Crain's Cleveland Business by Crain's Cleveland Business

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Suburban mayors eye plan worthy of casino cash BROOKLYN

County exec FitzGerald has stated goal for tax dollars to ‘transform’ By JAY MILLER jmiller@crain.com

ayors from some of Cuyahoga County’s inner-ring suburbs want to convince County Executive Ed FitzGerald and members of the County Council that their communities should share in any plan for the casino tax dollars that come to the county. A group of mayors and a city manager from suburbs that are members of the First Suburbs Consortium met last Monday, Aug. 6, in Warrensville Heights to start hammering out a proposal that will satisfy Mr. FitzGerald’s desire to use the casino tax revenue — an amount that could be nearly

New lease at Steelyard could spur second phase

$10 million dollars a year when all four of the state’s gambling halls are in operation — for projects that are “transformational.” “The message is: ‘We don’t want you to forget about us’” said Mayor Brad Sellers of Warrensville Heights, who chaired the committee. “This is found money; let’s make sure we get bang for our buck.” Members of the committee are Mayor Sellers; Mayor Richard Balbier of Brooklyn; Mayor Earl Leiken of Shaker Heights; Mayor Michael Summers of Lakewood; and city manager Henry Angelo of Bedford. The First Suburbs group is composed of 19 cities, most of which were filled out by the post-World War

Steelyard Commons, the big shopping center near downtown Cleveland, appears on the verge of its first major expansion since it opened in 2007 on the site of a former LTV steel mill. First Interstate Properties Inc. of Lyndhurst, the developer of Steelyard Commons, has leased land to Burlington Coat Factory, a national off-price department store chain,

for a 77,000-square-foot store to be built north of the Walmart Super Center. The lease is a breakthrough for First Interstate as it looks to launch a long-planned second phase of Steelyard Commons, which brought a contemporary, big-box retail center within the city limits. “We’re working on launching phase two,” Mitchell Schneider, CEO of First Interstate, said in an interview last Friday, Aug. 10, as he See STEELYARD Page 17

SHAKER HEIGHTS

OD WO E K LA

See CASH Page 18

Mineral rights deals now done at ‘rational’ pace

INSIDE

Landowners partner to secure favorable terms

Burlington would anchor 200K-square-foot center By STAN BULLARD sbullard@crain.com

BEDFORD

MARC GOLUB

Wary of welder shortage Community colleges are adapting their curricula to help ease area manufacturers’ fears of a dearth of welding specialists. PAGE 3 PLUS: ■ The Cleveland Clinic sues a Fla. company relating to a callback software system. PAGE 3

By DAN SHINGLER dshingler@crain.com

If you thought the land rush was over and that shale gas drilling companies are done buying up mineral rights in Ohio, think bigger. It’s true that, compared with six months ago, the county recorder’s offices in eastern Ohio finally are catching their breath and dealing with fewer oil companies filing new

mineral rights leases. But there still are substantial mineral rights available for lease in Ohio, often by landowner groups, conventional drilling companies and others that each hold thousands of acres. “I call it the ‘rational phase’ of leasing,” said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. “And that’s not a bad thing at all.” Look no further than Geauga County for an example. The county, on the northern edge of the Utica shale play that is driving Ohio’s oil and gas industry, is home See LEASES Page 17

NEWSPAPER

74470 83781

SPECIAL SECTION

SMALL BUSINESS At some local companies, hiring family members tops the priority list ■ Page 11 PLUS: CSAS BENEFIT FARMERS ■ ADVISER ■ TAX TIPS ■ & MORE

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REGULAR FEATURES Big Issue ....................9 Classified..................18 Editorial......................8 Going Places ..............6 Letters........................9 List: Ad agencies, PR/ marketing firms ..15-16 Personal View ............8

COMING NEXT WEEK Real estate A closer look at the growth in the city of Green, and residential real estate agencies appear to be hiring once again.

CORRECTIONS Due to an editing error, an Aug. 6, Page One story analyzing reasons Randy Lerner sold the Cleveland Browns incorrectly referred to former Cleveland Browns owner Art Modell as the late Art Modell. Mr. Modell is alive at age 87. In addition, the story

referenced an initial estate tax claim the Internal Revenue Service made against the estate of former Cincinnati Bengals owner Paul Brown upon his death; that $29.9 million claim later was dismissed by the U.S. Tax Court.

WWW.CRAINSCLEVELAND.COM

AUGUST 13 - 19, 2012

A RANGE OF BENEFITS Private-sector service industry workers are less than half as likely to have medical care benefits offered through work as their counterparts in management, professional and related occupations, according to data from U.S. Bureau of Labor Statistics. Here’s how access to employee benefits breaks down:

Occupational group

Percentage of workers with access to: Retirement Medical care Sick leave

Full time

74%

86%

75%

Part time

Management/professional

Service

Sales/office

Construction/maintenance

Production/transportation

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editor: Joel Hammond (jmhammond@crain.com) Sports Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Energy, steel and automotive Tim Magaw (tmagaw@crain.com) Health care and education Michelle Park (mpark@crain.com) Finance Ginger Christ (gchrist@crain.com) Manufacturing, marketing and retailing Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing director: Lori Grim (lgrim@crain.com) Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Assistant Events Manager: Jessica Snyder (jdsnyder@crain.com) Advertising sales manager: Nicole Mastrangelo (nmastrangelo@crain.com) Senior account executive: Adam Mandell (amandell@crain.com) Account executives: Dawn Donegan (ddonegan@crain.com) Andy Hollander (ahollander@crain.com) Lindsey Nordloh (lnordloh@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Digital strategy and development manager: Stephen Herron (sherron@crain.com) Web/Print production director: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com)

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Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-2912, or email to customerservice@crainscleveland.com, or call 877-812-1588 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Reprints: Call 1-800-290-5460 Ext. 125 Audit Bureau of Circulation

Pictured: Costas Mavromichalis, owner, Constantino’s Market, and his daughter, Anna Mavromichalis, general manager. All credit products are subject to credit approval. Banking products and services are offered by KeyBank N.A. Member FDIC and Equal Housing Lender. ©2012 KeyCorp. ADL5053

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CRAIN’S CLEVELAND BUSINESS

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Clinic files suit over Fla. firm’s software usage

INSIGHT

Its litigation accuses company that once sold callback system of trade secret theft By MICHELLE PARK mpark@crain.com

MARC GOLUB PHOTOS

ABOVE: Matthew Cawley (foreground, left to right), William Check and Thomas Howard check test plates for certification at Lorain County Community College on Thursday. In the background are Jason Kraps (left) and Joe Corey. BELOW: An LCCC student practices shielded metal arc welding.

WEDDED TO WELDING Community colleges update labs, tweak curricula to meet demand

See CLINIC Page 5

THE WEEK IN QUOTES “Big companies are not going to want to go out and piecemeal it. They’re going to want to find a block that they can get in one bunch.”

By TIMOTHY MAGAW tmagaw@crain.com

ortheast Ohio’s community colleges are planning to churn out hundreds of highly trained welders to meet an intense demand for such workers brought on by a rebound in American manufacturing and a pending wave of baby boomer retirements. Cuyahoga Community College and Lakeland Community College in Kirtland are upgrading their training labs with the latest technology and tweaking their programs’ curriculums to meet the evolving needs of an industry requiring a better-educated work force. Both moves are in addition

The Cleveland Clinic Foundation has sued the owners of a company that used to sell the Clinic’s copyrighted patient callback system to other hospitals and health care providers, alleging the two men used the Clinic’s trade secrets to create and sell a similar software program. The lawsuit, filed Aug. 3 in the U.S. District Court in Cleveland, names Quinton D. Studer and Barry G. Porter, who, until an October 2011 recapitalization, co-owned The Studer Group LLC in Gulf Breeze, Fla. They currently own an interest in Studer Group of at least 20%, the

lawsuit states. The Cleveland Clinic in its lawsuit is seeking monetary damages and a permanent injunction freezing and imposing a constructive trust upon monies received by the defendants through their alleged wrongful actions. The Clinic’s callback system — now called the Discharge Call Manager — was developed in 2002 and is used to automate the process of making calls to patients. When asked what kind of revenues the sale of the system has generated, a spokeswoman replied, “It involves several million dollars. This intellectual property is important as hospitals continue to seek to increase efficiency and quality efforts.”

“So many people come up to me and say, ‘I read it cover to cover.’ No one says, ‘I read it online.’” — Donna Marchetti, co-publisher, Wine Buzz. Page 7

— Dave Atha, president of D.T. Atha in Sugargrove, which is marketing mineral rights on about 15,000 acres in Ohio. Page One

to Lorain County Community College’s already-robust welding program, which since 2007 has snared $8 million in federal money to establish a national center to train welding educators. Lincoln Electric Co., the Euclidbased producer of welding equipment, also has its hand in See WELDING Page 18

“The main thing is the family business needs to operate like any other business. ... The business is there to make money and build and preserve the family’s wealth.”

“This is a place where pet lovers and owners can be relaxed and make that final disposition of their pet something they’ll always remember and cherish.”

— Chris Snider, founder and president of Aspire Management Inc. Page 11

— Joe Pavone, Paws Awhile Pet Memorial Park and Funeral Home, Richfield. Page 13

Jackson wants quicker progress on construction inclusion reform Mayor likens community’s inaction amid building boom to ‘addiction’ By JAY MILLER jmiller@crain.com

Efforts are moving forward on a program that would promote the so-far elusive goal of hiring greater numbers of local workers and contractors — especially minorities and women — on construction projects in Cleveland and Cuyahoga County. But Cleveland’s mayor, for one, wants to pick up the pace on reform. Natoya Walker Minor, Cleveland’s

chief of public affairs and director of the office of equal opportunity, said last Monday, Aug. 6, that the city expects to have a template ready in four months for a “community benefits agreement” the city would use when negotiating with developers of large construction projects. The CBA, as it is called, would be the basis for putting muscle into the city’s program to put more city residents on construction sites. In

addition, the CBA would be available for broader use by other public and private developers, including area hospitals. At a day-long Aug. 3 symposium devoted to discussing and advancing the CBA and other economic inclusion goals, Cleveland Mayor Frank Jackson led off by noting that the community is in the midst of a building boom, led by the Flats East Bank development and the convention center and medical mart. As a

result, he said, it’s a critical time to build the skills of local people in the construction trades. However, Mayor Jackson lamented a culture that, in his view, has been reluctant to bring minorities and women into the construction industry. He likened the problem to an addict resisting efforts at rehabilitation. The mayor also expressed a frustration that the community continues to talk about solving the problem without ever getting to a solution. “As long as we’re in conversation about it, it means we haven’t overcome our addiction,” Mayor Jack-

son told industry leaders gathered at the symposium. “When we have accepted that (inclusion) is just the course of business, we will have overcome it.”

Progress is slow The city’s effort has the backing of the city’s chamber of commerce group, the Greater Cleveland Partnership, and of Loree Soggs, executive secretary of the Cleveland Building Construction Trades Council, which represents unions in the construction field. Those unions play a See REFORM Page 17

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AUGUST 13 - 19, 2012

Northeast Ohio Medical University uses these flat-screen TVs to communicate to prospective students information about the school. PHOTO PROVIDED

Use of digital screens on the rise Cost of display monitors, software drops; more small, midsize companies employ technology By CHUCK SODER csoder@crain.com

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Outside of the admissions office at Northeast Ohio Medical University are four flat-screen TVs that together form one big monitor designed to reel in prospective students with promotional videos, graphics and details about campus life. It definitely sends a stronger message than covering a wall in posters or plaques, said Christine Boyd, director of public relations and marketing for NEOMED, which installed those flat screens and two others a few months ago and plans to add even more. “I think it adds a lot of excitement to a dull hallway,” Ms. Boyd said. Expect to see more screens like those around town over the next few years: The idea of using digital monitors to display marketing messages and other information is becoming more popular with small and midsize businesses as well as other organizations that weren’t early adopters of the technique. While the technology has been around for years — think of the scoreboard at Progressive Field or the screens that line the skywalk at the Cleveland Clinic — the cost of the screens themselves and the software that’s used to control the content on them has come down significantly over the last few years, said Linda Fruits, director of application development at Beachwood-based EDR Media LLC, which produces videos and other visual content. All the while, businesses and advertisers are starting to see “digital signage” as a legitimate way to communicate with customers, Ms. Fruits said. Thus, adoption is on the rise. “It’s in doctor’s waiting rooms. It’s in university cafeterias. It’s everywhere,” she said.

More screen time Digital signage isn’t everywhere yet, but it’s headed in that direction, according to a 2011 report from

technology market analysis firm ABI Research of New York. The global market for hardware, software and services related to digital signage is expected to grow from $1.3 billion in 2010 to $4.5 billion in 2016, driven by a growing acceptance of the technology and falling costs, according to the report, “Digital Signage Market & Business Case Analysis.” Big retailers such as Best Buy and Costco have been using digital signage for years. By contrast, Constantino’s Market got started in May, when it opened its store in University Circle. The local grocery store chain bought five flat-screen TVs from EDR Media for the store and plans to start running content on them in a few weeks, said owner Costas Mavromichalis. The company may add screens at its downtown store, too, he said. Constantino’s is planning to use the three screens at the front of the University Circle store to display specials, commercials for vendors that sell products in the store, information about local events and other messages, Mr. Mavromichalis said. The other two will serve as digital menus for ready-made food sold at the store. “The content is the issue,” said Mr. Mavromichalis, who got the idea for using the flat screens from his cousin, Peter Vrettas, who is CEO at EDR. Larger businesses are expanding their use of digital signage, too. Huntington Bank in June wrapped up a two-year effort to refurbish its 680 branches; as part of that effort, they now all have flat-screen displays, said David Clifton, chief customer and marketing officer for the Columbus-based bank, which has a big presence in Northeast Ohio. Though all the screens run commercials and messages promoting Huntington’s services, different regions and branches can use them to deliver customized messages to customers in their areas, Mr. Clifton said. For instance, if Huntington was to run a promotion targeting

Volume 33, Number 31 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the third week of May and fourth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

sports fans, screens at branches in different regions could use imagery from local teams. In exit surveys, Huntington customers have said they like the screens, which Mr. Clifton said create a “pleasant distraction” for customers waiting in line. “It gives customers something to watch, something to engage with,” he said.

Instant messaging Helping companies install and manage digital screens is a small but growing line of business for MCPc, an information technology hardware and services provider in Cleveland, said Dale Phillips, its chief information officer. Not all those screens are used to communicate with retail customers. Some companies hang them in their lobbies to greet and entertain visitors, Mr. Phillips said. Others put them in their offices to highlight employee birthdays or display recent company news. Manufacturers sometimes put screens in their plants, where they can display information about productivity or list the last time they had an accident that caused production to stop, he said. “It allows you to change your message in a heartbeat,” Mr. Phillips said. Interest in digital signage has “definitely picked up over the last couple of years,” said Jason Therrien, president of interactive marketing firm thunder::tech of Cleveland. That’s especially true among companies that sell to other businesses, because that sector in the past had been slower to use digital signage, Mr. Therrien said. His company is helping trucking equipment provider Transport Services Inc. of North Royalton set up a system that will allow it to display sales figures to its employees. The market for consumer-facing screens is bigger, though, Mr. Therrien said. On that front, thunder::tech last summer helped Cedar Point set up several outdoor screens, including the 40-foot-wide display that cars drive under on their way into the park. Thunder::tech also has helped a few companies set up touch screen displays for trade shows. As the cost of touch screens comes down, they’ll likely start to replace typical flat screens in some uses, Mr. Therrien said. As an example, a consumer could use a touch screen at a kiosk in a mall to get information on sales at nearby stores. Hotels could use similar kiosks that would let customers look up local restaurants. “The touch screen is going to be the next wave,” Mr. Therrien said. ■

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Clinic: Florida company filed first lawsuit continued from PAGE 3

According to the lawsuit, the Cleveland Clinic in summer 2004 provided Studer Group with confidential copies of the callback system’s software program, source code and manual, so that Studer Group could sell and market the system on the Clinic’s behalf. The lawsuit said Studer Group agreed to keep the information strictly confidential. On Jan. 30, 2006, the Cleveland Clinic and Studer Group entered into a written strategic alliance agreement, under which Studer was to act as the exclusive distributor of the Discharge Call Manager, according to the lawsuit. The agreement terminated by its own terms Jan. 30, 2009. The Cleveland Clinic claims that it discovered in early 2010 that Studer Group was marketing and selling a callback system and software program called Patient Call Manager, which is “substantially similar to the Cleveland Clinic’s Discharge Call Manager system and program, and uses the Cleveland Clinic’s trade secrets.” The suit also claims Studer Group informed potential customers that the Clinic’s Discharge Call Manager was no longer available, then marketed the Patient Call Manager to those same potential customers.

not registered until the year it discovered that Studer Group allegedly infringed on its rights. It was registered on Sept. 20, 2010, with the U.S. Copyright Office. While the date of registration may impact the amount of damages the Clinic might receive, infringement legally can occur before a copyright is registered, said George H. Carr, a partner with Gallagher Sharp in Cleveland who is not involved in this case, but handles intellectual property litigation frequently. “The copyright attaches when (you) first write down your work in a fixed medium,” he said. “It doesn’t matter that it may be several years before you register your copyright.” However, Mr. Carr added, “It could

be argued that (you) don’t get damages for something until registration.” That said, the Clinic’s citing of the Ohio Uniform Trade Secret Act brings its claims under the scope of that statute, too, not just the Copyright Act, Mr. Carr noted. Who will prevail depends on the accuracy of the respective parties’ lawsuits and whether Studer Group’s software is functionally similar to and incorporates trade secrets of the Clinic’s software, Mr. Carr said. “Software cases are generally pretty complicated and expensive,” he said, noting that jury members typically cannot read software code, so it’s common for both sides to hire software experts to assert whether code was copied. ■

Crain’s veteran lands national reporting honor Jay Miller, government reporter for Crain’s Cleveland Business, has been honored with a national reporting award in the annual Azbee Awards of Excellence competition conducted by the American Society of Business Publication Editors. Miller Mr. Miller received a bronze award in the category of government coverage for a body of work that included an analysis of the difficulty Gov. John Kasich could face in securing a lease deal with a big payoff for the Ohio Turn-

pike, a story that examined how business attraction group Team NEO would be returning to its roots under the privatized JobsOhio economic development nonprofit, and a profile of JobsOhio boss Mark Kvamme. It is the first award Crain’s has won in the Azbee competition. The gold award in the category went to Federal Times, and the silver award went to Crain’s sister publication, Investment News. ■

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The first volley The Clinic’s lawsuit comes nearly two years after Studer Group sued the health care giant. On Sept. 2, 2010, Studer Group sued in U.S. District Court in Cleveland, seeking a declaration that its Patient Call Manager product does not infringe upon any intellectual property rights of the Clinic. It maintained the Clinic had asserted that Studer Group’s development and marketing of its Patient Call Manager product infringes upon certain intellectual property rights the Clinic holds. Attorneys for Studer Group declined comment on the Clinic’s lawsuit and its own court action. A voicemail left for an executive went unreturned. Studer Group’s lawsuit is the reason the Clinic filed its suit, according to David Rowan, chief legal officer for the Clinic. “The litigation filed by the Cleveland Clinic against the Studer Group principals is in response to litigation initiated by the Studer Group to avoid contractual obligations regarding Clinic intellectual property,” Mr. Rowan said in a statement. “We intend to fully protect our rights and expect to prevail in court.”

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The Cleveland Clinic’s copyright for its patient callback system was

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Gladiators will return despite turmoil Gilbert considered shuttering team after forfeit By JOEL HAMMOND jmhammond@crain.com

The Arena Football League’s Cleveland Gladiators, who on June 8 were forced to forfeit a game 18 minutes before its scheduled start time at Quicken Loans Arena after players went on strike, will be back in Cleveland for the 2013 season. But it was a close call. Multiple sources confirmed that team owner Dan Gilbert — who last January bought the team from Jim Ferraro, a principal in the Kelley & Ferraro law firm — was on the verge of deciding to shut down or sell the team last month as the entire Cavaliers Operating Co. gathered for its annual summer sales meetings. Those sources indicate Mr. Gilbert was severely embarrassed by the forfeit. Now, though, the team is featuring 2013 season tickets on its website, and staff members have been instructed to begin planning for next season. Cavaliers spokesman Tad Carper said while shutting down the team was one consideration in a “deep, thorough evaluation of the Gladiators,” there never was a decision made one

way or the other to shutter the team. He said the evaluation was more intense than normal because of “challenges during the season no one expected” and because of the short time period the team had to get off the ground after Mr. Gilbert’s purchase. Mr. Gilbert, who five years ago added the Lake Erie Monsters of the American Hockey League to the Cleveland Cavaliers in his sports portfolio, saw in the Gladiators a team that could benefit from synergies with the Cavaliers and Monsters at The Q. Mr. Gilbert and his staff found out quickly, though, that the problems ran deeper than a lack of synergies: In March, only a few weeks after the ownership change, labor trouble between the league and its players union again surfaced. The two sides long have squabbled, with those battles leading to the league suspending operations in August 2009. When the league returned for the 2010 season with a new ownership group, both owners and players said the league’s new economic model would keep it sustainable. Through a new single-entity system, players would be paid by the league and not individual teams, and workers’

compensation costs would be reduced dramatically. Salaries, too, were drastically reduced, to as little as $400 per game and up to $1,000 per game for three “showcase” players. But in March of this year, Pittsburgh Power owner Matt Shaner fired the entire team hours before a game in Orlando, Fla.; replacement players were used in that game. Then, in June, the Gladiators, spurred on by the AFL Players Association and in a show of support for the Power, struck hours before a home game against Pittsburgh. The Gladiators organization, in turn, was forced to offer free tickets and parking for one of the team’s remaining home games as makegoods for fans disgruntled over the late announcement of the game’s cancellation. The owners and players on June 17 announced they’d reached a new, five-year collective bargaining agreement. However, last month, The Pittsburgh Tribune-Review reported that the sides hadn’t yet signed the agreement. The Gladiators averaged more than 14,000 fans in 2008, their first season in Cleveland, but have struggled to bring fans back, with attendance falling to 8,828 in 2010, 6,507 in 2011, and 6,229 last season. ■

AUGUST 13 - 19, 2012

GOING PLACES JOB CHANGES ARCHITECTURE HERMAN GIBANS FODOR INC.: Jonathan A. Cana to associate.

AUTOMOTIVE COLLECTION AUTO GROUP: James Pilla to chief operating officer.

Cana

Solich

Bellardine

Hatch

Markakis

Carter

FIRSTMERIT CORP.: Kathy S. Bushway to senior vice president, director of brand management; Eugene J. Lucci to senior vice president, marketing; Joseph M. Gabrosek to vice president, marketing.

Cougevan

Rode

Ferian

KEYBANK: Michael Bellardine to senior vice president and head, Enterprise Commercial Payments Product Group.

RETAIL

CONSULTING ALDRIDGE GROUP: Brad Schneider to senior consultant.

EDUCATION NEW HORIZONS COMPUTER LEARNING CENTERS: Steven Wood to sales manager; Vanna Robbins to enterprise account executive.

FINANCE DOLLAR BANK FSB: John Solich to vice president, commercial real estate. FIRST PLACE BANK: David G. Cogswell to chief credit officer.

FINANCIAL SERVICE CORRIGAN KRAUSE: Christine M. Eichmuller to supervisor, tax services; Michael J. Moore to supervisor, assurance services; Jeffrey A. Leciejewski to senior associate, assurance services. GLENMEDE: Lawrence H. Hatch to director, Cleveland office. MONTICELLO ASSOCIATES INC.: W. Christopher Doyle to investment analyst.

HEALTH CARE SISTERS OF CHARITY HEALTH SYSTEM: Paul H. Jones to chief technical officer.

CONSORTIUM OF AFRICAN AMERICAN ORGANIZATIONS: Richard T. Andrews to executive director.

STERLING JEWELERS INC.: Ed Hrabak to executive vice president, COO; Stuart Lee to senior vice president, merchandising and general merchandise manager; Dawn McGuire to vice president, merchandising; Judy Fisher to divisional vice president, merchandising/Mall Division; Laurie Kosarik to divisional vice president, merchandising/Jared Division; Laurel Kruger to vice president, associate general counsel. SIGNET JEWELERS LIMITED: Lynn Dennison to senior vice president, corporate affairs and general counsel; Kevin Valentine to vice president, internal audit and risk management; David Bouffard to vice president, corporate affairs.

STAFFING

WILLIS OF OHIO INC.: Joni Alexander to client service specialist.

INTEGRITY TECHNICAL SERVICES INC.: Phil Kohari to director of operations; Steve Wartko to senior placement specialist.

LEGAL

BOARDS

DAY KETTERER: Maria Limbert Markakis to member.

AMERICAN SOCIETY FOR INDUSTRIAL SECURITY AKRON CANTON CHAPTER NO. 123: Tim Dimoff (SACS Consulting) to chairman; Kevin Pratt to vice chairman; Jennifer Taylor to secretary; Anthony Wellendorf to treasurer.

INSURANCE

JACKSON LEWIS LLP: Morena L. Carter to associate. MCDONALD HOPKINS LLC: Bridget K. Cougevan to associate. REMINGER CO. LPA: Mike Rode to of counsel. THACKER MARTINSEK LPA: Mark I. Wallach to of counsel.

LOGISTICS PACKSHIP USA: Greg Gaither to director, logistics services; Adam Hanzie to director, logistics operations.

MANUFACTURING SIFCO INDUSTRIES INC.: Kevin Vadini to area operations manager.

MARKETING CORKY THACKER COMMUNICATIONS INC.: Lisa Ferian to marketing communications associate.

EPILEPSY ASSOCIATION: Kathleen Sanniti (Rainbow Babies & Children’s Hospital) to president; Peter Nelson to vice president; Susan Krantz to treasurer; Mark Nuss to secretary. LAKEWOOD HOSPITAL FOUNDATION: Ken Haber to president; Chas Geiger to vice president; Tom Baker to secretary; Bob Potts to treasurer. WORLDWIDE EMPLOYEE BENEFITS NETWORK: Corine R. Corpora (Ulmer & Berne LLP) and Rick Chelko (Chelko Consulting Group) to co-presidents.

RETIREMENT

NONPROFIT

STERLING JEWELERS INC.: Bill Montalto after 26 years of service.

BVU: THE CENTER FOR NONPROFIT EXCELLENCE: Elizabeth Winter to regional vice president.

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

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CRAIN’S CLEVELAND BUSINESS

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Life in print after digital? Some area publishers think so Narrowly focused formats can succeed, they say By JAY MILLER jmiller@crain.com

Noelle Celeste and her husband, Jon Benedict, wanted to create something that would give people interested in locally produced food a place to learn more. “I knew there was a lot going on in the local food scene,” Ms. Celeste said. “We knew a lot of people working very hard on the Ohio City farm and other places. But there wasn’t a consistent place to share stories and encourage people to learn more about what they can be doing to explore local foods.” And so, Edible Cleveland, a quarterly, ink-on-paper magazine, was born this past spring. Its second issue is at the printer and should be available this week. The digital age is here, we’re told. Print is dead. Well, not exactly. A number of editors and publishers such as Ms. Celeste believe there’s life in print, though the places in the media galaxy where it can succeed are changing. And they are launching new publications to prove the point. These ink-stained professionals believe they and their backers are making safe — if financially modest — bets on niche publications. They focus on interests of narrow appeal — such as local foods, bicycling and the arts — that have avid audiences that are hard for advertisers to reach online. Their formats range from newsprint tabloids to a bound magazine rich in color photography.

Passion projects Veteran Cleveland journalist Michael Gill is editor of two of the newest publications, The Great Lakes Courier and CAN Journal. He said the Courier is for bicyclists and CAN Journal targets the visual arts. The Courier, a 12-page tabloid newspaper that began monthly publishing in May, tells its 10,000 readers about new bicycle safety legislation; the status of a velodrome, or indoor arena for bicycle races, that is under construction in Cleveland; and coming family and group rides. CAN Journal is a nonprofit founded by the Creative Arts Network Cleveland, an organization of artists, galleries and arts organizations, as a response to the demise of visual arts coverage in other media, including the 2009 closing of Northern Ohio Live magazine. “The coverage of the subject has

just tanked,” Mr. Gill said. The larger arts organizations have tried to pick up the slack on their own websites and on Facebook, Mr. Gill said, but that approach has fragmented the arts audience. “There was no place to go for anything comprehensive,” Mr. Gill said. “That’s the environment in which (publisher Liz Maugans) had this idea that if galleries worked together they could create their own media.” Ms. Maugans is managing director of Zygote Press, a nonprofit fine arts press based on Cleveland’s East Side. The bicycling tabloid had a similar genesis. Mr. Gill said construction of the velodrome, the creation of a bicycling advocacy organization and a growing number of people, 300 or more, who join a monthly bicycle ride that begins at Public Square all suggested the publishing opportunity to him. “There is a huge amount of activity around bicycling,” he said. “There’s a huge amount of activity that gets virtually no media attention.” The Courier is a project of the Human Tribe Foundation, created by Jim O’Bryan, founder of AGS Software of Lakewood, which develops software for media firms.

CAN Journal and Edible Cleveland are two new Cleveland-area niche publications. Phoenix Coffee Co., which operates three coffee shops around Cleveland and a wholesale roasting operation. “There’s an authenticity to print,” she said. “We’re about building a coffee culture in Cleveland and the strength of the food scene is important to us.” Edible Cleveland distributed 15,000 copies of its summer issue and Ms. Celeste said the plan is to bump that up to 20,000 in the fall, based on the way copies are grabbed up. The

other two distribute 10,000 copies.

Role models None of these publications is more than three issues old, so their futures are hardly secure. But they have role models in Northeast Ohio that are building some stability. DD214, for example, has been reaching its audience of military veterans bimonthly since 2010. Publisher Terry Uhl said he had been involved producing a radio

The ‘authenticity’ of print Though it’s the goal of all three publications to be self-sustaining, only Ms. Celeste and Mr. Benedict have a for-profit model. All of these publications follow a similar template. They have been created by people with a passion for the subject matter and believed the market would support a publication. They also tend to be pay-as-yougo, covering printing costs and some editorial expense. They all have companion websites or a presence on Facebook, and they are distributed for free, with much of the press run distributed through the publications’ advertisers. Those advertisers are businesses that cater to the specific interest that attracts readers to the publication. CAN Journal advertisers include Lakewood’s Beck Center for the Arts, Convivium33 Gallery and the Cleveland Institute of Art. The Great Lakes Courier has won the business of Fairview Cycle, B&B Appliance and the West End Tavern. Among Edible Cleveland’s advertisers are Heinen’s supermarkets, the North Union Farmers’ Market and Phoenix Coffee. “It’s a positioning thing for us,” said Sarah Wilson-Jones, CEO of

World

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Thursday, Sept. 27, noon - 6PM Executive Caterers at Landerhaven

PRESENTED BY

Keynote Speaker: Robert Sinche

Global Head of FX Strategy, RBS Securities Inc. Mr. Sinche is responsible for directing strategy and forecasting efforts of the Bank for currencies of developed market (G10) countries.

CRAIN’S HEALTH CARE DIRECTORY Crain’s Cleveland Business on Sept. 17 will publish its 15th Health Care Directory, a listing of companies and organizations that provide health care services in Northeast Ohio.Go to www.crainscleveland.com/section/ hcd to view the Health Care Directory. If your company or organization has never submitted information for the directory, send an email requesting a survey to Deb Hillyer at dhillyer@crain .com. The email must include company name, address, phone number and a contact name. Incomplete requests will not receive a response. The deadline to submit a survey is Aug. 22. The directory will be divided into

show for vets when John Tidyman, an Army veteran and former reporter, now editor of DD214, suggested a print publication made sense for telling veterans’ stories. Articles tell some war stories, but DD214 — Defense Department form DD 214 certifies a soldier’s discharge from active duty — also writes about military skills that can transfer into the private sector and educational programs available to veterans. “I did it because I wanted to support the cause,” Mr. Uhl said. “With all the veterans coming home from Afghanistan and Iraq, we wanted to be able to tell their stories. John was a Vietnam vet, and he wanted to tell the stories of that era and World War II.” Advertising response has been strong from colleges and universities, he said. Other advertisers include a résumé service and a hospice center. Perhaps the longest-running niche publication is Wine Buzz, which is in its 11th year. Co-publisher Donna Marchetti said that because of its wine reviews, Wine Buzz is a natural impulse pickup for people going into a wine shop. “So many people come up to me and say, ‘I read it cover to cover,’” she said. “No one says, ‘I read it online.’” ■

20 categories: addiction services; associations and professional groups; biotechnology; dentists and dental groups; fitness and wellness; health insurance underwriters (only those companies listed as Health Insuring Corporations by the state of Ohio); home health; hospice; hospitals and hospital systems; laboratories; medical equipment and imaging; mental health; occupational health/occupational therapy; outpatient services; pharmaceuticals; physical therapy/ rehabilitation; physicians and physician groups; prescription services; senior and long-term care services; and women’s health services.

More information on track sessions and speakers visit: www.CrainsCleveland.com/NEOworldtix

SPONSORSHIP / ADVERTISING INQUIRIES:

Nicole Mastrangelo at 216-771-5158 or nmastrangelo@crain.com

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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

Enemy mine

vidence continues to pile up that Republican office holders in Columbus are their own worst enemy. They only have themselves to blame for a proposed constitutional amendment pushed by labor unions that would change the system for drawing Ohio’s congressional and legislative districts. Last year, Republicans overplayed their majority advantage in both chambers of the state Legislature when they created a congressional redistricting map that essentially set up rigged elections, with a dozen of the 16 districts loaded with voters who favor Republicans. They also carved out a legislative redistricting map that gave them a decided advantage in elections for seats in the Ohio House and Senate. Statehouse Republicans as a group must be lousy chess players, because they act without seeming to anticipate their opponents’ counter move. In the case of abusing the redistricting process, that counter move was made by a union-backed coalition that succeeded in collecting enough petition signatures to put its redistricting proposal on the Nov. 6 ballot. With its slogan of “People, not politicians,” the coalition — going by the name Voters First — depicts itself as nonpartisan. However, nearly all the money that funds its operations comes from unions and other groups aligned with the Ohio Democratic Party. Republicans now are crying foul, with Matt Borges, executive director of the Ohio Republican Party, saying that all Voters First is interested in is “undoing the election of 2010 and getting more Democrats in office.” Yes, Mr. Borges, you’re probably right. But wasn’t your party trying to keep Democrats out of office with its redistricting shenanigans? Mr. Borges and his Republican cohorts could have avoided this whole situation had they embraced a redistricting proposal put forth three years ago by one of their own, Secretary of State Jon Husted, who was a state senator at the time. Under the Husted plan, an Apportionment Board consisting of seven members (the governor, secretary of state, auditor, House speaker, Senate president, and minority leaders in the House and Senate) would not have been able to move a redistricting plan forward without the approval of a supermajority of five members. And of those members voting in favor, at least two votes would have needed to come from members aligned with the minority party. Neither party was a true winner with that plan, and that was the point. But because neither party loved it, the Husted plan faded away. In a sad bit of irony for Republicans, it is Mr. Husted, in his secretary of state role, who last week ruled that Voters First had secured enough petition signatures to put its proposed constitutional amendment on the fall ballot. So, Ohio voters now will get to decide whether a 12-member Citizens Commission should be given control of the redistricting process. We will wait to share our thoughts about the Voters First proposal. For now, we’ll note that the same Repubican arrogance that led last year to Ohio voters thrashing the anti-union Senate Bill 5 has produced yet another referendum on the party’s collective wisdom, or lack thereof. Republicans shouldn’t be surprised if they’re given their comeuppance again.

FROM THE PUBLISHER

Loss of LaTourette looms in two ways

to their own liking and accused me of here perhaps is no better evisuggesting that only the Republicans had dence of what I complain about to compromise (WRONG. Never said in our political system than the that) and that the Democrats never comresponses brought by my column promise (also wrong, clearly). last week about Steve LaTourette. I understand the impetus that spawned Here’s the Cliffs Notes version of what the Tea Party movement within the I wrote: I complained that one of our Republican Party — the frustration over most effective congressional representabudget deficits, anger over tives, the moderate Republican massive entitlement programs, from Lake County, was calling it BRIAN fury over Obamacare. But it quits, in large part due to his TUCKER seems to me the answer isn’t to distaste for the rancor in Washkeep doing stupid things such ington. I wrote that it is sad when as taking no-tax pledges or, as we lose moderates such as we did in Ohio, installing term Rep. LaTourette, and before him limits so that lawmakers aren’t Sens. Olympia Snow and Richard in office for life. Lugar. The problem with such I’m sick of elections in which thinking is the same flaw in any countless amounts of money and sort of fundamentalist reasoning. energy must be spent to shore Making everything a black-and-white, up the base, and the Democrats are yes-or-no proposition makes things easier, forced to be more liberal and the Repubbut rarely produces the best solutions for licans are forced to be more conservathe problems affecting us as a people. tive. What is lost are the moderate lawWas the force-feeding of health care makers who could compromise in order reform by the Democrats who followed to pass laws that do the most good for President Obama to Washington in early the greatest number of Americans. 2009 a good thing? I guess it depends on Some of our readers interpreted that

whether you’re comfortable in your job while the company keeps eating most of the costs of your health care or you’re a 50-something dad who lost your job through a downsizing and can’t find work in a sluggish economy. Few people would disagree that we can’t keep absorbing 8% annual increases in health care, but nobody with skin in the game wants to lose anything — not the lawyers, the doctors, the insurers or the hospital systems. So back to Rep. LaTourette, whose timing may help him steer the seat toward a candidate he supports but is clearly bad for the election system in general. As one reader told me in a letter last week, Rep. LaTourette could have chosen another way that wouldn’t have left his constituents in the lurch. But what really concerns me is that regardless of whether you agree with my assertion that we need more moderates, it can’t be argued that Rep. LaTourette had the kind of seniority that makes a congressman especially helpful to his district, region and state. And now that’s gone, and that’s so unfortunate for all of us who care about Greater Cleveland. ■

PERSONAL VIEW

Positive economic data masking reality By DAVID McCLOUGH

espite economic growth during the past four years of nearly $250 billion as measured by real gross domestic product and a decline in unemployment from a recession high of 10% to the 8.2% reported for June 2012, many individuals and households continue to experience the recession that “officially” ended three years ago in June 2009. How might we explain why key economic variables are trending in the right direction, yet consumers choose not to spend as if the recession had not ended? One reason is that the economic data misrepresent economic reality. The unemployment rate is calculated by dividing the number of unemployed

Mr. McClough is an assistant professor of economics at Ohio Northern University. workers by the civilian labor force. To be included in the labor force, an individual, among other criteria, must be actively seeking employment. If it is determined that the unemployed worker is not actively seeking work, he or she is no longer included in the labor force and, therefore, cannot be unemployed. Accordingly, the unemployment rate can decline as unemployed workers are removed from the labor force. This scenario explains much of the declining trend of the unemployment rate. Government data reveal that the labor force has been declining for more than a decade, but the decline accelerated during the last recession and has not

recovered. In June 2008, 66.6% of eligible adults participated in the labor force. By June 2012, four years later, the labor force participation rate declined to 64.3%. A decline in the labor force participation rate is not necessarily a bad thing. One can imagine numerous benefits of less labor force participation, such as greater opportunity to care for family members and more time to participate in civic affairs. Unfortunately, individuals are not voluntarily exiting the labor force. A committee at the National Bureau of Economic Research (NBER) has the responsibility of determining when recessions begin and end. Many of us may associate the start of the latest recession with the collapse of Lehman Brothers; See VIEW Page 9

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CRAIN’S CLEVELAND BUSINESS

THE BIG ISSUE RO

DG R 3 ANNINEMBE GORPE SEPT 15%

It appears Ohio will end the fiscal year with a surplus of $400 million or more. Should the state then cut taxes, or restore some spending that was cut to balance the budget?

VE SA

TIMOTHY HARRIS

SUSAN GALLAGHER

MARY LOUISE MADIGAN

DAVID LEOPOLD

Cleveland

Rocky River

Beachwood

With everything that’s going on with the economy, I’d say cut taxes. … People are paying a lot of taxes as it is nowadays.

I think the state should cut taxes. Give our taxpayers a break. … (The tax burden) in Ohio is high.

Lakewood (where she’s on city council) Restore spending. I think we need to invest in early childhood, in higher education, and we have to do it now. … If we’re that much ahead of the game, they also could restore some of the Local Government Fund that they cut.

We need money pumped into the schools. We need to make sure seniors are taken care of. We need to make sure families without means have a safety net. Things were cut to the bone during the economic downturn.

➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.

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Rep. LaTourette has quit on voters ■ Regarding Brian Tucker’s Aug. 6 commentary, “Mad as hell? You’d better believe it,” I’m mad as hell, too. I truly believe the Ohio delegation will be diminished when Rep. Steve LaTourette steps down. He has many excellent qualities. But why isn’t anyone talking about the fact he is quitting? Rep. LaTourette is breaking his “contract” with the people who elected him. Politicians who win their party’s primary should be required to fulfill the term of office they sought. Rep. LaTourette is frustrated; so are the people who elected him to serve. If he wants to step down, he should do so after the expiration of the coming term and should not run in the 2014 primary. By quitting now, he is leaving the door open for an appointee of the party establishment who may or may not have time to mount a winning campaign. But, most important, is the fact the candidate will not be the candidate elected by the people to represent the Republican constituency of our district. To hear the name of Tim “which office do I want today” Grendell as

LETTERS a possible replacement makes my head numb. Although I have voted for him in the past, I will have great difficulty voting for Mr. Grendell in the future because of his stunt during a recent election when he changed his mind about being seated for the office he won in the November election, preferring instead to keep the seat he held at the time. And if nominated to fill Rep. LaTourette’s seat, he will leave his position as judge. Yes, I’m mad as hell. John Asimakopoulos Willoughby

Enough with moderation ■ I’m mad as hell, but not for the reasons Brian Tucker suggests in his Aug. 6 commentary, “Mad as hell? You better believe it.” His outrage is misplaced. His assertion that the Tea Party has infected the GOP is ridiculous. Compromise is a two-way street. Democrats illustrated their willingness to compromise when they

View: Unemployment would rise with greater participation continued from PAGE 8

however, the NBER identified December 2007 as the beginning and June 2009 as the end of the recession. To make this determination, the committee members reviewed economic data pertaining to the level of economic activity. It should not be surprising that the growth of economic output as measured by the gross domestic product (GDP) and employment as measured by the unemployment rate are key statistics informing the decision. Accordingly, if output and employment are contracting for an extended period — typically two or more consecutive quarters — the economy is

deemed in recession. Once output and employment demonstrate sustained growth, the economy is considered to be in an expansion. Suppose, however, that the improvement in the unemployment rate is due to a decline in labor force participation rather than an increase in employment. Suppose further that the increase in output and the resulting increase in average income are realized by a small proportion of households. Under these conditions we can understand why consumption is not increasing despite higher average income. Indeed, consumption of consumer durables such as cars

jammed Obamacare down our throats with backroom deals and lies. I’m mad as hell because our country is broke and we’re heading down a road that will take generations to fix. Of course Marcia Fudge and the Democrats want moderate Republicans to remain in power. After all, it’s those same Republicans and Democrats who have allowed our deficit to explode. LaTourette and Olympia Snowe are getting out before they’re thrown out. The demise of longtime senator (and moderate) Richard Lugar would have become their demise. Big-government Republicans and Democrats beware; this country needs a jerk back to the right and the Tea Party’s message of “smaller government, less taxes, and more personal responsibility” is just the cure. Sounds reasonable to me … how about you?

Creating Value.

Jeff Longo North Royalton

WRITE TO US Send your letters to: Mark Dodosh, editor Email: mdodosh@crain.com

and appliances actually declined in June 2012 as one expects during a recession; but, according to the NBER, the recession ended three years ago. If I were a member of the NBER committee, I might ask: What would the unemployment rate be today if the labor force participation rate was still 66.6% rather than 64.3%? Using data from the Federal Reserve, I calculate that the unemployment rate would be 11.6%, which is greater than the 10% high recorded during the recession. Suppose this calculation slightly overstates the unemployment rate. Even so, my assertion that the economic reality is worse than the data suggest remains plausible. Indeed, the situation worsens if we acknowledge that increases in income are concentrated among a small proportion of households, a fact that is ignored by the measurement of GDP. ■

What do You Value? Maybe it’s advice from accounting and tax professionals to help your business grow and thrive.

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New owner spurs Akron commercial printer to diversify Industry shifts require new services to keep up By GINGER CHRIST gchrist@crain.com

When Cincinnati businessman Christopher Che bought Akron-based Digital Color International in July 2011, he had plans to transform the regional commercial printer into a national packaging and display company. Now, one year in, Mr. Che is well on his way to doing just that. Mr. Che, founder of Che International Group LLC â&#x20AC;&#x201D; a Mason-based holding company â&#x20AC;&#x201D; and now president of Digital Color, has upped Digital Colorâ&#x20AC;&#x2122;s 51-person work force by 10 people, boosted sales by 30% and secured an additional 10,000 square feet in warehouse space adjacent to its 40,000-square-foot plant. The company has expanded its middle-market customer base to include the likes of Cincinnati-based corporate giants Procter & Gamble Co., Macyâ&#x20AC;&#x2122;s Inc. and Kroger Co. â&#x20AC;&#x201D; companies with which Che International had prior relationships â&#x20AC;&#x201D; and is pitching to other Fortune 1000 companies. Mr. Che hopes to double the size

of Digital Colorâ&#x20AC;&#x2122;s work force within two years and to add equipment as demand requires. â&#x20AC;&#x153;Digital Color is a company that has a lot of opportunity to grow,â&#x20AC;? Mr. Che said. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;ve got a good, valuable position and good technology supporting that.â&#x20AC;? Under Mr. Cheâ&#x20AC;&#x2122;s leadership, Digital Color has transformed its business model. â&#x20AC;&#x153;Chris brought some fresh perspective to the whole business model,â&#x20AC;? said David Welner, chief operating officer and co-founder of Digital Color, who opted to remain involved in the Akron company after the sale. Digital Color, which was formed 20 years ago, had the business model of a printing company, and its services had become heavily commoditized, Mr. Welner said. He and cofounder David Fusselman tried to improve the businessâ&#x20AC;&#x2122;s profitability by diversifying as they added creative services such as wide-image formatting â&#x20AC;&#x201D; producing large banners. â&#x20AC;&#x153;I think that kept us alive over a lot of other printers that closed up shop,â&#x20AC;? Mr. Welner said.

Jim Cunningham, president of Printing Industries of Ohio and northern Kentucky, characterized the printing and graphics communication industry as one thatâ&#x20AC;&#x2122;s both shrinking and evolving. The industry continues to consolidate as companies close or merge to offer a wider variety of services, Mr. Cunningham said. The companies that arenâ&#x20AC;&#x2122;t aggressive and donâ&#x20AC;&#x2122;t keep on top of new technologies are, for the most part, the ones struggling. â&#x20AC;&#x153;A lot of the future of print is going to marketing service providers,â&#x20AC;? he said. â&#x20AC;&#x153;Printers are becoming marketers as much as they are putting ink on paper.â&#x20AC;? For that reason, packaging, which marries print and marketing, is one of the fastest-growing areas in the industry, Mr. Cunningham said. Digital Color now is on a path to becoming known for being a packaging and temporary retail display company, a direction in which it has identified room for growth. Jeff LeRoy, spokesman for P&G, said the company values packaging and shelf presentation as an effective way to communicate its brand to consumers. â&#x20AC;&#x153;It has always been, and will continue to be, a critical component

INTRODUCING

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to winning at the store shelf,â&#x20AC;? Mr. LeRoy said. â&#x20AC;&#x153;We refer to this moment, when a consumer first sees our product on shelf, as the First Moment of Truth.â&#x20AC;? Digital Color is on what Mr. Welner believes is the cutting edge of a new technology: virtual merchandising. Digital Color has developed a way to project an image, like a hologram, in front of a retail display in what it refers to as a digital media display. In founding Che International in 2005, Mr. Che wanted to acquire diverse companies that would serve one customer base. To that end, in 2007 he purchased Hooven-Dayton Corp., a Dayton-based commercial

printer, and last month acquired Cog LLC, a Cincinnati-based graphics production company. With each of these companies, he is adopting a similar strategy for growth. At both Hooven-Dayton and Digital Color, Mr. Che invested in new equipment and hired employees. â&#x20AC;&#x153;Each subsidiary will grow organically and through acquisitions of its own,â&#x20AC;? Mr. Che said. He said Digital Color already is looking at purchasing another packaging company in Northeast Ohio, although he wouldnâ&#x20AC;&#x2122;t discuss details. Che International has 160 employees in its three subsidiaries. â&#x2013;

Cleveland loses Senior Games HQ bid tied to more events By JOEL HAMMOND jmhammond@crain.com

Greater Cleveland Sports Commission president and CEO David Gilbert says planning and fundraising for next summerâ&#x20AC;&#x2122;s National Senior Games, to be staged in Cleveland, are going well â&#x20AC;&#x201D; so much so that he predicts Northeast Ohio will play host to the best event the National Senior Games Association has had. He just isnâ&#x20AC;&#x2122;t sure his staff and the region as a whole could handle staging the event every other year. And that appears to have played a key role in the associationâ&#x20AC;&#x2122;s decision to relocate its national headquarters to Kissimmee, Fla., in central Florida, instead of Cleveland. The association said in a news release last Monday, Aug. 6, that it will move its offices â&#x20AC;&#x201D; and what it hopes eventually will be 15 to 20 employees â&#x20AC;&#x201D; to Kissimmee and stage the National Senior Games in central Florida five times from 2016 to 2025. The games, now a bi-annual occurrence, will become an annual event in 2016. The association now is headquartered in Baton Rouge, La. NSGA CEO Mike Sophia said the group would be shifting the gamesâ&#x20AC;&#x2122; business model and placing less of the fundraising burden on host cities. Even so, he said the event

would benefit from a grant program from the Florida Sports Foundation, which assists with major events in the state, and another grant from Kissimmee that kicks in when hotel room night goals are met. Mr. Sophia said the central Florida location also was attractive as a multiyear host because of Disneyâ&#x20AC;&#x2122;s Wide World of Sports, a 220-acre complex in Kissimmee owned by ESPN. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a huge event, a huge undertaking, and itâ&#x20AC;&#x2122;s hard for other communities to do it so frequently,â&#x20AC;? he said. The National Senior Games Association sent a request for proposals to 60 or 70 cities that fit its criteria, which included ease of accessibility, Mr. Sophia said. From there, the organization received 15 letters of intent. Mr. Gilbert said the 2013 national gamesâ&#x20AC;&#x2122; budget is $4.3 million, about a third of which is already committed by national sponsors. And while he said the return on investment for Cleveland is â&#x20AC;&#x153;fantasticâ&#x20AC;? â&#x20AC;&#x201D; the National Senior Games Association estimates the games bring $23 million a year in economic impact and 11,000 athletes to the host city â&#x20AC;&#x201D; he was surprised by a city hosting it so often. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a tremendous amount to raise every other year,â&#x20AC;? Mr. Gilbert said. â&#x20AC;&#x153;It would be hard to commit to that.â&#x20AC;? â&#x2013;

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SMALL BUSINESS

INSIDE

14 TAX TIPS: TEMP STAFFING UNDER MORE IRS SCRUTINY.

CSAs offer farmers an early source of capital Risks exist, though, in unpredictable products By KATHY AMES CARR clbfreelancer@crain.com

JANET CENTURY

Joel Rathbone and his daughter, Kim, at the downtown Cleveland offices of Javitch, Block & Rathbone. The law firm places an emphasis on hiring family members of employees.

KEEPING IT IN THE FAMILY Some area companies make no bones about hiring those most familiar, though experts warn against pitfalls of treating insiders, outsiders differently By CHRISSY KADLECK clbfreelancer@crain.com

amily is the driving force and the corporate backbone at Javitch, Block & Rathbone. And it’s not just the families of co-managing partners Joel Rathbone and Bruce Block, who lead the Cleveland-based law firm specializing in collection and insurance subrogation. The emphasis extends to every employee, at every level. “We embrace family, and we hire family before we will hire others,” said Mr. Rathbone, whose daughter, wife and son-in-law work at the firm. Mr. Rathbone’s daughter and Mr. Block’s son both are partners and have been designated in a succession plan to take over the firm. “We ask all employees for recommendations and family members, and we pay them for referrals,” said Mr. Rathbone, who estimates

35% to 40% of his firm’s 400 employees have a relative working in the business. “By embracing family and having family as part of business, it’s no longer about outsider versus insider.” That doesn’t mean that bringing nonfamily members into the management ranks of a small, privately held family business isn’t a delicate balancing act. “The first one is the hardest,” said Mr. Rathbone, adding that his firm’s first outside management hire was its human resources director about eight years ago. He now is the firm’s chief operating officer. “There is no question that the role of the person coming in has to be clear for them and for every family member, especially if you’re in a growth mode and creating this position, possibly for the first time,” Mr. Rathbone said. “Nine times out of 10, you’re outgrowing the family.” Chris Snider, founder and presi-

dent of Aspire Management Inc., a Strongsville business consulting firm that specializes in exit planning, leadership transitions and mergers and acquisitions, said his first recommendation to a small business — family run or not — is to do an assessment of the company, including a business valuation, before making any high-level hires. “You have to know what you have and you have to know what you need. And you also want to take the emotion out of the decision,” said Mr. Snider, who also is the founder and president of the Northeast Ohio chapter of the Exit Planning Institute. “The main thing is the family business needs to operate like any other business. Family members need to understand the business is there to make money and build and preserve the family’s wealth, not to provide family jobs or make everyone See FAMILY Page 14

“We can’t have the son or daughter ... going over the COO’s head to see dad.” – Chris Snider, founder and president, Aspire Management Inc.

hile the manpower involved often is no picnic, the communitysupported agriculture arm of Melanie Schenk’s farming operation feeds a mutual benefit, nourishing her subscribers while keeping her business in the black. Ms. Schenk, who operates Bath Township-based Brunty Farms with Jeff Brunty, about two years ago started the CSA program with 15 customers, and now 215 food system investors enjoy the farm’s veggies, poultry and other items in exchange for reliable cash flow. “We wouldn’t be in business without the CSA,” she said. Ms. Schenk and others in local crop circles acknowledge that shared risks and unreliable profitability come with operating CSAs, but say the programs are valuable tools that float upfront capital and reinforce their bottom line. “It’s a great way to get cash flow at the beginning of the year. That’s the main reason I got into it,” said Floyd Davis, owner of Kinsman-based Red Basket Farm. “But I’m taking a huge risk in accepting payment for shipment of a product that I hopefully will have.” CSA members pay early-season subscriber fees, usually a couple to a few hundred dollars, to receive shares of produce. The bulk payment enables farmers to purchase new seed, make equipment repairs and invest in their operation. Many cooperatives are just getting off the ground as sole proprietorships, so entrepreneurs are juggling marketing and logistics with educating customers who don’t always know what to do with their gift bags. Then there’s unusual weather such as this year’s drought or last year’s record precipitation, which despite months of forecasting can upend business with lower yields. “Our shares were slim last year, and the price of our winter products will probably go up this year,” Ms. Schenk said. “That’s part of the shared risk of the CSA.”

Mixed bag City Fresh, a program of the New Agrarian Center in Oberlin, integrates the CSA into that nonprofit’s mission of building a more sustainable local food system, even though the CSA is not profitable, executive See CSAs Page 12

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SMALL BUSINESS

Be prepared for inevitable IT disasters CSAs: Organizers look to

ecause being able to guarantee uninterrupted service and performance despite all that nature and happenstance might bring, disaster recovery planning is a positive that enhances the prospects of any company and is one of the most important and useful things you can do for your customers. So what are companies doing to protect themselves? In most cases, not nearly enough. About 20% of small firms rely on backup software they’ve obtained free over the Internet. Many companies still back up data on fallible flash drives or CDs. Others use nationally advertised online backup services without realizing that the protected data does not include application program files and operating system files. (Your raw data might be saved but there are many hours of downtime ahead as you must reinstall the operating system and all your programs.) Computer system downtime created by unexpected events can cause your company to fail its customers, suffer huge losses and even face bankruptcy. But a surprising number of small business owners are in denial when it comes to anticipating and preparing for what industry experts consider not just a possibility, but something that eventually will strike even the most scrupulously maintained IT system — all moving parts will eventually fail. What can disrupt the performance of an efficient and seemingly durable computer network? A short list of threats that can stop your computer system in its

JONATHANHUSNI

ADVISER tracks includes an air conditioning malfunction, which leads to overheating; a leaky pipe; power surge; a disk drive crash; malware; and even employee sabotage or theft. Just one hour of downtime can cost your company dearly. Here’s a quick and easy way to calculate the damage: Take your company’s annual revenues (A), and divide it by 250 business days (B) times eight hours a day (C) — or A/(B x C). For example, if your company earns $1 million a year, each hour of downtime is going to cost $500. (A deeper analysis considers the number of computer work stations, hourly wages and other criteria, but this simple equation provides a useful snapshot of the cost.) According to Infonetics Research, computer downtime costs the average small to medium-size business 3.6% of its annual revenue each year. It’s been estimated that re-creating data from scratch can cost between $2,000 and $8,000 per megabyte. In the worst-case scenario, 93% of companies that lose their data center for 10 days or more are forced to file for bankruptcy within one year of the failure. Let’s look at what steps can be taken to assure a quick recovery

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without loss of data and a minimum of downtime. The key to survival is twofold: Save your data and get your system back up and running as quickly as possible. Here are some simple rules for an effective recovery system: ■ It must have a real-time or near real-time off-site capability: This ensures that as your data files are created and applications are updated, they immediately will be replicated and saved in a remote location, protecting them from fire, floods and theft. ■ Everything must be backed up: Whatever recovery system you put in place must duplicate your entire IT system — this means not just all your data, but the operating system and all your application programs in a ready-to-run format. ■ The clock is ticking: Time is most essential. As we’ve seen, every lost hour costs real money. Any backup solution that doesn’t restore full viability within 20 minutes is not going to adequately protect your bottom line. Disaster recovery planning doesn’t just preserve your company’s IT capability; it also protects your customers, ensuring that they will receive essential products and services without interruption. (This can be an important selling point when competing for customers.) And with today’s technology, it’s more affordable than ever, costing most businesses less than $10 a day. In fact, computer consultants advise spending from 2% to 4% of a company’s annual IT budget on a backup system that will protect them in the wake of a potentially disruptive event. Doing anything less could be courting disaster. ■ Mr. Husni is president of Acendex, an information technology services firm in Beachwood. Acendex is a consultancy that advises small and mid-sized organizations on how to achieve and maintain vital IT functionality. www.acendex.com.

IN BRIEF LOCATION REJUVENATION: The Cosmetic Rejuvenation Center has moved to 31100 Pinetree Road, Suite 105, next to Santo Salon and Spa in Pepper Pike. Formerly known as the Aesthetic Lasers and Cosmetic Rejuvenation Center, the Cosmetic Rejuvenation Center offers a range of beauty and noninvasive cosmetic services and procedures, including laser hair removal, laser tattoo removal, microdermabrasion, electrolysis, teeth whitening and chemical peel treatments.

winter programs for boost continued from PAGE 11

director Sandy Kish Jordan said. “It provides a source of income, and it could be profitable if we grew our shareholders to 1,000 per week,” from the approximately 700 to 800 customers who are not locked into a subscription, she said. City Fresh’s CSA has potential: 233 bags of food were distributed in 2005 at one stop in Cleveland, and last year about 13,000 bags were funneled to customers throughout 17 locations. Increased competition among CSAs also squeezes some farmers, said Stan Ernst, an agriculture economist for Ohio State University Extension. According to a 2009 University of Kentucky survey, which analyzed CSAs in a nine-state region that includes Ohio, there were 132 CSAs operating in the Buckeye State, with the average being less than 4 years old. “That gives us an idea as to the growth of CSAs over the past five to seven years,” said Mr. Ernst, noting the average membership in each CSA of about 75 has held steady since 2009. Still, about 60% of consumers are unfamiliar with the concept, Mr. Ernst said. Educating customers is a key part of the experience, said Kaitlyn Sirna, CSA operator of Sirna’s Farm & Market in Auburn Township. “I’m just not sure people join for the right reason,” she said. “Some customers don’t understand that they can’t ask for strawberries in May because they’re not ready until June.” Sirna’s CSA has grown from eight people to 50 in its fifth year. It recently picked up as CSA members employees at Bedford Heightsbased Waxman Industries and is in talks with other area companies, but its more predictable growth is through its wholesale business and farmers markets. That diversified approach supports what OSU’s Mr. Ernst suggests is key to managing a farm with a steady stream of income: Farmers must have other channels through which to sell their products. “A CSA as a stand-alone entity is not profitable,” he said.

Beefing up Fresh Fork Market, which connects farmers to consumers through its CSA, has branched out its business with winery tours, food education workshops and other outreach events, owner Trevor Clatterbuck said. The grassroots marketing enhances customer experience, even if they’re not providing an

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immediate return on investment. “I truly lose money on the workshops,” said Mr. Clatterbuck, who organizes for about $25 to $30 per person classes such as how to use a whole chicken. “I lost $700 on a winery tour, and I lost about $50 from the beet lab.” Meanwhile, the expenses of fueling the intermediary between farmer and foodie run the gamut. “I have to buy animals for the farmer, pay for the feed, pay the butcher to harvest the animal, pay for the warehouse and distribution, and pay the farmer,” he said. Still, Mr. Clatterbuck’s bread and butter has swelled in recent years. The proprietor started his CSA “on a whim” in 2009 with two customers, before reaching 40 that year and 400 in 2010. Those first couple years were not profitable, he said, but with 2,300 customers this year — including new subscribers at companies such as Eaton Corp., Rosetta and American Greetings — revenue is up about 150% to 250% over last year. “Winter is a big target this year,” he said. “I’m hoping to triple the winter program,” from 320 members last year to about 1,000 this season. Red Basket Farm also is considering bulking up its CSA — which represents a steady 10% of overall business —with a winter program, but Mr. Davis’ supply and wholesale accounts are the growth drivers. “Some farms use the CSA as a profit arm, but they may be in areas where they can charge more, and people are more familiar with a CSA,” he said. “Mine is more of a marketing tool.”

Growing pains Chef Brian Doyle experimented last year with a different model, in which he sells packaged meals using produce sourced from his Ohio City farm and other suppliers. The fraternal twin of the traditional CSA initially drew 10 customers, but Mr. Doyle said he’s planning to expand Sow Food beyond the current 20. He addressed production challenges by partnering with the Beachland Ballroom to use its kitchen, and is adding dessert to each share. Mr. Doyle also plans to build a hoophouse — a tunnel made with plastic that functions much like a greenhouse — to extend the growing season, but the investments, along with added overhead and additional labor costs, likely will mean another break-even year, he said. “We broke even last year, but I can be profitable if I hit 30 subscribers,” Mr. Doyle said. “Profitability has to do with economies of scale. The more subscribers you have, the more effective you can be at production.” But even expansion has its share of growing pains. “I’m spending more time on planning,” Fresh Fork’s Mr. Clatterbuck said. “I get a thousand emails a week, the phone’s ringing, we pay higher bank fees because of the size of our business, there’s truck repairs. I don’t know where to stop.” ■ (Editor’s note: Ms. Carr is a CSA subscriber of Fresh Fork Market.)

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SMALL BUSINESS

Services catering to grieving pet owners a growing biz In life and after, expenditures on furry friends show no signs of abating By KIMBERLY BONVISSUTO clbfreelancer@crain.com

ets are big business — even once they move on to the big doghouse or scratching post in the sky. According to the 2011-2012 American Pet Products Association National Pet Owners Survey, 62% of U.S. households — or about 72.9 million homes — own a pet. And those owners have proven they are willing to pay up when it comes to their pets. For many, pets are replacing children, according to the APPA, so owners are even more inclined to buy things to satisfy or spoil their pets. Veterinary care, specialty foods, supplements and alternative treatments are not unusual charges on a pet owner’s credit card. Even in death, 20% to 40% of pet owners are willing to spend to either memorialize or bury their pet, according to the APPA. Today’s pet owners have all the amenities to choose from when a pet dies, including caskets or urns, memorial services, final paw prints, fur clippings, cremation certificates, personalized monuments or garden stones, and even memorial jewelry. Northeast Ohio companies are taking advantage of pet owners’ desires to give their beloved pets a peaceful transition to the afterlife. In fact, some organizations are adding services that cater to pets, while other more established practices are reporting substantial growth in that category. Joe Pavone more than 20 years ago opened Paws Awhile Pet Memorial Park and Funeral Home on 23 acres in Richfield. Over the years, he’s seen “prolific” growth. “This is a place where pet lovers and owners can be relaxed and make that final disposition of their pet something they’ll always remember and cherish and personalize,” Mr. Pavone said. “I had a guy who spoke broken English, a construction worker, bring in his shih tzu. He said, ‘If someone told me 40 years ago I’d be burying my dog in a pet cemetery, I would’ve punched them out. That dog stole my heart.’”

‘Together in life, together in the afterlife’ Paws Awhile, which has buried

about 800 pets over its 21 years, has handled every type of pet from cats and dogs, to parrots and parakeets, and even a pet pig. And for those owners who would like to someday be reunited, Paws Awhile offers family plots that allow a person’s cremated remains to be buried alongside their pet. “Together in life, together in the afterlife,” Mr. Pavone said, adding that the cremated remains of four people are buried at Paws Awhile with their pets. “There are a few people who really cherish their pets and want this.” Mr. Pavone added he’s buried 30 to 40 K-9 police dogs at Paws Awhile over the years and said the ceremonies rival those of decorated police officers, complete with bagpipers and police officers from surrounding areas attending. Standing Rock Cemetery in Kent recently opened a section of its cemetery to allow people to be buried with their pet’s cremains. Cemetery clerk-treasurer Jean Chrest said a section within the cemetery, which will hold up to 700 graves, will allow the cremated remains of pets to be buried alone or with their human owners. She said she received a number of requests for pet burials over the years and decided it was time to make the option available to pet owners. “This is becoming a really big business,” she said. “People spent their lives with their pets, and they want to be with them. They grieve for their pets in the same way they grieve for their human counterparts.” For pet owners looking for simple cremation services, there are several businesses in Northeast Ohio ready to cater to their needs. All County Pet Memorial Services opened after the employees of National Mortuary Shipping and Great Lakes Crematory, all pet owners, saw a need. “We’ve all experienced that loss and not knowing what to do or where to go,” said Kahlen Knapik, business development manager. “It’s important to give the public the options of having a place they can go.” Mr. Knapik said business has grown exponentially in the last 11 years, from a dozen pets a month to an average of 30 to 60 pet ser-

6120 Parkland Blvd., Suite 206 Mayfield Heights 44124 Jeffrey D. Zimon has formed Zimon LLC, a boutique employee benefits and compensation law firm. Mr. Zimon, formerly the chair of the employee benefits and compensation and ERISA (Employee Retirement Income Security Act) litigation group of a large Cleveland law firm, has more than two decades of experience in ERISA and employee benefits. Zimon LLC will handle a broad range of employee benefit and compensation matters, including 401(k) plan fiduciary liability and responsibility,

– Jean Chrest clerk-treasurer, Standing Rock Cemetery vices a month. “All owners are individuals, and people view their pet as a member of the family,” he said. “They are looking for a place that understands them as pet lovers and treats them well.”

Saying goodbye Although 99% of the work All County does is cremations, once in a while they do have a request to prepare a pet for burial. In those cases, the pet is brought to the facility, where it is combed

defined benefit pension plans, collectively bargained plans, funding, claims, plan mergers, executive compensation and all aspects of benefit dispute resolution and litigation. 216-678-9300 (main) jzimon@zimonlaw.com To submit a new business, send the following by email to Amy Ann Stoessel at astoessel@crain.com: business name; address; city and ZIP; website; brief description of business; business phone number; business fax number; business email address; and date that business opened.

their pets more a part of the family more than they have in the past. There are families who don’t have children, but they have pets, and those pets are their children.” Rick Capretta, director of pet services at DeJohn Pet Services, said his family started the pet business out of its Willoughby Hills funeral home after his father-inlaw, Ross DeJohn Jr., owner and founder of DeJohn Funeral Homes, lost a cat. Late last year, they built an addon to the existing funeral home with a separate entrance for pet services. Today, the business is thriving and it offers everything from a pet bereavement specialist to pet blessings in October and a Christmas tree in December decorated with ornaments showing the names of clients’ lost pets. “You see so much outward emotional expression with people and their pets,” Mr. Capretta said. “People are completely heartbroken. This is the worst thing that’s happened to them. It’s good to have an outlet.” ■

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“People spent their lives with their pets, and they want to be with them. They grieve for their pets in the same way they grieve for their human counterparts.”

out, placed in a pet casket with liners and a silk pillow, and the family has a viewing and private procession back to their property or pet cemetery for burial. Similarly, North Coast Pet Crematory in Vermilion is an offshoot of the Riddle Funeral Home. Owner Mark Riddle decided to get in on the pet business after losing two Labradors. “I didn’t want to just bury them in the backyard,” he said, adding that many families are transient and want to take their pets with them when they move. “The crematory idea came to me, we put it in and it’s been successful ever since.” North Coast Pet Crematory is separate from the funeral home and caters to families seeking private cremation. The facility can handle any animal up to 300 pounds, and it has cremated pets ranging from small hamsters to a large potbellied pig. “People now care about their pets more than they ever have,” Mr. Riddle said. “People consider

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14 CRAIN’S CLEVELAND BUSINESS

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SMALL BUSINESS

IRS paying more attention to use of temporary staffing

n today’s environment, many businesses are reluctant to hire full-time employees and instead look to temporary workers to provide needed services. The Ohio Department of Taxation increasingly has scrutinized these types of transactions for purposes of determining whether sales tax should have been assessed and collected on the fee paid for the temporary workers. When Ohio sales tax is unexpectedly imposed, the amount can be significant since it is based on the full “price” the agency charges the business, without any deduction for the compensation paid to the worker. Ohio sales tax is imposed on the sale of an “employment service.” In general, the Ohio Department of Taxation deems that an “employment service” has been provided if two conditions are met. First, a business provides personnel to perform work under the supervision or control of another business. Second, the personnel’s wages, salary or other compensation is paid directly by the provider of

the employment service, not the business requesting the personnel. Sales tax is not due, however, if one of five statutory exceptions to the definition of a taxable employment service applies. These exceptions include those for workers qualifying as subcontractors and those on a long-term or permanent assignment. An example of a transaction that is treated as a taxable “employment service” is one in which a business needs extra secretarial support and engages a temporary staffing agency. Typically, the secretarial worker provided is directed and controlled by the business, but is paid by the staffing agency. In this scenario, the firm’s payment to the staffing agency is subject to Ohio sales tax. Information technology service is an area that often presents sales tax issues. It is not uncommon for contracts in the IT arena to be vague, which can be an issue for taxpayers claiming that the service is a nontaxable professional service or falls within one of the exceptions. An example of a transaction in the IT area that is treated as a tax-

CARLGRASSI

TAX TIPS able “employment service” is one in which a service purchaser merely desires the provision of computerproficient personnel to help support the purchaser’s existing in-house IT function. In this scenario, the transaction is most likely a taxable employment service because the purchaser is merely supplementing its internal IT function with temporary workers who will be supervised by the purchaser. In other scenarios, the transaction may not be treated as an “employment service.” Assume that XYZ Inc. needs an information technology function performed at its headquarters because it does not have the technology expertise.

Therefore, XYZ hires Information Technology of Cleveland Inc. to complete a specific project at XYZ’s offices. Under the contract, Information Technology of Cleveland will use its professional expertise to create and install a customized computer program at XYZ’s office that permits XYZ’s sales personnel to input sales data in a more efficient manner. Assume the computer program is tailored to the specific needs of XYZ and the program is not considered the sale of “canned software.” The delivery of this professional service from Information Technology of Cleveland to XYZ may not be taxable if the project is completed entirely by Information Technology of Cleveland without oversight by XYZ (i.e., no supervision or control of the means of completing a task) or it falls within the subcontractor exception. Ohio Department of Taxation auditors often look to the invoices that are sent to the purchaser of the service. While a description on the invoice is not dispositive of taxability, it is often the reason that

an auditor will dig deeper to obtain more facts. Upon review, the auditors may want to review the contract and may wish to interview the personnel about the actual relationship, notwithstanding the contract language. Ultimately, a review of both the contract and the facts and circumstances is essential for a thorough analysis of potential sales tax exposure. Each transaction should first be analyzed to determine whether the contractual arrangement falls within the core definition of an “employment service.” Again, this analysis will usually focus on whether the personnel are controlled or supervised by someone other than the provider of the personnel. If the purchaser merely hires a company to perform a professional service, rather than to provide personnel to work under its control, the transaction should not be considered a taxable employment service. ■ Mr. Grassi is president of McDonald Hopkins LLC.

Family: Honest talking vital continued from PAGE 11

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2100 One Cleveland Center

Cleveland, Ohio 44114

happy.” For that to happen, everyone needs to have clear roles, responsibilities, goals and accountabilities. Problems arise when there are different standards established for outsiders versus family members, he said. “We can’t have the son or daughter of the father, for example, going over the COO’s head to see dad because he doesn’t like what the COO had to say or has him or her doing,” he said. The only way to curb and defuse these human tendencies is through serial frank, open and possibly uncomfortable communication, said Chris Cooper, program coordinator of the Business Succession Planning Program of the Ohio Employee Ownership Center at Kent State University. The program’s goal is to help businesses transition from one generation of ownership to the next by providing education, training, technical assistance and consulting services. “The key prior to bringing the outside person in is communicating to the family members in an honest and open way. Sometimes bringing in outside experts to offer nonbiased opinions can help family members adjust to this idea of bringing someone new into the business,” he said. From there, family members in leadership roles should do their best to be inclusive and engage the nonfamily member in the decisionmaking process, Mr. Cooper said. Many times an outsider coming into a family-owned business is going to wonder about advancement opportunities and whether they fit into the long-term plans of the business, Mr. Cooper said. “A lot of times the ownership of the business will stay in the family but the management of the business will transition outside of the family,” he said. Enter Wallover Oil Co. in Strongs-

ville, one of the oldest manufacturers of lubricants in the country. Since its founding in 1863 there had always been a member of the Wallover family at the helm. But in January 2011, Eric Kielts, a longtime member of management, was tapped to succeed George “Hub” Marquis as president. “We always look for the right people for the right job. If it meant a nonfamily member, fine. If it meant a family member, fine,” Mr. Marquis said. “Eric joined us a little over 20 years ago as head of our laboratory. He has done a great job and he was the best candidate to take over. I have a son in the business and a nephew in the business and none of us felt they were ready to take over the running of the company. Eric was the most qualified person, and the family is firmly behind him.” Mr. Kielts said communication and time have been the keys to his smooth transition into a position he never expected to hold in this family company. “Certainly there is some trepidation not knowing what the family is going to expect, and I think Hub did a fantastic job of keeping me in the loop as to what the family was talking about and thinking about and that made me feel a lot more comfortable with the transition,” Mr. Kielts said. “It has been made perfectly clear (with the staff and family members) that Eric is in charge and he makes the decisions,” Mr. Marquis said. For Mr. Kielts, he said in many respects it’s easier to be an outsider running a family business. “At the end of the day, I don’t have to be sitting across the Thanksgiving table and having a difficult conversation,” Mr. Kielts said. “I can be the sort of bad guy and not bring it into the family. It’s a bit of advantage for them and for me.” ■

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

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LARGEST ADVERTISING AGENCIES RANKED BY NUMBER OF FULL-TIME EMPLOYEES(1)

Name of firm Address Rank Phone/Website

Full-time local employees

Year founded

Doner 1100 Superior Ave. East, 10th floor, Cleveland 44114 (216) 687-8521/www.doner.com

110

Stern Advertising Inc. 29125 Chagrin Blvd., Suite 300, Pepper Pike 44122 (216) 464-4850/www.sternadvertising.com

Top local executive Title Creative director

Representative clients

Specialties

1937

ADT, DuPont, Arby's, Sherwin-Williams, The UPS Store, Owens Corning, Things Remembered, Geisinger, Tuffy, OhioHealth, Purell, Owens Illinois

Strategic planning, branding retail activation, integrated creative, social media

Jennifer Deutsch executive vice president, general manager Mark Masterson

1954

Kay Jewelers, McDonald's Restaurants, Jared the Galleria of Jewelry, Third Federal, Southwest General, Collection Auto Group, Edible Arrangements, Live Nation, Feld Entertainment

Advertising, media planning, buying, strategic planning, public relations, digital

William J. Stern president, CEO Steve Romanenghi

Hitchcock Fleming & Associates Inc. 500 Wolf Ledges Parkway, Akron 44311 (330) 376-2111/www.teamhfa.com

1940

Goodyear, Dunlop and Kelly Tires brands, KraftMaid Cabinetry, Tremco, LP Building Products, Akron General Health System, Liquid Nails, Simonton Windows, City of Akron, Lubrizol

Integrated marketing: strategic planning, research, branding, media, digital, PR

Jack DeLeo chairman, CEO Nick Betro

Brokaw Inc. 425 W. Lakeside Ave., Cleveland 44113 (216) 241-8003/www.brokaw.com

1992

Coca-Cola Co., Hotels.com, Fazoli's, Wonka, Quiznos, Brand strategy; digital and social media Souplantation, University Hospitals, FirstMerit Bank, Great Lakes strategy/execution; in-house production/ Brewing, Dealer Tire, RTA, CLE, University Circle Inc. video/animation; PR/events; local marketing

Tim Brokaw Gregg Brokaw co-CEOs Steve McKeown

Innis Maggiore 4715 Whipple Ave. NW, Canton 44718 (800) 460-4111/www.innismaggiore.com

1974

Alside, Aultman, Bank of America, Gerber Foods, GOJO, Goodyear, Guidestone Financial, Nickles Bakery, Republic Steel, Strategic brand positioning and execution RTI, Shearer's Foods

Dick Maggiore president, CEO Jeff Monter

Arras Keathley 1151 N. Marginal Road, Cleveland 44113 (216) 621-1601/www.arraskeathley.com

1991

Brand planning, fully integrated MarComm programs

Jim Hickey president Tom Keathely

AMG Marketing Resources Inc. 2530 Superior Ave. East, Suite 601, Cleveland 44114 (216) 621-1835/www.amgmarketingresources.com

1973

Bendix, Honeywell, Nestle, Paytime, Sherwin-Williams, West Development Group, Lubrizol, federal government

Strategic marketing planning, branding, creative development, media planning and placement, public relations, social media

Anthony M. Fatica president Anthony M. Fatica

Melamed Riley 1375 Euclid Ave., Suite 410, Cleveland 44115 (216) 241-2141/www.mradvertising.com

2004

The MetroHealth System, Vitamix Corp., FMC Corp., Arizona Tile, CMI, Ohio University, Marketplace Events, RGH, Shoes & Clothes for Kids

Branding, research, strategic planning, creative, production, media planning and buying, interactive solutions

Sarah Melamed president Rick Riley

ST&P Marketing Communications Inc. 320 Springside Drive, Suite 150, Fairlawn 44333 (330) 668-1932/www.stpinc.com

1992

Kenney Sales promotions, consumer, sales incentives, Richard merchandising, fulfillment, advertising, media COO Russ Kern

WRL Advertising 4470 Dressler Road N.W, Canton 44718 (330) 493-8866/www.wrladv.com

1954

Best of Ohio's Amish Country, Mercy Medical Center, Quickdraft, Website design and programming, multimedia, C. Todd Locke Roca Tile, Stark County District Library, Stark State College of broadcast, print, branding, traditional/Internet president Technology, The Canton Ballet, Windsor Laurelwood marketing, PR Bob Isenberg

flourish Inc. 1001 Huron Road E., Suite 102, Cleveland 44115 (216) 696-9116/www.flourishagency.com

1998

Marketing, creative, photography

Henry B. Frey president Steve Shuman

The Marshfield Group 11241 Exmoor Drive, Concord Township 44077 (440) 974-8448/www.marshfield.com

1979

Holz Rubber, Holmbury Inc., John Palmers Bistro 44, Dyson, MEACO, Tecmark, Concord-Painesville JEDD, Concord Township, Lake County General Health District, Astro Mfg.

B-to-B marketing: advertising, brand development, crisis communications, direct mail, website development SEO, SEM

Thomas A. Mitchell president, CEO Mary Riddell

Razor Ltd. LLC 180 Linwood Lane, Aurora 44202 (330) 562-9635/www.razor-marketing.com

2003

Montrose Auto Group, Toshiba Business Solutions, GBS Corp., Alliance Staffing Solutions, Ohio Technical College, Adesso Fashions for Men, Interstate Lift Trucks, Redidoc.com

Peter Cimoroni Business development, corporate strategy and C. CEO communications, brand building and extension chairman, Valerie A. Cimoroni

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Business lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Numbers as of June 30, 2012.

RESEARCHED BY Deborah W. Hillyer

LARGEST PUBLIC RELATIONS FIRMS RANKED BY NUMBER OF FULL-TIME LOCAL EMPLOYEES(1)

Name of firm Address Rank Phone/Website

Full-time local employees

Year founded Representative clients

Specialties

Top local executive

Media relations, marketing communications, digital, business and reputation management, crisis communications, creative services

Rob Falls president, CEO

Falls Communications Terminal Tower, 50 Public Square, Fl 25, Cleveland 44113 (216) 696-0229/www.fallscommunications.com

1994

BioEnterprise, Calfee, Cleveland +, Downtown Cleveland Alliance, Gunlocke, Hylant, Huntington, Lincoln Electric, Moen, Sherwin-Williams, ShurTech, Things Remembered, Vitamix

Dix & Eaton 200 Public Square, Suite 1400, Cleveland 44114 (216) 241-0405/www.dix-eaton.com

1952

A.Schulman, AkzoNobel, Coca-Cola, Diebold, Eaton, Forest City, Investor relations, crisis communications, KeyBank, Lubrizol, NetJets, Parker Hannifin, PG&E, customer communications, media relations, UnitedHealthcare digital communications, reputation valuation

Scott Chaikin chairman, CEO

Akhia Public Relations & Marketing Communications 85 Executive Parkway, Suite 300, Hudson 44236 (330) 463-5650/www.akhia.com

1996

AmTrust Financial Services, GE Lighting, Diebold, Wausau Paper, Smithers-Oasis, Dots, Matco Tools, Parker Instrumentation, Quanex, Lubrizol

Janice S. Gusich president

Landau Public Relations(2) 700 W. St. Clair Ave., 4th floor, Cleveland 44113 (216) 574-8720/www.theadcomgroup.com

1983

MeadWestvaco, Daimler Trucks North America LLC, Giant Eagle, Corporate communications, media and Kichler Lighting, The Libman Company, RIDGID, Fund For Our community relations, social influence, product Economic Future marketing support, crisis management

Howard Landau president

Stevens Strategic Communications Inc. 1991 Crocker Road, Suite 500, Westlake 44145 (440) 617-0100/www.stevensstrategic.com

1976

Eriez, GMi Cos., Cleveland Vibrator Co., Ross Environmental, Cleveland Furniture Bank, IngenuityFest, Lancaster Colony, MMO, Materion, King Nut, Ohio Semitronics

Integrated marketing communications, corporate and crisis communications, media training, social media, research

Edward M. Stevens president

Fahlgren Mortine 1100 Superior Ave, Suite 1600, Cleveland 44114 (216) 298-4646/www.fahlgrenmortine.com

1962

Albert M. Higley Co., Associated Estates, Cliffs Natural Resources, Kent State Univ., Kidde, Materion, McDonald's, Nottingham Spirk, Scentsy, Sherwin-Williams, TransDigm

Advertising, branding, design, digital, investor Christy Bykowski relations, marketing communications, media vice president, planning/buying, media relations, social media managing director

PR 20/20 812 Huron Road, Suite 780, Cleveland 44115 (800) 920-1623/www.pr2020.com

2005

Inbound marketing agency and PR firm specializing in content marketing, PR, social media and search

Paul Roetzer CEO

Roop & Co. 3800 Terminal Tower, 50 Public Square, Cleveland 44113 (216) 902-3800/www.roopco.com

1996

KeyBank, Fisher & Phillips, Ohio Aerospace Institute, Sports Construction Group, Alego Health, Grace Hospital, RPM International Inc.

Marketing communication, public relations, financial communication, graphic design

James J. Roop president

Sweeney 20325 Center Ridge Road, Cleveland 44116 (440) 333-0001/www.sweeneypr.com

1986

Acuity Brands, Chef's Planet, High Performance Fitness, Healthy Strategic marketing and public relations firm; House Institute, Insurance Board, Jo-Ann Fabrics, KSU, Lithonia consumer, retail, health care, education, Lighting, Plaza Group, Westfield Shoppingtowns, Yube insurance and environmental practices

James B. Sweeney CEO

Highland Public Relations 935 W. Market St., Akron 44313 (330) 996-4140 /www.highlandpr.com

1993

Kent State, Cleveland Marathon, Akron Zoo, Akron City Council, Lorain Public Library System, Buckingham, Doolittle & Burroughs, Veterans Services Summit County

Integration of public relations, marketing and advertising strategies to achieve organizational objectives

Robert Zajac president

LiefKarson Public Relations Ltd. 23533 Mercantile Road, Suite 118, Beachwood 44122 (216) 831-3767/www.liefkarson.com

1993

Professional public relations and marketing communications counsel for restaurant, hospitality, interior design, furniture and retail

Crickett Karson owner

Hennes Paynter Communications 50 Public Square, Suite 3200, Cleveland 44113 (216) 321-7774/www.crisiscommunications.com

1989

Carpenter Technology, CONSOL Energy, Great Lakes Construction, KSU, Lake Health, Lubrizol, MetroHealth, NASA, Riverside, RTA, Saint Ignatius, Tri-C, Westfield Insurance

Crisis communications, media training and litigation communications

Bruce Hennes, managing partner; Barbara Paynter, partner

Strategic marketing, product launches, brand development, trade shows, media relations, social media, customer programs

RESEARCHED BY Deborah W. Hillyer See LIST Page 16

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LARGEST MARKETING FIRMS RANKED BY NUMBER OF FULL-TIME EMPLOYEES(1)

Name of firm Address Rank Phone/Website

Full-time local employees

Year founded

Top local executive Title

Representative clients

Specialties

1998

Otsuka America Par Inc. OAPI, Research in Motion, Apple, United States Mint, HTC, Citizens Bank, Nationwide, Safeguard Properties, Purdue Pharma

Consumer products, retail and technology, health care, financial services, B2B and emerging markets, Mark Taylor managing partner travel and hospitality, mobile

145

1989

Research, advertising, social influence, content strategies, web and app development, email marketing, PPC, videos

Marcus Thomas LLC 4781 Richmond Road, Cleveland 44128 (216) 292-4700/www.marcusthomasllc.com

140

1937

Akron Children’s Hospital, Bendix, Diebold, FirstEnergy, GE, Goo Gone, MTD, Nestle, Swagelok, Ohio Lottery, Ohio Tourism, Westfield Insurance

Idea generation, brand planning, digital strategy and James B. Nash execution, experiential and social media marketing managing partner and analytics

Fathom 8200 Sweet Valley Drive, Suite 100, Valley View 44125 (216) 369-2220/www.fathomdelivers.com

138

1997

Key Bank, American Greetings, Eaton, LifeLine Screening, Mead, Cleveland Clinic, Bissell, UsedCars.com

Full-service online marketing: B2B & B2C, health care, IT/software, education, manufacturing, government

Level7(2) 4807 Rockside Road, Independence 44131 (216) 524-9055/www.lvlsvn.com

1979

Safeguard Properties, Steve Madden, Leadbetter Golf Academy, Medical Mutual of Ohio, Diebold, Icon Sports Management, Groupize, Compliance Connection

Consulting-centric marketing and technology agency Stuart Taylor president, CEO

HMT Associates Inc. 151 Orchardview Road, Seven Hills 44131 (216) 369-0109/www.hmtassociates.com

2002

Kraft Foods, Mondelez, Gallo Wines, Promoworks, Easter Shopper marketing, consumer promotions, event Seals marketing

Patti Conti president, CEO

thunder::tech 3635 Perkins Ave., Studio 5, Cleveland 44114 (216) 391-2255/www.thundertech.com

1999

Munchkin Inc., Cliffs Natural Resources, Prestolite Performance, Grecian Delight, Lube Stop, DDR Corp., COSE, AC Milan, Baldwin Wallace University

Integrated marketing agency servicing local and national brands with advertising, communications, digital and design services

Jason Therrien president

WhiteSpace Creative 24 N. High St., Suite 200, Akron 44308 (330) 762-9320/www.whitespace-creative.com

1994

American Greetings, Lifebanc, Team NEO, Kichler Market research, strategic planning, social media, Lighting, City of Charlotte, Davey Tree, The Will-Burt Co., public relations, website/interactive, advertising/ Parker Hannifin, OEConnection promotions, direct marketing, packaging

Keeven White president, CEO

Home Team Marketing 812 Huron Road, Suite 205, Cleveland 44115 (216) 566-8326/www.hometeammarketing.com

2001

Shurtech, AT&T Wireless, Wal-Mart, Marathon Oil, Farmers Insurance, American Family Insurance, U.S. Army, National Guard, University of Cincinnati

Delivering integrated marketing campaigns into high Peter Fitzpatrick schools and state high school association events president, coacross U.S. founder

OuterBox Solutions Inc. 453 S. High St., Akron 44311 (866) 647-9218/www.outerboxdesign.com

2004

Ace Hardware, ABB, Groupe SEB, Waxman, Van Dorn Demag, Sportcraft, Home Products International, Action Door

Full-service web development and ecommerce web design firm specializing in SEO, branding, custom development and online marketing

Justin Smith CEO

Caler & Co. 66 E. Cuyahoga Falls Ave., Akron 44310 (330) 535-8053/www.caler.com

1984

ACRT Inc., Akron Area YMCA, AMHA, Bonnot Co., Buckeye Corrugated Inc., Edison Innovation Foundation, Network Polymers, Steris, Winer + Bevilacqua

Brand development, selling strategies, marketing planning and positioning, web development, social media strategies, advertising, product packaging

Steven L. Caler CEO

BFL Marketing Communications/GRA Group 1399 Lear Industrial Parkway, Avon 44011 (216) 875-8860/www.bflcom.com

1955

New product and brand launch specialists for home, Dennis J. Pavan outdoor and business products and services. president, CEO, Strategic brand marketing, web design BFL Marketing

Insivia 2020 Center St., Cleveland 44113 (216) 373-1080/www.insivia.com

2003

Cleveland Aquarium, Positively Cleveland, Microsoft, Cleveland Clinic, Cresco, Calfee, Lilly Tremont

Integrated strategic marketing. Web, search, video, social, print, software, environmental, mobile, animation and apps

Knox Marketing Inc. 1730 Akron Peninsula Road, Suite 201, Akron 44313 (330) 929-7700/www.knoxmarketing.com

1998

Summa Health System, Humility of Mary Health Partners, Marketing and brand advertising, corporate identity, Rollin K. Godding III Citizens Bank, Parker Hannifin, Moen, Premier Physician media planning/buying, interactive/web, TV and president Services radio, in-house editing, health care

Linkmedia 360 4700 Rockside Road, Suite 310, Independence 44131 (216) 447-9400/www.linkmedia360.com

2004

Lead generation, website development, pay-per-call advertising, pay-per-text, search engine marketing, social media management, reputation monitoring

Dave Wolf, managing partner; Betty L. Brown, president

Point to Point Inc. 23240 Chagrin Blvd., Suite 200, Cleveland 44122 (216) 831-4421/www.pointtopoint.com

1982

Sherwin-Williams, Fauquier Health, United Way, FlavorSeal, Schindler Elevator, Avery Dennison

B to B digital marketing agency

Mark Goren president

Grabowski & Co. 10689 Cleveland Ave., Uniontown 44685 (330) 498-0753/www.grabowskiandco.com

1997

The Timken Co., Diebold, Progressive Insurance, Honing messages, writing compelling content, Veyance Technologies, Akron Children's Hospital, Malone building strategic communications plans, designing University, DeHoff Realtors & Development award-winning campaigns

Sue Grabowski president

DigitalDay 122 Broad Blvd., Cuyahoga Falls 44221 (330) 940-2565/www.digital-day.com

2001

Hefty Bags, Reynolds Wrap, Duck Tape, RalCorp, Backyard Discovery, Schwebel's Baking Co., Hygenic, Cleveland Vibrator

Full-service online marketing agency: website and promotions strategy and design, email through Silverpop, Sitecore CMS Certified

Mark Vitullo marketing director, partner

Studiothink 1301 E. Ninth St., Suite 608, Cleveland 44114 (216) 574-9533/www.studiothink.net

2004

Full-service, internal and external brand management Christine A. Lobas and strategic communication planning, design and founder, CEO execution

Prodigal Media Co. 42 McClurg Road, Boardman 44512 (330) 707-2088/www.prodigalmedia.com

1994

V & M Star, Farmers National Bank, GBS, Cohen & Co., Sheely's Furniture and Appliance, Benesch, Youngstown Business Incubator, Patriot Water

Branding, market research, interactive development, Jeff Hedrich creative services president, CEO

Goldstein Group Communications Inc. 30500 Solon Industrial Parkway, Solon 44139 (440) 914-4700/www.ggcomm.com

1992

Keithley Instruments, Littelfuse, Harting, HeartSine, Weatherchem, Bud Industries, Radisphere, Abanaki, LJ Star, Accu-Sort, Avtron, AT&F, University of Phoenix

Technology, branding, lead generation, Internet marketing, social media, public relations

Joel Goldstein president

BTZ Brand 2019 Center St., Suite 100, Cleveland 44113 (216) 861-1500/www.btzbrand.com

1993

Brand development, integrated marketing, design and PR, health care, nonprofit, education, B2B and B2C

Darcy L Zehe managing partner

McKinney-Cerne Inc. 7466 Auburn Road, Concord Township 44077 (440) 352-2081 /www.mckinneyad.com

1936

Thermodisc Inc., Greenkote PLC, Case Alumni Assoc., The North American Menopause Society, Lake County Board of DD, Lake County YMCA, CareerCurve.com

Integrated marketing communications, strategic Judy Cerne planning and brand management programs. Includes president, CEO, advertising and public relations programs. owner

BMA Media Group 4091 Erie St., Willoughby 44094 (440) 975-4262/www.bmamedia.com

1991

Marketing, special events, TV and video production, web, interactive and social media, promotional merchandise

Jerrod T. Borkey president

Sonnhalter 633 W. Bagley Road, Suite 4, Berea 44017 (440) 234-1812/www.sonnhalter.com

1976

Viega, Nissan Forklift, Osborn, Wright Tool, Molex, Brennan Industries, Buyers Products, Knipex

A communications firm marketing to the professional tradesman in the construction, industrial and MRO markets

Matt Sonnhalter vision architect

Benghiat Marketing & Communications 23240 Chagrin Blvd., Suite 445, Beachwood 44122 (216) 831-8580/www.benghiat.com

1983

AJ Antunes, Athens Foods, Bliss Foods, Eagle Group, Gendron, Hamilton Beach, Hampton Farms, Meherrin Agricultural & Chemical Co., North American/NVISION

Advertising, public relations, digital communications, Russell Benghiat creative services, SmartMarketing Strategy & president Research

Pumphrey Marketing Inc. 4853 Galaxy Parkway, Suite A, Cleveland 44128 (216) 464-9687/www.pumphreymktg.com

1975

ATI Stellram, Cleveland Black Oxide, DealerPro, Drake, Gleason, Hautau, IMTS, Oerlikon Drive Systems, Pines, Romi, Stauff, Tru-Cut Saw

Industrial, full-service, project basis. Develop, implement integrated strategic marketing programs. Unique electronic solutions. SalesCat.

David C. Pumphrey, president, creative director

R solutions LLC 33730 Bainbridge Road, 2nd Floor, Solon 44139 (440) 735-9280/www.rsolutions.us

2002

Moen, Steris, Baskin-Robbins, Sherwin-Williams, LensCrafters, Pearle Vision, DuPont, Tempur-Pedic, Standard Parking, Oatey

Merchandising, packaging, sales promotions, incentive and loyalty programs, local store marketing

Rob Adelstein founder, principal

Sampson/Carnegie Co. 1419 E. 40th St., Cleveland 44103 (216) 881-2556/www.smarterthinking.com

1992

Busch Funeral & Crematory Services, Presque Isle Downs and Casino, Don's Pomeroy House, Don's Lighthouse Restaurants, Austin’s, Chili's Bar and Grille

Serious brand strategies

Peter R. Sampson creative director, president

Skoda Minotti Marketing LLC 6685 Beta Drive, Cleveland 44143 (440) 449-6800/www.skodaminottimarketing.com

2011

Benefits Resource Group, Cincinnati Bell Technology Solutions, CLS Facility Services, Explorys, Millwood, Rockwell Automation, University of Akron, Verizon

Connecting brands to customers: branding, creative Jonathan Ebenstein design, market research, SEO, strategic planning, managing director visual marketing, websites

Rosetta Marketing Group LLC 629 Euclid Ave., 15th Floor, Cleveland 44114 (216) 896-8900/www.rosetta.com

403

Adcom Communications Inc. 1370 W. Sixth St., 3rd floor, Cleveland 44113 (216) 574-9100/www.adcom1.com

Joe Kubic CEO

Scot Lowry president, CEO

Andrew Halko CEO

RESEARCHED BY Deborah W. Hillyer

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continued from PAGE 3

key role in who gets hired onto construction sites. The Commission on Economic Inclusion, an arm of GCP, in March 2011 commissioned a study seeking a plan for improving opportunities for minorities and women in the construction industry. The study was completed in March of this year but has not been released publicly. It includes 10 recommendations for action, including the creation of a community benefits agreement. Among the recommendations is the adoption by GCP of a policy statement encouraging developers to hire more minorities and women and to use contractors owned by those groups. “The policy should recognize that minorities are currently underrepresented in the local construction sector,” states a draft of the GCP report obtained by Crain’s Cleveland Business. In addition, the report recommends that, “Efforts should be initiated to encourage and support sustainable joint ventures, strategic partnerships and other alliances to expand capacity and offer real opportunities for (minority business enterprises) to gain business experience, technological expertise and on the job training and development.” Joe Roman, CEO of GCP, said the organization has not formally adopted the recommendations but will work cooperatively with the city and the construction industry to create a CBA and a process for enforcing it. “The first step we have to take is exactly what the mayor launched in terms of trying to create this partnership and consensus around what a Cleveland CBA might look like,” Mr. Roman said after the Aug. 3 symposium. Mr. Soggs expressed his support to the mayor and the industry leaders at a session of the symposium. “I say to you, mayor, the building trades stand ready to work with you and Natoya (Walker Minor) … and we will go ahead with the findings we heard today and we will go ahead and develop the culture you talk about,” Mr. Soggs said during the symposium.

Proving skeptics wrong Increasing the presence of minorities and women in construction has

been an ongoing struggle for years despite largely voluntary affirmative action efforts. So, too, have been efforts to ensure that when out-oftown construction firms win local contracts, they use a significant percentage of local tradespeople and not hire from the contractor’s home town. This is the first time, though, that local government and the private sector have pledged publicly to make economic inclusion in the building industry a high priority. CBAs have been evolving since the late-1990s. A CBA is an agreement between a developer and a community coalition that outlines the community’s goals for the project and usually offers incentives to developers for meeting those goals. The CBA may be used to set a minimum wage for the project and hiring goals for minorities, women and local workers. It also may be used to set green construction standards and allocate funds for community programs or public art. Some in the construction industry have been skeptical about the ability to achieve goals set for economic inclusion, either because of a lack of skilled minority or female tradespeople or because of inexperienced or financially shaky contractors. But several projects in Northeast Ohio have been built and met high goals with less formal agreements to achieve hiring goals; among them are projects at University Hospitals and at the new Eaton Corp. headquarters at Chagrin Highlands. The best example, though, may be the Horseshoe Casino Cleveland. There, Rock Ohio Caesars LLC, the casino developer, set a goal of spending 20% of its construction costs with minority and femaleowned businesses. In June, after the casino opened, the company reported that it had spent $47.1 million of the $108 million in construction contracts with minority and female-owned firms, or 43.5%. “We held people’s feet to the fire. We made people accountable,” said Jeff Cohen, a principal with Rock Gaming, a partner in Rock Ohio Caesars. “It didn’t make it more expensive but it took a little more time. But the benefit we got, the enthusiasm from people able to work on a project like the casino, was immeasurable.” ■

WhiteSpace buys Fairlawn PR outfit WhiteSpace Credeal, Mr. Davila ON THE WEB Story from ative, a marketing said. WhiteSpace www.CrainsCleveland.com. communications also increased agency in Akron, has acquired its staff to 33 people with its addiSmileyHanchulak Marketing Commu- tion of SmileyHanchulak’s seven emnications of Fairlawn, an advertising, ployees, all of whom are relocating marketing and PR agency. to WhiteSpace’s offices on North The acquisition accelerates White- High Street in Akron. Space’s move into public relations John Hanchulak, president of and social media, areas in which the SmileyHanchulak, approached company has been seeking to grow, WhiteSpace about a potential sale said Ralph Davila, senior director of because he was ready to retire. public relations for WhiteSpace. “It didn’t take long to recognize SmileyHanchulak’s staff also will add that WhiteSpace Creative had the to the agency’s creative design, same moral fiber and creative marketing, interactive and account drive, and would be the perfect service capabilities. Terms were not agency to make sure our employdisclosed. ees and clients would prosper,” WhiteSpace’s client base will said Mr. Hanchulak, 64, in a stategrow by one-third as a result of the ment. — Ginger Christ

confirmed Burlington’s commitment to Steelyard, which sits at the central location of Jennings Road and Interstate 71. “It’s been difficult to do in this retail and economic environment,” Mr. Schneider said. “We’re thrilled to have a lease with Burlington Coat Factory. We’re looking to get additional tenants and financing and hope to be under construction in the spring.” First Interstate wants to include Burlington in a new, 200,000-squarefoot retail center it plans on the site, Mr. Schneider said. The developer said Burlington would bring additional soft goods to customers at Steelyard Commons to meet his goal of filling the property with retailers “providing everything one needs for living in the city of Cleveland.” A site map of Steelyard Commons on the website of Goodman Real Estate Services LLC, which serves as the property’s broker, indicates that a second phase on 19.25 acres of the Steelyard complex now is leasing. That acreage includes a location tagged as the site of the planned Burlington store.

Trolling for tenants Mr. Schneider said the second phase would be the first significant

expansion of the 700,000-squarefoot shopping center since its opening. In the years since, a smattering of casual restaurants and a KeyBank branch have taken outlots that are part of the original plan. Mr. Schneider acknowledged the second phase has taken longer than expected after the crippling Great Recession. Only within the last year have some retailers regained their appetite for new space after the spate of store closings and retailer bankruptcies that occurred in the recession’s wake. When First Interstate and Goodman Real Estate were recruiting tenants for Steelyard’s inception, their challenge was selling retailers on an untested urban location compared to the suburbs. This time around, the challenge is getting commitments from the few tenants who are in expansion mode. “If you have a retailer adding, for example, 15 new stores this year compared to 50 before the downturn, it’s far more difficult now because you compete with all the locations with empty big-box stores or unused sites all across the country,” Mr. Schneider said. However, the sales track record established by Steelyard Commons retailers, he said, has helped make the case to prospective tenants.

‘It’s a coup’

The plan for phase two at Steelyard was not news to CBRE Group Inc., as the brokerage included the Burlington store and a new shopping area at Steelyard of more than 200,000 square feet on a map of planned construction projects in its recent mid-year retail survey. Keith Hamulak, a CBRE senior associate, views Burlington as a perfect match for Steelyard. “It’s a coup for the ownership,” Mr. Hamulak said. “It kicks off phase two for the ownership. The demographics are ideal for Burlington. It loves population density and chases discount-oriented customers. Where would be better for them to locate than in a market area with little substantial retail competition for three to five miles?” Despite its coat factory name, Burlington has broadened its merchandise line to include apparel and home décor at 470 stores in 44 states and Puerto Rico. Bari Kurzman, a Burlington Coat Factory spokesman, declined comment on a prospective Steelyard location. With the tenant commitment in hand, First Interstate now is making the rounds at financial institutions in search of financing, according to one of the prospective lenders who declined to be identified. ■

Leases: Bulk leases easier on drillers continued from PAGE 1

to a group called the Eastern Geauga Landowners. The group, which opened its office in Middlefield on July 4, represents about 300 land-owners with land or mineral rights to about 17,000 acres and is continuing to add members, said its president, real estate agent Mark Dolezal. Mr. Dolezal’s group functions something like a cooperative. He and two other directors don’t charge fees and won’t collect any percentage of other landowners’ up-front bonus payments or the royalties they might get later when gas is produced on their land. Instead, they’ve put their own land — more than 1,000 acres of it — into the group. The strategy is to use the larger acreage to negotiate better terms with whichever drilling company shows the most interest and is willing to provide landowners with the best deal, Mr. Dolezal said. The Northcoast Environmental Landowners Association, which according to its website charges participating landowners a fee of 6% of bonus payments and 15% of royalty payments, has been holding meetings for months to solicit landowner participation in Ashtabula, Geauga, Lake, Portage and Trumbull counties. However, a representative for NELA Shale, as it is known, said it was too soon for the group to discuss its plans publicly. Mr. Stewart, of the state oil and gas association, said he fully understands why landowners are joining forces. “I’m a spokesman for the producers, but it would be absurd to say that banding together on the other side of the equation doesn’t make sense for those folks,” he said. “They have more negotiating power, and there’s nobody that can argue against that.”

Marketing muscle There are groups of landowners who, while they don’t necessarily tie their parcels together, still choose to market them collectively with the help of a third party. One such marketer is Encore Energy of Bowling Green, Ky., which announced July 30 that it was marketing mineral rights for 175,000 acres in southeast Ohio. A longtime player in the Midwest oil and gas industry and a driller itself, Encore also has connections to the big oil companies that tend to dominate the capital-intensive world of horizontal drilling and fracking. “I’m marketing acreage in Ohio to the oil and gas industry, which is in places like Houston, Denver and Tulsa,” said Encore president Steve Stengell. Encore generally does not represent landowners directly, Mr. Stengell said, but it works with other companies and organizations that already have substantial lease holdings in Ohio. Encore’s client base includes another source of bundled leases — smaller drilling companies, many of which have been drilling small vertical wells in Ohio for decades but lack the capital or technology required to drill horizontal wells into Ohio’s deep shale deposits.

‘Everyone knows me’ One such company is D.T. Atha, in Sugargrove, Ohio, near Lancaster, which is using Encore to help it market mineral rights on about 15,000 acres. Company president Dave Atha said he’s known and done business with Mr. Stengell and Encore for many years and believes its connections, combined with aggregated

acreage, can help him get a better deal for the mineral rights he wants to sell. Not that D.T. Atha wants to get out of the oil and gas business. Far from it. Mr. Atha only wants to sell mineral rights for Ohio’s shale deposits. He intends to hold onto mineral rights for conventional gas and oil deposits and sell off rights to the shale, where horizontal drilling is required to extract gas and oil. He’ll drill the conventional deposits himself, but mostly after gas prices rise, he said. Holding a big chunk of mineral rights is an advantage, according to Mr. Atha, because it makes it easier for big drilling companies to lease the rights they need without sending an army of agents out contacting individual landowners. “Big companies are not going to want to go out and piecemeal it,” Mr. Atha said. “They’re going to want to find a block that they can get in one bunch.” Controlling substantial acreage also helps to negotiate lease terms, including those that protect the land at the surface, Mr. Atha said. That’s important, because even though Mr. Atha does not own or live on most of the land for which he holds the mineral rights, he still lives in the same community and, more often than not, knows the landowners. “I feel a big responsibility to my landowners and I take that very seriously,” said Mr. Atha, who bought most of his mineral rights for about $5 an acre, before he or anyone else knew about using horizontal drilling and hydraulic fracturing to extract shale gas — and the lease price jumped to thousands of dollars per acre. “I’ve been down here 25 years and everyone knows me,” he said. ■

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Cash: Legislature could revisit restrictions on using revenue continued from PAGE 1

II building boom. When the subject of casino revenue for the suburbs initially was discussed at a consortium meeting Aug. 2, South Euclid Mayor Georgine Welo said a strong vote from the suburbs in fall 2009 that helped pass the constitutional amendment creating the casinos justified using the money outside of downtown Cleveland. Mayor Welo said she believes the inner-ring mayors should suggest using some of the casino money for infrastructure improvements or for economic development. “I really need the money to return (to South Euclid) and grow new businesses,” she said. Mayor Welo suggested an innerring suburbs fund could be created within an existing, countywide in-

frastructure program that administers state public works money. Another alternative would be to put funds into a storefront renovation program, she said.

In the mix Ed Jerse, Mr. FitzGerald’s director of regional collaboration, attended the Aug. 2 First Suburbs consortium meeting and later said the administration would consider alternatives. “As you would expect when there (are) revenues involved, there are a lot of ideas about where (they) should go,” Mr. Jerse said in a telephone interview last week. He said the proposal from the suburban mayors “would be additional input that is put into the mix.” Mr. Jerse stressed that Mr. FitzGerald does not want the casino revenue portioned out in small amounts.

“What the executive has stressed is that he wants (the casino money) to be catalytic and transformational and not dispersed too widely,” he said. Mayor Sellers said because the group wants to get its message to Mr. FitzGerald quickly, the suburbs’ proposal may be more conceptual than concrete. Mr. FitzGerald has told county council that he believes a decision should be made soon, in September, to have a plan in place before the state Legislature decides to restrict the way casino money is spent. A bill passed by the Legislature in June that provided regulations for casinos and race track video gaming initially included a provision that would have required counties and cities that received casino tax money to spend at least 50% of that money on police, fire or other safety services.

Welding: Emphasis on skilled trades fades continued from PAGE 3

the game, providing welding equipment and logistical support for the colleges’ programs. Because, without trained welders, said Lincoln Electric’s Carl Peters, “Who’s going to buy our product?” “There is a very big need for welders,” said Mr. Peters, the company’s director of technical training. “Not just in Cleveland but across the country. You can’t get enough good welders.” By 2019, the American Welding Society anticipates a shortage of about 239,000 welders. But even now, there is a huge demand for the skilled workers. Project managers for roughly 8,900 industrial projects nationwide

are searching for trained welders and typically are coming up short in meeting their needs, according to a recent report from Industrial Info Resources, a Texas-based research firm.

Follow the money Lakeland Community College hopes to become the region’s eastern hub for welding training. The college plans to transform its small, eightstation training center into one with 16 stations, with the potential to add four more. The State Controlling Board this summer signed off on $472,000 in state money for the project, and Lincoln Electric will donate a precision TIG 225 welder — cost: $2,800 — for the classroom. “We have some great potential,”

said Dr. Gary Eith, dean of Lakeland’s business and engineering division. Lakeland this fall also is expected to launch an associate degree program in industrial welding that it developed in collaboration with representatives from Lincoln Electric. The program’s graduates could earn annual salaries ranging from $33,700 to $50,200, according to the college’s market research. Cuyahoga Community College, meanwhile, will open this fall a 2,000-square-foot welding lab with 12 workstations in its new technology training center under construction at the intersection of Woodland Avenue and East 30th Street in Cleveland. The college already oper-

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Spread the wealth Mr. FitzGerald in his State of the County address last Feb. 1 proposed using the entire proceeds of the county’s share of casino revenues for redevelopment and improvements in the area from West 25th Street to the Cleveland State University campus, and from the lakefront south to the Inner Belt freeway. As county council has taken up the issue and offered other alternatives, Mr. FitzGerald has expressed a willingness to compromise.

ates a 1,200-square-foot lab, which has been running at capacity due to the popularity of Tri-C’s welding programs. “Because of the high utilization rate, we’re starting to schedule our old lab for additional corporate training,” said John Gajewski, executive director of the college’s manufacturing programs. “That old lab will still be used, but our challenge is scheduling it all so students can be exposed to the new technology.”

Out with the old … Industry observers suggest that community colleges have trended toward offering more advanced welding training as the technology — much of which has been developed by Lincoln Electric — has grown increasingly complex, and many jobs in the manufacturing sector now demand an associate or bach-

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elor’s degree. Lincoln Electric’s Mr. Peters said his company, for one, has operated its own welding school since 1917 but as of late has encouraged local community colleges to beef up their programs so its own graduates could pursue more advanced degrees. Cindy Weihl, a spokeswoman for the American Welding Society, said much of the welder shortage is due to a weakened emphasis of the skilled trades over the last 20 years, as parents encouraged their children to get degrees, for example, in computer science rather than become certified welders. Ms. Weihl noted that the average age of a welder hovers at 55 years old, and “as this existing work force ages, a gap has been created where there are not enough young people to come and take over these new and replacement jobs.” ■

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The Cuyahoga County Fiscal Office has estimated that $9.7 million could flow annually to the county treasury once all four casinos are up and running in 2014 as the county’s share of the 33.3% tax on casino revenue. Ohio’s 88 counties are set to share in 51% of the tax revenue generated by the state’s four casinos. The 51% amount is divided among the counties based on population. Currently, based on the 2010 census, Cuyahoga County will get 11.09% of the counties’ share. School district will share 34%. The rest goes to the host cities and for casino oversight. In the first monthly distribution of casino tax revenue last month, Cuyahoga County received $554,424, Lake County got $200,668 and Geauga County received $81,379. ■

Mr. FitzGerald is concerned the General Assembly will take the issue up again in the fall. Mayor Sellers said the First Suburbs group will suggest any plan for divvying up the casino tax money have a two-year sunset provision so the program is re-evaluated.

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THEINSIDER

THEWEEK AUGUST 6 - 12 The big story: Under the ornate, four-story Cleveland Trust Co. rotunda at East Ninth Street and Euclid Avenue in downtown Cleveland, Cuyahoga County Executive Ed FitzGerald on Aug. 7 kicked off what he hopes will be a modernday land rush. He spoke to about 100 architects, real estate developers, brokers and investors about his hope that the county’s property consolidation effort — in particular, the redevelopment of the AmeriTrust complex that adjoins the rotunda — will spark a round of redevelopment around the county. In addition to selling or leasing 13 properties, the county is looking for a new administrative headquarters to replace its current, cramped home at 1219 Ontario St. Kids’ stuff: Akron Children’s Hospital plans to invest $200 million in its physical plant over the next three years, which would be its loftiest capital investment in more than two decades. The centerpiece of the project will be a new critical care tower that will include a neonatal intensive care unit with private rooms, a new emergency department, outpatient surgical suites and a dedicated space for several pediatric subspecialty programs. Also planned are an expansion of the Ronald McDonald House of Akron, a 1,200space parking deck already under construction, and a new welcome center for the hospital. Collaboration pays: Case Western Reserve University received a $64.6 million federal grant — the largest of its kind ever awarded in Northeast Ohio — to help usher medical breakthroughs from the laboratory to the bedside. The grant, formally known as the Clinical and Translational Science Award, from the National Institutes of Health, is in recognition of Case Western Reserve’s work over the last five years to advance medical discoveries in collaboration with the Cleveland Clinic, MetroHealth, University Hospitals Case Medical Center and Louis Stokes Cleveland VA Medical Center.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Sounds like he could use a Cash Mob himself ■ For the first time, the Cash Mobs movement is looking for cash itself. Andrew Samtoy, the local attorney who created the WordPress website used by Cash Mobs organizers around the world, is launching a fundraising campaign he hopes will net the incorporated group $20,000 — money he intends to use to develop a new website, www.cash-mobs Samtoy .com, and to protect the Cash Mobs trademark. Cash Mobs is the movement that rallies people to show up at local businesses, spend money and socialize, enabling mobs to impact the local economy more than individual shoppers. The central blog was created by Mr. Samtoy, co-founder of the local and national Cash Mobs movement and an associate at Painesville law firm Dworken & Bernstein. Mr. Samtoy said he intends to do his fundraising via the crowdfunding portal Indiegogo, which asks donors to give to causes about which they care. He hopes to raise $20,000 by mid-October. As for protecting the group’s trademark, which was filed April 19, Mr. Samtoy said he wants to make sure the Cash Mobs brand is used appropriately. There have been reports, he noted, that marketers and businesses were promoting Cash Mobs of their respec-

MILESTONE

Goodbye, and hello: University Hospitals announced it will lose one top administrator and gain another. Dr. Achilles A. Demetriou, the system’s chief operating officer, will retire from full-time employment at year’s end. A nationwide search for his replacement has begun. The health system also named John Foley as its new chief information officer. He was with the West Penn Allegheny Health System in Pittsburgh.

Estate planning:

The estate of Dorothy Ebersbach, a former World War II pilot, pledged $2 million to support Case Western Reserve University’s Frances Payne Bolton School of Nursing. The announcement came less than a year after Ms. Ebersbach, an alumna of the university, pledged $2 million to support a program that trains nursing students to care for patients being transported by aircraft to medical facilities.

What they bargained for:

Kent State University trustees signed off on a three-year collective bargaining agreement for full-time, tenure-track faculty. University faculty will receive across-the-board 2% salary increases, which will be applied retroactively to the start of the 2011-2012 academic year. Faculty members also are guaranteed 2% pay hikes for each of the following two academic years.

Aircraft parts from a printer? That’s the goal ■ Two Avon Lake companies are part of a team using a $3 million Ohio Third Frontier grant to develop materials and production parts by means of additive manufacturing, or three-dimensional printing technology. Rapid Prototype + Manufacturing LLC, a maker of 3D prototypes, and PolyOne Corp., a provider of specialized polymer materials, are working with the University of Dayton Research Institute on a three-year project to develop advanced materials and production parts using 3D printing technology. The project is expected to create 30 jobs within three years and 85 jobs after five years. The two local companies will collaborate with the Dayton research institute and Minnesota-based Stratasys Inc., a rapid prototyping machine manufacturer, to develop aircraft-engine components for GE Aviation and parts for Boeing Co., Northrop Grumman Corp. and Goodrich Corp., among others. “We are delighted to apply our expertise to this project and extend this collaborative effort across the state to further strengthen Ohio’s economic position in high-tech materials and 3D printing technology,” said Matt Hlavin, president of Rapid Prototype. Rapid Prototype, which originated as a division of Thogus, a custom plastics injection molder in Avon Lake, was founded in 2011

Hyland highlights public benefit of private equity

THE COMPANY: Impullitti Landscaping Inc., Burton THE OCCASION: Its 60th anniversary In 1952, Clifford Impullitti (top) started the company that today is known as Impullitti Landscaping Inc. But the company’s roots in the landscaping business stretch even deeper. Mr. Impulllitti’s father-in-law, Leo Lucarelli, also ran a landscaping business. When Mr. Impullitti met Mr. Lucarelli’s daughter, Elvira, and married her, he began to apprentice under his father-in-law and later started his own company. Sixty years (and five children) later, Impullitti Landscaping is going strong, with about 60 employees and more than 30 vehicles, 21 trailers and 11 pieces of heavy equipment. Wayne Impullitti (bottom photo), the youngest son of Clifford Impullitti, took sole ownership of the company in 1990 and continues to run it today. Nearly 25% of the company’s staff has a degree in various aspects of horticulture and management from Ohio State University, John Carroll University, the University of Dayton and other schools. Among the company’s services are design consultation, site development, plantings, outdoor kitchens and theme gardens, For information about Impullitti, visit www.EnjoyTheView.com.

and shares space with Thogus. — Ginger Christ

Reminger gets in the agent ballgame ■ Back when Anthony Catanzarite was studying law, he was offered a legal internship at the Cleveland Browns but chose to law clerk at Reminger Co. LPA in Cleveland — the “realistic approach” he expected to last longer term. Now, after nine years with Reminger, he has brought a sports slant to his practice after all. Mr. Catanzarite, who co-chairs the architects and engineers/construction liability practice group for Reminger, is the lone agent behind Reminger’s new limited liability company, Arrow Sports. Through it, he’s advising baseball players who want to go pro. The LLC was launched in February after Mr. Catanzarite was approached by a former Cleveland Indians pitcher, Jason Stanford, who asked Mr. Catanzarite to be his agent in a hoped-for comeback. After some research and getting the go-ahead from firm president Stephen E. Walters, Mr. Catanzarite began building his lineup. Six months later, Arrow’s client base now numbers slightly more than a dozen. Though it has clients, Arrow Sports has yet to generate revenue. Sports agency work generates revenues only when a player has been drafted or later in a player’s career when he or she attains a certain salary level. “It’s something that we believe long term is a good fit for our firm,” he said. “It’s a marathon, not a sprint.”— Michelle Park

BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.

Sounds good: The Ohio Music Education Association signed on to hold its annual professional development conference at the under-construction Cleveland convention center in 2015, 2017 and 2019. The event will bring 2,900 music teachers for educational sessions, a trade show that draws more than 170 exhibitors and concerts by several youth ensembles. The complex is scheduled to open July 1, 2013.

tive companies to reap more business. “We don’t think that’s right,” he said. “We want to make sure these are communitygenerated events.” —Michelle Park

■ A campaign to convince the public that the private equity business creates jobs — you might have noticed the presidential candidates arguing this point — highlights the experience of Westlake-based Hyland Software. The New York Times called attention to a video that’s the latest installment in the months-long campaign. The video, which lasts nearly four minutes, focuses on Thoma Bravo, which invested in Hyland Software in 2007. In the five years since, the company’s employee count has doubled, according to the Private Equity Growth Capital Council. (Crain’s most recent research had Hyland with 1,048 employees as of Jan. 1.) “The management team is exactly the same today, running a company nearly three times the size,” says Orlando Bravo, managing partner of Thoma Bravo, in the video. Members of Hyland management appear in the video and extol the virtues of working with Thoma Bravo. For instance, Bill Priemer, Hyland’s chief operating officer, says in the video that Hyland has purchased five companies since Thoma Bravo came on board. “It’s unlikely that Hyland Software would be where we are today without our private equity partner,” he says.

Talk about state of the art ■ Auto insurance giant Progressive Corp. “boasts one of the most extensive contem-

porary art collections in the corporate world,” according to Forbes.com. At the company’s Mayfield Village headquarters, “a walk down the stairs is a little more exciting than at most companies,” Forbes.com noted. “The main stairwell is draped with candles, steel, wire, silk flowers and ribbons all dripped in wax.” The installation, by artist Petah Coyne, gives the space the feel of a “haunted ballroom,” said Kristin Rogers, art education and communications manager for the Progressive Collection. But the collection is more than just decorative, as Progressive officials say the company “uses the art to encourage its employees to think creatively.” Forbes.com said it consulted “a range of writers, art advisers and curators” to come up with a list of the world’s best corporate art collections. The list isn’t ranked, but joining Progressive on it are Bank of America, Deutsche Bank, JPMorgan Chase, Microsoft and UBS.

We love Ohio, but this isn’t one of the reasons ■ An Associated Press analysis of ad spending in the race for the White House noted that Ohio is one of nine states where ad spending is being concentrated. Those states — in addition to Ohio, they are Colorado, Iowa, Nevada, New Hampshire, North Carolina, Pennsylvania, Virginia and Florida — have “absorbed an eye-popping $350 million in commercials so far,” the AP said. Ohio’s getting the worst of it. “No state has been flooded with more campaign advertising than Ohio, where an average viewer in the Cleveland television market is seeing about 87 presidential campaign spots a week,” the AP reported.

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