>ÊÊÎÎä ÓÇ{ änn£ÊUÊ"ÀÜi ÊÊ{{ä {ÎÇ ÇÓää iÜLÕÀÞÊÊ{{ä xÈ{ ÇäääÊUÊ ÀÌ > `ÊÊÎÎä ÈÎÇ ÎÓän

Get involved and stay informed by building your network online and in person.

■ The Cleveland Young Professional Senate is an organization of decisionmaking young professionals who strive to engage in civic discourse and promote opportunities for young professionals to participate and influence the revival of the Greater Cleveland area.

CYPS provides a bi-weekly forum where young adults can: dialogue about current events in Cleveland,

learn about events and issues in the community, and learn how they can be involved. Cleveland YPS is a nonpartisan, nonprofit organization. Meetings are the first and third Monday of the month, from 6 to 7 p.m. The next meeting is today, July 9, at the Center for Families and Children, 4500 Euclid Ave. Contact: Will Tarter, president — 216-905-2337 or ClevelandYPS@ yahoo.com Web: www.clevelandyps.org

GETTINGAHEAD Your monthly guide to getting to the next level in your career.

Money savers: Discipline key for millennials’ financial future

By AMY ANN STOESSEL astoessel@crain.com

W

here to start?

For Millennials — many of whom have entered a tough job market with mounds of student loan and credit card debt — that may be a question that’s top of mind as it relates to savings and financial health.

A 2011 survey by The PNC Financial Services Group Inc. revealed that only 23% of 20-somethings consider themselves totally independent. Even more striking is that only 18% of 20- to 29-year-olds responded that they are confident they will have enough money to live comfortably when they’re ready to retire.

That said, Mark Stratis, senior financial planner with Szarka Financial in North Olmsted, stresses that every little bit counts when it comes to starting out and saving money, even when there might not be a lot of money to go around.

While Mr. Stratis doesn’t necessarily regularly work with younger professionals (with the exception of the sons and daughters of his established clients), he said discipline in savings is critical.

Indeed, among Mr. Stratis’ traditional, more financially established clients “almost universally, it’s because there was a strong savings element at some point in time.”

David Rothstein, project director for asset building at Policy Matters Ohio, which is connected with Cleveland Saves, said the first step is as simple as creating the infrastructure for setting money aside.

“It’s more to have some dedicated savings account,” he said. “Having that account is one big first step.”

Mr. Stratis agrees, saying that in addition to taking full advantage of any employer-sponsored, pre-tax contribution program, a good starting goal is to set aside 0.5% to 1% of one month’s take-home pay.

“The trick is you have to take some of that take-home pay and put it somewhere,” said Mr. Stratis, who suggests an automated debit from a checking account. “Even if it’s not generating anything for you, it’s building your net worth.”

PNC’s survey showed that, on average, 20-somethings’ total debt is $45,000, ranging from $12,000 for ages 20-21 to $78,000 for 28- to 29year-olds.

Credit cards, of course, add their own wrinkle to the financial picture.

“They see them as a convenient way to make purchases, not as borrowing money,” said Mr. Rothstein.

“It’s not uncommon to see someone in their 20s with six credit cards.”

Mr. Rothstein said oftentimes it’s best to sit down with a free and reputable credit counselor, such as one referred by United Way’s 211, to sort things out.

■

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SMALL BUSINESS

Dentists: Media help doctors maintain connection with their patients continued from PAGE 13

of dentists using Facebook and other social media to communicate with patients and market for new ones. â&#x20AC;&#x153;With our use of Facebook, we are attempting to engage with our patients in a meaningful way,â&#x20AC;? Dr. Corbin said. â&#x20AC;&#x153;Many of our patients only see us every six months and Facebook provides us a good way to stay connected. I think that we would be getting it wrong if we looked at Facebook as just a place to directly sell to our fans.â&#x20AC;?

In late June, she had 269 â&#x20AC;&#x153;Likesâ&#x20AC;? for her Facebook page, which carries holiday greetings, office updates, links to articles about good dental health and picture shoutouts to staff members on their birthdays.

Cutting their teeth David Owsiany, executive director of the Ohio Dental Association, said there are no good estimates about how many dentists are using social media. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s growing, and itâ&#x20AC;&#x2122;s growing pretty fast,â&#x20AC;? Mr. Owsiany said.

The Ohio Dental Association has offered a few sessions at conferences to help dentists navigate social media, but Mr. Owsiany, who says that he doesnâ&#x20AC;&#x2122;t have a Facebook page himself, said some dentists are just not grasping it. â&#x20AC;&#x153;Dentists are a little behind on social media. I canâ&#x20AC;&#x2122;t explain it,â&#x20AC;? he said, noting that some dentists are hiring others to do social media.

But hiring outside firms to manage social media may not always be a great answer, Mr. Owsiany said.

He said some companies are

offering to build and maintain dentistsâ&#x20AC;&#x2122; social media presences in exchange for referral fees. â&#x20AC;&#x153;In most cases, it is frowned upon for dentists to pay someone for referrals,â&#x20AC;? Mr. Owsiany said.

West Park Dental in Cleveland pays a Florida firm between $800 and $1,000 per month to update its Facebook page and address other social media issues.

Cathy Gallagher, whose husband, Dr. Michael Gallagher, is one of two dentists at the office, said the Florida firm is paid the flat monthly rate and does not receive any referral fees or bonuses.

Ms. Gallagher said they have hired the firm because no one at West Park has time to manage social media, but they all recognize how important it is. â&#x20AC;&#x153;I think our doctors are current â&#x20AC;&#x201D; not only on social media â&#x20AC;&#x201D; but dentistry in general. They just stay up to date with everything,â&#x20AC;? she said, explaining that West Park decreased its phone book advertising in favor of more online exposure, including ads on Angieâ&#x20AC;&#x2122;s List.

Ms. Gallagher said she has thought about what could happen if an unsatisfied patient posted negative comments on the Facebook page. â&#x20AC;&#x153;We like to think that we handle all problems and respond,â&#x20AC;? she said.

Mr. Owsiany argues that oldfashioned word of mouth is still the most effective means of patient referrals. â&#x20AC;&#x153;The oral cavity is a personal space. Just getting a text or a (tweet) may not bring you through

the door,â&#x20AC;? he said.

Joseph Corbin, the husband of Dr. Corbin, manages his wifeâ&#x20AC;&#x2122;s marketing, which includes Google advertising, Foursquare and other electronic communications. He said print advertising in newspapers is still the most effective but he agrees with Mr. Owsiany about nothing beating word of mouth as a source for new patients.

new lights that they got. I just feel like I know everything about the practice through Facebook,â&#x20AC;? he said.

As for the new artwork in one of the examination rooms, Mr. Angello said he thought it looked like poppies and he enjoyed the

Does your business or medical practice

Reason to smile In fact, Todd Angello, 28, a patient of Dr. Corbinâ&#x20AC;&#x2122;s and frequent poster to her Facebook page, said it was a referral from his sister that first brought him to Whispering Pines but itâ&#x20AC;&#x2122;s the connection that he feels with her that keeps him coming back and referring others.

Mr. Angello said he feels comfortable with Dr. Corbin, in large part because he has gotten to know her and the practice through Facebook. â&#x20AC;&#x153;Because of Facebook, it feels more like a family,â&#x20AC;? he said. â&#x20AC;&#x153;Being able to follow them on Facebook is a big draw for me. Like I see that they got memory foam chairs and I saw the picture of the

online discussion about it. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s kind of a different relationship than what I had with the dentist who I went to when I was a kid. I wouldnâ&#x20AC;&#x2122;t talk to him like I can talk to Dr. Corbin. He didnâ&#x20AC;&#x2122;t have a Facebook page.â&#x20AC;? â&#x2013;

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IN BRIEF â&#x2013; Just say yes: Founded in 2011, Cleveland-based Perfect Proposal has expanded its offerings to now include wedding planning services and RĂŞve Events Planning. Perfect Proposal is a company that collaboratively works to assist in developing and executing a standout marriage proposal. It offers three proposal packages, with varying degrees of planning and creative involvement. â&#x2013; Adding to their image: The Image Group has acquired REB Marketing, a promotional products company with offices in Naperville, Ill., and Brunswick. REB Marketing specializes in safety programs, employee recognition programs and employee retention programs.

REB Marketing is led by Napervillebased Eric Edwards, who, along with the rest of the sales staff, will remain with The Image Group. The 60-employee Image Group specializes in marketing and branding and is based near Toledo with offices in Cleveland; Ann Arbor, Mich.; Fort Wayne, Ind.; Chicago; and now Brunswick. â&#x2013; Proper memorial: While putting the finishing touches on a memorial dedicated in 2011 to John Michael Kick, the first Cleveland Police officer killed in the line of duty, Monica Johns of the Johns-Carabelli Co. read about a number of Civil War veterans who had never been memorialized. In response, Ms. Johns, her brother, Michael Johns, and her sister, Michelle Shaw, of the Johns-Carabelli Co. designed and donated a monument

engraved with the names of 63 members of the United States Colored Troops who died fighting to preserve the Union during the Civil War. The monument was dedicated at Woodland Cemetery as part of the Black History Day celebration held there June 24. The 133-year-old Johns-Carabelli Co. has locations in South Euclid and Brook Park. â&#x2013; Med device innovators face rough path: Product designers and marketers at the recent Plastics in Medical Devices conference hosted

by Plastics News, a sister publication of Crainâ&#x20AC;&#x2122;s Cleveland Business, said theyâ&#x20AC;&#x2122;re jumping through multiple hoops for several years to bring products to market. That includes Concord-based Future Path Medical Holding Co., which later this year will commercialize its first product, eight years after the project began. The companyâ&#x20AC;&#x2122;s product is the UroSense-brand urine monitoring system, a sensor placed in a urine bag thatâ&#x20AC;&#x2122;s designed to prevent spills and other problems experienced by patients. UroSense uses a Mylar-brand polyester backing on a PET or PVC container.

Future Path CEO Brian Gilbert said the idea came from Chris Bryant, a quadriplegic Ohio resident, and his family. Urine bags present numerous challenges for paralyzed individuals, Mr. Gilbert said. And in hospital settings, nurses can spend as much as an hour per shift measuring and charting and emptying urine bags. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s an amazingly backward system,â&#x20AC;?

Mr. Gilbert said.

Lifetime Achievement award winner Thomas Hopkins, Senior VP, Human Resources, The Sherwin-Williams Co. â&#x20AC;&#x153;The Archer Awards tell a story of how todayâ&#x20AC;&#x2122;s HR role successfully aligns diverse human capital with Northeast Ohioâ&#x20AC;&#x2122;s modern economy.â&#x20AC;?

- Thomas Hopkins

Meet Northeast Ohioâ&#x20AC;&#x2122;s leading HR professionals!

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2:46 PM

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

WWW.CRAINSCLEVELAND.COM

JULY 9 - 15, 2012

HIGHEST PAID NON-CEOS RANKED BY 2011 COMPENSATION

Name Company Rank Title

Total compensation 2011 % 2010 change

Salary

Bonus

Stock awards

Option awards

Nonequity incentive plan

Change to pension value

Company net Company net income income % All other 2011 change from compensation (millions) 2010

1

Mark T. Clark/FirstEnergy Corp. executive vice president, CFO

$6,688,321 $3,578,980

86.9

$678,269

$0

$2,829,245

$441,417

$1,021,921

$1,704,055

$13,414

$885.0

19.3

2

Ronald A. Rice/RPM International Inc. president, COO

$5,831,910 $3,037,837

92.0

$620,000

$0

$3,438,674

$875,000

$750,000

$50,611

$97,625

$203.5

13.5

3

Raymond F. Laubenthal/TransDigm Group Inc. president, COO

$5,761,329 $3,115,735

84.9

$455,833

$500,000

$0

$4,551,430

$0

$0

$254,066

$244.6

95.2

4

Leila L. Vespoli/FirstEnergy Corp. executive vice president, general counsel

$5,545,153 $2,883,502

92.3

$554,231

$0

$290,989

$703,054

$737,153

$1,241,873

$17,853

$885.0

19.3

5

Arthur de Bok/Goodyear Tire & Rubber Co. president, Europe, Middle East and Africa Tire

$5,386,953 $4,986,295

8.0

$545,000

$0

$980,846

$522,299

$2,720,398

$592,029

$26,381

$343.0

NM

6

Glenn A. Eisenberg/Timken Co. executive vice president, finance and administration

$5,174,959 $3,078,645

68.1

$619,540

$0

$314,433

$627,795

$1,963,705

$1,517,000

$132,486

$454.3

65.3

7

Craig Arnold/Eaton Corp. vice chairman; COO, Industrial Sector

$5,107,649 $4,652,533

9.8

$679,080

$0

$805,650

$645,040

$1,936,422

$986,115

$55,342

$1,350.0

45.3

8

Thomas S. Gross/Eaton Corp. vice chairman; COO, Electrical Sector

$5,079,430 $4,647,337

9.3

$661,830

$0

$805,650

$645,040

$1,743,873

$1,158,181

$64,856

$1,350.0

45.3

9

Richard H. Fearon/Eaton Corp. vice chairman, chief financial and planning officer

$5,067,285 $4,543,212

11.5

$677,208

$0

$805,650

$645,040

$1,710,516

$1,155,629

$82,242

$1,350.0

45.3

10

Charles E. Jones Jr./FirstEnergy Corp. senior vice president; president, FirstEnergy Utilities

$4,799,833 $2,579,965

86.0

$537,115

$0

$1,940,891

$404,495

$564,894

$1,343,945

$8,496

$885.0

NA

11

Darren R. Wells/Goodyear Tire & Rubber Co. executive vice president, CFO

$4,774,222 $4,092,928

16.6

$526,667

$0

$966,856

$486,499

$2,329,186

$429,659

$35,355

$343.0

NM

12

Thomas L. Williams/Parker Hannifin Corp. executive vice president, operating officer

$4,399,826 $3,909,327

12.5

$582,900

$0

$1,156,171

$1,269,204

$883,492

$395,634

$112,425

$1,109.6

30.0

13

Salvatore J. Miraglia Jr. /Timken Co. president, Steel

$4,337,286 $2,508,843

72.9

$456,690

$0

$259,532

$550,068

$1,292,718

$1,706,000

$72,278

$454.3

65.3

14

Bernt G. Iversen, II/TransDigm Group Inc. executive vice president

$4,303,051 $1,397,506

207.9

$260,000

$201,500

$0

$3,755,115

$0

$0

$86,436

$244.6

95.2

15

Lee C. Banks/Parker Hannifin Corp. executive vice president, operating officer

$4,125,590 $3,776,326

9.2

$582,900

$0

$1,156,171

$1,114,786

$883,492

$274,022

$114,219

$1,109.6

30.0

16

Jeffrey B. Weeden/KeyCorp CFO

$4,021,914 $1,875,231

114.5

$899,932

$0

$1,977,497

$646,873

$420,000

$18,723

$58,888

$920.0

66.1

17

Robert G. O'Brien/Forest City Enterprises Inc. executive vice president, CFO

$3,943,808 $2,650,225

48.8

$550,000

$0

$1,164,984

$494,994

$1,665,000

$6,215

$62,615

($86.5)

NM

18

James Riley/TransDigm Group Inc. executive vice president

$3,781,419 $2,248,175

68.2

$319,167

$260,000

$0

$3,116,620

$0

$0

$114,799

$244.6

95.2

19

Christopher L. Mapes(1)/Lincoln Electric Holdings Inc. chief operating officer

$3,712,009 NA

NA

$170,000

$0

$2,526,855

$758,805

$253,311

$0

$3,038

$217.2

66.8

20

Christopher M. Gorman/KeyCorp president, Key Corporate Bank

$3,682,124 $2,192,236

68.0

$1,116,391

$0

$942,837

$749,999

$805,500

$29,700

$37,697

$920.0

66.1

21

Gregory Rufus/TransDigm Group Inc. executive vice president, CFO, secretary

$3,644,143 $1,365,002

167.0

$362,083

$280,000

$0

$2,800,880

$0

$0

$201,180

$244.6

95.2

22

Joseph P. Ruocco/Goodyear Tire & Rubber Co. senior vice president, human resources

$3,442,319 NA

NA

$484,667

$0

$701,049

$348,817

$1,639,042

$244,772

$23,972

$343.0

NM

23

John G. Morikis/Sherwin-Williams Co. president, COO

$3,359,013 $3,446,057

(2.5)

$776,295

$0

$971,138

$737,584

$663,000

$0

$210,996

$441.9

-4.5

24

David L. Bialosky/Goodyear Tire & Rubber Co. senior vice president, general counsel, secretary

$3,280,310 $2,667,338

23.0

$513,333

$0

$142,277

$389,993

$1,956,300

$254,391

$24,016

$343.0

NM

25

Jon P. Marten(2)/Parker Hannifin Corp.

CFO, executive vice president, finance and administration

$3,082,765 NA

NA

$391,230

$0

$1,723,571

$136,861

$484,873

$239,105

$107,125

$1,109.6

30.0

26

Christopher Coughlin/Timken Co. president, Process Industries

$3,055,347 NA

NA

$433,370

$0

$259,532

$550,068

$1,016,791

$753,000

$42,586

$454.3

65.3

27

Mark M. McGuire/Eaton Corp. executive vice president, general counsel

$2,809,483 NA

NA

$510,591

$0

$322,260

$351,840

$1,061,372

$518,849

$44,571

$1,350.0

45.3

28

Paul G. P. Hoogenboom/RPM International Inc. senior vice president, manufacturing and operations; CIO

$2,806,541 $1,597,696

75.7

$357,000

$0

$1,647,881

$262,500

$445,000

$46,847

$47,313

$203.5

13.5

29

Vincent C. Byrd/J.M. Smucker Co. president, COO

$2,742,967 $3,108,168

(11.7)

$525,000

$10,500

$840,000

$0

$464,700

$876,333

$26,434

$450.5

-10.8

30

Thomas C. Stevens/KeyCorp vice chair, chief administrative officer

$2,697,124 $1,909,601

41.2

$948,403

$0

$657,850

$586,250

$386,400

$45,325

$72,897

$920.0

66.1

31

Frederick G. Stueber/Lincoln Electric Holdings Inc. senior vice president, general counsel, secretary

$2,602,977 $1,873,282

39.0

$375,000

$0

$164,952

$175,787

$627,305

$1,236,865

$23,068

$217.2

66.8

32

Sean P. Hennessy/Sherwin-Williams Co. senior vice president, finance; CFO

$2,468,811 $2,570,877

(4.0)

$585,499

$0

$648,330

$553,188

$516,000

$0

$165,794

$441.9

-4.5

33

Benjamin J. Mondics/Applied Industrial Technologies Inc. president, COO

$2,446,375 $2,219,135

10.2

$450,000

$0

$480,028

$185,250

$748,989

$517,668

$64,440

$102.1

18.5

34

Charles E. Ducey Jr./Diebold Inc. executive vice president, North America operations

$2,423,562 $1,788,593

35.5

$384,322

$0

$505,665

$272,250

$514,223

$690,870

$56,232

$144.8

NM

35

Donald J. Gallagher/Cliffs Natural Resources Inc. executive vice president; president, global commercial

$2,413,177 $2,071,069

16.5

$488,167

$0

$932,507

$0

$556,338

$416,628

$21,537

$1,619.1

58.8

36

Jeffrey M. Weiss/American Greetings Corp. president, COO

$2,404,361 $2,821,564

(14.8)

$767,670

$0

$487,705

$0

$701,681

$388,822

$58,483

$57.2

-34.3

37

Laurie Brlas/Cliffs Natural Resources Inc. executive vice president, finance and administration, CFO

$2,300,083 $1,878,742

22.4

$516,000

$0

$1,009,278

$0

$630,118

$110,867

$33,820

$1,619.1

58.8

38

Brian C. Domeck/Progressive Corp. vice president, CFO

$2,289,738 $2,088,858

9.6

$443,461

$0

$1,223,768

$0

$609,759

$0

$12,750

$1,015.5

-4.9

39

Duncan P. Price/Cliffs Natural Resources Inc. executive vice president; president, global operations

$2,286,287 NA

NA

$548,284

$0

$889,555

$0

$560,503

$0

$287,945

$1,619.1

58.8

40

Vincent K. Petrella/Lincoln Electric Holdings Inc. senior vice president, CFO, treasurer

$2,215,986 $1,578,819

40.4

$395,000

$0

$219,344

$233,695

$783,061

$551,566

$33,320

$217.2

66.8

Source: Company proxy statements. 2011 net income and net income % change provided by S&P Capital IQ, www.spcapitaliq.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. The Book of Lists and enhanced versions of most lists, with more companies, are available to purchase at www.crainscleveland.com.

(1) Mr. Mapes was named Chief Operating Officer on Sept. 1, 2011.

(2) Not a named executive officer in 2010.

RESEARCHED BY Deborah W. Hillyer

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Manufacturing resurgence draws renewed investor interest

By FRANK ESPOSITO Plastics News

The U.S. manufacturing market is heading in the right direction once again — and that might be enough to draw back investors such as Riverside Co. As recently as 2006, Riverside, a Cleveland-based private equity firm, did almost 60% of its deals in manufacturing. But by last year, that number had dropped to 23%, and it’s only at 16% so far in 2012, senior adviser William Seelbach said at a May 31 manufacturing conference in Cleveland hosted by the National Association for Business Economics.

“In the last year or two, our interest in manufacturing has waned due to

better fits in health care, education and training, software and franchising,” Mr. Seelbach said. “But there could be a resurgence of manufacturing in the U.S. because of low natural gas costs and the return of business from China.”

The re-entry of firms such as Riverside could be a plus for plastics processors and other types of manufacturers, especially because Riverside never has been shy about making deals — and lots of them.

The firm has been involved in 300 transactions since its launch in 1988.

Its current portfolio includes more than 80 companies, with 14,000 employees and total sales of $3.2 billion.

Riverside currently owns two plastics-related companies — PVC

window extruder Sunrise Windows Ltd. of Temperance, Mich., and medical injection molder Coeur Inc. of Lebanon, Tenn. Riverside bought Sunrise early last year and has owned Coeur since 2008. Riverside also has sold three plasticsrelated firms in the last four years.

Mr. Seelbach said Riverside likes to invest in “little leaders,” meaning companies that rank in the top three in a niche or industry that Riverside knows well. The firm tries to steer clear of companies that make heavy equipment or do commodity or contract manufacturing.

“There’s only a few industries we don’t like, such as automotive or real estate,” Mr. Seelbach said.

“We’re basically industry-agnostic.”

Generational issue

Osbornes: Companies hurt by drop in natural gas prices continued from PAGE 1

Numbers game

One, according to bankruptcy filings.

Three of the Osbornes’ companies — Oz Gas Ltd., Great Plains Exploration LLC and John D. Oil and Gas Co. — filed for Chapter 11 bankruptcy protection from creditors last January in U.S. Bankruptcy Court in Erie, Pa. According to bankruptcy documents, Oz Gas and Great Plains Exploration owe RBS about $20.4 million, while John D. owes the bank $9.1 million, all of it in the form of secured loans.

Gregory Osborne said the current figure for debt outstanding on loans to the bank is closer to $26 million rather than $29.5 million.

The Osborne companies involved in the bankruptcy case have assets that consist largely of the oil and gas reserves they control. When the price of natural gas fell from about $12 per thousand cubic feet of gas (mcf) in 2009 to less than $4 per mcf throughout much of 2011, the value of those assets plummeted. Since those assets were securing the loans to Charter One, covenants of those loans were broken when the collateral behind them dropped in value, court documents state.

The price drops “had a snowball effect on the companies and their ability to manage their respective debts,” said Donald Whiteman, controller for Oz Gas and Great Plains Exploration, in a court filing.

But the lease rights that are being sold are worth far more today than they were a few years ago, because new drilling methods make it possible to access gas through the process of hydraulic fracturing, or fracking.

Unlike the shallower vertical wells that the Osbornes’ companies already have developed, fracking wells go more than a mile deep, then horizontally out a mile in several directions.

Gregory Osborne said the companies didn’t think the Pennsylvania leases were worth anything, until recently.

“Here’s an asset that, a couple of years ago, we had zero value for on the books — these were none of our core assets,” Mr. Osborne said.

The Osborne companies already have one bidder, Halcon Energy Properties of Houston, willing to pay $20 million for the rights to drill for gas and oil that the companies could not have accessed on their own — or at least not without investing millions of dollars into new drilling technologies.

That price equates to about $2,500 an acre, which Gregory Osborne noted was “the minimum” the leases now would fetch. Others will have the opportunity to outbid Halcon for the assets when they are auctioned off next month.

It remains to be seen whether the price will go up, but Mr. Osborne hopes it will, and his creditors no doubt share his hope. Jeffrey Baddeley, an attorney for RBS working on the case, declined to comment on the matter.

A successful sale of the Pennsylvania gas leases could help make the legal actions entangling the Osbornes’ three companies moot.

Another of the Osbornes’ companies, Cleveland-based Gas Natural Inc., which distributes natural gas to end users such as homes and businesses, on July 2 completed a secondary offering for $7.1 million of stock. All the 700,000 shares sold were held personally by Richard Osborne, rather than by the company itself.

Gregory Osborne said his father is using that money to help pay down the balance of the RBS debt. He said his father also likely will sell another 100,000 shares in Gas Natural, which would give him a total of $8 million that could go toward the RBS debt.

Bankruptcy Court filings had yet to reflect any payment on the debt, but reducing the amount owed by $8 million would leave about $21.5 million left to be paid, according to RBS’ claims.

It would leave a gap of $18 million, by the Osbornes’ calculations, as Gregory Osborne said his family and RBS disagree over interest and fees added to the debt.

■

Volume 33, Number 26 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the third week of May and fourth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373.

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Right now, Riverside is sailing through a post-recession mergersand-acquisitions market that, while improving, still contains hazards, observers say.

William Hartmann, chief credit officer of KeyBank in Cleveland, said Key “has seen some really interesting companies emerge (from the recession), where they take old machinery and bolt on new electronics and come up with efficient operations.”

But, at the same time, Mr. Hartmann said many manufacturers are going through a “generational transition” and that “a lot of them who made it through (the recession) are exhausted.”

“They did things (during the recession) that they never wanted to do,” Mr. Hartmann said. “They let go employees, cut customers — it wasn’t a lot of fun. So now some of them are saying, ‘If I get a good price (for my company), I’m out of here.’

A lot of them don’t have a son or daughter interested in the company.”

For now, Mr. Hartmann continues to see inactivity on the buyer side.

“Many companies are sitting on large amounts of cash,” he said.

“There’s tremendous liquidity and the number of loans is going down.

Companies are only making small investments in machinery or buying product lines from competitors that failed.”

Another challenging issue has been a lack of stability in prices for industrial real estate.

“It’s a very uncertain market, especially because in a lot of these cases the business is 50 or 80 years old, and real estate constitutes a lot of the value in small manufacturing,” Mr. Hartmann said.

75% of the way back A positive outlook on what’s ahead for manufacturing came from William Strauss, a senior economist with the Federal Reserve Bank of Chicago.

“I’m exceedingly optimistic in regard to manufacturing,” Mr. Strauss said. “Manufacturing productivity has been improving at a 6.5% annual rate since July 2009, and we’ve recovered 75% of the drop in output since the recession.

“The manufacturing sector continues to reinvent itself,” he said. “I truly believe the recent collapse is cyclical, not structural.”

In the meantime, the M&A field for mid-market companies — those with between $5 million and $50 million of earnings before interest, taxes, debt and amortization (EBITDA) — continues to evolve, according to Ronald Kahn, a managing director with financial firm Lincoln International in Chicago.

“There’s quite a bit of capital available for middle-market companies,” Mr. Kahn said.

■ Frank Esposito is a senior staff reporter with Plastics News, a sister publication of Crain’s Cleveland Business.

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THEINSIDER

THEWEEK JULY 2 – 8 The big story: Bedford Laboratories issued a voluntary recall for three lots of a drug because some vials in the lots contained visible crystalline particles. The particles consist of active drug substance, not foreign material, and no adverse reactions have been reported. The three lots contain injectable leucovorin calcium, which usually is used to treat side effects of methotrexate chemotherapy treatments. A week earlier, Bedford Labs, a division of Ben Venue Laboratories, issued a recall for one lot of another drug, vecuronium bromide. Ben Venue last year shut all its manufacturing operations after regulators found dozens of quality control issues at its plant in Bedford.

Busy quarter: DDR Corp. said it completed $1.6 billion of acquisitions and dispositions during the second quarter of 2012. As previously announced, a joint venture formed by Blackstone’s flagship real estate fund and DDR acquired the EDT Retail Portfolio on June 20 for $1.4 billion. Also, on April 3, DDR acquired its joint venture partner’s 50% ownership interest in two shopping centers in Portland and Phoenix in a transaction valued at $140 million.

Debit or credit?:

Vendors at Cleveland’s West Side Market and other markets across the state are receiving some technological assistance. U.S. Sen. Sherrod Brown, DAvon, announced at the West Side Market a $161,358 federal grant aimed at helping those vendors accept credit, debit and EBT (electronic benefit transfer) cards at Brown their stands. The grant will be implemented by the Ohio Department of Job and Family Services. Vendors can apply directly to the department for grant money, up to $1,100.

Duly noted:

Forest City Enterprises Inc. closed its offering of $125 million of 7 3/8% senior notes due 2034. The Cleveland-based real estate giant granted underwriters a 30-day option to buy up to an additional $18.75 million principal amount of the notes to cover overallotments. Forest City received net proceeds from this offering of $115.9 million — and expects to receive $133.4 million if the underwriters’ option is exercised in full — after deducting estimated offering expenses and the underwriters’ discount.

Southern exposure: CBiz Inc. acquired the assets of Stoltz and Co., a regional insurance broker based in Midland, Texas. CBiz did not say what it paid for Stoltz, which has operations in Midland, San Antonio and Amarillo, Texas, and was founded by Mark A. Stoltz in 1990. CBiz said the acquisition of Stoltz and Co. will add 13 employees and is expected to add $3.2 million in annual revenue to the provider of accounting and business services.

He’s the boss: The Cleveland office of Glenmede, a Philadelphia-based investment and wealth management firm, has a new leader in Lawrence H. Hatch, who has been involved for years in Cleveland’s wealth management scene.

On July 2, Mr. Hatch, 53, became director of Glenmede’s Ohio office, which employs about 20 and manages assets totaling $2.5 billion.

This and that: The Maltz Family Foundation awarded $1 million to Montefiore to fund a 3,000-square-foot addition for its hospice and palliative care program at the nursing home’s Beachwood campus. … The Riverside Co. in Cleveland generated a return of $2.80 for each dollar invested by selling Global Claims Services of Jacksonville, Fla., to Windjammer Capital Investors. Global Claims provides assessment services to insurance companies.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

MetroHealth CEO search down to the elite eight ■ MetroHealth officials have remained largely mum regarding the search for the health system’s next CEO, but they’ve cut a list of 38 candidates to eight names.

The eight hopefuls are slated to meet with the search committee over the next two days, July 9 and 10, behind closed doors, said Thomas McDonald, a member of MetroHealth’s board of trustees and chairman of the search committee. Mr. McDonald anticipates the system will extend an offer to a candidate by Labor Day. “It may seem that we’re not doing anything, but under the water the paddles are moving,” Mr. McDonald said in late June.

MetroHealth plans to narrow the list of eight to a couple names, then release it to the public, said hospitals spokesman Jim Armstrong.

MetroHealth’s current CEO, Mark Moran, last December said he plans to step down from the health system’s top post once his successor is named. Mr. Moran joined the system on an interim basis in 2008 and planned to stay for two years at the most.

His successor likely will oversee the construction of a handful of new outpatient locations throughout the county as well as the transformation of MetroHealth’s aging, 38-acre campus on West 25th Street in Cleveland. MetroHealth officials estimate it could cost as much as $435 million over the next

five years just to maintain current facilities, much less provide for any expansion. — Timothy Magaw

lishing a national manufacturing technology initiative, which would research and develop advanced technologies. — Ginger Christ

His strategy? Appeal for a manufacturing strategy

Mind if we pull up a chair?

■ The key to getting the gears of U.S. industry going again is a national manufacturing strategy, according to Robert Atkinson, founder and president of the Information Technology and Innovation Foundation, a Washington, D.C.-based research and educational institute.

Mr. Atkinson, who served as the keynote speaker for the June 27 annual meeting of manufacturing assistance group WIRE-Net, said the government needs to devise a strategy to encourage manufacturing growth.

“We need the national government to step up,” Mr. Atkinson said. “If you’re going to win the global game, you really need to have a government that’s a partner.”

Such a strategy, he said, would enable U.S. companies to be more competitive with those in countries such as Germany, which have manufacturing policies in place.

“If we don’t have a strong manufacturing sector in the U.S., we’re not going to have a strong economy,” Mr. Atkinson said.

He suggested such a strategy involve making the U.S. tax code more competitive; combating foreign intellectual property theft and currency manipulation; and estab-

■ National Interstate Insurance Co. hopes its customers notice that it has adopted what it believes is a more collaborative, consultative approach to risk management.

The Richfield-based commercial transportation insurer has its people calling and meeting with clients to analyze those clients’ risks and to provide resources to address problems, said Terry Phillips, senior vice president. To that end, the company’s risk management department has doubled to eight people over the past year-and-a-half.

“We want to sit down with you and pull up a chair,” Mr. Phillips said.

Also, National Interstate’s subsidiary, Safety, Claims and Litigation Services, in May launched a new risk management website, through which most commercial customers can access more than 300 informational videos. These efforts should allow the insurer to deepen relationships, increase retention rates and improve results, he said.

“Everybody has videos, everybody has newsletters,” he said. “Where we think we differentiate ourselves is with the consultative approach, actually doing the analysis of where your losses are coming from.

“We really think this is a way to … make the insurance purchase or process more than just a financial transaction, to make it a way for people to improve their operations,” he added. —Michelle Park

MILESTONE

BEST OF THE BLOGS

THE COMPANY: CRU Solutions, Middleburg Heights

Excerpts from recent blog entries on CrainsCleveland.com.

THE OCCASION: The company’s 30th anniversary

Manufacturing, energy sectors give Ohio a boost

Jim Kerr, the sole owner and president of CRU Solutions, started the information technology services company in 1982 and has kept it in business for three decades by using a straightforward philosophy: building longterm client relationships “by recommending the right technology to meet their unique needs, designing and delivering the solutions, and keeping them running.”

Kerr CRU Solutions works with organizations of 10 to 100 computer users. Its client base is primarily small and midsize professional service firms, physician’s offices and manufacturers in Northeast Ohio.

The company’s managed services include remote network monitoring and management, IT consulting and IT support. As such, Mr. Kerr serves as something of a “virtual CIO” for the company’s clients.

They work with CRU Solutions because of the company’s team, according to a quote from Mr. Kerr on the company’s web site.

“Many IT providers use the same tools,” he said. “The primary difference between a good client experience and a bad one is the ability and attitude of the people using those tools.”

The nine-employee company has an 18-year relationship with Intel, currently as a Technology Provider Gold Partner. It’s also a Microsoft Silver Competency Partner and a Microsoft-Authorized Education Reseller.

For more information, visit www.cru solutions.com.

■ Ohio is on a growth trajectory even as the economy seems to be slowing elsewhere, according to the Bloomberg Economic Evaluation of States index.

The BEES index showed that 31 states’ economies grew during the first three months of 2012, down from 35 states that grew during the final three months of 2011.

Plus, “half the states advanced by 2 percent or less in the index during the first quarter, down from 4 percent during the prior three months,” according to Bloomberg.

Ohio was among the growing states. Bloomberg said states “involved in manufacturing and energy were among the top gainers,” which puts Ohio in the sweet spot.

As one economist in the story put it, “There is an increasing bifurcation of the American economy between areas of the country involved in the extraction of minerals, energy and agricultural development, with those that are highly dependent on construction and the service sector lagging behind.”

For the Rust Belt, it’s been a tough 32 years ■ You won’t find a more concise description of the long-term decline of the Rust Belt than one displayed in a chart from The Atlantic.com, which ranked the top 30 U.S. metro areas by real GDP in 1978 and in 2010.

The data came from the McKinsey Global Institute. In 1978, Cleveland was the 17th

most important U.S. city economically, with real GDP of $66 billion. By 2010, though, Cleveland had slipped to 27th on the list, even as its GDP rose to $98 billion. (A GDP rise of 48% over 32 years is not great.)

Cleveland wasn’t alone in its downward trajectory. Pittsburgh fell 11 spots, to 24th in 2010 from 13th in 1978. Detroit was down nine positions, to 15th from sixth. Cincinnati nearly fell off the list, dropping to 30th from 22nd.

This is not surprising, TheAtlantic.com noted.

“As the country’s economy eased away from manufacturing, which tends to be clustered in discrete regions, and towards services, which can be almost anywhere, people moved away from the old, frigid, and declining industrial centers towards states with cheap real estate and warm weather,” according to the story.

The only Midwestern city that has held up well is Chicago, which TheAtlantic.com said is the result of its status as one of the world’s leading financial centers.

He wasn’t just the guy from ‘The Untouchables’ ■ Cleveland history buffs might want to check out an auction set for Sept. 27 by Central Mass Auctions of Worcester, Mass.

The auction house said a “rare collection of credentials and memorabilia belonging to legendary crime fighter Eliot Ness has surfaced and will be offered for the first time” this fall.

The Ness collection, which has been appraised at $30,000 to $50,000, will be sold as an entirety. Among the rarities in the stash are campaign photographs and brochures from Mr. Ness’ unsuccessful 1947 run for mayor of Cleveland.

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