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Vol. 34, No. 36
$2.00/SEPTEMBER 9 - 15, 2013
Entire contents © 2013 by Crain Communications Inc.
Park ready to re-up with I-X Center Operator says he’ll extend lease with city, despite dispute over $2 million sewer line break By JAY MILLER jmiller@crain.com
With all the hoopla surrounding the unveiling of the new Cleveland convention center, it would be a mistake to assume that its opening
spells the beginning of the end for the city’s other, larger exhibition hall — the I-X Center adjacent to Cleveland Hopkins International Airport. The I-X Center is still going strong, and Ray Park, 87, head of
the family-owned conglomerate that operates the giant exhibition hall, told Crain’s he intends to exercise his option to extend his lease for five years beyond its current 2014 expiration. “It’s doing good,” said Mr. Park,
whose Park Corp. does not report publicly the revenues of the I-X Center. “It isn’t very busy in the summertime, but it’s booked up for the show season. Little by little, it’s getting better.” See PARK Page 15
“It’s doing good. It isn’t very busy in the summertime, but it’s booked up for the show season. Little by little, it’s getting better.” – Ray Park, head of Park Corp., on the I-X Center
Compass directs its sights to Shaker Amsdell unit plans to spend ‘millions’ as it begins local self-storage push By STAN BULLARD sbullard@crain.com
Cleveland-based Amsdell Cos. is setting its compass for Northeast Ohio — its Compass brand of selfstorage centers, that is. The company led by the Amsdell family plans to convert the former Ganley Nissan and one-time Blauschild car dealership at 16005 See COMPASS Page 18
INSIDE MARC GOLUB
The centerpiece of the Akron Children’s Hospital project is a new critical care tower near the intersection of Locust and Exchange streets.
PRIMARY FOCUS IS GOOD FOR GROWTH
W
ith much fanfare, Akron Children’s Hospital last spring broke ground on an exhaustive, $200 million expansion of its main campus in the heart of downtown Akron — a project slated to be the hospital’s loftiest capital investment in more than two decades.
0
NEWSPAPER
74470 83781
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With 23 primary care practices in tow, Akron Children’s is developing powerful pediatric network
By TIMOTHY MAGAW tmagaw@crain.com
HEALTH CARE SUMMIT
An increasing appetite Gluten-free dishes are becoming a must for many Northeast Ohio retailers and restaurants. PAGE 3
See PRIMARY Page 6
5 2 T P E S ONE ROOM.
15 EXPERTS.
CrainsCleveland.com/HCSummit
Presented by:
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CRAIN’S CLEVELAND BUSINESS
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SEPTEMBER 9 - 15, 2013
BE SAFE
COMING NEXT WEEK
The federal government reports there were nearly 4,400 workplace fatalities in 2012, with transportation incidents accounting for nearly 41% of them. Of the nearly 1,800 transportation-related fatal injuries, about 58% were roadway incidents involving motorized land vehicles. Here’s a breakdown of the most common types of workplace fatalities last year:
Cleveland’s home for health care innovation The Cleveland Clinic’s Medical Innovation Summit will help to open the Global Center for Health Innovation. In a special supplement, Crain’s will highlight the facility and summit.
Type of event
Number
Transportation incidents
REGULAR FEATURES Classified ....................18 Editorial ........................8 From the Publisher ........8 Going Places ...............10
Letter............................8 Reporters’ Notebook....19 The Week ....................19 What’s New..................19
1,789
Violence by people or animals
767
Contact with objects or equipment
712
Falls, slips or trips
668
Exposure to harmful substances or environments
320
Fires or explosions
116
Other
11
Total
4,383
■ Source: U.S. Bureau of Labor Statistics; www.bls.gov
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CRAIN’S CLEVELAND BUSINESS
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3
Shearer finds this venture appetizing
INSIGHT
Former longtime CEO of food company sees big potential in Or Derv By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com
Less than a year after leaving the potato chip business for which his name is known, Bob Shearer has jumped into a different category of snacks: frozen appetizers. This summer, Mr. Shearer made an investment of undisclosed value in Akron-based Or Derv Foods LLC, a maker of frozen sauerkraut balls, falafel, calamari and other appetizers. Investment group Bob Shearer Akron LLC now owns 40% of Or Derv and is helping to usher in yet another period of growth in the company’s 51-year history. Mr. Shearer, who had been a cofounder at Shearer’s Foods Inc. and its CEO for all but five of his nearly 40 years there, said he was looking for a way to stay in the food business after the sale of his snack food company last October to Chicago private equity firm Wind Point Partners. Besides its own products, Or Derv makes and develops custom products for private label customers. If a customer wants a particular product, Or Derv can make it, Mr. Shearer said — there are “no boundaries as far as our sales opportunities go.” There are many chances to be innovative at Or Derv, he said. “I’ve always been a firm believer that your best ideas are going to come from
CONTRIBUTED PHOTO
Keith A. Kropp, left, is the CEO of Or Derv Foods LLC. A group led by Bob Shearer, right, owns 40% of the company. your customers,” he said. Much of that flexibility in product development can be attributed to Or Derv’s current CEO. When Keith A. Kropp, who now owns 60% of Or Derv, bought the company in 2004, it was just turning out the sauerkraut balls for which the company was known. But Mr. Kropp, who has spent his career in the food industry and started his own frozen cookie dough company in the early 1990s, saw more potential for Or Derv. Mr. Kropp said the company began introducing more “unique” appetizers for the retail and food service markets. An example is a wonton popper made of cream cheese and diced jalapeños wrapped in a wonton skin instead of a traditional jalapeño popper. “It’s really to set ourselves apart in the appetizer market,” Mr. Kropp said. See SHEARER Page 15
THE WEEK IN QUOTES “It’s doing good. It isn’t very busy in the summertime, but it’s booked up for the show season. Little by little it’s getting better.” MARC GOLUB
Eric Williams, owner and chef of Momocho in Cleveland and El Carnicero in Lakewood, prepares a gluten-free Al Pastor tamale at El Carnicero.
REMOVING THE WORRY C
By LAURA STRAUB clbintern@crain.com
Restaurants, grocers, food makers catering more to gluten-free diets
assie Paullin is a glutenfree trailblazer of sorts. The wellness coordinator for the 18-store Heinen’s supermarket chain has fought the last 10 years to make gluten-free items and education available in the grocer’s locations in Ohio and Illinois. See WORRY Page 9
ON THE WEB: Watch chef Eric Williams prepare a gluten-free product by viewing a video at: www.CrainsCleveland.com/EricWilliams
— Ray Park, head of I-X Center operator Park Corp. Page One
“It’s a continuous challenge to have the resources to compete.” — Dr. John Humphrey, executive director of North Canton Medical Foundation, which recently sold its pediatric practice to Akron Children’s Hospital. Page One
“People love the holidays, they love Christmas Ale and they love taking their family to Mitchell’s. We enjoy doing it because it’s fun, and we’re turning something that could be waste into something delicious.”
“It really started out as a creative way to be involved in the cycling business. Over time, we have learned more about art and design, how to give our clients what they want, and how to make them so they last a long time.”
— Mike Mitchell, co-owner, Mitchell’s Ice Cream. Page 11
— Lou Erste, partner, Rust Belt Welding. Page 11
1 EDI Source is more than happy to pick up the slack Solon company is expanding, thanks in part to two of its competitors shifting focus By CHUCK SODER csoder@crain.com
1 EDI Source has spent the past three years trying to fill a void.
In 2010, two competing companies that make electronic data interchange software — products that help companies sift through digital data they get from their
business partners and funnel it into their computer systems — were acquired by larger companies. All of the sudden, 1 EDI no longer had to fight them for customers
and started winning more business, said CEO John Onysko. As a result, the company has been on a hiring spree. Today, 1 EDI employs 90 people, up from
roughly 50 in 2009, when the company moved to Solon from Kent. Lately, the 24-year-old company has been putting the infrastructure in place to get even bigger. In June, it hired a new president, David Lowman, who spent eight years as See 1 EDI Page 17
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CRAIN’S CLEVELAND BUSINESS
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SEPTEMBER 9 - 15, 2013
Crain’s earns six awards, including two Best in Show, in Ohio SPJ contest Crain’s Cleveland Business has been honored with six awards — including two Best in Show awards and three other first-place awards — in the annual Ohio SPJ Awards presented by the Cleveland, Cincinnati and Columbus chapters of the Society of Professional Journalists. Among publications in the small print category, which is all publications in Ohio with circulation of less than 75,000, Crain’s won Best in Show as best weekly publication and Best in Show for best special section for “The Remaking of West 25th Street and the Market District.” That section, spearheaded by sections editor Amy Stoessel, was named a winner in the 59th annual Jesse H. Neal Awards, a national competition honoring the best work in business media, and in the 35th annual Azbee Awards, conducted by the American Society of Business Press editors, for best
Dodosh
Magaw
multimedia package. Also in the small print category, Crain’s swept the business reporting category, with fiStoessel nance reporter Michelle Park winning first place for stories representing a body of her work and technology reporter Chuck Soder winning second place for stories representing a body of his work.
Park
Soder
Education and health care reporter Tim Magaw won first place for reporting on higher education issues for stories representing a body of his work. And editor Mark Dodosh won first place for best editorial page campaign for a series of editorials calling for change in Ohio’s redistricting process. It is the second straight year Mr. Dodosh has received first-place honors in that category. The awards will be presented Oct. 5 at a luncheon at the Columbus Zoo and Aquarium. ■
Car and bike shows can be an effective way to drive business By LAURA STRAUB clbintern@crain.com
You’ve probably seen them in the parking lots of restaurants and even big-box stores in your town. Dozens, sometimes hundreds, of car enthusiasts with the hoods popped up on their vehicles, proudly displaying the engines in their GTOs, Mustangs or other muscle cars. Or the motorcycle riders who show up en masse to show off their Harley-Davidson Sportsters and Fatboys. For the businesses that host the gatherings of these motor-loving men and women, they remain an inexpensive way to bring new and repeat customers through their doors, often at times when business otherwise might not be so hot. Take the Northfield/Macedonia location of Mr. Chicken, 10710 Northfield Road. It hosts weekly cruise-ins every Friday night from Memorial Day through October. The shows started eight years ago when the owner noticed business slowing, said assistant manager Randy Scraga. The owner saw the success nearby businesses were enjoying with car shows and decided to try his hand at it. “The first shows had maybe 50 cars,” Mr. Scraga said. But now every Friday, the parking lot and adjacent fields overflow with close to 150 cars. And with the cars comes foot traffic, with more than 400 people coming in and staying longer than a typical fast food visit, Mr. Scraga said. “They spend a good hour here,” he said. Mr. Scraga said he also thinks the commotion attracts curious onlookers who aren’t usual clientele of the chain. The additional customers come at little expense, according to Mr. Scraga, who esti-
“You never know when someone will come in, have some popcorn, have a pop and go, ‘Oh, right, I needed some lumber.’ ” – Peggy Mason, lead generator for at-home service, Home Depot in North Olmsted mates putting on the weekly show only costs between $150 and $250, which covers a DJ, raffles and flyers. The car show trend is cruising down Northfield Road, Mr. Scraga said. He has noticed the Chick-fil-A at 5170 Northfield Road hosting antique cars on Wednesday nights. It’s easy to see why Quaker Steak and Lube boasts about what it calls Cruise-Ins and Bike Nites. From kids’ meals served in cardboard cars to full-size motorcycles suspended from the ceiling, these promotions fit the motif of the restaurant chain, which is based in Sharon, Pa. “It kind of helps when we do events that represent what our brand is about,” said Jami Karg, marketing and activities coordinator who is based at the Quaker Steak and Lube on 5935 Canal Road in Valley View. As a system, Quaker Steak and Lube has hosted Bike Nites and Cruise-Ins for the past 40 years, Ms. Karg said. Quaker Steak’s Northeast Ohio locations in Austintown, Sheffield and Valley View attract more than 500 cars and 1,500 to 2,500 bikes when the weather is right. With the big crowds and the surly reputation of motorcyclists, Ms. Karg said he could see how a dayto-day customer may not be comfortable when they come upon the scene. However, she said if they come up to the restaurant they would see the six Valley View police officers on duty for every Bike Nite.
“I think it gives people peace of mind when they see them,” she said.
Just pop in Although the majority of car and motorcycle gatherings are held at restaurants and fast food joints, big-box stores and strip mall retailers are in on the action, too. The North Olmsted Home Depot at 26241 Brookpark Road has been hosting a car show the first Saturday of every month in conjunction with its kids’ workshop. Kids don orange aprons from 9 a.m. to noon while working on do-it-yourself inspired craft, said lead generator for at-home service Peggy Mason. After the kids are done, the parents can take them to see the cars. Although this show is relatively small compared to other businesses’ weekly promotions, the 50 to 70 cars add to the carnival atmosphere induced by popcorn, samples from neighboring restaurants, raffles, face painters and Home Depot’s own self-proclaimed “Home Depot Radio Show,” comprised of the lumber and electrical department heads and the store manager. Each month the car show costs about $250 to put on, Ms. Mason said. Her goal is to get people inside the store to get estimates on home improvement projects that they simply don’t want to do themselves, like installing a ceiling fan, she said. Many people don’t realize Home Depot provides these services, and bringing in new customers through promotions such as the car shows is an effective way to spread the word. Employees also make sure to capitalize on impulse shopping tendencies of the new shoppers. “You never know when someone will come in, have some popcorn, have a pop and go, ‘Oh, right, I needed some lumber,’ ” Ms. Mason joked. ■
Volume 34, Number 36 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2013 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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More quietly, but just as important, the hospital also is strengthening its hold on Northeast Ohio’s pediatrics market by taking advantage of independent providers’ inability — and oftentimes, reluctance — to remain unattached to a larger enterprise. As a result, Akron Children’s has built a strong network of primary care pediatricians — 23 sites in all — and the hospital is showing no signs of slowing its regional sprawl. This summer, Akron Children’s made significant moves in Stark County by inking deals to take over two pediatric practices and Aultman Hospital’s inpatient pediatric unit. Akron Children’s also is looking to add some heft to its burgeoning presence in the Mahoning Valley and is eyeing new opportunities in Trumbull County. “We’ve maintained close allegiances with these practices basically so we could position ourselves when they’re looking to align with a health system that we were the partner of choice,� said Shawn Lyden, Akron Children’s executive vice president, in a recent interview with Crain’s Cleveland Business. With those new primary care practices in tow, Akron Children is poised to have one of the largest pediatric primary care networks owned by a children’s hospital in the country, according to Mr. Lyden. That’s not to downplay Akron Children’s significant and muchneeded investment at its main plant. However, health care observers suggest providers with robust primary care offerings will be best prepared for health reform as government and commercial payers shift toward a model that pays providers for keeping people healthy, rather than on a fee-for-service basis when people
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Akron Children’s Hospital broke ground on its $200 million expansion last spring.
ABOUT THE PROJECT The Akron Children’s Hospital expansion will include: ■A 100-bed neonatal intensive care unit with private rooms ■A high-risk delivery area ■An expanded emergency department ■A new outpatient surgery center ■An enclosed concourse that takes patients and staff to a new 1,250-space parking garage ■Source: akronchildrens.org are sick. It’s also become increasingly difficult for independent providers to cope with those changes on their own, opening the door for larger organizations such as Akron Children’s to make a move. “It’s a continuous challenge to have the resources to compete,� said Dr. John Humphrey, executive director of the North Canton Medical Foundation, which recently sold its pediatric practice to Akron Children’s.
Stuck in the middle? While Akron Children’s continues to extend its footprint, the heart of its operation in downtown Akron sits at what seemingly has been ground zero for this year’s wave of mergers and acquisitions rocking Northeast Ohio’s health care landscape. Akron-based Summa Health System, for one, is in the process of selling a 30% stake in its enterprise to Cincinnati’s Catholic Health Partners, the state’s largest health system. Akron General, which sits just a stone’s throw from Akron Children’s main campus, recently announced plans to be acquired by a newly launched joint venture by Community Health Systems, a for-profit health care juggernaut based in Nashville, Tenn., and the Cleveland Clinic. Akron Children’s maintains that, unlike its neighbors, it isn’t looking to link arms with a larger enterprise. Its neighbors looked to buddy up with a larger organization to boost their balance sheets. However, Akron Children’s — an operation with about $580 million in annual operating revenue — boasted a healthy 4.1% operating margin last year, according to a report issued last spring by Moody’s. The flurry of M&A activity is bound to have some impact on Akron Children’s, though Mr. Lyden said to what extent has yet to be seen. Akron Children’s, for instance, has close ties with both Summa and Akron General, as it operates neonatal intensive care units at
their main hospitals. Mr. Lyden said Akron Children’s already has a strong relationship with Catholic Health Partners — Summa’s suitor — given that the children’s hospital runs the neonatal intensive care unit at the health system’s St. Elizabeth Health Center in Youngstown. At one point, it was rumored that University Hospitals, another strong regional player in the pediatrics, was interested in a deal with Summa, though it was Catholic Health Partners that ultimately emerged. The Akron General situation may prove trickier considering the Clinic is another strong regional player in pediatrics, but Mr. Lyden said it was too early to say how the relationship might play out. “This is a complicated puzzle, but all the pieces will start to fit together at some point,� he said.
A modern home What’s more concrete is Akron Children’s $200 million investment in its facilities. With this investment, Akron Children’s joins Ohio’s other pediatric powerhouses that have upgraded or plan to upgrade their plants. Just last week, Cincinnati Children’s Hospital announced a planned $162 million expansion at its Liberty Township facility. Last summer, Nationwide Children’s Hospital in Columbus finished a seven-year, $783 million upgrade, which added 2.1 million square feet to the hospital’s downtown campus. The centerpiece of the Akron Children’s project will be a new critical care tower near the intersection of Locust and Exchange streets in downtown Akron. The tower will include a neonatal intensive care unit with private rooms, a new emergency department, outpatient surgical suites and a dedicated space for several of the hospital’s pediatric subspecialty programs. The investment includes a planned expansion of the Ronald McDonald House of Akron to accommodate the hospital’s growth, a 1,200-space parking deck and a new welcome center and “front doorâ€? for the hospital. Mr. Lyden said Akron Children’s isn’t necessarily eyeing the expansion as a way to grow its service lines, but rather as a means to modernize its aging facilities and have a plant that can cope with its patient volumes. The hospital’s current emergency department, for example, was built to accommodate 44,000 visits a year but today sees more than 60,000 visits annually. â–
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CRAIN’S CLEVELAND BUSINESS
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OPINION
Jobs? Right
T
hey call themselves the Committee to Protect Ohio Jobs, though protecting the jobs of average Ohioans is hardly their chief concern. They collectively are parties with vested interests in keeping Ohio’s Internet café business going so they can continue to fill their pockets with the money of people who play the slots-like sweepstakes games found at their thinly disguised gambling parlors. The committee’s aim is to repeal House Bill 7, a measure Gov. John Kasich signed into law in June that effectively would kill Internet cafés, in part by sharply restricting the payouts on their games of chance. The committee on Sept. 3 submitted to Secretary of State Jon Husted petitions that purport to contain the signatures of nearly 434,000 Ohioans who want a statewide referendum on the Internet café bill. To get the referendum on the ballot in November 2014, the committee needs about 231,000 valid signatures. So, it would appear the committee’s chances of success are fairly good even if many of these signatures are invalidated by the county election boards that must verify them. The response of the café interests was predictable. There is too much money on the table for them to fold their hands and walk away quietly. News reports have put the cafes’ annual volume of business in Ohio at amounts approaching $1 billion. That explains why the parties that benefit most from their operation are willing to spend the time and money to prevent their gravy train from grinding to a halt. According to campaign finance data available as of last Thursday, Sept. 5, on the Secretary of State’s website, the Committee to Protect Ohio Jobs from May 24 through June 28 had collected $641,500 in contributions. Of that total, nearly half — $300,000 — was contributed by Frontier Software Systems Inc., a company listed with an address in Piedmont, S.C., that provides software for Internet café games. Among the other contributors are café operators. They include Gamers Club North Olmsted Inc. ($23,000), Players Oasis in Zanesville ($10,000) and Café in the Village LLC in Sheffield Village ($6,500). More than $550,000 of the committee’s expenditures went to The Strategy Network LLC of Columbus for what is described on the secretary of state’s website as “petition services.” That’s a relatively small investment to make, considering what’s at stake. The café interests are a dogged bunch, as seen by their actions here and in Florida, where Gov. Rick Scott last April signed into law a bill declaring Internet cafés illegal. Florida Today reported last month the bill not only is undergoing a legal challenge, but operators of the now-banned cafés also are modifying their machines so that they no longer fall within the scope of the law. The filing in Ohio of the referendum petitions has put House Bill 7 on hold. That’s frustrating for the parties that see the cafés as illegal gambling operations and want them killed. They will need to be even more determined than the pro-café interests should the bill be put to a vote, which we expect it will.
FROM THE PUBLISHER
Brother, can you spare a dime? ford,” she writes. emember the 1982 ghost movie, “Surprise” me? Hardly. “Easily af“Poltergeist?” Perhaps one of ford”? Not a chance. that film’s eeriest moAnd as for it being an “unments was when little BRIAN usual proposition,” well, not reactress Heather O’Rourke, the TUCKER ally. It seems ever so similar to child of the couple being torthose emails from that disenmented by the destructive spirfranchised Nigerian prince who its, uttered those memorable needed my help — and money words: “They’re back.” — to unlock his oil wealth. My So it was with those words in guess is that Aisha’s offer of “a mind that I chuckled as I read very profitable joint venture my email from “Aisha Shukri and a lasting business relationGhanem,” who claims her famship” was very much like all ily fled from Libya following the those similarly generous offers from that uprising “last year” against Muammar Nigerian prince. Gadaffi. The revolt actually ended in late All I had to do was write back. 2011, but let’s not let facts get in the way. Do you suppose Aisha is waiting by It appears “Aisha’s” father has passed her computer, at her mother’s sickbed? away and her mother is in ill health. ConGosh, I hope not. sequently, she writes, “I believe in taking ***** business risk with strangers mainly to esPollsters visiting our home page at cape the spotlight and I hope you can do www.crainscleveland.com are split this for my family.” evenly on their predictions for the Huh? Browns’ new football season. “I have a rather unusual proposition A total of 45.7% of the voters clicked the having found you on the internet in desbox “6 wins or fewer, same as it ever was,” peration and I am here to surprise you and 44.3% chose “7-9 and some hope for with this extreme offer you can easily af-
R
2014.” The mild surprise — given the Browns’ futility for most of their years since returning as an NFL expansion team — was that the other 10% predicted “10 wins and a return to the playoffs.” Curiously, my pal, Arthur, a Philly boy who’s accustomed — as all Philadelphia fans are — to being demanding of sports teams, also thinks the Browns can win 10. For those of us who were around to enjoy the Browns’ legitimate Super Bowl chases of the mid-’80s, that would be a wonderful first step. Another recent poll asked about Cleveland’s reinvention of its neighborhoods and whether that enticed folks to play and dine more in the city. A whopping 72.7% chose the response “yes, and there are more good options to do so.” Only 15.7% said they preferred to stay in the ’burbs, maybe to save on gas. Visit our home page and cast your vote. By doing so, you can read some interesting results of recent poll questions. It’s entertaining and informative, and takes just a couple minutes. Maybe we should ask if anyone has gone into business with Aisha? ■
LETTER
POLL POSITIONS
Who are we? Let’s find out
I
appreciate Crain’s strong statement supporting Medicaid expansion in the Aug. 26 editorial, “Get movin’.” I hope you keep a close watch on this issue. It is extremely important for Ohioans who will be denied care if Republicans deny expansion, for our economy, and for providing an answer to that old question: Who are we? Are we the greedy and bigoted, or do we care about all our fellow citizens? I would also encourage you to look at Michigan, where Gov. Rick Snyder, a Republican, lost an initial vote in the Republican Senate, went to work, called for a second vote and won it. Contrast that to the statement of Gov. John Kasich’s spokesperson that “we
WRITE TO US Send your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, 700 W. St. Clair Ave., Suite 310, Cleveland, OH 441131230; Email: editor@crainscleveland.com
don’t get involved with the Legislature.” Completely lame. Does Gov. Kasich just not know how politics works, how a governor can use that position to get results? Did he not see “Lincoln?” Or more likely, is he just terrified that pushing the proposal would kill whatever thoughts — far-fetched as they may be — he may have about running for president in 2016, because he has to kowtow to the right wing? Ray Sawyer Cleveland Heights
Do you think Frank Jackson deserves to be re-elected as mayor of Cleveland? Yes. He has been a good mayor.
27.9% Probably, but I wish there were stronger competition for the job.
32.6% No. The city needs change.
39.5%
Based on 129 online responses. Vote in the poll each week at CrainsCleveland.com.
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Worry: One in 133 Americans have celiac disease continued from PAGE 3
“I just saw a need with my customers in my store,” Ms. Paullin said. She remembers one of her first customers was a mother of two teenagers who had just been diagnosed with celiac disease — a disease that damages the small intestine and is triggered by eating gluten, a protein found in wheat, barley and rye. Ms. Paullin spent four hours casing the store with the woman, educating her on its glutenfree products. As the ranks of people diagnosed with celiac disease has risen dramatically in recent years, so, too, has the interest of food producers, retailers and restaurants in Northeast Ohio in meeting the needs of customers who must adhere to gluten-free diets. Just last month, J.M. Smucker Co. in Orrville completed for an undisclosed price the acquisition of Enray Inc., a company in Livermore, Calif., that sells gluten-free pastas, grains and cookies under the truRoots brand. Maribeth Burns, vice president of corporate communications for Smucker, said Smucker plans to use the new products as a launching platform for what it recognizes as a rapidly growing gluten-free market. Smucker is not the only company bulking up its supply of gluten-free products. Pierre’s Ice Cream Co. in Cleveland offers 24 celiac-friendly flavors of ice cream in addition to its gluten-free frozen yogurt and sorbet offerings. Two months ago, Pierre’s introduced a new gluten-free treat for the summer, its “¡Hola Fruta!” fruit bars, said Laura Hindulak, vice president of marketing. “We feel everyone deserves a treat, so Pierre’s is excited to offer so many options for its ice cream fans,” she said. At Heinen’s, Ms. Paullin remains an advocate for her customers who require gluten-free diets. Today, any customer can call and schedule a tour with a wellness consultant at their closest Heinen’s location. Although the grocer’s marketing department designates each mainstream manufacturer’s gluten-free products with a brown gluten-free sticker and Heinen’s stores feature sections of exclusively gluten-free items, the tours teach shoppers how to make balanced meals from the hundreds of products offered. “It really puts them at ease, because they think their whole life has
changed,” Ms. Paullin said.
Removing the guesswork From breads and medicine capsules to the saliva-activated glue on an envelope, gluten can be found in everything that requires binding. Its presence can make life hard for the one in 133 Americans who is affected by celiac disease. For those individuals, the constant intake of the protein can result in a range of 200 symptoms, from common digestive problems to the more serious gall bladder malfunction and the early onset of osteoporosis, said Hillary Kane, communication director of the Celiac Disease Foundation. Though the foundation estimates that more than eight out of 10 celiac sufferers remain undiagnosed, awareness of the disease is growing. Local restaurateurs are responding by offering more gluten-free creations on their menus. “Vegetarianism and veganism is a choice,” said Eric Williams, owner and chef of Momocho at 1835 Fulton Road in Cleveland and El Carnicero at 16918 Detroit Ave. in Lakewood. “But celiac is a disease. They don’t have a choice.” Mr. Williams said his staff spent three or four days researching each individual ingredient for every item on the menu, deciding if it was gluten-free. It was a tedious process, because certain brands or styles of an ingredient are glutenfree while others are not, he said. For example, while yellow mustard and regular vinegar are celiacfriendly, whole grain mustard and malt vinegar are not. “We tried to take all the guesswork out of the customer’s experience and have them enjoy themselves,” he said. “We’re in the business of making people happy,” Mr. Williams said. “If that means taking a few extra days of researching where my soy sauce and mustards come from, so be it.” Restaurants with ingredients from natural sources prove to be the most reliable sources for gluten-free meals. At Spice Kitchen & Bar, 5800 Detroit Ave. in Cleveland, owner and chef Ben Bebenroth said he creates simple, flavorful dishes with fresh ingredients from farmers’ markets or his suburban and urban gardens. “There’s really no guessing game,” Mr. Bebenroth said. “We don’t hide fillers and things like that
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in there.” Like Mr. Williams, Mr. Bebenroth wants customers with special dietary needs to feel special, not a burden. However, he has an ulterior motive to producing dishes with local, fresh, gluten-free products. He wants to take business away from industrial agriculture and put that money back into community farms so he knows exactly from where his crops are coming, “Chefs have more control over your health than a doctor does,” Mr. Bebenroth said.
Touchy subject The U.S. Food and Drug Administration slowly is introducing mandates regarding gluten, including an Aug. 14 stipulation that to bear a gluten-free label an item must have less than 20 parts per million of gluten. However, the power and enforcement is in the hands of the chefs and manufacturers. Although verifying ingredients and their origins is important to keeping a celiac-friendly meal gluten-free, food suppliers, processors and handlers also must contend with cross-contamination and take precautions against it. The Celiac Disease Foundation’s Ms. Kane said if the cookware used to make a gluten-free item also comes
Bratenahl
into contact with gluten throughout the day, the ongoing contamination could bring the gluten levels up high enough to irritate a person suffering from celiac disease. For Mr. Williams’ staff, it is common knowledge which fryer is used to make gluten-free dishes, and gluten-free sauces are made on a designated day, so that they’re not next to a gluten sauce on the stovetop. Mr. Williams’ two Tex-Mex restaurants even offer a wine list of vino aged in celiac-friendly cast iron, free of gluten contaminants. Spice Kitchen’s Mr. Bebenroth said he treats gluten contamination as seriously as protein contamination associated with meats, and keeps the products separate by using different preparation stations. The practices implemented to prevent cross-contamination at a restaurant are no different than at the deli counter at Heinen’s, which offers specialty gluten-free deli meats. But, if the butcher didn’t designate a shaver for the gluten-free meat, the specialty product would be for naught, Ms. Paullin said. Pierre’s also understands the severity of the problems cross-contamination can create. It produces an assortment of regular and gluten-free frozen treats, all in the same plant, but keeps the gluten-free products
pure through carefully planned and executed production schedules and a meticulously cleaned production space, Ms. Hindulak said. “This becomes a challenging puzzle to piece together, especially during the busy summer selling season,” she said. As another layer of protection, Pierre’s certifies its gluten-free ingredients and their producers by putting each through a thorough evaluation process.
Spread the word Education is an important tool to protect against cross-contamination as well. Employees at the Pierre’s plant are trained in the dangers of cross-contamination and in verification procedures for the ingredients in each recipe, Ms. Hindulak said. Education also is key at the Aladdin’s Eatery chain of restaurants, based in Lakewood. The chain offers more than 40 different gluten-free Lebanese dishes in five states. Since 2010, employees at the 30 Aladdin’s locations have undergone mandatory training in accommodating gluten-free customers, said Jamie Samaha, executive assistant to Aladdin’s president and CEO Fady Chamoun. The classes include a training module for new hires, three-hour classes two times a month through the corporate office and a “serve safe” class through the local board of health. ■
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AMERICAN CHEMISTRY SOCIETY: Mary Ann Meador (University of Akron) to fellow. OHIO ACADEMY OF FAMILY PHYSICIANS: John M. Surso, M.D., (Family Medicine Associates of Medina Inc.-Summa Physicians Inc.) received the 2013 Family Physician of the Year Award.
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Send information for Going Places to dhillyer@crain.com.
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SMALL BUSINESS
INSIDE
13 TAX TIPS: IT MIGHT BE TIME TO EXERCISE STOCK OPTIONS.
MARC GOLUB
Grant Smrekar, left, and Lou Erste, co-owners of Rust Belt Welding Co., display one of their bike racks.
RACKING UP NEW BUSINESS Rust Belt Welding is developing an artistic way for urban areas to be more welcoming to bikes By DANIEL J. McGRAW clbfreelancer@crain.com
B
icyclists in Cleveland and beyond long have complained about parking options. Often a rider has to search for a chainlink fence, try to get their wheels and
frame hitched to a parking meter and hope that where they lock up is fairly close to their destination. But in recent years, as government agencies and businesses are finding that providing better amenities for cyclists is good policy in many ways, more parking options are springing up.
ON THE WEB For a photo gallery from Rust Belt Welding Co., go to: www.crainscleveland.com
Most are the upside-down blue U-shaped pipes screwed into the sidewalk — functional, but hardly anything that adds to the artistic landscape of the urban streetscape. But much of that is changing, as urban
planners, businesses and community groups are figuring that as long as bike racks are being paid for and installed, why not make them public art that is part of the neighborhood? And the company doing many of the bike rack art projects in Cleveland is Rust Belt Welding Co., a business started by two friends who shared a common interest in cycling and building their own bike frames. See RACKING Page 12
Food and drink distributors are finding right blend Northeast Ohio heavyweights such as Malley’s and Momocho have teamed up to create product hybrids that have become very popular By KATHY AMES CARR clbfreelancer@crain.com
Malley’s Chocolates sells milk chocolate-covered Momocho tortilla chips
D
an Malley was dining at one of his favorite spots — Momocho — a couple years back when the
thought crossed his mind to develop a chocolate-covered tortilla chip in collaboration with the modern Mexican restaurant in Cleveland. “I approached (owner) Eric Williams, and it was a no-brainer, really,” said the president and CEO
of Malley’s Chocolates. The Lakewood-based chocolate maker and Mr. Williams finalized the recipe after about one month of three recipe trial runs. The first batch — a half-ton of Malley’s milk chocolate-covered Momocho tortilla chips
— hit the shelves of Malley’s Northeast Ohio store locations in 2012. Malley’s Chocolates and Momocho are among a handful of Northeast Ohio food- and beveragebased businesses that are spinning off product hybrids. The partnerships foster collaboration and creativity, and underscore their philosophies of supporting their locally owned neighbors. See BLEND Page 14
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12 CRAIN’S CLEVELAND BUSINESS
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Racking: Company has done work in Ohio City and Lakewood continued from PAGE 11
“When we started out about four years ago, we wanted to make bike frames that were a bit better than you could buy in a store, mainly ones that were tough enough to bike during the winter in Cleveland,� said Grant Smrekar, one of the principals in the company. “But we weren’t doing much business, and we took on some projects to build bike racks during the slow months in the winter.� Two years ago, that translated to just four bike racks. Today, that focus makes up more than half of the company’s business and it is growing (they have done about 30 bike racks). “It really started out as a creative way to be involved in the cycling business,� said Lou Erste, the other partner. “Over time, we have learned more about art and design, how to give our clients what they want, and how to make them so they last a long time.�
From headphones to hammers The first bike racks built by Rust Belt Welding were on West 25th Street in Ohio City in front of the restaurant and brew pubs owned by entrepreneur and bicycle enthusiast Sam McNulty. Soon, other businesses took notice, and the nonprofit urban planning firm LAND Studio approached Messrs. Smrekar and Erste about converting shipping containers destined for the scrapyard into bike boxes. There are now about a half-dozen of those around the city, with more expected to be in the pipeline soon. “We are seeing more and more urban planning focusing on bicycling as being a form of transportation that we want to put into design for all sorts of reasons,
MARC GOLUB PHOTOS
A look at a “CJ� bike that was manufactured by Rust Belt Welding Co.
“It really started out as a creative way to be involved in the cycling business.â€? – Lou Erste co-owner, Rust Belt Welding Co. walkability and environmental issues and good use of public art,â€? said Greg Peckham, managing director for LAND Studio. “The guys with Rust Belt Welding get what we are trying to do, and I think a lot of that has to do with the fact that they understand ‌ what cyclists want.â€? The result has been some basic pipes shaped like bicycles mounted on sidewalks, but also some strange looking public art: the music headphones at the Touch Supper Club in Ohio City; the hammer pounding the nail into the sidewalk in front of Blazing Saddle Cy-
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Rust Belt Welding Co. co-owner Grant Smrekar welds a mounting plate onto a bike rack. three blue stars on the sidewalk in front of their business. “We had multiple reasons for the bike rack,� said Blue Star Design president Julia Briggs. “We are artists and appreciate public art, and we also wanted to put our brand out there. We noticed all the biking in the neighborhood, and we thought we might do something that added to that as well.� Rust Belt Welding charges a private business between $1,000 to $2,000 for a rack, depending upon the design and labor and amount of metal used. Messrs. Smrekar and Erste
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Douglas Bess President and Owner, Bess Industries
Tom Thielman
cle on Detroit Avenue near Gordon Square; and the script of “Lakewood� in front of the suburb’s city hall. Messrs. Smrekar and Erste, both 37, did not start out with any artistic background. They met while attending St. Ignatius High School and years later hooked up for the bike frame business when they both were dissatisfied with their careers. Mr. Smrekar worked repairing boilers for large industrial companies, while Mr. Erste was working in Florida marketing organic hair care products. “I liked working with metal, but I didn’t like working for big companies,� Mr. Smrekar said. They ended up becoming partners in the bike frame business, and leased work space in an old factory near West 25th Street and Clark Avenue. That space has allowed them to build the bike frames and racks, as well as carve up the big shipping containers for the bike boxes.
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expect to do more public work as government policy is moving toward more funding for bicycle transportation initiatives. The Federal Highway Administration spent $23 million on “pedestrian and bicycle facilities and programsâ€? in 1992; last year the FHA spent $854 million. One of the public projects on which Rust Belt Welding is working is nine bike racks for Lakewood, which the city will use as part of its redesign of Madison Avenue in the Birdtown neighborhood. The bike racks will have an aviary theme and are being funded through a grant from the Charter One Foundation’s Growing Communities program. “We asked our citizens what they wanted to improve in the city, and the No. 1 thing we heard was better facilities to park their bike,â€? said Dru Siley, Lakewood’s director of planning and development. “Our citizens don’t see bicycling as alternative transportation. They see it as part of the whole transportation system. We also like the design of these bike racks to reflect the community, and we are very happy with what (Messr. Smrekar and Erste) have done in both artistic design and functionality.â€? Rust Belt Welding is charging Lakewood $3,600 for the nine racks. “It’s funny how things work out,â€? Mr. Smrekar said. “We started out thinking our business was going to be building these great bike frames, and we still do a lot of that, but the bike rack business has taken off. What’s fun is that each one is different, and we get to work with artists and designers, and get to be artists ourselves.â€? â–
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SMALL BUSINESS
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CRAIN’S CLEVELAND BUSINESS 13
Protect your biz Take stock of your chance to cash in from injury claims W Companies hiring contractors should require endorsement that will transfer risk
Y
our company is growing, and to accommodate that growth it decides to expand its existing facilities significantly. Having no experience in building construction, you retain a general contractor to handle the entire project. The general contractor assumes full responsibility for engaging the subcontractors and controlling the work site. Work is proceeding on schedule when you are informed that a subcontractor’s employee was seriously injured on the job site. The injured party asserts that conditions on the premises (your building or outdoor site) constituted a concealed, inherently dangerous condition that caused his injuries — and that your company is liable. The fact is, the company has potential liability exposure any time a third party, such as a contractor’s employee, performs work on the premises. If a contractor’s employee or another third party is injured on the job site, he or she can sue your company under several theories of liability. You may believe the company is protected by the contractor’s insurance, but this is not always true. If your company uses contractors to provide any services, materials or labor, it has a liability exposure arising from the contractors’ performance of the work. This applies no matter what the industry, be it heavy manufacturing or a flower shop, or whether the work is building an addition or replastering a ceiling. It could be someone injured by slipping on gravel left from repaving a gas station. Often, the claimant will allege that your company negligently maintained the work site, thereby causing the injury. The suit will add you as an additional, deeppocket defendant. If the claimant is a contractor’s employee, the claim against you will circumvent the limitations on a recovery imposed by workers’ compensation. Your objective is to manage this risk of loss by transferring it to the contractor who is directly responsible for the work site, the work and its employees. This transfer of risk can be accomplished by requiring the contractor to add your company, by endorsement, as an additional insured to its general liability policy. The following is an example of a situation in which an additional insured endorsement on your contractor’s general liability policy is needed and what it would accomplish: Your company is a manufacturer. It contracts with a general contractor to perform maintenance on heavy equipment in your plant during downturns. The general contractor has complete control over the work site and is
RICHARDWITKOWSKI
ADVISER responsible for getting the work completed. It subcontracts some of the work. A subcontractor’s employee is seriously injured on the job site when he trips and falls. He alleges a known defect in the floor and that your company was negligent by failing to warn or to correct a known hazardous condition. The employee files a workers’ compensation claim against his employer and a lawsuit against your company and the general contractor. If your company required the general contractor or the subcontractor to name it as an additional insured in regard to claims arising from the performance of the work, you would be covered. The contractor’s or subcontractor’s general liability insurer would be required to assume your company’s defense and indemnify it for liability. Your company should specifically request additional insured status during negotiations and at renewal of the contract. Satisfaction of the insurance requirements should be a condition precedent to executing or renewing a binding contract. Additional insured status must be added by endorsement to the contractor’s policy and evidenced by a certificate of insurance naming your company as an additional insured. A copy of the policy containing the endorsement and the certificate of insurance should be obtained to confirm compliance and retained to enforce coverage. When the contractor’s insurance policy is renewed, your company should obtain updated policies, endorsements and certificates. In addition, your company should require the general contractor and all subcontractors to carry sufficient coverage for property damage and personal injury liability and to be insured with an acceptable insurer. Additional insured coverage is not a substitute for your company having its own general liability insurance policy. Your company’s insurance coverage, liability exposures and the potential to transfer risks through additional insured endorsements should regularly be reviewed. Your insurance agent/broker, legal counsel, contract administrators and internal risk management/insurance professionals should all be involved. If opportunities exist for an economical transfer of risk, a team approach is needed to implement and manage an effective program. ■ Richard G. Witkowski is with the firm of Nicola, Gudbranson & Cooper LLC in Cleveland.
hile the result of the American Taxpayer Relief Act of 2012 for many business owners was an increase in tax rates, one provision that has largely been overlooked is the extension of the elimination of capital gains tax on sales of certain corporate stock. The act not only extended this benefit through the end of 2013, but retroactively made it effective for all of 2012. Under this provision, individual taxpayers can exclude 100% of the gain realized on the sale of qualified small business stock (QSB stock) that was acquired after Sept. 27, 2010, and before Jan. 1, 2014, and held for more than five years. No alternative minimum tax preference will be applicable to gain on the sale of QSB stock, nor will the gain be subject to the 3.8% Medicare tax on investment income of higher income taxpayers. The sale of qualifying QSB stock will therefore be totally tax-free. This extension provides several opportunities for companies adopting or utilizing already adopted stock incentive plans for their employees. QSB stock includes stock issued to employees as compensation for services provided to the corporation. The five-year holding period requirement would provide a built-in incentive for employees to stay with the company for that period of time to enjoy a complete elimination of taxes on the eventual sale. The ability to sell the stock in the future and pay no taxes would certainly be seen as an added benefit by the recipient employee. Employees who previously received stock options may want to consider exercising those options
CARLGRASSI
TAX TIPS in 2013 to take advantage of this exclusion. Because the exercise of an option usually results in compensation income to the employee/option holder, most employees do not exercise their options until an event (such as the sale of the company) happens that will provide cash proceeds to pay the tax. Given the opportunity to pay no tax on the eventual sale of the stock, an exercise of an employeeheld option may be worth looking into, even if it requires an investment of the exercise price and recognizing current compensation income. In order for stock to qualify as QSB stock, it must meet the following basic requirements: ■ It must be stock acquired as an original issuance from the corporation. While warrants and options do not qualify as QSB stock, if this type of instrument is exercised to acquire QSB stock, the exercise will be a qualifying acquisition (for example, original issuance). The QSB stock must be acquired for money, property (other than corporate stock) or services provided to the issuing corporation. ■ The corporation issuing the stock must be a qualified small business. In general, a qualified small business is a C corporation with aggregate gross assets of less
than $50 million at any time before (or immediately after, taking into account any monies invested by the stockholder) the issuance of the stock. The fact that the corporation’s assets increase and become worth more than this limit after the issuance is not relevant. ■ The corporation must also meet an active business requirement, meaning the corporation uses at least 80% of its assets, measured by value, in the active conduct of one or more qualified trades or businesses. Services-type businesses generally will not qualify. There are a number of more detailed requirements that must be considered. There also is a limitation on the amount of the gain that can be excluded equal to the greater of: 10 times the taxpayer’s basis in the corporation’s QSB stock disposed of by the taxpayer in the tax year, or $10 million. Because C corporations are not tax efficient in many circumstances, a business owner starting a new business should carefully consider the potential tax drawbacks of operating as a C corporation. For a business already operating as a C corporation, offering shares to employees or to investors will, through the end of this year, have the potential added bonus of providing tax-free income in the event of a sale of such stock to a thirdparty buyer. This can be a very tax efficient strategy for investors, business owners and employees. But the stock must be issued this year and must meet all of the requirements. Consult with a corporate tax professional to see if this strategy might provide tax benefits for your business. ■ Carl Grassi is the president of McDonald Hopkins LLC.
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SEPTEMBER 9 - 15, 2013
Blend: Collaborations have challenges GRANDOPENINGS continued from PAGE 11
“I received an email from (Dan) Malley after Cinco, and it said something like, ‘Thanks again, they were well-received from the public. They sold out in six days,’ ” Mr. Williams recalled. The businesses this year doubled production to one ton of chips, and Mr. Malley expects another marginal production increase of the seasonal item in 2014. “We love the idea, and the public loves it, too,” Mr. Malley said.
Generating a buzz Local whiskey and coffee are emerging as key flavors in artisan bakery and frozen treats, such as Mason’s Creamery Rising Star Coffee ice cream sourced with the Ohio City small-batch roaster’s premium java. Cleveland Whiskey, another of the fledgling ice cream maker’s popular flavors, also materialized this past March as the star ingredient of a macaroon at Cleveland Heights-based Luna Bakery Cafe. “A lot of it is serendipitous. Requests to use our product just come our way,” said Tom Lix, founder and CEO of Cleveland Whiskey, whose venture began distributing spirits just weeks prior to the macaroon debut. “We live in an area where a lot of people are experimenting. It’s a win-win for each business.” In another example, The Velvet Tango Room, a high-end Cleveland cocktail lounge, and Vinegar Tavern Co., an arm of the Greenhouse Tavern restaurant operation, experimented this past spring with a blend of high-end cocktails and vinegar, which led to the Tavern rose vinegar cocktail. Velvet Tango Room owner Paulius Nasvytis this month plans to introduce to his selective menu
VINEGAR LINE GROWING Tavern Vinegar Co. is expanding its distribution of hand-crafted, barrel-aged vinegars through a recent partnership it formed with Middle West Spirits. The Columbus-based microdistillery in collaboration with Jonathon Sawyer’s hand-crafted vinegar operation plans to initially offer to select markets six beer vinegars, four wine vinegars and two malt vinegars before expanding to about 20 varieties next year. “We’re negotiating to have representation in Boston, Houston, Chicago, New York and (Los Angeles),” the chef said. — Kathy Ames Carr two more old-fashioned shrub cocktails — a red wine vinegar and fig, and a double-oak chardonnay vinegar with peaches. “First, the (vinegar) is outstanding,” Mr. Nasvytis said. “Next, it goes along with my desire to source whatever I can locally. They’re very old-fashioned cocktails and quite … tasty.” The cooperative between Great Lakes Brewing Co. and Mitchell’s Homemade Ice Cream goes back about a decade, when the brewer and ice cream maker formed an Edmund Fitzgerald porter chocolate chunk. The tasty treat is a recurring dessert item at Great Lakes’ Ohio City brewpub and is sold in limited quantity throughout Mitchell’s stores. “These products are an extension of our zero-waste initiative,” said Pat Conway, co-owner of Great Lakes Brewing Co., which sends to the ice cream maker ale from lowfill bottles that it can’t sell. The establishments in 2011
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rolled out their second offspring with a seasonal Christmas Ale ginger snap ice cream. “It’s a really big seller. People love the holidays, they love Christmas Ale and they love taking their family to Mitchell’s,” said co-owner Mike Mitchell, who noted the ice cream flavor again will hit the marketplace this year. “We enjoy doing it because it’s fun, and we’re turning something that could be waste into something delicious.” Their revenue-sharing agreement? “We give them free ice cream, and they give us free beer,” Mr. Mitchell said.
FIBRENEW NORTHEAST OHIO
A bottlenecked process
EVER IRISH GIFTS
Well-intentioned product collaborations produce their own set of challenges to varying degrees, as several Northeast Ohio brewers discovered in 2010. During that year, 12 brewers set out to produce a 12-pack collaboration beer sampler as part of an Ohio Craft Brewers Association initiative to raise awareness about the craft beer industry, just in time for Cleveland Beer Week in October. But state and federal laws — from packaging to licensing and bonding with the right distributor to figuring out which breweries pay taxes on the beer — delayed the sampler’s release by six months. The local brewers then teamed up last year to produce specifically for Cleveland Beer Week six limited-edition joint brews. Sixteen breweries have paired off to craft a total of seven small-batch collaboration beers during this year’s event, set for Oct. 18-26, said Christine Montague, event director. Those breweries (Indigo Imp, Market Garden and Rocky River; Buckeye, Black Box and Ohio Brewing; Great Lakes Brewing Co. and Cellar Rats; Lager Heads and Cornerstone; Willoughby and Brew Kettle; Thirsty Dog and Portside; and Chardon Brew Works and Fat Head’s) don’t have to worry about tedious bottling labeling procedures since they are tapping from tagged kegs. This year, the recipes were finalized by the end of July, Ms. Montague said. “To our knowledge, this is the largest brewery collaboration of its kind in the country,” she said. “Collaborations are the future of craft beer. You put two renowned brewers together to produce a new beer that they may not have otherwise made.” ■
Cleveland 44120 www.EverIrishGifts.com
25175 Shaker Blvd. Beachwood, Ohio 44122 www.Fibrenew.com/northeast-ohio Fibrenew Northeast Ohio, led by Steve Rosner, is a mobile repair service company specializing in the restoration and repair of leather, vinyl and plastics in the residential, commercial, auto, medical, marine and aviation markets. Phone 216-772-8585 Fax 216-927-3734 neohio@fibrenew.com
This Cleveland-based artisan goods website aims to offer a collection of authentic handcrafted gifts from Ireland and the British Isles. Product pages offer a detailed history of the brand, studio or craftsman, many with a video to see a product in progress. The products included as part of the online shop are either made by craftsmen in Ireland or elsewhere in the British Isles, or they have a connection to the region. Representatives visit Ireland, Scotland, Wales and England to search for emerging artists, and products are warehoused in Cleveland. Phone 216-921-6200 or 1-800-991-4561 Fax 216-658-1070
customerservice @everirishgifts.com
HEALTHY HAIR SOLUTIONS LICE REMOVAL SALON 25001 Cedar Road (Legacy Village) Lyndhurst 44124 liceremovalohio.com Darrah Parsons, a graduate of Duke University with a master’s degree in education from Ohio State University, is the founder of Healthy Hair Solutions Lice Removal Salon. Ms. Parsons is a trained and certified operator of the Air Alle’, a FDA-cleared medical device (formerly known as the Lousebuster). Beyond professional head checks, Ms. Parsons treats head lice infestations with the Air Alle’ in a one-time 30minute treatment using only heated air, killing the lice and nits. 440-384-2605 info@liceremovalohio.com To submit information about a new business, opened within the past six months, send the following information for publication to Crain’s Cleveland Business sections editor Amy Ann Stoessel at astoessel@crain.com: business name; address; city and ZIP; website address; brief description of the business; business phone number; business fax number; and business email.
GET DAILY NEWS ALERTS FROM CRAIN’S ! Register for free email alerts and receive: ■ The Morning Roundup: The day’s business news from Ohio’s daily papers ■ Breaking news alerts ■ Daily headlines: Crain’s-produced news and blog items from the day ■ Dealmaker Alert: A weekly guide on M&A trends and recent transactions in Ohio. Published Wednesday.
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IN BRIEF ■ FEEL BETTER: Cleveland-based BooBoo Kids, founded by Therese Andjeski and Barb Gee, recently expanded its line of T-shirts designed as get-well gifts for children and is offering them for online sale. The T-shirts include slogans such as “I must be a star, I’m in a cast” and “I went to the ER and all I got were these lousy stitches,” and they are available at select hospital gift shops and online. Each shirt also includes a certificate of wellness. ■ AND WE HAVE A WINNER: Karen Bowersox, owner of Downs Designs in Mentor, was among the winners of a $50,000 prize package from Staples, as part of the retailer’s Push It Forward campaign. The prize package includes paid digital marketing; an account manager from a digital marketing agency to create, manage and optimize a customized digital marketing media solution; a free, one-year account with Constant Contact; and a one-on-one session with a small business expert. Downs Designs, founded in 2009, offers clothing for people with Down syndrome or other special needs.
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Park: I-X, Cleveland Convention Center won’t compete that much continued from PAGE 1
Despite that upbeat assessment, Mr. Park and the city of Cleveland, which owns the building, are butting heads over responsibility for a $2 million sewer line break that occurred earlier this year. Chris Warren, chief of regional development for the city, told Crain’s the matter currently is in the hands of lawyers, and Mr. Park said he’s confident the issue will be resolved. However, neither would discuss the matter. The building that is now the I-X Center was constructed by the federal government in 1942 to assemble World War II bombers. It was converted after the war to make a variety of heavy military hardware — it long was called the “Tank Plant” — until the U.S. Department of Defense closed it in 1972. Park Corp. bought the building and in 1985 opened it as an exhibition hall called the International Exposition Center — I-X Center for short. It sold the building to the city
I-X CENTER: BY THE NUMBERS ■ 2.2 million: Square feet of gross space ■ 1.4 million: Square feet of exhibit space ■ 280,000: Square feet of column-free space ■ 85,000: Square feet of carpeted conference center ■ 16,000: Square feet of grand ballroom ■ Source: www.ixcenter.com of Cleveland in 2001 for $30 million and a rent-free lease that runs until 2014, with five-year options that could extend Park Corp.’s ownership until 2039. The building has more than 2.2 million square feet of gross space and more than 1.4 million square feet of exhibit space, including 280,000 square feet of column-free space. By comparison, the new Cleveland Convention Center has 225,000 square feet of exhibit space with 90-foot column spacing.
Shearer: Custom side of company is taking off continued from PAGE 3
Mutual admiration The private label part of Or Derv’s business started about four years ago, Mr. Kropp said, with the company selling products ranging from fried calamari and lobster bites to meatballs. Within the last eight to 10 months, the company has broadened that service and began offering bottled products, such as sauces and dressings. Or Derv has a corporate chef, John Bahas II, a local restaurateur who works on product development. The custom side of the business is “really starting to take off and grow,” Mr. Kropp said. He declined to share annual sales or revenue, but said the company has grown significantly and that annual sales have more than doubled each of the last two years. In addition to the private label business, Or Derv sells its appetizers in grocery stores such as Heinen’s, Acme and Sam’s Club and in restaurants under its own label. Or Derv has a geographic concentration in the Midwest and Canada, but the company ships across the country and is looking into new partnerships, Mr. Kropp said. Mr. Shearer stays out of the dayto-day operations at Or Derv. At 62, he’s still plenty busy consulting at Shearer’s Foods and running his own consulting business, Shearer Solutions — and he said he appreciates everything Mr. Kropp does for the company. The two have a “lot of respect” for each other, he said. Mr. Kropp hadn’t been looking for outside investments — and, he added, if it wasn’t Mr. Shearer, he “would not have taken on a partner.” But with Mr. Shearer’s food industry knowledge and contacts, this particular partnership made sense. “It’s all positive for the company,” he said.
Gearing up for growth The investment from Bob Shearer Akron LLC, which was completed in July, is helping Or Derv move for-
ward with plans for a new plant and is adding to the company’s knowledge of the food industry, Mr. Shearer said. The investment group is made up of Mr. Shearer, Bob Hanline of produce distributor R.S. Hanline Co., Al Melchiorre of investment bank Melcap Partners LLC, Steve Surmay, a vice president at Shearer’s Foods, and Joe Rogers of Shearer Solutions. Mr. Rogers also recently joined Or Derv as its director of sales. Or Derv plans to start construction on a new plant next month. The location isn’t officially confirmed yet but will be in Akron, Mr. Kropp said. The plant will be about 16,000 square feet, with room on the land for future expansion, and the projected cost is about $2 million. Or Derv will keep its current plant on Johnston Street open, moving the bottling operation from a rented space to the 7,000-square-foot building. The frozen foods equipment, some of which has been added this year, will be moved from the Johnston Street plant to the new building. Or Derv has made about a quarter-million dollars in capital investments in the past year, Mr. Kropp said, updating its portioning and breading equipment. The newest piece of equipment on the line is a liquid nitrogen tunnel, which freezes the products instantly and saves time for the company. Or Derv also has made additions to its staff that will further save time and increase productivity. Mr. Kropp said the company added a second-shift cleaning crew of three employees last week. Now, the firstshift employees just need to focus on producing food, rather than cooking and then cleaning at the end of the day. Those hires brings Or Derv’s staff to about 15, Mr. Kropp said. He’d like to increase that total to 25 to 30 employees in the next two to three years. “Our growth is really unlimited,” he said. ■
Peaceful co-existence With its emphasis on consumeroriented shows that appeal to people who live in Northeast Ohio, the expectation on both sides is that the I-X Center and the new Cleveland Convention Center can co-exist successfully. “I really don’t see the two venues competing for too many shows,” said Dave Johnson, director of public relations and marketing for the convention center. He said the focus of the new downtown convention center is to attract business-tobusiness events, particularly health care industry trade shows. “It’s designed to bring people downtown to fill hotel rooms,” he said. Mr. Park agreed. He said smaller shows that could fit into the new convention center are not big moneymakers for the I-X Center. “We have more room for storage than they have in the whole center,” he said. Because of its wide open spaces, the I-X Center offers a unique setting for shows that display large pieces of equipment, such as industrial shows and recreational vehicle shows. The center also has created its own shows, such as the Fabulous Food Show and International Beer
“I really don’t see the two venues competing for too many shows.” – Dave Johnson, director of public relations and marketing, Cleveland Convention Center Fest to be held Nov. 8-10 — though this year without local celebrity chef Michael Symon, who couldn’t come to financial terms with the IX Center. And it is home to the I-X Indoor Amusement Park; its next run is set for March 21-April 20, 2014. In addition, the I-X Center has hosted the local auto show since 1986. The Cleveland Auto Show is booked for March 1-9, 2014, and it isn’t planning to move.
Room to ‘stretch out’ Lou Vitantonio, president of the Greater Cleveland Automobile Dealers Association, said the I-X Center is valuable because his group’s show couldn’t fit into the downtown convention center. He said the Auto Show uses close to 1 million square feet of exhibition space and attracts 600,000 tire kickers to the 10-day event. The I-X Center’s acres of parking are important, too. The show offers
attendees free parking and a place for the auto companies to stash their test-drive cars. That roominess, Mr. Vitantonio said, makes the Cleveland show a leader in what he called “ride and drives” — allowing potential buyers to walk outside and take a road test. By contrast, downtown convention-goers must park in pay lots scattered across downtown. “We are probably the fifth- or sixth-largest auto show in the country, and we’re not the fifth- or sixthlargest market in the country,” Mr. Vitantonio said. “But (the car companies) can stretch out.” This week, the I-X Center will host the annual Tri-State Expo of Akron-based building supply wholesaler Famous Supply (Sept. 10-11) and the Outdoor RV Expo (Sept. 13-15), followed by the International Elastomer Conference (Oct. 8-10). The building is only a small part of Park Corp., which is involved in manufacturing, redeveloping industrial and commercial real estate, and financial services. But it holds a special place in Mr. Park’s portfolio that hasn’t been dimmed by the current dispute over the sewer line. “It’s an interesting business,” the publicity-shy Mr. Park said. ■
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LARGEST GRANTMAKING FOUNDATIONS RANKED BY AMOUNT OF 2012 GRANTS
Name Address Rank Phone/Website
2011 2012 grants grants (millions) (millions)
2012 assets (millions)
2012 largest grant ($)
2012 smallest grant ($)
1
Cleveland Foundation 1422 Euclid Ave., Suite 1300, Cleveland 44115 (216) 861-3810/www.clevelandfoundation.org
$91.6
$78.7
$1,883.0
10,000,000
50
2
The George Gund Foundation 45 Prospect Ave. West, Suite 1845, Cleveland 44115 (216) 241-3114/www.gundfoundation.org
$25.6
$16.6
$454.0
5,000,000
3
KeyBank Foundation 800 Superior Ave., Cleveland 44114 (216) 828-7397/www.key.com/about/community/keyfoundation-philanthropy-banking.jsp
$12.8
$12.6
$37.2
4
Saint Luke's Foundation of Cleveland 4208 Prospect Ave., Cleveland 44103 (216) 431-8010/www.saintlukesfoundation.org
$10.8
$9.6
5
The Timken Foundation of Canton(1) 200 Market Ave. N., Suite 210, Canton 44702 (330) 452-1144
$10.6
6
Lerner Foundation(2) 26500 Curtiss Wright Parkway, Highland Heights 44143 (440) 891-5000
7
Year founded Total Top executive staff Title
Largest grants Case Western Reserve University, Village Capital Corp., Cleveland Center for Arts and Technology dba NewBridge, ideastream
1914 73
Ronald B. Richard president, CEO
1,000
The Cleveland Museum of Art, Fund for Our Economic Future, The Foundation Fighting Blindness, The Cleveland Foundation-Portfolio of Excellent Schools
1952 12
David T. Abbott executive director
1,250,000
500
Cleveland Metropolitan School District, Cleveland Museum of Art, Musical Arts Association, NewBridge Cleveland-Center for Arts and Technology
1969 3
Margot James Copeland chair
$174.0
1,500,000
1,000
Neighborhood Progress Inc., MetroHealth System, Free Clinic, Case Western Reserve University School of Dental Medicine
1997 8
Denise San Antonio Zeman president, CEO
$13.3
$87.9
750,000
10,000
Canton Symphony Orchestra, The Putnam Foundation, Buckeye Council Inc., Stark Development Board, Alice Peck Day Memorial Hospital
1934 NA
Jeffrey Halm executive director
$10.5
$16.3
$12.3
8,000,000
100
Cleveland Clinic Foundation, Jewish Community Federation, Cleveland Museum of Art, Cleveland Clinic Center for Autism
1993 NA
Norma Lerner president, treasurer
Eaton Charitable Fund 1000 Eaton Blvd., Cleveland 44122 (440) 523-5000/www.eaton.com
$8.7
$8.1
$2.0
667,890
250
United Way of Greater Cleveland, Cleveland Museum of Art, National Merit Scholarship Foundation, United Way of Asheville & Buncombe County
1953 NA
William B. Doggett, senior vp, public and community affairs
8
Kelvin & Eleanor Smith Foundation 30195 Chagrin Blvd., Suite 275, Cleveland 44124 (216) 591-9111/www.kesmithfoundation.org
$7.2
$7.5
$126.8
1,000,000
5,000
Case Western Reserve University, Cleveland Botanical Garden, Cleveland Museum of Art, Musical Arts Association
1955 3
Ellen Stirn Mavec president, chairman
9
Akron Community Foundation 345 W. Cedar St., Akron 44307 (330) 376-8522/www.akroncf.org
$7.2
$6.3
$150.2
95,000
500
Akron Art Museum, City of Akron Neighborhood Partnership, Akron Metropolitan Housing Early Learning Project, Boys and Girls Club of the Western Reserve
1955 15
John T. Petures Jr. president, CEO
10
Stark Community Foundation 400 Market Ave. N., Suite 200, Canton 44702 (330) 454-3426/www.starkcf.org
$6.8
$8.1
$182.1
157,975
100
Stark Education Partnership, United Way of Greater Stark County, Arts@inStark, The Wilderness Center, NEOMED
1963 12
Mark J. Samolczyk president
11
Mt. Sinai Health Care Foundation Allen Med. Library Bldg., 11000 Euclid Ave., Cleveland 44106-1714 (216) 421-5500/www.mtsinaifoundation.org
$6.1
$6.7
$130.0
1,600,000
100
Jewish Federation of Cleveland, Case Western Reserve University School of Medicine, Cleveland State Univ./ Northeast Ohio Medical University Urban Health
1994 5
Mitchell Balk president
12
GAR Foundation 277 E. Mill St., Akron 44308-1735 (330) 576-2926/www.garfoundation.org
$5.3
$4.7
$144.3
870,000
1,000
Akron Public Schools, BVU: The Center for Nonprofit Excellence, United Way of Summit County, Greenleaf Family Center, Summit Education Initiative
1967 6
Christine Amer Mayer president
13
Nord Family Foundation 747 Milan Ave., Amherst 44001 (440) 984-3939/www.nordff.org
$5.1
$4.6
$114.3
150,000
25
Amherst Historical Society, Teach For America, Team Lorain County, The Nurturing Center (SC), Cleveland Public Theatre Inc., Education Through Music Inc.
1988 NA
John Mullaney executive director
14
Parker Hannifin Foundation(3) 6035 Parkland Blvd., Cleveland 44124 (216) 896-3000/www.parker.com
$4.9
$4.3
$12.0
364,500
25
United Way, Case Western Reserve University, Village at Marymount, Cleveland State Univ.-Allen Theater project, Cleveland YMCA, Ursuline College
1953 NA
Don Washkewicz president, trustee
15
Community Foundation of Lorain County 9080 Leavitt Road, Elyria 44035 (440) 984-7390/www.peoplewhocare.org
$4.1
$4.0
$88.6
328,040
250
Community Health Partners Foundation, Lorain Palace Civic Center, Common Ground
1980 10
Brian R. Frederick president, CEO
16
FirstEnergy Foundation(2) 76 S. Main St., Akron 44308 (330) 761-4246/www.firstenergycorp.com/community
$4.0
$2.8
$39.5
500,000
50
Hurricane Sandy New Jersey Relief Fund, United Way Greater Cleveland, United Way Berks County, American Red Cross Jersey Coast
1961 NA
Delores J. Lowery president
17
Nordson Corp. Foundation 28601 Clemens Road, Westlake 44145 (440) 892-1580/www.nordson.com
$4.0
$3.7
$14.0
275,000
1,500
Boys & Girls Club of Lorain County, CollegeNow, Friends of Breakthrough Schools, Lorain County Urban League
1988 4
Cecilia H. Render executive director
18
H. C. S. Foundation(4) 1801 E. Ninth St., Suite 1105, Cleveland 44114 (216) 781-3502
$4.0
$3.8
$79.5
400,000
450
University of Cincinnati Foundation-Brain Tumor Center, Cleveland Play House, University Hospitals Health System, Ohio Dominican University
1959 NA
Board of trustees
19
Community West Foundation 20545 Center Ridge Road, Suite 448, Rocky River 44116 (216) 476-7060/www.communitywestfoundation.org
$3.6
$5.5
$90.1
378,762
5,000
Fairview Hospital, Cleveland Foodbank, North Coast Health Ministry, Malachi House, Second Harvest Food Bank, Lakewood Community Services Center
1997 8
David T. Dombrowiak president, CEO
20
In His Steps Foundation P.O. Box 23455, Chagrin Falls 44023 (330) 528-1785/www.ihsfound.org
$3.4
$3.3
$17.5
100,000
100
Campus Crusade for Christ, Christian Broadcasting Network, New Covenant Fellowship, The Chapel
1998 1
Robert S. Cathcart executive director
21
Fairmount Minerals Foundation 8834 Mayfield Road, Chesterland 44026 (440) 279-0258/www.fairmountminerals.com
$3.4
$3.6
$12.2
135,000
10
United Way Services-Geauga Cty., Cleveland Central Catholic High School, America SCORES Cleveland, Aqua Clara Foundation, Cleveland Botanical Garden
2008 0
Jenniffer D. Deckard president, CEO
22
The Youngstown Foundation P.O. Box 1162, Youngstown 44501 (330) 744-0320/www.youngstownfoundation.org
$3.1
$4.1
$91.0
701,850
1,000
Easter Seal Society, United Way of Youngstown/ Mahoning County, Children's Rehab Center, Potential Development
1918 2
Janice E. Strasfeld executive director
23
William J. and Dorothy K. O'Neill Foundation 30195 Chagrin Blvd., Suite 106, Cleveland 44124 (216) 831-4134/www.oneillfdn.org
$3.1
$3.1
$80.0
100,000
100
Case Western Reserve School of Medicine, YMCA Camp Silver Beach, Virginia Beach, Va., Western Reserve Land Conservancy, Jacob's Pillow Becket, Mass.
1987 3
Leah S. Gary president, CEO
24
Martha Holden Jennings Foundation 1228 Euclid Ave., Suite 710, Cleveland 44115 (216) 589-5700/www.mhjf.org
$3.0
$3.3
$64.7
63,440
620
Literacy Cooperative of Greater Cleveland, Miami University, Great Lakes Museum of Science, Environment and Technology, Musical Arts Association
1959 4
William T. Hiller executive director
25
Elisabeth Severance Prentiss Foundation(4) PNC Bank, Box 94651, Cleveland 44114 (216) 222-2760/www.esprentissfoundation.org
$3.0
$3.6
$65.4
1,150,000
2,500
University Hospitals of Cleveland, MetroHealth, Free Clinic of Cleveland, Hospice of the Western Reserve, Case Western Reserve University
1939 NA
Richard W. Mack secretary
26
Veale Foundation(4) 30195 Chagrin Blvd., Pepper Pike 44124 (216) 255-3179
$2.9
$1.8
$34.2
1,000,000
2,500
Case Western Reserve University-Wireless Health, Veale Center Campaign and Center Campaign. American Foreign Policy Committee
NA NA
Cynthia Bailie executive director
27
The Kent H. Smith Charitable Trust 1111 Superior Ave., Suite 1000, Cleveland 44114 (216) 696-4200
$2.9
$2.0
NA
1,250,000
2,500
Case Western Reserve University, Holden Arboretum, Fund for Our Economic Future, Downtown Cleveland Alliance
2005 NA
Phillip A. Ranney secretary, trustee
28
The Burton D. Morgan Foundation 22 Aurora St., Hudson 44236 (330) 655-1660/www.bdmorganfdn.org
$2.8
$3.1
$126.8
527,822
250
BioEnterprise Corp., Blackstone LaunchPad Initiative, Entrepreneurship Education Consortium, Invent Now, Purdue University
1967 6
Deborah D. Hoover president, CEO
29
The Raymond John Wean Foundation 147 W. Market St., Warren 44481 (330) 394-5600/www.rjweanfdn.org
$2.8
$3.2
$72.7
500,000
500
Mahoning Valley Organizing Collaborative, Youngstown Neighborhood Development Corp., Trumbull Neighborhood Partnership, Community Solutions Assoc.
1949 4
Jennifer E. Roller interim president
30
Forest City Enterprises Charitable Foundation Inc.(4) 50 Public Square, Suite 1100, Cleveland 44113 (216) 621-6060
$2.8
$3.0
$0.2
600,000
200
Jewish Community Federation, United Way Services, Case Western Reserve University. Cleveland Leadership Center
1977 NA
Charles A. Ratner 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. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Information is from the 2011 990-PF, year ending 9-30-2012. (2) Information is from the 2012 990-PF. (3) Information is from the 2011 990-PF, year ending 6-30-2012. (4) Information is from the 2011 990-PF.
RESEARCHED BY Deborah W. Hillyer
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1 EDI: Company is on a hiring spree continued from PAGE 3
executive vice president and chief financial officer at SageQuest, a Solon company that makes software for managing fleets of vehicles. 1 EDI also recently created five new management positions. Most of those jobs were filled by promoting from within, but for the president’s job Mr. Onysko specifically sought an outsider with experience helping a company grow. “We specifically went out to market and said, ‘We want someone who has done this before,’ ” Mr. Onysko said. Mr. Lowman fit the bill: SageQuest’s sales grew nearly 1,500% from 2004 through 2008, landing the company atop the 2009 Weatherhead 100, a list of Northeast Ohio’s fastest-growing companies. SageQuest was acquired in 2010 by FleetMatics of Dublin, Ireland. 1 EDI is expanding physically as well. The company is in the process of taking over another 6,500 square feet next to its headquarters at 31875 Solon Road, which would bring its total square footage to about 22,500. The new space won’t last long, Mr. Onysko said. The company has identified more office space in Solon that it could expand into in a pinch, but soon it might need a “significantly bigger” headquarters in the region, he said. The only thing holding the company back is its ability to find qualified employees, Mr. Onysko said. In late June, he told Crain’s that 1 EDI would hire 12 technicians immediately if it could find the right people with experience using Microsoft’s Excel spreadsheet program. The company’s website listed openings for four different job titles as of Friday, Sept. 6.
Time for some fun Finding new employees has been hard lately because of the sheer number of people 1 EDI has been hiring. “Two years ago, we plowed through everyone we had in the cue, and it’s been painful ever since,” he said. That was just after two of 1 EDI’s competitors got acquired. Sterling Commerce of Columbus was bought by IBM, and Inovis of Atlanta was bought by GXS, a spinout of General Electric. Both companies still sell electronic data interchange software, but they apparently aren’t going after the same customers 1 EDI serves, Mr. Onysko said. Midsize companies form the core of the company’s customer base. “Not once have we gone up to the table and we’re up against IBM,” he said. The Berea High School graduate founded 1 EDI while in college at Kent State University in 1989. Since then, the company has “always had a better year than we had the year before,” said Mr. Onysko, who aimed to study medicine but instead followed his passion for computers. Now, 1 EDI is ready to “put the pedal to the metal,” he said. “When I founded this company, I was a kid,” he said. “Now it is really time to take this company out and see all the fun we can have with it.”
Go with the flow The company’s software itself has become crucial to BX Solutions, according to Erik Young, vice president of information technology for the shipping and warehousing company based in Swanton, near Toledo. Three years ago, a prospective
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“We specifically went out to market and said, ‘We want someone who has done this before.’ ” – John Onysko, CEO, 1 EDI Source, on his search for five new management positions customer required BX Solutions to implement some sort of electronic data interchange software if they were going to do business together. 1 EDI got the system up and running fast enough to meet what Mr. Young described as “a tight deadline of about 30 days.” Today, 1 EDI’s software helps BX Solutions interpret data from all sorts of digital files flowing back and
forth between BX Solutions and 16 of its customers. For instance, it converts data about incoming shipments into a format that BX Solutions’ computer systems can understand, then it does the same thing in reverse when the company sends its customers data about shipments as they head out. The software works smoothly, which is important now that customers are expecting to send and receive information through an electronic data interchange system, Mr. Young said. “We need to have it if we want to compete and play in this industry,” Mr. Young said. “I would say at least 80% if not more of our business depends on it.” ■
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Compass: New center will be 70,000 Pro Football Hall of Fame square feet; at least five are planned president is set to retire “The reason we were attracted to the Shaker Heights site was that the city has not had zoning for self-storage properties. That created a hole in the network of self-service providers in the area.”
continued from PAGE 1
Chagrin Blvd. in Shaker Heights to a climate-controlled miniwarehouse at a cost of “millions,” said Todd Amsdell, president of Compass Self Storage LLC. He wouldn’t be more specific The 70,000-square-foot center will be the first of as many as five more Compass properties the family plans to build in Northeast Ohio in the next couple years, Mr. Amsdell said. As part of the self-storage project in Shaker Heights, Compass has agreed to buy for $73,000 a oneacre parcel on the edge of the dealership from Greater Cleveland Regional Transit Authority, which still needs to approve the deal. The dealership had leased the site for years and it functions as part of the dealership’s grounds. The project reflects a homecoming of sorts for Amsdell Cos. The Amsdells had developed and owned a portfolio of self-storage properties with multiple Northeast Ohio locations that it took public in the form of U-Store-It Real Estate Investment Trust. The family lost control of the public company and
– Todd Amsdell, president, Compass Self Storage LLC sued its management in 2007, but later settled and remains a major shareholder in it. Now called CubeSmart, the company is based in Wayne, Pa. A non-compete clause in that long-settled lawsuit has long expired, but Mr. Amsdell said Compass’ game plan is to locate properties in areas that are not served by competitors or CubeSmart. “The reason we were attracted to the Shaker Heights site was that the city has not had zoning for self-storage properties,” Mr. Amsdell said. “That created a hole in the network of self-service providers in the area.”
The city amended its zoning code to allow climate-controlled self-service properties in commercial districts last spring, according to the city’s website. Amsdell Cos. launched the Compass brand in 2007. It now has 38 locations around the nation thanks to a string of acquisitions. Most operations will remain outside Northeast Ohio, as Mr. Amsdell noted he plans to be in Pittsburgh, Dallas and Atlanta the next few weeks. The Shaker Heights location will be the first developed under the Compass Self Storage name, although the company has rebuilt several properties to maximize their effectiveness, Mr. Amsdell said. “This will be a little more satisfying when we get a shovel in the ground,” Mr. Amsdell said, noting it is good to be building again. The Amsdell clan began building as contractors in 1928 and became pioneers in what became the selfstorage business in 1975. The Shaker Heights project will retain some of the art deco design elements of the original dealership, which dates from 1957, according to a city building permit. ■
Perry, who served seven years on job, led $27M expansion Stephen A. Perry, president and executive director of the Pro Football Hall of Fame in Canton, announced he plans to retire. In a news release, the institution said Mr. Perry, 67, earlier had shared his retirement plans with the Hall of Fame’s senior management team and its board of trustees, including NFL commissioner Roger Goodell, as well as members of the Hall of Fame who were in Canton during the recent enshrinement festival. However, he chose to delay the public announcement until now. “While there is no perfect time to have a change in the president/executive director position, now, with the recent completion of our expansion and renovation programs and the securing of a long-term television contract with NFL Network, we are well-positioned for a smooth and orderly transition to continue
ON THE WEB Story from: www.crainscleveland.com our record of success,” Mr. Perry said in a statement. Randy Hunt, chairman of the Hall of Fame’s board, said a search committee has been formed and the institution “is actively engaged” with executive search firm Korn/Ferry International to identify candidates to succeed Mr. Perry. During more than seven years in the job, Mr. Perry spearheaded facility improvements that included the Hall of Fame’s recently completed, $27 million “Future 50” expansion, renovation and modernization project, the largest venture ever undertaken by the institution. The news release said Mr. Perry’s retirement plans “include spending more time with his family, including his wife, Sondra, their five adult children and their eight grandchildren; and perhaps a little more golf.” He will continue to be associated with the Hall of Fame as an emeritus member of the board. ■
REAL ESTATE CLASSIFIED Phone: (216) 522-1383 Fax: (216) 694-4264 Contact: Denise Donaldson E-mail: DDonaldson@crain.com COMMERCIAL SPACE Call for final offers by Friday September 13th Receiver orders immediate sale
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19
THEINSIDER
THEWEEK
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
SEPTEMBER 2 – 8
Watch for Mariner’s Watch in Ohio City
The big split: Following pressure from large investor groups to do so, Timken Co. decided to split its bearing and steel businesses, creating two publicly traded companies within the next 12 months. After the split, Timken’s president and CEO, James W. Griffith, 59, will retire after 30 years with the company. Ward J. Timken Jr., 46, currently chairman of Timken’s board of directors, will serve as chairman and CEO of the new steel business. Richard G. Kyle, 47, most recently a group president at Timken, will serve as president and CEO of the bearings and power transmission company.
■ Look for something new in Ohio City — a 62-unit low-rise apartment complex — to start going in soon at 3100 Detroit Ave. Eric Wobser, executive director of the Ohio City Inc. neighborhood development and marketing organization, called the project “incredibly important for Ohio City and Cleveland” because it consists of construction of rental apartments. Prior projects in the neighborhood were loft conversions of old commercial buildings as rentals or construction of condos or single-family homes. The project, dubbed “Mariner’s Watch” since it overlooks Lake Erie and Whiskey Island, is ready to go. Marous Brothers Construction of Willoughby has recorded with Cuyahoga County a notice that it intends to start construction. FirstMerit Bank of Akron also has filed an $8 million mortgage for it. Brian Koch, managing member of Ohio City Development Partners LLC, which is building the project, did not return three calls by Crain’s deadline. Mr. Koch has sold multiple apartment properties the last few years. The investor group acquired the property in 2007 but did not proceed with a plan to build condos on the land. A small commercial building on the site was demolished this spring. — Stan Bullard
Flight plan: Cleveland aviation entrepreneur Kenn Ricci added to his portfolio as his Directional Aviation Capital investment group agreed to buy Flexjet, the fractional jet ownership subsidiary of aircraft maker Bombardier Inc. With the addition of Texas-based Flexjet to its Flight Options and Sentient Jet brands, Directional Aviation said, the company can offer private jet travelers “a full range of choices as to how they fly.” The combined companies have annual revenue of more than $1.1 billion. All-star lineup: Four of the state’s health care powerhouses — including University Hospitals and Summa Health System — forged an alliance designed to allow the institutions to share best practices as they brace for the health industry’s dramatic shift from a system that pays hospitals for the amount of services rendered to one that rewards providers for keeping people healthy. The new independent organization, Health Innovations Ohio, also includes Columbus’ Mount Carmel Health System and Cincinnati’s Catholic Health Partners, which is in the process of buying a 30% stake in Summa.
These aren’t the robots you’re looking for ■ A Berea resident who keeps a roller coaster car in his backyard has landed a spot in an
WHAT’S NEW
You want answers?: Two years after the death of John Bukovnik, its head visionary, Easy2 Technologies of Cleveland was acquired by the company that runs Answers.com, one of the most popular sites on the Internet. Representatives from both companies said the deal won’t immediately affect daily business at Easy2, which has 45 employees and sells software that allows companies to create their own online product demonstrations and tutorials. Easy2’s employees will remain on board, as will CEO Ethan Cohen. However, Easy2 now will work alongside Webcollage, a New York company that used to be its biggest competitor; Webcollage was bought by Answers.com this past spring.
Hello, HealthSpan:
Once the acquisition by Cincinnati’s Catholic Health Partners is complete, Kaiser Permanente’s Ohio operations will be known as HealthSpan. The acquisition, announced last May, is expected to close in the next few months, pending approval by the Ohio Department of Insurance. As part of the arrangement, HealthSpan Partners, a Catholic Health Partners subsidiary, will operate the Kaiser health plan and an associated medical group.
Can’t get that bridge financing: The city of Cleveland again was unsuccessful in winning a $17 million federal transportation grant for a pedestrian bridge that would connect the lakefront museums with the Mall and the new convention center downtown. The bridge is a key piece in the $350 million downtown development plan announced by Mayor Frank Jackson and Cuyahoga County Executive Ed FitzGerald in June.
Apple’s surviving Steve talks: Steve Wozniak, one of Apple Computer’s founders, will give a lecture at the University of Akron on Oct. 21. The event is free for anyone who orders a ticket through the E.J. Thomas Hall ticket office.
Welding together a promotional effort
American Express ad campaign. As you might guess, his business, Weigl Works, doesn’t focus on accounting, law or ■ Welders are a “fiercely brand-loyal” some other buttoned-down profession. group, says Craig Coffey, which can pose a Weigl Works co-founders Mike Blasko, problem for the U.S. marketing communiwho attended North Royalton High School, cations manager at Lincoln Electric Co. and John Kaplan, who lives in North Carolina, Most advertising spends time and money sell hardware used to control robots, lights fighting over those customers who already and video systems used to put on a show. have sided with Lincoln Electric Their three American or one of its competitors. But Express commercials go the Euclid-based welding equipheavy on the robots. The ment maker’s new marketing 60-second spot opens effort is targeting people who with a pair of blinking aren’t (yet) welders — after all, if robot eyes and then people can’t be convinced to moves on to show a fake start welding, the company shark, a fake caveman won’t be able to keep selling its and various fake people. products. “No one wakes up in “We want to make this prothe morning and says, fession, this skill, interesting,” ‘I’m going to buy a roMr. Coffey said. bot,” Mr. Blasko says in The company in July launched the ad, “let alone think about how to control it Mr. Blasko, left, and Mr. Kaplan. its “Made Possible With” content marketing effort. Mr. Cofand what goes into that fey said today’s best ads connect people to process.” brands, rather than featuring products. The commercials promote the American The “Made Possible With” campaign aims Express ReceiptMatch mobile app, which to do that for welding. At madepossiblelets users take photos of their receipts and with.com, current and potential customers immediately matches the pictures to their can read stories, watch videos and peruse online statements. photo galleries that illustrate how welding Mr. Kaplan does most of the talking in the supports ventures such as Indy auto racing. commercials — Mr. Blasko doesn’t appear The hardest part of the effort so far has in two shorter spots. Hopefully that hasn’t been choosing which stories to leave out, created a rift in their friendship, which beMr. Coffey said. He has about two years of gan in Bowling Green, where the commerideas put together now. cials were filmed. You can find all three ads “There’s so many of them,” he said. on YouTube by searching for “Weigl Works” — Rachel Abbey McCafferty or “ReceiptMatch.” — Chuck Soder
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
Looking for adventure
COMPANY: Buyers Products, Cleveland PRODUCT: Rotating D-rings with mounting brackets. Buyers Products, a maker of mobile equipment products, says its new D-rings have a 1-inch diameter and are forged from strong carbon steel with a 15,586-pound working load limit. “These versatile rings are ideal for use on side rails and decks of heavy equipment trailers and they rotate to provide the best angle to secure loads,” says Brian Smith, marketing manager at Buyers Products. Applications load limits may vary per installation, and the rotating D-rings are not designed for overhead use, according to the company. Buyers Products manufactures a full line of truck accessories and equipment, including its SnowDogg line of snow plows, ScoopDogg line of snow pushers, SaltDogg line of salt spreaders, DumperDogg dump inserts and a line of toolboxes. For information, visit www.Buyers Products.com.
Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.
■ A University of Akron lab is one place “where research meets white-knuckled adventure,” according to a Popular Science feature on “the 10 most awesome college labs of 2013.” “Only the toughest and most sure-footed students need apply for undergraduate honors thesis work in Hazel Barton’s lab,” the magazine said. Prof. Barton, a microBarton biologist and geologist, “studies cave microbes, and students will often do their fieldwork in Brazilian caverns, accessible only by donning snakeproof boots and hacking through the Amazon with a machete,” according to the story. “By analyzing rock samples and the microbes that live on them (many eat iron within the rock), they are learning how to better predict the formation of sinkholes and caves.” Popular Science said Prof. Barton and her students “also study the competition between various microbial species, looking for insights that could lead to new forms of antibiotics.”
The hole story ■ The Wall Street Journal had a case of tunnel vision in a story that gave prominent play to comments from an executive at Robbins Co. of Solon, one of the world’s largest producers of tunnel-boring machines. Doug Harding, vice president for sales at Robbins, “travels the globe hawking giant cylindrical augers that can chew a train route through a mountain or burrow a thoroughfare under a city,” The Journal noted. He told the newspaper that people endlessly are
intrigued by the mix of brute force, cuttingedge technology and unknown goings on beneath their feet. “Sitting on a plane, talking to the person in the next seat, the conversation is usually one-sided,” Mr. Harding said. “They ask me all the questions.” Borers “can both excavate a tunnel and line the tube automatically, staffed by only about 20 workers,” according to the story. “Their pace can range from a few inches per day through wet, unstable terrain to the 409 feet in 24 hours that Robbins recently claimed as a record pace on a dig through hard rock in Indianapolis.” Mr. Harding understands the appeal for engineers. “If you’re a mechanical engineer, which would you rather build?” he asked. “A machine that makes light bulbs, or a machine that can cut a hole in a mountain?”
Winds of change ■ Cedar Fair Entertainment Co. of Sandusky has big plans for its North Carolina park, which is called Carowinds. A $50 million expansion there “will put the site on par with some of the country’s largest amusement parks,” according to The Charlotte Observer. The multiyear project “will involve new rides and attractions, upgraded food locations, and general infrastructure improvements,” the newspaper reported. Richard Zimmerman, Cedar Fair’s chief operating officer, was coy about specifics but said, “I ride everything we build, and I can’t wait to ride what we’re going to build at Carowinds.” Cedar Fair in 2011 announced it had bought 61 acres of vacant land next to Carowinds, which sits on 337 acres that straddle the North Carolina-South Carolina state line. Carowinds, with 13 roller coasters, ranks as one of Cedar Fair’s midsize parks.
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