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Vol. 31, No. 35
INSIDE A thaw in wage freezes on the horizon A survey by a Mayfield Village human resources organization reveals Northeast Ohio companies are showing more interest in salary increases in the next year. Read more on Page 3.
Lawsuits dog Zaremba’s Avenue Sales of residences stop as litigation adds to economic challenge By STAN BULLARD sbullard@crain.com
While the housing market flared and sputtered this year, the much-publicized Avenue District in downtown Cleveland stood still, mired in litigation. No condominiums or townhouses have sold so far this year at the residential development near the Galleria and Tower at Erieview, in part because of an inability of prospective buyers to gain clear title to the properties amid the litigation. However, where the Avenue once was one project, it now is two endeavors, each with its
own court-appointed receiver. One receiver is in charge of the 10-story, 58unit condo tower at 1211 St. Clair Ave. Another oversees a cluster of 20 low-rise townhouses nestled north of Superior Avenue near East 13th Street. The latter receiver was the result of Fifth Third Bank filing a foreclosure last May against Avenue developer Zaremba Inc. of Cleveland. Fifth Third’s court filing stated that its $2.5 million construction loan for the project’s townhouse portion matured Feb. 28. The proceeds of suite sales typically repay such loans, but sales See AVENUE Page 4
STAN BULLARD
Group to county: Push government collaboration Streamlining would make attracting business easier
LeBRON’S GONE.
By JAY MILLER jmiller@crain.com
Whether the Cavs’ surprisingly robust ticket renewals still lead to big crowds is less certain By JOEL HAMMOND jmhammond@crain.com
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hances are the masses still will show up at Quicken Loans Arena beginning Oct. 27, when the Cavaliers open the post-LeBron James era against the Boston Celtics, and throughout the season. How much the eventual ticket holders will have paid to watch Cleveland’s NBA team in person is another story. The Cavaliers confirmed last week their season ticket renewal rate is the highest it’s ever been, likely a product of the team requiring season ticket holders to commit for the 2010-2011 season in March, before Mr. James decided to leave for the Miami Heat in free agency. See TICKETS Page 9
ED SUBA JR./ AKRON BEACON JOURNAL; KRISTEN WILSON ILLUSTRATION
A volunteer group examining the role the new Cuyahoga County government should play in promoting economic development is proposing that the county aggressively pursue an agenda heavy on collaboration among itself, municipal governments, neighboring counties and the private and nonprofit sectors. The working group envisions a streamlining of government bureaucracies through collaboration to hold down their operating costs and make it easier for the region to attract and retain business. A report by the group also will recommend that the county help create businessready sites in targeted locations, notably in the city of Cleveland and the inner-ring suburbs, that most need new sources of tax revenues. At the last of the working group’s 12 planning meetings, held Aug. 24, Lee Trotter, one of its three co-chairs, said the new county government should “make an announcement to the world that we’re open for business.” Mr. Trotter added that the focus should be on “things that make job
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SPECIAL SECTION
Crain’s identifies and honors Northeast Ohio individuals and companies making a difference in sustainability efforts ■ Page E-1
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CORRECTION An Aug. 23, Page 3 story about an Irish company’s acquisition of SageQuest LLC incorrectly identified the city where SageQuest is based. The fleet management software company’s headquarters is in Solon. Its new parent company, FleetMatics Ltd., is based in Dublin.
REGULAR FEATURES Big Issue ......................10 Classified .....................18 Editorial .......................10 Going Places ................11 Letter ...........................11 List: Largest grantmaking foundations ...............17 Reporters’ Notebook .....19
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SEPTEMBER 6-12, 2010
THAT’S GROSS Gross Product is a measure of value-added output produced in a region. For 2009, Northeast Ohio’s Gross Product was $168.4 billion — 3.8% lower than 1999. The following chart looks at the seven largest industry sectors and how they fared from 2007 to 2009. As you might expect, the numbers aren’t pretty. (Unless you’re in public administration or health care, which have been growth industries in the recession.) Gross Product by major industry sector, 2007 to 2009
2009 Gross ’07-’09 change Product in NE Ohio in NE Ohio Manufacturing
’07-’09 change ’07-’09 change in Ohio in U.S.
$29.4 billion
-12.8%
-10.0%
-7.1%
Public administration
20.3
11.3
11.3
12.3
Real estate/rental/leasing
18.2
0.6
-4.9
-0.1
Health care/social assistance
16.2
9.0
8.2
10.2
Wholesale trade
12.7
1.0
4.2
-4.4
Finance/insurance
11.6
-14.7
-12.9
-9.0
Retail trade
10.3
-10.9
-8.5
-6.0
All industries
168.4
-3.2
-2.3
-0.3
SOURCE: NORTHEAST OHIO EMPLOYMENT AND WAGE TRENDS ECONOMIC BRIEF JULY 2010, PREPARED BY CLEVELAND STATE UNIVERSITY
700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Tim Magaw (tmagaw@crain.com) Health care & education Michelle Park (mpark@crain.com) Finance Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Advertising sales director: Mike Malley (mmalley@crain.com) Account executives: Adam Mandell (amandell@crain.com) Dirk Kruger (dkruger@crain.com) Nicole Mastrangelo (nmastrangelo@crain.com) Dawn Donegan (ddonegan@crain.com) Business development manager & classified advertising: Genny Donley (gdonley@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Production manager: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Graphic designer: Kristen Wilson (klwilson@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com) Circulation manager: Erin Miller (emiller@crain.com) Customer service manager: Brenda Johnson-Brantley (bjohnson-brantley@ crain.com) 1-877-824-9373
Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation
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Wage freezes defrost as pay begins uptick
INSIGHT
Minimal increases of around 2.8% reflect local employers’ uncertainty on economy By DAVID PRIZINSKY clbfreelancer@crain.com
JESSE KRAMER
George Schiller, director of the Baldwin-Wallace College Store, says the facility’s book rental program has been successful since it began in July. Most students are renting books for core, lower-level classes, as shown below, since they likely will not need to retain them for future reference.
BOOKSTORES TURN A NEW PAGE More colleges offer texts for rent to compete against other sources that sell less-expensive course material By TIMOTHY MAGAW tmagaw@crain.com
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ollege bookstores in Northeast Ohio now are offering textbook rental programs in order to make their inventory more attractive to students who have flocked to web sites such as eBay and Amazon to buy their mandatory reading material for far cheaper prices than what they’d find in stores. “Our members have faced competition throughout the years, and it’s probably increasing some” due to online sellers of books, said Charles Schmidt, director of public relations for the National Association of College Stores, an Oberlin-based trade association representing collegiate book retailers. To counteract that competition, textbook rental services will be available this fall at about 1,500 of the association’s stores in the United States and Canada, including many in Northeast Ohio. See BOOKS Page 7
Pay freezes will begin to thaw during the next year at Northeast Ohio companies, but the overall employee compensation picture is less than rosy, according to the 2011 wage and salary adjustment survey from the Employers Resource Council in Mayfield Village. “The percentage of employers freezing pay is going down,” said Marty Mordarski, director of research for ERC, a human resources group. The survey included 121 companies and other organizations in Cuyahoga, Lake and Summit counties. Manufacturers made up 55% of the sample. Among survey respondents, 23% said they won’t increase pay for executives during the next year. That’s a big drop from last year’s survey, when 52% of respondents
said they planned to freeze executive pay. Companies with fewer than 50 employees appear to be under the most economic stress, because more than half of them still said they would not raise executive pay for the next year. Companies planning to boost pay for all employees will raise pay an average of 2.8%, basically the same figure as last year. The average increases will be in a narrow range, from a low of 2.7% for nonunion production workers to a high of 2.9% for executives. During this decade, the biggest raises occurred in 2001, when wages rose an average of 4.4%. The smallest occurred in 2002, when the average was 2.6%. Mr. Mordarski said employers are showing more interest this year in planning salary increases, although he said the prevailing mood was See WAGES Page 8
THE WEEK IN QUOTES “There is an extremely high level of confidence that we’re seeing and hearing from stakeholders.”
“Generally, when Americans are back to work, the collections agency is able to do its job.”
— Tad Carper, spokesman, Cleveland Cavaliers. Page One
— Rozanne Andersen, CEO, ACA International. Page 8
All the stakeholders ... have a common denominator: Nobody wants the carp to infiltrate the Great Lakes.”
“It’s about evaluating opportunities. For us, that’s what sustainability has given us.”
— From a Letter to the Editor, Page 11
— Pete Accorti, president, Talan Products. Page E-1
Goodyear takes the green movement for a ride It’s working with Danish biotech firm on tire made with an oil substitute By CHUCK SODER csoder@crain.com
Bacteria helped make the prototype Goodyear tire that Richard LaDuca occasionally lugs around to industry events. Goodyear Tire & Rubber Co. and a
division of Danish biotechnology company Danisco A/S have created a few prototype tires that were made with synthetic rubber produced from sugar instead of oil. The product is maybe five or six years from commercialization, Dr. LaDuca said. Regardless, when he shows off one of the prototypes, people are impressed. “People go, ‘Oh my god, this is incredible. It really works,’” said Dr. LaDuca, senior director of business development for enzyme product maker Genencor, a division of Danisco.
The companies call the new compound “BioIsoprene,” which Genencor produces by feeding sugar to genetically altered bacteria. Laboratory tests suggest the compound is no different than standard isoprene, an oilderived material commonly used to create synthetic rubber, said David Benko, Goodyear’s director of materials research and development. The polymer that the compound is used to create is not biodegradable, and the prototype tires still contain some oil-derived synthetic rubber. However, Dr. Benko said the product
will help Akron-based Goodyear reduce its dependence on a nonrenewable resource that fluctuates wildly in price. “We’re very much dependent on the price of oil,” Dr. Benko said.
Putting bacteria to use Today, Genencor can make BioIsoprene at its lab in Palo Alto, Calif. Next year, however, the company plans to pick a location for a pilot plant, Dr. LaDuca said, See TIRES Page 8
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Avenue: Receivers may help project continued from PAGE 1
dried up due to the slumping economy and the onset of an earlier foreclosure action against Zaremba. Cuyahoga County Common Pleas Judge Jose Villanueva appointed Richard Cohen, a partner at Ohio Realty Advisors of Richfield, the receiver at Fifth Third’s request while its foreclosure case is pending. Meantime, Michael O’Donnell, a Brouse McDowell lawyer, is the receiver appointed by Judge John O’Donnell in the lawsuit filed Feb. 4 in Cuyahoga County Common Pleas Court by Panzica Construction Co. to foreclose on the Avenue’s tower because of $2.7 million in unpaid construction fees. The two O’Donnells are not related.
A central issue in the Panzica case is undergoing an appeal in the Ohio Eighth District Court of Appeals in Cuyahoga County. Panzica received a stay in its foreclosure case while it seeks to arbitrate its dispute with Zaremba. However, Zaremba appealed the stay decision because it maintains Panzica lost its right to arbitration by filing the lawsuit.
‘Ear deep in this’ Court of Appeals filings by Zaremba publicly disclose the root of the construction dispute for the first time. According to Zaremba’s filings, a leak in the condominium tower’s sprinkler system damaged seven floors of the tower. While Zaremba’s insurance paid for the repairs,
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â&#x20AC;&#x153;There is definitely interest in both (sets) of properties. The receivers will be able to deliver a clear title to the buyers.â&#x20AC;? â&#x20AC;&#x201C; Dan Lindner, attorney for Zaremba, which developed downtown Clevelandâ&#x20AC;&#x2122;s Avenue District Zaremba has not paid Panzicaâ&#x20AC;&#x2122;s $2.7 million construction bill because the developer maintains the work was not properly completed. Court filings by Panzicaâ&#x20AC;&#x2122;s lawyers say it fulfilled its contractual agreements and should be paid. That disputed bill triggered Panzicaâ&#x20AC;&#x2122;s foreclosure suit. Dan Lindner, Zarembaâ&#x20AC;&#x2122;s attorney, said in an interview last Thursday, Sept. 2, that the developer did not oppose the appointment of the receivers because the family-owned Zaremba firm believes they will help advance the Avenue District. The presence of the receivers will assist a plan the parties have developed to allow condo and townhouse buyers to close on properties, Mr. Lindner said. â&#x20AC;&#x153;There is definitely interest in both (sets) of properties,â&#x20AC;? Mr. Lindner said. â&#x20AC;&#x153;The receivers will be able to deliver a clear title to the buyers.â&#x20AC;? There currently is an 18-inch file of documents in the appeals court from the Panzica dispute and a twoinch file in the newer Fifth Third case as various parties try to protect multimillion-dollar interests in the Avenue District. Nonetheless, Mr. Lindner said he is encouraged by recent developments. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re still ear deep in this,â&#x20AC;? Mr. Lindner said. â&#x20AC;&#x153;We are actively working to resolve all disputes with the parties. While there is nothing in the immediate future, we are hopeful that things are going in a very positive direction.â&#x20AC;?
Priced to sell Jim Anderson, an agent at the Progressive Urban Real Estate brokerage in Cleveland with substantial sales experience downtown and in Ohio City, said the real estate market is so weak that some fine projects are failing to register no sales in a calendar year. He said 15 downtown and Flats condos have sold so far this year â&#x20AC;&#x201D; none at the Avenue District. Litigation over a project, he said, â&#x20AC;&#x153;adds another layer to the challenge in this market.â&#x20AC;? However, Mr. Cohen, the receiver in the Fifth Third case, said he and the other parties are so eager to get the last six units at the townhouse development sold they recently have instituted a 10% price cut on the remaining townhomes. That reduction would come off The Avenueâ&#x20AC;&#x2122;s townhouse asking prices that are upward of $269,000. In The Avenue Condominium, as court documents now label the tower, only five units of 58 have sold. Zarembaâ&#x20AC;&#x2122;s three-story townhouses at the Avenue have fared far better. Fourteen are sold, some in the $300,000 range. â&#x2013;
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Volume 31, Number 35 Crainâ&#x20AC;&#x2122;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 Š 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 Crainâ&#x20AC;&#x2122;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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Some Asian tiremakers on a roll D D D D D
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Other nations boost exports to U.S., while China shipments dive By MILES MOORE and BRUCE DAVIS Tire Business
The impact of the U.S. government’s decision nearly a year ago to impose stiff import tariffs on Chinese consumer tires is clear: Shipments from China have dropped more than 40% and the void has been filled predominantly by imports from other Asian nations. The import tariffs — instigated under Section 421 of the Trade Act, which allows relief to U.S. industries injured by upsurges of imports from China — have proven a boon for tiremakers in Indonesia, South Korea, Taiwan, Thailand and Vietnam. They’ve seen their shipments to the United States shoot up at least 60% during the same time frame, according to an analysis of available trade data by Tire Business, a sister publication of Crain’s Cleveland Business. In the nine months through June since import duties on Chinesemade passenger and light truck tires were raised to 39% from 4%, U.S. imports of car tires from China fell nearly 41%, to 18.8 million units. Perhaps more significantly, the 18.8 million units were more than 60% lower than the volume imported in the comparable 2008-2009 period, before U.S. demand collapsed. However, car tire imports overall during the nine months in question rose 7.8%, to 80.3 million units, according to Tire Business’ analysis of data. Imports from Taiwan doubled to
2.79 million units, while shipments from Indonesia rose 70.5% to 5.72 million units. What’s more, imports from Thailand were up 64% to 3.85 million units and imports from South Korea climbed 63% to 12 million units. The U.S. replacement passenger tire market is expected to grow about 5% this year over the depressed 2009 total to 199 million units, according to a recent Rubber Manufacturers Association forecast, before slowing somewhat next year to a more modest 1% increase. That amount of growth represents about 10 million units, which coincidentally is exactly how much imports rose in the first half of 2010. That leaves little if any room for domestic production to fill the void. Replacement shipments of light truck tires are expected to rise 3% this year to 28 million units, the Rubber Manufacturers Association said, but then should level off next year. That’s a gain of about 1 million units. By comparison, imports were up 1.7 million units in the first half. As the Sept. 26 date marking the first anniversary of the imposition of the Section 421 tariffs approaches, those affected are debating their pros and cons, albeit quietly. The tariffs will drop to 34% this year and 29% in 2011, before lapsing to the 4% rate in 2012. The Section 421 action was initiated in April 2009 by the United Steelworkers Union, which represents more than 30,000 workers at tire plants in the United States.
Impact hard to assess The Tire Industry Association, which led the opposition to the tariffs along with several of its major distributor members, has had trouble quantifying the impact of the tariffs. “The biggest problem for us is that all the information we have is anecdotal,” said Paul Fiore, director of government and business relations for the association. “What’s missing from the discussion is that (the Office of the U.S. Trade Representative) has not been forthcoming with their efforts on data collecting.” Under Section 421 regulations, that federal office, which is America’s chief trade negotiator, must gather information regarding the effect of the tariffs on the domestic tire industry. However, Mr. Fiore said, this is the first successful Section 421 action, and the first time the office has had to gather data under a Section 421 action.
The Tire Industry Association does not have its own data collection department, Mr. Fiore said. Still, the Bowie, Md.-based trade association would like to know how much wholesale and retail prices have gone up as a result of the tariffs. “More importantly, we’d like to know what the picture is pertaining to jobs,” he said. “Unfortunately, the trade representative made a fairly general statement about saving jobs because of the tariffs, and when I challenged this, they sent a reply that was all spin.” A spokeswoman for the U.S. Trade Representative said the agency would consider Tire Business’ request for information for this story, but at press time the agency had not responded.
Silent Steelworkers While most everyone in the tire industry is waiting to see what happens when the tariffs fall, then exit altogether, many are staying close-lipped about the effect of the first-year tariffs on tire supplies, prices and employment. That includes the Steelworkers union, which declined comment for this story. The union originally filed its Section 421 petition in April 2009 with the International Trade Commission, claiming rising Chinese tire imports were to blame for the loss of more than 5,000 jobs at U.S. tire plants through year-end 2008. The union also cited 3,000 more job cuts scheduled through year-end 2009. Between 2004 and 2008, U.S. imports of Chinese car and light truck tires tripled to more than 46 million units, the union told the trade commission. It certainly doesn’t appear the increased tariffs have done much for encouraging investment by tiremakers in their U.S. operations. Of companies producing consumer tires in the United States, only Cooper Tire & Rubber Co. and Goodyear Tire & Rubber Co. have disclosed plans to invest in their U.S. plants. Cooper is spending $7 million to expand capacity for car and light truck tires at its Tupelo, Miss., factory, while Goodyear is expanding its Lawton, Okla., car tire plant an undisclosed amount. ■ Miles Moore is senior Washington reporter and Bruce Davis is special projects reporter for Tire Business, a sister publication of Crain’s Cleveland Business.
Index indicates stagnant employment Here is yet another was released ON THE WEB Story from sign of stagnation in www.CrainsCleveland.com. last Friday, the U.S. economy. Sept. 3. The CBiz Payroll Services unit of CBiz said its payroll data CBiz Inc. said its CBiz Small Busishowed that 28% of the companies ness Employment Index for August managed by CBiz Payroll Services decreased by 1.01% from July. reduced their headcount during the It was the second consecutive month of August, compared to 24% monthly decline in employee payof companies doing so in July. rolls within the small businesses However, the data show more jobs surveyed, which CBiz said is “an have been added than cut for the indication that small businesses year to date. remain cautious and fearful that the CBiz said of the nearly 3,000 economy’s recovery is stalling.” companies included in the survey in CBiz said its index has seen a August, 22% added employees and correlation with Bureau of Labor 50% made no change. July data Statistics data throughout 2010 showed that 26% of companies and serves as a preview to the added staff, while 50% maintained bureau’s employment report, which headcount.
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BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s, highlighting positive business news. To submit information, contact Scott Suttell at SSuttell@crain.com. ■ The Inc. 5,000 list of the country’s fastestgrowing small and midsize businesses is out, and 55 Northeast Ohio companies made the cut. Inc.’s list of Northeast Ohio companies is at www.inc .com/inc5000/list/metro/Cleveland. Quality Electrodynamics of Mayfield Village, which designs and makes MRI radio frequency coil technology for human body imaging, is the top-ranked local company. It’s No. 193 on the overall list with three-year sales growth of nearly 1,500%. You can find the full list at www.inc.com/inc5000/list. ■ Diebold Inc. has made sure there’s a state-of-the-art system for a major client that deals in high-end artifacts. The company based in North Canton recently helped Christie’s Auction House centralize its security operations, reduce risk and improve event response times across multiple sites. Diebold said it designed a new command and control center for Christie’s Rockefeller Center headquarters in New York, where it houses extremely valuable collections of fine art, jewelry and
collectibles for storage, display and sale at auction. The design “integrated new video surveillance technologies with legacy systems, replacing Christie’s original analog-linked video system with a video display wall that’s digitally connected to cameras, digital video recorders (DVRs) and a custom-programmed touch-screen control system,” Diebold said. “The new layout puts any camera feed in an operator’s field of view with the click of a mouse.” The redesign “has reduced event response times by improving the visibility of areas throughout the facility and at remote sites,” the company said. It also helped Christie’s reduce risk for its business and clientele. Diebold said Christie’s insurers have used the new security operations as a case study platform for other clients. ■ LakewoodAlive has received from The Cleveland Foundation a 24-month, $44,000 grant to expand its housing outreach service capacity. LakewoodAlive, a nonprofit economic development corporation, provides outreach to low- and moderate- income households for assistance in exterior house maintenance. The grant award will fund the balance of a full-time staff position and support efforts to bring volunteer resources to homeowners in need, according to LakewoodAlive. “The condition of Lakewood’s housing stock correlates with
property values, city services, retail viability and demand for social and safety services,” said Mary Anne Crampton, executive director of LakewoodAlive. LakewoodAlive’s housing outreach service began in July 2009. The group said the program “connects financially vulnerable property owners to resources that can assist in maintaining the exterior condition of a home.” In collaboration with Neighborhood Housing Services of Cleveland, LakewoodAlive also provides foreclosure prevention financial counseling in Lakewood. ■ Cleveland law firm Reminger said it has launched a practice group devoted exclusively to attorneys and their counseling and litigation needs. The mission of the group, called Ohio Lawyers 4 Lawyers, is to “provide integrated and costeffective solutions to the full spectrum of operational, transactional and litigation challenges facing small and medium-sized legal services providers during all phases of formation, practice and evolution,” the firm said. “We believe that through the establishment of Ohio Lawyers 4 Lawyers, we will be able to better meet the unique challenges facing attorneys who simply do not have either the time or special expertise required for certain situations,” said Reminger managing partner Stephen E. Walters.
Books: Students still buy reference materials continued from PAGE 3
Cleveland State University, Kent State University, Lorain County Community College, University of Akron, Baldwin-Wallace College and Oberlin College are among the local schools letting students rent textbooks for more than 50% less than the sticker price.
How it’s going George Schiller, director of the Baldwin-Wallace College Store, said his store’s rental program has been successful since it started in July. Books for core, lower-level classes, Mr. Schiller said, are the ones students are renting rather than those that might be used for reference purposes further down the road. “There’s a value to the book that’s never perceived in the beginning,” Mr. Schiller said. “That negative appearance certainly hurts when you’re paying for it up front. You have to ask, ‘What titles don’t you want to keep?’ Those are the ones you’re going to rent.” At Cleveland State, results have been more of a mixed bag, said Keith McCann, director of the university’s bookstore. Purchasing, he said, still outweighs renting because of the flexibility it offers the students. There’s still a large demand to buy used books for the basic courses because there’s such a large, relatively inexpensive supply of the materials, McCann said. Still, he said his bookstore has 35% of its inventory available for rent. “Popular is a relative term, but people are choosing the option to rent,” Mr. McCann said. “Most of the time they choose it because of budget reasons and sometimes out of necessity. Sometimes, even if it’s a book they want to keep, they’ll
rent it.” David Cummings, Lorain County Community College’s director of auxiliary services, said the community college model is aimed at making higher education affordable and textbook rental programs fit nicely into the fold. The program still is in its pilot stage and only 12 titles are offered, but Mr. Cummings said it’s been a “huge success right off the bat” and the available titles are “flying off the shelves.” “Today, we’re obviously dealing with a much, much savvier consumer compared to 100 years ago when I was in school,” Mr. Cummings said. “It’s a good thing, though. It spurred us to think outside of the box and do things like rental programs. We have to be proactive and look and see how we can beat (online competitors) to the punch.”
The competition College bookstore sales, which include goods other than just course materials, have rebounded slightly since the 2006-2007 school year, when they dropped by $700 million to $9.8 billion, according to an industry financial report from the college stores association. Sales remained steady for 2007-2008 and rose to $10.2 billion for 2008-2009. The association has cautioned students against buying textbooks online because doing so could expose them to fraud, damaged products, hidden shipping costs or murky return policies. “If you’re doing it online, especially buying it used, the seller’s description of what is ‘lightly used’ is often different than the buyer,” Mr. Schmidt said in offering an example of the alleged dangers of buying online.
In an e-mailed statement, however, eBay contends that the growth of online commerce has led to greater competition in the textbook market and offers students more options and better prices. The statement said eBay and its subsidiary, Half.com, are “safe and trusted platforms for buyers and sellers to transact. “We encourage buyers to review a seller’s feedback profile before bidding on an item, to ask the seller questions before purchasing, and to carefully inspect the product upon receipt,” the statement said. “If the item is not as described, buyers are protected under our robust buyer protection policies.”
Controlling prices Full-time and part-time students on average spend $667 per year on course materials, according to the college stores association. So, besides improving the competitiveness of their stores, rental programs can save students significant dollars, store owners said. To make such savings possible, the federal government made $20 million available to universities and colleges over the last two years for pilot textbook rental programs. Two Ohio schools — Stark State College of Technology and Youngstown State University — applied for the latest round of grants, with winners to be announced later this month. “When it comes to course materials, the expenses are spiraling upwards without any chance to curtail them,” Mr. Schiller said of the reasoning behind BaldwinWallace’s rental program. “Finding an option and opportunity to offer titles at a substantial discount price and ease the burden there, that was a very important thing for us.” ■
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Debt collection outfit Wages: Many employers holding tight adds staff amid growth continued from PAGE 3
caution. Interviews with survey participants indicated that while business has been improving, more time is needed to recover from the recession.
By MICHELLE PARK mpark@crain.com
A Cleveland-headquartered law firm specializing in debt collection has added 80 jobs this year and projects it will add another 100 by year’s end — growth that one industry insider says is reflective of a job uptick among credit and collection companies. More than 70 of the new jobs planned for Weltman, Weinberg & Reis Co. LPA will be created at its Brooklyn Heights location, said Timothy Corman, the firm’s chief operating officer. The new jobs represent a nearly 17% increase to the current local work force of 420. Weltman Weinberg, which also specializes in creditor representation, will add another 15 jobs to its Grove City location near Columbus and will create 10 more at a new office in the Ft. Lauderdale, Fla., area. Around April, credit and collection firms began reporting increased employee counts to ACA International, the collection industry’s largest trade association, said Rozanne Andersen, the organization’s CEO. The Minneapolis-based association has 6,000 members representing 90,000 employees worldwide. It does not track revenues. Ms. Andersen said the increase in collections employment follows a stagnant period that had persisted since the economic crisis struck in fall 2008. Previously, Ms. Andersen said, the industry had experienced a steady job growth rate of about 5% annually since 2000. “At this point, what we see is the agencies are preparing for another surge, both in expansion of their employee pool and accounts
The worst is over, but …
Corman
Weinberg
placed,” Ms. Andersen said. “We’re seeing signs of improvement. We’re turning the corner.” Ms. Andersen said she expects the industry’s annual job growth rate to return to the 5% to 10% range by early 2011, carried by an improving economy that will enable more debtors to pay for necessities and past-due obligations. “Generally, when Americans are back to work, the collections agency is able to do its job and you’re going to see growth in the industry,” Ms. Andersen said. Weltman Weinberg’s growth is a direct result of the economy, said Alan Weinberg, the firm’s managing partner. Beginning in the latter part of 2009, the company saw a noticeable increase in its volume of work as more creditors needed assistance in recovering the debts owed them, Mr. Corman said. Plus, Mr. Weinberg noted, three or four collection competitors closed in early 2010, leaving room for Weltman Weinberg to expand. Weltman Weinberg primarily will hire collectors — staffers who call debtors — and legal collectors who get involved if and when legal action is taken, Mr. Corman said. The majority of the hiring is planned for Brooklyn Heights, as the company is leasing more space there. ■
The ERC survey results were more optimistic than those reported by the National Federation of Independent Business, but a little less so than the annual survey done by Mercer LLC in New York. The NFIB sounds out small businesses with an average of 10 employees, while Mercer samples midsize to large firms. Mercer indicated that 13% of the companies it talked to froze pay in 2010. That number is down to 2% who say they will freeze pay in 2011. The Mercer survey said raises next year would average 2.9%, up from 2.7% this year. A downbeat employee compensation outlook clearly was reflected in the July data released by the NFIB, which asked 2,000 of its small business members about their wage and salary plans for the second half of this year. Only 7% of these companies said they expected to increase compen-
sation during the period, while 4% said cuts would be made. The vast majority expect to stand pat and ride out generally poor business conditions. “The business outlook looks terrible and labor accounts for 80% of a firm’s costs,” said Bill Dunkelberg, chief economist for the NFIB. The ERC findings didn’t surprise Ken Mayland, an economist who heads ClearView Economics in Pepper Pike. “We have seen the worst of the wage growth decline,” he said. Mr. Mayland said there are signs of marginal improvement in the economy and he cited statistics that show the recession bottomed out last summer. He added, however, that he expected some companies to hold the line on pay increases next year, which squares with the ERC survey’s results.
Time to rebuild One company in the survey that reflects Mr. Mordarski’s sense that optimism may be gaining is Ohio Broach & Machine in Willoughby, where treasurer Jim Lutz said pay hikes returned recently after a five-year drought.
Mr. Lutz said the machine tool builder has approved 3% increases for its 32-person work force because of improved business conditions that he detected this summer. He said the local manufacturing economy was hit hard during the recession, and Ohio Broach had to resort to layoffs. Conditions only now are showing signs of improvement. “We had 51 employees in 2008,” before layoffs, Mr. Lutz said. The company in July recalled seven laid-off workers. “We are taking advantage of our production broaching,” he said. Production broaching is a highvolume machining process. A significant improvement in business also is taking place at Kerr Lakeside Inc. in Euclid, but owner Charlie Kerr said he is using this year to rebuild his balance sheet at the maker of specialty socket screws and other fasteners. “Cost-of-living increases are not on my radar screen this year,” Mr. Kerr said. Wage administration probably is the most difficult management issue he faces, Mr. Kerr said, noting, “I could afford to give pay raises this year, but I must rebuild the bottom line.” ■
Tires: Wheels turning at Bridgestone, others continued from PAGE 3
adding that he was unsure where it might be built. Genencor aims to build a commercial scale plant in 2015 or 2016. Goodyear would be the plant’s biggest customer, though Genencor also plans to sell the compound for use in other products, such as adhesives. Dr. Benko said he’s unsure
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whether tires using BioIsoprene would be sold at a premium, but he noted that he expects the compound to be “competitive with existing materials” in terms of cost. Both Goodyear and Genencor, which sells about $800 million of enzyme products per year, are financing BioIsoprene research, though Drs. Benko and LaDuca declined to say how much each company is contributing. The project is expected to cost the companies $50 million between 2009 and 2011, according to a June 14 story by Rubber & Plastics News, a sister publication of Crain’s Cleveland Businesss. Dr. LaDuca said he is confident Genencor will be able to massproduce BioIsoprene. He noted that a joint venture between chemical giant DuPont and ingredients manufacturer Tate & Lyle of England has a plant in Tennessee that uses bacteria to make 100 million pounds of chemicals per year. “This is not something with a bunch of people sitting around saying, ‘I wish I could do this,’” Dr. LaDuca said.
The spread of innovation Other tire companies are working on replacing oils used to make tires with more environmentally friendly compounds, though Dr. Benko said he did not know of any that had created a synthetic rubber without
the use of oil. Some companies wishing to reduce the use of oilderived rubber use more natural rubber in their tires, Dr. Benko said. “I’m not aware of anything that approaches the impact this could have,” he said. Bridgestone Corp., which employs about 1,000 people in Akron, by the end of the year expects to finish phasing out the use of highly aromatic oils in its tires. For the past six years the company has been converting to using what it calls “Harmony oil.” As of Jan. 1 of this year, tires containing highly aromatic oils cannot be made in or imported into The European Union. The EU has classified the oils as carcinogens. Though Harmony oil is made with petrochemicals, Bridgestone is working on several projects that aim to reduce the use of petroleum in the tire manufacturing process, said Jason Poulton, director of Bridgestone Americas Center for Research and Technology in Akron. Other manufacturers are trying to make their tire materials more environmentally friendly as well, said Dick Gust, co-chair of the environmental advisory council for the Tire Industry Association of Bowie, Md. He noted how Yokohama Rubber Co. in July 2009 released a consumer tire that uses oil from oranges to reduce the amount of petroleum in the tire. ■
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Tickets: Potential of renewing tickets outweighed risk continued from PAGE 1
Behind the numbers: In January, the NBA recognized the Cavs as one of eight teams with at least 10,000 full season ticket sales, one of eight with at least 2,000 new full season ticket holders and one of three with a 90% season ticket retention rate. Team president Len Komoroski told Crain’s at that time the Cavs’ season ticket number was “significantly more than” 10,000. Spokesman Tad Carper declined to disclose the Cavs’ sales, citing league policy that could lead to a fine. But previously, The Plain Dealer, citing a league memo, reported the Cavs as of July 2009 had sold 11,385 seats; it’s safe to assume the team added to that total before making partial season-ticket plans available, which this year were unveiled on Aug. 17.
holidays forward. I renewed them knowing that if (LeBron) did stay, it would be more of that. The (potential) reward totally outweighed the risk.” According to SeatGeek.com, a web site that analyzes prices on the secondary ticket market from resellers such as StubHub, eBay, TicketsNow, RazorGator and more, Cavs tickets for the coming season are averaging $57, down 39% from last year’s $94 price. Mr. Klang said the failed risk and resulting decline in seat values will amount to a loss of about 30% of his investment, while Merk’s president Scott Merk claims he will lose a staggering 95% of his investment. Mr. Merk said he has exclusive
access to 24 to 36 season tickets for each game — “not a good number” — though that number can fluctuate if demand rises. Mr. Merk contends that his sales for Indians games will outpace Cavs sales; Mr. Klang said that’s likely to happen for Amazing Tickets next year. (SeatGeek says Indians tickets sell for an average of $39 this year, actually up from $38 last year.) He also estimated his Cavs sales with LeBron in Cleveland at $200,000 a year, and he’s sold anywhere from $150,000 to $250,000 of playoff seats. “Anything I sell (this season) will be a miracle,” Mr. Merk said. “Every day is a gamble. Do I get 300 tickets
for (country music act) Rascal Flatts? It’s really legalized gambling. We’re day traders with sporting events and concert tickets. I can’t recover if he leaves, or if they miss the playoffs.”
Potential savior Mr. Klang tempered his loss estimate after seeing unprecedented interest in the two games in which the Cavs play host to Mr. James’ new super team, the Miami Heat, on Dec. 2 and March 29. Amazing Tickets has tickets for that game listed from $200 to $5,000, the latter being at courtside. He said lower level seats near midcourt would sell for $850 to $1,500.
“It’s by far the biggest game we’ve ever had,” Mr. Klang said. “We underestimated what the game would be.” Mr. Merk said the two Heat games and the Lakers’ only visit on Feb. 16 will help ease the pain. Merk’s has tickets ranging from $200 to $2,500, a range wildly above prices for Mr. James’ first home game as a Cavalier — Nov. 5, 2003, against the Denver Nuggets and their heralded rookie, Carmelo Anthony — when tickets sold for $125 to $750. “You have to adjust along the way,” Mr. Merk said. “The Indians carried me for four years (in the 1990s), and other trends pop up.” ■
“Every day is a gamble. We’re day traders with sporting events and concert tickets.” – Scott Merk, president, Merk’s Tickets “We’ve always felt pretty strongly we were doing the right things, in terms of the product,” said Mr. Carper, who noted that the support the team has received since owner Dan Gilbert’s reaction to Mr. James’ departure has been “unprecedented.” “There is an extremely high level of confidence that we’re seeing and hearing from stakeholders,” Mr. Carper said. “All of this has been a reflection of that.”
A not-so-pretty penny Where all those tickets end up, and for how much, is another story. Two area ticket brokers played roles in the Cavs’ renewal rate, as both Merk’s Tickets in Brook Park and Amazing Tickets in Mayfield Heights each renewed all their tickets in March. Each are expecting big losses on those investments, though each said they’d likely make the same decision again. “The entire seven-year run was better than I could have expected, especially the last two years,” said Mark Klang, president of Amazing Tickets. “It was beyond what I ever thought Cleveland sports teams could be, and consistently, from the
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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
Low blow
W
e’d like to give Ted Strickland the benefit of the doubt and say that the complexities of the global economy are hard for most people — including a sitting governor — to understand. But the insistence of his re-election campaign to defend a TV ad that takes an indirect, unwarranted shot at Invacare Corp. indicates that Mr. Strickland is like too many politicians who make business their bogeyman in their bid to win votes, all while ignoring the economic realities of the world today. The offending ad is aimed at Gov. Strickland’s Republican challenger, John Kasich, who sits on the board of wheelchair maker Invacare, one of the largest private employers in Lorain County. The ad features a woman, Nilda Ramos, who blames Mr. Kasich for his role in the loss of her husband’s job at Invacare in 2006 as the company decided to move some of its production to China. “I believe they sent those jobs overseas so they can make more profit,” Mrs. Ramos says. Mrs. Ramos can’t be blamed for the way she feels. However, the ad fails to capture the dilemma faced by companies that, like Invacare, must compete with foreign manufacturers in cheap labor markets such as China, which can sell their products for far less than U.S. suppliers yet still can earn tidy profits. Invacare already had lost plenty of business to wheelchair makers in China when Crain’s interviewed CEO Mal Mixon in February 2007 about the company’s decision to realign its global production. Mr. Mixon said while Chinese manufacturers could make and ship standard, mass-produced equipment and parts at prices lower than their cost to make them in the United States, they couldn’t make customized wheelchairs at a competitive price. That part of Invacare’s business, which is based in Elyria, would remain profitable and couldn’t be outsourced, he said at the time. However, to keep Invacare’s domestic products priced competitively and its employment prospects in Ohio strong over the long haul, Invacare would buy more parts from China, too, Mr. Mixon said. Proof of the wisdom of that strategy is outlined in Invacare’s recent response to the campaign ad. “Though difficult, the changes made in 2006 strengthened Invacare, and over the past few years, despite the challenging economy, the company has added approximately 200 associates to its Ohio campus and rehired many associates,” Invacare stated. Like Invacare, business people statewide took exception to the ad. However, Strickland campaign spokeswoman Lis Smith wouldn’t back down. She maintains the ad wasn’t about Invacare, but about Mr. Kasich and his support for outsourcing Ohio jobs. We’d suggest that the ad is more about Gov. Strickland and an outdated view of the world where companies in this country can ignore the global nature of the supply chain. Invacare has worked to adapt to that world yet maintain its role as a big employer in Ohio — and has a backhand slap in the face from its home-state governor to show for it. It’s a fine signal to send current and prospective Ohio employers, no doubt.
FROM THE PUBLISHER
Convention center pace is promising
A
running the Cleveland bureau of The fter what seems like countless Associated Press when the city last spent years of trying, Cleveland is millions to enhance the existing convengetting a new convention center. tion center. And from all the preliminary But despite the new lobby and other views, it appears that we’re getting a center improvements, the current center was that will work well, be scaled appropriplagued by low ceilings, too many columns ately and be an attractive addition to the and embarrassingly inadequate truck city center. docks. One by one, the city lost the On a similar positive note, regional trade shows and conMMPI, the Chicago developer BRIAN ferences that can do so much to that will market and operate the TUCKER stimulate a downtown economy. center and its adjacent medical Thank goodness we had the mart, announced last week that new stadiums and arena, the Rock it has 32 signed letters of intent Hall and Great Lakes Science from companies and vendors Center during that time. Despite that want permanent display all the naysaying, those projects space in the medical mart. reversed many Northeast Ohioans’ What’s better is that MMPI also image of downtown Cleveland has 16 letters of intent for conand led to the establishment of ferences, conventions and trade first-rate dining and entertainment shows at the complex, which is slated to districts. People came back to a downtown open in 2013. they had deserted so many years before. I know that 2013 sounds like a long Now, we have a couple of renovation way off, but at least we now know when projects planned or under way aimed at it will happen. I’ve been at Crain’s for 25 changing old historic buildings to hotels. years and this issue has been nagging at One is at East Ninth and Euclid; another the city’s civic and business leadership is in University Circle. Perhaps the Maron since before then. In fact, I believe I was
family might have done the Tudor Arms project anyway because of its location near the Cleveland Clinic, University Hospitals and Case Western Reserve University. But I don’t think the central city hotel renovation project would happen without the new convention center and medical mart. And say what you will about the Healthline bus/rapid hybrid transit line that connects Public Square to University Circle — and many have complained about its cost. The fact is that buildings are being renovated and new ones are being built along what once was the city’s grandest street before it fell into near-total abandonment. Cleveland and Northeast Ohio face a long uphill climb, but as we take each step we’d be well-served to spend more time thinking about what is working rather than focus on what can’t. We have a skilled work force fortunate to live near the source of abundant freshwater. Our economy is becoming knowledge-driven, in the lab and on the shop floor. We must focus on what we can do. And that is quite a lot. ■
THE BIG ISSUE How do you feel about the last U.S. combat troops pulling out of Iraq?
DAN GERMAN
LAWRENCE KING
DALE SCHNITZLER
KAY DESIR
Lakewood
Lorain
Grafton
Parma Heights
I think it’s good. I think we’ll support the Iraqis as long as they want us there.
I believe they should have been pulled out long ago. And let’s have the Arab nations policing Afghanistan.
It’s about time. The invasion was a colossal mistake of the Bush doctrine — attacking someone before they attack you. We’ll accomplish more for our strategic purposes with diplomacy.
I have mixed feelings. I’m glad they’re coming home. However, I hope they can still keep our country safe — that’s why they were there.
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
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GOING PLACES JOB CHANGES ARCHITECTURE DOMOKUR ARCHITECTS: Andrea Shelton to interior designer.
editor, Brian Horn to associate editor and Dave Szy to national sales manager, Lawn & Landscape; Jim Gilbride to associate publisher, Greenhouse Management & Production.
CONSTRUCTION
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VN INTERNATIONAL LLC: Richard Leach to principal.
AMERICA SCORES CLEVELAND: Katherine Blackley to development and communications associate.
VN SERVICES: Richard Leach to principal; Joseph Morris to associate.
CLEVELAND STATE UNIVERSITY: Geoffrey Mearns to provost and senior vice president for academic affairs; Joe Mosbrook to director of strategic communications.
FUND FOR OUR ECONOMIC FUTURE: Chris Thompson to director of funder and regional engagement; Ashley Basile to finance and operations associate; Bethia Burke to manager of emerging initiatives; Colette Taylor to support coordinator.
MAGNIFICAT HIGH SCHOOL: Mary Van Dalen to vice president, marketing and enrollment.
INTERNATIONAL WOMEN’S AIR & SPACE MUSEUM: Michelle Epps to education manager.
FINANCE
UNIVERSITY CIRCLE INC.: Erika McLaughlin to public affairs manager.
HUNTINGTON BANK: Greg Michels to syndications officer.
REAL ESTATE
EDUCATION
FINANCIAL SERVICE CARDINAL COMMUNITY CREDIT UNION: Christine Blake to president, CEO. GRANT THORNTON LLP: Ashley Ludrosky, Sam Moore, Matt O’Donnell, Kali Poza, Katie Spiegler and Andrew Stock to senior associates. GREAT LAKES RETIREMENT GROUP: Andrew Toccaceli to director of client relations.
HEALTH CARE UNIVERSITY SUBURBAN HEALTH CENTER: Joanne Molica to director of surgical services; Joy Simonian to associate director of surgical services.
LEGAL BENESCH: Meredith Marcinko to associate. HAHN LOESER: Robert A. Ross to partner.
MEDIA GIE MEDIA INC.: Chuck Bowen to
EMMCO CORP.: Ronald Markowitz to commercial real estate broker. TRANSACTION REALTY: Emily Murray and Michael Musitano to sales associates.
SERVICE CORPORATE SCREENING: Greg Dubecky to president; Dennis Drellishak to CEO and founder. RICHTER & ASSOCIATES INC.: Adam Gockowski to director of client services; Shelley Betteridge to consultant; Maureen Hedrick to director of consulting services; Carolyn Lookabill to director of operations. ROGERS GROUP: Kurt Bright to senior account manager; Thomas Butzer to account manager; Gabriel Angelini and Raymond Glinka to project coordinators.
TECHNOLOGY TOA TECHNOLOGIES: Tammy Cotto to human resources manager; M.H. Sauer to in house counsel; Jeffrey Walker to recruiting manager.
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AWARDS AMERICAN CHEMICAL SOCIETY: Robert A. Weiss (University of Akron) to fellow.
Send information for Going Places to dhillyer@crain.com.
Asian carp lawsuits counterproductive Plainly stated, evidence shows the electronic barrier is working. One Asian carp has been found above the barrier in what is now nearly a year of intense fishing and poisoning of the Chicago Area Waterways killing thousands of pounds of other fish. A carp czar, lawsuits and tactics that divide these Great Lakes states will not lock out the Asian carp. Professionals of agencies ranging from Illinois EPA to U.S. Fish & Wildlife Service have indicated closure of the locks is not a solution of any merit. Lawsuits are generally initiated for two reasons, neglect or distinct difference of opinion. Neither is relevant in this case, but securing political gain or seeking publicity may be in the current equation. This push to “do something” at great expense for public favor is shortsighted and foolish. Some media have insinuated that the Asian carp situation parallels the horrifying Gulf Coast oil spill; those insinuations are irresponsible
11
Salt for Ice Control
LETTER ■ The Asian carp found in June in Lake Calumet near Chicago was likely put there by humans. Scientists that analyzed the fish determined it is likely one of many releases — for cultural and other reasons — that have taken place over the years in the Chicago Area Waterways. In the spate of lawsuits demanding something be done about the Asian carp, the plaintiffs, their defendants and all the stakeholders in this fight have a common denominator: Nobody wants the carp to infiltrate the Great Lakes. The Illinois Chamber of Commerce appreciates the Obama administration’s approach to this issue and sees it as thorough and even-handed, focused on protecting the entire Great Lakes while balancing commerce and environmental interests. Criticism that Illinois is being shown favoritism here, while the federal government invests $78 million on a very active multi-agency coalition solely committed to tactically addressing the matter every day, is off the mark on many levels.
CRAIN’S CLEVELAND BUSINESS
and simply not the case. A modest review of the Asian Carp Regional Coordinating Committee web site, www.asiancarp.org, will identify an unprecedented level of cooperation, communication, transparency and flexibility to respond quickly to changing circumstances. In keeping focus on the common objective, rational leaders should turn away from lawsuits and blogs harping about carp. The Illinois Chamber suggests a better solution than taking these battles to court. Let’s invest in science and technology while the feds continue to secure barriers. Let’s harvest and export the fish to create jobs, generate income and cull the population. And let’s work together on a solution that helps everyone, not pursue follies that pit state versus state and put our economic future at risk. Jim Farrell Executive director, Infrastructure Council Illinois Chamber of Commerce
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GREEN LANTERN AWARD WINNER
Talan more frugal with energy use after rehab By TIMOTHY MAGAW tmagaw@crain.com
F
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he Crain’s Cleveland Business Emerald Awards honor Northeast Ohio companies, organizations and leaders that have implemented and benefited from sustainable priorities that significantly trim costs, increase cash flow with innovations and design products to reduce environmental footprints. An independent panel of judges evaluated nearly 40 nominations to assess initiatives based on the result and impact on people, profits and planet. The judges were Richard T. Stuebi, founding principal, NorTech Energy Enterprise; David Beach, director of the GreenCityBlueLake Institute at the Cleveland Museum of Natural History; Melanie Knowles, Kent State University’s first sustainability manager; and Monica Alston, corporate director of environment, health and safety for Eaton Corp.
EMERALD AWARD FINALISTS Large organizations ($10 million or more in annual revenues) ■ Baldwin-Wallace College, E-2 ■ Cleveland Clinic Health System, E-2 ■ Cleveland Indians, E-2 ■ Cuyahoga Community College, E-2 ■ The Lube Stop Inc., E-2 ■ Lubrizol Corp., E-3 ■ Northeast Ohio Regional Sewer District, E-3 ■ Shearer’s Foods Inc., E-3 ■ City of South Euclid, E-4 ■ The Taylor Cos., E-4 Medium organizations ($9.9 million or less in annual revenues) ■ Doty & Miller Architects & Planners Inc., E-4 ■ Greater Cleveland Habitat for Humanity, E-4 ■ Nutek, E-4 ■ Ruffing Montessori School, E-4 Green Lantern Award winner ■ Pete Accorti, Talan Products
or Pete Accorti, sustainability is all about opportunities. As the president of Clevelandbased Talan Products, Mr. Accorti has modeled how manufacturing companies can benefit by implementing sustainable business strategies. “It’s about evaluating opportunities,” Mr. Accorti said. “For us, that’s what sustainability has given us.” Talan, for example, rehabbed an old building on Cochran Avenue in CleveAccorti land as its headquarters and commissioned Twinsburg-based Lighting Services to retrofit the plant with energy-efficient lighting. The final result reduced the company’s lightingenergy consumption by 73% and saved the company more than $30,000 in energy costs. Bob Taussig, an energy lighting specialist at Lighting Services, nominated Mr. Accorti for the Green Lantern Award because he was impressed with Mr. Accorti’s dedication to ensuring Talan’s plant was as energy efficient as possible. Mr. Taussig, who worked with Talan on the project, said Mr. Accorti wasn’t a tough sell on making sure the project was done correctly. “Here’s a guy who sees the future and sees the benefits of sustainability and is proactive throughout the whole process,” Mr. Taussig said. Mr. Accorti said his involvement with the Entrepreneurs for Sustainability, commonly known as E4S, is what piqued his interest in sustainable business practices. Talan, for instance, is committed to becoming waste-free by 2019. Additionally, Mr. Accorti said Talan is moving its products into “green” markets, such as solar thermal. But Mr. Accorti’s commitment to the environment doesn’t start or stop Talan. In fact, rather than take a car, he makes the hour-plus bike ride from his home in Bay Village to Talan’s headquarters in Cleveland every day. “It’s not for everyone, and I understand that,” Mr. Accorti said. “But it works for me.” ■
THE EMERALD AWARDS RECEPTION Winners of the Emerald Awards will be announced at an event from 6 p.m. to 8:30 p.m. Sept. 23 at the Cleveland Museum of Natural History. The keynote speaker for the night will be David Beach of GreenCityBlueLake. For information and tickets, go to www.CrainsCleveland.com/emerald.
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BALDWIN-WALLACE COLLEGE
Berea
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y teaching sustainability to its students and promoting it through educational outreach efforts to Northeast Ohio’s corporate community, Baldwin-Wallace College wants to become a regional and national leader when it comes to going green. “Baldwin-Wallace College’s focus on sustainability is not directed to any particular ‘product,’ process or service, but seeks to be as comprehensive and institutional as possible,” according to the nomination. ■ Profits: The school’s sustainability major has become a revenue driver: It is estimated that at least 25% of the majors would not have otherwise considered B-W, constituting a revenue increase of about $350,000. Other programs, such as an MBA in Sustainability and the Institute for Sustainable Business Practice, similarly are expected to generate new revenue and positive economic outcomes. In addition, a number of capital expenditures and policies, such as heating and cooling policies that reduce energy usage, have resulted in cost savings for the school. ■ People: Faculty, staff and students have been very involved in sustainability efforts — whether through contributions of ideas, time or money. For example, B-W’s students raised the majority of funding for three major innovations: $10,000 toward an industrialsize composter; $25,000 toward a wind turbine; and $5,000 toward enhanced energy consumption metering of select residence halls. ■ Planet: B-W’s goal is to become a zero-waste organization, producing no net increases in pollution and waste. B-W already has reduced its fossil fuel energy consumption by about 60% and cut its paper waste by more than 50%.
SEPTEMBER 6-12, 2010
CLEVELAND CLINIC H E A LT H S Y S T E M Cleveland
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he Cleveland Clinic is wellknown for its patient care, but the giant health care system seems to be looking out for the rest of the world as well. From its “green teams” to the healthy food it serves in the cafeteria and its commitment to sustainable construction, the Clinic’s
CLEVELAND INDIANS Cleveland
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he Indians long had recycled at Progressive Field, but it involved a third party; the materials would be collected in a compactor, then sent to a sorting facility. Since early 2008, the team has sorted recyclables on site, significantly reducing trash tons and hauls. Additionally, the Indians in 2007 installed a solar array and the team participates in Major League Baseball’s Stadium Operators Greening Committee, through which it shares statistics, best practices, successes and failures with its peers. The Indians also have set multiple monthly records for low electricity consumption, and the team is planning similar studies for water, sewer and natural gas usage. ■ Profits: A full on-site recycling system required the purchase of two $30,000 bailers, though the Indians, through the sale of recycled materials and canceled compactor hauls, paid off that cost in six months. The new system cut trash tons 42.7% since 2007, while trash hauls have been reduced 62% in the same time frame. The Indians’ electricity study involved after-game walkthroughs aimed at identifying equipment or
sustainability efforts reach throughout its organization. ■ Profits: The Clinic’s effort to cut waste cut its disposal costs to about $400,000 from $600,000. The biggest savings came from energy efficiency programs, which cut $4.5 million in costs across the Clinic’s system in 2009. Smaller projects made an impact, too, as waste reduction and recycling projects generated more than $60,000 in new revenue. ■ People: The Clinic works to
ensure a healthy environment for employees and patients by eliminating toxic chemicals and materials when possible. It even tries to limit contact between food and plastics in its kitchens. The Clinic also works with local farmers to hold farmers’ markets and encourages its hospitals to grow food in their own gardens. Employees at all major Clinic facilities have formed “green teams” charged with coming up with their own programs.
■ Planet: The Clinic cut the amount of energy it uses by 16% on a per-square-foot basis between 2007 and 2009, and water use reduction in 2009 saved the health system the equivalent of 63 Olympic-size swimming pools. The Clinic today diverts from landfills more than 25% of its waste, up from about 10% three years ago. And it plans to keep its green momentum going by conducting major construction projects according to LEED standards.
The Indians have set multiple monthly records for low electricity consumption.
C U YA H O G A COMMUNITY COLLEGE Cleveland
A $35 million investment allowed Tri-C to reduce energy usage by 29% from 2000 to 2009, exceeding a 20% requirement that must be achieved by 2014. ■ People: In 2008, Tri-C formed a Sustainability Steering Committee, which leads the school’s efforts. The school also trumpets its ability to “expose 55,000 individuals annually to the importance of sustainability by educating them on our green operations and by exposing them to sustainability literacy in the classroom.” ■ Planet: Tri-C, while having reduced its carbon footprint from electricity and natural gas usage 20% since 2000, still recognizes the impact it has, stemming mostly from student and staff commuting; the school says 50% of its footprint is from commuting. Tri-C cites efforts to decrease single-occupancy driving as progress: The school and the Greater Cleveland Regional Transit Authority have partnered on a discount pass for students, available this fall.
lights that weren’t essential, and the team has implemented a sector shutdown plan for after games. The Indians last year set three monthly records for low energy consumption, and have set two more this year. Last year, electricity consumption was 14% below the park’s historic average. ■ People: With their recycling and other efforts viewed by some as “obtrusive,” the Indians report “education was a very large part of implementation” of their stadiumwide recycling program, “because the practice in the public areas and in every office was new.” The team said goal-setting and consistent updates on those goals have been vital; as for how the players have reacted: “They’ve adapted recycling by the use of shame. We have observed players pull recyclables out of the trash and give it back to the offending player.” ■ Planet: According to the team’s recycling partner, Gateway Recycling, the Indians since 2008 have saved 3,942 trees, 937,938 kilowatt hours of electricity and 788 cubic yards of landfill.
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ri-C has committed to sustainability across its main campus downtown and its satellite campuses, including in its curriculum, support programs (Pathways to Green Jobs) and administration (a vice president of sustainability, hired earlier this year). Additionally, the school has created a six-pronged sustainability program, designed six facilities the school hopes will receive LEED Silver certification, developed a plan to reduce energy usage and reinvigorated a schoolwide recycling program. ■ Profits:The new buildings — all of which are tracking to receive LEED Silver certification or higher — are expected to use 30% less energy than equivalent buildings constructed to code; the six buildings’ impact is estimated at a savings of $1.8 million per year over the next 20 years.
THE LUBE STOP INC. Berea
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ube Stop’s EcoGuard Oil Change Service has fueled both its sustainability efforts and revenues since its launch in December 2007. The oil change service uses re-refined oil, which is cleansed of any contaminants and reblended with additives. EcoGuard has shifted many of its customers’ preferences from its standard service to its greener oil change, with that service climbing from 10% to 50% of Lube Stop’s oil change services in a little more than two years. ■ Profits: Lube Stop initially priced the EcoGuard Oil Change Service at 12% higher than the price of an Expert Oil Change Service because of higher inventory costs. The company also was measuring consumers’ initial response to the service. EcoGuard
currently costs 6%, or $3 more, than the Expert Oil Change service because of a slightly higher product cost of re-refined motor oil. ■ People: Lube Stop knew that the success of the product relied on their employees’ ability to market it and educate consumers about the service’s benefits. The first day Lube Stop launched EcoGuard, 10% of customers chose it, and the number has been climbing since. Lube Stop employs 250 people throughout its locally owned and operated locations. The company also works with Heartland Petroleum Co. and Lyden Oil Co. throughout the re-refining process. ■ Planet: The EcoGuard Oil Change service allows for the reuse of a finite resource and raises the awareness that improper disposal of oil damages the environment. Further, because Lube Stop works mostly with Ohio companies, the firm reduces its manufacturing and transportation carbon footprints.
#ONGRATULATIONS Mary Lou McMahan
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L U B R I Z O L C O R P. Wickliffe
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very time you hear a hiss, chances are that money and energy are escaping and being lost, in the form of steam or air — which is why Lubrizol Corp. decided to focus on making its steam-powered plant in Painesville more efficient to save both money and resources. ■ Profits: Steam powers and heats much of the equipment at the chemical and lubrication company’s 277-person operation, and the steam itself is generated by boilers at the plant. Every time a boiler has to take in fresh cold water and turn it into steam, it’s wasting energy. So, when Lubrizol increased the amount of water it was able to recapture and reuse — from 37% to more than 63% at the end of the second quarter — it amounted to savings for the company. By the end of 2009, the initiative yielded an annual savings of $275,000 from 2008 to 2009. ■ People: David Enzerra is Lubrizol’s director of social responsibility, but it took a whole team of Lubrizol staff members and buy-in from all departments to make the program work. And virtually everyone working at the plant benefited. For example, the plant is safer because visibility issues that might have been caused by escaping steam are gone, as are
When Lubrizol increased the amount of water it was able to recapture and reuse, it amounted to savings for the company. slick floors. ■ Planet: While Lubrizol is saving money, it’s also saving water and cutting down on its use of electricity and output of greenhouse gases. The plant was able to cut its water usage by 25%, which means that fewer chemicals and less power was used to produce that clean water in the first place. Perhaps more importantly, though, it reduced its annual gas consumption by 16.5 million cubic feet per year cutting its associated carbon emissions by roughly 2 million pounds per year.
SHEARER’S FOODS INC. Brewster
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nack food maker Shearer’s Foods said it is committed to increasing its manufacturing capacity while minimizing environmental impacts, and its new $20 million site in Massillon underscores that strategy. According to its nomination, Shearer’s is the first Ohio food manufacturing site that exceeds LEED Gold Certification standards, and the company is moving to seek LEED certification at its other facility in Brewster. ■ Profits: Shearer’s said its new 47,000-square-foot production facility and manufacturing process will produce more than $9 million
in new revenue, with potential over the next two years to reach $52.5 million per year in revenue. Its new high-efficiency infrared tortilla chip manufacturing line is capable of generating more than 9 million pounds of finished product in its first year of production. Shearer’s is planning for a second and third phase to expand capabilities to house two new lines currently in development. The site when all phases are complete will be capable of producing more than 80 million pounds of finished product each year. ■ People: The new LEEDcompliant site brought more than 268 construction-related jobs to the area. The company has created about 60 new full-time positions since April, and when all phases of construction are complete in
January, the company expects it will have added a total of 189 new associates. In addition, employees have access to sustainability training and education, as well as to an on-site health clinic that logged 400 visits in less than six months of operation. ■ Planet: The new Massillon site exceeds the Gold energy design requirements by more than double, with a 30% energy reduction over the industry standard using extensive daylighting and insulative and building shell technologies. The facility was built with 22% recycled content and 29% locally harvested and manufactured materials, while 92% of waste streams were recycled. All of its hard surfaces have a solar reflective index to prevent heat island generation.
NORTHEAST OHIO REGIONAL SEWER DISTRICT Cleveland
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ustainability is the foundation of a new facility the sewer district is building. The $170 million renewable energy facility at the Southerly Wastewater Treatment Center in Cuyahoga Heights will generate electricity and devour fewer resources — all while burning waste. The project, which broke ground in 2009 and should be complete by 2013, will reduce the carbon footprint of the state’s largest treatment plant by 16,200 metric tons. ■ Profits: New incineration systems will burn biosolids more efficiently and reduce natural gas consumption by at least 95%, saving about $1 million a year. Plus, the facility will use waste heat to generate electricity, creating the opportunity to offset electricity purchases and save $1.3 to $2.3 million annually. The district also expects multimillion dollar decreases in capital and operating costs. ■ People: Neighbors of the Southerly need not complain about the burned coffee smell anymore: The decommissioning of an existing system will eliminate the issue. Residents also won’t see the increased truck traffic that would have resulted had the district chosen to landfill biosolids. Additionally, at least 20% of the $93 million construction and installation contract will be committed to small businesses. ■ Planet: The new facility will generate nearly 25% of the energy the Southerly needs and reduce both the consumption of natural gas and the amount of biosolids delivered to landfills. Decreased trucking will save more than 340,000 gallons of fuel a year. Plus, the facility will reduce regulated air emissions by 145% each year.
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Water, gas and electric utilities depend on Aclara’s proven technologies to lower costs, provide superior customer service, and conserve our most precious natural resources. Our 300 NorthCoast team members make it possible. We draw on the talent, innovation, and spirit that define our region. With employees from over two dozen area communities, we have created one of the region’s fastest growing Green-Tech teams. Thank you, Aclara MVPs, for making this a great place to work, a great place to grow, and a center of excellence for technology innovation in the utility industry. Congratulations to the entire Aclara family. We love working with you and take pride in being recognized as a NorthCoast 99 company for the second year in a row!
www.Aclara.com
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CITY OF SOUTH EUCLID South Euclid
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n 2009, South Euclid launched its Green Neighborhoods Initiative to stabilize areas hit hardest by foreclosures, believing it could attract new residents to a walkable, green community with affordable housing.
T H E TAY L O R C O S . Bedford
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t makes sense that a company in business since 1816 knows a few things about sustainability. The Taylor Cos., an office furniture maker, not only has survived for 194 years, but it takes seriously its efforts in the areas of land revitalization, energy conservation, waste diversion and greenhouse gas emission reduction. Taylor says it looks beyond industry standards, “which we found to be self-serving and occasionally hypocritical.” ■ Profits: Since moving to its Bedford operation (a 50-acre brownfield site) in 2006, Taylor says it has reduced its consumption of natural resources annually by nearly 60% from fiscal 2005 levels. That reduction translates to annual savings of more than $80,000. Taylor also diverts about 90% of its manufacturing waste — about 60 tons a year — from local landfills through upcycling, recycling and
SEPTEMBER 6-12, 2010
The city has completed the rehabilitation of a home on Wilmington Road with energy efficiency in mind. It plans to renovate five more homes and build a new energy-efficient home to replace one that had been demolished. In addition to rehabilitating homes, the program includes several community gardens. ■ Profits: The city expects to see a reduction in vacancies and a
reduction in crime and nuisance calls to police. Longer term, the city believes it will see an increase in its tax base and it hopes this effort will attract new businesses to the Cedar Center redevelopment project. ■ People: Local families leased out all of the available lots in the new Warrendale and Colony community gardens and city leaders say residents have become more
engaged in the community as a result. The new effort also has helped the city build public-private-university partnerships that are bringing funding and student expertise to help move the effort along. An MBA class in environmental marketing at John Carroll University made the community garden programs its class project. ■ Planet: The first Green Neigh-
composting, reducing waste hauling costs by $20,000 annually. Due in part to these efforts, Taylor reports its revenues grew 8% in its most recent fiscal year compared with a 16% decline across the office furniture industry. ■ People: Everyone plays a part in making Taylor a sustainabilityfocused company. All employees are taught how to divert the byproduct waste from their work stations. Most employees on a daily basis take specific actions to reduce energy consumption during working hours. Sustainable practices help the company save more than $100,000 a year, which Taylor says helps keep prices competitive and preserves jobs. ■ Planet: The brownfield redevelopment kick-started a commitment to the planet that Taylor is following up with a plan to reduce greenhouse gas emissions by 35% before the end of 2012. The company also is getting agreements with key suppliers to “share a common approach” to sustainability.
DOTY & MILLER ARCHITECTS & PLANNERS INC. Bedford
a downturn devastating to its profession. While design layoffs have been common, it did not cut staff. The firm has been involved in more than 15 LEED projects with 10 more in the planning stage. ■ People: Doty & Miller is active in the Evergreen Cooperative Development Fund, which is dedicated to creating living-wage jobs in disadvantaged neighborhoods while applying green construction techniques, including its initial co-op laundry. ■ Planet: Doty & Miller estimates it has saved 10 buildings, totaling more than 250,000 square feet of building area, for reuse. That cut the call for new building materials by nearly a million pounds and saved the energy equivalent of nearly four million gallons of gasoline. Moreover, its projects slashed electricity use by 2.5 million kilowatts and natural gas use by 14 million food pounds annually. Energy savings spare its clients more than $510,000 annually.
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rchitects Chuck Miller and Bill Doty helped drive the green and sustainability bandwagon in design and construction long before the industry clambered aboard. Mr. Doty, a past president of the Earth Day Coalition, helped the Cleveland Green Building Coalition but now prefers to put those principals to work on projects. More than 2,500 people have toured the firm’s headquarters in a restored US Post Office, which married green techniques with reusing a historic property. The firm sums up its strategy with the phrase, “Responsible design today builds a better world tomorrow.” ■ Profits: The firm credits its green focus with helping it survive
G R E AT E R C L E V E L A N D H A B I TAT F O R HUMANITY Cleveland
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escue and recycling are at the core of Greater Cleveland Habitat for Humanity’s mission and work. From its focus on building homes with a low environmental impact to reusing materials and tools, the nonprofit organization heralds itself as one that “takes nothing for granted.” ■ Profits: The Cleveland Habitat ReStore’s sales of used and new construction material have more than doubled since the organization’s 2008 move to West 110th Street, increasing from an average of $20,000 per month in 2007-2008 to $52,000 per month in 2010-2011. According to the nomination, Habitat affiliates generate substantial dollars on sheer volume by using one mission-based activity to support another, making the ReStore one of
NUTEK Chagrin Falls
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utek has convinced some big-name retailers — Home Depot, Ace Hardware and Kroger among them — that there’s a market for what it calls its “safe alternatives to toxic chemistry.” The company is a supplier, developer and marketer of branded green lubricants and cleaning products to consumer and industrial end markets. Nutek’s products are sold under eight registered trademarks. They use four proprietary, soy-based formulations, one patent and a proprietary degreasing and cleaning formulation.
borhoods project on Wilmington Road is pending LEED certification. Renovations are complying with LEED for Homes standards — much of the material salvageable from the renovations was donated to Habitat for Humanity for recycling. The city also is building a bio-cell storm water demonstration project at the city’s Quarry Park, as an entry to that park’s community garden.
RUFFING MONTESSORI SCHOOL Cleveland Heights
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the most sustainable and unique strategies in the nonprofit sector today. ■ People: Over the past 21 years, the organization has brought together 145 sponsor groups and more the 45,000 volunteers to help 162 partner families build $24 million worth of homes in some of Cleveland’s most distressed neighborhoods. ■ Planet: Cleveland Habitat’s ReStore diverts multiple tons of typically wasted resources from local landfills while providing the public with low-cost access to tools and materials for home renovation and repair. According to one formula, Cleveland Habitat estimates it was receiving, recycling and returning to use approximately 500 tons of material per year while being open one day a week. With the additional capacity and flexibility of its new space, the organization has seen a 300% increase, or approximately 1,500 tons of material per year.
uffing Montessori School, with 326 students ranging in age from toddler to eighth grade, “seeks to treat all it touches in a nurturing, holistic fashion.” This philosophy no doubt helped to inspire its campus redevelopment and sustainability initiative, which eventually led to the school’s new building being designated as LEED certified. ■ Profits: From lower operating costs to the creation of a healthier and safer building, Ruffing’s sustainability efforts are paying off in more ways than one. For example, with the school’s geothermal heating and cooling system, along with the installation of 28 photovoltaic panels, at least 5% of the school’s energy is provided by onsite renewable energy supplies. According to the school, even with increasing electric prices and the addition of 10,000 square feet of new classroom space, the school’s electricity costs are nearly 10% lower than they were in 2007. Not only that, Ruffing also reports increased enrollment, which is attributed in part to parents’ interest in the school’s sustainability efforts and green curriculum. ■ People: The school has focused on green cleaning and nontoxic pest management policies, which reduce environmental hazards and ultimately protect children and staff and increase the life span of facilities. ■ Planet: Ruffing intentionally opted to build at its current site, reusing its footprint, rather than move to another location. In addition, the building project reused many materials and emphasized energy conservation. The theme of sustainability also carries well beyond the building project through other efforts, including the school’s no-waste lunch program and the use of native landscaping.
Products include the Bolt Off Penetrating Soy Lubricant, the Shield It Dry Lubricant and the Mrs. Green Clean Multi-Surface Cleaning Solution. ■ Profits: On the strength of retailers allocating shelf space to the products, Nutek has gone from a startup to a company with $2 million in sales in two years. The market for its products has “experienced exponential growth” in the past decade, Nutek says, as industrial and household consumers become more aware of sustainability and the impact of chemicals on the environment. ■ People: Nutek has hired and contracted with can makers, chemical blenders, corrugated packaging designers and others to help bring its products to retail
shelves. Plans also are being made for a manufacturing site in the Cleveland area, Nutek says, which would add “dozens of new jobs to the area from a diverse network of potential employees.” The company says its employees and contractors are immersed in a “green think tank” environment that promotes eco-friendliness even down to small details, such as soy ink on employee business cards. ■ Planet: Nutek’s Smart Green products are more than 90% biodegradable and have less than 50% volatile organic compounds (VOCs). Its Simply Soy lubricant is even greener — 100% biodegradable and is National Science Foundation-certified to be used around food areas.
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LARGEST GRANTMAKING FOUNDATIONS RANKED BY AMOUNT OF 2009 GRANTS
Name Address Rank Phone/Web site
2008 2009 grants grants (millions) (millions)
2009 assets (millions)
2009 largest grant ($)
1
Cleveland Foundation 1422 Euclid Ave., Suite 1300, Cleveland 44115 (216) 861-3810/www.clevelandfoundation.org
$81.1
$76.3
$1,807.4
3,000,000
2
Lerner Foundation(1) 26500 Curtiss Wright Parkway, Highland Heights 44143 (440) 891-5000
$20.6
$25.0
$24.9
3
George Gund Foundation 45 Prospect Ave. W., Suite 1845, Cleveland 44115 (216) 241-3114/www.gundfoundation.org
$15.4
$16.4
4
KeyBank Foundation 800 Superior Ave., Cleveland 44114 (216) 828-7349/www.key.com/foundation
$12.8
5
The Timken Foundation of Canton(2) 200 Market Ave. N., Suite 210, Canton 44702 (330) 452-1144
6
2009 smallest grant ($)
Year founded Total Top executive staff Title
Largest grants
29
Shorebank Enterprise Group, University Hospital Case Medical Center, Case Western Reserve University, Ideastream, Musical Arts Association, Team NEO
1914 77
Ronald B. Richard president, CEO
10,005,000
18
Cleveland Clinic Foundation, National Portrait Gallery, London, Hospital for Special Surgery, New York, Columbia University
1993 NA
Norma Lerner president, treasurer
$422.8
3,000,000
500
Fund for Our Economic Future, Foundation Fighting Blindness, The Cleveland Foundation, The Musical Arts Foundation
1952 13
David T. Abbott executive director
$12.5
$35.6
1,100,000
250
United Way of Greater Cleveland, University Hospitals, Musical Arts Assoc., Cleveland STEM schools, JumpStart, PlayhouseSquare Foundation
1969 2
Margot James Copeland chair
$10.3
$10.8
$175.2
400,000
5,000
National Football Museum Inc., Malone College, The Schongauer Society, Colmar, France, Arts in Stark
1934 NA
Ward J. Timken president, trustee
Saint Luke's Foundation of Cleveland 4208 Prospect Ave., Cleveland 44103 (216) 431-8010/www.saintlukesfoundation.org
$9.0
$9.7
$179.2
928,950
1,000
Mt. Pleasant Community Zone, MetroHealth Foundation, CWRU School of Dental Medicine, Cleveland Department of Public Health
1997 7
Denise San Antonio Zeman president, CEO
7
Akron Community Foundation 345 W. Cedar St., Akron 44307 (330) 376-8522/www.akroncommunityfdn.org
$7.0
$8.0
$126.0
100,000
1,580
Fund for Our Economic Future, City of Akron Neighborhood Partnership, Akron Metropolitan Housing Early Learning Project, Child Guidance & Family Solutions
1955 13
John T. Petures Jr. president, CEO
8
Eaton Charitable Fund 1111 Superior Ave., Cleveland 44114 (216) 523-5000/www.eaton.com
$6.7
$7.9
$9.6
495,389
300
United Way of Greater Cleveland, University Hospitals of Cleveland, Economic Growth Foundation, United Way of Allegheny County, National Merit Scholarship Corp.
1953 0
William B. Doggett senior vice president, public and community affairs
9
GAR Foundation 277 E. Mill St., Akron 44308-1735 (330) 576-2926/www.garfoundation.org
$6.5
$7.3
$137.6
525,000
500
Akron Public Schools, United Way of Summit County, Stan Hywet Hall and Gardens, Team NEO, Girl Scouts of Northeast Ohio, Fund For Our Economic Future
1967 7
Robert W. Briggs president
10
Mt. Sinai Health Care Foundation 11000 Euclid Ave., Cleveland 44106 (216) 421-5500/www.mtsinaifoundation.org
$6.1
$8.3
$121.5
1,525,000
100
Case Western Reserve University School of Medicine, Jewish Community Federation, Cuyahoga County Invest In Children, Fund for Our Economic Future, BioEnterprise
1994 6
Mitchell Balk president
11
H. C. S. Foundation(3) 1801 E. Ninth St., Suite 1105, Cleveland 44114 (216) 781-3502
$5.6
$5.3
$89.5
1,500,000
5,000
Craig and Frances Lindner Center for Hope, The Children's Home of Cincinnati, Cleveland Hearing & Speech Center
1959 2
Board of trustees
12
Stark Community Foundation 400 Market Ave. N., Suite 200, Canton 44702 (330) 454-3426/www.starkcf.org
$5.5
$5.7
$153.5
399,724
100
John H. & Evelyn L. Ashton Preservation Center, Stark Education Partnership, United Way of Greater Stark County, The Wilderness Center
1963 11
Mark Samolczyk president
13
The Burton D. Morgan Foundation 22 Aurora St., Hudson 44236 (330) 655-1660/www.bdmorganfdn.org
$5.3
$4.0
$118.4
200,000
220
BioEnterprise, Case Western Reserve University, E City, Entrepreneurship Education Consortium
1967 8
Deborah D. Hoover president, CEO
14
Kelvin & Eleanor Smith Foundation 30195 Chagrin Blvd., Suite 275, Cleveland 44124 (216) 591-9111
$5.2
$7.6
$142.8
NA
NA
NA
1955 2
Ellen Stirn Mavec president
15
Weatherhead Foundation 25825 Science Park Drive, Beachwood 44122 (216) 292-7100
$5.0
$5.0
NA
NA
NA
Tulane University, Harvard University, Columbia University, University of Texas
1953 2
Albert J. Weatherhead III president
16
Forest City Enterprises Charitable Foundation Inc.(3) 50 Public Square, Suite 1100, Cleveland 44113 (216) 621-6060
$4.8
$5.0
$0.2
975,000
150
Jewish Community Federation, United Way Services, Rock & Roll Hall of Fame, Cleveland Metropolitan School District
1976 NA
Charles A. Ratner president
17
Nord Family Foundation(3) 747 Milan Ave., Amherst 44001 (440) 984-3939/www.nordff.org
$4.3
$4.7
$63.0
105,044
25
Amherst Historical Society, Community Foundation of Lorain County, Cleveland Scholarship Programs Inc., Nurturing Center
1988 NA
John Mullaney executive director
18
Parker Hannifin Foundation(4) 6035 Parkland Blvd., Cleveland 44124 (216) 896-3000
$4.2
$4.1
$10.2
670,000
100
Cleveland State University, United Way, Ohio Foundation of Independent Colleges, Hospice of the Western Reserve
1953 NA
Don Washkewicz president, trustee
19
Community Foundation of Lorain County 1865 N. Ridge Road East, Suite A, Lorain 44055 (440) 277-0142/www.peoplewhocare.org
$4.2
$4.1
$77.6
463,904
250
Community Health Partners Foundation, Lorain Palace Civic Center, Common Ground
1980 10
Brian R. Frederick president, CEO
20
Elisabeth Severance Prentiss Foundation(5) PNC Bank, 1900 E. Ninth St., Cleveland 44114 (216) 222-2760/www.esprentissfoundation.org
$4.2
$4.7
$70.9
1,000,000
2,500
University Hospitals Health System, Cleveland Clinic Taussig Cancer Center
1939 NA
Richard W. Mack secretary
21
William J. and Dorothy K. O'Neill Foundation(3) 30195 Chagrin Blvd., Suite 106, Cleveland 44124 (216) 831-4134/www.oneillfdn.org
$4.1
$3.6
$57.3
100,000
250
Center for Families and Children, Cleveland Sight Center, Horses and Humans Research Foundation, Jacob's Pillow Dance Festival Inc.
1987 NA
Leah S. Gary president, CEO
22
Martha Holden Jennings Foundation 1228 Euclid Ave., Suite 710, Cleveland 44115 (216) 589-5700/www.mhjf.org
$3.9
$4.6
$63.9
100,000
300
Cleveland Clinic Foundation, Cleveland Foundation, Foundation to Advance Childhood Education, Great Lakes Museum of Science, Environment & Technology
1959 5
William T. Hiller executive director
23
The Kent H. Smith Charitable Trust 1111 Superior Ave., Suite 1000, Cleveland 44114 (216) 696-4200
$3.6
$3.1
NA
NA
NA
University Circle Inc., Fund for Our Economic Future, Case Western Reserve University, Downtown Cleveland Alliance
2005 NA
Phillip A. Ranney secretary, trustee
24
The Margaret Clark Morgan Foundation 10 W. Streetsboro St., Suite 200, Hudson 44236 (330) 655-1366/www.mcmfdn.org
$3.4
$4.1
$72.0
NA
10,000
NEOUCOM, Akron Children's Hospital, Community Support Services
2001 5
Rick Kellar president
25
The Youngstown Foundation P.O. Box 1162, Youngstown 44501 (330) 744-0320/www.youngstownfoundation.org
$3.3
$4.2
$75.0
300,000
1,000
Easter Seal Society, Visiting Nurses Association, Youngstown Hearing & Speech Center, Potential Development, United Way of Youngstown/Mahoning Cty.
1918 3
Janice E. Strasfeld executive director
26
Stocker Foundation(6) 401 Broadway Ave., Suite C, Lorain 44052 (440) 246-5719/www.stockerfoundation.org
$2.9
$2.8
$43.9
100,000
100
American Red Cross Lorain, Fund for Our Economic Future, Planned Parenthood Arizona, Southern Arizona Children's Advocacy Center
1979 NA
Patricia A. O'Brien executive director
27
Reinberger Foundation 27600 Chagrin Blvd., Suite 355, Cleveland 44122 (216) 292-2790/www.reinbergerfoundation.org
$2.8
$3.9
$62.6
285,714
5,000
Cleveland Clinic Foundation, Great Lakes Theater Festival, Cleveland Zoological Society, Kent State University, Great Lakes Science Center
1968 4
Robert N. Reinberger, William C. Reinberger, co-directors; Karen R. Hooser, president
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 990-PF. (2) Information is from the 2008 990-PF, tax year from Oct. 1, 2008 to Sept. 30, 2009. (3) Information is from the 2008 990-PF. (4) Information is from the 2008 990-PF, tax year from July 1, 2008 to June 30, 2009. (5) Information is from the Annual Report, January, 2010. (6) Information is from the 2009 990-PF and www.stockerfoundation.org.
RESEARCHED BY Deborah W. Hillyer
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SEPTEMBER 6-12, 2010
Group: Financing development efforts still an issue continued from PAGE 1
plan may be dialed back as the county faces the prospect of annual budget deficits of up to $20 million in 2011 and 2012.
growth happen.” The co-chairs said a final report from the group would change somewhat from a draft discussed at the Aug. 24 meeting, but the differences primarily would relate to its structure, not its content. The economic development group is one of 13 ad hoc citizens’ working groups tackling various aspects of the county government that will go into place in January. Last November, Cuyahoga County voters overwhelmingly approved a new county charter that replaces three county commissioners with a county executive and an 11-member county council. The new charter gives the new government’s leaders broad flexibility to reorganize county government. A public presentation of the economic development report is scheduled for Sept. 16. Reports from all the working groups will be compiled and forwarded to the county executive and members of the county council. The effort to transform county government has had an overarching goal of reducing county operating costs by 15%, which would reduce the cost of government by about $50 million. The new government’s backers have said they would put that annual savings into an economic development fund, though that
Contact: Phone: Fax: E-mail:
Staying off ‘the third rail’ The economic development working group makes no recommendations on how the county’s economic development efforts would be financed. And while the group recommends that the new county government take advantage of the stronger role the new charter gives to county government to initiate economic development programs, it does so with the caveat that the new government must continue to honor the local authority of cities and other public agencies. Though the report emphasizes the need for collaboration and streamlining of public processes, it does not suggest consolidation to reduce overlap among programs. “That’s the third rail right now,” said Judy Rawson, an economic development group co-chair and former mayor of Shaker Heights, in referring to the fear among some municipal leaders that county reform will lead to mergers of communities. After examining how other counties — notably Summit County and Allegheny County in Pennsylvania — handled similar transitions, the working group laid out core principles
it believes the new county elected officials should use to set priorities for economic development. The report will recommend that the county economic development effort should focus on programs and projects of sufficient scale to “help transform the economic base of Cuyahoga County and improve our economic competitiveness” while leaving room for existing municipal development efforts. “Job creation and retention,” the draft of the report says, “is the paramount goal.” The group also will recommend that the county make land-use decisions, in particular focusing its energy on creating business-ready districts. Many of the built-up areas of the county have had difficulty attracting new or expanding businesses because companies scouting sites for new plants or offices shy away from properties that need demolition, rezoning or environmental cleanup before they are ready for construction. In addition, the report will outline the responsibilities of the new Economic Development Commission created by the new county charter.
Down to the details The charter only says that the commission will have 15 members, each of whom will represent a
specific constituency, and that the county executive and the county director of development will keep the commission informed of the county’s economic development activities. They also will consult with the executive and department director on the annual preparation of a five-year development plan and its presentation to the county council. The charter gives each of 14 organizations the power to name one member to the commission. Among the organizations with slots on the commission are the mayor of Cleveland, the Cuyahoga County Mayors and Managers Association, the Greater Cleveland Partnership, the Cleveland-Cuyahoga County Port Authority and the North Shore Federation of Labor. The 15th commission member will be chosen by the other 14. At the Aug. 24 meeting, Ms. Rawson said that while the commission has no substantive authority, it was clear to the drafters of the charter — she was one of them — that the commission would be a place to bring together all the key players in economic development in the county. But because the county executive and county council will make all spending decisions, the economic development commission would not have the power to make grants or loans. ■
Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com
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Data center operator has plan for new Akron facility Involta LLC, a company based in Cedar Rapids, Iowa, that provides third-party data center services, has announced plans to build and operate a $20 million enterprise data center in Akron. Involta said design of the 46,000-square-foot facility is under way and the company anticipates it will be operating by the fourth quarter of 2011. Involta said the data center will house computer systems and related components for businesses, government and educational institutions. The operation will include redundant back-up power, specialized fire suppression and reinforced concrete building construction. “The data center will mean more network connectivity and more technology infrastructure in Akron,” said Involta chairman Lonnie Bloomquist in a statement. — Mark Dodosh
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19
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REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
AUGUST 30 - SEPTEMBER 5
Kent State whips up ad with Devo co-founder
The big story: The CEO of Continental Airlines and Cleveland Mayor Frank Jackson both sought to downplay the significance of an internal Continental document that said air service in and out of Cleveland Hopkins International Airport would be cut severely after Continental’s planned merger closes with United Airlines later this year. In a statement that described the report as one Jackson of several simulations developed by Continental prior to the final merger agreement, Continental CEO Jeff Smisek said his airline “is firmly committed to Cleveland and will remain so after its merger with United.” According to Mr. Smisek, who will be CEO of the merged airline, “Other simulations showed Cleveland maintaining its size and others showed it growing.”
■ Kent State University officials are keeping tight-lipped about a new marketing campaign the university plans to unveil this fall, but one school administrator spilled some of the beans on his Twitter account last month. Tom Neumann, the university’s associate vice president for communications and marketing, tweeted Aug. 11 that he was filming a commercial at Kent State that featured Mark Mothersbaugh, co-founder of Devo, the oddball rock band whose biggest hit was “Whip It.” Mr. Mothersbaugh studied art at Kent State from 1968 to 1973 and in 2008 was awarded an honorary doctorate degree from the university. Mr. Neumann also tweeted that he filmed Mr. Mothersbaugh at the composer’s Los Angeles-based recording studio and another commercial “at a hospital in Cleveland.” Kent State spokesman Bob Burford confirmed that the university was planning to unveil a new marketing campaign but couldn’t release any of the details. Mr. Burford said the university would share the information at its Sept. 15 board of trustees meeting, which will be held at its Center for Urban Design at Playhouse Square in downtown Cleveland. — Timothy Magaw
By the numbers: It appears interest is growing in the planned medical merchandise mart and convention center in Cleveland. MMPI Inc., the Chicago-based developer behind the project, said it has received its 32nd signed letter of intent from a tenant for permanent showroom space in the medical mart. MMPI said it also has 16 letters of intent for conferences, conventions and trade shows at the complex. Both numbers represent significant increases in letters of intent from a June announcement highlighting tentative commitments to 24 permanent showrooms and 12 conferences, conventions and trade shows.
High times for Hyland: Hyland Software Inc. just doubled the number of colleges and universities it serves. Hyland acquired another document management software firm, Hershey Systems of Santa Fe Springs, Calif. The deal gives Hyland Software another 200 higher education institutions to add to the 200 colleges and universities that already use the Westlake company’s OnBase software. Hershey Systems also serves about 140 courts and 100 businesses. The acquired company employs about 30 at three offices in the United States and one in the United Kingdom. Hyland Software employs about 960.
Time to realign: Akron-based A. Schulman Inc. plans to reduce production at a plant in South Wales of the United Kingdom and move some of that output to two other, larger plants in Europe. As a result of the realignment, the producer of plastic resins said several production lines at its 74,000-square-foot plant in Crumlin, South Wales, will be shut down and about 30 jobs will be eliminated. This and that: A Park-Ohio Holdings Corp. subsidiary acquired Assembly Component Systems, a unit of Lawson Products Inc. The diversified manufacturing and logistics company did not say what it paid for Assembly Component Systems, which provides supply chain management services throughout North America. … FirstEnergy Nuclear Operating Co. submitted an application to the Nuclear Regulatory Commission for renewal of the operating license for the Davis-Besse Nuclear Power Station. If approved, the license renewal would extend DavisBesse’s operations until 2037.
A killer of an idea
■ Is your bus stuck in traffic and running 15 minutes late? Wouldn’t you like to know?
■ Manufacturers in Lake County are taking competition to a new level, one that requires a cage to protect spectators while they fight to the death. They aren’t going to fight themselves, though. They’re going to get school kids to do it — with robots. This spring, members of Lake County’s Alliance for Working Together will sponsor area high schools in a battling robots competition called RoboBots. So far, 15 manufacturers have signed on
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For political junkies, Ohio’s got it all
Garick goes to Waste: Waste Management Inc. acquired a majority stake in Garick LLC, a Cleveland-based supplier of organic lawn and garden products. Waste Management, a publicly traded company based in Houston, bought the interest in Garick in an effort to expand its ability to turn food, yard waste and other organic trash into mulch, compost and other organic products. Depending on the time of year, Garick employs 25 to 35 at its Cleveland headquarters and 125 to 150 across the country.
Well, the Greater Cleveland Regional Transit Authority soon will be giving you a chance to avoid freezing in a bus shelter on a cold January day. It’s developing a text message system, tentatively called “Commuter Alert,” that will allow riders to register the train or bus lines they take and during which time frames they travel. Then, if a transit vehicle gets stuck, registered riders will receive messages on their cell phones alerting them to the delay. RTA spokeswoman Mary McCahon said beta testing of the alert system began in early August and it should be up and running in a few months. Farther down the road, Ms. McCahon said, RTA hopes to develop a phone app that will make its scheduling information easily available to smart phone users. — Jay Miller
COMPANY: Brennan Industries Inc., Cleveland PRODUCT: Gap gages Brennan, a supplier of hydraulic fittings and adapters, is trying to help customers who find themselves in a tough spot — literally. The company has introduced a line of gap gages designed to make sure instrumentation tube fitting have been pulled up sufficiently. The gages are especially useful, Brennan says, “for tightening fittings in hard-to-reach locations.” They also are designed for systems where “insufficient make-up could result in dangerous or expensive consequences.” After an instrumentation tube fitting is installed and before the system is pressurized, users can insert the gap gage between the fitting nut and the body hex, Brennan says. If the gage will not fit it at any point of the gap, the company says, the nut has been properly made up and no additional tightening is necessary. If the gage can be placed between the fitting nut and the body hex, the assembly procedure must be repeated. For information about the company, visit www.BrennanInc.com. Send new product information to managing editor Scott Suttell at ssuttell@crain.com.
■ Ohio is that state to watch in this fall’s elections. So said Peter A. Brown, assistant director of the Quinnipiac University Polling Institute, in a piece for The Wall Street Journal. “In a presidential election year, Ohio is arguably the most important state in the country when it comes to the Electoral College,” Mr. Brown wrote. “In this November’s offyear elections, the Buckeye State may serve a similar function — as the swing state that tells us just how hard the winds are blowing nationally.” With tight races for governor and senator, not to mention several close congressional contests, “Ohio is likely to tell us not only which political party will be victorious but also how large the anticipated Republican wave turns out to be,” according to Mr. Brown. If the GOP can win these toss-up Ohio races, “then a repeat of the 1994 Republican landslide might be possible nationally,” he noted. But wins by Democrats in those races “would likely indicate that their losses might be smaller elsewhere, more in line with those typically suffered by a president’s party at this point in the calendar.”
Only well-connected cities thrive in the wired world ■ New research from a Michigan State University sociologist found that cities with the best opportunities to build vibrant local economies are those that have extensive connections — both physical and digital —
to sponsor one robot each, and the group is in the process of approaching local high schools to sign up participants, said Rich Ditto, vice president of manufacturing for Fredon Corp. in Mentor. Each school will begin with a kit, costing a little under $1,000, that includes wheels, a motor, a frame and a remote control. Students then need to armor, weaponize and develop a strategy for their robot on their own, Mr. Ditto said. The idea is to attract more high school kids to advanced manufacturing and to expose them to robotics, computer programming and other high-tech skills that today’s manufacturers employ. Alliance for Working Together also hopes to send its champion to compete in a national competition sponsored by the National Tooling and Machining Association. Mr. Ditto and other volunteers are designing and gathering material for a cage, to be constructed of bulletproof clear plastic, that he said will cost about $15,000 to build. That’s so the robots can battle with their saws, hammers and other destructive devices without posing a risk to audience members from flying metal. The competitions will be held at Lakeland Community College, where the Alliance for Working Together meets. Mr. Ditto said he hopes to see robots killing each other there by spring 2011. — Dan Shingler
to other places. Zachary Neal reported that although America’s largest cities once had the most sophisticated economies, that’s no longer necessarily true. “The rise of commercial aviation, high-speed rail, the Internet and other technological advances have allowed smaller cities to compete with urban powers such as New York and Chicago,” according to a Michigan State summary of Mr. Neal’s work. He examined the population and air-traffic data for 64 U.S. cities from 1900 to 2000 and found that a city’s population was the most important factor for its economy until the 1950s, when the spread of commercial air travel fostered more cross-country business networks. That trend continued with advances such as teleconferencing and the growth of the Internet. “Some large cities — including New York, Los Angeles and Chicago — built on those networks and maintained their economic clout,” Mr. Neal reported. “Other cities — like Detroit, Cleveland and Pittsburgh — were unable to effectively capitalize and now are considered ‘poorly connected.’” In the last decade, he said, “wired towns” such as the Raleigh/Durham area of North Carolina and Bentonville, Ark. — thanks, Walmart — are seeing fresh economic opportunities that in the past only would have been possible in larger markets.
We suggest the title ‘Sturman Drang’ ■ In what could be a film worth seeing, a screenwriter is working on a project on the late Cleveland porn king Reuben Sturman. The Hollywood Reporter says the script is being written by Adam Mazer, an Emmy winner for HBO’s recent Jack Kevorkian movie starring Al Pacino.
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