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Owner of prime sites seeks to amend loan
Mortgage lenders opening new doors Banks hiring despite tepid housing market
Outcome of Gotham King’s debt talks could impact office market
By MICHELLE PARK mpark@crain.com
Joshua Beyl says he’s never seen his rivals in the mortgage business so aggressive. The mortgage loan officer, who has worked in mortgage lending 12 years, said even when he prices a loan as low as he can, he’s still being beaten more often for borrowers’ business. Mr. Beyl, who works for Nations Lending Corp. in Middleburg Heights, noticed a marked change in the mortgage market earlier this year. “Banks are more aggressive because they need to keep that income coming in,” he said. The aggressiveness of the business seems only to be building, as a number of lenders are hiring mortgage staff and offering limited-time interest rate promotions to attract business. First Federal of Lakewood has hired 10 new mortgage originators this year alone and plans to add another seven by year-end, which would bring its residential lenders to a total of 48. “Our HR department is working overtime,” said Ronald R. Webb, First Federal senior vice president and chief lending officer. Banking giant Chase is hiring, too, and hosted a mortgage operations job fair last week. The bank plans to fill about 50 mortgage positions this month in Cleveland. Some are new, and some are existing, though Chase spokeswoman Mary Kay Bean didn’t provide a breakdown. “We want to be there and lend to qualified buyers when they are ready to buy a home and refinance a home,” Ms. Bean said. And Nations Lending has a “gutsy, ambitious” plan to grow by January 2013 to 220 mortgage originators from its current 65, said Michael T. Bardy, vice president of operations. Today’s interest rates have created a “world of opportunity,” Mr. Bardy noted. But there’s more. “We’re under way to what should
By STAN BULLARD sbullard@crain.com
FIRMS FEAR LIFO MAY HIT SHREDDER Local companies face significant tax liabilities if government nixes traditional accounting method By DAN SHINGLER dshingler@crain.com
T
hey’re talking again in Washington, D.C., about doing away with LIFO accounting for business — and that could cost companies in Cleveland and across the nation billions in new tax liabilities. At least one area company, Applied Industrial Technologies Inc.
of Cleveland, says it alone has tens of millions of dollars riding on the issue of eliminating the last-in, firstout method of accounting. Mark Eisele, Applied Industrial’s vice president and chief financial officer, said the recent proposal by President Barack Obama to eliminate LIFO and require companies to pay taxes for its use to date would be expensive. It would mean his See LIFO Page 11
“It’s like a retroactive tax increase.” – Mark Eisele, vice president and chief financial officer, Applied Industrial Technologies Inc.
A partnership that owns nine prime office buildings in Cleveland’s eastern suburbs is in talks with its lender in efforts to modify the $136 million loan the investors used to buy the portfolio from Duke Realty Corp. in 2007. Local real estate investor Donald King, who along with New York investor group Gotham Partners bought the nine buildings, last week confirmed reports in mortgage industry publication TreppINSIDE: A closer look at Wire and by the Morningstar the properties in Gotham investment research firm King’s portfolio. Page 8 that the loan was assigned to “special servicing” by the lender. LNR, a company in Miami Beach that manages distressed mortgages for lenders and also buys distressed loans and properties from lenders, is in the special servicer role. Mr. King confirmed that Gotham King skipped its July payment on the mortgage, but he described the failure to pay as a means to get a special servicer appointed to consider the investors’ efforts to restructure the loan. “We’re simply talking to the lender to restructure the loan,” said Mr. King, who is the managing member of Gotham King Fee LLC, the partnership that owns the buildings. “The real estate market is not what it was when we purchased the properties. It’s pretty typical of what a lot of landlords are doing.” Nonetheless, a local real estate expert, who spoke on grounds of anonymity, said Gotham King risks losing the properties if the lender, identified in mortgage documents as LBUBS 2007-C2, chooses not to restructure the See KING Page 8
INSIDE KeyBank Center sold An unidentified investor group won the bid in an online auction for the 23-story office tower at 800 Superior Ave., which soon will have a vacancy rate of about 60%. The purchase price was far less than the property’s land value. To read more, see Stan Bullard’s story on Page 3.
See MORTGAGES Page 6
NEWSPAPER
SPECIAL SECTION
Crain’s profiles the area’s top human resources professionals Page 17
Entire contents © 2011 by Crain Communications Inc. Vol. 32, No. 32
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TAKEOFF
COMING NEXT WEEK Work it Many Northeast Ohio companies have stepped up their efforts to promote a healthy environment within the workplace, with benefits such as fitness centers and wellness programs. We explore these efforts in our Health and Wellness section.
If it seems like your flights out of Cleveland Hopkins International Airport and AkronCanton Airport are getting more expensive, well, they are. New federal data show that average domestic fares at Cleveland Hopkins International Airport rose 10% in the first quarter of 2011 compared with the like quarter of 2010. Fares during that period at Akron-Canton rose 10.5%. Both airports’ fare increases were higher than the national average. Here’s how Ohio five largest airports stack up against the nation as a whole.
REGULAR FEATURES Best of the Blogs ........31 Big Issue ....................10 Classified ..................30 Editorial ....................10 From the Publisher ....10
Going Places ................9 List: Foreign-owned companies ............28 Milestone ..................31 Reporters’ Notebook ..31
Airport
Q1 2011 fare
Q1 2010 fare
% change
Cincinnati
$465.75
$404.29
15.2%
Cleveland
407.59
370.65
10.0
Dayton
342.20
314.12
8.9
Columbus
333.72
299.05
11.6
Akron-Canton
297.66
269.48
10.5
U.S. average
355.72
328.12
8.4
SOURCE: U.S. BUREAU OF TRANSPORTATION STATISTICS; WWW.BTS.GOV
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Tri-C acquires more Westlake property Industrial park acreage seen as ideal for campus development as enrollment surges By TIMOTHY MAGAW tmagaw@crain.com
Although Cuyahoga Community College isn’t done developing existing land at its new campus in Westlake, the school already is pursuing more property in the area to accommodate what it perceives as an explosive market for its services. Tri-C has signed an agreement to pay $1.21 million for two plots, totaling about 11 acres, of the Beacon Westlake industrial park that sits north of Interstate 90 off
Clemens Road — just steps away from the college’s new Westshore Campus. The deal is pending final approval by the State Controlling Board, which is set to rule on the matter today, Aug. 8. Charles Marshall, a developer who owns the land, said Tri-C and Westlake officials expressed interest in changing the site from an industrial zone to one that would be more conducive toward a college environment. “They don’t look at an industrial site as a good entrance statement to
Mysterious bidder nabs KeyBank Center for $7.1M in online auction
a Tri-C campus,” Mr. Marshall said. “They would rather have support facilities for Tri-C. The whole area is changing from what we originally designed it for.” The industrial park houses four companies — Industrial Electric Wire, West Shore Distributors, Controlco and Inspection Engineering — and a daycare center. However, Mr. Marshall said no business will need to move, as there are more than 40 acres available at the business park. The college opened a $24.3 million, 65,000-square-foot building this spring on its Westshore Campus, a 31-acre site it bought in 2008. Tri-C’s master plan for the campus calls for a two more buildings, according to Craig Foltin, the college’s executive
vice president of administration and finance. Dr. Foltin said residents in the western suburbs “pay property taxes that help fund us and keep our
tuition low, and we’re just beginning now to tap into this area of the county that also deserves these kinds of opportunities.” See LAND Page 28
INSIGHT
Buyer faces challenges with outfitting building By STAN BULLARD sbullard@crain.com
In a surprise move in downtown Cleveland’s long-ailing office market, an unidentified investor group has won the bidding for vacancy-riddled KeyBank Center, which formerly was known as McDonald Investment Center, via a lender-ordered online auction at www.auction.com. Michael Guggenheim, president of the Guggenheim Realtors brokerage in Beachwood, confirmed there was a successful bidder in the web auction that concluded July 27 for the building at 800 Superior Ave.,
PHOTO PROVIDED
Sam Gerace, CEO of Cleveland-based Veritix, says the company that processes ticket sales for major sports events is planning to bolster staff size at its Cleveland office.
See BID Page 8
STAN BULLARD
THE WEEK IN QUOTES “We would have to pay taxes on things that happened decades ago. … It’s sort of like if they repealed the home interest deduction on your house and said you had to pay all that back.” — Mark Eisele, vice president and chief financial officer, Applied Industrial Technologies Inc. Page One
“We had to rethink the way we did business. It’s difficult for one agency on its own to address the needs of every client.” — SueAnn Naso, president, Staffing Solutions Enterprises. Page 13
“Real estate’s not going to go down for forever. I think there’s some belief that the real estate market is as bad as it’s going to get and it’s going to get better.” — Kevin T. Jacques, the Boynton D. Murch Chair in finance at Baldwin-Wallace College. Page One
“These new technologies are a perfect way as a younger agent to sell yourself.” — Joe Rath, real estate agent, ERA Rath Realtors in Rocky River. Page 15
JUST THE TICKETS Cleveland firm Veritix scores big in sporting event sales, plans to up the ante with foray into targeted marketing By CHUCK SODER csoder@crain.com
F
our years ago, Flash Seats was just a website where Cavs fans sold extra tickets. Now it’s part of a software system that has been used to sell well over $1 billion in tickets — both physical and digital — for live events in 30 states. Veritix, the Cleveland company that developed Flash Seats, has won the right to process ticket sales for several major sports teams and entertainment venues since 2008. Its clients include the owner of the arena where the Denver Nuggets play, the athletic department at Texas A&M University and even the NCAA. See VERITIX Page 7
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Influx of out-of-region patients exacerbates nursing shortage By TIMOTHY MAGAW tmagaw@crain.com
Northeast Ohio’s health care sector may be staring down a nursing shortage faster than anticipated due to an influx of patients migrating from outside the region for care, according to a new work force forecast released by a local hospital advocacy group. “In a lot places, that (in-migration) doesn’t matter, but in a place like Cleveland, where you have organizations like University Hospi-
tals and the Cleveland Clinic, you have people coming from the rest of Ohio, nearby states and even all over the world,” said Craig Moore, a Massachusetts-based consultant and economist who helped develop the forecast for the Center for Health Affairs. “That is substantial,” Dr. Moore said. “That increases the demand for health care and the demand for nurses.” Work force projections rarely consider what Dr. Moore characterizes as “export sales” — those that
come from outside the region for care — but rather focus solely on regional demographics. Assuming a modest growth in the amount of care provided to outsiders, Dr. Moore said the demand for nurses could surpass the supply as quickly as later this year or early next year. By 2015, the region could face a shortage of about 2,000 full-time-equivalent registered nurses and as many as 4,000 by 2020. “There’s going to be more need for more health care and people in the health profession are going to be retiring,” Dr. Moore said. “That’s a perfect storm.” Dr. Moore compared economic data from Northeast Ohio’s health care sector to similar-size markets. He found that total receipts, payroll and employment figures of Cleveland’s health care sector far exceed those of San Antonio, Cincinnati, Columbus and other comparable cities — a factor he attributes largely to providing care to people from outside the region. Dr. Moore suggested that as much as one-third of health care revenues generated in Cleveland come from patients who live outside Northeast Ohio. An aging population also factors into the looming nursing shortage, according to several health care professionals. They say the work force forecast model developed by Dr. Moore and Cypress Research, a local consulting group, could help all interested parties avert a potential squall. For example, Northeast Ohio is flush with accredited nursing programs, many of which have waiting lists for prospective students. But with the new work force forecast, many nursing schools are expected to consider expanding their programs, if they aren’t already. “There is a direct relationship between the number of students and the number of nurses needed,” said Laura Dzurec, dean of Kent State University’s School of Nursing. “This helps us figure that out.” The forecasting tool also can be adopted by hospitals, allowing them to modify variables — such as patient migration patterns and patient volumes —to gauge the demand for nurses for their institutions. Traditionally, hospitals largely have based hiring on annual turnover rates and factors such as whether a new wing or building was opening. “One area there was a huge gap was that we did not have regional information about our supply of registered nurses and (licensed practical nurses), as well as the demand,” said Lisa Anderson, vice president for the Center for Health Affairs. “The federal government does surveys and breaks it down by state, but this gets us down to local level.” ■
Volume 32, Number 32 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2011 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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Mortgages: Economic uncertainty lingers continued from PAGE 1
be — hopefully, probably — the largest purchase market that we’ve ever seen,” he said. Once consumers regain confidence, it’s “only natural” that they will take advantage of low home prices and low rates, Mr. Bardy predicted. All this amid a housing market that remains depressed. On a national basis, refinance application levels are roughly 30% lower than they were when rates were previously this low, and the level of applications to buy homes has decreased in the past couple months to lows last seen in 1997, according to the July monthly commentary by the Mortgage Bankers Association. But banks are flush with deposits and looking for places to lend. They’re not interested in buying Treasury bonds because returns are so low, and their desire to do business lending is deflated by the potential for a second-wave recession, said Kevin T. Jacques, who worked for 14 years for the U.S. Department of the Treasury. “Despite the fact that it might seem a little strange, with real estate and mortgages, you still have the potential for making some profit relative to other opportunities,”
said Mr. Jacques, the Boynton D. Murch Chair in finance at BaldwinWallace College. “Real estate’s not going to go down for forever,” he added. “I think there’s some belief that the real estate market is as bad as it’s going to get and it’s going to get better.”
Home field advantage Some banks may be acting now because they believe the “sun is coming up” and the housing market is near the bottom, agreed Mike Van Buskirk, president of the Ohio Bankers League. Plus, a good deal of mortgage personnel talent is available for hire as a result of cutbacks, he said. First Federal’s Mr. Webb said he has seen competitors react in two ways to the tough mortgage market: Some have focused on capturing what business exists, while others have exited segments of the business. First Federal has stayed “highly focused” on the mortgage business because it’s a main source of revenue for the institution, said Douglas R. Baker, vice president of residential lending. The year 2010 actually was a record lending — and record mortgage — year for the institution, Mr. Webb said. It closed a half-billion
dollars in loans, and 80% of that was residential mortgages — largely refinances. Unlike last year, about 80% of this year’s pipeline of mortgage loans are home purchases, Mr. Webb said. “What we’re happy to see is that even though the market may not be gangbusters right now as far as activity, our share has certainly increased,” he said. Mr. Baker said he believes First Federal’s increases are the result of a “flight to quality” — more buyers desiring to borrow from institutions where the underwriting is local. He also said loan officers want to align themselves with local institutions. Lower home prices have attracted some buyers into the market, according to Ms. Bean of Chase. She called mortgages a “very important relationship product” for banks because people who have them are more likely to have other products and services, such as checking accounts, with that bank. Chase’s new mortgage hires will join several hundred who already work in the bank’s mortgage operations in Northeast Ohio, Ms. Bean said. Some will support the hundreds of mortgage loan officers Chase has hired since 2009, and
nsights
some will support the New YorkNew Jersey-Connecticut market, Ms. Bean said. Chase’s mortgage market share, Ms. Bean said, was up in the Cleveland area for all of 2010 over 2008.
Here’s the deal Not everyone is aiming to lure mortgage business with added feet on the ground. While its people are “optimistic for the future,” Third Federal Savings & Loan Association of Cleveland is not seeing a significant uptick in business and is not hiring mortgage personnel, spokeswoman Jennifer L. Rosa said. However, the thrift is developing what she termed “alternative ways, including products and pricing, to attract customers looking for a home.” They include a promotion that began two months ago that offers first-time homebuyers a discount of one-quarter percentage point off their mortgage rate and a 10% down product introduced last month. Fifth Third Mortgage Co. likewise announced in July that it’s offering customers through Aug. 31 a choice of two new purchase mortgage incentives. Buyers can choose either a one percentage point interest rate reduction for the first year of a mortgage or take a one-eighth percentage point reduction for the life of the loan.
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Now remains a “very dangerous environment” for bank lending and bank risk, Mr. Jacques of BaldwinWallace said, citing concerns of
another recession, instability in the real estate markets and the risk of a downgrade to the credit rating of the United States. “The macro environment is very difficult, and if you’re a bank and you’re trying to be more aggressive in any market, you’ve got to tread carefully,” he said. However, if banks’ credit underwriting standards are solid and they’re picking the right markets, Mr. Jacques is confident that mortgage isn’t a bad business to be in by any stretch. As banks increase their mortgage lending efforts, more people who want to buy homes and can qualify should have the financial ability to do so, he noted. It’s not that all these Northeast Ohio bankers expect the mortgage business to go gangbusters in the near term. However, some are optimistic that business will pick up, and they aim to be ready when it does. While Mr. Webb forecasts increased volume for First Federal, he doesn’t anticipate any big boom in local mortgage business over the next year. The Mortgage Bankers Association’s mortgage outlook for this year and next year also isn’t robust. For all of 2011, the association anticipates total originations to decrease to about $1 trillion from $1.57 trillion in 2010. Purchase originations are expected to fall 12%, to $415 billion from $473 billion in 2010. And as mortgage rates increase slowly to 5% for a 30-year fixed-rate loan by year-end, the association expects refinance originations to decrease 45%, to $603 billion. By the end of 2012, mortgage rates are expected to increase to 5.6%, causing a continued slide in refinances, the MBA has forecasted. ■
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Veritix: Software offers closer look at buyers’ habits continued from PAGE 3
The company — founded in 2006 when an investment group led by Cavs owner Dan Gilbert bought a patent related to the software — has prepared for more growth. For one, Veritix last November announced it had secured a $100 million line of credit from Rockbridge Growth Equity LLC, which also is one of Mr. Gilbert’s companies. Plus, for the past few years Veritix has been hiring software engineers to improve its technology, which gives its clients a way to sell tickets without actually issuing a physical piece of paper, said CEO Sam Gerace. Ticket holders enter events by simply swiping a credit card, a driver license or some other form of ID containing a magnetic identification strip. Because of the focus on the software, most of the company’s 83 employees work out of its offices in Dallas and San Jose, Calif., not Cleveland, Mr. Gerace said. Veritix acquired Dallas-based Vertical Alliance in late 2007, and the developers who created the first version of the software were based in Silicon Valley. The next wave of growth, however, should boost the size of the company’s Cleveland office, which today employs 12, Mr. Gerace said. “We’ve now started to grow the non-engineering side of the business,” he said. “That’s where you’ll see the bigger growth (in Cleveland).”
Working out the kinks The company still faces challenges, of course. Ticketmaster, which has its own system for selling paperless tickets, remains the dominant player in the ticketing business. Plus, an organization called the Fan Freedom Project has been speaking out against some companies that offer digital tickets, arguing that some systems put unfair restrictions on how fans can resell their tickets. The Washington, D.C.-based group doesn’t have a big problem with Veritix’s system, mainly because it allows fans to transfer their tickets electronically to other
– Sam Gerace, CEO, Veritix people for free. Still, the company should change its software so that fans can resell digital tickets on other online marketplaces, such as StubHub, said Jon Potter, president of the Fan Freedom Project. StubHub, which is owned by eBay, finances the group. “It’s not a complete solution,”
Mr. Potter said. Veritix has offered StubHub and other ticket brokers the option of interfacing with the company’s system, but they would have to pay to do so, Mr. Gerace said. Even so, ticket holders still can sell tickets to people they know without paying a fee: They can arrange payment in private and then transfer the tickets as if they were a gift. But if they want access to all the potential buyers searching for tickets on Veritix’s network, they’ll have to pay the fee. “Our marketplace has value,” he said. Kurt Schwartzkopf is a big fan of the technology. His company,
Kroenke Sports & Entertainment in Denver, uses the system to sell tickets at all the venues it owns, including the Pepsi Center, which is home to the NBA’s Denver Nuggets and the NHL’s Colorado Avalanche. The rate at which ticket buyers are using the Veritix system to buy paperless tickets “continues to astonish us,” said Mr. Schwartzkopf, who is Kroenke’s chief marketing officer. Not only does technology work well, but the company’s owners and its management also have a lot of industry experience, he said. “They know this business better than anyone,” Mr. Schwartzkopf said. ■
We make it our business to know your business.
Analyze this Part of that growth will come in the form of a new team being formed at Veritix’s headquarters in Tower City Center, which houses company executives, as well as sales, marketing and some client services functions. The new group will help clients analyze data they collect using Veritix’s software, Mr. Gerace said. The company will hire at least five people to join that team, he said, adding that it’s likely the group could have 20 employees before the end of the year. Some clients use the software to study the habits of ticket buyers, and could use that information to help design marketing campaigns. For instance, sports teams could send coupons for team-owned restaurants to ticket buyers who tend to show up a few minutes before tipoff, Mr. Gerace said. The system can be programmed to send offers to ticket buyers automatically or to alert sales staff of upsell opportunities, he said, adding that it can be tied in to digital marketing software clients already use. However, Mr. Gerace said some clients rather would have Veritix help them analyze data the software collects. “In many ways I think Veritix is a marketing and information systems company masquerading as a ticketing company,” he said. The Veritix system was used to sell about 11 million tickets valued at $585 million in 2010. The system processed $390 million of tickets in 2009, the same year it settled a lawsuit with Ticketmaster that allowed it to sell tickets for every event at Quicken Loans Arena. It processed $208 million in tickets in 2008. Veritix charges clients a fee on every ticket they sell, Mr. Gerace said, noting that the fee goes down for clients that sell more tickets. He declined to say how much Veritix receives per ticket or provide revenue figures for the company.
“We’ve now started to grow the non-engineering side of the business. That’s where you’ll see the bigger growth (in Cleveland).”
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debt and looks to foreclose. Mr. King said he does not worry about the lender instituting a foreclosure action, though he would not detail as to why he isn’t concerned. The Gotham King portfolio commands local attention because it includes many of the gems of the East Side office market, from the Landerbrook Corporate Center I, II and III office buildings in Mayfield Heights to Corporate Circle in Pepper Pike. The properties encompass nearly 900,000 square feet of office space. Mr. King declined to discuss the changes in terms Gotham King is seeking from its lender. However, as far as the properties go, Mr. King said, “Everything is good. We’re about 85% occupied.” F. Brock Walter, a principal at Pinnacle Financial Group, a commercial mortgage brokerage in Independence, said it’s “almost a rule of thumb” that a borrower must default in order to get a lender’s attention on a securitized loan. Mr. Walter said it isn’t unusual to find commercial securitized loans that are classified as special servicing. About 6% of all syndicated commercial loans are in special servicing and 11% of the loan balances outstanding in the securitized mortgage market are in special servicing, according to
PLUM SPACES The following properties comprise Gotham King’s portfolio: ■ Landerbrook Corporate Center I, II and III in Mayfield Heights ■ Corporate Circle I and II in Pepper Pike ■ Corporate Place, Beachwood ■ One Corporate Exchange, Beachwood ■ Metropolitan Plaza, Highland Hills ■ One Harvard Plaza, Highland Hills national data Mr. Walter provided. No foreclosure actions against the properties had been filed as of last Thursday, Aug. 4, in either Cuyahoga County or U.S. District Court in Cleveland, according to a search of computer databases. Mr. King said no such formal legal filings were in the offing. Bob Nosal, managing director of Grubb & Ellis Co.’s Cleveland office, said the former Duke portfolio has fared well under Mr. King’s control and has renewed substantial top-tier tenants as their leases have expired. However, as rents generally are now lower now than in 2007, the properties likely produce less revenue to support the loan, and the value of the properties has declined since the loan was made, Mr. Nosal said.
Because the properties in the Gotham King portfolio account for about 20% of the office space in the eastern suburbs, the outcome of Gotham King’s debt talks could have a profound impact on the broader office market, even if the lender does not put the properties in foreclosure. Steve Egar, president of Egar Associates real estate brokerage, said if Mr. King succeeds in reducing the portfolio’s debt outstanding or achieving other favorable loan modifications, the owner would be able to compete more vigorously for tenants. As a result, lower rents may trickle through the market. And if the buildings went into foreclosure, they could create a glut of available properties on the market that further would depress the value of competing buildings. The properties held by Gotham King either were developed by Indianapolis-based Duke between 1997 and 2001 or were acquired by Duke after it entered the Cleveland market. The real estate investment trust shed the portfolio in 2007 as part of a plan disclosed in 2005 to exit Northeast Ohio in search of stronger office and industrial markets. Duke retains 14 buildings in the Rockside Road office corridor and in North Olmsted that it has been unable to sell. ■
Bid: Insiders say Cleveland market improving continued from PAGE 3
which soon will have a vacancy rate of around 60%. However, he declined to identify the winning bidder because the group asked him not to disclose that information before the
purchase closes. A Google snapshot of the www.auction.com page for the auction of the building indicates a final bid of $7.1 million, or double the $3.5 million initial bid price. Mr. Guggenheim wouldn’t comment on the purchase price, though he said multiple parties were bidding for the building that dates from 1969. The last time the building sold in an arms-length transaction was in 2007, when the Dallas-based real estate company Behringer Harvard paid $45 million for the structure as part of an 11-skyscraper portfolio. Guggenheim served as the local brokerage contact in the offering and manages the building for LNR Partners, the lender in Miami Beach that owns it. Under auction rules, the investor must close the deal by late August or LNR could take the 23story office tower back to market. In a tantalizing twist to the mystery-cloaked purchase, a limited liability corporation named “800 Superior, LLC” was recorded Aug. 2 with the Ohio Secretary of State’s office. However, the filing provides no clue to the identity of the Delaware-incorporated party that intends to use the name. Behringer surrendered the building’s keys in 2010 to LNR, which invests in distressed mortgages and handles distressed properties for lenders. Cuyahoga County assigns the building a market value of $44 million for property tax purposes. The apparent winning bid is far less than the property’s land value, which the county sets at $11 million. In other words, the building’s buyer stands to get it for less than the land alone should fetch downtown.
Wide open spaces When Behringer gave up the building, it said it did so because it felt the cost of populating it with
new tenants was too costly and Cleveland rents were too low to be worthwhile. Late last year, the Calfee Halter & Griswold law firm announced it would exit KeyBank Center for a renovated building all its own at 1200 Rockwell Ave.; the move will empty six more floors this fall. Just last year, the former East Ohio Gas Building at 1717 East Ninth St., on the opposite corner of East Ninth and Superior from KeyBank Center, did not sell at an auction. However, real estate experts say the market for real estate investments and leasing is improving in Cleveland and across the country, and that the challenges faced by KeyBank Center are smaller than those of the mothballed, empty building at 1717 East Ninth. “No one would bid on a building like this if their outlook on the city were negative, negative, negative,” said Bill West, a partner at the Ostendorf-Morris Co. real estate brokerage. Mr. West said the process of adding tenants to KeyBank Center would be less extensive and expensive than returning the old East Ohio Gas Building to service. Nonetheless, Mr. West said it still will take a sizable amount of cash to outfit space for new tenants, which will make it hard to turn a profit at current rental rates. Viewing a pending sale of the building as a step forward for Cleveland is Michael Deemer, director of business development at the Downtown Cleveland Alliance stakeholder group. “We’re not aware who the winning bidder is, but look forward to engaging with them to discuss the market downtown and make sure they are fully aware of all state, county and city support for bringing businesses to the building,” Mr. Deemer said. ■
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OPTIEM LLC: Jordan Burnside to SEO manager; Joe Santoli to paid search manager.
GOING PLACES JOB CHANGES
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EDUCATION
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CASE WESTERN RESERVE UNIVERSITY SCHOOL OF MEDICINE: Dr. David S. Rosenbaum (MetroHealth) to the Louis Rakita, MD and Maurice Moss, MD Professor in Cardiology.
FLACK STEEL: John M. LaScola to vice president, commercial operations.
TRUST FOR PUBLIC LAND: Dave Vasarhelyi to senior project manager; Kim Kimlin to project manager.
MARKETING
SERVICE
AKHIA: Katrina Healy to senior account executive; Amber Davis, Carrie Drummond, Jodee Hammond, Holly Kleese and Lukas Treu to assistant account executives.
GLOBAL TECHNICAL RECRUITERS: Stephanie Baker to vice president, operations and sales.
ENGINEERING MANNIK & SMITH GROUP INC.: Pamela L. Davis to director of planning and sustainable development, NE Ohio.
FINANCE BANK OF AMERICA MERRILL LYNCH: Larry McDonald to senior vice president, senior client manager; Florence Hatvany to senior vice president, senior treasury solutions officer; Eric Johnson to vice president, business banking client manager; Anna Benade to treasury solutions analyst.
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HILEMAN ENTERPRISES: Ana Terstage to web designer; Megan Bardy to account manager. LIGGETT STASHOWER: Joseph Baucco and Tim Boesel to graphic designers; Rachelle Patsey to account executive.
IMARC RESEARCH: Huwaida Betts, Lauren Dye, Jessica Flynn, Kelly Granath, Stephani Hulec, Jenine Jones, Jacqui Lingler, Jamie Wynbrandt and Rebecca York to clinical research associates.
TECHNOLOGY INTERCON GROUP: Jennifer
Davis to director, social media marketing.
Randell McShepard (RPM International) received the 2011 Black Professional of the Year Award.
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HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION: Kelly Linson and Jill Barber (Southwest General) received 2011 Future Financial Leaders Awards.
CLEVELAND SOCIETY FOR HUMAN RESOURCE MANAGEMENT: SueAnn Naso (Staffing Solutions Enterprises) to president; Lauren Rudman to president-elect; Dawn Zima to past president; Beth Warholy, Vicky DePiore, Shirley Hunter, Michael Hoffman, Doug Justus and Janet Rohlik to vice presidents; Pam Smith to chapter administrator.
AWARDS AMERICAN NUCLEAR SOCIETY: Dan Yurman received a 2011 Special Recognition Award. BLACK PROFESSIONALS ASSOCIATION CHARITABLE FOUNDATION:
INTERNATIONAL COUNSEL OF SHOPPING CENTERS: Michael E. Stevens (Forest City Enterprises) received the 2011 Trustees Distinguished Service Award. NATIONAL INSTITUTE FOR TRAUMA AND LOSS IN CHILDREN: Gretchen M. Miller (Domestic Violence and Child Advocacy Center) received the Trauma Consultant Supervisor Award.
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FIRSTMERIT CORP.: Daniel P. Crawford to senior vice president, investment team leader; Scott E. Dodds to senior vice president, team leader, business banking.
FINANCIAL SERVICE ERNST & YOUNG LLP: Gregory Miller to partner. TRINITY PENSION CONSULTANTS: Beth Cecconi to defined benefit relationship manager.
HEALTH CARE UNIVERSITY HOSPITALS CASE MEDICAL CENTER: Dr. Pablo R. Ros to radiologist-in-chief; Dr. Warren R. Selman to neurosurgeonin-chair. WILLCARE: Lolita Marshall to branch administrator; Tammy Pakiz to director of patient services.
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we’re not. In fact, so far this year, we’ve extended nearly 10 billion dollars in credit to business customers, and we plan to lend another 28 billion dollars in the year to come. In addition to lending, we will keep supporting local businesses with financial solutions and services that can improve productivity and, ultimately, help them succeed. Find out how we can help you drive results at 53.com/drivingresults or call 1-877-804-2091.
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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
We’ll see
T
rust and collaboration — two commodities that at times have been in short supply in efforts to promote regionalization in Northeast Ohio — will be among the linchpins that will determine whether the wheels stay on JobsOhio, the nonprofit vehicle created by Gov. John Kasich to drive business development and job creation in the state. We admit we haven’t been quick to endorse the concept of turning over a big chunk of the economic development duties performed by the Ohio Department of Development to an organization that isn’t under state control. One reason for our reticence is that we haven’t found the department to be as plodding in responding to the needs of business as Gov. Kasich has made it out to be, both before and after his election last fall. However, details that have emerged over the last few months of how JobsOhio would work have us inclined to give a try to this experiment in bringing a venture capitalist approach to a role that traditionally has been the province of the state bureaucracy. We’re particularly intrigued by the idea of JobsOhio contracting with six regional organizations — most of which already work in the economic development trenches — to serve as its primary eyes and ears in their portions of the state. In Northeast Ohio, that job would be performed by Team NEO. It’s the business attraction group that, in its early days, tried to play a bigger role in helping broker business expansion and retention deals, but eventually narrowed its focus because of resistance from municipal leaders and local chambers of commerce to Team NEO playing in their sandboxes. Under the setup envisioned by Mark Kwamme, the venture capitalist whom Gov. Kasich wooed to head JobsOhio for $1 a year, the six regional groups would be the conduits through which deals would flow if the people behind them expect to secure state incentives such as loans and tax credits. That arrangement may not sit well with various mayors and chamber heads, who have been accustomed to controlling the dealmaking process and working directly with state officials. And attempts to circumvent it could provide an interesting test of the Kasich/Kwamme team’s commitment to its decentralized vision of how the economic development process should work. For example, what happens when local civic leaders try to do an end-around their regional group by bringing directly to the governor a big deal, such as a potential headquarters relocation (think American Greetings), with hundreds if not thousands of jobs at stake? Will exceptions be made to the JobsOhio rules for deals of a certain scale? We raise the questions because history indicates many economic development officials at the grassroots level may not embrace readily the change the Kasich administration is promoting. It is going to take local officials trusting the regional intermediaries to look out for their best interests, then working together with them to make deals happen, for JobsOhio to be the job creation tool the governor envisions. We’ll see whether it evolves as he, and we, hope.
FROM THE PUBLISHER
Fear of financial fragility not finished
T
Who would have ever thought that we’d be here was plenty of angst-ridden at a place in the nation’s history where it financial news coverage over the was a problem that our citizens were saving past couple weeks, what with all more and paying down debt? the arguing and posturing in The other disconcerting truth is that Washington over the debt ceiling, the we will now be victimized by months of losses in the U.S. equity markets and the repetitive political carping by both sides, ongoing worry over the Eurozone. neither of which distinguished itself in But this lead paragraph — from a the debt limit death dance. CNN/Money.com story — really House Speaker John Boehner, a bothered me: It read: “The fight BRIAN seasoned, respected veteran of over the national debt is not TUCKER Capitol Hill battles, seemed over. Not even close.” poised to strike a deal with The story by Charles Riley President Obama that went on to predict that even offered long-term benefits for though lawmakers finally voted our country and its economy. to raise the debt ceiling so our But he couldn’t convince his country did not default on its strident Tea Party wing, many of obligations, we still face month whom were elected on the “no upon month of bickering and taxes for any reason” mantra. political maneuvering over our On the other side, liberal leaders of the future course. Democrats — such as Sen. Carl Levin of That’s just plain scary, for a couple Michigan — were mouthing the same reasons. Most obviously, we all should old, tired nonsense about how the “rich” be concerned about our fragile economy aren’t paying enough taxes, and the and the recovery that never seems to Republicans wanted nothing more than fully start. Part of the sluggishness is fear to gut services to the poor and elderly. — on the part of consumers who aren’t Because both our major parties and spending and companies that aren’t hiring.
their leaders have allowed their most radical arms to hijack the political process, we have emasculated the veteran legislators who know the value of compromise after honest arguments over the issues at hand. Presidents of both parties have presided over steady increases in American debt because they can’t bring themselves to say “no.” Both should listen to Rob Portman, the U.S. senator from southern Ohio who is a respected former U.S. trade representative and federal budget director. He’s known as someone who’s reasonable and willing to compromise, yet who understands fully the perils we face as a debtor nation. He urges tighter spending, a reform of the tax code and smart changes that would strengthen Medicare and Social Security for future generations. Listen to him, Washington, and abandon the shrill voices of the radical left and right, of those whose only concern is getting re-elected. Now, perhaps more than ever, we need real leaders, not political opportunists, in our nation’s capital — for the sake of us all. ■
THE BIG ISSUE The U.S. Commerce Department announced that Americans cut their spending in June for the first time in nearly two years. What spending have you cut, what spending have you not cut, and why?
BILLY BASS
CHRIS GAROFOLI
LEAH HASLAGE
HANNAH DETEC
Cleveland
Pepper Pike
Lakewood
Youngstown
It’s about time they cut some spending. What I cut was cable TV. Don’t know if I’m happy about that. That’s just too much money for me. And I’ve cut out driving as much as possible.
I really haven’t cut anything. I haven’t had that much of a hit — yet.
I have started going out to eat a little less. That’s my big indulgence. Instead of going out three, four nights a week, I now go out for one to two.
I don’t cut on food because I really like food. But anything shopping-wise (I cut), probably because I have too much, and I realize I don’t need that.
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com
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LIFO: Revenue shortage stirs movement Tired of Being Screwed? continued from PAGE 1
HOW IT WORKS
company’s tax liability could rise by more than $50 million based on current inventory levels — and as much as $60 million if those levels climb to where they were a few years ago. The company would have 10 years to pay, but that gives Mr. Eisele little comfort. “That’s $60 million I don’t have to invest in my facilities, to invest in my people and to expand,� Mr. Eisele said. And Applied Industrial is not alone. The move would affect most manufacturers, along with their suppliers, retailers, car dealers and just about any other business that carries an inventory. Applied Industrial and other businesses that would be affected, along with their accountants, are united in opposition to the proposed change. “Add my name to the list of people who don’t want to see LIFO go away,� said Suzy Hecht-Remer, owner of Midwest Box Co., also in Cleveland. Companies have been relying on the LIFO accounting method for years, often decades, in part because the federal government told them it was an accepted method of accounting. Now the government might want them not only to stop the practice, but also to pay for using it in the past. That’s not fair, financial executives say. “It’s like a retroactive tax increase,� Mr. Eisele said. “We would have to pay taxes on things that happened decades ago. It’s not like this money is sitting in my cash. It’s sort of like if they repealed the home interest deduction on your house and said you had to pay all that back, going back to when you bought the house.�
1970s, LIFO was a useful tool for companies that were watching the cost of their goods and raw materials skyrocket due to high inflation. Today, it’s called an “arcane� accounting method by no less than the president of the United States, who is only the latest in a long line of politicians and financial pundits to call for its abolishment. This time, though, LIFO’s supporters are more worried. The government is hungry for tax revenue, and doing away with LIFO could bring in $95 billion over the next 10 years, The New York Times reports. Even the financial news outlet Bloomberg has piled on, editorializing on July 15 that “LIFO should be first tax reducer to go in a budget fix.� Bloomberg argued that the United States should be in step with the rest of the world, which largely does not allow for LIFO accounting. Still others argue that cost-basis accounting, or a “first-in, first-out� (FIFO) method of accounting, more accurately would reflect a company’s real profits.
LIFO-suction
Feeding time
Under LIFO, a company uses the price of the last piece of inventory purchased or produced to determine the cost of a product that’s been sold. Think of it this way: If an oil company sells a barrel of oil for $100, which barrel does it sell: the last one it pumped out of the ground, or the oldest barrel in its inventory? The cost difference between those two barrels can be great, just as it can be for steel or widgets. If it’s the first barrel, and it cost the oil company $50 to produce, then the profit on the sale is $50, which is the amount that’s taxed. If the company sells the barrel it just produced yesterday, its cost might be $95 — generating a much smaller $5 profit on paper, and a much smaller tax liability with the government. The oil company and other businesses tend to argue that they just sold their newest and most expensive piece of inventory, and their accountants says they have a valid argument. After all, the oil company will need to produce a new barrel of oil to replace the one it just sold. In times of high inflation, like the
Bob Burak, partner and head of the tax practice at Cleveland accounting firm Bober Markey Fedorovich, said about one-third of his clients use LIFO, and many of them would face new and significant tax liabilities. “For a lot of my clients, it’s $3 million or $4 million in income they have to pick up and pay taxes on,� Mr. Burak said. “Auto dealers will be hurt a lot, the oil and gas industry uses it quite a bit, so do manufacturers. It’s dispersed quite a bit among our clients.� Observers worry that LIFO might be especially vulnerable now because it presents an opportunity to raise tax revenues without raising actual tax rates. “It’s all driven by revenue shortfalls,� said Wes Howard, chief financial officer of Jergens Inc., a Cleveland supplier of tools and accessories to machine shops and general industry. “Government at all levels is looking for a buck.� Mr. Howard said eliminating LIFO would not cripple Jergens. The company would need to pay taxes on
Last-in, first-out accounting, or LIFO, is favored by many companies for the tax relief it provides. A company uses the price of the last piece of inventory purchased or produced to determine the cost of a product that’s been sold. Companies arguing that they just sold their newest and most expensive piece of inventory, and their accountants says they have a valid argument.
some income it avoided in previous years and decades, he said, but Jergens has grown so much since then that the amounts could be easily managed. Still, Mr. Howard does not want to pay that money or to lose a tool from his accounting tool box that he says would be handy if inflation spikes again. And, like others, he thinks it would be wrong to enact a change that would affect some companies but not others, such as service businesses that don’t rely on carrying inventory. “It would be a disproportionate increase in the tax burden on businesses that carry inventory, and that’s not fair,� Mr. Howard said.
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‘Pressure for change’ So far, though, the elimination of LIFO is far from a done deal. President Obama reportedly proposed the idea most recently in early July during budget negotiations, but legislation to do away with LIFO has yet to be introduced. Observers note, though, that this is the second attempt by the Obama administration to kill the accounting method, following previous efforts by other politicians and financial regulators that pre-date the current administration. “There’s pressure for change,â€? said Bober Markey’s Mr. Burak, who said he is watching the issue closely on behalf of his clients. But, Mr. Burak said there’s also resistance to that change, including by some big companies, such as Exxon Mobil, that may have billions at stake. “You better believe they’re going to be spending some money to try and make sure this doesn’t happen,â€? Mr. Burak said. â–
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Hurry up — the government still is giving money to companies that need help fighting overseas competition, but the cash might not last. That’s the word from the Great Lakes Trade Adjustment Assistance Center, an entity at the University of Michigan charged with managing federal trade assistance for companies in Ohio, Indiana and Michigan. Manufacturing companies can receive up to $75,000 in federal funds if they can show that foreign competition has affected their business and that they will put up equal amounts of their own money, said Ruth Ann Church, the center’s project manager of sales and marketing. “We can only work with companies that have been hurt by imports,” Ms. Church said. But applicants had better be quick. Because future money for the program is uncertain, it will not sign up as many new companies as it has in previous years. “Most years, we take in about 16 new companies,” Ms. Church said. “This year it will probably be more like four.” That’s in part so companies already approved for the program can continue to tap into Trade Adjustment
Assistance money; those businesses include CIMA Plastics Group in Twinsburg. The 60-employee plastic injection molder makes products for other manufacturers under contract; among those products are containers, retail security tabs and electrical enclosures. It also made dispensers for skin-care products before that business went to China, said CIMA president and owner Jim Stewart. CIMA turned to the assistance center for help. It has received $33,000 to date and used that money to hire consultants, including the developer of a new product that CIMA bought called the Dynasty Sprayer. The device attaches to a garden hose and allows anything from car wash fluids to bug killer to be dispensed. CIMA hopes to sell the sprayer to the companies that make those products, Mr. Stewart said. Mr. Stewart concedes his company probably would have tried to do the deal on its own. But it might not have succeeded and could not have done it as quickly without financial assistance from the center, he said. Trade Adjustment Assistance funds also can be used to hire outside help to do market research, streamline production processes or even introduce lean manufacturing strategies, Ms. Church said. ■
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INSIDE
15 QR CODES HELP REALTORS BETTER MARKET THEIR LISTINGS.
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SMALL BUSINESS
MANY FIND COLLABORATION ADDS UP These days, competitors learn that asking for help can generate business, increase awareness
R
ich Peterson received the call from an out-of-state customer who needed an order filled on the fly for 1,000 plates and brackets. The vice president of business development for Astro Manufacturing & Design said the Eastlake-based company didn’t want to turn down the business, but all five of its plants were slammed with work and unable to fulfill the request. “We called Tendon Manufacturing (in Warrensville Heights), and I said, ‘Can you help us out?’” Mr. Peterson said. “They called us back within 24 hours with a quote.” See MATH Page 16
Story by KATHY AMES CARR kcarr@crain.com
SHORT TAKES These stories originally appeared in Crain’s Cleveland Business’ Small Business Report, an email newsletter sent every Thursday. To receive the report, visit www.Crains Cleveland.com/register and sign up. ■ Evan Morse, owner of Warrensville Animal Hospital since 1972 and co-founder of the Free Animal Clinic of Cleveland, received the American Veterinary Medical Association’s President’s Award during the organization’s annual convention in St. Louis. The award “recognizes individuals and groups inside and outside veterinary medicine who have made a positive impact on animal, human or public health, veterinary organizations and the profession,” according to the association. Dr. Morse graduated from Tuskegee University and was one of the first African-American veterinarians in Ohio. He specializes in exotic pets.
■ The Ohio Environmental Protection Agency issued a “covenant not to sue” to Cuyahoga County and Great Lakes Towing Co. for a 2.18-acre property at 5300 Division Ave., clearing the way for site redevelopment under the state EPA’s Voluntary Action Program. Issuance of the covenant completes the volunteers’ participation in the Voluntary Action Program, or VAP. Following standards developed by Ohio EPA, the county and Great Lakes Towing “hired a certified environmental professional to assess the site, identify any areas of concern and remediate soil contamination on the property to a level that allows for commercial or industrial redevelopment,” according to the regulatory agency. Cuyahoga County used a $2.1 million grant from the Clean Ohio Fund to help pay for the work, including installation of a bulkhead to prevent contaminated groundwater from migrating to the river channel. Industrial operations on the property began in the 1890s, when American Shipbuilders Co. began manufacturing and repairing ships, the Ohio EPA said. Great Lakes Towing is in the midst of an expansion and recently installed a new crane system on the remediated property.
■ Giant Leap Pictures, a local production company founded by Cleveland native Kenny Latimer, is a few weeks away from wrapping up production on a feature-length film called “Falling Backwards.” Mr. Latimer said it’s a “family-friendly drama” that tells the story of a father who goes to extremes to save his only son from drug addiction. It stars Cleveland native Robert Piper, who has appeared on “All My Children” and “Rescue Me.” The film eventually will appear in theaters in Cleveland, Canton and New Philadelphia, Mr. Latimer said. A portion of the box office receipts from the film will go to Glenbeigh, a nonprofit drug rehabilitation center in Rock Creek, Ohio, an affiliate of the Cleveland Clinic. “That is my vision for this production company,” Mr. Latimer said. “With every film we produce, a portion of the proceeds will go to a charity related to the theme of that movie. Should we become blessed to grow larger and make a substantial dent in the entertainment industry, it is our civic duty to inspire those we entertain and give back to our communities.”
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14 CRAIN’S CLEVELAND BUSINESS
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mall businesses are the engine drivers of today’s economy. In fact, 25 million small businesses across the United States employ more than half of the country’s nongovernment work force and are the main source of new jobs. While small businesses generate more than half of our gross domestic product, obtaining business loans and lines of credit is difficult for them. Nonetheless, credit remains available for small businesses that prepare and plan, through banks and the U.S. Small Business Administration, America’s largest single financial backer of small businesses. Together, the SBA and partner banks lend to small businesses through the 7(a) and 504 loan programs. Both the SBA 7(a) and 504 programs are partnerships with banks that grew as banks tightened their credit standards for commercial and industrial loans and lines of credit during the recent downturn. The 7(a) program guarantees portions of loans that banks make to small businesses, which can use the loans for various purposes. The SBA 504 program also guarantees portions of loans to small businesses, specifically providing long-term, fixed-rate financing for major fixed assets such as land, buildings and some types of equipment. SBA Preferred Lenders are banks or other lenders that have the ability to approve SBA loan requests in-house, using their own paperwork and underwriting procedures. This allows Preferred Lenders to act quickly, usually approving loans
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ADVISER within 24 hours after obtaining financial information from a borrower. Borrowers work with the Preferred Lenders, who work directly with the SBA to obtain a guaranty on the loan that reduces the risk and allows for more favorable terms than with conventional loans. When the SBA guarantees a loan that reduces the risk to the bank, and, in turn, allows the institution to offer longer repayment terms to the borrower, decrease the loan payments and eliminate prepayment penalties (except for commercial real estate financed through the 504 program). There are a number of benefits to the SBA preferred lender program: ■ The SBA loan guaranty minimizes the bank’s risks. ■ It reduces the risk to the bank and allows it to provide loans it might not otherwise risk, while enabling the bank to improve the borrower’s loan terms. ■ The bank’s financing leverages the SBA’s ability to assist small businesses, facilitating investments that build success and expand the tax rolls as well as enhance tax revenues. ■ SBA loans also benefit communities by encouraging job development. For 7(a) loans — the most common
kind of SBA loan — the maximum gross loan size is $5 million, and the loan guaranty is 75%. Introduced during the 1980s, the SBA 504 loan program allows business owners to make significant investments in their businesses. The interest rate on 504 loans is fixed for 10 years on equipment and 20 years on real estate, compared to traditional small business loans with 10- to 15- year terms for real estate, ending in a balloon payment. Eligibility for both 7(a) and 504 loans extends to businesses with a net worth of $15 million or less, and with an average net income for the preceding two completed fiscal years that does not exceed $5 million. The borrower would have to exceed both requirements to be deemed ineligible for SBA financing. The limit for 504 loans is $5 million for most applications, and $5.5 million for manufacturers and green projects. In some cases, 504 loans also can be used for refinancing existing debt on loans, although some conditions apply on refinancing existing debt through new SBA 504 loans. As with all business loans, a lender will review your credit scores and other data, including the length of time your company has been in business and its sales, revenues, profits and cash flow. Simply put, all lenders need confidence that you are able to pay back the loan. Building an ongoing banking relationship with a business banking specialist who is a Preferred Lender can be crucial for the success of your small business. Working with a bank that offers special expertise and a range of financing options for businesses can help your company grow in difficult economic times or more favorable conditions. ■ John Moshier is senior vice president, national SBA segment manager at KeyBank.
Budget offers credit for some investments
A
last-minute addition to the recent Ohio budget bill can provide a substantial tax credit for making investments in certain businesses operating in Ohio. The credit equals 10% of a qualifying investment in a business that meets the requirements described below, and it is taken against the investor’s Ohio income tax liability. The credit can equal up to $1 million for an individual, and for married couples filing joint returns, a taxpayer’s spouse could make investments generating additional credits up to a separate $1 million limitation. The credit cannot exceed an investor’s tax liability for the year, but any unused credit can be carried forward for up to seven years. Taxpayers eligible to receive this credit include individuals, trusts and estates. A pass-through entity, in which such an individual, estate or trust holds a direct or indirect ownership or other equity interest, also is eligible, with the credit being passed through to the eligible owner. The credit is provided for investments in any form of business, including corporations, LLCs or partnerships, in any industry, as long as
CARLGRASSI
TAX TIPS certain other requirements are met. The key requirement for the Ohio tax credit is that the investment must be in a business qualifying as a small business, defined as one in which either the assets do not exceed $50 million or annual sales are $10 million or less. The credit is available only for investments in businesses with at least 50 full-time equivalent employees in the state of Ohio; or, if the business has fewer than 50 full-time employees, if more than one-half of its employees are located in Ohio. The final requirement is that the business must use the investment in one or more of the following ways in an amount at least equal to the amount of the investment, within six months after receiving the investment:
■ to acquire tangible personal property located in Ohio; ■ to acquire motor vehicles if the motor vehicles are purchased in Ohio, registered in Ohio and are necessary for the operation of the enterprise’s business; ■ to acquire real property located in Ohio and used in business; ■ to acquire intangible personal property, including patents, copyrights, trademarks, service marks or licenses used in business primarily in Ohio; or ■ to pay compensation for new employees of the business for whom Ohio income tax must be withheld, not including increased compensation for owners, officers or managers of the business. Each of the acquisitions by the business listed above must be held for either a two-year or five-year holding period, based on when the investment is made. The applicable holding period is two years for qualifying investments made on or after July 1, 2011, but before July 1, 2013, and five years for qualifying investments made on or after July 1, 2013. ■ Mr. Grassi is president of McDonald Hopkins LLC.
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SMALL BUSINESS
Quick response codes offer Realtors rapid returns Agents find buyers to be more knowledgeable about target properties By JOEL HAMMOND jmhammond@crain.com
Q
uick response codes are eliminating a lot of waste in the residential real estate business. No, not of printed materials, which agents still are churning out. Rather, the codes — included on those printed materials and yard signs — and other new technologies are allowing agents to find customers. The codes, which look similar to bar codes and are able to be scanned by any number of applications for smart phones, such as the iPhone or Droid, can direct a house hunter either to a specific home’s vitals or an agency’s home page. That information instantly tells the potential buyer whether they’re in the right spot or whether a target has two too many bedrooms. “When people are at their desktop or laptop, we say they are browsers,” said Jim Bray, the president of Cutler Real Estate in Canton, with offices also located in Stark and Medina counties. “When they are out in the field, they are hunters, and brokerages must have mobile applications to take advantage of that.” Mr. Bray said the company always has monitored the circular ads in area newspapers, and even at Christmas, there was little evidence QR codes, as they’re known, were catching on. Shortly thereafter, though, he noticed them popping up in more places each week. And recent reports suggest the market will continue to grow: According to a June report by 3GVision, an Israeli tech company that makes the i-nigma barcode scanner, second-quarter QR scans in the United States rose 39% over this year’s first quarter, which followed a 181% surge over fourth quarter 2010. Mr. Bray has a keen viewpoint into the technology, as he’s a partner in Delta Media Group, a Canton IT provider that focuses specifically on real estate companies. Mr. Bray said Delta hosts 30,000 agent websites and 500 company websites, and more are turning onto the QR technology. Cutler first used the codes to direct customers to its home page, but in late April began tailoring them to individual properties; it now pairs a Cutler Real Estate “for sale” sign with a companion sign featuring a large QR code scannable from a curbside car.
Talk to everyone Coldwell Banker Hunter Realty in Beachwood has been using QR codes in various capacities for a year, said president Ed Dolinsky. Like Cutler, it started with fliers and postcards and now has moved to for-sale signs. Additionally, Mr. Dolinsky said the brokerage has a text message address — think “text FOR SALE to 12345” — from which house hunters without a smart phone and QR code reader can receive photos
of the specific property on their phone. “This way, you have everyone covered,” Mr. Dolinsky said. “There aren’t any more wet pieces of paper flying around the properties; instead, we have photos, videos and are keeping the buyer up to date in a new way.” (For Cutler, having everyone covered also includes people like Mr. Bray’s wife, who doesn’t text and doesn’t have a browser or a QR code reader; instead, she can call a number and hear audio information about the property.) At ERA Rath Realtors in Rocky
River, real estate agent Joe Rath — who also advises other agents on online marketing — said linking QR codes to videos of properties has been a big hit. He and other agents there simply take short videos with their iPhones or Flip cameras, post them to YouTube or another video-hosting site and connect the footage with the corresponding code. “So we have open houses where customers come and it’s like they already have walked through the house,” said Mr. Rath, whose company has been using the technology for a year to 18 months.
“That’s the real benefit: Our agents have quality leads.”
Whenever you’re ready Howard Hanna began creating QR codes for its agents about a year ago, said Barbara Reynolds, the company’s vice president of global marketing and communications. She said they’ve been a hit with agents — who now have another tool to use — and potential buyers. “People want to do their own information search,” Ms. Reynolds said. “We see buyers doing a great deal of research on their own, and
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now they can do that more easily and contact the agent when they’re ready for the next step.” Mr. Bray said agents who use Delta Media Group’s software can track when the QR code is activated, which offers them feedback to give to their client, the seller. The technology also can help agents sell themselves better to possible clients, Mr. Rath said. “Sellers usually interview two to three agents, and these new technologies are a perfect way as a younger agent to sell yourself,” said Mr. Rath, who pitches potential clients with an iPad presentation. ■
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SMALL BUSINESS
Math: Companies rethink models
GRANDOPENINGS CLASSIC REALTY GROUP INC.
SELECT HOME REFERRALS LLC
500 E. Royalton Road, Suite 500, Broadview Heights 44147
533 E. 315th St. Willowick 44095 www.selecthomereferrals.com
11925 Pearl Road, Suite 302, Strongsville 44136 www.classicrealtygrp.com Owned by Susan R. Bradley, broker, and Frank Ferraro, manager, Classic Realty is an independent real estate company serving Cuyahoga, Medina and Summit counties.The firm employs 15 agents. Phone 440-526-4200 Fax 440-627-1051 Rhaslage@classicrealtygrp.net
MARKET GARDEN BREWERY & DISTILLERY
Select Home Referrals LLC, owned by Rick D’Alessandro, is a home improvement referral network of Northeast Ohio contractors and home service professionals. Referral services, provided free to the homeowner, provide links to home improvement professionals in various fields. Service providers are pre-screened, licensed and insured. Phone/fax 440-944-0675 info@selecthomereferrals.com
TOTAL MANAGEMENT
1947 W. 25th St., Cleveland 44113 marketgardenbrewery.com The Market Garden Brewery & Distillery is a 400-seat establishment located in the Ohio City entertainment district. The brewery and distillery serves brewmaster Andy Tveekrem’s carefully crafted brews and chef Michael Nowak’s artisinal brewpub specialties, from scotch egg with garlic sausage, mustard and hot sauce to authentic Mexican tacos. Market Garden features spaces for private events, an outdoor beer garden, two bars, a sidewalk patio and soon will have a rooftop bar. The brewery is open 364 days a year from 4 p.m. to 2 a.m. Phone 216-621-4000
30 Brandon Court Moreland Hills 44022 www.totalmanagement.com Co-founded by CEO Justin Pearl and Jonathan Goler, Total Management offers to the public cloud-based property management software, which includes tools to manage largeand small-scale residential and commercial properties. Key features of the software include a duplicate invoice catcher and built-in live chat support. 888-696-0797 info@totalmanagement.com To submit a new business, send the information listed for each business above to Amy Ann Stoessel at astoessel@ crain.com.
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The Alliance for Working Together also has spearheaded an effort to lure younger talent to the field, a concern to manufacturers as skilled baby boomers retire. The group and Lakeland Community College this fall will launch an associate of applied science certificate/degree program, with concentrations in manufacturing, maintenance and repair, computer-aided drafting and automation, said Pat Hoyt, dean of workforce development and continuing education. “We facilitate the manufacturers in helping them achieve their goals,” Ms. Hoyt said. “They’re very passionate.” Manufacturers over a two-year period raised about $200,000 that will be allocated for scholarships and programming, Ms. Hoyt said.
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Local manufacturers and other small enterprises that typically compete for the same or similar customer bases are discovering that collaborating in certain ways can generate new business and raise awareness of their respective industries. “We’re competitors helping each other out,” Mr. Peterson said. “We’re learning each others’ capabilities, and we’re working together as an industry.” These creative partnerships were not common before the recession, said Kenneth M. Haffey, partner at business advisory firm Skoda Minotti in Mayfield Village. He noted that companies typically operated at full capacity with healthier staffing levels and had little or no need to work with their competitors to drum up additional business. “People have figured out that 1 plus 1 can equal 3,” said Mr. Haffey, referring to the many potential benefits of companies working together.
In harmony Another alliance, this one between Mayfield Heights-based Staffing Solutions Enterprises and Twinsburg-based Integrity Staffing, materialized in May 2009 as a way to attract new and existing customers during the recession. The North East Ohio Talent Alliance was formed as a way to offer more services to both firms’ clients, said SueAnn Naso, Staffing Solutions president. “Once the recession hit, we had to rethink the way we did business,” Ms. Naso said. “It’s difficult for one agency on its own to address the needs of every client. We created this partnership to address those needs.” Both operations have seen a strong uptick in their respective job placement businesses. “We saw a spike in the temp business in the second half of last year and it has continued,” she said. “Permanent placement has started to pick up.” The approach is similar to that of three record stores — Music Saves, Blue Arrow Records and This Way Out Vintage Shop — in the Waterloo Arts District in Cleveland’s Collinwood neighborhood. “We’re quite possibly the only place in the country with three
Building partnerships The impetus behind local manufacturers’ collaborative approach stems back to the Sept. 11 terrorist attacks and the subsequent economic downturn, Mr. Peterson said. Roger Sustar, owner of Mentorbased Fredon Corp., called a group of area manufacturers together to strategize on ways to collectively make manufacturing more viable in Northeast Ohio. That initial meeting in early 2002 drew about a dozen representatives. Now called the Alliance for Working Together, the group has more than 100 members who advocate for the region’s manufacturing sector, said Mr. Peterson, the alliance’s co-chairman. The recent recession only has fueled manufacturers’ partnership efforts. Members not only promote the industry’s capabilities but even refer business leads between each other, as Astro and Tendon have done.
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“We’re encouraged by business coming back, and people being creative in finding new ways to attract business.” – Kenneth M. Haffey partner, Skoda Minotti
record stores in a two-block area,” said Melanie Hershberger, co-owner of Music Saves, who noted that demand for vinyl records has increased over the last decade. Each store specializes in certain types of products, such as new music and independent rock and pop at Music Saves, but if a customer’s search for a specific title turns up empty, store proprietors send the client to their nearby friendly competitors. “There’s enough business to go around for all of us,” Ms. Hershberger said.
A toast to teamwork Meanwhile, 12 Northeast Ohio breweries brewed up a plan in 2010 to create a collaboration sampler to raise awareness about the Ohio craft beer industry. The concept surfaced on April Fools’ Day, and even though government red tape and distribution issues held up the 12-pack sampler’s release date — scheduled to debut for Cleveland Beer Week in October 2010 — the product hit shelves in April. “There were 1,536 cases, and they sold out within hours,” at local grocery stores and other high-end specialty beer shops, said John Najeway, co-owner of Akron-based Thirsty Dog Brewing Co. Matt Chappel, co-owner of Cleveland-based Indigo Imp Brewery, which partnered with Thirsty Dog Co. to create a smoked black lager, noted that the idea wasn’t intended to be a money maker for breweries. “The brewers didn’t expect to make money,” he said. “We looked at it as sort of an advertising opportunity, to raise awareness about the (craft beer) industry and get people to try new beers.” The proceeds benefited the Jimmy Malone Scholarship Fund, which helps students attend college. Mr. Najeway said the brewers are in talks about producing another collaboration sampler with the same mission in mind. “The point is to highlight Ohio craft breweries first and foremost, to build awareness of great breweries in Ohio and to show competitors can work together,” said Mr. Najeway, president of the Ohio Craft Brewers Association. “We’re not competing so much against each other but getting people to convert to the craft beer industry.” Skoda Minotti’s Mr. Haffey said he thinks certain companies likely will continue collaborating, even as their business awakens from a recession slumber. “I think there’s a long tail to this,” Mr. Haffey said. “We’re encouraged by business coming back, and people being creative in finding new ways to attract business.” ■
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hey’re the people behind the people. Northeast Ohio’s human resources specialists and executives are not only managing the work forces of area companies, they are coordinating everything from training and incentive programs to employee recruiting. For the first time, Crain’s Cleveland Business is honoring HR professionals who have helped build their companies with a strategic combination of the best people, talent, development and culture.
In all, 33 Archer Awards finalists were selected in nine categories: human resources executive of the year, public company; human resources executive of the year, private company; human resources executive of the year, nonprofit; innovation award; lifetime achievement award; rising star, public; rising star, private; rising star, nonprofit; and citizenship. All profile information was gleaned from the nomination forms. Judges for the event were Ron Alsop, editor, Workforce Management; Rob
Gilmore, partner, Kohrman, Jackson & Krantz; Sindy Warren, Warren & Hays LLC; and Paul Meshanko, managing partner, Edge Learning Institute of Ohio. In choosing finalists and winners, judges took into consideration a variety of qualities among nominees, including leadership, best practices, achievements and community involvement. Winners will be announced at an event from 5:30 to 8:30 p.m. on Wednesday, Aug. 17, at LaCentre Conference and Banquet Facility in Westlake.
Human resources executive of the year — public companies
S
STEVE BECKER
THOMAS E. HOPKINS
ANDREW J. PASSEN
senior vice president of human resources
senior vice president of human resources
executive vice president of human resources
Sterling Jewelers Inc.
The Sherwin-Williams Co.
Forest City Enterprises Inc.
teve Becker was brought on board at Akron-based Sterling Jewelers Inc. to make human resources a strategic business partner. And since starting at Sterling in 2005, Mr. Becker has done just that, facilitating efforts such as a new strategic vision, enhanced leadership and systems development, evolved communications strategies, increased community involvement, and preferred employer status. “Through his leadership, the function has been reinvented from a traditional policy management and staffing function into a critical partner in company decisions and strategic initiatives,” the nomination said. “Steve has given human resources an elevated strategic seat in the Becker organization.” Mr. Becker — who has earned a place on Sterling’s executive and budget review committees and is chairman of the company’s social, ethical and environmental committee — is credited with developing a human resources strategy that has transformed the organization. Programs credited to Mr. Becker and his department include a careers website; a new hire orientation; leadership and executive development programs; and an evaluation of the company’s rewards program, which encompasses all elements of compensation, benefits and wellness. “Steve’s vision and strategic approach has enabled human resources to add value to the business through focusing on Sterling’s most critical asset —our team members,” the nomination said.
T
om Hopkins is credited with leading many of the strategic initiatives that have changed the way that The Sherwin-Williams Co. recruits, develops and promotes its employees, ultimately improving the caliber of talent and employee retention rates at the company. “If ever there was a person ideally suited to lead the human resource practice of an organization, large or small, Tom is that person,” the nomination said. “He was born with great intellect, but his deep sense of fairness and compassion, his unwavering moral principles, his initiative and strong work ethic are products of his life experience.” For instance, Mr. Hopkins tackled the issue of turnover at the company’s more than 4,000 specialty paint stores and industrial coatings branches in part by designing and launching a management training program, recruiting on more than 400 college campuses. The 29-year Sherwin-Williams veteran also has worked to identify employees from within the organization who exhibit leadership potential and to develop a formal succession planning process. SherwinWilliams’ Emerging Leaders Initiative works in collaboration with Case Western Reserve University’s Weatherhead School Hopkins of Management to offer three-week intensive leadership courses. “Tom has, arguably, led Sherwin-Williams through the most turbulent manpower environment in the company’s history,” the nomination said. “During his tenure, we have become a significantly more global enterprise with a significantly more diverse work force. We have navigated an increasingly complex regulatory environment. We have embraced new technology and contained rapidly escalating labor and benefit costs. We have been a pioneer in work force safety and expanded our commitment to give back to the communities in which we live and work.”
A
ndrew J. Passen has helped guide Forest City Enterprises Inc. through some significant times of change. Indeed, Dr. Passen this summer helped manage the transition of the company’s leadership to the first CEO, David LaRue, not related to the founding Ratner family. The HR leader, who joined the company in 2006, also assisted in working through the first significant layoffs in the company’s history. Dr. Passen worked to secure severance and outplacement assistance benefits for those affected, while also guiding a detailed plan to counsel those who remained and to maintain the company’s familial culture. “In the last five years, the real estate industry, much like our economy, has Passen been through the ringer and back. Today, Forest City stands strong, and one of the main reasons is Andrew Passen,” the nomination said. Dr. Passen ultimately helped transition Forest City’s human resources department from a rules-based, operationally focused personnel department to one that provides consultative advice and is intricately involved in business directions. He plays a role in strategic planning efforts, is involved in executive committee discussions and meetings and has taken on such tasks as updating job descriptions and overhauling the company benefits package. Additionally, he also serves as the company’s executive sponsor of the St. Martin de Porres High School corporate work-study program. “As a constant voice and driving force for positivity, innovation and continuous improvement, Andy Passen demonstrates the leadership skill, human capital expertise and community/industry involvement worthy of being named human resources executive of the year,” the nomination said.
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Human resources executive of the year — private companies Congratulations to
Kerensa Parke, finalist for the 2011 Rising Star Award – private sector.
Thank you for all you do – we are proud of your work and appreciate your many contributions!
D
ebbie Connelly cut her teeth at Hyland Software beginning in 1997, when she was the only human resources representative at the 30employee company in Westlake. Fourteen years later, Ms. Connelly has directed both the department and the firm’s growth. The 16-member human resources department is the command center for about 1,200 global Connelly employees. “From the beginning, the focus was on bringing in people who wanted to grow and learn with Hyland, creating a workplace culture where people wanted to work toward a common goal and make Hyland a success, while
LAURA LEILI director of human resources Leading provider of home health care and home intravenous therapies in Ohio. Locations: Cleveland, Columbus, Cincinnati www.csi-infusion.com • www.csi-network.com
TMW Systems Inc.
I
t can be challenging to identify and attract employees with very specific skill sets to a particular operation, but Laura Leili has just the knack. Ms. Leili has led the way to recruit qualified applicants to Beachwoodbased TMW Systems Inc., a transportation service software company,
DEBBIE CONNELLY
building a clear message of what the Hyland Software brand is,” Ms. Connelly is quoted as saying in the nomination. She fostered Hyland’s philosophy as a people-driven, employee-motivated operation. To build the company’s roster with the right kind of people, Ms. Connelly developed a recruiting process that entailed attracting the right type of candidates to Hyland and creating an environment in
which staffers would be committed to working. She spearheaded the Hyland Software Career Expo in late March, which attracted more than 800 people in four hours, to fill more than 200 open positions. Ms. Connelly also continues to find better ways to garner constructive employee feedback and over the past two years led career development and wellness initiatives to help achieve those goals. She has built the Hyland brand through outreach efforts with local colleges and universities. Ms. Connelly spearheaded the effort to incorporate the company into the Regional Information Technology Engagement Board, which is composed of local IT executives who strategize on, among other things, increasing the quality and quantity of IT students graduating from Northeast Ohio colleges. ■
that currently employs 425 individuals. The firm has increased its employee base by 50% since 2007, when she joined the company. “Laura Leili has a rare and valuable talent which is to fully and clearly com- Leili municate with ease to all — from our board members and employee Ph.D.s to our entry-level employees and interns,” according to the nomination. Ms. Leili has navigated the company through five acquisitions in four years by working with the executive team to ensure employees are informed and concerns are addressed immediately to minimize any interruptions on operations. She monitors compensation
trends and advises the firm on how to remain competitive. TMW this year has added 56 new employees in which some strategic placement was required. She encourages employees to advance their education by taking advantage of the company’s tuition reimbursement program and coaches managers to further develop their respective staffs. Ms. Leili also has introduced health and wellness initiatives. Her efforts extend beyond the office, too. Ms. Leili also guides an annual food drive for hunger centers near company offices here and in Raleigh-Durham, N.C.; Dallas; Indianapolis; and Vancouver, British Columbia. ■
vice president of human resources
Hyland Software
TINA MYLES director of human resources
InfoCision Management Corp.
Your great work merits recognition. Congratulations to all the finalists for the 2011 Archer Awards. Best of luck from FirstMerit.
firstmerit.com
P E R S ON A L
BUSINESS
C OM M E RC I A L
W E A LT H
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ina Myles was tasked with restoring order to InfoCision’s fragmented human resources department when she joined the Akron-based teleservices company in 2009. Her impact was immediate. Ms. Myles has championed corporate initiatives that include improving workplace diversity, employee orientation and training, and fostering Myles community partnerships. She oversees a staff of 26, which is responsible for 4,200 InfoCision employees. Ms. Myles’ involvement with the Greater Cleveland Partnership Commission on Economic Inclusion extended into the workplace, where she instituted programs and policies that recognize and celebrate each employee’s background. InfoCision currently is composed of more than 70% minorities and females, according to the company. Ms. Myles also helped cultivate relationships with other community organizations to expand InfoCi-
sion’s pool of diverse candidates. The company entered into a partnership with the Cleveland Sight Center to provide training and jobs for blind and visually impaired individuals. She also improved the employee orientation program by greeting new hires with welcome baskets at their home, reimbursements for orientation-related travel expenses and a cake at the end of a three-day initiation. Since the program was implemented, employee 90-day retention rates increased to 90% from 60%. Ms. Myles’ fiscal discipline also has helped the company save money, with minimal impact on staffing levels. In 2008, InfoCision’s cost-perhire was $267; this year’s cost-perhire was reduced to $80. She also discovered that some employees were not abiding by certain tuition reimbursement policies and guidelines, which resulted in an overpayment of more than $30,000. Those policies since have been followed, yielding big savings. ■
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Human resources executive of the year — nonprofits TOM CORNHOFF director of human resources
City of Solon
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om Cornhoff’s job became even more challenging after major cuts to local governments were passed in Gov. John Kasich’s new biennial budget passed by the Ohio Legislature. So far, the city is plowing ahead: Last year, Mr. Cornhoff managed contract negotiations for nine bargaining units, with eight Cornhoff settling without arbitration. He also found inefficiencies in the city’s Waste Water Treatment Plant and saved Solon $348,000 by returning it to a selfsustaining state. Mr. Cornhoff also has made automating HR functions a priority by implementing new technology. He commissioned a wage study to
make sure the city was competitive in compensation, and he established a health insurance committee to analyze whether employees were properly covered. Medical Mutual chose Solon as its model community for wellness initiatives. Additionally, he persuaded city officials to self-insure workers’ compensation, which has saved Solon hundreds of thousands of dollars. Mr. Cornhoff’s nomination also included a fun quirk: He possesses a knack for calming angry citizens at City Hall meetings. “What sets Tom apart … is his ability to manage difficult and sensitive employee issues,” said Solon Mayor Susan Drucker. ■
DENISE SMUDLA director of human resources
Jennings Center for Older Adults
D
enise Smudla started at the Jennings Center in 2004 with a focus on improving recruitment practices and thus improving retention. The results are evident: Jennings reports that its first-year turnover Smudla has decreased by nearly 75%, while overall turnover has declined 58%. That has allowed the
center to realize a 74% decline in advertising expenses. Practices Ms. Smudla implemented to achieve those savings include screening tools such as behavioral interviewing, while a customized orientation program allows new hires the appropriate time to become acclimated.
An adviser from Towards Employment is on site eight hours per week to counsel employees on work-life support and career development, while the center also has enhanced recognition programs, leadership training and an employee assistance program. Ms. Smudla chairs the city of Cleveland Healthcare Sector Advisory Council and directs the REACH Project, a long-term care work force development project in Cuyahoga and Mahoning counties. The three-year program — aimed at addressing “hiring and retaining talented staff necessary to fulfill the growing demand for their (long-term care) services” — is funded by $1 million in grants from foundations in each county. ■
CONGRATULATIONS!
Penske Cleveland is very proud of Farrah Board for her selection as a finalist in the Crain’s Cleveland Business Archer Awards Rising Star Category.
MICHELLE MEERS director of human resources
PlayhouseSquare Foundation
I
n her 23 years at the helm of the department Michelle Meers created, PlayhouseSquare’s employee roster has grown more than 200%, to 320 employees. Half have been employed for more than five years, while onequarter have been employed there at least 10 years; the foundation’s retenMeers tion rate is hailed as one of the highest nationally in the performing arts industry. Ms. Meers has earned national plaudits for the HR internship program she developed, with former understudies now in management positions at organizations ranging from Medical Mutual and Continental Airlines to the Rock and Roll Hall of Fame Museum. A promote-from-within policy has boosted staff morale, and Ms. Meers implemented a wellness program, bringing in local experts to advise workers on health care benefits and finances. Employees also can nominate fellow employees for awards, while PlayhouseSquare offers free monthly group birthday parties and summer hours from Memorial Day to Labor Day. Ms. Meers also is an accomplished actress, performing at local staples such as the Dobama and Huntington theaters. ■
Farrah Board Human Resources Executive - Penske Automotive Cleveland
NOW HIRING FOR ALL POSITIONS Email Farrah Board at fboard@penskeautomotive.com
Penske Automotive Group A FORTUNE Most Admired Company
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Innovation
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CLEVELAND AIRPORT SYSTEM
efore 2007, when it implemented a new business plan, the Cleveland Airport System did not have a strategy for managing and evaluating its 412 employees. The Cleveland Airport system aimed to have “the right people with the right skills in the right places at the right times,” the nomination said. As such, the airport system, which includes Cleveland Hopkins International Airport
U
S Endoscopy was struggling with a high turnover rate during a time when the Mentor medical device company was gearing up for a growth spurt. Human resources vice president Bill Busby needed to find a way to retain as many existing employees as possible to keep personnel replacement costs under control. Indeed, US Endoscopy added 50 employees in 2010, bringing its headcount to 375, and it is looking forward to additional growth with the opening of a building in Busby Mentor later this year. “It is difficult to estimate the amount of money Bill has saved US
and Burke Lakefront Airport, began a talent management program that has reduced new-hire training time, curtailed employee turnover and increased training opportunities. As a result, employee retention has increased, and the internal promotion rate has risen from 22%
BILL BUSBY vice president of human resources
US Endoscopy Endoscopy because of these efforts,” the nomination said. “But it is safe to say that it has been hundreds of thousands of dollars.” Mr. Busby, who joined the company in May 2006, focused on the company’s production and sales teams. The company studied what performance factors it should use
in 2008 to 27% in 2010. Training opportunities also were offered to all employees, up from 30% in 2007. “I have worked with the airport 14 years, and this is the first time we have had the opportunity to participate in leadership development,” said Jean Simmonds, acting concessions and properties manager, in the nomination. “We never had a program geared toward developing the administrative and leadership staff, other than some computer training here and there.” Along the way, the Airports Council International-North America named Hopkins the “Most Improved Airport in North America.”■
to evaluate employees and built a set of benchmarks that would be used to predict most effective employees and what to look for in new hires. Mr. Busby then was able to improve the interview process by training managers on hiring techniques. He also created a leadership development program, improved compensation packages and even increased employees’ days off, which was especially important for hourly employees. As a result, turnover rates tumbled. Turnover for production employees dropped to 8% from 55% three years earlier. The sales force turnover effort began a year later and sales force turnover has dropped to 16% from 35% after two years. ■
HAROLD HARRISON director of human resources and labor relations
Cleveland Metroparks
H
e’s only been on the job nine months, but Harold Harrison already has identified and started to tackle an area of critical concern for his employer, the Cleveland Metroparks. Mr. Harrison
Harrison
ROBERT HATTA vice president of entrepreneurial talent
JumpStart Inc.
A
s JumpStart’s vice president of entrepreneurial talent, Robert Hatta helps young, highgrowth companies create jobs and then matches them with the talent that will keep those companies growing.
is forecasting that nearly 300 of the park system’s 682 full-time employees will retire by 2020. To prepare the Metroparks, Mr. Harrison is developing a management trainee program to identify hourly employees with the
Hatta
“Robert has developed and implemented innovative talent programs that meet the specific and unique needs of our region’s job creators,” the nomination said. On behalf of JumpStart, Mr. Hatta is credited with helping resource-strapped startups to accelerate their growth in a variety of ways, including by helping them recruit and retain the top talent. “Robert is also a thought leader in the region when it comes to entrepreneurial talent,” the nomination said. “He blogs regularly, and entertainingly, on everything from big picture trends in entrepreneurial hiring to advice for startups, to things job seekers should consider.”
Congratulations to the inaugural class of Archer Award finalists!
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Innovation potential to move up so he can broaden their awareness of the opportunities in the system. And once he identifies future managers, he plans to have them sit in on senior management meetings to get a taste of the how they can grow with their employer. Mr. Harrison’s approach is “there is plenty of opportunity,” the nomination said. In addition, Mr. Harrison is working to automate hiring processes to reduce the time to hire and bolstering compensation and benefits packages, within budget constraints, to make the Metroparks an attractive place to work. ■
Mr. Hatta also is part of Global Cleveland, a welcome center for foreign-born residents of Cleveland. Additionally, through JumpStart, Mr. Hatta hosts CEO mixers, at which the CEOs of JumpStart’s client companies can gather to share ideas and talk about talent attraction and best practices. ■
LORI HEDRICK vice president of human resources
TONI MERLENO director of human resources and operational services
Kendal Northern Ohio, Kendal at Oberlin/Kendal at Home
T
he right staff can be critically important to any entity charged with something as important as caring for the elderly, and Kendal credits Toni Merleno with helping the organization get the right people in order to deliver a high level of care and
services. Ms. Merleno is the “consummate human resources professional,” according to the nomination, having made a significant difference in the past decade in the growth and success of Kendal Northern Ohio, which includes Kendal at Oberlin,
Kendal at Home and most recently Senior Independence. “She has helped our organization attract the very best and most compassionate staff to provide care and services to seniors residing in seven Merleno counties throughout Northern Ohio,” the Archer Awards nomination said. “She has been an excellent model, resource and friend for more than 240 staff who value Kendal as an employer of choice.” Ms. Merleno’s efforts are brought to life by consistent low turnover and individual staff development. Those efforts also include
performance management with rewards for goals met each year, high employee satisfaction as gauged regularly by outside surveys, competitive wages and benefits, and a focus on employee and family wellness. Her employer not only credits her with recruiting the right talent, though. Kendal also credits Ms. Merleno with making the company a better and more rewarding place to work, improving the productivity of all of its employees and improving employee health — all for the betterment of the seniors served by Kendal. ■
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Marcus Thomas LLC
L
ori Hedrick has made significant contributions in the area of talent acquisition for the 75-year-old marketing and communications firm where she works — “most notably through the early adoption of social recruiting and community management,” the nomination said. “Lori has a longstanding history of chalHedrick lenging the boundaries of her discipline. Always aligned with business outcomes and driven by a passion to hire only the best in the business, Lori employs creative solutions that go beyond the traditional scope of human resources and continually exceed expectations,” the nomination said. Ultimately, Ms. Hedrick shifted the thinking that talent recruitment takes place on job boards — rather, it’s about building relationships and matching values. She also has invested her own time sharing knowledge and experience in this area within various professional networks, as well as with members of Northeast Ohio’s business community and nonprofit sector. “Lori has rewritten the playbook on talent acquisition by her futuristic and social approach, filling the agency with the right people at the right time and developing relationships and connections in a manner that is natural, effortless and much more userfriendly than the ways of the past,” the nomination said. ■
To this year’s inaugural nominees, finalists and winners...
Congratulates you for “Hitting the Mark”
We are pleased to recognize Northeast Ohio’s 2011 best in class Human Resources Leaders! Howard & O’Brien Associates is an award-winning, retained executive search firm specializing in senior-level recruitment. Candidate selection is based on leadership philosophy, chemistry, and management style to effortlessly mesh with our clients’ cultures to provide the “perfect fit”.
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Innovation
Congratulations, Kara Serger! Vice President of Human Resources Eliza Jennings Senior Care Network
2011 Archer Awards Rising Star Finalist For exceptional leadership in the recruitment and development of our most valuable resource, our employees. The outstanding talent and performance of our dedicated staff makes us a recognized leader in the provision of not-for-profit care and services to older adults on Cleveland’s West Side.
CBIZ Congratulates
Leonora Yurichak on her nomination as an Archer Award Rising Star
© Copyright 2011. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.
• FINANCIAL SERVICES • EMPLOYEE MANAGEMENT SERVICES
6050 OAK TREE BLVD., STE. 500 • CLEVELAND, OH 44131 216.447.9000 • www.cbiz.com
C
artoon characters are helping Kathy Puskas make sure employees at Jergens Inc. learn more about the benefits and wellness initiatives available at the Cleveland company. Many of the 175 people who work for the maker of industrial tools and supplies have had a tendency to ignore Puskas information the company sends out on those topics. Thus, Ms. Puskas decided she needed to do something to get their attention. With the help of human resource consulting firm Findley Davies Inc., which has a Cleveland
ZACHARY SIMON director of global executive talent acquisition
Eaton Corp.
M
ost big corporations turn to other companies to help them conduct searches for highlevel executives. Because of the efforts of Zachary Simon, however, Eaton Corp. of Cleveland now conducts many of Simon those searches itself, which has helped the company find
KATHY PUSKAS human resources director
Jergens Inc. office, Jergens teamed up with nationally syndicated cartoonist and Cleveland-area resident Jenny Campbell, who then helped create the mascots “Chip” and “Scrap.” Now, twice a month, a new cartoon featuring the two characters appears on big monitors throughout the plant and in the email
better candidates faster and at a lower cost. Eaton has built a department that replicates the external search firm model. In 2007, the company committed resources to building an in-house executive search department that serves the entire corporation in all regions of the world. When Mr. Simon joined the diversified manufacturing company in 2007, he’d already helped KeyCorp build out its own in-house executive recruiting team. Prior to joining Key, Mr. Simon spent six years at executive search firm Christian & Timbers, which now is known as CTPartners. So far at Eaton, Mr. Simon’s seven-member team has conducted executive searches in regions all over the world, covering most functions within Eaton. The team also has recruited 10 executives to Northeast Ohio. “(Mr. Simon) and his team have established a full-cycle recruiting model that identifies, attracts, assesses and acquires senior level talent and also provides a consultative assessment of candidates, the marketplace and at times, competitive intelligence,” the nomination said. The team has helped the company save more than $3 million over the past four-plus years, based on Eaton’s estimates, according to the nomination. ■
in-boxes of salaried employees. Scrap doesn’t take the time to learn about his benefits and generally leads an unhealthy lifestyle. Chip, meanwhile, pays attention and is better off for it. The campaign seems to be working so far, since employees have been asking questions about topics in the cartoons, Jergens chief financial officer Wes Howard said in the nomination. Ms. Puskas — who also created a “spread the word” campaign in which benefit information is sent directly to spouses and dependents on Jergens plans — keeps her eye out for new ways to explain benefits while also bringing “a fresh spin to health and wellness,” Mr. Howard said in the nomination. ■
PATRICIA STUMPP senior vice president of human resources
Invacare Corp.
A
fter being named senior vice president of human resources in September 2009, it didn’t take Patricia Stumpp Stumpp long to start having a big impact on Invacare Corp. A few months after getting the
JANET KENDALL WHITE human capital management leader
Human Arc Corp.
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Lifetime Achievement ROBERT MADISON president
Madison & Associates
T
hose who know Robert Madison’s tenure in the human resources field speak to his knowledge, and his readiness to share it. “Mr. Madison is the consummate willing spirit,” wrote Morris W. Beverage Jr., president of Lakeland Community College, in a letter of
promotion, Ms. Stumpp took on a leadership role in an effort to transform the Elyria-based wheelchair maker from a loosely connected group of companies into a unified corporation. Ms. Stumpp and Invacare president and CEO Gerald Blouch, who at the time was the company’s president and chief operating officer, led the effort to redesign the company’s management structure. Some of the challenges she faced were related to staffing: For instance, she recruited an executive to lead global product development and another to head up operations and supply chain management — functions previously handled on a regional basis. Ms. Stumpp also led the organization design and communications for the initiative, ensuring that it “transformed from words on paper into a live strategic action plan,” according to Mr. Blouch. ■
O
ne reason Janet Kendall White’s colleagues applaud her is because she applauds others. In keeping with Human Arc Corp.’s aim to be a “Great Place to Work,” Ms. White led the way for the implementation of a corporate recognition program called Applause. Implemented about six months ago, Applause, a high-tech, pointsWhite based program, has had “phenomenal” impact. More than 6,330 individual recognitions were given in the first quarter alone, and 100% of Human Arc associates received recognition during that time. Ms. White also has innovated to do more with less, particularly in leveraging her professional network. One example: As plans for training Human Arc leaders were developed, it became apparent that space for such training was limited. Ms. White contacted a nonprofit organization with which she’s affiliated and arranged a cost-effective solution: Human Arc would partner with the organization, which had training needs but a limited budget. Human Arc would fund the training while the nonprofit would provide the space. Whereas the “normal” cost of nine full days of training space is about $11,200, Human Arc has executed nine full days of training with no training space costs. ■
recommendation. “I have never known him to turn his back on an individual in need.” Prior to starting his own consulting firm, Mr. Madison led human resources activities worldwide for the international company, ISK Biosciences Corp. in Concord. He achieved recognition for ISK for a “unique investment and profit-sharing plan,” and also established a college recruiting program Madison that became recognized as a model within the industry. “Bob Madison was a forward thinker and presaged many developments in HR before they became common,” the nomination said. It’s not only within his chosen
field that Mr. Madison has received credit and accolades: He is the recipient of the Silver Beaver award from the Boy Scouts of America, an award for adult leaders who’ve made an impact on youth. He’s involved in the Society for Human Resource Management and is a volunteer counselor and trustee for Hudson Job Search. Mr. Madison teaches, too, at Lakeland Community College. “Having a heart for people and a keen desire to help them ... his accomplishments demonstrate as much concern for the laborers in Mexico or Spain as for the executives in the corporate suites,” the nomination said. ■
CHRISTOPHER MAURER executive vice president and director of human resources
FirstMerit Bank
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hristopher Maurer’s human resources career has spanned more than 40 years, involved him wearing a number of hats and placed him in both union and nonunion environments. Maurer And his dedication to the field is evidenced not only in his tenure, but by his involvement in
professional organizations, including the Stark County Human Resources Association, with which he has been involved for 30 years. Today, Mr. Maurer leads human resources for a FirstMerit bank that’s on a growth spurt and where he has worked for 21 years. “During his career, the bank has See MAURER Page 24
Congratulations to Andy Passen and all the finalists for The 2011 Archer Awards for achievements in Human Resources.
Thank you for your leadership and skill in building Northeast Ohio business talent, capabilities and culture.
www.forestcity.net
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Lifetime Achievement DON STALLARD CEO and founder
The Reserves Network
I
n 1984, Don Stallard launched The Reserves Network as an executive recruiting firm at a single office in Rocky River. Today it has grown into a Fairview Park-based temporary staffing company, serving the office, industrial, professional and technical Stallard markets with more than 160 employees, sales of $84 million a year and 30 offices in eight states. The Reserves Network helps about 20,000 people annually find cost-
free temporary employment. Mr. Stallard holds an MBA from Ohio State University, but much of his style was honed by U.S. Air Force service, starting as a pilot in Vietnam. He continued that career part time and retired as a lieutenant colonel in the U.S. Air Force Reserves. All the while Mr. Stallard was building The Reserves Network, he and the firm were contributing to the community. He served on more than a dozen civic and professional boards on the local and national level, ranging from the board of the Kent State University Foundation — his bachelor of science degree is from Kent State — to the Greater Cleveland Growth Association. Additionally, The Reserves Network supports more than 20 nonprofits, from Project Wounded Warrior to Harvest for Hunger. ■
Rising Star — Public CARLA M. BENESH human resources supervisor
The Ritz-Carlton, Cleveland
A
t the hotel chain with a name synonymous with exceptional service, a colleague said Carla Benesh is poised, confident and eloquent. Moreover, he says that if he were assembling a dream management
team, he would make her a member. In four years in the human resources industry, all spent with the 36,000-employee hotel chain, she has earned the support of superiors who ask her for guidance in complex situations. Yet she also
MAURER
a strategy to understand the issues of newly acquired employees, as well as current employees. Mr. Maurer also has enacted a succession planning program for the bank. The program identifies indicators of leadership potential and aims to nurture that potential. Additionally, Mr. Maurer has led numerous projects to upgrade the technological capabilities of human resources, including the institution of online learning management. ■
continued from PAGE 23
experienced tremendous growth in total number of employees, as well as skill level needed to service clients and compete in the marketplace,” the nomination said. Through surveying of acquired and current employees and the coordination of a committee of executive leaders, FirstMerit devised
Thank you for your dedication to building a strong InfoCision team. Finalist, Human Resources Executive of the Year – Private Companies
Tina Myles, Esq., SPHR
Human Resources Director, InfoCision
YOUR STRATEGIC DIRECT MARKETING PARTNER 1-866-670-4IMC
|
www.infocision.com
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Rising Star — Public FARRAH BOARD
ith a total of eight years in human resources, including the last three years at Penske Automotive Group, Farrah Board has earned a reputation for boosting cooperation while also managing strife-prone situations. For one, she assisted in a Board successful union avoidance campaign at the Detroit-based
company’s Northeast Ohio auto dealerships. She also is described as a visible, effective communicator at Penske who is able to advance its values and mission with a skill for minimizing conflict, according to the nomination. At the same time, she has navigated the continuing challenges of serving in the auto industry, from reducing staff to acquiring talent, including hiring managers and aiding in the transition between managers. Moreover, she handled the personnel integration involved in the acquisition of four dealerships in three months, which boosted Penske’s Northeast Ohio employment 30% to 400 workers. She has also helped reduce employee turnover to 36%, its best ratio in six years. ■
gets their full compliance with the company’s employee performance review and tracking system. She also has sharpened the skills to advance in the industry by demonstrating focus and strengthening the discipline within the Benesh company. Ms. Benesh achieved that by creating sustainable programs at the hotel, particularly in areas that
help new human resources professionals and other new hires succeed at the company. She supervises all of the department trainers at the Ritz-Carlton Cleveland — it calls them learning coaches — and champions the hotel’s program of certifying new and recertifying employees to ensure their continuous improvement. ■
area human resources manager
Penske Automotive Group, Cleveland
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L
eonora Yurichak’s confidence and professionalism were immediately noticed the first time she walked through the doors at CBiz’s Independence office to personally deliver her résumé. Impressed by her initiative, the company created an administrative position specifically for her skill set — Yurichak and that was just the beginning. While working at CBiz, Ms.
LEONORA YURICHAK corporate human resources manager
CBiz Inc. Yurichak earned her degree at Cleveland State University and steadily climbed the corporate ladder, eventually landing as the company’s corporate human resources manager.
Rising Star — Private MEGAN BUSOVICKI human resources manager
AdvoCare Group
T
he combination of Megan Busovicki’s ability to listen and willingness to create a vibrant working environment are just a few reasons why she’s become such an integral part
of the AdvoCare Group team since her arrival five years ago. “Her professionalism, sharp wit and kindness have been crucial to attracting new employees, creating a productive workplace environment Busovicki and boosting employee morale,” AdvoCare Group CEO Joseph Cannelongo said in the nomination. “Megan embraces the core values of the company, and her strength and endurance have helped to move the company forward and continue to be successful.” Ms. Busovicki has been responsible
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Her co-workers credit her with creating an environment where feedback is not only encouraged but rewarded. For instance, Ms. Yurichak helped smooth the company’s process for breaking in new hires and has taken on the role of becoming a confidante for new employees as they transition to the company. Ms. Yurichak oversees the human resources functions for about 200 employees in Ohio, Kansas, Florida and California, but her work has affected more than 5,000 employees companywide when she started a workplace walking program that has gone national. ■
for managing recruitment and job placement during a period of 35% growth for the Cleveland company. Indeed, she pulled double duty by leading the charge to spread AdvoCare Group’s culture throughout the region and country as it expanded its headquarters and opened offices in Toledo and Columbus. Ms. Busovicki developed a program for new hires to participate in a company-wide tour during which they’re encouraged to sit with each department to adapt to an integrated business model. ■
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Rising Star — Private
HR STAR For a cast of thousands
PLAYHOUSESQUARE CONGRATULATES OUR
MICHELLE MEERS AND THE ARCHER HR AWARD FINALISTS.
playhousesquare.org
ERIN WHITE recruiting manager
Windward Partners
E
rin White isn’t one to shy away from the ever-evolving recruiting industry. By embracing the latest technology and recruiting techniques, Ms. White has shown she’s the embodiment of the next generation of human resources professionals. Entrepreneurial by nature, Ms. White has interviewed candidates by Skype White and solidified a network of human resources professionals she can tap for advice. She also has extended her network beyond Windward Partners’ walls and was instrumental in creating a group on the LinkedIn social network for Cleveland recruiters to share best practices. “Erin has a keen ability to quickly understand client needs and precisely locate and recruit highcaliber candidates,” David Perel, principal at Windward Partners in Independence, said in the nomination. “She has produced tremendous results for our clients and as a result has been contributing to the value of the Windward brand.” At Windward Partners, an executive search firm, Ms. White implemented an applicant tracking system that helped the firm become paperless. She also started the executive recruitment services division at Windward. ■
K
erensa Parke isn’t afraid to try something new. It’s that willingness to experiment that makes her stand out as an HR professional. At a previous employer, human resources firm Adecco, Ms. Parke’s technological savvy “led to her progressive use of social media for recruitment before this method was widely considered by most recruiters,” according to the nomination. In her current job at CSI Infusion, a provider of home health care services located in Brecksville with 125 employees, Ms. Parke “revamped the recruiting process for the Cleveland and Columbus markets by creating a ‘Stoplight’ candidate evaluation program to increase efficiency in screening processes,” the nomination stated. Ms. Parke chairs the wellness committee at CSI Parke Infusion, where she has implemented an annual company
KERENSA F. PARKE human resources coordinator
CSI Infusion & Network Services screening. This preventive approach encourages employees to “know their numbers” to reach or maintain their wellness goals, according to the nomination. The information is handled in compliance with Health Insurance Portability and Accountability Act regulations, the nomination stated, and it’s used to determine areas in which employees need more health education. ■
Rising Star — Nonprofit LAUREN RUDMAN human resources performance specialist
Greater Cleveland RTA
I
t makes sense that someone who works at RTA should be driven to succeed. Lauren Rudman, a lifelong Clevelander, began work five years ago at the transit agency as an HR assistant. Early in her tenure, Ms. Rudman “spearheaded an initiative Rudman to reduce the time to fill key union positions from 90 days to 60 days,” according to the nomination. She was promoted to business
analyst in 2008 and developed the agency’s HR Business Partners training program, created its Diversity Recruitment and Training Program and formalized a succession plan that is evolving today, the nomination stated. This summer, Ms. Rudman is leading RTA’s first internship program. She’s developing and maintaining relationships with local colleges, according to the nomination, and is designing all the projects interns will handle, “ensuring that they are meaningful and strategically relevant.” Reflecting a desire to “modernize a traditional organization and make it more relevant to a young employee demographic,” Ms. Rudman in November 2009 started the RTA Future Leaders Club. She continues to manage the group, which promotes professional development, holds monthly lunches and hosts speakers from the Cleveland-area business community. ■
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Rising Star Nonprofit
Citizenship
D
KARA SERGER director of human resources
CLEVELAND AIRPORT Eliza Jennings SYSTEM Senior Care Network
T
alk about making something out of nothing. When Kara Serger was hired at Eliza Jennings Senior Care Network in 2003, the network didn’t have a human resources department, and HR matters were handled at each Eliza Jennings facility by administrators on site. Since then, Ms. Serger has taken the HR Serger functions “from a departmental view to one that is organizational in its scope and expertise,” the nomination said. “She has become a voice for the employees and an advocate for their professional development,” the nomination stated. Eliza Jennings has about 600 employees and annual revenues of $34 million. Overseeing HR functions at any large institution is a challenge. In the demanding field of long-term care, where employee turnover routinely hits 40% or more, it’s even more difficult. The nomination noted that under Ms. Serger’s direction, Eliza Jennings’ turnover “consistently stays between 20% and 30%.” Since 2008, Ms. Serger also has taken a “proactive approach to accident prevention and providing a safe work environment,” which has enabled Eliza Jennings to cut its workers’ compensation premium by 43%, the nomination stated. Total losses from 2008 to 2011 “have been slashed by 70%,” or nearly $750,000, according to the nomination. She also serves on the Cleveland/Cuyahoga Workforce Investment Board’s health care sector advisory council. ■
27
T
he Cleveland Airport System thrives on its ability to foster partnerships and employee support in promoting the greater good of Northeast Ohio. Airport employees over the past two years raised $73,000 for various causes, gave $59,000 for community sponsorships, donated 174 hours for community cleanup work and supplied 34 pints of blood. They also biked 305 miles and walked or ran 159 miles to raise money for charitable causes. Cleveland Hopkins International Airport also hosted several fundraising events in 2010, including the first “plane pull,” which raised $20,000 for Special Olympics of Ohio. The Cleveland Airport System, which includes Burke Lakefront Airport, supports the United Way, Harvest for Hunger and Rebuilding Cleveland. Its support of Youth Opportunities Unlimited, a program to train teenagers for the world of work, included providing summer jobs for 40 youths in 2010, and it is upping that number to 150 in 2011. “The organization’s commitment to lead by example inspires employees throughout the organization to roll up their sleeves to perform yard/house work for an elderly woman; train for months riding a bike for miles to raise money for a cause; slow down the time lock to share job knowledge to inner-city youth; dig their heels in pavement, pulling a plane 12 feet; and reach into their tightening pockets to give generously to those less fortunate, because it is the culture of the organization,” the nomination said. ■
aniel Blain stresses to all employees that working at the Jewish Federation of Cleveland is more than just a job. Indeed, he “leads the HR function at the Jewish Federation of Cleveland by setting an example for how a nonprofit Blain professional should act,” his nomination reads.
CHRISTA LENKO director of employee development
Skoda Minotti
C
hrista Lenko is a key figure in promoting the community service that is ingrained in the mission
DANIEL BLAIN
Mr. Blain ensures that a complete orientation is done for new employees so they understand the mission and the vision of the
agency. He also works to get all staff members involved in fundraising campaigns, both for the Jewish community and the Cleveland community generally through the United Way. “It is very important to Daniel that all staff see what it is like to raise funds as well as give away their own resources,” the nomination said. In fact, Mr. Blain is so successful in getting employees involved in the Federation’s mission that 100% of its employees contributed to the organization’s fundraising efforts.■
statement and brand philosophy at Mayfield Heights-based Skoda Minotti. Each of the main initiatives that the firm focuses on supports the firm’s efforts to enhance the future of the community — Lenko volunteer trust institute; quarterly on-site blood drive; donein-a-day service projects; Meals on Wheels; and jeans day donations. Ms. Lenko and the HR group use a variety of methods to increase participation and buy-in to these
programs, including informational meetings, internal newsletters and emails. Employees are encouraged to spend time helping out in the community and are even able to count work time spent with nonprofits toward their 40hour work week. And their efforts must be working quite well. According to the nomination, employees spent a total of 2,022 work hours with Northeast Ohio nonprofits in 2010. ■
senior vice president
Jewish Federation of Cleveland
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AUGUST 8 - 14, 2011
Land: Development pace hinges on support continued from PAGE 3
If the financials fall into place, Dr. Foltin said Tri-C plans to have the campus developed in full over the next five to seven years. By that time, enrollment is expected to surge to as many as 9,000 students — a size similar to Lakeland Community College in Kirtland or TriC’s Metro campus in downtown Cleveland.
The demand for classes in western Cuyahoga County is growing at a rate faster than the projected 3% annual increase forecasted in the college’s master plan, Dr. Foltin said. He said the college has had particular success recruiting students from the West Side directly out of high school, whereas Tri-C traditionally has served students in their late 20s and early 30s.
“With the rising cost of tuition at the (four-year universities) and with increased quality and transfer of classes from Tri-C, we’re seeing a big influx from those that used to be traditional college students,” Dr. Foltin said. To keep up with the expected boom in enrollment, the college expects to break ground on a second building in Westlake over the next
two or three years. The second and third buildings, slated to cost about $20 million each, will house student activity and classroom space. Though plans are fluid for what to do with the land it plans to buy, Dr. Foltin said it likely would be home to a work force development center to offset the burden placed on its Corporate College West location in Westlake. The Corporate College West building previously housed such programs, but now mainly offers courses that lead to degrees
because of increased demand. Dr. Foltin said the college still is piecing together how to pay for the projects. He said the rate at which Tri-C breaks ground depends on the amount of financial support the college receives from the state as well as the success of a recently launched capital campaign. Tri-C five years ago completed a capital campaign that brought in about $20 million, Dr. Foltin said. The college still is developing the scope of the current campaign. ■
LARGEST FOREIGN-OWNED COMPANIES RANKED BY NUMBER OF LOCAL EMPLOYEES
Name Local address Rank Phone/Web site
Number of full-time equivalent employees Parent company HQ location
6/30/ 2011
6/30/ 2010
# of Ohio Worldwide local employees employees facilities Type of business
Top local executive
1
Sterling Jewelers Inc. 375 Ghent Road, Akron 44333 (330) 668-5000/www.sterlingjewelers.com
Signet Jewelers Ltd. Hamilton, Bermuda
2,679
2,323
3,343
16,229
36
Retail jewelry
Mark Light president, CEO
2
Nestle USA in Solon (includes Nestle Prepared Foods and Baking) 30003 Bainbridge Road, Solon 44139 (440) 349-5757/www.nestleusa.com
Nestle S.A. Vevey, Switzerland
1,947
1,626
2,408
280,000
1
Manufacturer of Stouffer's and Lean Cuisine prepared foods, Buitoni pasta and sauce, Hot Pockets and Lean Pockets
Frank Higgins president, CEO, Nestle Prepared Foods and Baking
3
ArcelorMittal 3060 Eggers Ave., Cleveland 44105 (216) 429-6000/www.arcelormittal.com
ArcelorMittal Luxembourg
1,916
1,612
2,701
274,000
2
Steel manufacturer
Eric Hauge vice president, general manager, ArcelorMittal Cleveland
4
Bridgestone Americas Inc. 1200 Firestone Parkway, Akron 44317 (330) 379-7000/www.bridgestoneamericas.com
Bridgestone Corp. Tokyo
1,725
1,715
2,314
139,822
6
Tire manufacturer
Hank Hara, chief technology officer, vp, Bridgestone Americas Tire Operations
5
Republic Engineered Products Inc. 2633 Eighth St., NE, Canton 44704 (800) 232-7157/www.republicengineered.com
Industrias CH S.A.B. de C.V. Tlalnepantla, Mexico
1,504
1,310
1,504
NA
4
Manufacturer of special bar quality steel
Jaime Vigil president, CEO
6
Ben Venue Laboratories Inc. 300 Northfield Road, Bedford 44146 (440) 232-3320/www.benvenue.com
Boehringer Ingelheim Corp. Ingelheim, Germany
1,303
1,297
1,303
41,500
1
Manufacturer of sterile injectable pharmaceutical products
Thomas J. Murphy president, CEO
7
Philips Healthcare 595 Miner Road, Highland Heights 44143 (440) 483-3000/www.philips.com/healthcare
Royal Philips Electronics Amsterdam, Netherlands
1,250
1,250
1,250
117,000
1
Manufacturer of medical diagnostic equipment
James Mazelsky general manager, CT and nuclear medicine
8
Saint Gobain Corp. 750 E. Swedesford Road, Valley Forge 19482 (610) 341-7000/www.saint-gobain-corporation.com
Saint-Gobain Paris
904
839
904
189,193
15
Construction products, highperformance materials, glass containers
John Crowe president, CEO
9
Luk USA LLC 3401 Old Airport Road, Wooster 44691 (330) 264-4383/www.lukusa.com
Schaeffler KG Herzogenaurach, Germany
800
800
800
70,000
1
Clutch systems and torque converters for the automotive industry
Marc McGrath president
10
V&M Star 2669 Martin Luther King Jr. Blvd., Youngstown 44510 (330) 742-6300/www.vmstar.com
Vallourec Group Boulogne-Billancourt, France
580
580
580
20,600
1
Seamless steel pipe, mainly OCTG and Joel Mastervich line pipe for the energy industry president, COO
11
AkzoNobel Paints LLC 15885 W. Sprague Road, Strongsville 44136 (440) 297-8000/www.akzonobel.com
AkzoNobel Amsterdam, The Netherlands
576
550
1,059
55,590
10
International paint, coatings and specialty chemicals company
Erik Bouts CEO, Akzo Nobel Paints LLC
12
Meggitt Aircraft Braking Systems Corp. 1204 Massillon Road, Akron 44306 (330) 796-4400/www.aircraftbraking.com
Meggitt PLC Dorset, England
512
525
512
NA
1
Aircraft wheels and brakes and related landing gear systems
J.J. Williams senior vice president and general manager, global operations
13
ABB Inc. 29801 Euclid Ave., Wickliffe 44092 (440) 585-8500/www.abb.com
ABB Group Zurich, Switzerland
440
460
700
116,500
1
Industrial process control systems
Mark Taft Regional BU manager, Power Generation, North America
14
Bendix Commercial Vehicle Systems LLC 901 Cleveland St., Elyria 44035 (440) 329-9000/www.bendix.com
Knorr-Bremse Group Munich, Germany
418
400
418
2,708
1
Leading developer of active-vehicle J. McAleese safety technologies, air brake charging Joseph and control systems and components president, CEO
15
Hitachi Medical Systems America Inc. 1959 Summit Commerce Park, Twinsburg 44087 (330) 425-1313/www.hitachimed.com
Hitachi Medical Corp. Tokyo, Japan
346
350
346
7,754
2
Medical imaging OEM
Donald Broomfield president, CEO
16
Thomas Steel Strip Corp. Delaware Ave. NW, Warren 44485 (330) 841-6222/www.tatasteeleurope.com
Tata Steel Ltd. Mubai, India
330
286
330
80,000
1
Cold rolled steel manufacturer
William Boyd president, CEO
17
The Akron Beacon Journal 44 E. Exchange St., Akron 44309 (330) 996-3000/www.ohio.com
Black Press Ltd. Victoria, British Columbia
296
320
296
NA
1
Akron Beacon Journal and Ohio.com
Andrea Mathewson publisher
18
Vesuvius USA Corp. - Foseco Foundry Division 20200 Sheldon Road, Brook Park 44142 (440) 826-4548/www.foseco.com
Cookson Group PLC London
263
241
297
NA
2
Leading manufacturer of refractory products for the molten metals industries
William Patterson regional vice president, Americas
19
Bekaert Corp. 3200 W. Market St., Suite 303, Akron 44333 (330) 867-3325/www.bekaert.com
NV Bekaert SA Belgium
243
NA
243
25,000
2
Manufacturer of cold rolled steel
David Best, chief financial and administrative officer; Steve Mazak, sales director, North America
20
Elster Perfection 436 N. Eagle St., Geneva 44041 (440) 415-1600/www.elster-perfection.com
Elster Group Luxembourg
230
276
230
NA
2
Mechanical joining products for natural Robert Diak gas and propane gas distribution director of operations systems
21
Koyo Corporation of U.S.A. 29570 Clemens Road, Westlake 44145 (440) 835-1000/www.koyousa.com
JTEKT Corp. Osaka, Japan
210
180
210
36,775
2
Leading international manufacturer of ball and roller bearings for automotive and industrial applications
22
Pepperl+Fuchs Inc. 1600 Enterprise Parkway, Twinsburg 44087 (330) 425-3555/www.pepperl-fuchs.us
Pepperl+Fuchs GmbH Mannheim, Germany
168
155
152
4,300
1
Manufacturer of sensors, controls, and Wolfgang Mueller safety devices COO
23
EYE Lighting International of North America Inc. 9150 Hendricks Road, Mentor 44060 (440) 350-7000/www.eyelighting.com
Iwasaki Electric Co. Tokyo
130
160
130
3,500
1
Manufacturer and distributor of HID light sources
Tom Salpietra president, COO
24
Lafarge North America Inc. 10325 State Route 43, Unit F, Streetsboro 44241 (330) 954-1750/www.lafargenorthamerica.com
Lafarge S.A. Paris
124
130
124
NA
6
Construction material supplier and producer
Max Wolanske vice president, general manager
Source: Information is supplied by the companies unless footnoted and from corporate websites. Worldwide employee numbers are for the parent company and may be from the annual report or website. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual business lists and The Book of Lists are available to purchase at www.crainscleveland.com.
Ken Hopkins COO
RESEARCHED BY Deborah W. Hillyer
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Nationally ranked, Patient-focused, Mission-driven care. At University Hospitals Case Medical Center, our mission is To Heal. To Teach. To Discover. It’s why we’re consistently ranked among the best hospitals in the nation by U.S.News & World Report. Because each and every day, we provide our patients with access to state-of-the-art technologies, innovative research and groundbreaking treatments in a patient-focused, healing environment. BEST HOSPITALS:
Cancer Diabetes & Endocrinology Ear, Nose & Throat Gastroenterology Geriatrics Gynecology Nephrology Neurology & Neurosurgery Orthopedics Pulmonology Urology
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Among the nation’s leading academic medical centers, University Hospitals Case Medical Center is the primary affiliate of Case Western Reserve University School of Medicine.
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Contact: Phone: Fax: E-mail:
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REAL ESTATE
Toni Coleman (216) 522-1383 (216) 694-4264 tcoleman@crain.com
AUCTION L e n d e r
AUGUST 8 - 14, 2011
OFFICE SPACE
O r d e r e d
A U C T I O N
www.maascompanies.com
Tuesday, August 30 – 11 am Two Mixed Use Commercial/Retail Buildings Selling Separately 5,600 Sq. Ft. Single Tenant Office Building on .525 Acres 'PSNFS 4OPEHSBTT "DDPVOUJOH t .PWF *O $POEJUJPO
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1BSL "WFOVF t .BJO "WF t "TIUBCVMB 0IJP INSPECTIONS: .POEBZT "VH t /PPO QN 10% BP; 1% Broker Participation. $10,000 Certified Deposit per Property. Selling AS-IS, WHERE-IS; See Bidder Kit for Complete Terms. Maas Companies of Ohio Inc #2011000032; Hugh B. Miller, President; Auctioneer #57199773419, Broker #000339274.
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INDEPENDENCE CORPORATE CENTER
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7100 E. Pleasant Valley Rd.
(614) 915-8835
Do I want to move or expand? 16,000 sq. ft. building & offices + fenced in area. Where? Valley View. Owner says SELL! Stys, Inc. 216-641-7897
Premium First Floor Space Available up to 5,500 contiguous sq. ft.
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3,500 sq. ft. - Independence Full office equipment, computers, secluded, clean, modern. Pleanty of parking. (216) 524-6068
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OFFICE/WAREHOUSE SPACE HAPPY WITH YOUR LANDLORD LOCATION OR RENT? RIGHT NOW, WE ARE OFFERING DEEPLY DISCOUNTED RATES ON INSULATED FLEX SPACE NEXT TO THE RAMPS OF I-271. NOW IS YOUR TIME AND WE ARE NICE!
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Let USAMDT help you: Get in compliance, stay in compliance, Maintain a safe and drug-free workplace and save money
BUSNIESS OPPORTUNITIES NOTICE OF BUSINESS OPPORTUNITY The Cleveland Airport System of the City of Cleveland is soliciting proposals from qualified firms to undertake the design, construction, lease and management of a nationally branded gas station and related amenities on selected Airport owned property near Cleveland Hopkins International Airport. Interested parties may obtain a copy of the Request for Proposal, free of charge, under the Business Information section at www.clevelandairport.com; by calling (216) 265-6086; by written request addressed to Procurement Section, Department of Port Control, 5300 Riverside Drive, P. O. Box 81009, Cleveland, Ohio 44181-0009 or by e-mail to dcartellone@clevelandairport.com. Proposals are due by 4:00 p.m. EDT Wednesday, October 26, 2011.
Cleveland: 440/653-5003 or kakitchen@usamdt.com Cleveland South: 440/385-6740 or jgorman@usamdt.com
Cleveland-based interactive marketing firm seeking to grow We are interested in acquiring /assuming a smaller web marketing firm or working with freelance marketers & consultants who want to change careers without disappointing their customers. If you would like to speak confidentially, contact Mark: 330-220-6100 ext. 222. www.ProximityMarketing.com MarkP@proximitymarketing.com
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Crain’s Executive Recruiter WE ARE NOT ORDER TAKERS! We find what your needs are We sell & buy since 1962. Used machinery, forklifts, material handling - pallet racks conveyor - shelving. www.stysinc.com Stys, Inc. 216-641-7897
INVESTMENT OPPORTUNITY INVESTMENT OPPORTUNITY
(Accredited Investors Only) Cleveland based company is seeking an equity capital investment, to develop their new business model. Projected revenue, is a combination of sales of our unique kitchen appliance and ad sales from major food and beverage companies. Detailed business plans and forecasts are available. If interested, please call Rick at 440-821-5322 to learn more.
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(800) 690-9409 www.flynnenvironmental.com
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FOR SALE Bulk Lubricants & Chemical Sale Local distributor selling remaining Inventory of engine oils, gear oils, ATF, and antifreeze. In 330 Gallon Totes & 55 Gallon Drums
Email arin@CAS-GRP.com for bid and sale instructions Phone 330-777-5205
Director of IT (Healthcare)
Vice President of MSO Operations
The Director of IT will be responsible for leading the efforts at the Managed Services Organization (MSO) to ensure client satisfaction with the practice management and electronic medical records systems. The position manages the Service Line IT vendor relationships including software, services and hardware contracts and service level agreements. Strong project management skills, budgeting and team management is required. Candidates must be creative and follow through in a timely manner. The position ensures appropriate implementation methodologies and support strategies for these applications to effectively enhance the strategic posture of the MSO. This position reports to the company Vice President of Operations and the CEO.
We are a rapidly growing MSO serving multiple regions and our main office is in the Cleveland area. Reporting to the CEO, the VP of MSO Operations will oversee the continued development and implementation of short and long term operational plans, and aligns regional goals with company-wide objectives. The VP will manage team performance, financial budgets and departmental contribution levels within the MSO. You will play an active role in envisioning and implementing EMR/revenue cycle implementation strategies, assuring high levels of project management effectiveness and providing outstanding customer satisfaction. You will also be responsible for and inspiring excellent associate performance that aligns with our customer oriented goals and values. Significant related experience in healthcare is required.
Qualified candidates should send a resume, cover letter, salary requirements via email to medicalpresentations@roadrunner.com.
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THEINSIDER
THEWEEK AUGUST 1 – 7 Global view: Squire, Sanders & Dempsey is planning an expansion Down Under. The law firm is finalizing talks to add to its ranks a majority of the partners of a western Australia firm that has operated under the Minter Ellison brand for more than two decades. The combination of Minter Ellison Perth and Squire Sanders is subject to a Squire Sanders partner vote that’s to conclude in August; it would allow Squire Sanders to expand into Australia while strengthening its presence in the Asia Pacific region.
A bright spot: Energy Focus Inc., a Solonbased provider of energy-efficient lighting products, said it has been awarded a $23 million Navy supply contract to provide LED fixtures and its proprietary IntelliTube LED lamps for use on the U.S. Navy fleet. Energy Focus said the majority of the contract includes sales of fixtures using the company’s new IntelliTube lamps, which the company describes as “intelligent plug-and-play LED lamps” to replace the existing linear fluorescent tube lamps used in most of the Navy’s light fixtures. Progress on the jobs front: Progressive Corp. announced plans for another round of hiring. The big auto insurer based in Mayfield Village said it’s looking to fill 131 jobs in the Cleveland market; 23 would be information technology and analyst positions, and the other 108 would be sales, service and claims phone representative positions. In May, Progressive announced it was hiring 125 people in Northeast Ohio. Collective effort to save SB 5:
The Greater Cleveland Partnership said it will support the campaign to keep Senate Bill 5, the collective bargaining bill that will appear as State Issue 2 on the ballot Nov. 8, when voters will be asked to consider its repeal. GCP said it will work with Building a Better Ohio, a nonprofit organized to support SB 5, to rally business support for the campaign. SB 5 restricts the collective bargaining rights of public employees and public school teachers, and it prohibits them from striking.
Makes sense: Bendix Commercial Vehicle Systems LLC in Elyria completed the purchase of the vehicle sensors business of Iteris Inc. Iteris put the purchase price at $14 million, with $2 million subject to holdbacks and adjustments based upon working capital at closing. In addition, Iteris said it expects to receive performance and royalty-related earn-outs as they occur over time.
Securus secures financing: JumpStart Inc. and RiverVest Venture Partners announced plans to invest a total of $750,000 in Securus Medical Group, a biomedical technology startup that moved to Cleveland from Boston in July. RiverVest, which is based in St. Louis but has a Cleveland office, committed $500,000 to Securus, which is developing a technology meant to provide real-time temperature mapping within a body cavity. The rest came from JumpStart, a nonprofit that assists and invests in Northeast Ohio startups. This and that: The long-rumored entry of another sports-talk radio station into Cleveland’s media market is official. CBS Radio announced that 92.3 The Fan, on WKRK-FM, 92.3, will launch Aug. 29. . … Jim Fulton, a longtime Philips Healthcare executive, will serve as Imalux Corp.’s first president and chief operating officer. Mr. Fulton will lead the market expansion program for Imalux’s Niris Imaging System, which uses near-infrared light to provide realtime, cross-sectional images of tissue structures.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Healthy share of ideas flow at Max-Wellness ■ Michael Feuer is taking his new wellness venture beyond the traditional retail model that scored big when he co-founded OfficeMax. Mr. Feuer recently opened a smaller version of his MaxWellness stores at Lake Health’s West Medical Center in Willoughby. The shop, like its larger counterparts, carries wellness products not found in drugstores. FILE PHOTO/ “The traffic counts JESSE KRAMER Michael Feuer: No, in hospitals are the best no, we’ll come to I’ve ever seen compared to a retail store,” you! Mr. Feuer said. The idea behind the hospital-based store was sparked after Lake Health president and CEO Cynthia Moore-Hardy visited a MaxWellness store and met soon thereafter with Mr. Feuer. The Max-Wellness chief said his company has gained access to thousands of prospective customers at West Medical Center, and the health system is able to extend another service to its patients. “The great new marketers of this new era are going to be the smart ones who know how to take merchandise to where the customer is instead of bringing the customer to us,” Mr. Feuer said. Over the next three or four months, Mr. Feuer said he is bringing several health system CEOs and medical directors from around the country to see the store, and he
MILESTONES
hopes to see others spring up. Later this year, Max-Wellness plans to set up in airports, casinos and hotels 50 vending machine-like devices — dubbed “Max-Wellness in-a-box” — that will dispense products offered by the company. Max-Wellness currently operates four full-service stores — two in Northeast Ohio and two in Florida — with a fifth set to open next month in Columbus and others on the way. “It’s this whole shtick of wellness in this new era, predicated on the fact the government can’t make you healthier and your employer can’t make you healthier,” Mr. Feuer said. “It’s on the individual.” — Timothy Magaw
Thieves have a thing for the ’94 Accord ■ Ohio’s car thieves have eclectic, and not particularly good, tastes. The National Insurance Crime Bureau (NICB) of Des Plaines, Ill., last week released its “Hot Wheels” list of the most-stolen vehicles nationwide and in each state. Topping the list in Ohio: the 2000 Dodge Caravan. (Of course that’s what you guessed, right?) Rounding out the top five in the Buckeye State: the 1994 Honda Accord, the 1994 Chevrolet Pickup, the 1999 Ford Taurus and the 2000 Honda Civic. Here’s something domestic automakers can tout. “Nationally — and for the first time since 2002 — thieves preferred domestic makes over foreign brands,” the NICB reported, with Ford taking three slots in the top 10, Dodge two and Chevrolet one. The ’94 Accord has been the most-stolen
THE OCCASION: Its 30th anniversary David Rosenberg (pictured) started the business in 1981 as a one-man, one-client marketing and advertising agency. Today, the firm employs 15, and it has served more than 200 clients in the past 30 years. The firm, previously based in Cleveland’s Warehouse District, now operates from a renovated century home in Lakewood. Mr. Rosenberg says the office offers “a comfortable environment ... that encourages goodwill, resulting in great work.” Its web site is www.RosenbergAdv.com.
THE COMPANY: Finelli Architectural Iron & Stairs, Solon THE OCCASION: Its 50th anniversary The family-owned manufacturer of custommade wrought iron products and curved wood staircases started in 1961 in Bedford. It since has evolved into what president Frank Finelli calls “a multimillion-dollar company (with) a state-of-the-art facility in Solon.” After immigrating to America in 1947 from Italy, Michael Finelli Sr. started Finelli Ornamental Iron. “What started out in 1961 as a business in my father’s garage has steadily grown over the years, and we are now very excited to be celebrating our 50th year in business,” Frank Finelli said. For information, visit FinelliIronWorks.com.
Lawyer bags plum job in Atlanta ■ He thought last year it was a “once-in-alifetime thing,” but this week, a member of Cleveland’s legal community again will be inside the ropes of the PGA Championship. Andrew Dorman, a partner at Reminger Co. LPA, is caddying for Rob Moss, his gradeschool friend and the head professional at Pepper Pike Club, for the second consecutive year. This year’s practice rounds begin today, Aug. 8, at the Atlanta Athletic Club. In 2010, when Mr. Dorman and Mr. Moss first traveled to the PGA at Whistling Straits in Kohler, Wis., they played with Ben Curtis, a Kent State University grad who won the 2003 British Open, and sat near Tiger Woods at lunch, Mr. Dorman recalled. “A guy like me — just a dumb old lawyer — gets to walk the fairways with guys like that,” quipped Mr. Dorman, who has practiced law for 17 years and has a 5 handicap. As they have in the past, Mr. Dorman and Mr. Moss are making their trip to one of golf’s four majors a family affair: Their wives and children are in Atlanta with them. “When you love the game as much as we do … to be that close to the pros you see on TV and to enjoy that experience with your friends and family — it’s about as good as it gets,” Mr. Dorman said. — Michelle Park
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com
THE COMPANY: Rosenberg Advertising, Lakewood
car nationwide for the last two years. Vehicle thefts in Ohio have been falling for years, from 41,379 in 2005 to 22,890 in 2009 and 21,242 last year, the NICB reports; the group cites improved car technology as a big deterrent to theft. — Scott Suttell
Chief Wahoo is in Berlin? Now that’s a long road trip ■ A bit of Cleveland is illuminating the sky of Berlin. The Wall Street Journal explored the art scene of the German city in an interview with Cyprien Gaillard, a young French artist who now calls Berlin home. The paper described Mr. Gaillard, 31, as “a rising star in the international art world.” His latest project, unveiled a few weeks ago, is in Mitte, Berlin’s oldest and innermost district. “On a derelict East German office building, ominously called the “House of Statistics,” he has mounted a 12meter neon replica of the logo of the Cleveland Indians baseball team,” The Journal reported. “Only visible at night, the logo, depicting a Native American with a hard-edged grin, floats eerily above the city,” according to the newspaper. “The project, which combines a symbol of the American Rust Belt with a souvenir of Communist town planning, is meant to reflect on the broader subject of urban decline.” In Europe, such a work would only be possible in Berlin, Mr. Gaillard said. “You would never find an abandoned building in the middle of Paris,” he told the newspaper.
Lakeland, employers employ hands-on training approach ■ A new program at Lakeland Community College got some nice attention in a CNNMoney.com story about community colleges’ efforts to train Americans for jobs that currently are going unfilled. “Employers are turning to community colleges because those lining up at the door
aren’t qualified,” said Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce. “The skills requirement has gone up, and employers don’t train entry-level workers anymore.” CNNMoney.com noted that this fall, the first group of students will take part in Lakeland’s applied science program in manufacturing. The initiative came from the Alliance for Working Together, a group of more than 100 manufacturers in Northeast Ohio. Local industry leaders helped design the curriculum and will offer scholarships and internships to promising students. Roger Sustar, president of Fredon Corp. in Mentor and the group’s founder, told the website that the alliance wants to interest high school students in pursuing a career in manufacturing and educate them so they can enter the field. He says he could fill a dozen job openings at his company “if we could get people.” “You think we’ll let an 18-yearold kid run a $400,000 machine?” Mr. Sustar said. “Are you crazy?”
Even at the Fed, money is tight ■ The Federal Reserve Bank of Cleveland is downsizing in Pittsburgh. The Pittsburgh Business Times reported that the Cleveland Fed has eliminated 130 posts in its Pittsburgh office, bringing employment there to 175. Another 112 will be cut during the next 11 months, according to June Gates, a spokeswoman for the Cleveland Fed, which oversees western Pennsylvania. Once the cuts are complete, the number of employees the Fed has in Pittsburgh will be roughly 60, one-fifth of what it was before layoffs and voluntary retirements began May 31. The jobs all were in the Fed’s Treasury retail securities operations, which handle savings bond transactions, and related IT posts.
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