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Vol. 31, No. 34
INSIDE
“Farming can be financially sustainable. But we need more entrepreneurial farmers who are willing to take risks.”
Glenwillow outfit cleans up with deal
– Peter McDermott (below), urban grower and network manager, Entrepreneurs for Sustainability
A Chagrin Falls company that sells soy-based cleaning products to major retailers such as Home Depot, Kroger and Ace Hardware has piqued the interest of another Northeast Ohio company. The Hoover unit of TTI Floor Care North America has purchased Nutek LLC, which has contracts with several suppliers across the state. Read Chuck Soder’s story on Page 3.
Crain’s Aug. 16 story on school sparks dustup
Witness this, local giant in mining says By DAN SHINGLER dshingler@crain.com
Feeling a little unnoticed — if not underappreciated — Cliffs Natural Resources Inc. wants Cleveland to know it has one superstar that isn’t taking its talents to South Beach, even if it already has gone global. Cliffs is beginning its “Witness” advertising campaign today, Aug. 30, which pokes fun at the departure of LeBron James and is running in local business publications, at Cleveland Hopkins International Airport, on area billboards and in the local editions of national publications such as Bloomberg BusinessWeek and Forbes.
INSIDE: Witness Cliffs’ print ad that is a spoof of the former LeBron James banner in downtown Cleveland. Page 4 “We’re feeling undernoticed for sure,” Cliffs spokesman Steve Baisden said. “We wanted something that raises our profile in this town. We have to compete for talent in this market and want to be recognized as one of the top industrial companies here.” Cliffs has grown rapidly in recent years, Mr. Baisden said, increasing revenues from $1.2 billion in 2004 — when it still was known as ClevelandCliffs Inc. — to what is expected to be more than $4 billion this year. Along the way, it has gone from being a U.S.only company to a Fortune 1000 giant
By JAY MILLER and TIMOTHY MAGAW jmiller@crain.com, tmagaw@crain.com
JASON MILLER
Cliffs Natural Resources boosts its visibility in ads
GROWINGPAINS Urban farmers, advocates cite challenges in cultivating business, but government collaboration advances efforts By KATHY AMES CARR ■ kcarr@crain.com
F
arming is a tough business. Not only is it physically demanding, but it also can be mentally and emotionally taxing, especially for entrepreneurial urban farmers who must sift through a field of obstacles before their dreams become for-profit realities. However, the need for small farms is emerging in Cleveland and other cities as consumers grow more aware of sources of food and industrial farming becomes more costly, said Peter McDermott, who farms two plots on Cleveland’s near West Side. So, a hearty group of urban farming pioneers is rising to the challenge. “We’re going to need tens of millions of farmers over the next few decades as energy to generate industrial farms becomes more expensive and scarce,” said Mr. McDermott, a network manager for Entrepreneurs for Sustainability, or E4S. “Industrial farms use a lot of natural gas and oil, but we’re going to have to transition into farms that rely more on human and animal energy.” See FARM Page 11
See CLIFFS Page 21
34
Accrediting body head chastises Chancellor president Chancellor University president Robert Daugherty has gotten a rap on the knuckles from the president of the Higher Learning Commission, the agency that accredits the for-profit university, for his response to a story about Chancellor in the Aug. 16 issue of Crain’s Cleveland Business. The rebuke, which came in an Aug. 19 letter from commission president Sylvia Manning, followed an open letter from Mr. Daugherty to the Chancellor community that was distributed by the university administration on Aug. 17, one day after the story appeared in Crain’s about the potential loss of Chancellor’s accreditation.
ON THE WEB: The full text of the letters from Chancellor University president Robert Daugherty and Higher Learning Commission president Sylvia Manning is available at www.CrainsCleveland.com/chancellor. Mr. Daugherty’s letter described the story as “a biased, factual (sic) inaccurate and misleading description of our school.” The story recounted executive staff turnover at Chancellor and the issuance last Feb. 25 by the Chicagobased commission of a “show-cause” order, which gave Chancellor almost a year to show it’s deserving of continued accreditation. In his letter, Mr. Daugherty wrote that Robert Appleson, vice president for accreditation relations at the Higher Learning Commission, was “supportive of Chancellor and the progress we are making” and that Dr. Appleson had told Mr. Daugherty that a Crain’s reporter had misquoted and lied to Mr. Appleson in the course of reporting the story. The letter came to the attention of Dr. Manning, who voiced displeasure See CHANCELLOR Page 20
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AUGUST 30-SEPTEMBER 5, 2010
A SELLING POINT Northeast Ohio doesn’t generally fare well in studies about tax rates, so it’s striking to see the results of a new study from The Tax Foundation. The Washington, D.C.-based research institution looks at sales tax rates in 107 U.S. metropolitan areas with populations greater than 200,000 people, and it found that those rates are pretty modest in Akron and Cleveland. Akron ranked 88th nationally, while Cleveland was 62nd. Here’s how those markets stack up with the 10 highest metro areas for sales taxes nationwide.
Honoring green efforts People. Profits. Planet. They are simple ideals, but it remains challenging for organizations to incorporate all three of these concepts into their operations. We profile our Emerald Awards finalists.
City
REGULAR FEATURES Best of the Blogs .........23 Classified ....................22 Editorial ......................10 From the Editor ...........10 Going Places ...............14
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List: Largest conference centers ....................19 Reporters’ Notebook....23 The Week ....................23 Tax Liens.....................12
State
County
City
Total
Birmingham, Ala.
4.0%
2.0%
4.0%
10.0%
Los Angeles
7.25
2.0
0.5
9.75
Chicago
6.25
2.25
1.25
9.75
Glendale, Ariz.
6.6
0.8
2.2
9.6
Seattle
6.5
3.0
0
9.5
San Francisco
7.25
2.25
0
9.5
Akron
5.5
1.0
0
6.5
Cleveland
5.5
2.25
0
7.75
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Local flavor lies in acquisition of Nutek Unit of Glenwillow-based TTI takes over Chagrin Falls cleaning products maker By CHUCK SODER csoder@crain.com
A Chagrin Falls company that sells soy-based cleaning products through several major retailers has been bought by the Hoover unit of TTI Floor Care North America in Glenwillow. Hoover Inc. bought Nutek LLC
THE WEEK IN QUOTES
under undisclosed terms this month. Nutek employs just a handful of people at its headquarters on River Road, but it contracts with several suppliers across the state, including a few in Northeast Ohio. Nutek, founded three years ago by Cathy Horton and Kim Novotney, sells its degreasers and lubricants in Home Depot, Kroger, Ace Hardware
and Tractor Supply stores, among others. The acquisition will allow Nutek to further product development efforts and expand its sales channels, according to a quote attributed to Ms. Horton in a news item posted on the Horton North American Retail Hardware Association’s web site. Ms. Horton, who owns a consulting company called Beta Strategy Group and was a technology adviser to ex-Cleveland Mayor Jane Campbell,
had been Nutek’s CEO prior to the acquisition. Her e-mail signature now lists her title as director of solutions and accessories for Hoover. Ms. Novotney, who was executive vice president of marketing for Nutek, left the company this month, according to her LinkedIn profile. Ms. Horton directed questions to Hoover. A Hoover official who contacted Crain’s said she could not provide additional information
INSIGHT
Kelsheimer will oversee affiliate markets’ growth
— Peter McDermott, a network manager for Entrepreneurs for Sustainability who farms two plots on Cleveland’s near West Side. Page One
By MICHELLE PARK mpark@crain.com
“We were ahead of Amazon, ahead of Google and ahead of McDonalds. I’m pretty proud of that accomplishment.”
“Frankly, I think ... it has far exceeded what the county expected in terms of payback.” — Ed Nolan, vice president of product development, Magnet. Page 6
We are doing things that we never would have done if the economy didn’t take a turn for the worse.” — Terry Davis, CEO, Our Lady of the Wayside. Page 15
“I kept hearing from people, ‘Can’t you do anything differently?’ For months afterwards people would say, ‘I don’t know how I’m going to feed my family.’ ... You just die ... when you hear that.” — Anita Branan, executive director, St. Malachi Center. Page 17
See NUTEK Page 22
Huntington ex-exec leads Fifth Third regional plans
“Farming can be financially sustainable. But we need more entrepreneurial farmers who are willing to take risks.”
— Steve Baisden, spokesman, Cliffs Natural Resources Inc. Page One
in time for publication. Nutek traditionally has relied heavily on Ohio-based suppliers. Exal Corp. of Youngstown makes the aluminum cans that are used to dispense the company’s lubricant products, which are designed for use in the home and on lawn equipment and cars. Specialty Lubricants of Macedonia makes packaging that houses Nutek’s cleaning and lubricating wipes. The company uses boxes from Buckeye Container of Wooster, and Custom Aerosol
MARC GOLUB
Fedeli Group president and CEO Umberto Fedeli said Lorain National Bank had a solid second quarter, but two areas where the company can improve are earnings potential and efficiency ratio.
Fedeli has attention of another community bank, Lorain National Well-known insurance broker, longtime bank investor will impart vision for smaller board in meeting with company officials this week FEDELI’S BANK HISTORY
By MICHELLE PARK mpark@crain.com
A month after he made recommendations for the future of Lorain National Bank in a filing with the Securities and Exchange Commission, investor and shareholder Umberto P. Fedeli says he, company executives and board members have agreed to talk bank. Mr. Fedeli, a longtime investor in community banks and president and CEO of Independence insurance brokerage The Fedeli Group, said the meeting is scheduled for this Tuesday, Aug. 31, at his offices. He invited company officials, and they accepted, he said. Mr. Fedeli said he intends to ask executives of the bank’s Lorain-based parent company, LNB Bancorp Inc., what they envision for the future in terms of the bank’s products and services. He also said he will make suggestions of his own, but declined to identify See FEDELI Page 21
A 22-year banking veteran who for five years presided over the Greater Cleveland region for Huntington National Bank now will direct strategic planning in five regions for a larger institution. Jerry Kelsheimer, 44, started last Monday, Aug. 23, as managing director for strategic planning for Cincinnatibased Fifth Third Bank. In the newly created job, Mr. Kelsheimer will work with leadership teams of Fifth Third’s 16 affiliate markets to develop strategies for growth and to satisfy the needs of the individual markets. Mr. Kelsheimer had overseen all Huntington business locally, including the bank’s transition following its 2007 acquisition of Sky Bank. Last April, he was replaced by Daniel P. Walsh Jr. but remained with the bank for a few months. At the time, Crain’s Cleveland Business reported Mr. Kelsheimer would work with management to define his role as he helped in Mr. Walsh’s transition. See KELSHEIMER Page 8
Well-known insurance broker Umberto Fedeli, who says he has invested in dozens of community banks, including seven or eight in which he did so significantly, did the same with LNB Bancorp Inc., the parent of Lorain National Bank, this summer. It’s too early, he said, to draw comparisons between his meeting this Tuesday, Aug. 31, with LNB leaders and his activist role in PVF Capital Corp., in which he was nominated to the PVF board and loudly objected to Park View Federal Savings Bank being poorly run. In his meeting with LNB executives, Mr. Fedeli said he will address the size of the company’s board and its long-term growth potential, including merger possibilities. FILE PHOTO/JESSE KRAMER
Former Huntington Bank executive Jerry Kelsheimer now will oversee strategic planning in five regions for Fifth Third Bank.
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Magnet confident in loan program Manufacturing group says it has created jobs, but anticipates scrutiny from new government By DAN SHINGLER dshingler@crain.com
Cuyahoga County has loaned nearly $500,000 this year to 12 area businesses in the hope that they’ll be able to launch new products that will provide manufacturing jobs in Northeast Ohio. Backers of the loan program, now in its sixth year, also hope it can prove itself worthy and survive the
coming reorganization of county government. “That’s something we’ll have to wait and see about — but we think the program’s results are pretty impressive” said Ed Nolan, vice president of product development at Magnet, a nonprofit manufacturing support group. Magnet has collected information on the program’s results to date, figuring it may need to prove the worth of the lending effort to whoever is running the county when officials of a new county government are elected this fall. Its data show that since the program began it has created 202 jobs with 101 loans totaling $4.27 million. The loans also have helped
support $27.5 million in private investments at companies participating in the program, Magnet’s survey of participants found. “I think the county likes the program,” Mr. Nolan said. “Frankly, I think it makes a lot of sense and it has far exceeded what the county expected in terms of payback.” The loans go to applicants that range from existing operations looking for help with a new product to fledgling incubator companies and ambitious inventors working on ideas in their garages or basements. Companies can receive a $15,000 loan to determine if a product can be marketed. They also can come back later and apply for additional loans, of $40,000 or $60,000, to move the product though its design stage and into production. When it began, the program loaned out about $1 million a year, but in recent years that total has been cut back as the county has had to watch its budget. Nonetheless, the program has only become more popular with applicants, said Magnet product development support specialist Megan Tomsik, who helps the organization administer the program for the county. This year, 43 companies applied for a loan before a committee made up primarily of local business people. The committee chose 12 applicants to receive $470,000 this year. This year’s loan recipients include a company producing bio-based fire resistant materials, an entrepreneur who hopes to prove he can age whiskey faster than traditional methods, a business working on synthetic crude oil and another working on a plasma cutting machine that can work with steel plate.
An advocate at hand
WITNESS A TOP PERFORMER THAT HASN’T LEFT IN 163 YEARS.
We’re Cliffs Natural Resources Inc., a 163-year-old international mining and natural resources company. We are NYSE Euronext-listed, a member of the Fortune 1000 and S&P 500, and one of the largest and fastest-growing companies in Cleveland. cliffsnaturalresources.com/witness
Current county commissioner Peter Lawson Jones said he’s not only satisfied with the results of the loan program to date, but he’s already lobbying that the program be continued with anyone who will listen. “I think, whether you’re measuring it in terms of job creation and retention or from follow-on funding from other sources ... From all perspectives, it’s a very successful program,” Mr. Jones said. “The thing speaks for itself — these are stubborn facts that are hard to ignore in terms of the success of this program.” Mr. Jones said he hopes the next county government also will see the worth of the program. It will, he said, if voters elect officials focused on creating jobs. “We know that many of the jobs in the future are going to come from small businesses and entrepreneurs, and through this program we supply them with some funding and some seed money that they might not be able to get from other sources — and that allows them to bring in additional funding,” Mr. Jones said. ■
Volume 31, Number 34 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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Port’s planned rail loop could improve shipping capabilities By JAY MILLER jmiller@crain.com
Making good on his commitment to expand shipping business through the Port of Cleveland, William Friedman, the new CEO of the Cleveland-Cuyahoga County Port Authority, is pursuing a plan for a $3.16 million rail loop that would make it easier and less expensive to move cargo from the port’s docks by rail. Mr. Friedman said a foreign steelmaker is looking to abandon its traditional East Coast port of call in favor of a port further inland that would keep its steel slabs on water longer. He said he has had discussions with company representatives, but he would not identify the importer. “Rail is becoming more important for moving freight” as fuel costs rise, Mr. Friedman told members of the Port Authority’s maritime committee earlier this month. It costs much less to ship by water
than by rail or truck. A U.S. Maritime Administration study calculated that 1 gallon of fuel can move 1 ton of cargo 59 miles by truck, 202 miles by train and 514 miles by inland water barge. Mr. Friedman and his staff plan
to meet with representatives from the Ohio Rail Development Commission to see what funds that state agency has for freight rail development. The commission provides grants and loans to improve freight and
More health care costs to shift to employee By JERRY GEISEL Business Insurance
Nearly two-thirds of employers say they intend to make health care plan design changes to shift more costs to employees in 2011, according to a survey released last Wednesday. The Aon Consulting survey found
that 65% of respondents plan to increase cost-sharing through actions such as boosting deductibles, copayments, coinsurance or out-ofpocket limits. In addition, 57% said they expect to boost health care plan premiums paid by employees. Those changes come amid major increases in health care plan costs.
Just over one-third of respondents said their group health care costs rose at least 5% but less than 10% this year, while 18% said costs climbed at least 10% but less than 15%. Twenty-four percent, though, said cost increases were less than 5%, while 5% said cost increases were at least 15% but less than 20%.
passenger rail systems in the state. Port officials also met recently with members of the Northeast Ohio congressional delegation, including Rep. Steve LaTourette, who is a member of the powerful House Appropriations Committee. LaTourette spokeswoman Debbie Setliff said the rail spur was discussed briefly and that the congressman offered his support for the project. Federal money would be a long shot for the project, however, because Congress will be finalizing the budget shortly for the fiscal year that begins Oct. 1. Stuart Nicholson, a spokesman for the Ohio Rail Development Commission, said his agency has been contacted by Cleveland port officials but detailed discussions have not begun. The commission is leading the effort to create a Cleveland-ColumbusCincinnati rail corridor, for which the Obama administration has pledged $400 million in federal stimulus
money. But it also is doling out federal and state dollars for improving Ohio’s freight rail system. The commission currently is administering 21 freight projects totaling $61 million in federal stimulus money, including a similar track improvement project at the Port of Toledo. The rail loop at the Port of Cleveland would make the transfer from ships to rail easier and allow the port to hold as many as 70 rail cars at a time. CSX and Norfolk Southern each have separate stub lines that cross over to port property. A new loop would extend track to the waterfront docks and connect to both rail carriers’ existing lakefront tracks. While this expansion initially would make the port more attractive for the steel slab importer and the port’s traditional finished steel shippers, Mr. Friedman also told Crain’s Cleveland Business he wants to diversify the cargo coming into the Port of Cleveland. ■
The survey also details how expensive COBRA health care continuation coverage has become. For example, this year, the median monthly COBRA premium charged for single coverage in a preferred provider organization plan was $449, while the median monthly premium for family coverage was $1,310. Through legislation passed in 2009 and later extended and expanded, the federal government pays 65% of the COBRA premium for employees
who are involuntarily terminated. But that subsidy is available only to employees laid off through May 31. A total of 1,079 people took the survey, including 44% at employers between 500 and 5,000 employees, 38% at employers with less than 500 employees and 18% at employers with more than 5,000 employees. ■ Jerry Geisel is editor-at-large with Business Insurance, a sister publication of Crain’s Cleveland Business.
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Macedonia manufacturer looks to grow sales with investments By FRANK ESPOSITO Plastics News
After more than six decades in business, Joslyn Manufacturing Co. in Macedonia still is working to grow. The thermoformer is spending $350,000 on equipment for a new design center, an improved quality control lab and an enterprise resource planning computer system. Those projects are expected to increase Joslyn’s annual sales — which were about $4 million last year — by at least 20%. “A lot of customers know Joslyn they want something, but they don’t know what they want,� Joslyn president Bret Joslyn said. “Now we’ll be able to take their (computer-aided design) files and run an analysis of different thicknesses and show how different plastics will form in the tool.� The company began using the new design center in early August, with the quality control lab soon to follow. The new ERP system will be in place Jan. 1. Joslyn also might add computer numerically controlled routing equipment and other pieces of thermoforming machinery next year. If that happens, the company will need to add three or four production jobs as well. “We’re looking at 2010 as a year of organizing in a leaner sense, and at 2011 as a year when we’ll focus on efficiencies,� Mr. Joslyn said. Joslyn currently runs 10 thermoforming lines in a 105,000-squarefoot space, where it makes parts as small as a few inches wide to ones that measure 6 feet by 10 feet. The company employs 30 and expects to post sales of about $5 million this year. That’s down from a peak of $7 million in 2005 and 2006, but Mr. Joslyn noted that the company didn’t need to lay off any workers during the worst of the economic downturn. Industrial parts for the component
machinery of original equipment manufacturers make up a big part of Joslyn’s business, with medical and consumer products also doing their share. In the last year or so, Joslyn also has picked up business from other thermoformers. “Some other companies have gone out of business or had problems,� Mr. Joslyn said. “We’ve focused on quality and the technology behind quality.� The company also makes racing shells used in the All-American Soap Box Derby, an event held every summer in Akron.
Tractor seats set the stage The Joslyn family’s manufacturing history reads like a plastics industry version of an Ernest Hemingway or John Steinbeck novel. Call it “The Sun Also Rises in Macedonia.� Or maybe “Of Tractor Seats and Men.� First off, Bret Joslyn’s first name actually is Charles, which makes him the fourth Charles Joslyn to run the company. Each of the men had a different middle name, so there’s not a junior among them. His great-grandfather — Charles P. Joslyn — launched the family business in the mid-1940s, making replacement tractor seats and other farm supplies for farmers in and around Macedonia, a small town between Cleveland and Akron. By the mid-1960s, Bret’s grandfather — Charles H. Joslyn — had begun making those tractor seats out of vinyl fabric, which officially got the family into the plastics business. In the early 1970s, Bret’s father — Charles A. Joslyn, who goes by Chuck — got out of the U.S. Air Force and joined the family business, which he then steered into thin-gauge vacuum forming. By the late 1970s, Joslyn got about 70% of its sales from thermoformed point-of-purchase displays.
Charles the Fourth returns Bret Joslyn’s own route to running
the family business hardly went in a straight line. He had worked summers at the plant during high school, running thermoforming equipment. But he now admits that he “never really saw the business as an opportunity — I almost saw it as a burden.� “I wanted to be in the office helping to make decisions, and my dad wanted me on the production floor, learning that side of the business,� he said. That situation changed after Mr. Joslyn graduated with a finance degree from DePauw University in Indiana and spent a year working as a bank analyst in Chicago. The job was hardly glamorous, convincing him to go back to the family business. He earned an MBA from Purdue University before joining Joslyn in a full-time management role in 1996. Chuck continued to run the company before retiring in 2005. Bret’s brother, Brian, also works for the company and is in charge of operations. The brothers are in the process of buying the company from their dad. A sister isn’t involved in the family business. “My dad left the decision up to me,� Bret Joslyn said of his choice to return to the company. “There was no pressure or anything.� Mr. Joslyn now describes his father Chuck as “retired — with an opinion.� But he does admit that “it’s nice to have someone to talk to about the business who’s been through it all before.� The company is looking to expand through a merger or acquisition, and has been checking out other thermoforming companies in the Midwest for the last year. “We’re not looking to take over assets and buildings,� Bret Joslyn said. “This would be more businessrelated.� ■Frank Esposito is senior reporter with Plastics News, a sister publication of Crain’s Cleveland Business.
Pulte Homes moving on Pepper Pike project By STAN BULLARD sbullard@crain.com
Doing our part to keep our Great Lake great. The Northeast Ohio Regional Sewer District is proud to protect public health and our environment.
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National homebuilder Pulte Homes Inc. plans to start constructing its first townhouses next month in the posh Sterling Heights subdivision in Pepper Pike as the suburb and land developer Forest City Enterprises Inc. work out the final elements of a pact hiking the development’s density. Bloomfield Hills, Mich.-based Pulte on Aug. 24 acquired sites for its first five townhouses for $238,750, according to Cuyahoga County land records. However, Pepper Pike City Council will not approve final details of changes in the subdivision plan until its meeting tonight, Aug. 30. The site is north of Chagrin Boulevard on the east side of Interstate 271. Forest City originally sought to raise the subdivision’s townhouse component to 140 from 93. However, through a series of meetings in the spring and summer, the developer, city and a half-dozen neighborhood residents agreed to a plan that
allows Pulte to build 86 units. Under the plan for part of the subdivision dubbed “The Pointe at Sterling Lakes,� Forest City will devote four acres of the 13-acre townhouse neighborhood in Sterling Lakes to a new park. “I think the compromise will hopefully get the situation restarted there,� Pepper Pike Mayor Bruce Akers said. The Sterling Heights site sits amid existing neighborhoods, far different than the fringe suburbs where Pulte first entered the Northeast Ohio market in the 1990s. The site is only now undergoing development because it was mired in litigation for more than a decade as the suburb sought residential development on it and the Porter family, the prior owner, sought commercial zoning. Tony Barbee, president of Pulte Homes Ohio, said his company is eager to start the project. “It’s a great location,� Mr. Barbee said. “The buyer profile we serve is not being served in that market —
the nurse, the young professional or the first-time buyer who wants access to work, shopping and entertainment in a lock-and-leave scenario.â€? Mr. Barbee said Pulte is completing construction drawings so it does not have construction bids to allow it to state pricing for the project. However, Pulte’s Montrose Park Townhomes cost upwards of $143,000. Although land prices are a big variable in housing costs and vary by community, Pulte’s “affordableâ€? mantra means the townhouses will cost far less than Sterling’s original townhouses costing $400,000. Forest City sought to change the number of townhouses allowed in the project last spring because the larger, more costly townhouses there did not sell after the housing market cratered. Since 2006, builders sold just six Sterling Lakes townhouses in the $400,000 range. Sites for another eight sat fallow. Pulte’s Sterling Lakes townhouses will range from 1,800 to 2,300 square feet on three floors, including two or more bedrooms, Mr. Barbee said. â–
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Local ShoreBank continues mission Cleveland arm unaffected by failure, acquisition of Chicago institution By MICHELLE PARK mpark@crain.com
A CLOSER LOOK AT SHOREBANK’S FAILURE More than 110 institutions insured by the Federal Deposit Insurance Corp. have failed this year, and ShoreBank is the 10th-largest of those, with total assets of about $2.16 billion. The institution failed because of loan and operational losses that depleted earnings and eroded capital. The bank was notified of critical undercapitalization on Feb. 23, 2010. A viable recapitalization plan did not emerge within the allotted “prompt corrective action” period, and the Illinois Department of Financial & Professional Regulation closed
The same people are working, access to money hasn’t changed and depositors’ funds remain insured by the Federal Deposit Insurance Corp. Though Chicago-based ShoreBank failed and was acquired Aug. 20 by the newly chartered Urban Partnership Bank, activities at its Cleveland branch are not impacted, said bank spokesman Brian J. Berg. “It is business as usual, and customers will see no difference as to how they make deposits and prise Cleveland web site assured payments,” Mr. Berg said. The branch, tenants, customers and stakeholders located in the Glenville Enterprise that the events affecting ShoreBank Center on East 105th Street, remains would not impact Enterprise Cleveopen as an Urban Partnership Bank, land operations. though signage hasn’t changed. “Enterprise Cleveland is confident All 12 branches of the failed bank that it has taken necessary and remain open under the new name. reasonable steps to prepare the Those branches include one in organization for any contingency Detroit and 10 in Chicago. that may arise in the future,” the ShoreBank Cleveland primarily statement read. handled lending and Officials at Enterdeposit accounts and prise Cleveland de“It is business was not a full-service ferred comment to as usual, and bank, Mr. Berg said. Mr. Berg. customers will see The bank had lent The new bank’s money in recent years name — Urban Partno difference as to local minority firms to how they make nership Bank — reflects and to Evergreen Coopthe institution’s comdeposits and eratives of Cleveland, mitment to continuing payments.” an initiative aimed ShoreBank’s mission at forming employeeto fill the financial – Brian J. Berg, owned companies. spokesman, ShoreBank services void in lowShoreBank Enterto moderate-income prise Cleveland, a nonprofit affiliate areas, Mr. Berg said. of the failed bank’s holding company, How will it fulfill that mission ShoreBank Corp., remains a partner without encountering the same loan in the Evergreen initiative, which has and operational losses that sank formed two companies to date. ShoreBank? Customers and investors The bank’s failure will not affect are confident that changed leaderEvergreen because ShoreBank Enter- ship will make the difference, Mr. prise Cleveland is a separate entity, Berg said. Evergreen spokeswoman Jennifer “We have a new leadership team Cimperman said. ShoreBank Enter- committed to continuing to provide prise Cleveland has registered to do urban communities with quality business as Enterprise Cleveland to financial services in a sustainable avoid confusion. manner,” he said. Though separate, the nonprofit David Vitale will serve as bank and the failed bank shared a name chairman, and William Farrow will and collaborated on investments. serve as president and CEO. Mr. According to the ShoreBank web Vitale is a former vice chairman and site, the two invested more than director of Bank One Corp. and First $100 million in 10 city neighbor- Chicago NBD Corp. Mr. Farrow hoods, creating more than 300 jobs formerly worked as executive vice in the past four years. president and chief information officer for the Chicago Board of Words of assurance Trade and was involved in multiple Enterprise Cleveland, which also bank integrations as First National is legally, financially and opera- Bank of Chicago became First Chicago, tionally independent of ShoreBank then First Chicago NBD and then Corp., is a business development Bank One. organization that provides lending Both Mr. Vitale and Mr. Farrow solutions to companies not ready for became involved in ShoreBank this traditional bank financing. It also year during efforts to recapitalize the offers affordable space at Glenville bank to avoid its failure. Enterprise Center, which houses On with the mission more than 40 businesses. A posting last week on the EnterShoreBank was the largest commu-
nity development financial institution (CDFI) in the country based on total assets, according to the Community Development Bankers Association, a Washington, D.C.-based trade association for CDFI-certified banks and thrifts. To be certified as a CDFI by the U.S. Treasury, banks must demonstrate that at least 60% of their total activities benefit low-income markets, said Jeannine Jacokes, CEO and policy adviser of the trade association. Urban Partnership Bank will apply for CDFI certification, Mr. Berg said. Seeing ShoreBank fail is sad, Ms. Jacokes said, but she’s heartened by the commitment to keep its mission alive. “People shouldn’t miss the story that there’s a group of investors that came together and said, ‘You know, it is important that this community has access to good financial services,’” she said. ■
CLEVELAND STATE UNIVERSITY IS NAMED ONE OF AMERICA’S BEST COLLEGES.
AGAIN.
The honor goes to CSU — the thanks go to you. Cleveland State University has again been named to the U.S. News & World Report America’s Best Colleges list, recognized in the National University category.
EVENT INFO The latest installment in Crain’s Ideas at Dawn business breakfast series is set for tomorrow, Aug. 31, at the Ritz-Carlton in downtown Cleveland. Sponsored by accounting company CBiz and law firm Calfee, Halter & Griswold, panelists will explore fiduciary best practices that will enable
the bank. The new Urban Partnership Bank is buying all of the failed institution’s deposits and nearly all its assets. It has a new board of directors. The cost to the FDIC’s Deposit Insurance Fund is estimated at $367.7 million. Had the bank been liquidated, the cost could have been $250 million to $334 million more. FDIC officials expect the number of bank failures in 2010 to exceed the number in 2009 — 140 — but they anticipate failures will begin to decrease thereafter, FDIC spokesman David Barr said.
companies and organizations to reduce 401(k) plan management risk. Tickets are still available for the event, which begins at 8 a.m. To register, call Crain’s marketing/ events manager Christian Hendricks at (216) 771-5182, or e-mail him at CHendricks@crain.com
To the faculty, staff, students, alumni, donors and community, we say congratulations and thank you. Your hard work and commitment to engaged learning is what sets CSU apart. N OW, P E O P L E A C RO S S T H E C O U N T RY K N OW T H E E XC E L L E N C E W E S E E E V E RY D AY.
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Mr. Kelsheimer said he left Huntington in July. Fifth Third operates 1,308 branches in 12 states, 84 of which are in Northeast Ohio. The company’s assets total $113 billion. Columbusbased Huntington operates more than 600 branches in six states, including 55 in Greater Cleveland. Its assets total $52 billion. Officials with both banks declined to discuss whether Mr. Kelsheimer had a noncompete agreement with Huntington. Although he said it’s too early to discuss specific strategic initiatives, Mr. Kelsheimer said he is focused on applying his experience and skill set to support organizational objectives and to grow Fifth Third in each of its marketplaces. “Ultimately, a gauge of my success would be the accomplishments of the geographic markets I’ll serve and support,” Mr. Kelsheimer said. “My interaction, my facilitation of interaction between the leadership teams of the affiliates would be expected to enhance execution and results. “I’m successful if our affiliate markets are successful, and our organization is successful if our
“I’m successful if our affiliate markets are successful, and our organization is successful if our affiliates are successful.” – Jerry Kelsheimer, managing director for strategic planning, Fifth Third Bank, and former president of Huntington Bank’s Northern Ohio region affiliates are successful,” he said. Mr. Kelsheimer’s position was created because the staff of the 9-month-old Fifth Third strategic planning group was overloaded, said Tom Heuer, senior vice president and senior managing director of the group. He said bringing Mr. Kelsheimer aboard will allow Fifth Third to better support the bank’s five regions across 12 states and its five lines of business — retail, mortgage, commercial, business banking and investment advisers. “Obviously, he’s got the experience and the skill,” Mr. Heuer said. “It just fits what we need.” Mr. Kelsheimer’s “very strong strategic mindset” — the ability to anticipate the future of the banking industry and strategize accordingly — is critical, Mr. Heuer added. Mr. Kelsheimer worked 14 years for Huntington, beginning as a commercial banking team leader.
“I enjoyed working the years with Huntington,” he said. “I’m grateful for the relationships I had with clients and colleagues. The conversation isn’t about, ‘Why not Huntington?’ It’s about Fifth Third (and) why I’m excited about my future there.” Mr. Kelsheimer said he was attracted to working for Fifth Third in part because of its platform for supporting growth and its business model, which positions a local leadership team for each affiliate market. He also said the job will allow him to continue to live in Westlake with his wife, Julie, and their four children. In a statement, Jim Dunlap, who was Mr. Kelsheimer’s boss at Huntington, said he wished Mr. Kelsheimer well on all his future endeavors. Mr. Dunlap is senior executive vice president and director of regional and commercial banking for Huntington. ■
Celebrating 80 Years!
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his year marks the celebration of Maloney + Novotny’s 80 years of excellence as a leading accounting and business advisory firm. We thank our clients, friends and referral sources for your continued support and for the privilege and opportunity to be of service. We look forward to many more years of helping our clients achieve financial success.
+ Cleveland 216.363.0100 + Canton 330.966.9400 + Elyria 440.323.3200 + maloneynovotny.com
AUGUST 30-SEPTEMBER 5, 2010
Step2’s head man not toying around with job Widely varied background helps as Streetsboro company tries to keep products fresh, long-lasting By BILL BREGAR Plastics News
Jack Vresics has learned the importance of safety, international business and quality control from a series of executive positions at companies making everything from Lenox china to products for public restrooms. Now he’s applying that know-how to the toy industry as president and CEO of Step2 Co. in Streetsboro. He does so with a passion for manufacturing that he shares with Step2 founder Tom Murdough, who sold the company in 2006 to Liberty Partners LP, a New York private equity firm. “I think when you do something, you’ve got to go in all the way,” Mr. Vresics said. “You’ve got to love the businesses. You’ve got to get in, and (not at) arm’s length.” Mr. Vresics took the top spot at Step2 in February, replacing Scott Levin, who left the maker of toys and lawn and garden products after three years at the company. Mr. Vresics had held CEO positions at two Liberty Partners companies and became a director of Step2 in September 2009, replacing Mr. Murdough on the board. “But he’s still actively involved,” Mr. Vresics said, referring to Step2’s founder, who resides in nearby Hudson. “I still talk to Tom a lot.” Mr. Vresics, 50, talked about his background and the state of the toy industry during a July interview in the toy showroom at Step2 headquarters, where he was surrounded by ride-on toys, playground sets and sand and water tables. To keep the business fresh, Step2 employs seven product designers, who dream up future toys and garden products, and three model makers. “We’re very proud of the fact that we’re making durable toys that are going to last, and people are going to get value out of this product,” Mr. Vresics said. “It’s our responsibility as a manufacturer to make sure that we’re doing everything that we can to make sure they’re safe and to have that long-term viewpoint, because that’s what our brand rests on.”
Steps along the way Mr. Vresics earned an MBA in 1986 from the Wharton School of the University of Pennsylvania. He joined Brown-Forman Corp., the Kentucky distiller that makes Jack Daniels whiskey. Brown-Forman put him in charge of a strategic team to study its Lenox chinaware unit, which suffered from uneven quality. Asian-made china such as Mikasa was taking market share. “We had 30-year-old technology making china,” he said. “One out of every two plates we had to throw away because they didn’t meet Lenox standards.” The team recommended selling off some related businesses and using the money to modernize Lenox. In the late 1980s, Lenox built a new factory in Kinston, N.C., with process control and state-of-the-art kilns. “We got our yields up to 96%,” Mr. Vresics said. Management got workers involved in the new plant design.
BILL BREGAR
Jack Vresics assumed the president and CEO roles at Streetsboro-based Step2 Co. in February. “That’s one of the things you learn in life,” he said. “No matter how smart you are, you have to learn how to work with people. And get them all together on a project.” Mr. Vresics met Robert Pritzker, a Chicago industrialist who started the Marmon Group of manufacturing companies. Pritzker hired him to run Trackmobile Inc., a company that makes railcars that also can run on a road. Then he moved to another Marmon company, Colson Group, a global maker of industrial casters and wheels. He left to become CEO of a company owned by Liberty Partners: Technical Concepts LLC, a maker of touch-free devices that flush toilets, dispense soap, turn on faucets and sanitize restrooms. Mr. Vresics went to Component Hardware Group, another business owned by Liberty Partners. He later became general manager of Infantino LLC, a maker of toys for infants that Step2 bought in 2007, before moving to the Step2 board.
Growing with its customers Step2 will continue to invest in new technology to make rotomolding as efficient as possible, Mr. Vresics said. “You want to make sure you build the right process controls on the equipment and give the operators the training and proper feedback so they can make the adjustments,” he said. The company also wants to design toys that increase their play value, in part by using “grow with me” features, Mr. Vresics said. For example, users can flip the legs up on Step2 sand and water tables to make them higher. In a similar vein, the company’s Double Play Basketball & Football Set has a basketball hoop that folds down, creating a football goal post and throwing target. “You have to decide how you’re going to add value and how to extend the play life of these toys, because kids are going to grow,” Mr. Vresics said. ■ Bill Bregar is a senior reporter with Plastics News, a sister publication of Crain’s Cleveland Business.
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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
Race is on
I
n the competition among states for a share of more than $4.3 billion in federal grants under President Barack Obama’s Race to the Top program, Ohio finished in 10th place on the list of 10 winners. Even if our state led the entire field, however, we’d still be wondering whether the $400 million Ohio will receive truly will be put to its designated purpose of promoting transformational change in school districts across the state. Trust us — we’re not looking down our noses at the money that Ohio has coming its way over the next four years under the program. And, without a doubt, the 38 states that have yet to see a dime under Mr. Obama’s incentive-based effort to get states to develop comprehensive education reform plans gladly would settle for barely sneaking onto the honor roll of “Race” winners. However, coming up with a swell plan at the state level that set goals for improving student graduation rates and raising math and reading scores is the easy part. How well that master plan is executed will come down to how well local school districts adhere to the individual plans they must submit by November for how they intend to use Race to the Top money. Eugene Sanders, CEO of the Cleveland Metropolitan School District, understandably is enthused. His district is in line to receive $29.5 million — the biggest allocation in the state — that will help implement Mr. Sanders’ ambitious academic transformation plan for the city’s schools. We nonetheless are concerned that many school districts, facing intense financial pressures in a down economy, will stray from putting the money toward purposes outlined in their reform plans and instead will use the windfall to plug holes in their operating budgets so they can carry on business as usual. Fresh in our minds is how various states, including Ohio, spent billions of dollars they received from the settlement of lawsuits against the nation’s tobacco companies. A significant chunk of those dollars was supposed to go toward anti-smoking advertising and education programs; large amounts of the money were diverted instead to initiatives and expenditures that had nothing to do with efforts to discourage the use of tobacco. We actually like the Race to the Top concept and its goal of getting states and school districts to think holistically about their education programs and how they can be improved. It’s particularly noteworthy that the Obama administration includes charter schools among those eligible for Race to the Top dollars, because the quality operations among them can provide examples of how to serve students that many in society have written off. This seed money for innovative thinking in education is welcome. But Ohio still must address the far bigger issue of how to put more education dollars into the classroom and fewer into administration. It’s imperative that the governor and Legislature formulate a plan for forcing consolidation among the 600-plus school districts in Ohio. Without all that overhead, the race to reach the top of the education ranks would become far easier to run.
FROM THE EDITOR
Let people make name for themselves
D
odosh. some of Cleveland’s fledgling auto plants, It’s an interesting last name. where he hand-stitched the upholstery It isn’t easy for most people of cars — the successor mode of transto pronounce. portation to the horse. On the side, he I’ve gotten “Doo-dash” and “Doughwashed dishes at Shaker Country Club. douche” and other variations. I try to My grandmother, Ethel, was a seammake it easy for people by saying, “It’s stress and created dresses for some of ‘dough-dosh,’ like ‘by gosh’ or the wealthiest women in Cleveland. ‘Oshkosh.’” Like many of the hordes that They still mess it up. passed through Ellis Island and MARK I understand why. It isn’t of DODOSH dispersed themselves around the Anglo-Saxon origin. It’s Eastern country, they settled in neighborEuropean, though it isn’t Hunhoods with their own kind. My garian, which is what many mom’s parents lived in Clevepeople mistake it for. Rather, land’s Buckeye Road neighborit’s Serbian. hood, which at one time had the Not that I don’t have Hungarian largest concentration of Hunblood in me. My mom’s parents garian-speaking people in the both were born in Hungary. world outside of Budapest. They came over to this country in They and their neighbors their youth. Didn’t know or understand spoke Hungarian to each other. They a word of English. They were among the also spoke it to their kids. millions upon millions of immigrants who It was the primary language of my were part of the melting pot of the early mom’s older brother, Elmer — so much 20th-century in America. so that he failed kindergarten in the My grandfather, Joe, was trained as a Cleveland public schools because he harness maker in Europe. That skill didn’t understand enough English. translated in this country into working at There were no remedial classes, though,
and no bilingual classes, either. After all, what second language do you pick when you’ve got kids coming from homes where German, Polish and Croatian were their parents’ languages of choice? Yet somehow my grandparents and my uncle learned English. So did the parents and kids who spoke all the other strange languages. I have tried to picture myself in my grandparents’ shoes as they contended with a society where assimilation, not accommodation, was the order of the day. I cannot. Instead, I’m left to admire their determination and perseverance, which paved the way for the life I’ve come to know and enjoy. Today, it wouldn’t hurt Cleveland to embrace a 21st-century immigrant class that instead of speaking Hungarian, Serbian or Italian speaks Russian, Spanish or Hindi. The talents this fresh blood can bring to our community could benefit the region in unimagined ways. Let’s open the door to the possibilities of what they can contribute to our economy as they, too, pursue the American Dream. ■
THE BIG ISSUE Are you in a throw-the-bums-out mood for elections this fall, or are you open to voting for incumbents and evaluating each race on its merits?
MARY MCKEE
ALLEN MIX
RICH PHILLIPS
CHAD HARTUP
Oberlin
Cleveland
Warren
Rocky River
Incumbency is not as important to me as whether the candidate is a good, strong Democrat. To me, it matters more what the person is saying than how much they are spending.
I say, “Throw the bums out.” People are getting fed up with the corruption. The state has to do something to lower taxes, and a non-incumbent is more likely to cut taxes.
I’m going to take the approach of who is better for America. In the governor’s race, I need to hear more about what you are going to do for me.
I think the incumbents are going to have a tough time in the fall. With the bad economy, the answer is to add jobs — and they’ve not improved the job picture.
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
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Farm: Urban growers eye profit potential
Growing a Farm 101 That’s easier said than done. Mr. McDermott and his girlfriend, Virginia Houston, will generate about $10,000 in revenue this year. However, he said there’s potential to generate between $30,000 and $40,000 per half-acre, which is where he hopes to be within two years. So for now, the half-acre farm that Mr. McDermott started in 2008 is a part-time business, but he said many microfarms such as his can become profitable if they do two things: Plant high-value crops such as greens, carrots and onions that thrive in small spaces, and market directly to consumers through farmers’ markets and community-supported agriculture (CSA) programs. CSA members pay subscriber fees upfront to area farmers and in return receive shares of weekly produce. “We’re preparing to start up our own ultra-local CSA that will serve about 25 subscribers within a one- to two-mile radius,” he said. “We will turn a profit this year.” Before farmers can develop CSAs and other direct-market avenues, they must have access to land, which is available in the city.
Land hoe According to nonprofit community developer Neighborhood Progress, there are 3,300 vacant acres and 15,000 vacant buildings within Cleveland’s city limits. Taking advantage of some of that empty space, Ohio City Near West Development Corp. helped develop Ohio City Farm — the largest contiguous urban farm in the nation. The nonprofit economic development organization leases the land for the farm at West 24th Street and Bridge Avenue, behind Cuyahoga Metropolitan Housing Authority’s Riverview Complex, from CMHA. Graham Ford Veysey, creative director of Ohio City Near West, said his group co-developed the project with The Refugee Response, which empowers local immigrants to become contributing members of society; restaurant operator and microbrewer Great Lakes Brewing Co.; and urban grower Central Roots, all of which license the land from Ohio City Near West. “This is a unique collaboration of
Story from www.CrainsCleveland.com.
New technology advances brain tumor removal
continued from PAGE 1
“Therefore, we’ll see a transition into smaller, more sustainable farming,” he said. Urban farming advocates such as Mr. McDermott say microfarms could play an important role in feeding Clevelanders in the future, but that securing financing, obtaining land and generating income aren’t easy. Nonetheless, a coalition of government and nonprofit organizations and other local food economy proponents are working to advance urban agriculture by easing land access, issuing grants and enhancing partnerships. “Farming can be financially sustainable,” Mr. McDermott said. “But we need more entrepreneurial farmers who are willing to take risks.” About five years ago, there were only five to 10 urban and suburban farm projects in Cuyahoga County, said Morgan Taggart, program specialist for OSU Extension — Cuyahoga County’s urban agriculture program. Now, there about 50 farm projects throughout the county. Their goal is to sell their own produce and other goods to local grocers, restaurants and consumers.
ON THE WEB
Matthew Pietro, a cofounder of the Central Roots urban farming initiative, kneels by the group’s temporary farm site at East 53rd Street and Stanard Avenue in Cleveland. Central Roots is working to develop vacant land at East 59th Street and Thackeray Avenue into a market garden, or for-profit farm, but soil contaminants have stalled some of those efforts. PHOTO PROVIDED
non-profit, for-profit and entrepreneurs who’ve all been catalysts behind this project,” Mr. Veysey said.The city of Cleveland’s economic development department has chipped in by issuing to the stakeholders Gardening for Greenbacks grants, which award recipients who make capital improvements to urban sites. Because banks’ lending requirements are so stringent and it’s hard for farmers to get small loans, creative financing and governmental partnerships will be a critical part of tilling blighted land for urban farms, according to Mr. Veysey. However, there should be a payoff for cities such as Cleveland, with an overabundance of idle property. “All this vacant land is in purgatory, but we have the opportunity to put it to productive use,” Mr. Veysey said.
Digging up problems Even with land, however, there are issues for would-be urban farmers. Todd Alexander discovered problems with lead in the soil of his Central Roots market garden project, an initiative that received this year a $20,000 grant through the city of Cleveland and Neighborhood Progress Inc. to develop vacant land into productive use. The Ohio Environmental Protection Agency conducted in spring soil samples, and when lead turned up in part of the two-acre plot at East 59th Street and Thackeray Avenue, the agency halted part of the project until further testing could be done. Lead contaminants are a problem at sites that used to house gas stations or other heavy industrial sites, though OSU Extension — Cuyahoga County’s Ms. Taggart said most urban agriculture projects target residential land.
Come together Even if small urban farms continue to grow and populate the region, local operations such as Mr. McDermott’s can’t stand alone without more support from the community. Residents within the 16-county Northeast Ohio region consume about $8 billion in food each year, but less than 2% of that consumption is of local food. The boost to Northeast Ohio’s economy could be significant with just a 1% increase in local food spending, industry advocates say. Many restaurants and even grocers are doing their part — clients who buy produce from the Ohio City farm alone include Ohio City Pasta, Side
Show at the West Side Market, Dante in Tremont and the Flying Fig in Ohio City. Still more buy products from farmers markets. Jeff Heinen, co-owner of the Heinen’s supermarket chain, said he buys food from more than 100 different local farming operations and would like to bolster that capacity as more farms come online. Even though small farms alone can’t meet the demands of a grocer that must supply 17 Northeast Ohio stores, perhaps adding more spokes to the wheel will keep food suppliers and distributors circulating their products locally as much as possible. “They could combine their deliveries,” Mr. Heinen said. “When I listen to small producers, logistics seems to be one of the biggest challenges.” ■
LAWS OF THE LAND Two pieces of legislation aimed at making the city more open to urban farming are moving through Cleveland City Council: ■ Amend the residential zoning district to allow for more food production and agricultural uses, and to let people set up stands to sell to their neighbors the produce they grow. ■ Establish an urban agriculture overlay district to permit more intensive and larger-scale farming operations. Morgan Taggart, program specialist for OSU Extension — Cuyahoga County, said she is meeting with officials in the next couple of weeks.
The Cleveland Clinic now is taking pictures of the brain under the knife. The health system has built a surgical suite in which physicians can use an MRI to scan the brain while they are removing a tumor, said Dr. Gene Barnett, director of the Clinic’s Brain Tumor and Neuro-Oncology Center. Doctors have been using various ways to scan the brain during surgery since the 1990s, but the pictures have always been “fair” at best, Dr. Barnett said. However, the machine used in the Clinic’s new operating room enables surgeons to get a better picture of the tumor they’re trying to remove, he said. As a result, physicians can make sure they’re removing as much of the tumor as possible before stitching the patient back up, Dr. Barnett said. Doing so hasn’t always been possible because the tumor looks just like healthy brain tissue and often is buried deep within the brain, he said. The brain also “sags and even flows” like liquid during surgery because it is reacting to the procedure, so the tumor moves as well, rendering MRIs taken before surgery useless, he said. “It’s virtually impossible to distinguish what is a tumor versus what is the brain,” Dr. Barnett said. “You’d be surprised how often there is a little bit more you would’ve liked to have gotten.”
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Type: Employer’s withholding Amount: $10,979
TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.
LIENS FILED Nationwide Protective Services Inc. 3459 W. 117th St., Cleveland ID: 31-1728391 Date filed: July 1, 2010 Type: Employer’s withholding Amount: $43,443 Ideastar Inc. 6161 Oak Tree Blvd., Independence ID: 34-1905764 Date filed: July 9, 2010 Type: Employer’s withholding Amount: $39,617 Automatic Stamp Products Inc. 1822 Columbus Road, Cleveland ID: 34-0665901 Date filed: July 7, 2010 Type: Employer’s withholding Amount: $32,477 Watsons Funeral Home Inc. 10913 Superior Ave., Cleveland ID: 34-0755005 Date filed: July 7, 2010 Type: Employer’s withholding Amount: $31,762 National Bias Fabric Co. 4516 St. Clair Ave., Cleveland ID: 34-0736356 Date filed: July 9, 2010 Type: Employer’s withholding Amount: $30,973 Loving and Giving Daycare Inc. 678 S. Green Road, Cleveland
The Fisher Executive MBA Work for a nonprofit organization? Want to earn your MBA? Apply for The Business of Good scholarship for nonprofit leaders. Thanks to The Business of Good, one scholarship is available in the Executive MBA program at Fisher College of Business for leaders and administrators of charitable nonprofit organizations. Eligible candidates must be employed by a not-for-profit, non-governmental 501(c) 3 charitable organization that provides direct social services. The Executive MBA program meets three consecutive days per month (always Thursday, Friday and Saturday) for 18-months on the Columbus campus.
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The Business of Good scholarship applications are due September 20, 2010. Learn more about application requirements at fisher.osu.edu/emba.
ID: 34-1832602 Date filed: July 9, 2010 Type: Employer’s withholding, unemployment Amount: $23,498 Kordiac Plumbing & Mechanical Co. 11010 Union Ave., Cleveland ID: 34-1808496 Date filed: July 7, 2010 Type: Employer’s withholding Amount: $23,251 Plastic Consultants Inc. 1388 Gladys Ave., Lakewood ID: 34-1338156 Date filed: July 7, 2010 Type: Corporate income Amount: $19,371 C & S Door Inc. 5639 Porter Road, North Olmsted ID: 20-4000968 Date filed: July 13, 2010 Type: Employer’s withholding Amount: $16,900 Peerlis Services Corp. 1301 E. Ninth St., Cleveland ID: 20-8401472 Date filed: July 7, 2010 Type: Employer’s withholding, unemployment Amount: $15,410 Auto World Wholesalers Inc. 11101 Lorain Ave., Cleveland ID: 34-1970158 Date filed: July 13, 2010 Type: Employer’s withholding, corporate income Amount: $14,333 NRC Management Inc. P.O. Box 32009, Euclid ID: 34-1960019 Date filed: July 9, 2010 Type: Employer’s withholding Amount: $14,285 Walters Family Dentistry 14100 Cedar Road, Suite 260, University Heights ID: 34-1824604 Date filed: July 7, 2010 Type: Employer’s withholding Amount: $13,318 Canvas Specialty Manufacturing Inc. 4045 St. Clair Ave., Cleveland ID: 34-0890218 Date filed: July 7, 2010 Type: Employer’s withholding Amount: $12,077 Musa Inc. 1023 Ansel Road, Cleveland ID: 34-1832633 Date filed: July 7, 2010 Type: Employer’s withholding, unemployment Amount: $11,715 MSK Business Solutions LLC 3411 Perkins Ave., Cleveland ID: 20-4984000 Date filed: July 7, 2010 Type: Employer’s withholding Amount: $11,550 Hastings Home Health Center Inc. 15210 Industrial Parkway, Cleveland ID: 34-1344019 Date filed: July 1, 2010 Type: Employer’s withholding Amount: $11,435 Thomas & Thomas IQC Corp. P.O. Box 43502, Cleveland ID: 86-1159542 Date filed: July 7, 2010 Type: Employer’s withholding Amount: $11,339 Expert Networking LLC P.O. Box 347262, Parma ID: 83-0408919 Date filed: July 7, 2010
Datavid Corp. 16820 E. Shoreland Ave., Rocky River ID: 34-1438821 Date filed: July 9, 2010 Type: Employer’s withholding Amount: $10,961 Euclid Foreign Motors Inc. 20020 St. Clair Ave., Cleveland ID: 34-1087596 Date filed: July 9, 2010 Type: Employer’s withholding, unemployment Amount: $10,908 Focus on Children Foundation 6880 W. Snowville Road, Suite 210, Brecksville ID: 20-1505673 Date filed: July 7, 2010 Type: Failure to file complete return Amount: $10,035 Accurate Instrument Service Co. 4228 W. 130th St., Cleveland ID: 34-1192678 Date filed: July 13, 2010 Type: Employer’s withholding Amount: $8,511 Signature Interiors Inc. 13275 Strathmore Drive, Valley View ID: 34-1881664 Date filed: July 7, 2010 Type: Employer’s withholding, failure to file complete return Amount: $8,226 Cross Ocean Associates Ltd. P.O. Box 181487, Cleveland Heights ID: 20-3524091 Date filed: July 7, 2010 Type: Partnership income Amount: $7,990 Warrensville Heights Animal Hospital Inc. 4003 Warrensville Center Road, Warrensville Heights ID: 34-1098332 Date filed: July 13, 2010 Type: Employer’s withholding Amount: $7,945 Giant Dollar Inc. 12805 Larchmere Blvd., Suite 3, Shaker Heights ID: 11-3648737 Date filed: July 1, 2010 Type: Failure to file complete return Amount: $6,619 Integrity Investigations LLC 16502 Detroit Ave., Lakewood ID: 20-1915641 Date filed: July 7, 2010 Type: Employer’s withholding, unemployment Amount: $5,682 Story Business Systems Inc. 15007 Shore Acres Drive, Cleveland ID: 34-1455676 Date filed: July 1, 2010 Type: Employer’s withholding Amount: $5,380
LIENS RELEASED Financial Healthcare Associates Inc. 20595 Lorain Road, Suite 200, Fairview Park ID: 20-2066015 Date filed: March 5, 2007 Date released: July 13, 2010 Type: Employer’s withholding Amount: $635,024 Forum Architectural Services LLC 1138 W. Ninth St., Suite 200, Cleveland ID: 26-3647659 Date filed: April 12, 2010 Date released: July 20, 2010 Type: Employer’s withholding Amount: $23,425
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GOING PLACES JOB CHANGES
BRIGHT SPOTS Perno and Steve Srmag to managers.
EDUCATION
LAKEFRONT PARTNERS LP: Lea E. Taft to operations associate.
BALDWIN-WALLACE COLLEGE: Greg Flanik to chief information officer.
NOVOGRADAC & COMPANY LLP: Christina Apostolidis to principal.
FINANCE
RETIREMENT SOLUTIONS: Steven Massari to associate financial consultant.
FIRST NATIONAL BANK OF PENNSYLVANIA: Andrew J. Olsen to vice president, commercial banking, Northeast Ohio.
HEALTH CARE
FIRSTMERIT CORP.: Eric N. Shaffer to president, Medina market.
METROHEALTH SYSTEM: Sherry Aronson to vice president, inpatient operations.
LAKE NATIONAL BANK: Andrew Meinhold to executive vice president, lending; Christine Hartog to senior vice president, operations; Eryn Medved, Tim Flenner and Denise Gelofsack to assistant vice presidents; Trish VanWinkle to assistant treasurer.
FINANCIAL SERVICE BC BASICS LTD.: Robert C. Lung to development director. CEDAR BROOK FINANCIAL PARTNERS LLC: Anthony Podojil to associate. COHEN & CO.: Katherine Henry to office manager; Eric Merkys to software developer. Maria Shinn-Bouck to director and Kristin Hornyak and Aya Ophir to health care consultants, Cohen Healthcare Consulting. FOCUSCFO: Larry Pitorak, Don Schilling and Tom Gentile to partners. GRANT THORNTON LLP: Eric Burdette, Patricia Clute, Mike Fanous, Eric Floriani, Sean Kelly, Max Krumpholz, Jim Makar, Jackie
AUGUST 30-SEPTEMBER 5, 2010
KEMPER HOUSE: Tracey Murphy to building administrator, Olmsted Falls.
MONTEFIORE: Dr. Mariel Ann Harris to medical director, palliative care and hospice; Dr. Amanda Tiffany Lathia and Dr. Barbara Messinger-Rapport to co-medical directors.
HOSPITALITY INTERCONTINENTAL SUITES HOTEL CLEVELAND: Neville Erasmus to executive assistant manager.
INSURANCE HOFFMAN GROUP: Chris Bohland to personal lines account manager. HYLANT GROUP: Don Bryant Jr. to vice president and client executive, environmental practice. NEACE LUKENS INSURANCE: Aaron Moore to employee benefits senior account executive. PROGRESSIVE BENEFITS AGENCY: Ronnie Marcelewski to account executive. USI INSURANCE: Drew Gray to benefits consultant.
Flanik
Shaffer
Taft
LEGAL TAROLLI, SUNDHEIM, COVELL & TUMMINO LLP: Anne Brown to partner.
MANUFACTURING MAIN STREET GOURMET: Brett Boyer to sales and marketing specialist. PIPE LINE DEVELOPMENT CO.: Pete Haburt to general sales manager.
MARKETING HILEMAN ENTERPRISES: Julia Finkelstein to business analyst. ROSENBERG ADVERTISING: Noelle Pangle to copywriter.
MEDIA CONTEMPO COMMUNICATIONS: Lisa Catalano to media coordinator.
BOARDS NORTH RIDGEVILLE CHAMBER OF COMMERCE: Sue Sawyers (Great Lakes Publishing) to chairman; Julie Cantrell to first vice chairman; Dana Novotny to program chairman; Amy Haven to visitors bureau chairman; Chris Teater to assistant treasurer; Jack Smith to treasurer.
Send information for Going Places to dhillyer@crain.com.
Bright Spots highlights positive business news in Northeast Ohio and are posted every week on the front page of our web site, www.CrainsCleveland.com. To submit information, please e-mail Scott Suttell at SSuttell@crain.com. ■ Cleveland marketing firm Adcom Communications Inc. has been named agency of record for The Lube Stop Inc. Adcom said it will work with Berea-based Lube Stop to enhance its brand strategy through media planning and buying, traditional advertising and digital marketing efforts. Lube Stop since 1985 has performed more than 8 million services for Northeast Ohio customers, which the company says makes it the largest independent quick oil change company in the state. “We’re excited to get a fresh set of eyes and a new perspective on our business, our customers and the Northeast Ohio market,” said Tom Morley, president of Lube Stop. ■ Kennametal Inc., a supplier of tooling, engineered components and advanced materials, this month received the Supplier of the Year award from Honda. The company said its Solon operation is the largest among several Kennametal sites that provide Honda with “custom tooling,
engineered solutions, continuous quality and proven cost savings.” Kennametal’s four plants in Ohio employ nearly 1,000 people. ■ Energy Focus Inc. of Solon said its research and development team was selected to receive a $1 million Phase II Department of Energy Small Business Innovation Research award to develop advanced coatings capable of enhancing the performance of both energy-efficient lighting and solar systems. “This project has a nice overlay for both our Intellitube and solar program efforts,” said Roger Buelow, chief technology officer of Energy Focus. “In the world of energy-efficient lighting, these kinds of coatings should allow us to increase efficiency of our LED lighting solutions 4% to 10% by applying a low-cost affordable coating versus an uncoated approach. Similar gains are possible in our high-performance solar systems.” Joseph Kaveski, CEO of Energy Focus, said the project “aligns well with our current efforts to develop next-generation, energy-efficient lighting and solar systems.” ■ First Federal of Lakewood said it has begun offering its customers a full line of personal and commercial insurance products through the establishment of FFL Insurance Agency LLC. The new agency began operations Aug. 3.
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17 NONPROFIT EXECS STILL COMMITTED AS FUNDS THIN.
CHANGING METHODS
With donors hard to find, a focus on current ones By CHUCK SODER csoder@crain.com
T
he days of “just asking people for checks” are over, according to Terry Davis. Nonprofits all across Northeast Ohio have changed the way they raise money over the past few years, largely because of two major forces: the recession and the growing popularity of social media and electronic marketing. Our Lady of the Wayside in Avon is among them, according to Mr. Davis, CEO of the group, which provides housing and services to people with developmental disabilities.
INSIDE: Profiling changes at Saint Luke’s Foundation and United Way of Summit County. Page 18 The organization decided to make some big changes three years ago when it started seeing a drop in donations from foundations, corporations and other major donors. It started spending more time meeting with and talking to donors. It helped them find other ways to get involved with the organization, such as by donating services instead of money. And it added some events, combined a few and lowered ticket prices. The result is that Our Lady of the Wayside now is projecting a surplus exceeding $180,000 for 2010. The group, which spends about $16 million each year, lost about $280,000 in 2009. “We are doing things that we never would have done if the economy didn’t take a turn for the worse,” Mr. Davis said. Officials from several Northeast Ohio nonprofits mentioned that they now are spending more time talking to their biggest donors, arguing that it’s easier to persuade them to keep giving than to bring on new donors. Among them is the American Red Cross of Greater Cleveland, which tries to contact regular donors several times per year and arranges multiple meetings with major donors, said CEO Mary-Alice Frank. “The economy has driven us to do more with the people who are close to us,” Ms. Frank said.
Getting facetime The Red Cross isn’t without tools to fight the effects of the recession. Lately the group has been using a metrics-based system to help figure out, for instance, how often it needs to speak with various donors and who it should ask See METHODS Page 16
CHANGING NEEDS
Many issues THE EVOLVING WORLD intensify amid brutal OF NONPROFITS recession
M
ission and money. The nonprofit sector can be boiled down to those two words — a simple, yet dangerous, combination during tumultuous economic times. Calculate in lightning-quick changes in technology and an evermounting list of needs, and those two words can equal a complicated philanthropic equation that’s
nearly impossible to solve. The answers have run the gamut, albeit with some common denominators. For those charged with leading Northeast Ohio’s nonprofit agencies, steadfast determination and a willingness to address changing needs and methods have become critical factors to staying grounded in a sector that’s continually in motion.
Combating poverty, hunger more difficult By JAY MILLER jmiller@crain.com
F
or most of its 36-year life, the organization Project: Learn organized and directed volunteers who, in one-on-one sessions, helped older Americans learn to read, mastering a life skill that had for whatever reason eluded them. Some just wanted to be able to sit with their grandchildren who wanted to hear about “The Cat in the Hat.” But now, said executive director Richard Peterson, his Cleveland-based nonprofit holds formal classes — some in jails — for young men and women in their late teens or 20s. These students want to improve their basic reading and math skills so they can pass the GED test that is the equivalent of a high school diploma and their ticket to a job or further education. Project: Learn also offers job placement and life skills programs in both one-onone tutoring lessons and small group classes. “What we do is too expensive for school districts and not everybody likes school,” Mr. Peterson said. “We never mention love of learning anymore.”
INSIDE: Profiling changes at the Cleveland Rape Crisis Center and the Hospice of the Western Reserve. Page 18 Nonprofits are changing, in part because of financial pressures, but also because their worlds are changing. “It goes to the core of what nonprofit organizations do,” said Thomas Schorgl, president and CEO of the Community Partnership for Arts and Culture, a Cleveland nonprofit that advocates for the arts in Northeast Ohio. “We’ve got to understand the needs of a public that is constantly changing.” So literacy can no longer be put off until a grandfather wants to be able to read to his grandchildren. Men and women no longer can find work without knowing how to read.
Same problems, new solutions There are some things that remain constant, said John Begala, executive director of the Center for Community Solutions, a Cleveland human services planning organization. “Poverty is no more or less devastating today than it has ever been,” Mr. See NEEDS Page 16
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Methods: Corporate giving down Needs: Arts programs continued from PAGE 15
to give more. And like many nonprofits, the Red Cross is using Facebook and Twitter to recruit donors. Those recruits may not give as much as more established donors, partly because they tend to be younger. Youth, however, can be a plus, given that the average Red Cross donor is 65 years old, Ms. Frank said. “You’re starting relationships with young people; a relationship with someone that you can cultivate over the long term,” Ms. Frank said. That’s the attitude to take with social media, said Tim McCormick, who helps nonprofits in Northeast Ohio and elsewhere raise money and make strategic decisions through his company, McCormick Consulting in Lorain. Donations through social media may be small now, but the tools can help nonprofits build a base of future donors, he said. “From that perspective, I think people are seeing a good return on their investment,” he said. Mr. McCormick noted that a lot of nonprofits in the region are focusing more on following up with existing donors. Some, he added, are focusing less on organizing events such as dinners and auctions, particularly because it is hard to find sponsors for events
during economic downturns. Koinonia Homes Inc. in Independence, however, has added to the number of special events it organizes, said Jody Curry, vice president of institutional advancement and communications. Over the past few years, the organization, which provides housing and support services to people with learning disabilities, has started events such as a downtown luncheon and a fundraiser walk at Whiskey Island called Walk for D.R.E.A.M.S. One goal of the events is to help Koinonia Homes bring on more corporate donors, Ms. Curry said. The organization, which is trying to fill a gap left by reduced Medicaid reimbursement rates, also is spending more time telling donors what their dollars have achieved, Ms. Curry said. “Stewardship is extremely important,” she said.
An uphill battle Corporate donors can’t give as much as they used to. Sheri Kellner knows that first hand: She joined the Leukemia & Lymphoma Society’s Northern Ohio Chapter only after being laid off from her position as an analyst in Key Bank’s information technology department in April 2009.
“This $4 million I’ve raised here ... will be the hardest $4 million I’ve ever raised.” – Susan Berger development and community relations director, Cleveland’s Positive Education Program That’s one reason why the society is focusing more on raising money from smaller companies in addition to larger corporations. Online tools have helped the group narrow the gap, said Ms. Kellner, campaign manager for the group’s annual Light the Night Walk. Giving through the society’s web site has been relatively strong, and social media tools help the group drive traffic to the site. For instance, the national organization has created a Facebook application specifically for its “Totally Baldacious” campaign, which encourages individuals and teams of fundraisers to shave their heads to show their support for cancer research. The app allows Facebook users to create and distribute “bald” pictures of themselves as a way of raising awareness of the event and the cause. “(Online giving) is something that just keeps growing,” she said. Still, challenges remain. Some donors are being more selective about to which groups they give money, said Susan Berger, development and community relations director for Cleveland’s Positive Education Program. A year ago, the organization lost one donor who decided to stop giving to educational programs for the time being. All the while, the organization is trying to raise $4 million that will help the group renovate a Fairview Park building that will house the Positive Education Program’s classes for students with developmental disabilities. The group has raised half of the money. Raising the rest won’t be easy, Ms. Berger said. “This $4 million I’ve raised here, in my 20-plus year career will be the hardest $4 million I’ve ever raised,” she said. ■
Home HealthCare
When Francine Evans sat down at Hospice to begin sewing her memory quilt, her own life seemed lost. After all, it was just a few days earlier that her daughter Jennie was laid to rest. At first, the sewing group was just something to take her mind off everything. But as Francine stitched the swatches of Jennie’s clothes, her life started to come together, too. She found herself talking. And smiling. And healing a little more each day. At Hospice, we provide many services, like the Fabrics & Feelings group, to help survivors cope. Because we believe that death is no reason to stop living.
Choosing the right home healthcare makes all the difference.
suffer as loyalty wanes continued from PAGE 15
Begala said. “The ability to intervene in the cycle of poverty is frustrating and will always be with us.” But, Mr. Begala said, some services are changing, if only because the need is expanding. He believes that the aging and retiring of the baby boomer generation will have a considerable impact on the nonprofit sector. He also cited the growing need for the services of food banks that began before the current recession. And it’s still growing. The volume of food distributed by Cleveland Foodbank Inc. has grown by 50% in the last two years, said president and CEO Anne Goodman. That, she said, has forced the nonprofit to find creative ways of getting food to the hungry in Northeast Ohio. The Cleveland Foodbank always has relied on a slow-to-build network of hunger centers operated by volunteers in church basements and other community centers, but last year it started the mobile food pantries program. Now it can deliver a three-day supply of food to residents in neighborhoods without an established hunger center. The trucks distributed during 2009 the equivalent of 138,000 meals. The mobile pantry program is an outgrowth of an earlier farmer’s market program, for which the food bank set up temporary fresh produce stands at hunger centers that didn’t have refrigeration to store perishable fruits and vegetables. “Hunger has always been serious,” Ms. Goodman said. “But now we need to move in an accelerated fashion.”
Getting creative Music and other cultural programs see a similar need to change the way they bring their programs to the community. Mr. Schorgl said he sees arts groups doing it through cooperation
Hospice Care
Home Assist™
among organizations. He said groups are beginning to market their programs together, sometimes around a holiday or festival theme. For example, the Cleveland Play House for its FusionFest brings together performances by a number of regional arts groups including GroundWorks DanceTheater, Verb Ballets and Karamu House. “It’s a collaboration around marketing,” Mr. Schorgl said. “More and more, organizations understand they don’t own their audience; individuals are less tied to organizations.” He said that younger generations have less loyalty to specific organizations, especially as arts programs in schools have gotten smaller. As a result, young people have less opportunity to develop an appreciation of a specific art form. “They’re cultural omnivores,” he said. The next step up from collaboration is consolidation and that, too, is beginning to happen. Of course, these moves have a financial impetus behind them as well. In a June 2010 survey of 7,000 public charities and private foundations, GuideStar — a nonprofit that gathers information about the sector — found that 8% consider their organizations to be “in imminent danger” of folding. And that changes programs as well. The Cleveland Play House is moving to space at Playhouse Square, for example, Mr. Schorgl said. And it will be joined by the Cleveland State University theater program, bringing hundreds of students into closer contact with the professionals at the Play House. Ms. Goodman, too, expects to see more collaboration among human service organizations. “Collaboration and consolidation is not a luxury but a responsibility,” she said. “If we can do something better (by working together) it’s our responsibility.” ■
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Nonprofit execs: Passion remains despite challenges As funding gets scarcer and demand rises, leaders still committed to charitable causes By DAN SHINGLER dshingler@crain.com
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hese are the times that test the worth of warm, fuzzy feelings. Folks in the nonprofit sector are working harder than ever just to maintain funding from a shrinking pool of resources, while the river of need for their services seems only to swell. But the executives who take on such challenges — generally for less pay than their for-profit counterparts — say they would not trade their roles with anyone, especially now when the need for their services is great. “It’s definitely challenging and difficult work,” said Joanne Federman, executive director of Family Connections of Northeast Ohio in Cleveland Heights and Shaker Heights. “But I’m passionate about the nonprofit sector; I couldn’t see myself in any other area. But we still have to run it like a business.” Family Connections works with parents and young children to improve parenting skills, childhood literacy and on other issues that make families and individuals succeed. Like other nonprofits, it’s operating in a difficult environment these days. In July, Family Connections merged with Heights Parent Center in the hopes the combined larger organization could go after more and larger grants. Funding has become tougher to come by, whether it’s from contracts to provide services to schools and other agencies, support from foundations, individual and corporate contributions or even governments. The usual sources of funding often are watching their own budgets in tough times — and they have more requests for money than ever. All the while, of course, the demand for services ranging from food and shelter to employment assistance is increasing. That
means there is tremendous pressure to keep up basic services — sometimes at the expense of other programs in a cruel form of social triage.
Sacrificial lambs At St. Malachi Center on Cleveland’s near West Side, showers still are offered five mornings a week for the homeless, mostly men, who rely on the facility for basic hygiene needs. Once a month, they still manage to provide a few clothing items, like new underwear, said Anita Branan, the center’s executive director. But other things have had to be cut, including some staff and the center’s Malachi Mart, which used to provide donated groceries and other items at a steep discount to the area’s poor. Those donations dried up, she said. With 30 years of working in nonprofits, Ms. Branan only is a little more than a year into her current job and said she’s already had to make painful and difficult decisions. “I had to make cuts and lay off staff. We had to cut programs. We just didn’t have any money,” she said. “It was really hard when the mart went. I kept hearing from people, ‘Can’t you do anything differently?’ For months afterwards people would say, ‘I don’t know how I’m going to feed my family,’ and you just die inside when you hear that.” Only a stimulus grant from the federal government has kept the center afloat for this long, she said, though with cuts and some new grants Ms. Branan said she’s now hopeful the center can continue. If you ask Ms. Branan why she does it, she seems to find the question surprising. “There’s a whole community here who needs some help,” she said. “If (the economy) is hurting me and our pocketbooks, what about the people who don’t have as
much as we do?” If there’s one thing that nonprofits have no shortage of these days, it’s clients, said John Klee, executive director of Catholic Charities in Cleveland. The region is no stranger to those in want, he said, but this time around the need is broader and deeper than in the past. “There’s definitely a greater unmet need than there was five years ago. Whatever you call this — a recession or a depression — it’s hitting a wider swath of folks,” Mr. Klee said. “It’s hitting folks from the innerring suburbs that you might not think of and even some of the suburbs.”
More than a job While increased needs stretch many agencies’ ability to help and presents greater challenges, it also seems to help drive many in the nonprofit sector to work even harder. “I just really believe in what nonprofits can do to change children’s lives, families and adults in the community,” said David Lundeen, CEO of the mental health agency Bridgeway and also of the Cleveland Christian Home, which serves children with adoption and behavioral health services. “I believe in that and it’s something that brings me to work every day.” It can require sacrifices, however. Last year when it became apparent that Mr. Lundeen’s agencies were going to have to make cuts, he stood at the front of the line to take his. “We decided everyone making over $50,000 would take a cut in pay, and I took the largest cut
because I wanted everyone to know we were serious about it,” he said. “This year,” he said, “we’re taking unpaid holidays.” Mr. Lundeen, like others in his position, isn’t all rosy. He warns, for instance, that nonprofit agencies that help local governments provide services can only be stretched so far without adequate funding or increases in what they can charge for services. Already, most have adopted very business-like practices for keeping
their organizations efficient and lean, he said. But, also like most in the sector, Mr. Lundeen says he couldn’t imagine doing anything else for a living. He’s been head of the Christian Home for 17 years, and has seen many a former resident come back to say thank you. “If it was just a business, where it was just a bottom line and the point was only to make money, I wouldn’t be happy,” Mr. Lundeen said. ■
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CHANGING NEEDS: HOSPICE OF THE WESTERN RESERVE
Foundation to target nursingâ&#x20AC;&#x2122;s staffing ills
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H
Nonprofit gets funding to expand number of educators The Cleveland Foundation typically doles out grant money, but this time around itâ&#x20AC;&#x2122;s receiving it. Partners Investing in Nursingâ&#x20AC;&#x2122;s Future, a national initiative aimed at advancing the nursing profession, awarded the foundation a two-year grant for $200,000 to address Ohioâ&#x20AC;&#x2122;s nursing shortage by expanding the number of nursing educators. The grant will be matched by $210,000 in local funding. The Cleveland Foundation was one of nine foundations throughout the country to receive the grant. â&#x20AC;&#x153;It was an unusual opportunity for us, but we saw it as a way of benefiting the community directly and the broader field,â&#x20AC;? said Kathy Hallissey, the foundationâ&#x20AC;&#x2122;s director of community responsive grantmaking. The idea behind the grant is to give nurses who might not be able to take the time to travel to teach a live class the opportunity to teach online. The Cleveland Foundation will partner with the Mt. Sinai Health Care Foundation and the nursing schools at Kent State and Cleveland State universities, as well as the University of Akron and Ursuline College in tackling the nursing shortages in Northeast Ohio. â&#x20AC;&#x201D; Timothy Magaw
he volunteers and staff for the United Way of Summit County have had to be more aggressive and entrepreneurial in soliciting donations and new accounts. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve been working on customer relationship management,â&#x20AC;? said Bob Kulinski, the organizationâ&#x20AC;&#x2122;s president. â&#x20AC;&#x153;We tell our staff, this is a customer service and sales job.â&#x20AC;? The United Way of Summit Countyâ&#x20AC;&#x2122;s annual fundraising campaigns have remained relatively flat during the teeth of the recession, even as the regionâ&#x20AC;&#x2122;s unemployment rate has risen from 5.4% in 2007 to the current level of 10.6%, he said. â&#x20AC;&#x153;I never thought in all the years Iâ&#x20AC;&#x2122;ve been with United Way that I would be satisfied with flat levels,â&#x20AC;? he said. â&#x20AC;&#x153;Flat is the new normal. The county has put forth heroic efforts.â&#x20AC;?
Nonprofits have struggled to raise money as donations and foundation support have dwindled and demand has increased. The fundraising and community service organization raised $10.95 million in 2009, a little less than $11.2 million in 2008 and down from $11.5 million in 2007. Its goal this year is $11.1 million. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re already trying to backfill the $100,000 we lost this year in foundation support,â&#x20AC;? Mr. Kulinski said. And even as companies big and small recover from the bad economy, Mr. Kulinski said several executives have expressed willingness to bolster fundraising efforts. â&#x20AC;&#x153;For the first time ever, we had a large dental supply company produce $20,000 toward United Way,â&#x20AC;? he said. â&#x20AC;&#x153;They all understand our needs.â&#x20AC;? â&#x20AC;&#x201D; Kathy Ames Carr
CHANGING METHODS: SAINT LUKEâ&#x20AC;&#x2122;S FOUNDATION
D
enise San Antonio Zeman, president and CEO of Saint Lukeâ&#x20AC;&#x2122;s Foundation, believes nonprofits need help telling their stories. To that end, the foundation created a new program this year that awarded to 10 nonprofits a total of $513,000 thatâ&#x20AC;&#x2122;s intended to advance their ability to tell their stories. Saint Lukeâ&#x20AC;&#x2122;s dedicated its secondquarter grant cycle to the first â&#x20AC;&#x153;Make It Stickâ&#x20AC;? program and in June awarded the nonprofits money to advance
one-year projects that range from using social media to brand development and market research. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re going to evaluate these projects next July, and look at how successful they are before we decide whether to continue the program,â&#x20AC;? said Kim St. John-Stevenson, communications director. The applicants were required to demonstrate that communications initiatives will help them better serve their populations and sustain their missions. The â&#x20AC;&#x153;Make It Stickâ&#x20AC;? grant recipients are: Project: Learn, Berea Childrenâ&#x20AC;&#x2122;s Home and Family Services, Partnership for a Safer Cleveland, Senior Outreach Services Inc., Habitat for Humanity, Boys & Girls Club of Cleveland, United Way of Greater Cleveland, Cleveland Rape Crisis Center, Friendly Inn Settlement Inc. and Cleveland Housing Network. â&#x20AC;&#x153;We plan to spotlight these projects in our 2010 annual report and our biannual meeting next August,â&#x20AC;? Ms. St. John-Stevenson said. According to Ms. St. John-Stevenson, St. Lukeâ&#x20AC;&#x2122;s net assets as of Dec. 31 were $179.2 million, higher than the $150.3 million it had as of Dec. 31, 2008, but below 2007â&#x20AC;&#x2122;s figure of $228.9 million. â&#x20AC;&#x201D;Kathy Ames Carr
ospice of Western Reserve staff members have found that personally handing to veterans a small pin of Ohio and thanking them for their service to the country has made a big difference. â&#x20AC;&#x153;For some veterans, itâ&#x20AC;&#x2122;s the first time in their lives someone has thanked them for serving their country,â&#x20AC;? said Beth Schindler, communications specialist. Ms. Schindler has been instrumental in orchestrating the Peaceful & Proud program, a personalized veterans service initiative launched in 2007 that educates hospice staff and volunteers about post-traumatic stress disorder, substance abuse and how veteransâ&#x20AC;&#x2122; military experiences have shaped their end-of-life preferences. The initiative has served more than 4,000 veterans since starting, and the nonprofit is preparing for an influx of Vietnam War veterans in about 10 years.
Staff members visit veterans, whether itâ&#x20AC;&#x2122;s at a private residence, nursing home or assisted living facility, to provide specialized hospice care. Services can include the use of war-area music therapy, perusal of old scrapbooks or documentation of the veteranâ&#x20AC;&#x2122;s war experiences. â&#x20AC;&#x153;It gives them the closure they need, and theyâ&#x20AC;&#x2122;re leaving something behind,â&#x20AC;? Ms. Schindler said. The Peaceful & Proud program has educated more than 850 paid staff members and more than 1,000 volunteers throughout hospiceâ&#x20AC;&#x2122;s 11 Northeast Ohio facilities located throughout Northeast Ohio. Hospice also is recruiting more veterans to serve as volunteers. Meanwhile, staffers are learning the differences between Vietnamera veterans and their WWII predecessors. â&#x20AC;&#x153;They came home to a different America,â&#x20AC;? Ms. Schindler said. â&#x20AC;&#x201D; Kathy Ames Carr
CHANGING NEEDS: CLEVELAND RAPE CRISIS CENTER
T
he number of hotline calls to the Cleveland Rape Crisis Center increased by 19% between January and June 2010 compared with the like period in 2009. The increase is likely the result of the general publicity the agency recently has received, particularly amid the case surrounding suspected serial killer Anthony Sowell. Sowell, 50, is accused of killing 11 women whose remains were found at his home on Imperial Avenue in Cleveland. Even with the increase in calls, the Cleveland Rape Crisis Center this year eliminated its waiting list for counseling and therapy services for the first time in the nine years Megan Oâ&#x20AC;&#x2122;Bryan has been a part of the organization. The nonprofit through the American Recovery and Reinvestment Act was able to add 10 temporary direct-service positions to bring to 27 the total number of employees at its office, thereby eliminating its waiting list that was 75 individuals deep one year ago.
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Ms. Oâ&#x20AC;&#x2122;Bryan, president and CEO, said because of the additional staffing, the organization was able to increase by 47% the number of people receiving individual and group therapy services between the first half of 2009 compared with the first six months of 2010. The organization also increased the number of school-based education and prevention programs by 70% and the number of professional training programs by 25%. â&#x20AC;&#x153;This shows the great demand that exists for these programs for both rape survivors and the community,â&#x20AC;? she said. Ms. Oâ&#x20AC;&#x2122;Bryan said the Cleveland Rape Crisis Center is assessing how to expand its services beyond Cuyahoga County into surrounding underserved counties, even when those temporary therapy, advocacy and hotline service positions expire by the end of 2011. â&#x20AC;&#x153;We would like to establish satellite officesâ&#x20AC;? and work with law enforcement, health care and domestic violence help centers, she said. In 2001, the center served 10,000 individuals and by the end of this year is on track to serve 20,000. During that time, the Cleveland Rape Crisis Centerâ&#x20AC;&#x2122;s budget has increased from $750,000 to $1.6 million. â&#x20AC;&#x201D; Kathy Ames Carr
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19
LARGEST CONFERENCE CENTERS RANKED BY MEETING SPACE
Name Address Rank Phone/Web site
Meeting space (square feet)
Room capacity (range)
Number of meeting rooms
Number of 2009 business events
Other business services
Event contact Phone number
1
Cleveland Convention Center(1) 500 Lakeside Ave., Cleveland 44114 (216) 348-2200/www.city.cleveland.oh.us
124,068
50-10,000
29
NA
Executive Caterers banquet service, electric, water, gas, telephone, compressed air, stage and sound service, in-house security service
Terry O'Brien Susie Claytor (216) 348-2211
2
International Exposition Center (I-X Center) One I-X Center Drive, Cleveland 44135 (216) 265-2549/www.ixcenter.com
111,279
40-1,200
27
12
All services provided in-house: catering, general contracting, decorating, A/V services, graphic design and sign shop, ExpoTron outdoor video sign
John J. O'Brien (216) 265-5673
3
Kalahari Resort & Convention Center(1) 7000 Kalahari Drive, Sandusky 44870 (877) 642-6847/www.kalahariresorts.com
95,000
12-2,200
26
NA
Full-service 884-room destination conference and waterpark resort, convention center, team building, executive and business center, free self-parking, shops and spa.
Maris Brenner (419) 433-3140
4
LCCC Conferencing 1005 N. Abbe Road, Elyria 44035 (440) 366-4100/www.spitzerconferencecenter.com
92,473
5-350
30
NA
Wi-fi, AV capabilities, high-speed Internet, video conferencing, ARS systems, satellite downlink system, video-recording, white boards, data Debbie Jancsura projectors, smart rooms, DVD capabilities, document cameras (440) 366-7824 available
5
PlayhouseSquare Center 1501 Euclid Ave., Suite 200, Cleveland 44115 (216) 771-4444/www.playhousesquare.org
82,000
25-900
12
50
Auditorium seating for 180-3,000, grand theatrical lobbies, satellite teleconference capabilities, catering by Sammy's
Jordan Davis (216) 348-5274
6
Renaissance Cleveland Hotel 24 Public Square, Cleveland 44113 (216) 696-5600/www.renaissancecleveland.com
62,000
8-2,950
33
NA
Executive boardrooms, AV services, business center, high-speed Internet, event service professionals, 22,000-square-foot Grand Ballroom
Lan Ta
7
Arden Shisler Conference Center 1625 Wilson Road, Campus of OSU/OARDC, Wooster 44691 (330) 287-1486/www.shislercenter.com
60,000
500
14
NA
Complete meeting package, ergonomic furniture, communications technology, business office, dedicated conference planners, complete catering services
Hannah Roscoe-Metzger (330) 287-1424
8
John S. Knight Center 77 E. Mill St., Akron 44308 (330) 374-8900/www.johnsknightcenter.org
53,400
2-3,000
16
174
Sound system, stage, in-house culinary department and services, audiovisual and video conferencing, satellite downlinks, wireless Internet, Dirk M. Breiding video streaming
9
E. J. Thomas Hall-The University of Akron(1) 198 Hill St., Akron 44325 (330) 972-6573/www.ejthomashall.com
52,000
2,925
1
NA
Lobby display areas
Cynthia A. Hollis
10
House of Blues 308 Euclid Ave., Cleveland 44114 (216) 274-3326/www.houseofblues.com/specialevents
45,000
10-3,000
10
NA
Catering, dining, entertainment, corporate gifts
Julie Woyma (216) 274-3326
11
Wolstein Center 2000 Prospect Ave., Cleveland 44115 (216) 687-9292/www.wolsteincenter.com
43,676
20-2,000
10
175
Conference center and Grand Ballroom space, AV services, Internet, catering, parking and outdoor marquee to display upcoming events
Courtney Fidler (216) 687-5239
12
Corporate College East 4400 Richmond Road, Warrensville Heights 44128 (216) 987-2800/www.corporatecollege.com
35,300
10-330
27
NA
Conference, training and meeting rooms with flexible seating arrangements. Free wi-fi, video conferencing and teleconferencing capabilities, on-site AV services, tradeshow and vendor exhibit area
Amy M. Janos
13
InterContinental Hotel & Conference Center 9801 Carnegie Ave., Cleveland 44106 (216) 707-4100/www.intercontinentalcleveland.com
35,000
10-1,000
13
NA
Award winning Table 45 for lunch and dinner, Northcoast Cafe for breakfast and lunch, 24-hour room service, business center and fitness Scott Gerlach center, 500-seat amphitheater, grand ballroom seating up to 720 (216) 707-4181 people
13
Kent State University Conference Bureau P.O. Box 5190, Kent 44242 (330) 672-3161/www.kent.edu
35,000
10-5,000
32
50
AV services, food service, summer housing, Internet, recreation center, NA gymnasium, fashion museum
15
Quaker Square Inn at the University of Akron 135 S. Broadway, Akron 44325 (330) 972-7266/www.uakron.edu
28,103
1-1,000
12
260
Wireless Internet, hotel accommodations, restaurant, attached shopping mall
Lisa Showalter (330) 972-7266
16
Crowne Plaza Cleveland City Centre Hotel 777 St. Clair Ave. N.E., Cleveland 44114 (216) 771-7600/www.clevelanddowntownhotel.com
28,000
2-1,100
20
NA
Complimentary high-speed Internet in all guest rooms, on-site AV center, teleconferencing, catered events, business center, Enterprise car rental
Stephanie Irelan
16
Executive Caterers at Landerhaven 6111 Landerhaven Drive, Mayfield Heights 44124 (440) 449-0700/www.executivecaterers.com
28,000
50-1,200
7
1,300
Full-service catering facility, indoor and outdoor spaces, decor and floral division, wi-fi, AV, high-speed Internet, complementary valet parking, adjacent hotel, unique culinary creations
NA
18
LaCentre Conference & Banquet Facility 25777 Detroit Road, Westlake 44145 (440) 250-2000/www.lacentre.com
26,000
10-1,000
9
400
Video projection, production and audio systems operated by in-house professionals, executive board room, catering and event planning
David Leffew (440) 250-4180
19
John Carroll University 20700 North Park Blvd., University Heights 44118 (216) 397-1886/www.jcu.edu
24,548
40-1,000
11
NA
Wireless Internet campus wide, AV services, high-speed Internet, food service
Carol Dietz (216) 397-4314
20
Ritz-Carlton, Cleveland 1515 W. Third St., Cleveland 44113 (216) 623-1300/www.ritzcarlton.com
24,466
2-450
12
NA
AV equipment, shipping and receiving services, business center, wireless Internet, customized menus, business and meeting supplies, security, Community Team Building Activities - Community Footprints
Theresa Hahn (216) 902-5220
21
The University Center, Kent State University at Stark 6000 Frank Ave. NW, North Canton 44720 (330) 244-3300/www.youruniversitycenter.com
24,200
10-600
14
NA
Extensive technological resources and professional services, a distraction-free environment for corporate meetings, training, videoconferencing, trade shows and professional conferences
Becky DeHart Janet Capocci
22
Quicken Loans Arena 1 Center Court, Cleveland 44115 (216) 420-2000/www.theqarena.com
24,000
10-20,000
8
NA
AV services, Internet access, video conferencing, in-house food and beverage service
Shari Lindenbaum (216) 420-2157
23
Cleveland Campuses of Indiana Wesleyan University 4100 Rockside Road, Independence 44131 (216) 525-6160/http://cleveland.indwes.edu
23,000
1-125
27
NA
Wi-fi, AV capabilities, catering, outside food allowed, copy/fax, classroom and meeting spaces
Vaso Suhodolsky (216) 525-6160
23
Sheraton Suites Akron/Cuyahoga Falls 1989 Front St., Cuyahoga Falls 44221 (330) 929-3000/www.sheratonakron.com
23,000
2-500
14
NA
High-speed Internet, riverside meeting rooms, full-service catering, outdoor event options
Deborah Smith
25
Corporate College West 25425 Center Ridge Road, Westlake 44145 (216) 987-2800/www.corporatecollege.com
22,900
10-75
13
NA
Variety of training and meeting rooms in a professional suburban setting, free wi-fi, video conferencing, DVD, CD, VHS, Sammy's Catering, Java City Coffee Shop and concierge staff
Amy M. Janos
26
NEOUCOM Conference & Event Center 4209 state Route 44, Rootstown 44272 (330) 325-6850/www.neoucom.edu/conf
22,000
5-400
11
750
Wi-fi, high-speed Internet, free at-the-door parking, AV services, in-house Dawn Hull food and beverage service (330) 325-6852
27
Hilton Garden Inn Cleveland Downtown 1100 Carnegie Ave., Cleveland 44115 (216) 658-6400/www.clevelanddowntown.stayhgi.com
20,000
10-500
14
NA
Wired and wireless high-speed Internet, two business centers, on-site AV services
Marcia Krumheuer (216) 373-3806
27
Sheraton Cleveland Airport Hotel 5300 Riverside Drive, Cleveland 44135 (216) 267-1500/www.clevelandairportsheraton.com
20,000
1-400
15
NA
Newly renovated, free parking, free Internet in guest rooms, rental car delivery service, remote hotel check in desk at airport, comprehensive fitness center
Cindy Perkins
29
Holiday Inn Cleveland South/Independence 6001 Rockside Road, Independence 44131 (216) 524-8050/www.hiindependence.com
18,100
1,000
18
NA
Wireless Internet, full-service restaurant, business center, AV services, airport shuttle, ATM, fitness center, swimming pool, sauna
Laura Surace (216) 264-2606
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. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Information is from the 2009 Conference Center list.
RESEARCHED BY Deborah W. Hillyer
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Chancellor: For-profit school’s leader disputes account of key conversation continued from PAGE 1
with some of its contents in her Aug. 19 letter to Mr. Daugherty. “I am writing to express my deep concern about this letter,” stated Dr. Manning, who went on to say she was “particularly concerned about your characterization of Bob’s opinions regarding Chancellor’s level of progress and the possible outcome of the visit in January 2011.” The latter reference is to a planned visit by an evaluation team of the commission. Dr. Manning noted that the Higher Learning Commission “has not made any determination with regard to Chancellor’s progress and no inference about the progress or the final determination should be made by anyone affiliated with the university.” “Those who are less familiar with the accreditation process may infer from your letter that the Commission has made a determination that Chancellor is making good progress in addressing the concerns that led to the Show-Cause action and that it is reasonable to expect a positive outcome in January,” Dr. Manning wrote. “It is essential that the university community has a realistic understanding of the potential consequences of the upcoming review and it is the university’s responsibility to ensure that understanding.”
Differences of opinion Chancellor must present its case for maintaining its accreditation in a report delivered to the commission by Dec. 1. The commission then will assign an evaluation team of educators to validate the contents of the report, and the commission’s board of trustees will decide at its February 2011 meeting whether to continue or withdraw Chancellor’s accreditation. Besides addressing the accreditation issue, Dr. Manning wrote in her Aug. 19 letter that Dr. Appleson’s “only issue with the way in which he was quoted” in the Crain’s Aug. 16 story “was that two of his responses were truncated, thereby providing an incomplete rendering of the answers he actually gave the reporter.” “He conveyed this observation to our staff when the article first appeared and he has consistently affirmed this position in later conversations,” Dr. Manning told Mr. Daugherty in the letter. “Bob’s unaware of anything in his conversation with you that could have been interpreted as saying that the reporter lied to him.” Mr. Daugherty talked to Crain’s last Wednesday, Aug. 25, as he returned a call Crain’s had placed to Jack Welch. Mr. Welch is the former General Electric Co. CEO who has invested in Chancellor and is the force behind its new Jack Welch Management Institute, an online graduate business program that began offering courses last January. Asked during the phone call about the rebuke from Dr. Manning, Mr. Daugherty said, “Neither (Dr. Manning nor Dr. Appleson) vote on whether Chancellor is accredited.” Mr. Daugherty also challenged Dr. Appleson’s version of the conver-
sation the two had, as portrayed in Dr. Manning’s letter. After Mr. Daugherty was read key excerpts from Dr. Manning’s letter relating to Dr. Appleson, he said, “What I’m suggesting is (Dr. Appleson) needs to refresh his memory.” Asked further about his criticisms of the Aug. 16 Crain’s story, Mr. Daugherty described it as old news. “I’m surprised at why you would you be reporting a story that is nine months old,” he said.
Meeting postponed Crain’s editor Mark Dodosh said Chancellor officials as yet have not provided Crain’s with specific examples of erroneous information in the Aug. 16 story, though they have been offered the opportunity to do so. Mr. Dodosh said Chancellor officials, including Mr. Daugherty, and Crain’s representatives were scheduled to meet this Tuesday, Aug. 31, to discuss the story. However, Chancellor executive director of human resources Catherine Nita e-mailed last Thursday to say Chancellor needed to reschedule the meeting “due to scheduling conflicts.” Mr. Daugherty declined to talk to Shannon Mortland, who was Crain’s education reporter at the time, about Chancellor’s operations for the Aug. 16 story. However, he did take issue in the Aug. 25 phone conversation with a reference to himself in that story.
The university had made regular interest payments on the mortgage, according to Port Authority chief financial officer Brent Leslie, but it was obligated to pay the loan off by Aug. 21. Chancellor proposed instead to the Port Authority that the university turn over title to the agency by Dec. 31 and make payments to the agency totaling $500,000 by the end of the year, plus issue the port a $500,000 note payable over five years. Mr. Daugherty said the decision to give back the building was a business decision. “We’re looking to move to a new building,” he said. “We think we can find a better building.”
‘On the right path’ Losing accreditation would be a blow to Chancellor, which two years ago as Myers University was near collapse. It was saved by a $5.25 million sale to an investment group led by Significant Partners LLC of Solana Beach, Calif., an investment firm specializing in taking over struggling nonprofit colleges and reincorporating them as for-profit institutions. Without accreditation, students would not be eligible for federal student aid — and 70% of Chancellor’s students received federal loans in the 2008-2009 school year, according to information from the U.S. Department of Education. In the meantime, Chancellor
“It is essential that the university community has a realistic understanding of the potential consequences of the upcoming review and it is the university’s responsibility to ensure that understanding.” – Sylvia Manning, president, Higher Learning Commission, in an Aug. 19 letter to Chancellor University president Robert Daugherty According to Mr. Daugherty, he did not describe himself as a consultant to Chancellor during a brief conversation with Ms. Mortland, as she wrote in the Aug. 16 story, but rather identified himself as Chancellor’s full-time president. The story further referred to him as chairman and managing partner of Knowledge Investment Partners, a Cleveland investment firm, as he was described on Knowledge Investment’s web site. Mr. Daugherty said last week that Knowledge Investment Partners is inactive. A visit to the Knowledge Investment web site last week found a single page with the announcement that, “The KIPLP website is in the process of being updated.” However, the return telephone number Mr. Daugherty left with a Crain’s reporter last week is not a university number but the number listed for Knowledge Investment Partners on its web site.
Moving time Mr. Daugherty last week discounted any negative consequences of Chancellor’s recent decision to relinquish the title to its home at East 40th Street and Chester Avenue to the Cleveland-Cuyahoga County Port Authority, which held a $2.25 million mortgage on the building.
officials are pressing on. Steve Kerr, executive director of the Jack Welch Management Institute and a longtime colleague of Mr. Welch, said the institute is in a transition period at the moment and is looking to acquire more faculty members. Still, he said courses have been steadily offered since the program launched in January. “It’s in the works, but I wouldn’t be ashamed if people look at it now,” Mr. Kerr said of the online course offerings. The institute’s launch was delayed when, in August 2009, Mr. Welch was hospitalized with a serious spinal infection. As for the “show-cause” order from the Higher Learning Commission, Mr. Kerr said, “Nobody loves being under the magnifying glass, but they’re helping us be focused more than we would be.” He said the commission’s criteria for accreditation are what any “sound leadership would require.” Darius Navran, dean of Chancellor’s College of Professional Studies, said he is hopeful. “Everybody is confident we’re on the right path and the processes we have in place should not result in us losing accreditation,” Mr. Navran said. “We’re taking a lot of significant steps we hadn’t been taking in the past.” ■
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with operations in Canada, Latin America and Australia. Last year, Cliffs became a component of the S&P 500 stock index, and this year Bloomberg BusinessWeek’s list of the top 50 companies in the S&P 500 put Cliffs at No. 9 among all S&P companies in terms of its total five-year return for investors. That return was 309%; during that same five-year period, which ended last March 31, the Dow Jones Industrial Average gained only 5.8%. “We were ahead of Amazon, ahead of Google and ahead of McDonalds,” Mr. Baisden said. “I’m pretty proud of that accomplishment.” And Cliffs isn’t slowing down, either. “We’ve probably done a billion dollars of M&A deals just this year,” Mr. Baisden said, ticking off a list of transactions that includes $757 million for a major coal mining operation in West Virginia and millions more for chromite deposits in eastern Canada.
An attention-grabber Unfortunately for Cliffs, most of its local operations are invisible. They entail men and women in suits pushing pens and keyboard buttons, rather than in cover-alls and helmets moving thousands of tons of earth — or in shorts and tank tops moving a basketball up and down a court. The ad Cliffs is using in its corporate identity campaign likely will click with any Clevelander who
sees it. It’s a black-and-white photograph of a miner, his headlamp illuminating what looks like talcum powder in the dark above him and his arms outstretched, palms up. On first glance, it looks remarkably like the “Witness” banner that stood across the street from Quicken Loans Arena, when Mr. James was a Cleveland hero. But this miner hardly looks able to dunk, given all the gear he’s wearing. The ad reads: “Witness … A top performer that hasn’t left in 163 years.” It then lists just a few of Cliffs’ recent national accolades. “They said, ‘Show me something that’s really going to get attention,’” said Pat Gallagher, senior vice president of Fahlgren Mortine Public Relations, which developed the ad for Cliffs. Mr. Gallagher said his client has a great story to tell, but too few people have heard it. “In Cliffs’ case, they have really changed so much in the last five or so years,” Mr. Gallagher said. “People who remember Cleveland-Cliffs (the company’s name until 2008) and might associate it with the Mather ship. That’s part of history. But they’ve become a major player on the global stage. In terms of market cap, they’re the fifth- largest company in Northeast Ohio now.” Branding or so-called “image advertising” like the kind that Cliffs is undertaking is not as common as it once was, said Joe Mosbrook, director of strategic communications at Cleveland State University.
“I think most people are doing campaigns with specific objectives in mind, to reach specific goals, as opposed to general brand awareness, especially when budgets are so tight like they are now,” Mr. Mosbrook said.
Bulking up downtown Cliffs won’t say how much it’s spending on the ads, beyond confirming that it’s a “multiplehundred-thousand-dollar campaign.” Mr. Baisden concedes that’s a little unusual for a company with only one customer here — ArcelorMittal — and no other local prospects to court for its iron-ore business. So why do it? The ad itself might be a bit of a clue. Cliffs needs bench strength, Mr. Baisden said, and wants to raise awareness of its recent success so potential new hires will be familiar with Cliffs and attracted to work there. The company’s employment in downtown Cleveland at 200 Public Square has increased to 225 today from 94 in 2006. With the empire continuing to expand, Cliffs is bound to need more people to help run it in the future, Mr. Baisden said. It also wants greater visibility and a voice in local affairs. But no, it’s not planning to apply for any tax abatements, he said. “We’re getting to be the size of a company where we need to continue to develop our presence in town as sort of a thought leader on business and the economy in Cleveland,” Mr. Baisden said. ■
Fedeli: LNB has high earnings potential continued from PAGE 3
them out of fairness to LNB officials. Attempts last week to reach LNB board members and executives, including CEO Daniel Klimas, were unsuccessful. Mr. Fedeli said he respects how Lorain National Bank has navigated fairly well in an environment in which many small community banks have not. The bank — which along with its Morgan Bank division operates 23 retail locations in four counties — is profitable, he said. This month, LNB reported that its second-quarter net income had more than doubled. Net income for the quarter that ended June 30 was $1.24 million, or 12 cents per diluted share, compared with earnings of $516,000, or 3 cents a share, for the like period a year ago. For the first six months of 2010, net income was $2.57 million, or 26 cents a share, up 40% from $1.83 million, or 17 cents a share, for the 2009 first half. “Now, is there room for improvement? Sure,” Mr. Fedeli said. Earnings potential and efficiency ratio are two areas he identified.
Not inclined to sit back When he acquired a more than 5% stake in LNB this summer, Mr. Fedeli filed required paperwork with the SEC. In the July 29 filing, he asserted that the number of board members should be reduced and that the company must review long-term growth options, such as a potential merger with another local bank. Fourteen board members, he explained last week, is too many and creates difficulties for manage-
ment. This is not the first time an LNB shareholder has called for change: In 2007, investor and Mentor real estate developer Richard M. Osborne and a business partner sought a seat or two on the LNB board and criticized the bank’s performance. This also is not the first time Mr. Fedeli has advocated change to a bank in which he’s invested. In the case of PVF Capital Corp., Mr. Fedeli said he had asked for years for management to present its plan for the future of Park View Federal Savings Bank. Finally, in July 2008, he filed paperwork with the SEC in which he asked to be nominated to the PVF board. At the time, Mr. Fedeli criticized Park View for being poorly run and hemorrhaging money. Mr. Fedeli said last week he was nominated to the PVF board on “friendly” terms and now is in his second year as a member. The board dropped to eight members from 14 after some existing members resigned. Mr. Fedeli said he owns a 9.9% stake in PVF, which makes him the single largest individual shareholder. Park View Federal, he said, has written off tens of millions of dollars in bad loans, recruited strong, promising executives and raised millions in capital in the past year or so. In the past 15 to 20 years, Mr. Fedeli said, he’s invested in dozens of community banks and significantly in seven or eight. Only in the Park View case, he said, did he become an activist shareholder. “I’m not an activist,” Mr. Fedeli said. “I’m really an investor. But I had
to get involved. I feel that if we had not gotten involved, it would not have been a good ending. Park View could have been another statistic.”
Apples and oranges? It’s premature, Mr. Fedeli said, to draw parallels between what happened with Park View and what’s happening with LNB. “I can’t say this is parallel today,” he said. “I think a lot of it depends on them. I’m happy to be a happy, passive investor, but I also have never had a problem with doing the right thing for the right reason. “If I feel that (LNB) management is moving in the right direction with the right people … the right plan, then I’m happy to be a passive investor,” he explained. “My hope is that they share a great plan and demonstrate their ability to continually make improvements.” In the month since his SEC filing, Mr. Fedeli said he has increased his number of LNB shares by more than 15,000 to about 400,000, which represents less than 6% stake. He said he has bought LNB’s stock because it has tremendous value now and tremendous value considering its potential future earnings. As for Park View, Mr. Fedeli is confident the bank is headed in the right direction. After focusing primarily on savings and loans in the past, Park View, which has 17 branches in Northeast Ohio, is working to diversify its services, including its loans and deposit mix, said president and CEO Bob King. “We’re moving forward,” he said. “We’re making progress.” ■
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Packaging in Piqua for filling. The company previously received investments of undisclosed size from Mercer Landmark Inc., an investment vehicle owned by a coalition of farmers from western Ohio, and the Heartland Agdeavor Association, a Columbus nonprofit that invests in agriculture-related businesses. The Ohio Soybean Council also has helped connect Ms. Horton with Ohio farmers, who supply much of the soy oil for the company’s products, said Rocky Black, director of bioproduct utilization and outreach for the Ohio Soybean Council. Mr. Black described Nutek as “the
Contact: Phone: Fax: E-mail:
Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com
IT companies remain confident, though optimism wanes a bit
ultimate example” of a bioproducts success story in Ohio. He noted that the company in just three years was able to get its product into major retailers and win a spot in U.S. Department of Agriculture’s BioPreferred program, which gives the company an advantage when it comes to selling to federal agencies and contractors. He also lauded Ms. Horton’s entrepreneurial skills, and how Nutek works with so many Ohio suppliers and farmers. “If we had 10 more companies like her in Ohio, we would have a thriving bioproducts industry,” he said. ■
Northeast Ohio’s information technology companies are pretty confident about their prospects — just not as confident as they were during the first quarter. Those reporting that business is good dropped from the first quarter to the second quarter, and they are starting to show less enthusiasm about the future, according to the Northeast Ohio Software Association’s second-quarter survey. Still, the numbers are better than they used to be: 61% of respondents said business was “good” or “very good” during the second quarter, whereas that figure roamed in the
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tions down, according to a summary included with NEOSA’s statistics. The survey also suggests hiring might be slowing among IT companies. Thirty-seven percent of respondents said they are not hiring, which is up from 29%. However, the secondquarter figure is on par with the like quarter in 2009, and it’s significantly better than numbers from the third and fourth quarters of 2009. Also, 57% of respondents are planning to increase staff over the next 12 months, which is down from 61% in the first quarter and up from 49% during the like quarter in 2009. — Chuck Soder
ON THE WEB Story from www.CrainsCleveland.com. 45% to 55% range through much of 2009. However, that number stood at 66% in the first quarter, though at that time a few more IT companies were reporting that business was “bad” and “very bad.” Respondents have lower expectations for the coming year: 76% expect business to be better, compared with 87% during the first quarter. Recent news reports describing “a lingering recession and less-thanstellar recovery period” might have helped push IT businesses’ expecta-
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THEINSIDER
THEWEEK
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
AUGUST 23 - 29
Encouraging words on the NASA Glenn front
The big story: Squire, Sanders & Dempsey
■ It sounds so grand: Under President Barack Obama’s space exploration plans, NASA Glenn Research Center will lead two of the federal agency’s technology programs that are expected to account for more than $2 billion in spending over the next five years. Those leadership roles, however, may translate into only a “relatively small” number of jobs should Congress approve Mr. Obama’s plan, said Robert Braun, NASA’s chief technologist, who visited the NASA Glenn campus last week. Mr. Braun expects NASA Glenn, which employs about 3,500 government and contract workers, to allot fewer than 40 people to the management of the Exploration Technology Development and Demonstration Program and the Space Technology Research Grants Program. What will matter more is whether NASA Glenn wins its share of contracts from those programs and others managed by other NASA centers, Mr. Braun said. And, like center director Ramon Lugo — and, reportedly, NASA administrator Charles Bolden — Mr. Braun said he thinks NASA Glenn’s focus on technology research will make the center particularly competitive in winning contracts. “It’s likely that Glenn … will be well served,” Mr. Braun said. — Chuck Soder
LLP said it’s pursuing a merger with a company based in the United Kingdom to create a law firm with expanded global reach. Squire Sanders is in talks with Hammonds LLP, a leading commercial law firm that has 10 offices in six countries and employs more than 1,000 people. Squire Sanders has 32 offices in 15 countries. If the companies merge, the combined firm would be among the top 50 global law firms by revenue with projected annual revenues of more than $625 million. It would have 37 offices in 17 countries and about 1,300 lawyers.
We’re the tops:
Ohio secured $400 million of federal money in the second round of the Obama administration’s Race to the Top program, which provides financial support to schools that plan to undergo ambitious reforms to bolster student achievement. Ohio didn’t secure any funds in the first round of the program. This time around, however, the state was one of 10 finalists to win a share of the $4.35 billion pot, which will be doled out over the next four years. See editorial, Page 10.
Improving their image: ViewRay Inc. of Oakwood Village, a medical imaging company that moved to Northeast Ohio from Florida two years ago, secured a $20 million investment led by Siemens Venture Capital Gmbh. ViewRay will use the money to move its technology from the late stages of development to the market. The company is developing a product called the Renaissance System 1000 that uses magnetic resonance imaging in an effort to improve the accuracy of radiation used to kill cancerous tissue. The system initially will be used for nonclinical research at BarnesJewish Hospital at Washington University Medical Center in St. Louis.
Your stomach may spin, too: Cedar Point made official what had been rumored in recent weeks — that the amusement park in Sandusky next summer will introduce a 30-story-tall swing ride that takes thrill-seekers above the Lake Erie shoreline. The new ride, WindSeeker, is a planned, 301-foot-tall tower that will spin riders well above the park. Seated in two-person swings that will allow their feet to dangle, riders will slowly begin rotating in a circular motion as the swings ascend the tower. At the top, the swings will reach speeds of up to 30 miles per hour, flaring out almost 45 degrees from the tower.
Micro managers: Parker Hannifin Corp. acquired Micro Thermo Technologies of Quebec, Canada, from Carrier Corp. Parker did not say what it paid for Micro Thermo, which makes refrigeration controls and energy management systems for supermarkets. Parker said the acquisition is expected to be accretive to earnings in its first full year of operations. Micro Thermo had sales of $10 million in 2009 and employs about 50 people. To keep up with local business news as it happens, visit www.CrainsCleveland.com.
■ Cleveland-based Authentic Films has
some cool things going on these days — but college football and basketball documentaries aren’t among them. The company — located on East 63rd Street in the Hyacinth Lofts, a live/work space designed in part for filmmakers — in May traveled to the Cannes Film festival in France to show “Cleveland vs. Wall Street,” its film about the city suing 21 banks for their roles in the foreclosure crisis. Its “Running America,” the story of the cross-country trek of Charlie Engle and Marshall Ulrich, now is available on Amazon.com (and can be sampled at AuthenticFilms.net). However, producer and co-founder Kate O’Neil said she and husband/ co-founder/writer/editor Kevin Kerwin field many a call about another, mysterious Authentic Films, which apparently has made a name for itself for its documentaries of football teams at Auburn and Maryland universities and Marquette University’s basketball team. The latter recently was profiled in The (Milwaukee) Journal Sentinel, which reported the unknown Authentic Films is run by Bill Kraus, a Marquette alumnus. “We’ve had a lot of Auburn fans calling,” said Ms. O’Neil, who has tried — unsuccessfully — to track down the other Authentic Films and Mr. Kraus, who seem to lack an online presence. “It’s an interesting lesson about how you should have some form of online presence, no matter how small your operations are, if only to prevent business going to a competitor.” The Cleveland Authentic Films currently
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The films are authentic, and so are the filmmakers
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The recession is bringing workers closer together ■ Employees are squeezed these days in a lot of ways, so a recent Wall Street Journal story should come as no surprise. The Journal reported that even as the office market “enjoys a rebound of leasing activity, some businesses are giving landlords the shivers by figuring out how to use less space per employee.” One company doing just that is PNC Financial Services Group Inc., which found itself with more than 300 square feet per employee after its merger with Cleveland-based National City Corp. in late 2008, according to The Journal. It recently put in place new guidelines that call for about 180 square feet per employee in new offices, said Gary Saulson, PNC’s director of corporate real estate.
It certainly wasn’t love at first sight ■ Count Cleveland lawyer Raymond Vasvari
is working on a documentary, “Patrol Base Jaker,” which tells the story of a successful counterinsurgency in Afghanistan in which troops have built schools and bridges and educated farmers, among other things. “You hear little about that, because it’s not sexy,” Ms. O’Neil said. — Joel Hammond
An accountant who’s a true peak performer ■ For three days last month, this certified public accountant traded his suit and tie for T-shirts and hiking trousers in the name of challenge and charity. Rob Whittall, a partner at Clevelandbased Cohen & Co., joined friends in forming a seven-person team to tackle the 6 Peaks Challenge in July in his native United Kingdom. The feat required them to walk 50 miles, drive 1,000 miles and climb 20,000 feet in 72 hours as they scaled the summits of the highest peaks of the six regions of the British Isles, which include Wales, England and Scotland. Mr. Whittall said his team raised $7,500 for WaterAid, a charity that works to provide safe water and sanitation to people worldwide, and another $4,500 for Help for Heroes, which assists British soldiers injured in Iraq or Afghanistan. Mindful of the way their clients and sponsors had donated, Mr. Whittall said his friends and he knew that they had to finish the challenge. “There was no way we couldn’t,” he said. — Michelle Park
among the haters of “Love Story.” Ms. Vasvari was quoted in a New York Times story about a longstanding tradition at Harvard, his alma mater. The Crimson Key Society, a student organization that conducts campus tours and promotes college spirit, every year runs the Harvard-set “Love Story” strictly for laughs for first-year students during their orientation, The Times reported. It’s a fun ice-breaker that gives everybody a chance to mock the sentimental romance and reduce some of the tension they feel about coming to Harvard. Mr. Vasvari underwent his “Love Story” indoctrination in 1983. “What struck me was the collective uncertainty of what it all meant,” he told The Times. “You take people from different socioeconomic backgrounds who are stamped with the Harvard imprimatur and marched into this big, brutalist, antiseptic space with 1,600 other geeks to watch this girl die. And you’re sitting around watching people’s reactions to you. I suppose I was supposed to be made effete by the experience. Was Ryan O’Neal supposed to be my role model?” For good measure, he added: “I left because it was so sickeningly sweet. I can’t believe that suicide rates in the Yard didn’t skyrocket.”
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