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IT collaboration sparks interest By CHUCK SODER csoder@crain.com
Scot Rourke long has dreamed of a day when governments all across Northeast Ohio would work together to become highly efficient digital machines. Only now are many area governments starting to embrace the idea. Driven largely by falling tax receipts and rising costs, a growing
NE Ohio governments warm to shared services amid mounting budget pressures number of cities and counties in the region are showing a willingness to share software, hardware and even staff members who know how to use the technology. The attitude shift is far from complete, said Mr. Rourke, who is president of OneCommunity.
However, his organization — a Cleveland-based nonprofit that offers high-speed Internet access and information technology services to area governments and nonprofits — might be able to persuade a few more communities to join the cause.
OneCommunity is offering to extend its super-fast fiber-optic network to the offices of cities and counties that put together proposals showing a serious commitment to sharing IT resources and putting them to good use. The nonprofit plans to use $15 million to connect 200 government sites and 600 other nonprofit institutions to its bigger fiber-optic network, which is undergoing a See IT Page 17
STEVE BENNETT
Country club surfaces in talks on AG expansion
JOBSOHIO BOSS MEANS BUSINESS
Crocker Park neighbor may be on firm’s radar By STAN BULLARD sbullard@crain.com
Mark Kvamme sees momentum building behind state’s economic development efforts
Crocker Park, the sprawling mixed-use center in Westlake, has shops, restaurants, offices and apartments on its 75-acre grounds. However, a deal announced in May to add American Greetings Corp.’s headquarters to the mix appears to be triggering a quest for land at adjacent Lakewood Country Club. A forest on the private country club’s northeast corner brushes against open land on the southwest edge of Crocker Park that American Greetings picked as the destination for its new home. Word of interest in the country club’s land came out during a June 18 meeting of Westlake’s planning commission. Residents of the Wyndgate Club condominiums, which abut Crocker
By JAY MILLER jmiller@crain.com
H
e’s only been in Ohio seven months setting up Gov. John Kasich’s JobsOhio, the nonprofit vehicle for the governor’s job creation push, but Mark Kvamme already is working on JobsOhio 2.0. The Silicon Valley entrepreneur said at a meet-and-greet swing through Northeast Ohio last Thursday, July 28, that he expects legislation to be introduced in the state Legislature in the next few weeks that will fill in the details of how the new nonprofit will work with the state Department of Development. While by giving the bill the “2.0” suffix he’s implying a new and improved version, Mr. Kvamme said businesses and the economic development community won’t see big changes in the way the state packages its incentives to businesses.
See CROCKER Page 6
ONLINE Sports chat goes live
31
Crain’s last Thursday launched the first of a periodic online chat feature, at which readers can comment on topics, from sports to news. Watch for the next edition on www.CrainsCleveland.com.
See KVAMME Page 6 MARC GOLUB
Mark Kvamme, who is leading Ohio’s economic development efforts at JobsOhio, says he is confident the nonprofit will help generate new business activity in the state.
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SPECIAL SECTION
REAL ESTATE Euclid Avenue has undergone a renaissance fueled by calculated redevelopment ■ Page 11 PLUS: CREATIVE OFFICE RENOVATIONS ■ PURCHASING POWER
Entire contents © 2011 by Crain Communications Inc. Vol. 32, No. 31
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CRAIN’S CLEVELAND BUSINESS
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WHAT A DIFFERENCE A YEAR MAKES
COMING NEXT WEEK
Ohio was one of 29 states to see unemployment rise in June, which offered further confirmation that the economic recovery — never all that hot — is faltering. The state’s jobless rate was 8.8%, up from 8.6% in May. Nonetheless, Ohio’s job market has improved markedly since June 2010, when unemployment was 10.1%. In the past year, Ohio’s nonfarm payroll employment has grown by a net of 72,400 positions to 5.095 million. Here are categories that have fared best:
Northeast Ohio HR pros are hitting the mark Crain’s identifies and profiles some of the top human resources professionals in Northeast Ohio. Read about 33 of them in our first Archer Awards section.
Job category
REGULAR FEATURES Best of the Blogs ..........19 Big Issue ........................8 Classified ....................18 Editorial ........................8 From the Publisher ........8
June 2011
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Going Places................10 Letters ..........................9 List: Largest law firms ..................14-16 Reporters’ Notebook ....19
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Jobs gained, June ’10-June ’11
Education and health services
33,200
Leisure and hospitality
25,170
Professional/business services
17,300
Durable goods manufacturing
10,400
Trade/transportation/utilities
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Construction
4,800
Other financial services
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SOURCE: OHIO DEPARTMENT OF JOB AND FAMILY SERVICES; JFS.OHIO.GOV
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CRAIN’S CLEVELAND BUSINESS
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Small banks see raising capital as rehab tool
AND A REGION REJOICED: BROWNS OPEN TRAINING CAMP
A FAST RETURN FOR FANS Early sales reports from Browns, secondary market show no ill effects from 132-day lockout
Facing higher regulator, investor expectations, locals get to work
By JOEL HAMMOND jmhammond@crain.com
By MICHELLE PARK mpark@crain.com
C
Those aiming to invest in a community bank need not look beyond Northeast Ohio to find willing takers. Liberty Bank in Beachwood is at the tail end of a $5 million capital-raising effort, and Middlefield Banc Corp. is in the process of raising $25 million in capital. Central Federal Corp. of Fairlawn also has signaled that it’s after more capital, though details of its plans are scant. Attempts by community RAISE UP! banks to raise more capital More banks — are occurring with greater including several area frequency nationwide, incommunity institutions dustry insiders say. — are raising capital to “What you’re seeing is the appease regulators and tip of the arrow,” said Jeff investors. Quayle, senior vice presiExamples: dent and general counsel for ■ Liberty Bank: Comthe Ohio Bankers League. pleting a $5 million round “You’re seeing the start of ■ Middlefield Banc what I expect to be a threeCorp.: In the process of to five-year trend.” raising $25 million The current capital■ Central Federal raising activity is more than Corp.: Undisclosed what occurs in a typical amount year, said Charlie Crowley, who helps banks raise capital as managing director of Paragon Capital Group LLC in Mayfield Heights. From 2000 to 2008, there was far less activity, Mr. Crowley said, because the industry for the most part was profitable and banks were accumulating capital through retained earnings. “In many cases, they were worried about becoming overcapitalized, which sounds strange these days,” Mr. Crowley said. Today, after a wrenching period of losses, regulators
leveland Browns players and staff members weren’t the only ones in a holding pattern during the recently ended lockout imposed in March by NFL owners. Fans, too, sat on the sidelines, with uncertainty over the start of the season and wariness to make an investment in tickets prevailing. But like enthusiastic players who returned to Berea last week for training camp, fans quickly are flocking back. Various reports from the secondary ticket market show little apparent fallout from the league’s 132-day work stoppage. To wit: ■ According to Joellen Ferrer, a spokeswoman for San Francisco-based StubHub, NFL sales last Monday, July 25 — when NFL players agreed to a deal with the owners — were double the normal daily average, in terms of volume and total gross sales. ■ TiqIQ, an online aggregator of many webbased secondary sources, said ticket prices were up 22.7%, to $186.62, for the 2011 season. ■ And Ticketmaster reported sales on its secondary marketplace, NFL Ticket Exchange, rose 332% last Monday over the previous day and were up 294% over the week prior. It’s happening in Cleveland, too, and in a big way. SeatGeek, a local aggregator in the mold of TiqIQ, said 12% more tickets were sold in three days last week than the entire three-month period after the NFL released its schedule on April 19. In other words, what lockout? It’s a marked change from business activity before a new collective bargaining agreement was reached. See TICKETS Page 10
ZUMA WORLDWIDE PHOTOS
Welcome sight: Browns tight end Evan Moore catches a pass over cornerback Joe Haden during training camp last August. After the lockout imposed by NFL owners was lifted last Monday, the Browns were scheduled to begin training camp yesterday in Berea. Moore said last week he’d re-sign with the Browns; Haden, last year’s No. 7 overall draft pick, excelled as a rookie.
See CAPITAL Page 17
THE WEEK IN QUOTES
INSIGHT
“We want to preserve our history and heritage, but prepare our campus for the future.”
Local outfit racing to first mobile wallet
— Donna Thomas, a BaldwinWallace College trustee and chair of the board’s building and grounds committee. Page 7
“We’re a part of Akron, and (The World Golf Championships-Bridgestone Invitational) is a part of Akron. We feel we need to have a presence there.” — FirstEnergy Corp. spokesman Todd Schneider. Page 9
“It has changed the “When you have a perception and reality small landlord like of the street.” me, you can’t compete — David Browning, managing with the big guys. director of CB Richard Ellis’s This gives us the Cleveland office, regarding Euclid Avenue updates. Page 11 benefit of buying in bulk.” — Jerome Schmelzer, owner of 120 suites on Lake Avenue and at the Pointe at Gateway. Page 12
SparkBase says Paycloud system offers advantage over Google, others By CHUCK SODER csoder@crain.com
The thing the big-name companies don’t have, Mr. Hardman said, is SparkIf SparkBase Inc. is to Base’s network: More win the super-competitive than 120 independent serrace to turn the world’s vice organizations (ISOs) smart phones into walalready resell the compalets, it will need an army. ny’s existing processing Fortunately, it has one. Hardman services to retailers, who The Cleveland company will need to install new in September plans to start rolling technology before they start taking out a new product designed to mobile payments. allow smart phones to replace gift Those organizations, who work cards, loyalty cards and — eventuthrough 22,000 individual agents, ally — credit and debit cards. can’t wait to get their hands on Douglas Hardman, CEO of the Paycloud, Mr. Hardman said. gift and loyalty card processing “Our ISOs have been clamoring firm, argues that the Paycloud to sell this for a long time,” he said. system will be less expensive and SparkBase was scheduled to easier to deploy than competing start a three-week pilot program systems under development by involving several Chicago mercompanies such as Google and a chants on July 30, and it plans to consortium set up by AT&T, Verizon begin a national rollout with a and T-Mobile USA. launch in Hudson before the end
of September, Mr. Hardman said. A SparkBase “street team” will patrol the city’s First and Main retail district telling shoppers with iPhones or Androids to download the Paycloud software. Those who do sign up could use their phones to find and sign up for loyalty programs from participating merchants, including several in the First and Main area. They then could make purchases, receive discounts and put money on electronic gift cards by holding their phones in front of sensors connected to standard credit card processors. SparkBase aims to have Paycloud sensors installed in several cities before year’s end, Mr. Hardman said. Though merchants at first only will be able to accept loyalty and gift card-style transactions See NETWORK Page 7
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CRAIN’S CLEVELAND BUSINESS
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AUGUST 1 - 7, 2011
Small companies could benefit from InvestOhio; some wary of effectiveness By MICHELLE PARK mpark@crain.com
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Rick Brindisi speaks from experience when he says there’s a need to incentivize business investment. The president of SmartShopper Electronics LLC in Valley View thought his search for a $2 million investment would have netted the money in six months. It’s been 10, and he’s empty-handed. “It was a little surprising,” Mr. Brindisi said. “We’ve talked to firms in Cleveland, we’ve talked to firms across the country and pretty much heard the same story: ‘Too small. Too small.’” So Mr. Brindisi is among those who applaud the state’s new InvestOhio credit, aimed at encouraging small business investments up to $10 million. “This is hopefully filling that niche that there’s definitely a need for,” he said. “I think it’s definitely a step in the right direction.” While those in business agree there’s a need for encouraging small business investment, particularly in these economic times, some are doubtful the tax credit alone will prompt investment. Approved in the state budget and officially law as of Oct. 1, InvestOhio affords investors a 10% Ohio tax credit if they invest up to $10 million in small business and hold the investment for at least two years. (On July 1, 2013, the required hold period becomes five years.)
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MORE ABOUT INVESTOHIO The state’s new InvestOhio credit is aimed at encouraging small business investments. The program affords investors a 10% Ohio tax credit if they invest up to $10 million in small business and hold the investment for at least two years.
ploy the investment within six months for one or more delineated purposes, including real property, intangible personal property — such as patents and copyrights — and compensation for new employees for whom the enterprise is withholding income tax.
■ Who’s eligible: Eligible investors are individuals, estates or trusts subject to tax, or pass-through entities. They must invest in companies that have more than 50% of their fulltime-equivalent employees in Ohio or have 50 employees in Ohio. Enterprises also must have sales of $10 million or less and/or assets of $50 million or less.
■ When: Any investments made on or after July 1, 2011, are applicable. Tax credits are applied after a two-year holding period, though the holding period increases to five years on July 1, 2013.
■ What: Qualifying investors can invest up to $10 million every biennium. Recipient businesses must dehere. Mark D. Kvamme, the interim chief investment officer for JobsOhio who worked to develop the credit, says there’s potential for InvestOhio to create some 30,000 jobs. That could mean it generates as much in taxes as the tax credit waives, he noted. While Ron Cohen, partner emeritus of Cleveland CPA firm Cohen & Co., “admires and respects” the effort, he’s among those who doubt InvestOhio actually will generate investment. “My problem with this is virtually nobody is going to invest in a company because they will get a 10% credit for their investment,” after a two-year wait, said Mr. Cohen, who has consulted with local companies for more than a decade. “Ten percent is not a big incentive to do anything.” Mr. Cohen also believes the credit will be an “administrative nightmare,” particularly because there’s a requirement that the investment recipients deploy an amount equal to the investment in six months’ time. That, he anticipates, means dollars will need to be tracked. Mr. Cohen would rather see the state focus its attention on incentivizing bank financing. “I think the real problem companies are having today is not new investment; it’s access to capital through traditional sources,” he said. “For growing businesses, startup businesses, they can’t get money unless they’re just immensely profitable and can prove themselves to the banks. (Banks) are not making loans that are not slam dunks.”
Out of the box But Mr. Kvamme calls the InvestOhio credit a “significant credit.” He’s unaware of a larger one offered by the state. Lynn-Ann Gries, chief investment officer for JumpStart Inc., agrees, noting the credit could total up to
■ Dollar signs: The state has set aside $100 million for the program. ■ Quotable: “The more out-of-thebox styles of incentives that our state can have, the more our state can differentiate itself.” — David Sobochan, principal with Cohen & Co. $1 million for someone investing $10 million. But Ms. Gries sees a need for clarifying certain guidelines, such as defining what constitutes an Ohio employee, and she worries that it’s not realistic to require any business to deploy $10 million in six months. JumpStart, which assists and invests in startups in Northeast Ohio, is a nonprofit, which means it won’t benefit from the tax credit. “It’s another arrow in the quiver for the state to help companies attract investment,” Ms. Gries said. “I think the incentives are needed. I don’t think that the economy, at least in this geography, has recovered enough so that money is freely flowing.” Some in the investment world also noted that the required hold period offers no immediate benefit to investors. Only after the required hold period is the tax credit applied. But, Mr. Kvamme said, “We wanted to make sure that this was a true investment, not people trying to game the system.” There is potential for the InvestOhio tax credit to make investing in Ohio more attractive than in other states, said David Sobochan, principal with Cohen & Co. “The more out-of-the-box styles of incentives that our state can have, the more our state can differentiate itself,” he said. It’s tough to tell right away what impact InvestOhio will have, said Adam J. Conrad, vice president of Rockwood Equity Partners, a Beachwood private equity firm actively seeking to make additional investments. His firm, he noted, will want to better understand the specifics. “I think it certainly helps,” Mr. Conrad said. “While we invest across the nation, something like this could increase our interest in investing in Ohio versus other states.” ■
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Survey of Medina businesses shows widespread expansion Economic development officials in Portage, Geauga counties note uptick in investments By JAY MILLER jmiller@crain.com
Businesses not growing, not investing? Not in Medina County. A recently completed survey by the Medina County Economic Development Corp. indicates that 72% of the 85 businesses surveyed this spring are expanding in one way or another. Those projects will add 430 jobs this year — a 14% increase at the companies reporting — in a county that already has low unemployment. Medina County’s unemployment in June was 7.0%, according to state data. Statewide unemployment was 9.2%. Less comprehensive surveys in two of the other smaller counties in the region — Geauga and Portage — suggest that business is improving there, too. Those two counties and Medina County each have fewer than 100,000 workers.
Of the 61 Medina County businesses that either have expanded or have expansion plans, 32 were far enough along to put a dollar figure on their plans. Those firms told the county’s nonprofit economic development group that they will spend $32 million in 2011, either adding new space or adding new equipment. Manufacturers, health care tech companies and durable goods producers account for 41% of the growth, but Bethany Dentler, the organization’s executive director, said some of the expansion is by retailers and providers of professional services. “We’re seeing continual activity even through the recession,� Ms. Dentler said. “(Companies) are having great years; they’re having record years, so we’re seeing very definite signs of optimism.� In 2010, 51 companies also reported expansion plans. That was up from
Local small manufacturers report growing confidence By DAN SHINGLER dshingler@crain.com
Economists in New York can give you a national view of the economy, the Federal Reserve Bank in Cleveland takes the pulse of a region and groups like the Precision Metalforming Association in Independence track the strength of their industries. But you might not get a better perspective on pure local manufacturing than the one offered by the Cleveland Industrial Distributors Association. And the group of 30 local companies is pretty upbeat when it comes to the business volumes they expect to see out of the area’s manufacturers. The companies aren’t large; they typically have just more than 20 employees, and most have annual sales of less than $10 million. But as a group, they sell almost $250 million worth of products to area manufacturers each year and employ nearly 500 people. And they say they are a pretty good barometer of the local manufacturing economy. “Right now, I think our people are pretty confident,� said Michael Resch, president of Automated Valve & Equipment Co. in Cleveland and the group’s president. “We’re seeing a rebound in manufacturing here, and our people are confident that their customers need them and rely on them.� Members of the group sell equipment, raw materials, tools, controls, parts and supplies to a variety of industries, Mr. Resch said. As a result, they have a good handle on whether manufacturing is picking up or slowing down. When Mr. Resch surveyed Cleveland Industrial Distributors Association’s members in June, they were fairly upbeat about both their current sales and future prospects. For instance, when asked about their “overall confidence in the economic prosperity of your clients and customers,� 14 members reported they were “moderately� confident and
four said they were “veryâ€? confident. No one ventured into the realms of “not veryâ€? or “highlyâ€? confident. As for their own recent sales, only one of 18 respondents said revenues this year were below expectations, while eight said sales had exceeded their expectations and nine said they were coming in as expected. Trevor Stohr, vice president of Conveyor & Caster/Equipment for Industry in Cleveland, was one respondent who reported strong sales this year. He said his company sells casters that other manufacturers put on their own products, as well as conveyor systems and other factory automation equipment. “The big dollar projects, like big warehouse expansions, big in-plant expansions and conveyor systems, in 2010 (customers) really clamped down and companies weren’t putting $100,000 into their warehouses or manufacturing plants,â€? he said. “Now, they’ve released a lot of those projects and they’re moving forward.â€? As a result, Conveyor & Caster was one of 11 respondents reporting they will expand in the next one to three years. It already has been hiring and is up to 34 employees, Mr. Stohr said. “We let go three people in 2009 and 2010,â€? he said. “Since then, though, we’ve hired five new people.â€? Mr. Resch said he’s not surprised most of his members plan to expand, if not in the next three years, at least in the next five. Indeed, he said he was more surprised to see five members who say they won’t. “As a business person, I know I have to grow my business,â€? Mr. Resch said. Most of the group’s members are growing. That heartens people like Gary Davis, president of Aetna Plastics Corp. in Cleveland, as well as a past president of the group and a current member. “I was glad to see it,â€? Mr. Davis said of his fellow members’ optimism. “Our business mirrors the manufacturing economy.â€? â–
34 in 2009.
‘Things ‌ are looking up’ Portage County also is seeing expansion. Diana Fierle, executive assistant at the Portage Development Board, wrote in an email that “we have a ways to go, but things definitely are looking up for Portage County.â€? The development board is a new nonprofit. It contracted in January with the Portage County commissioners to take over economic development work for the county. It is in the process of hiring a new president. The development board’s investment summary has five projects on its board for 2011 so far, projecting $34.8 million in new investment and 306 jobs. Statistically, that’s small potatoes compared with 2010. But last year’s $92.4 million in new investment and 305 jobs included two unusual boosts — a $42 million expansion of the Northeast Ohio Medical University campus in Rootstown and a $47.4 million growth spurt by Automated Packaging Systems Inc. in Streetsboro. For the three years from 2007 to 2009, the development board’s predecessor booked six new expansions totaling $31.9 million. Ms. Fieri said six more expansion
deals, which she wouldn’t discuss further, are in the works.
Upbeat in Geauga, too In Geauga County, the Geauga Growth Partnership also found reason for optimism. The young organization — which was founded last September — only recently completed a survey of its small membership. “In a survey we did back in the late spring, about one-third of our members plan some sort of major capital investment or meaningful expansion and about two-thirds are going to hire somebody over the course of the next six months,� said Frank Samuel, the organization’s president. “That was still positive on the whole; I didn’t expect twothirds to be hiring.� Twenty-seven of the organization’s 40 members participated in the survey, Mr. Samuel said. The Geauga Growth Partnership, which received startup money from the Lake-Geauga Fund of the Cleveland Foundation, is helping businesses link up with government and private programs to fund their growth.
In need of the right people The growth Medina County is
seeing is slowed by a dearth of qualified workers, according to the survey by its economic development corporation. Thirty-one of 78 Medina County companies that responded to questions about their work forces said they had difficulty recruiting for some particular positions, an increase over the 23 that had work force problems in the 2010 survey. “There are specific skills that are difficult to find and I think, talking with my development colleagues, it’s probably true throughout the region,â€? Ms. Dentler said. “Certain skilled production labors is a problem, such as welders, machinists, maintenance workers and tool and die makers.â€? Ms. Dentler said part of the problem is that younger people aren’t learning the trades to replace retiring, older workers. So the county has begun a training program to fill that pipeline. One thing surveyors didn’t hear was grumbling about raising capital, Ms. Dentler said. “A lot of the companies have conserved over the recession and they’re doing a lot of self-financing,â€? she said. “Interestingly enough, this year over previous years I didn’t hear complaints about lack of capital from the banks.â€? â–
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Crocker: Country club borders center continued from PAGE 1
Park on Crocker Road, turned out at the planning commission meeting to inquire about a rumored deal to add land at Lakewood Country Club to Crocker Park. The residents vociferously complained about the prospect of six- and seven-story office buildings near their condos, while other parts of Crocker Park are no more than five stories high. Steve Rubin, chief operating officer of Stark Enterprises Inc., which co-developed Crocker Park with members of the Carney family, told the planning commission that there were negotiations under way with the golf course. However, Mr. Rubin said the land talks had nothing to do with plans the city is considering for Crocker Park’s third phase, which would include American Greetings’ headquarters. In a phone interview with Crain’s last Thursday, July 28, Mr. Rubin said the developer is not negotiating with the country club, but that American Greetings is doing so. Mr. Rubin declined to comment on those talks or why the card maker would pursue ground outside Crocker Park. However, Mr. Rubin said Crocker Park has adequate land to satisfy city requirements for
American Greetings’ new headquarters, stores on the first floors of the company’s proposed buildings, added apartments and required parking garages. Nancy Lesic, a spokeswoman for American Greetings in its site search, said she would ask the card maker if it is in talks with the country club. She did not provide a response by 2 p.m. last Thursday. American Greetings spokeswoman Patrice Sadd did not return a call by 2 p.m. last Thursday. Robert Parry, Westlake planning director, said Crocker Park executives often have referred to expanding on part of the country club’s property if the need arose. He said it is his understanding talks are between American Greetings and the club, but the city has received nothing formal concerning club land. A veteran real estate negotiator is at the country club’s helm to pursue its interests, whether it is negotiating with the global corporation or developer Robert L. Stark’s forces. Albert Adams, a partner at the Baker Hostetler law firm, is president of Lakewood Country Club, which dates to 1921 and has a street address of 2163 Bradley Road. Mr. Adams said in a phone interview
that it is premature to comment. He would not answer when asked whether a transaction might incorporate part, most or all of the club’s 100-plus acres, which back up to Crocker Park. Building on golf course land isn’t unusual these days. Oakwood Country Club in Cleveland Heights and South Euclid currently is undergoing redevelopment as a big-box shopping center on its South Euclid side. However, members of Lakewood Country Club may be able to sell a piece of the property yet keep most of it in service for duffers, tennis players, swimmers and their families. Cuyahoga County land records show Lakewood Country Club owns a vacant, 10-acre parcel abutting Crocker Park and Wyndgate; that land is held under a separate parcel number from another eight parcels that hold the rest of the club’s land and a picture-postcard white clubhouse overlooking a pond. Westlake was anointed as the new home for American Greetings and its 2,000 employees here after the company conducted a search for a new headquarters that included suburban Chicago as well as multiple locations in Northeast Ohio. ■
AUGUST 1 - 7, 2011
Kvamme: Jobs czar hopes to elevate state’s attractiveness continued from PAGE 1
“Pretty much it’s going to stay the same for next biennium,” he said during an interview at LineStream Technologies, a startup developing energy-saving manufacturing controls technology. “But things will change after that.” Mr. Kvamme is a venture capitalist wooed to Ohio by Gov. Kasich, who he met a decade ago. He will be the $1-a-year head of JobsOhio. The nonprofit is Gov. Kasich’s idea, a way to accelerate job creation by moving economic development out of the state’s sometimes slow-moving bureaucracy into the more flexible, more nimble private sector. Mr. Kvamme said most of the existing package of incentive programs will remain in place. “We cannot upset the apple cart right now,” he said. “We have some things that are working, and we can’t drop the ball.” But he believes the state must dramatically change the business climate in Ohio so it eventually can attract businesses even without financial incentives. “Name a company that’s been a huge success that was started (in Ohio) in the last 10 years, 15 years,” he said. “We don’t have that here.” Then he rattled off the names of some of the home-run businesses of recent years that cropped up elsewhere, including online successes Facebook, LinkedIn and Groupon, an online coupon service. “Chicago has Groupon, that’s 7,000 new employees,” he said. He nonetheless offered some words of encouragement for his new colleagues in Columbus who are trying to figure out where they stand in this new regime. “I’ve met some very accomplished people (in state government) who have their hearts in the right places,” Mr. Kvamme said.
Take-action kind of guy His visit to LineStream was in many ways a demonstration of the way Mr. Kvamme envisions JobsOhio helping new businesses. After listening to president David Neundorfer, marketing vice president Matt Zilli and Jonathan Murray, managing partner of Early Stage Partners, a LineStream investor, Mr. Kvamme started asking questions about the technology and potential clients. He then started suggesting people he knows in the venture capital community to whom Mr. Neundorfer and Mr. Zilli should be talking. “When did you have your (first) pilot (running)? … When did you sign the agreement? … Six months after the demonstrable pilot is unbelievable,” Mr. Kvamme kept poking and probing. “You should contact Chris at … I’ll do a shameless plug for you.” While he wasn’t ready to unveil JobsOhio 2.0, he has settled on the broad mission of the nonprofit. “I really want to focus on companies that are going to move the needle and hire tons of people,” he said. Mr. Kvamme said he wants the organization to have specialists who think like venture capitalists, who offer knowledge and insight beyond whatever dollars they might bring.
They will know the key industries in the state and can connect young companies to the right financial and technology partners. “All a VC does is three things, and this is what we want to do at JobsOhio,” he said. “First, helping them find people. (Second), connecting them with people in the state with different capabilities and then, three, for lack of a better term, figuring out how we can give them an advantage in the state of Ohio that they couldn’t get anywhere else.” He said JobsOhio will evaluate itself and the deals it makes on three metrics: net new jobs, net new capital investment and net return on investment for the state. It’s that last measurement — return on investment — that Mr. Kvamme described as calculating the potential growth in taxes a business might generate if it reaches its potential and then subtracting the cost of the tax credit or other incentive. “No. 1 is jobs. But the more jobs there are the more taxes” are generated, he said. He said his goal, which he believes he can demonstrate can happen soon, will be to attract companies to Ohio without financial incentives and solely because of the business climate in the state.
Making it work As for existing programs, Mr. Kvamme won’t be changing much right away. “Many of the programs are working,” he said, citing the Third Frontier and other programs that have been investing in research and development. “Those seeds were planted in the late 1990s, early 2000s, and we’re starting to see many of those companies really prosper. “The only frustration is that sometimes decisions are made for political reasons and not because it’s the right decision,” he said. “We saw a company today that’s been here 10 years and they’re starting to hit escape velocity. That’s exciting.” Mr. Kvamme also answered some big questions on the minds of economic development professionals, such as, how will they bring their deals to the state, and who do they call to get answers? Mr. Kvamme said the Columbus office of JobsOhio will be small, no more than 50 people. As a result, most of those questions will be answered by the network of regional offices that the state is currently building. In Northeast Ohio, that regional office will be housed with Team NEO, the regional nonprofit that works to attract new businesses. Those offices, he said, likely will be able to give companies and local mayors and economic development officials the green light on deals up to an as-yet undetermined threshold. In many cases, a state board may still need to give final approval. “There will be issues and potholes along the way, absolutely, but we’ll work through it,” he said. And he offered LineStream’s Mr. Neundorfer and Mr. Zilli a last bit of advice: “You’re hitting the long ball. Don’t sell the company until it’s worth a billion dollars.” ■
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Retiring B-W president has robust agenda for final year Richard Durst launches multi-pronged campus improvement project By TIMOTHY MAGAW tmagaw@crain.com
Facing his last year as president of Baldwin-Wallace College in Berea, Richard Durst has no plans to ease into retirement quietly. Instead, he’ll kick off a big campus investment project that could cost as much as $78 million over the next 10 years. “Unfortunately, this is not just a year where I can put my feet up,” said Mr. Durst, who announced in March that the 2011-2012 school year would be his last at the college. “My job is to get this plan under way.” The new master plan calls for a $32 million upgrade to the school’s aging student union; a new, $3.5 million welcome center; 200,000 square feet of new green space; additional academic buildings and
expanded parking options. A large portion of the green space will be between the college’s recreation center and student union — the current site of the old Loomis Elementary School, which B-W bought in 1985; it now houses mathematics and computer sciences programs. Part of the plan includes closing two nearby roads, Jacobs and East Grand streets, to make way for the space. Slated to begin construction in October, the first component of the master plan is a 10,000-square-foot welcome center to house the school’s admissions staff. The building, which trustees are naming after Mr. Durst and his wife, Karen, will be located in the heart of campus off Tressel Street and serve as the entry point for prospective students. “We are going to take a 200-plusyear-old school and embrace the next generation of students and what they’re learning. … We want to preserve our history and heritage, but prepare our campus for the future,” said Donna Thomas, a
“We are going to take a 200-plus-year-old school and embrace the next generation of students and what they’re learning. We want to ... prepare our campus for the future.” – Donna Thomas, trustee, Baldwin-Wallace College B-W trustee and chair of the board’s building and grounds committee. Mr. Durst said the plan also will serve as a guide for discussions with donors, who ponied up more than $97 million during a recently closed fundraising campaign that financed other major construction projects. For one, a $20 million upgrade of the college’s conservatory of music — which doubled the size of the facility and added space for classrooms, practice rooms and rehearsal space — is scheduled to be completed in August. Other construction projects included a 90,000-square-foot project to enhance the college’s sciences facilities and a 27,000-square-foot building to house the Center for Innovation and Growth, which
focuses on entrepreneurship opportunities for students.
Counting the cost Aside from the welcome center, Mr. Durst said the order in which the projects are completed depends largely on which ones donors choose to back financially. However, he was quick to add that while the price tag of the plan is considerable, it’s well within B-W’s means. Regarding the cost of the plan, Ms. Thomas noted that B-W trustees “didn’t want to set the bar so high we couldn’t pay for it and couldn’t raise funds for it. “Every time it got to somewhat of a Disney World-like campus, President Durst reined everybody in, and said ‘That’s beautiful, but how
Network: System makes retailers’ marketing easier continued from PAGE 3
through the system, Paycloud should be able to process credit and debit card payments soon, he said. Doing so would require SparkBase to form partnerships with companies such as Visa and MasterCard, which it is working on. “We want to have this be the industry play for mobile wallets,” Mr. Hardman said.
Outgrowing the home base SparkBase raised $725,000 in equity financing to fund the launch of Paycloud while raising another $2.2 million to ramp up its existing loyalty and gift card processing business, Mr. Hardman said. The company raised the money from North Coast Angel Fund of Mayfield Heights; Ohio TechAngels of Columbus; Blue Olive Partners LLC, which is a group of four individuals based in Northeast Ohio; and more than 40 other individuals. Revenue from the company’s existing business has grown five-fold over the past year, thanks in part to the investment, Mr. Hardman said. He would not disclose SparkBase’s revenue. The investments and the growth have helped the company expand its staff to 32 people today from eight in November, he said, noting that only a few SparkBase employees are focused on Paycloud. SparkBase plans to hire more than 12 additional employees over the next three to six months, he added. The expansion has forced SparkBase, which is based in Tyler Village in Cleveland’s Midtown neighborhood, to rent space from nearby interactive marketing firm DigiKnow Inc., even though SparkBase doubled the size of its office to 7,500 square feet over the past year, Mr. Hardman said. The company plans to expand its footprint soon, likely within the Tyler Village complex. “The paint wasn’t dry and already we were out of space,” he said. Though Mr. Hardman’s original
goal when he started looking for investments was just to expand SparkBase’s existing business, investors were quick to jump in when he requested more money for Paycloud, he said. The system will give merchants an easy way to market themselves to people who may be unfamiliar with them, while also helping the stores send deals to existing customers, Mr. Hardman said. Plus, the only hardware a merchant needs to install is a sensor, which will cost them $50 if resellers follow SparkBase’s suggested price, he said. By comparison, the technology that Google and the consortium of wireless carriers plan to use requires that both the phones and the credit card terminals be equipped with special chips.
With a name like Zoosh … Those advantages are a few rea-
sons why Merrell Sheehan is excited about Paycloud. Mr. Sheehan, vice president of product development for Electronic Merchant Systems, one of the companies that resells SparkBase’s services, said the Independence-based firm will encourage its agents to feature Paycloud prominently. SparkBase will charge resellers a few dollars per month for each merchant that uses Paycloud. Mr. Sheehan, too, expects Paycloud to be cheaper than competing systems. Companies would need to spend roughly $500 to upgrade an existing terminal or buy a new one designed to work with the near-field communication technology that competitors employ. SparkBase will use a version of that technology called Zoosh, which communicates through sound waves. “A lot of the other solutions … require a complete upgrade at the
Ursuline Announces New Executive MBA Program! u r su li n e’s n e w e x ecu t i v e m ba in Entrepreneurial and Ethical Leadership is an elite, one-year program in which students meet once every other Saturday for a total of 24 class sessions throughout the year. Students enrolled in the program receive an iPad furnished with e-books as well as a one-week study abroad trip to China. Ursuline’s accelerated MBA program is also offered in a one-year format through evening courses that meet once a week for five weeks and some that are entirely online. Learn more about these options at Ursuline’s Not a Number Night on August 11, 5:30 – 8:30 PM at the College’s Mullen Academic Building. RSVP at 440 646 8119 or ursuline.edu.
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point of sale,” Mr. Sheehan said. The Electronic Transactions Association likes Paycloud, too. The Washington, D.C.-based trade group in May awarded SparkBase its 2011 Technology Innovation Award. Judges
do we pay for it?’” Ms. Thomas said. The Collaborative Inc., a Toledobased architecture and capital planning firm, worked with B-W on the master plan. Philip Enderle, a campus planner and landscape architect at the firm, agreed the plan was feasible. “We have done more ambitious master plans, but I think for B-W, this is where they want to be,” Mr. Enderle said. “It’s a plan that fits their ambitions of who they want to be and fits who they are.” Although the plan was developed on Mr. Durst’s watch, Ms. Thomas said trustees aren’t overly concerned the college’s next president would abandon the plan. However, she said it might be difficult for a new president to join in the midst of a significant campus overhaul. “It may offer a bit of a challenge for a new president, but it’s a very attractive time for a new president,” she said. “The college has a strong financial history. We are solid in that regard, and we have a plan that’s been developed and embraced by the community.” ■
picked Paycloud over a handful of other technologies for its creative use of cloud computing, its security and, most of all, its ability to generate revenue for the resellers that belong to the association, said Thomas Goldsmith, communications director for the group. “This is something that our guys can sell,” Mr. Goldsmith said. ■
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PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Aye, captain
W
illiam Friedman, the man who has captained the ship for the last year at the Cleveland-Cuyahoga County Port Authority, has set on a proper course a maritime agency that was in danger of running itself aground as it chased the overly ambitious plans of his predecessor. It now remains to be seen whether Mr. Friedman can deliver the key elements of the Port Authority’s latest strategic plan. The plan Mr. Friedman will shepherd is based on a simple premise: The Port of Cleveland has the capacity to handle far more cargo than it does at present, and it’s up to port officials to bring more tonnage over its docks. It’s a common-sense plan that is the polar opposite of the fantasy spun by Adam Wasserman, who was the Port Authority’s CEO for three years. Mr. Wasserman spoke of turning the Port of Cleveland into a megaport that would serve as an alternative to busy East Coast seaports. All it would take is 20 years and a half-billion dollars to make it happen. The Port Authority board bought what Mr. Wasserman was selling, at least long enough for the boss to assemble a staff to pursue his vision. However, the enormity of the financial commitment required for a new, bigger port eventually caused various board members to mutiny against Mr. Wasserman, who abruptly resigned in late 2009. In contrast to the empire-building Mr. Wasserman, the pragmatic Mr. Friedman recognizes that money is a precious commodity at the port. The agency’s maritime business, he recently told Crain’s editorial board, “is not on a sustainable path right now.” He’d like to see its docks pay their own way, so that money from the Cuyahoga County tax levy dedicated to the Port Authority wouldn’t be siphoned off for operating funds. Instead, those dollars could help support a long-term bond issue, the proceeds of which could be used for investments such as upgrading the port’s cargo handling equipment and restoring bulkheads along the Cuyahoga River to maintain that waterway as a navigable channel for cargo ships. Port officials realize that serving as a guardian of the Cuyahoga would boost the agency’s relevance, which could help convince taxpayers to continue to support the port when its levy comes up for renewal next year. But we also agree with Mr. Friedman when he talks about the strong link between the environmental health of the river and its economic health, and how “it’s the right thing in terms of public policy” for his agency to keep watch over both. The challenge for Mr. Friedman and staff in executing their strategic plan will be to win more business for the port. If they fail, it won’t be for a lack of trying. They’re busy spreading the word to shippers that the port isn’t going anywhere and is eager for their business. They’re exploring the potential for a new container cargo route that would bring goods chiefly shipped from northern Europe to Cleveland via Montreal. And they’re talking up a cargo ferry service that would shuttle from a Canadian port on Lake Erie to Cleveland. We give a hearty “aye” to Capt. Friedman’s efforts.
FROM THE PUBLISHER
Point of view? Here’s ours on Page 1
W
reporter started with a “point of view,” I e apparently touched a few can only say that’s exactly how every story nerves with our July 11, Page in every publication begins. Reporters One piece on the Historic notice trends, or changes, that deserve Warehouse District, judging notice. Our reporters discuss their ideas by the letters we’ve received. with the editors, then begin the factLast week’s letter from Downtown gathering process. Sometimes that Cleveland Alliance boss Joe Marinucci process leads them to a different story; might have been the most thoughtful, sometimes it doesn’t. It’s then citing the big differences between the responsibility of the editors the Flats of the 1980s and the BRIAN to make sure the story is fair, Warehouse District of today. TUCKER balanced and accurate, and this And there are many, to be sure, story was just that. starting with the fact that the As to the story taking the Warehouse District — where entire front page, that’s simply Crain’s offices have been for the decision of the editors who more than two decades — has a compare it to all other stories healthy mix of offices, housing, done for that week’s issue. And restaurants and nightclubs. about the headline — well, I But I need to answer directly can only say that some people some of the criticisms raised by might have thought it was more positive the letter writers. than negative. Shootings and late-night First, we didn’t design the cover to sell fights gave all of us vested in the neighmore newspapers. Our success centers borhood reason for concern. on annual subscriptions, paid by those The DCA, Mayor Jackson, Councilman who want our business news and analysis Joe Cimperman, the police and local on a weekly basis; our newsstand sales business owners have responded fabuare modest. lously, and Crain’s has no qualms about Next, to the writer who said our
staying right where we are at the corner of West Sixth and St. Clair. After all, when we moved our offices here, we were across from a porn shop on one corner and a homeless shelter on another. We believed in this neighborhood then, just as we do now. I don’t think anyone can answer as yet how the district and the other downtown entertainment spots will be affected by the new casino and convention center/ medical mart projects. What I do know, though, is that downtown Cleveland finally has a critical mass of restaurants and nightclubs catering to a broad scale of visitors, and it’s poised for redevelopment that could be far broader than the construction boom of the 90s when we built the new baseball, football and basketball facilities, the rock hall and the science center. Yes, I see no problem in the fact that our newspaper highlighted the successes as well as the challenges facing the Warehouse District as this new order evolves. It will keep everyone working to ensure that it remains a great, and enduring, Cleveland success story. ■
THE BIG ISSUE Given the recent demise of Borders, do you think the days of the physical bookstore are numbered? If so, how do you feel about that?
KATIE BATAILLE
JAY PIERCE
CHRISTINA MOSS
JON ZAGORSKI
Cleveland
Cleveland
Akron
Cleveland
I think, unfortunately, they are numbered. I personally like going into a bookstore and having a book in my hands … rather than seeing it on the screen.
Yes, but I hope it would help some of the smaller bookstores and specialty shops come back. … But I think a lot of that customer base will go online.
I don’t think so. The business might not be as good as in the past, but I don’t think they’ll go away completely.
I definitely feel like it’s going away. The e-book readers are huge. … As more and more technology advances, there’s less of a need for paper, it seems like.
➤➤ Let us know what you think. Vote in our online poll at www.CrainsCleveland.com
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Indiana toll road lacks exit strategy LETTERS So, the locals avoid the pike, as do business travelers if possible. And if that’s the case in Indiana, I can’t imagine it not happening here. My guess is that usage of Ohio Route 2 and Interstate 90 will dramatically increase. Looks like just another quick cash deal that’s good for the short term. Barry B. Beeler Olmsted Falls
He really likes us â– Developer Robert Rains began a
letter to the editor in your July 25 issue with the comment, “I never read Crain’s.� Wow, that must hurt, guys. Especially if it were true. Personally, I find it difficult to believe because Mr. Rains — with partner John Carney — is a prime downtown and area real estate developer. Bragging about not reading Crain’s (and thus Stan Bullard’s real estate coverage) would be like telling the world you want to remain ignorant. I don’t think Mr. Rains had that in mind. Maybe he just wasn’t thinking — just venting. Roldo Bartimole Cleveland
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By JOEL HAMMOND jmhammond@crain.com
Pro sports teams often talk of wanting as much certainty as possible. It’s why they push so hard to grow their season ticket ranks, or in the absence of that, why many — including the Browns, Indians and Cavaliers — have gotten creative with partial season ticket plans and other incentives. The same goes for golf, in the form of long-term commitments from sponsors, and it has worked for the World Golf Championships-Bridgestone Invitational. Don Padgett, executive director of the tournament — set for this week on the South Course of Firestone Country Club in Akron — said last week that after tiremaker and fledgling golf equipment producer Bridgestone renewed its sponsorship of the event in 2009, “almost all� of the tournament’s top hospitality supporters committed through 2014. It’s a luxury some other tournaments on tour haven’t had. “Bridgestone’s commitment helped us a great deal,� Mr. Padgett said. “We took that to our biggest hospitality clients and said, ‘We’re interested in having you commit as well.’� Mr. Padgett said that group was a mix of local and national companies. As a World Golf Championships event, the tournament is broadcast worldwide, and it draws an exclusive field of only about 80 players, with no cut. (Players can qualify by being in the top 50 of the Official World Golf Ranking, winning a worldwide event since last year’s tournament or by playing on the last-played Ryder Cup team.) Akron-based FirstEnergy Corp. was one of those corporate sponsors to re-up; with two years left on a fiveyear hospitality agreement it signed in 2007, the utility renewed for five more years last year. The company hosts clients in one of the villas dotting the fairways of Firestone South. “It’s an opportunity to entertain our valued customers,� FirstEnergy spokesman Todd Schneider said. “We’re a part of Akron, and the tournament is a part of Akron. We feel we need to have a presence there.� **** MORE TO CHARITIES: A tax-exempt
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■I just finished your July 18, Page One story on the possible selling of the Ohio Turnpike and how the Indiana Turnpike’s sale relate. As a businessman who travels via the pikes to Elkhart and South Bend, I can offer an explanation why the usage of the Indiana Turnpike is down. You can’t get off the Indiana Pike! Its automated systems cause massive back jams at the gates. Either the easy pass won’t register or the machine won’t take the bills. And when it does work, it’s at a snail’s pace. And, God help you, if you have to give it a $10 or $20 because you’ll get your change in dollar coins.
77
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Rory McIlroy, who won the U.S. Open in June by eight shots, this week will play at Firestone Country Club for the third time. His best finish is a tie for ninth. organization, the PGA Tour — through its own events and those on the Nationwide and Champions tours — gave $120 million to over 3,000 charities nationwide last year. The Bridgestone, though, this year expanded its charitable outreach by offering area organizations — Mr. Padgett said over 40 were involved — the ability to sell $20 single-round tickets and keep 75% of the proceeds. The other 25% goes back to the Akron, Canton and Cleveland chapters of The First Tee, a group that promotes the sport to youth. “We saw it as a way to increase attendance; the more people at the course, the better,â€? Mr. Padgett said. “And it’s a way to help great nonprofits.â€? **** FROM THE HALL: The NFL’s inability to settle its labor dispute cost Canton the league’s annual Hall of Fame Game, which was scheduled for Aug. 7 at Fawcett Stadium and would have pitted the Chicago Bears against the St. Louis Rams. And it appears the Bridgestone might benefit. The Hall of Fame enshrinement weekend will be cut short after Saturday’s induction ceremony. The Bridgestone in 2007 was moved up to the first weekend in August, which it shared with the Hall of Fame festivities. After the NFL’s preseason opener officially was canceled, Mr. Padgett said he’d heard from Hall of Fame officials that “a good contingentâ€? of those with tickets for Sunday’s game was interested in shifting their Sunday plans to Firestone. â–
North Coast Community Homes
Home Sweet Homes An Evening At Hickory Lane Farms Hosted by:
Benefit Co-Chairs:
Tony and Lenora Petrarca
Peter and Ellie Brodhead
Thank You To Our Supporters! Presenting Sponsor The Rick Osborne Family Orwell Natural Gas Company, John D Oil & Gas Company, Orwell-Trumbull Pipeline, Cobra Pipeline Gold Grand Patron Peter and Ellie Brodhead Chemical Solvents, Inc. Jainco International, Inc. Susan and John Turben Foundation Platinum Patron Developers Diversified Realty Ronald D. Holman, II, Esq. and Susan E. Stephens, M.D. KeyBank Dennis and Kim Lansdowne Stephen and Gail McPeake PNC Bank Primus Capital Partners VI Spangenberg Shibley & Liber LLP Gold Patron Barry and Ann Klein Moskal Gross Orchosky, Inc. Omni Property Companies Prince and Izant Co. Barbara S. Rosenthal, Esq. SS&G Financial Services, Inc. Taft Stettinius & Hollister LLP The O’Brien Law Firm LLC Ulmer & Berne LLP Steve and Judy Williams (List In Formation)
9
Saturday, September 17 Hickory Lane Farms 5:30 p.m. to Midnight
Special Thanks To The Antonucci Family Classic Auto Group
For additional information www.HomeSweetHomesNCCH.org Developing homes for people with disabilities
20110801-NEWS--10-NAT-CCI-CL_--
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Tickets: Browns avoid other teams’ struggles continued from PAGE 3
Mark Klang, president of ticket brokerage Amazing Tickets in Mayfield Heights, said his NFL traffic was almost nonexistent after April 19 — a time when Browns tickets usually are most in demand — until mid-July, when rumblings of an end to the lockout began surfacing. He estimated his Browns sales were down 90% to 95% in that period compared with the like time frame last year. “We had to say on our website, ‘These games might not be played’ or ‘These dates might change’ in selling during the lockout,” Mr. Klang said. “Football is the one sport where people travel into town, book hotels and flights. The uncertainty scared people.” Yet after the players voted to approve the owners’ proposed settlement, Mr. Klang said his company saw a big spike in business in the next 48 hours. The Browns, too, anticipated a pickup and quickly mobilized for their single-game sales, which launched Saturday. Jim Ross, the team’s senior vice president of business development, said the Browns began offering season tickets in February, earlier than in years past, to get ahead of a
potential work stoppage. Fueled in part by a $19 upper-deck corner ticket, of which the team sold out, those season-ticket sales got off to a great start, Mr. Ross said. The Browns also kept in place a unique program they instituted last year, through which former seasonticket holders could rejoin the fray without repaying for a personal seat license. Those PSLs, common in the NFL, must be bought by any new season-ticket holder for the right to purchase tickets for each game. They’re required in all sections of Browns Stadium except for the Dawg Pound — in the east end zone — and range from $375 to $1,500. But like Amazing Tickets and other secondary sources, the team’s sales activity stagnated during the dog days of the lockout, which started March 12. During that time, the team mostly worked on renewing existing season-ticket holders’ plans; the effort has paid off, according to Mr. Ross, who said the Browns are ahead of last year’s 90% pace in season ticket renewals. “And we heard from some account holders who said, ‘I’m in, but not until the labor issues are resolved,’” Mr. Ross said last Tuesday, July 26, so the team was expecting to lock in more season-ticket packages as last
AUGUST 1 - 7, 2011
GOING PLACES
week went on.
JOB CHANGES
One by one
ARCHITECTURE
Now come single-game sales, a “very important event,” Mr. Ross said, as they fill out the seats not accounted for through full-season or partial-season packages. Team officials expect to sell out all eight regular-season home games at the 73,200-seat stadium, Mr. Ross said, thus avoiding local television blackouts. The Browns averaged 66,116 fans per game last season, but managed to avoid blackouts through different partnerships covering remaining tickets. Mr. Ross said little would change in the number of tickets available for single-game purchases and group sales, which last year was around 5,000. It’s a far cry from the plight of some other NFL teams, such as Jacksonville, which in mid-July posted a chart on its website breaking down its sales goals: The Jaguars at that point reported only 32,536 seasonticket holders for 67,000-seat EverBank Field. Elsewhere, the Tampa Bay Buccaneers and Oakland Raiders filled only 75% and 73% of their respective capacities last season. “We’re very fortunate to have a great fan base,” Mr. Ross said. ■
TDA ARCHITECTURE: Linda W. Bayer to director of business development.
The 2011
Archer
Awards
Achievements in Human Resources
CONSTRUCTION
Bayer
Zahoranski Alvarado
Paulsen
Mueller
Evans
Downs
Thompson
Afflerbach
HEALTH CARE
Carlson
Lukens
Smith
AKRON GENERAL HEALTH SYSTEM: Dr. Thomas R. Thompson to chairman, Department of Orthopaedic Surgery.
director of sales.
RUHLIN CO.: Rich Zahoranski to estimator; Cheryl Alvarado to administrative assistant; Dan Paulsen to project engineer.
FINANCE HUNTINGTON NATIONAL BANK: Tom Cirincione to senior portfolio manager, Private Financial Group — Investments; Mike Coyne to business banker.
FINANCIAL SERVICE BROCKMAN, COATS, GEDELIAN & CO.: Maria Liossis to tax supervisor. CARD, PALMER, SIBBISON & CO.: Matthew T. Krupa to supervisor. MELCAP PARTNERS: Kevin Bader to analyst. RETIREMENT SOLUTIONS: Alexander Drake to associate financial consultant. WESTERN RESERVE PARTNERS: Matthew J. Mueller to vice president; Erin E. Evans to marketing manager; Courtney S. Downs to analyst.
ELIZA JENNINGS SENIOR CARE NETWORK: Dr. Jayantilal Bhimani to medical director, Eliza Jennings at Home.
HOSPITALITY MORTON’S THE STEAKHOUSE CLEVELAND: Denise Afflerbach to assistant manager.
INSURANCE
Meet NE Ohio’s Leading HR Professionals
HYLANT GROUP: Michele Stine to regional human resource generalist.
LEGAL
Awards & Networking Gala
FANGER & ASSOCIATES LLC: Elizabeth K. Sheard and Deborah Zaccaro Hoffman to associates.
Wednesday, August 17 l 5:30 - 8:30pm LaCentre, Westlake
MANUFACTURING EATON CORP.: Harold Jones to senior vice president, Environment, Health and Safety. ENERGY FOCUS INC.: Mark J. Plush to vice president, finance, CFO.
MARKETING HR EXECUTIVE OF THE YEAR
INNOVATION AWARD
LIFETIME ACHIEVEMENT AWARD
CITIZENSHIP AWARD
RISING STAR AWARD
Join us! Ticket and finalist information:
www.CrainsCleveland.com/ArcherTix Presented by:
SWEENEY: James B. Sweeney to CEO. TRIAD COMMUNICATIONS/NEXT LEVEL INTERACTIVE: Michael Carlson to graphic designer.
RETAIL SAKS FIFTH AVENUE BEACHWOOD: Mai Moore to director of marketing.
SERVICE
Sponsored by:
DAVEY TREE EXPERT CO.: John Kusnier to ecological services project developer and NEPA team lead, Davey Resource Group. MEDDATA: Brenda N. Brown to director of compliance audits and education; Barb Astler to vice president, human resources.
TECHNOLOGY EXCHANGEBASE: Alex Lunato to
BOARDS AMERICAN COLLEGE OF EMERGENCY PHYSICIANS, OHIO CHAPTER: Dr. Thomas Lukens (MetroHealth) to president; Dr. Michael Smith (MetroHealth) to president-elect. AMERICAN MARKETING ASSOCIATION CLEVELAND: Jeff Staats to president; Krystyl Paterson to president-elect; Patty DelMonico to secretary. EPILEPSY ASSOCIATION: Amy Georgalis to president; Kathleen Sanniti to vice president; Anthony Smits to secretary; Peter Nelson to treasurer. NORTHEAST OHIO REGIONAL SEWER DISTRICT: Darnell Brown (City of Cleveland) to president; Ronald D. Sulik to vice president; Mayor Dean DePiero to secretary. WILLIAM J. AND DOROTHY K. O’NEILL FOUNDATION: William J. O’Neill Jr. to trustee emeritus. YOUNG AUDIENCES: Katie Solender to chairperson; Chris Cwiklinski to vice chairperson, development; Andrew Koonce to vice president, education; Ann Kent to secretary.
AWARDS AMERICAN COLLEGE OF HEALTHCARE EXECUTIVES: Nancy M. Tinsley (University Hospitals Case Medical Center) received the SeniorLevel Healthcare Executive Regent’s Award; Erin M. Roush (University Hospitals) received the Early Career Healthcare Executive Regent’s Award.
RETIREMENT NORTHEAST OHIO ADOPTION SERVICES: Kathy Franz, associate director, after 22 years of service.
Send information for Going Places to dhillyer@crain.com.
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INSIDE
12 APARTMENT ASSOCIATION FINDS POWER IN NUMBERS.
11
REAL ESTATE 668 EUCLID AVE. AFTER
BEFORE
EUCLID AVENUE’S RENAISSANCE Character, location have made downtown artery an ideal spot for rejuvenation
By STAN BULLARD sbullard@crain.com
T
o appreciate today’s Euclid Avenue between Public Square and Cleveland State University, consider conditions in 1994. At that time, realty insiders called that stretch of downtown “the dead zone.” That year, Willis Boyer, a Cleveland real estate developer, produced
a report for a stakeholder group arguing that a 43% office vacancy rate highlighted the need to transform the avenue’s buildings from office use to apartments. Old buildings have a character lacking in newer suburbs, he said, that could make the city distinctive. “There were some guys trying to do some things on East Fourth Street between Euclid and Prospect, but little else was going on,” Mr. Boyer recalled recently of what later
became the East Fourth Neighborhood, a restaurant and entertainment venue developed by MRN Ltd. Fast forward to today. MRN’s East 4th project has spilled onto Euclid with two loft apartment buildings, the House of Blues, Holiday Inn Express and several eateries. Other developers have transformed the Old Arcade, as well as the Euclid and Colonial arcades, to hotels. Five other office See AVENUE Page 13
COWELL & HUBBARD BEFORE
AFTER
A realty affiliate of PlayhouseSquare in 2007 acquired the Cowell & Hubbard Building, the former home of a famed downtown jewelry store. After a $9 million renovation, the commercial building at 1305 Euclid Ave. on its second floor houses The Kent State University Cleveland Urban Design Collaborative, which plans to foster a design district on Euclid. Chef Zachary Bruell recently announced plans to open an eatery there — Cowell & Hubbard Co. — named for the jewelry store.
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REAL ESTATE
Allegro Realty repositions renovated space By STAN BULLARD sbullard@crain.com
to those on Euclid as part of a plan to use the space as a restaurant site. he first time that Mr. Hutchinson said Damon Taseff, a prinAllegro is now negotiating cipal at Allegro Realty with prospective restauraAdvisors, saw the corteurs. The terra cotta front of porate realty consultants’ new the building, which was pockdowntown home, he found marked with thousands of that the second-floor walls of holes, also was restored in the the onetime Morse Graphic renovation, which received Arts Building resembled relics financial assistance from the of an R-rated graffiti party. city of Cleveland’s vacant Now, after a $2 million properties initiative. project that transformed the Allegro’s investment is not Allegro Realty Advisors’ sleek interior at its new home building at 1938 Euclid Ave., lost on the neighborhood. at 1938 Euclid Ave. once was a canvas for graffiti. the second floor is a cuttingRockette Richardson, execufrom an upswing in values as CSU edge corporate environment, from tive director of the Campus District finished multiple buildings that since wood floors to work stations and a local development corporation, said: have transformed that part of Euclid lobby that performs multiple duties, “Allegro took a building that had as the city’s Campus District. as a location for the firm’s kitchen been in a state of transition for many “You always want to be near new area and center for networking years and turned it into an asset on investments,” Mr. Taseff said. parties. (Hidden behind a stainless the street. The design is marvelous.” Allegro also needed to move steel appliance cover is a surprise: Moreover, she said it is encourbecause it needed room to expand, Allegro’s own refrigerated keg.) aging for the college neighborhood Mr. Hutchinson said. Its 10-person The process that led Allegro to to win a vote of confidence from a staff now occupies 5,000 square feet company that could have put its the downtown headquarters was from 3,000 it had in the suburbs. the same type of search it does for offices anywhere in the region. In the meantime, Allegro reposiits clients, said Allegro CEO George The property investment is mildly tioned the structure in several ways Hutchinson, after it decided its contradictory with Allegro’s — for itself and the neighborhood. former Independence office no principles and branding. Allegro is First, it installed new retail tenants longer met its needs. dedicated to serving as a tenant — a Moe’s Southwest Grill and “We wanted ease of access for representative, with its only duty to our clients, so we needed easy high- Euclid Avenue’s second Jimmy get the best deal for its tenants. As John’s sandwich shop — on the first such, Allegro eschews property way access,” Mr. Hutchinson said. floor to cater to the campus crowd. “We wanted an enjoyable working listings or taking an ownership To maximize space for the retailers, interest in buildings where its environment to attract young peoAllegro shut the building’s original ple to work with us. We also wanted clients might want to locate that Euclid stairway. Thanks to CSU’s to be downtown, where you can see might color a realty broker’s advice. demolition of an adjoining building people you need to see and netHowever, Mr. Hutchinson said, to create a link from campus to the work when you go to lunch.” Allegro restricted the investment by nearby Wolstein Center, Allegro was Mr. Taseff said the firm decided in its principals solely to the headable to install its second-floor en2009 to buy the formerly bedraggled quarters building. trance on the west side of the building. commercial building across from “We know and appreciate real The rear of the building’s first Cleveland State University. Allegro estate,” Mr. Hutchinson said, “so floor also got huge windows similar knew the property might benefit we did this project for ourselves.” ■
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Apartment group’s purchasing plan renders efficiencies By STAN BULLARD sbullard@crain.com
C
ommercial real estate types pride themselves on their independence. That often earns them the nickname of being lone wolves. However, a group purchasing plan operated by the Northeast Ohio Apartment Association shows the benefits of being part of a herd — and a very big herd — when it comes to cutting expenses. The trade group launched its group purchasing in 2007, and it now annually buys about $50 million of various products for its members, according to Ralph McGreevy, executive vice president of the association, which has about 600 members who own about 175,000 rental units in the region. He estimates half its members participate in purchasing in some way to serve about 100,000 units. Natural gas buying through IGS Energy, NOAA’s first foray into group purchasing, has accounted for about $300 million in spending through the program’s history, Mr. McGreevy said, and it has been as much as $35 million in a single year. The purchasing program now, through various vendors, covers most things a small or large apartment owner might need, including electricity. For example, owners get discount rates for paint and carpet through the SherwinWilliams Co. that amounted to about $2 million last year. That’s a lot of paint and floor coverings, but Mr. McGreevy has no estimate for the volume of materials acquired. Other programs cover cleaning supplies, liability insurance, resident screening and payroll. The newest is pest control, through Orkin. The program only goes into areas where it can provide a service to members, he said.
Formerly, NOAA provided group purchasing for refuse removal, but consolidation in the trash hauling industry limited the trade group’s ability to be effective, he said. Even though these are good times for the apartment industry — occupancies are nearly 96% in the region, NOAA estimates — saving money remains important. As Northeast Ohio is considered a low-rent market compared to other regions, watching costs is crucial here because profit margins for landlords are narrower. Jerome Schmelzer, an advertising man who owns a total of 120 suites on Lake Avenue on the West Side and at the Pointe at Gateway downtown, calls watching expenses “the nature of the business” here. Moreover, he adds, “When you have a small landlord like me, you can’t compete with the big guys with thousands of apartments for deals. This gives us the benefit of buying in bulk.” Mr. Schmelzer estimated he saves $15,000 yearly on energy costs. He said that’s significant because utility bills are such an expense, particularly at his familyowned Edgewater Manor in Cleveland, where tenants pay natural gas as part of their rent. Even some owners of large portfolios, who may have sophisticated purchasing departments because of their scale and buying power, find the NOAA program useful. Doug Price, CEO of Willoughbybased K&D Group, buys in bulk anyway because the firm owns 12,000 units in the region. Many vendors in NOAA’s purchasing program are the same that K&D uses, he said. However, Mr. Price noted that because of NOAA’s group program and still larger numbers of customers, vendors have more incentive to resolve problems for apartment owners when disputes develop. ■
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REAL ESTATE
Avenue: More rejuvenation on tap continued from PAGE 11
but to assist qualified developers with expertise if they need help. Similarly, Mr. Yablonsky said, adaptability in potential uses in the planning stages aids renewing urban areas such as Euclid. Given the advent of the Holiday Inn Express, Hyatt, Residence Inn and Wyndham hotels on Euclid, the planned hotels could allow the street to be marketed as the city’s hospitality district. Meanwhile, a more dynamic Euclid street scene could allow other underused buildings on Euclid or nearby to find fresh starts as apartments.
buildings have become loft apartments. Cleveland State University has transformed the east end of Euclid with new student housing and other buildings. And yet, while Euclid Avenue has made significant progress, more work remains.
Bigger picture Although dozens of outdated commercial buildings have found new uses or been demolished, a study by CoStar, an online data service, reveals a 41% office vacancy rate on Euclid from Public Square to Cleveland State as of last Monday, July 25, little below the 1994 figure used by Mr. Boyer. Effectively, as some older structures got renovated, other buildings lost tenancy over the years to keep the market standing in place — though not worsening. For Mr. Boyer’s part, he believes the weakness of the office market is a function of the weakness of the regional economy — far larger in scope than efforts to redo Euclid. David Browning, managing director of CB Richard Ellis’s Cleveland office, said he knows the office statistics but considers the Euclid updates a success: They help downtown win tenants. “It has changed the perception and reality of the street,” Mr. Browning said. Tracey Nichols, Cleveland city economic development director, said the best way to size up Euclid is to look at how much progress the street has made, work that’s often accomplished with city funds helping to leverage other financial resources. Likewise, Thomas Yablonsky, executive director of the Historic Gateway Neighborhood local development corporation and vice president of the Downtown Cleveland Alliance, says he tires of being asked, “When will Euclid happen?” His answer: Euclid Avenue’s rejuvenation not only is well under way, there’s more to come. “It’s very different from what it was then,” said Mr. Yablonsky, who in 1994 worked on downtown development at the former Greater Cleveland Growth Association, now Greater Cleveland Partnership. “It’s vastly improved,” he said, pointing not only to people who visit the Euclid corridor for entertainment but to the increasing buzz among developers — some from out of town — being created by the convention and casino projects.
What’s the next stop? Joseph Marinucci, president and CEO of Downtown Cleveland Alliance, said the increased animation at the street level is helpful. Moreover, he noted the $200 million HealthLine, which links Public Square to East Cleveland with a hybrid bus-rail transit system, has changed the street. The work also had impacts he did not expect. As businesses closed during the two-year HealthLine project, Mr. Marinucci said the public response and media coverage of it gave him a fresh understanding of the street’s importance in the region. Due to its history in the region’s early development, it enjoys what he calls “origin myth” status in Northeast Ohio’s collective psyche far beyond its bricks
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‘We’ll have to see’ STAN BULLARD
The WT Grant Building was outfitted for the WT Grant Loft Apartments, located on Euclid Avenue between Public Square and East Fourth Street. and mortar features. The HealthLine also brought the region attention, such as an international award from the Urban Land Institute trade group. One shortcoming of the street has been eased due to dining establishments taking positions in storefronts, though shopping-oriented retailers remain scarce. Indeed, several large storefronts became offices for nonprofits, the Wyse Advertising firm and others as antidotes for retail weaknesses. One of the surprises today is dueling ideas, if not plans, for what to do next on Euclid. Doug Price, CEO of Willoughbybased K&D Group, an apartment ownership concern, worries the city will lose its hard-won momentum as a downtown residential market. He said K&D’s Residences at 668, a $60 million makeover to 232 apartments of the onetime Taylor department store and Atrium Office Plaza, has a waiting list of more than 300 people. “We’re in danger of stifling that because we don’t have quality new product for young professionals,” Mr. Price said. For its part, K&D has revised its plans for the Ameritrust complex, dropping a hotel component and streamlining it to apartments and service retail. The proposal is dependent on whether K&D gets to renew its quest for the skyscraper; Cuyahoga County, which owns the complex, is studying its own office needs before deciding whether to dispose of the skyscraper.
Too much room at the inns The other side of the outlook is that Mr. Price, whose firm owns Embassy Suites at Reserve Square on East 12th Street, worries too many hotel plans are afoot because of construction of an initial casino by early next year and the Cleveland Convention Center and Medical Mart. “The convention center should bring the Cleveland hotel market to normal,” Mr. Price said. For example, JHB Hotel LLC, a Sandusky based investor group, is pursuing plans to convert the John Hartness Brown office building at 1001-1101 Euclid to a 206-room Westin Hotel. Work to remove asbestos and demolish unneeded parts of the property, Ms. Nichols said, recently started with a $3 million state grant, Ms. Nichols said it is not the city’s role to dictate development
Mr. Yablonsky and others point to the unknown — but mostly positive — factors that loom for downtown and could reshape Euclid. The Cleveland Convention Center and Medical Mart will open in 2013 in a city that has essentially had no downtown convention center for a decade. The new Horseshoe Casino Cleveland will also bring a new clientele to town early next year. “What will that market be?” Mr. Yablonsky asked. “We’ll have to see.” Ari Maron, a principal in MRN, sees plotting Euclid’s future more simply. He said MRN is pursuing, and close to signing, tenants to fill the three empty storefronts it has left on Euclid. It also is on the hunt for more office tenants for Rosetta Tower, 629 Euclid, named after new anchor tenant Rosetta Marketing Group LLC. “We’re targeting companies that want cool office space in an urban setting,” Mr. Maron said. “We see it as the same thing as ever: Find out how people want to do business and build space for them.” ■
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AUGUST 1 - 7, 2011
LARGEST LAW FIRMS
RANKED BY NUMBER OF LOCAL ATTORNEYS(1)
Firm Rank Local address Phone/Web site
Local attorneys Partners
Female partners
Minority partners Associates Of counsel
Staff
Worldwide attorneys
Salary for associate hired from law school
Top local executive Offices Title
1
Jones Day North Point, 901 Lakeside Ave., Cleveland 44114-1190 (216) 586-3939/www.jonesday.com
210
74
10
3
96
40
688
2,500
$145,000
35
Lyle G. Ganske partner-in-charge, Cleveland
2
Baker Hostetler(2) 1900 E. Ninth St., Suite 3200, Cleveland 44114 (216) 621-0200/www.bakerlaw.com
188
104
24
2
43
13
413
757
$135,000
11
R. Steven Kestner, national executive partner; Hewitt B. Shaw, Cleveland office managing partner
3
Calfee, Halter & Griswold LLP 800 Superior Ave., Suite 1400, Cleveland 44114 (216) 622-8200/www.calfee.com
140
74
15
1
36
11
285
157
NA
2
Brent D. Ballard managing partner Thomas F. McKee, chairman
4
Squire, Sanders & Dempsey (US) LLP 127 Public Square, Suite 4900, Cleveland 44114 (216) 479-8500/www.ssd.com
137
66
12
5
53
18
376
1,321
NA
36
Frederick R. Nance, regional managing partner; David S. Goodman, Cleveland managing partner
5
Thompson Hine LLP 127 Public Square, Suite 3900, Cleveland 44114 (216) 566-5500/www.thompsonhine.com
128
60
48
6
13
15
330
367
NA
7
James B. Aronoff partner-in-charge, Cleveland
6
Ulmer & Berne LLP 1660 W. Second St., Suite 1100, Cleveland 44113 (216) 583-7000/www.ulmer.com
104
62
10
2
33
9
220
176
NA
4
Kip Reader managing partner
7
Benesch, Friedlander, Coplan & Aronoff LLP 200 Public Square, Suite 2300, Cleveland 44114 (216) 363-4500/www.beneschlaw.com
100
55
10
2
37
7
239
163
$110,000
7
Ira C. Kaplan managing partner
7
Tucker Ellis & West LLP 925 Euclid Ave., Suite 1150, Cleveland 44115 (216) 592-5000/www.tuckerellis.com
100
44
6
2
23
33
235
154
NA
5
Joseph Morford managing partner
9
Hahn Loeser & Parks LLP 200 Public Square, Suite 2800, Cleveland 44114 (216) 621-0150/www.hahnlaw.com
97
50
7
3
35
12
192
127
$105,000
6
Lawrence E. Oscar managing partner, CEO
10
Roetzel & Andress LPA 1375 E. Ninth St., 9th floor, Cleveland 44114 (216) 623-0150/www.ralaw.com
88
59
14
2
29
0
225
203
NA
12
Bradley A. Wright, Akron partner-incharge; Douglas E. Spiker, Cleveland partner-in-charge
11
McDonald Hopkins LLC 600 Superior Ave., E., Suite 2100, Cleveland 44114 (216) 348-5400/www.mcdonaldhopkins.com
85
49
2
0
29
7
159
137
NA
6
Carl J. Grassi, president Shawn M. Riley managing partner, Cleveland
12
Reminger Co. LPA 101 Prospect Ave. W., Suite 1400, Cleveland 44115 (216) 687-1311/www.reminger.com
81
67
14
2
12
2
205
118
NA
10
Stephen E. Walters CEO, president
13
Brouse McDowell LPA 388 S. Main St., Suite 500, Akron 44311 (330) 535-5711/www.brouse.com
71
46
13
1
20
5
124
72
$83,000
3
Jeffrey T. Heintz, managing partner; Joseph T. Dattilo, partnerin-charge, Cleveland office
14
Buckingham, Doolittle & Burroughs LLP 1375 E. Ninth St., Suite 1700, Cleveland 44114 (216) 621-5300/www.bdblaw.com
64
43
7
2
16
5
138
78
NA
4
John P. Slagter managing partner, president
15
Frantz Ward LLP 2500 Key Center, Cleveland 44114 (216) 515-1660/www.frantzward.com
63
36
5
0
22
4
113
63
$115,000
1
Partnership
16
Gallagher Sharp 1501 Euclid Ave., 6th floor, Cleveland 44115 (216) 241-5310/www.gallaghersharp.com
53
35
8
2
16
2
108
57
NA
3
Thomas E. Dover managing partner
17
Vorys, Sater, Seymour and Pease LLP 1375 E. Ninth St., Suite 2100, Cleveland 44114 (216) 479-6100/www.vorys.com
52
17
2
0
19
9
83
349
$120,000
6
F. Daniel Balmert, managing partner, Akron; Anthony J. O'Malley, managing partner, Cleveland
17
Walter & Haverfield LLP 1301 E. Ninth St., Suite 3500, Cleveland 44114-1821 (216) 781-1212/www.walterhav.com
52
31
4
1
18
4
99
52
NA
1
Ralph E. Cascarilla managing partner
17
Weston Hurd LLP 1301 E. Ninth St., Suite 1900, Cleveland 44114 (216) 241-6602/www.westonhurd.com
52
40
7
1
4
8
92
63
NA
4
Carolyn M. Cappel managing partner
20
Taft Stettinius & Hollister LLP 200 Public Square, Suite 3500, Cleveland 44114 (216) 241-2838/www.taftlaw.com
49
31
4
1
9
8
89
296
$105,000
7
Stephen M. O'Bryan partner-in-charge, Cleveland
21
Krugliak, Wilkins, Griffiths & Dougherty Co. LPA 4775 Munson St. N.W., Canton 44718 (330) 497-0700/www.kwgd.com
45
32
3
0
13
0
62
45
NA
5
Terry A. Moore managing director
22
Weltman, Weinberg & Reis Co. LPA 323 W. Lakeside Ave., Suite 200, Cleveland 44113 (216) 685-1000/www.weltman.com
43
13
4
1
30
0
650
111
NA
10
Alan H. Weinberg, managing partner Bob Weltman, senior partner
23
Fay Sharpe LLP 1228 Euclid Ave., 5th floor, Cleveland 44115 (216) 363-9000/www.faysharpe.com
41
20
4
1
17
4
88
41
$90,000
1
Management Committee
24
Kohrman Jackson & Krantz PLL 1375 E. Ninth St., 20th floor, Cleveland 44114 (216) 696-8700/www.kjk.com
40
24
6
0
15
1
61
40
$87,500
2
Marc C. Krantz managing partner
25
Day Ketterer Ltd., Attorneys at Law 200 Market Ave., Suite 300, Canton 44702 (330) 455-0173/www.day-ketterer.com
36
26
2
0
6
4
70
36
NA
2
James R. Blake managing attorney
25
Pearne & Gordon LLP 1801 E. Ninth St., Suite 1200, Cleveland 44114 (216) 579-1700/www.pearne.com
36
15
1
1
18
3
67
36
NA
1
NA
27
Brennan, Manna & Diamond 75 E. Market St., Akron 44308 (330) 253-5060/www.bmdllc.com
33
18
1
2
13
1
60
50
NA
3
Lee S. Walko Matthew A. Heinle co-managing members
28
Buckley King LPA 600 Superior Ave., 1400 Fifth Third Center, Cleveland 44114 (216) 363-1400/www.buckleyking.com
32
19
7
2
7
4
65
57
NA
7
Brent M. Buckley managing partner
28
Cavitch Familo & Durkin 1300 E. Ninth St., 20th floor, Cleveland 44114 (216) 621-7860/www.cavitch.com
32
21
0
1
9
2
55
32
NA
2
Michael C. Cohan president
30
McCarthy, Lebit, Crystal & Liffman Co. LPA 101 W. Prospect Ave., Suite 1800, Cleveland 44115 (216) 696-1422/www.mccarthylebit.com
31
20
2
0
8
3
58
31
$55,000
1
Kenneth B. Liffman managing principal
30
Wickens, Herzer, Panza, Cook & Batista Co. 35765 Chester Road, Avon 44011 (440) 930-8000/www.wickenslaw.com
31
18
7
7
9
1
77
31
NA
1
David L. Herzer president, CEO
20110801-NEWS--15-NAT-CCI-CL_--
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AUGUST 1 - 7, 2011
Firm Rank Local address Phone/Web site
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Local attorneys Partners
Female partners
Minority partners Associates Of counsel
Staff
Worldwide attorneys
Salary for associate hired from law school
15
Top local executive Offices Title
32
Javitch Block & Rathbone LLC 1100 Superior Ave., 19th floor, Cleveland 44114 (216) 623-0000/www.jbandr.com
30
11
3
4
18
1
385
54
NA
7
Bruce A. Block Joel H. Rathbone co-managing partners
32
Mazanec, Raskin & Ryder Co. LPA 34305 Solon Road, Cleveland 44139 (440) 248-7906/www.mrrlaw.com
30
11
0
0
13
1
48
30
NA
2
John T. McLandrich managing partner
32
Wegman, Hessler & Vanderburg 6055 Rockside Woods, Suite 200, Independence 44131 (216) 642-3342/www.wegmanlaw.com
30
14
2
0
13
1
56
30
NA
1
Keith A. Vanderburg managing partner
35
Littler Mendelson P.C. 1100 Superior Ave., 20th Floor, Cleveland 44114 (216) 696-7600/www.littler.com
29
19
5
1
10
0
55
800
NA
51
Sue Marie Douglas office managing shareholder
36
Porter Wright Morris & Arthur LLP 925 Euclid Ave., Suite 1700, Cleveland 44115 (216) 443-9000/www.porterwright.com
28
17
7
0
10
1
42
275
$110,000
6
Hugh E. McKay partner-in-charge
37
Davis & Young 1200 Fifth Third Center, 600 Superior Ave., E., Cleveland 44114 (216) 348-1700/www.davisyoung.com
27
16
2
0
5
6
57
27
NA
3
C. Richard McDonald managing partner
38
Dworken & Bernstein Co. LPA 60 South Park Place, Painesville 44077 (440) 352-3391/www.dworkenlaw.com
26
11
1
1
14
1
68
26
NA
2
Howard S. Rabb managing partner
39
Critchfield, Critchfield & Johnston Ltd. 225 N. Market St., Wooster 44691 (330) 264-4444/www.ccj.com
25
18
4
0
7
1
62
35
$70,000
4
Daniel H. Plumly managing member
39
Stark & Knoll Co. LPA 3475 Ridgewood Road, Akron 44333 (330) 376-3300/www.stark-knoll.com
25
16
3
3
6
3
39
25
NA
1
John K. Krajewski managing partner
41
Roderick Linton Belfance LLP One Cascade Plaza, 15th Floor, Akron 44308 (330) 434-3000/www.rlbllp.com
24
10
1
0
9
5
50
NA
NA
NA
42
Sutter, O'Connell & Farchione 1301 E. Ninth St., Suite 3600, Cleveland 44114 (216) 928-2200/www.sutter-law.com
23
9
3
1
12
0
65
25
$90,000
2
Lawrence A. Sutter managing partner
42
Ziegler Metzger & Miller LLP 925 Euclid Ave., Suite 2020, Cleveland 44115 (216) 781-5470/www.zieglermetzger.com
23
9
0
0
14
1
39
23
NA
3
Richard T. Spotz Jr. managing partner
44
Nicola, Gudbranson & Cooper LLC 25 W. Prospect Ave., Suite 1400, Cleveland 44115-1048 (216) 621-7227/www.nicola.com
22
NA
NA
NA
6
3
34
NA
NA
NA
45
Turocy & Watson LLP 127 Public Square, Key Tower, 57th floor, Cleveland 44114 (216) 696-8730/www.thepatentattorneys.com
21
5
2
2
15
1
38
21
NA
3
Gregory Turocy managing partner
46
Fisher & Phillips LLP(3) 9150 S. Hills Blvd., Cleveland 44147 (440) 838-8800/www.laborlawyers.com
20
12
1
0
6
2
36
260
NA
25
Steven M. Nobil managing partner
William G. Chris partner
Management Committee
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
AUGUST 1 - 7, 2011
LARGEST LAW FIRMS
RANKED BY NUMBER OF LOCAL ATTORNEYS(1)
Firm Local address Rank Phone/Web site
Local attorneys Partners
Female partners
Minority partners Associates Of counsel
Staff
Worldwide attorneys
Salary for associate hired from law school
Top local executive Offices Title
46
Meyers, Roman, Friedberg and Lewis 28601 Chagrin Blvd., Suite 500, Cleveland 44122 (216) 831-0042/www.meyersroman.com
20
12
3
0
6
2
37
NA
NA
NA
46
Zashin & Rich Co. LPA 55 Public Square, 4th floor, Cleveland 44113 (216) 696-4441/www.zrlaw.com
20
2
0
0
17
1
35
21
NA
2
Andrew A. Zashin Stephen S. Zashin co-managing partners
49
Bonezzi Switzer Murphy Polito & Hupp Co. LPA 1300 E. Ninth St., Suite 1950, Cleveland 44114 (216) 875-2767/www.bsmph.com
17
14
2
0
3
0
41
17
$55,000
2
Steven J. Hupp managing director
49
Janik LLP 9200 South Hills Blvd., Suite 300, Cleveland 44147 (440) 838-7600/www.janiklaw.com
17
5
2
0
9
3
28
20
$65,000
3
Steven G. Janik managing partner
49
Ogletree, Deakins, Nash, Smoak & Stewart PC 127 Public Square, Cleveland 44114 (216) 241-6100/www.ogletreedeakins.com
17
9
1
0
5
3
33
550
NA
40
S. Dan Pace managing shareholder, Cleveland
49
Stumphauzer, O'Toole, McLaughlin, McGlamery & Loughman Co. LPA 5455 Detroit Road, Sheffield Village 44054 (440) 930-4001/www.sheffieldlaw.com
17
5
1
0
7
1
28
NA
$85,000
NA
Board of directors
53
Carlisle, McNellie, Rini, Kramer & Ulrich Co. LPA 24755 Chagrin Blvd., Suite 200, Cleveland 44122 (216) 360-7200/www.carlisle-law.com
15
5
1
0
10
0
81
15
$60,000
1
Management Committee
53
Kelley & Ferraro LLP 127 Public Square, Suite 2200, Cleveland 44114 (216) 575-0777/www.kelley-ferraro.com
15
5
0
0
8
0
60
14
NA
1
James L. Ferraro managing partner
55
McGlinchey Stafford PLLC 25550 Chagrin Blvd., Suite 406, Cleveland 44122 (216) 378-9905/www.mcglinchey.com
14
5
1
0
5
4
26
159
NA
10
Mark Edelman, managing member, Cleveland Rodolfo J. Aguilar Jr. managing member, firm
55
Schneider, Smeltz, Ranney & LaFond PLL 1111 Superior Ave., Suite 1000, Cleveland 44114 (216) 696-4200/www.ssrl.com
14
10
2
0
3
1
28
14
NA
1
James D. Vail managing partner
Anne L. Meyers managing partner
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. (1) Numbers as of June 1, 2011. (2) Starting salary for associates includes a $5,000 stipend. (3) Formerly Millisor & Nobil Co. LPA.
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WWW.CRAINSCLEVELAND.COM
CRAIN’S CLEVELAND BUSINESS
17
Capital: Process longer, IT: OneCommunity shepherds idea tougher for small banks continued from PAGE 1
continued from PAGE 3
and investors have higher expectations for capital levels. As a result, over the last 18 months, several Northeast Ohio banks, including other community banks such as Park View Federal Savings and the region’s largest players such as KeyCorp, have gone to market to raise money in what Mr. Crowley calls “part of the ongoing rehabilitation of the industry.” Two of the aforementioned local banks — Liberty Bank and Central Federal, which is the parent of CFBank — are after capital, in part, because regulators require it. Some community banks that see themselves as “long-term survivors” will raise capital to position themselves to be an acquirer of other banks, Mr. Quayle noted. And anticipating that larger banks will enter the market soon, more community banks are deciding to go after capital now to avoid competing for investments, he said.
An imposition Liberty Bank, which began a private placement around June 1, is raising capital to accommodate commercial loan growth and to meet “new capital standards imposed upon us” by the Office of the Comptroller of the Currency, said Bill Valerian, the bank’s chairman, president and CEO. The regulator required Liberty Bank to raise capital by June 30. To achieve one of the required ratios — total capital versus total net riskweighted assets — Liberty Bank needed $750,000, Mr. Valerian said. “That (amount) would only get to the newly imposed ratio,” he said. “It wouldn’t give us any capital for future growth.” So, the bank — which Mr. Valerian said is profitable — set a goal to raise $3 million to $5 million, of which it has raised more than $4.5 million. It’s the third time since 2004 that Liberty Bank has raised capital. It raised $5.5 million in 2004 and then $5.5 million in 2006, said Mr. Valerian, who knew this time “wasn’t going to be a walk in the park.” “People have this fear,” he said. “Everybody thinks bankers are stealing money from them, (that) they’re incompetent, bad news. “So, when you’re out raising capital, you have to differentiate yourself,” he said. “And that’s what we do.” Liberty Bank doesn’t buy millions of dollars of securities with its capital, Mr. Valerian said. It takes in customer deposits and lends money locally, and that’s the message the bank works to disseminate, he said. Eloise L. Mackus, CEO of Central Federal, confirmed that efforts related to raising capital are ongoing, but she wouldn’t disclose additional information. According to a press release the company issued in July, its board is “looking at a $15-$20 million capital raise … and other alternatives to improve capital ratios of the company and CFBank.” Should Central Federal fail to do what regulators deem necessary, dissolution or acquisition by another bank are identified as recourses in a May 2011 cease-and-desist order issued by the Office of Thrift Supervision. The order states that a Jan. 3 examination found the bank to be operating with an excessive level of
adversely classified assets and inadequate earnings to augment capital.
Reality check Larger, publicly traded banks can raise money in the national market, usually quickly and in large sums, Mr. Quayle said. Community banks tend to raise capital from local markets, which means it’s in smaller amounts and takes longer. Community banks tend not to have as many, if any, institutional investors, and in some cases have a tougher story to sell to investors because “the problems were more pronounced,” Mr. Crowley said. Middlefield Banc began raising capital in 2010 and in February of this year filed paperwork anew with the Securities and Exchange Commission, changing some of the terms of its ongoing private placement. For one, it lowered the amount it is seeking to raise to $25 million from $30 million as a result of the market outlook, said Jim Heslop, executive vice president and chief operating officer. “We’re the last on the food chain,” he said, noting that super-regional banks have “a far easier time raising capital.” “As we went out, we’ve had some interest and we’ve had some investors,” Mr. Heslop said. “But as we assessed the market and where we were and wanted to go, we felt ($25 million) was still realistic and more attainable.” Mr. Heslop anticipates Middlefield Banc’s process will wrap up in the next couple months, and he expects the company to raise a significant portion of its goal. One of the company’s motivations for raising capital is a potential regulatory change to capital standards, he said. The company also plans to deploy the capital to maximize shareholder return, and buying other bank offices and other banks are “always options,” Mr. Heslop noted. “We’ve not been hesitant to do either one,” Mr. Heslop said, citing Middlefield’s 2007 acquisition of Emerald Bank in Dublin, Ohio.
More eager to lend? Mr. Crowley said he hopes banks over the next five years again will be able to generate most of their capital internally through earnings, instead of externally by raising capital. Some banks in this region and elsewhere that have raised capital recently may have failed otherwise, leading to a loss of jobs and restricted choice for consumers and business borrowers, Mr. Crowley noted. And more capital should translate into more lending. “Every bank would love to make good quality loans, but to the extent that their capital position is weak, we have had banks here and nationally that have been looking to limit their growth just for the sake of keeping their capital ratios up,” Mr. Crowley said. That’s the case with Liberty Bank, which plans in the short term to add $45 million in new loans in one year thanks to the added capital, Mr. Valerian said. In the longer term, over the next three to five years, the goal is to grow the bank to $1 billion to $1.5 billion in total assets from its current $217 million. Some of that growth likely would be via merger or acquisition, Mr. Valerian said. ■
$70 million expansion partly financed by the American Recovery and Reinvestment Act, Mr. Rourke said. OneCommunity also plans to seek philanthropic money so that it can hire an executive tasked with designing an IT vision for area governments and helping them achieve it. Hospitals and schools have been faster to embrace IT innovation than governments, but the budget crunch many face is giving governments incentive to catch up, Mr. Rourke said, noting that they could save a lot of money and provide better services by sharing IT resources. “We’re sure there are fantastic returns somewhere in this,” he said.
Near and far Among the governments that have shown strong interest in sharing IT services are Cuyahoga, Summit, Medina, Portage and Stark counties as well as the cities of Akron, Canton, Hudson, Richfield and Tallmadge. Hudson Mayor William Currin said his city, Tallmadge and Summit County are putting together a proposal for OneCommunity. The group already was working on a plan to install fiber from Tallmadge to northern Summit County when it learned of OneCommunity’s effort. Local governments could save money by pooling their purchasing power when buying big software systems or by receiving IT support from other area governments that have extra capacity, Mayor Currin said. And there is plenty of extra
“We’re way overcapacity in Ohio because of our fragmentation, with every community duplicating everything.” – William Currin, mayor, Hudson
capacity in local government, he said. “We’re way overcapacity in Ohio because of our fragmentation, with every community duplicating everything,” said Mayor Currin, who is past chairman of the Northeast Ohio Mayors and City Managers Association and co-chair of the Regional Prosperity Initiative, which aims to get governments in the region to collaborate more. Budget pressures are helping local governments overcome their fear of change, Mayor Currin said. Though consolidations often are associated with layoffs, communities that don’t want to send anyone home can cut their staffs over time, by attrition, he said. Portage County also is considering writing a proposal to OneCommunity, said Brian Kelley, the county’s chief information officer. It wouldn’t be the first time the county has shared services with other governments, he said, noting that its sheriff’s department is about to start using Kent State University’s computeraided dispatch system, which is used by the campus police, the city of Kent and the city of Aurora. Momentum for more collaboration is building because so many local governments face budget pressures, Mr. Kelley said. Those same pressures, however, could derail collaboration plans that involve high upfront costs, he
said, noting that some communities may need to seek grants or other financing for projects. Communities looking to collaborate also will need to build strong relationships with each other, given how hard it can be for governments to give up control over services they provide, Mr. Kelley said. “Technology is not the challenge,” Mr. Kelley said. “It’s about people and relationships.”
‘It’s all the same stuff’ The state of Ohio has the capacity to provide several communities with email systems and computer storage space, said Stu Davis, who in January became Ohio’s chief information officer. The state should be able to offer more IT services to cities and counties if it can find the money to consolidate its servers into a single data center, he added. Today, Cuyahoga County occasionally provides web development services and Internet Protocolbased phone technology to suburbs within the county, but it could bring in more revenue by offering its IT services to more communities, said Jeff Mowry, who in April became Cuyahoga County’s first chief information officer. Bill Blausey reached the same conclusion while helping a task force put together a report on the state of the county’s IT system. Mr. Blausey, who is CIO of Eaton Corp., a publicly traded manufacturing company based in Cleveland, said there are plenty of opportunities for local governments to share software, servers, networks and services. “It’s all the same stuff in the back office,” Mr. Blausey said. ■
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AUGUST 1 - 7, 2011
Cleveland med mart developer pares back staff, operations By RYAN ORI Crain’s Chicago Business
woman also would not say how many people work for Merchandise Mart. Dave Johnson, spokesman for the Cleveland Medical Mart and Convention Center declined to comment, referring a reporter to the Chicago office, where a spokeswoman declined to speak about specific cuts. Mr. Kennedy, who announced his resignation last month, may have resigned rather than preside over a business set to become much smaller. Earlier this year, Vornado chairman Steven Roth said he planned to “scale the (Mart) business back to its core.” As part of a little-noticed restruc-
Merchandise Mart Properties Inc.’s layoff of 50 employees last week came less than a week after Christopher Kennedy stepped down as president and follows an edict by its parent company to pare back operations to just three cities. Merchandise Mart, a unit of New York-based Vornado Realty Trust that serves as developer for the Cleveland Medical Mart and Convention Center, confirmed the layoffs, but a spokeswoman would not verify the number or specify where the cuts took place. The spokes-
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says in a statement, “The market has changed dramatically over the last few years and we have taken a fresh look at the business.” The Merchandise Mart “is now making changes to enhance our overall efficiency while also enabling us to better serve our tenants and exhibitors and their customers,” he said. “These changes will improve how we go to market and help us build a better business. Unfortunately, the changes will result in the reduction of staff.” Mr. Kennedy’s departure and the layoffs follow the collapse of a deal
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turing announced earlier this year, Merchandise Mart, which at one time had operations in six markets, is now focused on just three: Boston, Washington, D.C., and Chicago, where it owns the hulking structure along the north bank of the Falanga Chicago River. Mr. Kennedy, who spent 25 years with the company once run by his grandfather, Joseph P. Kennedy, declined to comment, referring questions to the company spokeswoman. He remains a consultant to the Merchandise Mart. His successor, Mark Falanga,
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by Vornado to sell off the bulk of the Merchandise Mart for about $1.2 billion. This year, Merchandise Mart has been retrenching. The company handed back to a lender a property in High Point, N.C., after being unable to restructure a loan. A New York showroom and office building was assigned to another division within Vornado, and the real estate investment trust hopes to cash out of 350 N. Orleans St., which is on the market. Mr. Roth disclosed plans to pare back the Merchandise Mart operation in an April 11 letter to shareholders, noting that the unit had become less profitable. ■ Crain’s Cleveland Business reporter Jay Miller contributed to this report.
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Come, buy our seats, except for you scalpers
Still going strong after 99 years
“That’s what the West Side Market did for us,” Mr. Campbell said. — Jay Miller
The big story: Eighteen young health care
■ Despite a pesky owners’ lockout of players that many observers figure will cost at least part of the 2011-12 NBA season, the Cleveland Cavaliers last Tuesday emailed their “Insider” list, asking for $200 deposits on partial-season ticket plans now that the NBA schedule is “set.” A peculiar note — in big, blue type, but not comic sans — greets visitors to that website: “Partial Plan purchases are available for the state of Ohio and surrounding area buyers only. Any purchases made from an out of region address will be cancelled (sic) and your credit card will be refunded. Thank you for your understanding.” Crain’s reported in May that a Cavs open house at Quicken Loans Arena showed a bevy of seats available, many in prime, money-making locations. So, wouldn’t the Cavaliers want to grab all the business they can? Cavs spokesman Tad Carper said the team has taken this same measure in the past, in which it essentially vets customers calling for season tickets or partial season tickets. Now, he said, the Cavs are more explicitly informing potential customers. “It’s a mechanism we’re using to try to limit scalpers,” especially for high-profile games, Mr. Carper said. “We want to preserve as much direct-to-fan inventory as we can.” — Joel Hammond
■ Sam McNulty, owner of various restaurants along West 25th Street in Cleveland’s Ohio City neighborhood, recalls going to the West Side Market as a young boy and watching his mother pick out a live chicken at a poultry shop next door, then picking up the dressed bird at the end of their Saturday shopping trip. “It doesn’t get much fresher than that,” Mr. McNulty said, making a point about the allure of the 99-year-old, city-owned market and the so-called Market District that is growing up around it. Mr. McNulty was a panelist at a City Club of Cleveland program last Tuesday, July 26, highlighting the West Side Market, its role in building the vitality of the neighborhood around it and its coming 100th anniversary in 2012. Eric Wobser, executive director of Ohio City Inc., the neighborhood’s development nonprofit, described the West Side Market as an incubator for small, artisan-style businesses that can grow into stand-alone businesses in Ohio City and beyond. Mr. Wobser said he has seen 20 new businesses move into the Market District in the last two years as part of $40 million in new investment in the neighborhood. One of those businesses is Campbell’s Popcorn Shop, which is opening a shop on Lorain Avenue across from the public market after operating at the market since 2004. Jeff Campbell, owner of the business, said the foot traffic through the West Side Market provided the impulse shoppers he needed to test and refine his snack creations.
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companies in Northeast Ohio raised a total of $50.2 million in venture capital during the first half of 2011, according to BioEnterprise Corp.’s Midwest Health Care Venture Investment Report. That’s an improvement over the $37 million raised during the first half of 2010 and the $31 million raised in the first half of 2009. Still, the total falls short of figures from previous years: Health care startups in Northeast Ohio raised $60 million in the first half of 2008 and a record-setting $199 million in the first half of 2007. The amount raised by health care companies throughout the Midwest dropped 23.5% to $315 million during the 2011 first half from $412 million in the first six months of 2010.
Gives him time to think about it: Robert J. Kassouf, president and owner of the Kassouf Co. of Cleveland, will serve 57 months in prison for his role in a bribery scheme that paid $600,000 to William B. Schatz, formerly general counsel of the Northeast Ohio Regional Sewer District. Mr. Kassouf, 62, pleaded guilty last November to conspiracy to commit bribery in federally financed programs. He also must pay $682,000 in restitution. The payments were made between 2004 and 2007, at a time when Kassouf Co. and three other contractors in a joint venture were seeking a legal settlement for claims against the sewer district.
A job well done: N. Mohan Reddy, dean of Case Western Reserve University’s Weatherhead School of Management, will step down from his administrative post and return to teaching full time when his term expires in June 2012. Mr. Reddy became the school’s dean in December 2006 after serving four months in an interim capacity. During his tenure, he helped redesign many of Weatherhead’s proReddy grams that had been outdated. He also brought a sense of stability back to the school after years of revolving leadership at Weatherhead. Busy week: Chart Industries Inc., which makes equipment used in the production, storage and end-use of hydrocarbon and industrial gases, acquired a German company and secured a $40 million contract. The Garfield Heights company said it entered into a definitive agreement to buy GOFA Gocher Fahrzeugbau, which makes and maintains cryogenic and non-cryogenic mobile equipment, primarily in Europe. Separately, Chart said it was awarded a contract to provide brazed aluminum heat exchangers and other equipment for a baseload liquefied natural gas project in eastern Australia. Bright idea: GE Lighting agreed to acquire Lightech, a privately held producer of advanced lighting technology that is based near Tel Aviv, Israel. GE Lighting did not disclose what it will pay for Lightech, which it said invents, designs and manufactures power supplies, such as drivers, transformers and ballasts, for LED and low-voltage halogen lighting systems. This and that:
JumpStart Inc. agreed to invest $250,000 in Segmint Inc., a Tallmadge company developing software meant to help advertisers target consumers based on their spending habits. Segmint is expected to use the investment to expand its business development efforts. … Monarch Teaching Technologies Inc. of Shaker Heights received a $730,000 federal grant to further develop its software, which teachers use to create multimedia lessons for students with autism. The money will be used to turn the video modeling elements in the software system into more sophisticated tools.
■ Progressive Insurance is fixing to make customers more comfortable at a generally uncomfortable time. The Mayfield Village-based company began in June an initiative to freshen up and open more service centers, which serve drivers whose vehicles have been damaged. As part of the initiative, the company is retrofitting its 54 centers in 25 states with televisions and, on a case-by-case basis, computer kiosks and children’s play centers. The improvements to the existing centers, including those in Akron, Mayfield Village and Parma, should be completed over the next year or two, according to Kelly Crowe, senior controller in charge of the national service center expansion. “Would they (potential customers) buy insurance because we have a TV in our lobby? No, probably not,” Mr. Crowe acknowledged. However, accidents are traumatic, he said, and Progressive wants people’s time spent in its service centers to be as convenient as possible. Progressive also is building new centers nationwide. Two already are under construction, and the company is in the process of purchasing six other sites, Mr. Crowe said. Each site employs roughly 10 people. Mr. Crowe said he didn’t have a number for how many new service centers will open, but said the capital outlay for the project will be significant. — Michelle Park
Excerpts from recent blog entries on CrainsCleveland.com
of research for the report’s author, the Global Business Travel Association Foundation. Forbes.com noted that the top 50 U.S. markets are ranked two ways: by overall travel tax burden (general sales tax and travelrelated taxes combined), and by travel-related taxes only. The report included separate ■ Associated Estates Realty Corp. plans to data for central city and airport locations, as build a 104-unit luxury apartment complex the tax structures are often distinct. in North Dallas, according to the Dallas Cleveland was No. 7 on the list of U.S. Morning News. destinations where travelers incur the The real estate investment trust highest total taxes in central city based in Richmond Heights already locations. Chicago had the highest owns an apartment complex — its only taxes, followed, in order, by New Texas property — next to the project York, Seattle, Boston, Kansas site. The 1.5-acre property behind the City, Mo., and Minneapolis. The Del Frisco’s Double Eagle Steakhouse lowest taxes for travelers are conis owned by a church and is one of centrated in Florida, with the last vacant lots in the area. the top three spots going to Plans Associated Estates has filed with the city of Dallas show the new Welcome to Cleveland! Fort Lauderdale, Fort Myers and West Palm Beach. building will have rental units Now pay up. constructed around a courtyard and parking garage, according to the Morning News. An Associated Estates spokesman told ■ There’s at least one part of the small business the newspaper the REIT is not ready to lending environment that seems pretty robust. publicize its project plans. The Dayton Business Journal reported that small business lending by Ohio credit unions was up 20% during the first quarter of the year. Ohio credit unions originated $28.4 ■ People visiting Cleveland pay some of the million in business loans through March 31 highest travel-specific taxes in the country, of this year, up from $23.7 million during the according to a blog post from Forbes.com. like period of 2010, according to the Ohio The post was based on a new report, Credit Union League’s Quarterly Performance “Travel Taxes in the U.S.: The Best and Summary. Loans were originated by 101 Worst Cities to Visit,” which “found that taxes of Ohio’s 384 credit unions. targeting travelers impose an average cost As of March 31, credit unions reported of 56% more than general sales taxes,” business loan balances outstanding of $386.6 according to Forbes.com. Taxes on travelmillion, 8.3% higher than the previous March. related services, called discriminatory travel “Ohio small businesses are in need of taxes, are for things such as staying at hotels, credit to help them sustain, grow, and create renting cars and eating in restaurants. jobs. Credit unions are in a strong position “The discriminatory sales tax is above to lend, and have embraced the need,” said and beyond the general sales tax and is borne Paul Mercer, president of the Ohio Credit largely by travelers,” says Joe Bates, director Union League, in a statement.
Must not be hot enough here for Associated Estates COMPANY: Swift Filters Inc., Oakwood Village PRODUCT: Glue-Free MiniCrimp filter elements Swift says its new filter elements aimed at the racing industry feature a fully swaged, or crimped, design, which eliminates epoxy from their construction. Without epoxy, they are compatible with all fuels, including methanol and nitro methane, Swift says. The filter elements are made entirely of stainless steel and “can easily withstand high temperatures (500° F) and high pressures (up to 300 PSID), Swift says. They are unaffected by most corrosive fluids and can be cleaned and reused, according to the company. “For years we’ve been asked by major filter manufacturers to supply elements that didn’t require epoxy bonding due to concerns about fuel or oil contamination,” said Ned Swift, president of Swift Filters, in a statement. “These new designs address these issues while providing stronger construction, higher pressure and higher flow rates.” Mr. Swift said the filter elements are available from racing filter manufacturers in different filter housing styles. For information, visit www.SwiftFilters.com.
Credit unions a bright spot in the lending fog
Visitors to Cleveland find they have to pay up
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