Crain's Cleveland Business by Crain's Cleveland Business

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$1.50/SEPTEMBER 13 - 19, 2010

Vol. 31, No. 36

CUYAHOGA COUNTY CORRUPTION: CAN IT HAPPEN AGAIN?

Business leaders aim to prevent sequel New government will have strong ethics code, but problems remain ‘endemic’ in political realm By JAY MILLER jmiller@crain.com

It’s easy to look at the charges filed by the U.S. Attorney’s office against Cuyahoga County Auditor Frank Russo and see the mopping up of a political problem. But it’s more than a political

problem. It’s a business problem, too, because Mr. Russo and his political cohorts weren’t dancing alone. Alongside the politicians in this federal probe into payoffs and bribes to county officials are a complementary set of business people and attorneys. While the politicians may

INSIDE: A who’s who in the county corruption saga. Page 25 have fallen into the conspiracy for trips to Las Vegas or backyard home improvements, the businesspeople had their own prizes in mind, seeing payoffs to government officials as an acceptable or required

cost of doing business. Last Thursday, Sept. 9, Mr. Russo was charged with 21 counts in a bribery scheme that began in March 1998. The information filing in federal court in Cleveland cited Mr. Russo with accepting cash, home improvements and travel to Las Vegas in exchange for steering

contracts, reducing property tax valuations and trading for county jobs. Besides Mr. Russo, who resigned as auditor last Thursday, 32 individuals have been charged in the 2-year-old investigation. Among them are 20 businesspeople and attorneys See RUSSO Page 24

4G upgrades to speed up pace of doing business Major carriers’ plans here to help ‘anyone who deals with customers’ By CHUCK SODER csoder@crain.com

JASON MILLER

The first part of an economic development plan for the city of Shaker Heights involves an incubator for early stage companies, to be housed in a former auto dealership in the city. Carlton Jackson (left), the co-founder of Tunnel Vision Hoops; Barbara Oney, president of Uncommon TV Network and producer of “Got City Game”; and Chris Clark, founder of Sunflower Solutions, all will take their businesses to the incubator.

PUBLIC, PRIVATE TEAM UP IN SHAKER 36

Recognizing need to add industry, city takes first steps to lure businesses

By JAY MILLER jmiller@crain.com

Some of the newest smart phones are about to become fast phones, relatively speaking. Most of the major wireless phone service providers are in the midst of launching faster, “4G” data service in Northeast Ohio and across the country. Sprint Nextel Corp. has committed to launching its 4G service in Greater Cleveland by the end of 2010, and Verizon Communications Inc. may do the same. Meanwhile, AT&T Inc. expects to launch 4G service in the Cleveland and Akron markets sometime during 2011. The smallest of the four major U.S. carriers, T-Mobile USA Inc., in June finished an upgrade of its network in Cleveland, which provides “4G speeds,” according to the company based in Bellevue, Wash. The launch of 4G, which stands for “fourth generation,” should be noticeable to anyone who uses a wireless See 4G Page 4

alf a century ago, Shaker Heights became an American icon — a suburb among suburbs — for its tree-lined streets and quality neighborhood schools. Its staid brick homes appealed to the lawyers, accountants and corporate executives who took the city’s two rapid transit lines to offices in downtown Cleveland every day. But, by design, its planners left little room for commerce and industry, except for a few small grocery stores and exclusive shops. Well, Shaker Heights will be 100 in 2012 and it realizes it needs to move into the business-driven 21st century — and find new sources of tax revenue. So it has hired a

INSIDE STEM students hit the books Two technology-focused high schools in Northeast Ohio — MC2 STEM High School in Cleveland and the National Inventors Hall of Fame School in Akron — have gotten high initial marks from the Ohio Department of Education. Page 3

See SHAKER Page 8

NEWSPAPER

71486 01032

SPECIAL SECTION

SMALL BUSINESS Checking in on the progress of four businesses founded in the teeth of the recession ■ Page 17 PLUS: THE BUSINESS OF DYING ■ GRAND OPENINGS ■ & MORE

CrainsCleveland.com

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COMING NEXT WEEK Health Care Directory Our annual listing of health care providers — which covers 18 categories and nine counties — appears in next week’s Crain’s. This comprehensive guide is a resourceful tool for business leads, contacts and more.

REGULAR FEATURES Big Issue .....................11 Best of the Blogs .........27 Classified ....................26 Editorial ......................10 Going Places ...............16

Letters ........................10 List: Industrial Parks ...23 Reporters’ Notebook ...27 Tax Liens ....................15 The Week ...................27

WWW.CRAINSCLEVELAND.COM

SEPTEMBER 13-19, 2010

CHALLENGING RE-ENTRY The federal government reports that from January 2007 through December 2009, 6.9 million workers were displaced from jobs they held for at least three years. In January 2010, 49% of those long-tenured displaced workers were re-employed — the lowest re-employment rate since the government began tracking this data in 1984. Here’s a breakdown of re-employment by industry:

Employed

Unemployed

No longer in labor force

38.7%

44.6%

16.7%

Information

41.3

43.5

15.2

Transportation/utilities

44.5

38.8

16.7

Wholesale/retail trade

48.8

32.6

18.6

Construction

49.1

39.2

11.7

Professional services

52.0

35.2

12.8

Government

55.3

30.2

14.5

Financial

58.4

28.7

12.9

Industry Manufacturing

SOURCE: U.S. BUREAU OF LABOR STATISTICS; WWW.BLS.GOV

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Tim Magaw (tmagaw@crain.com) Health care & education Michelle Park (mpark@crain.com) Finance Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Advertising sales director: Mike Malley (mmalley@crain.com) Account executives: Adam Mandell (amandell@crain.com) Dirk Kruger (dkruger@crain.com) Nicole Mastrangelo (nmastrangelo@crain.com) Dawn Donegan (ddonegan@crain.com) Business development manager & classified advertising: Genny Donley (gdonley@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Production manager: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Graphic designer: Kristen Wilson (klwilson@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com) Circulation manager: Erin Miller (emiller@crain.com) Customer service manager: Brenda Johnson-Brantley (bjohnson-brantley@ crain.com) 1-877-824-9373

Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation

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CRAIN’S CLEVELAND BUSINESS

Consulting giant seizes area’s potential PricewaterhouseCoopers’ management appointments reflect expansion plans here By MICHELLE PARK mpark@crain.com

This global name is bringing talent to — and keeping talent in — Cleveland. Professional services giant Price-

waterhouseCoopers LLP has promoted Bob Saada to managing partner for the firm’s Lake Erie market amid plans to add at least 50 employees to its Cleveland office. Mr. Saada, a 43-year-old business consultant and certified public

accountant, began his consulting career in 1989 and his career with PricewaterhouseCoopers in Cleveland in 1996. He made partner in 2000 and moved in 2007 to Washington, D.C., where he led the company’s transaction services business for its Saada east region. A Mayfield Heights native, Mr. Saada returned to Cleveland to

assume two new roles beginning July 1; the other is managing partner of the Cleveland office. The market he’ll oversee encompasses Cleveland, Pittsburgh, Rochester and Buffalo and employs about 1,000 partners and professionals. PricewaterhouseCoopers views the region as one of its highest potential growth markets, said Jay

L. Henderson, who oversees six of the firm’s markets, including Lake Erie. Where there is growth, there is potential for the company to expand its services, he said. This market is not the obsolete Rust Belt many perceive it to be, Mr. Saada said. “This is a region that has a lot of strong companies and global companies in it,” he said. “Our See INVEST Page 24

THE WEEK IN QUOTES

INSIGHT

“A code of ethics doesn’t just create a system of expectations for government; it creates a set of expectations for business leaders as well.”

STEM MAKES THE GRADES

— Joe Roman, president, Greater Cleveland Partnership. Page One

Akron, Cleveland schools’ advances in science, technology, engineering and math earn solid marks from state

“Second-quarter OE (original equipment) demand for tires was up 70% and replacement was up 25%, so we’re busy producing product. Compared to last year, things have been picking up.”

By CHUCK SODER csoder@crain.com

ill Gates would be proud. Two technology-focused schools in Northeast Ohio that Mr. Gates’ foundation helped start got good grades on their very first report cards. The Ohio Department of Education gave MC² STEM High School in Cleveland an “effective” rating, the equivalent of a “B,” based on 10thgraders’ scores on the Ohio Graduation Test and the school’s attendance rate. Likewise, the National Inventors Hall of Fame School in Akron received an “excellent” rating, the equivalent of an “A,” based on attendance and tests taken by fifth- and sixth-graders. Started with funds from the Bill & Melinda Gates Foundation, the Battelle Memorial Institute in Columbus and the state of Ohio, the two schools put heavy emphasis on science, technology, engineering and math, or the “STEM” subjects. See REPORT Page 11

— Keith Price, spokesman, Goodyear Tire & Rubber Co. Page 6

RUGGERO FATICA

Austin Pope works on the artistic component of a class project at the MC² STEM High School, where freshmen take classes at the Great Lakes Science Center in Cleveland. The school recently earned an effective rating based on graduation test scores and the school’s attendance rate.

Nordson ready to execute acquisition strategy Analysts say cash-heavy Westlake manufacturer in good position to grow By DAN SHINGLER dshingler@crain.com

With CEO Michael Hilton now settled in under center, Westlakebased Nordson Corp. is ready to play offense again — and will make some acquisitions if it can find opportunities on the free agent market that fit its game plan. “We made a lot of acquisitions in

2007. In 2008, we sat down and digested those. In 2009, we just hunkered down. Now it’s time to look for more opportunities,” Mr. Hilton said in a recent interview with Crain’s. Nordson makes automated spraying and dispensing Hilton equipment that apply adhesives and specialized coatings to products ranging from food packaging and appliances to LED lights and circuit boards inside mobile phones, which must have numerous chips and processors adhere to their surface. Mr. Hilton said he’s looking to

buy companies with products or technologies that complement the company’s existing lines and markets. He’s especially interested in those that can sell to the high-tech and electronics fields. Nordson in the past has taken a disciplined approach to acquisitions, Mr. Hilton said, and he vows to continue to do so. But, with strong sales and margins so far this year — and a stash of $49 million in cash as of July 31 — the company doesn’t need to shop in the toy aisle. “Historically, we’ve looked at

acquisitions from a few million (dollars in annual revenues) to a few hundred million. And we’ll look across that range,” Mr. Hilton said. “But if something came about that was $300 million to $500 million, that would not scare us from a balance-sheet perspective. We certainly have the cash available to do that.” Nordson more than doubled its cash on hand in less than 12 months, as it rose from $18.8 million as of Oct. 31, 2009 — the end of its last fiscal year. But the company’s available cash isn’t the only aspect of its financial results that have improved over the last year and helped to bolster See NORDSON Page 8

“From June 1 to Sept. 1, I put in 20 hours a day and that was seven days a week. I had a couple people who would help by answering questions but no one there to hold my hand.” — Pierre Jamnicky, owner, Blue Moon Screenprinting. Page 17

“It’s been a good year. I’m definitely paying the bills and caught up on everything. I haven’t gone out and bought myself a new vehicle or anything yet, but I’m not one to spoil myself.” — Kelly Novak, owner, Kelly’s Polishing and Metal Finishing Inc. Page 18

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4G: Devices will be designed for new service continued from PAGE 1

phone equipped to access the upgraded network, according to representatives from the major carriers. That includes typical business users, who with the added speed will be able to download attachments and join video conferences more easily while on the go. The network’s improved ability to stream video could prove particularly useful to, say, a security company or a business that wants to keep an eye on shipments coming in and out of its warehouses, said Larry Evans, vice president and general manager for Dallas-based AT&T. “It’s really up to the imaginations of the people making the applications,” said Mr. Evans, who oversees

sales of wireless accounts and U-verse television subscriptions in Ohio and nearby areas.

Bigger and faster The networks promise to be about three times faster than the “3G” networks that cover most metropolitan areas today. For instance, New York-based Verizon, the country’s largest wireless carrier, expects devices accessing its 4G network to be able to download between five and 12 megabits of information per second, up from about two megabits per second now, said Don Carretta, executive director for Verizon’s network in Ohio, western Pennsylvania and West Virginia. Verizon plans to launch 4G

service in 25 to 30 metropolitan areas in the United States before the end of 2010. Mr. Carretta would not say whether Northeast Ohio would be among that group, but he did say the region, including Akron, is the type of large market Verizon is targeting this year. “They’re going to be very large markets. Cleveland is a large market,” Mr. Carretta said. To make the upgrades, Verizon needs to add new antennas, base stations and other equipment at its existing towers, allowing the company to send signals in the 700 megahertz range, which should improve coverage and reception inside buildings. It also needs to upgrade the gear that connects the towers to the traditional landline telephone network. Mr. Carretta said Verizon likely won’t need to hire many people in Northeast Ohio to implement the upgrades. AT&T, however, expects to hire extra employees and contractors as it upgrades equipment in the region, Mr. Evans said. Another company official, however, declined to say how many people AT&T might hire. Mr. Evans only would say that AT&T would upgrade equipment in Northeast Ohio at some point next year. He added, though, that the company has near-term plans to double the speed of its 3G network, which already is the fastest in the nation.

Cost/benefit analysis Businesses should get a lot of use out of faster 4G speeds, said John Adams, communications manager at Overland Park, Kan.-based Sprint, which already offers 4G in a few dozen cities scattered across the United States. Improved access to online videos could help sales people, retail employees and just about “anyone who deals with customers,” he said. More devices, such as radios, video game consoles and even cars are expected to be designed to tap into 4G networks. For now, however, companies will be faced with the decision of whether to upgrade to 4G phones to take advantage of the higher speeds. Mike Snyder, public relations director for the Telecommunications Industry Association of Arlington, Va., thinks many businesses will upgrade their mobile phones as 4G service becomes available, especially considering that they may have been putting off upgrades because of the recession. However, many businesses have delayed other, higher-priority projects, too, said Laura Pettit Rusick, who owns technology consulting firm OPT Solutions Inc. of Sagamore Hills. Though high-speed Internet and streaming video is nice, Ms. Rusick said she isn’t sure whether the benefits of an upgrade outweigh the costs for many businesses. “It all comes back to, are people going to see the business value in it?” Ms. Rusick said. ■

Volume 31, Number 36 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

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WWW.CRAINSCLEVELAND.COM

SEPTEMBER 13-19, 2010

Some manufacturers chug along despite overall ebb Local firms’ activity in line with recent Beige Book report, depending on industry they serve By DAN SHINGLER dshingler@crain.com

If America looks in the economic mirror it might see Cleveland. It’s a land where, by and large, companies that make things say they’ve had a much better year than last and they sing the mantra “cautiously optimistic” almost in chorus — save for a few corners, such as construction-related businesses, where the cobwebs and the outlook still are dismal. Steve Peplin, CEO of Talan Products and GoPro Construction Solutions in Cleveland’s Collinwood neighborhood, lives on both sides of those manufacturing tracks. On one side, Mr. Peplin’s original business — Talan — has been slamming steel nearly as fast as its stamping machines could be fed the metal in recent months as it makes parts for things such as appliances and automobiles. “Talan is booming. We’re on fire,” he said. That’s not so for GoPro, which sells a specialized bracing system that Talan developed and produces. The “new product,” as Mr. Peplin calls it, makes the tricky task of building stairways in houses and buildings a simple thing. He started GoPro in 2008 to sell it, and the

product has gotten rave reviews, he said. But sales stink, because unless people are building, they don’t need to make stairs. “It’d be a disaster if all we had was the new product,” Mr. Peplin said. Mr. Peplin’s experience is a microcosm of the Northeast Ohio economy, and generally is in line with the assessment of the regional economy outlined in the latest Beige Book report issued last Wednesday, Sept. 8, by the Federal Reserve Board. The report, which looks at the state of the economy in the Fed’s 12 districts, said the Fed’s Cleveland district —which includes all of Ohio and part of three adjoining states — reported that “orders and activity edged up for makers of steel and other metals” due largely to demand for transportation equipment, though it noted that manufacturing demand overall “softened compared with the previous reporting period. “Recent weakness was most notable for construction-related products,” the report stated. The Beige Book aside, a number of area manufacturers indicate they’re still going along fairly strong.

Positive barometer “We’re seeing some good signs — people are active,” said Steve Kowalski,

owner of Kowalski Heat Treating, looking out from his office over Lake Erie from the Detroit Shoreway. Guys such as Mr. Kowalski are mini economic indicators of sorts. They perform a specialized process — heat treating of metal — used by a plethora of other area shops. So, when the general manufacturing economy is busy, so is Mr. Kowalksi. “Off-road construction, transportation, power transmission, alternative energy, medical — there’s truly not a market that we’re not in,” he said. With the exception of construction, all those industries are keeping Mr. Kowalski busy, causing him to add four employees in the last six months and bringing his payroll to 25. Like many, though, he is a cautious high-wire performer, stepping onto the cable gingerly in his first time back since a big fall. “We’re positioning ourselves to expand, but to be able to contract quickly if we need to,” he said. In automotive, small shops such as precision stamping company Die-Matic Corp. in Brooklyn Heights report sales still are healthy, and the same is true for giants such as Goodyear Tire & Rubber Co. in Akron. “Everybody’s a little bit up,” said Jerry Zeitler, president of Die-Matic, who said his sales to the automotive market still are about where they were last August. That’s when the government’s Cash for Clunkers program boosted auto sales and Mr. Zeitler says he again became

“The market hasn’t really rebounded at all, quite honestly. If the back half of 2010 had continued like the first half, we’d see a positive gain — but it has not.” – Rob Horton, vice president of U.S. Paints, AkzoNobel profitable, after a tough 2008 and early 2009. Die-Matic still is profitable today, Mr. Zeitler said, though he worries constantly that consumer confidence will wane. Though bigger, Goodyear is in the same boat. “Second-quarter OE (original equipment) demand for tires was up 70% and replacement was up 25%, so we’re busy producing product,” Goodyear spokesman Keith Price said. “Compared to last year, things have been picking up.” However, there are manufacturers operating in markets where even good companies have it rough.

And then there’s housing … Among them is AkzoNobel, the maker of Glidden paint that has its U.S. headquarters in Strongsville. The company has spent the last two years refocusing on the Glidden brand, including reformulating the paint to make it a high-end performer and remodeling its more than 400 stores that serve professional contractors. The moves apparently have paid off, too, as the company recently became the primary paint supplier to Walmart, while keeping its highprofile Home Depot account.

But, try selling paint in a world that does not build houses, office buildings or other structures that include bare wood and drywall. “The market hasn’t really rebounded at all, quite honestly. If the back half of 2010 had continued like the first half (when home buyers’ tax credits were in place), we’d see a positive gain — but it has not,” said Rob Horton, vice president of U.S. Paints at AkzoNobel and a constant watcher of home sales, unemployment rates and vacancy rates. “Quite frankly, we don’t expect the indicators to move that much next year,” Mr. Horton said. Like many manufacturers, Mr. Horton worries that employment and housing won’t come back the way they need to in order to buoy consumer confidence and that the economy therefore will get worse, not better. However, large companies, such as Goodyear, still are predicting that the recession will not double dip. But the big guys often are looking at global markets. Smaller companies, especially those that sell all or most of their product in the United States, are more wary. “I’m still not convinced it’s over,” Die-Matic’s Mr. Zeitler said. ■

Can you handle the truth? Who’s helping you? The truth is most investors’ portfolios did not handle the past years’ market volatility well. A more alarming truth is that most plans have not been changed to mitigate future risks or capture opportunities. We have helped many investors with an honest assessment of their current portfolio and plan. May we help you?

Bill Caster (216) 464-4244 bnymellon.com/truth ©2010 The Bank of New York Mellon Corporation. All rights reserved. Products and services may be provided by various subsidiaries of The Bank of New York Mellon Corporation.

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Excellence in Action

College of Architecture and Environmental Design, Improving the Quality of Urban Spaces. The Cleveland Urban Design Collaborative debuts in its new location in the PlayhouseSquare District. • Kent State has the region’s only college of architecture, which includes the Cleveland Urban Design Collaborative, a unique city-university partnership. • Kent State graduates ranked in the top 20 out of approximately 150 accredited programs in the 2009 national Architect Registration Examination. • The Cleveland Urban Design Collaborative, Kent State’s community service organization, provides design services, research and advocacy for cities, neighborhoods and institutions in the region. • Kent State is the only public university in Northeast Ohio that ranked in the coveted ﬁrst-tier list of Best National Universities in the 2011 edition of Best Colleges by U.S. News. • The Carnegie Foundation has ranked Kent State among the nation’s top 77 public research universities.

Our thanks to the Cleveland Foundation, the George Gund Foundation, the Kent H. Smith Charitable Trust and the Kelvin and Eleanor Smith Foundation for their support for the relocation to PlayhouseSquare District.

Kent State University, Kent State and KSU are registered trademarks and may not be used without permission. 10-1791

1309 Euclid Avenue, Suite 200 Cleveland, OH 44115 216-357-3434 www.cudc.kent.edu

www.kent.edu

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Shaker: Commercial presence key

In business, the right banker makes all the difference

continued from PAGE 1

The firm plans to reconfigure the vacant, 22,000-square-foot former auto dealership owned by the city at the corner of Lee Road and Chagrin Boulevard into office and showcase space. The city believes this building is a good first step in creating a commercial area that can be attractive to young, entrepreneurial professionals who want reasonably priced business space in a community they also want to live in with their families.

nesses, a series of lunchtime speaker programs and even classes Mr. Goldstein described as “Startup 101.” Mayor Leiken said he believes Shaker Heights has a good shot at succeeding. He noted the city still is home to people who might have a say in where a business is located and who might welcome an office destination just a few minutes from home.

Andy Hopper

Bethesda, Md., consulting firm, Robert Charles Lesser & Co., to map out a five-year economic development plan that would position the city as an office destination, initially, for startup entrepreneurs. The city hopes to get a head start on that transformation with a $350,000 investment to turn a former auto dealership into a business incubator in collaboration with a young seed capital firm. That deal is on the agenda for approval by Shaker Heights City Council tonight, Sept. 13. “We’re ready to establish a much stronger commercial presence in Shaker Heights than we’ve had in the past,” Mayor Earl Leiken said. “We want to do that for the sake of our tax base and to make a major contribution to the vibrancy of our community as we move into the future.” Down the line, the city wants to tackle the remaking of the Van Aken-Warrensville shopping district beginning in 2012. The Goldstein, Caldwell & Associates early stage investment firm is expected to move to Shaker Heights in November provided City Council approves the investment in the former Zalud Oldsmobile dealership. In the process, Goldstein Caldwell would transform itself into Shaker LaunchHouse, a business incubator/ accelerator, and would bring a dozen client firms with it. Goldstein Caldwell has been operating out of the former Brunswick Florists shop on Carnegie Avenue, but that building is ready to be torn down to make way for the makeover of the old Tudor Arms Hotel next door into a $22 million Doubletree Hotel. Partner Dar Caldwell said the firm was moving last week and temporarily will occupy a building in Shaker near the Van AkenWarrensville shopping area.

Assistant Vice President Business Banking 13 years in banking 216-704-0184

Nordson: New markets present opportunities

Meet Our Difference Makers: Pat Rositani Vice President Business Banking 33 years in banking 440-953-3615

Jim Burke Assistant Vice President Business Banking 15 years in banking 216-694-5676

continued from PAGE 3

FirstMerit is proud to welcome these three experienced bankers to our Business Banking team. We take the “people” part of “businesspeople” very seriously. Adding this trio will continue to distance FirstMerit from our competition.

Mr. Hilton’s confidence in Nordson and its ability to grow. Investment bankers say Nordson is exactly the kind of company that can secure financing for a transaction these days — a large company with a strong cash position and rising revenues coming from diverse industries. Thanks to cost-cutting measures put in place during the recession, Nordson has seen profits surge as its revenues have rebounded. For the nine months ended July 31, its net income more than doubled, to $114.5 million, or $3.35 a share, from $49 million, or $1.46 a share, in the like period last year, with sales increasing 29%, to $751.4 million from $581.7 million.

Capital spending kicks in

firs tm e rit. c o m

Nordson sells both new spraying and dispensing systems and replacement parts and supplies for its systems that are already in place, giving it a sort of razor/razor-blade business. During the recession, Mr. Hilton said, sales of systems were depressed as companies the world over put off the kind of capital spending that normally drives Nordson’s system business. The blade business kept the company profitable — but in 2010, it’s been

Creative thinking Shaker has an unusual vested interest in seeing the project succeed. The investment firm will pay no rent for the first four years. Instead, said Tania Menesse, the city’s economic development director, Shaker, through its nonprofit community improvement corporation, will have a 3% stake in LaunchHouse and will receive 10% of whatever profit the investment firm sees from each of its portfolio companies in the building. City Council will vote on spending $300,000 for building improvements and $50,000 for working capital for LaunchHouse, which was formed in 2008 as Goldstein Caldwell. LaunchHouse has told the city it plans to invest an average of $15,000 in each of 15 startups over the next several years. Goldstein Caldwell invests modest amounts of money, usually under $20,000, in the business ideas of young entrepreneurs. It also provides office space, support services and counsel. The front 5,000 square feet of the new building, the old dealership showroom, will be broken up into office space, partner Todd Goldstein said. The rest of the building, the service area, will be used for special events such as occasional showcases for the portfolio busi-

selling systems, too, Mr. Hilton said. “Technology (electronics) picked up first, then the adhesives business came back. It’s only just now that we’re seeing the industrial coatings come back,” he said. The growth of sales has slowed a little from early in the year, Mr. Hilton said, but sales still are rising and some favorable trends are working in Nordson’s favor. For one, mobile phones are using more chips and processors, which means more system sales for Nordson. Also, the company hopes LED lighting takes off as many expect it will, creating another opportunity for Nordson to increase system sales. The company is predicting fourth-quarter sales will rise by 22% to 25% from a year ago, compared to a 29% increase in sales for the first nine months of its fiscal year. “Most of the folks we’re talking to don’t expect a double-dip (recession),” Mr. Hilton said. “They do expect a slowdown in the U.S. without more stimulus, however.”

Analysts approve Analysts have given Nordson high marks for its performance this year and several recently increased their earnings forecast for the company for the rest of fiscal 2010, which ends Oct. 31, as well as 2011.

Hometown advantage Steve Weitzner, a consultant who helped the city craft the LaunchHouse deal, said it is “an opportunity for Shaker to redefine itself as a great place to start a business.” Mr. Weitzner is a Shaker resident and president of Silverlode Consulting Corp., an economic development consulting firm in Cleveland. He sees Shaker with distinct advantages in its efforts to build its business presence. “We have some strong location factors and a lower income tax than a lot of the cities we compete with,” he said. “And we have available buildings.” The Zalud building is at the nexus of an old auto dealer row at the city’s western edge that extended along both Chagrin and Lee. It’s dotted with old dealerships and smaller one- and two-story commercial buildings that, Mr. Weitzner said, give the city opportunities to keep young companies as they grow out of the incubator. “People tend to stay where they start their businesses,” Mr. Weitzner said. Indeed, Mr. Goldstein, LaunchHouse interim director Paul Allen and 11 of the firm’s 34 mentors — including Tom Sudow, director of business development at the Cleveland Clinic-affiliated Global Cardiovascular Innovation Center — are Shaker residents, Mr. Goldstein said. ■

“We are raising our 2010 earningsper-share estimate to $4.27 from $3.78 and raising our 2011 EPS estimate to $4.79 from $4.33,” wrote analyst Liam Burke, analyst for Janney Capital Markets in Washington D.C. “Nordson has felt the effects of a weak economy in its business and has adjusted its cost structure accordingly and is in a strong position to benefit from world-wide economic recovery,” Mr. Burke continued in his Aug. 20 report. Analyst agree with Mr. Hilton that revenue growth at Nordson probably will slow next year, but they also believe it will continue to increase — and that there are whole new markets on the horizon for the company. One is LED lighting, which Mr. Hilton said represents a significant market for Nordson because its systems are used to encapsulate lighting components during production as well as to package complete lights. “We look to the LED and Life Science businesses to be the real growth drivers for Nordson in the future,” Barrington Research analyst Walter Liptak wrote Aug. 23. “We believe LED lighting has a bright future and Nordson is well positioned to take advantage of the expansion in this market.” ■

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CRAIN’S CLEVELAND BUSINESS

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KSU vision for public health lofty School aims to outdo those already established in rapidly growing, community-based field By TIMOTHY MAGAW tmagaw@crain.com

PHOTO PROVIDED

The Jet Express IV, docked in Lorain, this fall will carry passengers to Cleveland for Browns games as it did last year. Put-In-Bay Boat Lines is planning three Browns shuttles this season.

Non-island trips buoy ferry’s first full summer Lorain boat popular for cruises, Cleveland By MICHELLE PARK mpark@crain.com

The Jet Express ferry serving Lorain attracted some 1,000 riders during its first full summer of operation, but averaged only 12 people a day on its weekend ferries to the Lake Erie islands — a number that doesn’t begin to compare with the thousands who board the company’s island ferries daily in Sandusky and Port Clinton. While the low island traffic has Jet Express and Lorain Port Authority officials talking about fewer trips and lower rates for next season, officials also emphasize the Lorain ferry performed swimmingly in other services. Wine-tasting cruises offered in July and August were “going like gangbusters,” with the final four of six selling out, said Lance Woodworth, Jet Express director of operations. Also, tours up the Black River have attracted groups, including three school class reunions, and companies have chartered the ferry for meetings. The vessel is owned jointly by Put-in-Bay Boat Line Co., which does business as Jet Express, and the Lorain Port Authority, which is working to develop the waterfront in Lorain. Lorain ferry service began before Labor Day last year at the tail end of that season. This summer, Mr. Woodworth said, was a test to see what would work and what didn’t. Whether the Lorain service will change is a discussion Jet Express and Lorain Port Authority officials plan for this fall, Mr. Woodworth said. The numbers, including expenses, need to be digested first, he said. In all, 168 island travelers rode the Lorain ferry during 21 trips over 14 days, Mr. Woodworth said. It takes about an hour and a half to cover the 73-mile distance, a route officials admit they weren’t sure people would want to take. The service was never meant to compare with the back-and-forth ferry service in Sandusky and Port Clinton, Mr. Woodworth said, noting it took years to build the service there. Instead, the ride from Lorain to South Bass and Kelleys islands was marketed as a mini-cruise that dropped riders off in the morning

and picked them up at night. The service ran Saturdays between Memorial Day and Labor Day and some Sundays. Roundtrip tickets cost $58 for adults and $12 for children ages six to 12. “We went in there knowing the market in Lorain wasn’t Sandusky, wasn’t Port Clinton,” Mr. Woodworth said. “I don’t think we were surprised in any way, except for the positive responses (to) some of the river trips.” What Jet Express and port authority officials learned, Mr. Woodworth said, is that while Lorain may be a less attractive docking site for island travelers, it seems attractive for people who want to travel in the other direction — toward Cleveland. Specialty trips, private charters and game-day ferries to downtown sporting events seem to be the way people want to sail out of Lorain, he said. Like last fall, three Browns game-day shuttles are planned this football season. The challenge remains getting the word out within budget about all the services, Mr. Woodworth said. The ferry service in Lorain is one tool in planned waterfront development there. The port authority will use $3.3 million in American Recovery and Reinvestment Act funds to transform Lorain’s concrete deck pier into something more aesthetically pleasing and to add parking by year’s end, said Rick Novak, executive director of the port authority. In addition, the authority plans a ferry terminal building near the dock that will house Jet Express and port authority offices, a ticket office, concessions and restrooms, Mr. Novak said. The goal is to open it by June. In Lorain, city officials have no immediate plans to study the ferry’s impact, said Robert Gilchrist, director of public service. “We just plan on reaping the benefits,” he said. “I am definitely happy that we have them.” Some Lorain business owners say they’ve benefited already from the ferry traffic. Leonard DeLuca, owner of the Rose Café near the dock, said he had 10 groups of 20 or more come in before boating excursions. He hopes the service will go daily. “As people get used to it being here, it’ll pick up,” he said. ■

Kent State University plans to invest $5 million into its new College of Public Health over the next four years with hopes of becoming a regional and national leader in the growing field — an objective that means going head-to-head with some already-established public health programs. “We see a lot of distinctive advantages Kent State can offer instead of the other schools of public health relatively nearby,” said Mark James, the new dean of KSU’s College of Public Health. Kent State established the new college last year and welcomed its first freshman class last week. In so doing, it now pits itself against two major, accredited public health institutions in the region — Ohio State University and the University of Pittsburgh. There are other public health programs in the area, including Case Western Reserve University’s graduate program, but Kent State is looking to set itself apart; it now offers the only undergraduate public health degree in Ohio. Like most new ventures, the college has yet to provide a return on the $2.4 million invested in the program thus far, but Dr. James indicated it’s a matter of when, not if, there will be a payoff. “It will take us some time before we show positive results on that side of the ledger, but with the increase in student enrollment, increase in research dollars, some expansions

of our current degree program and hiring of senior faculty, we feel fully confident of becoming a selfsustaining college,” Dr. James said.

How it started Jumpstarting a major public health initiative was one of President Lester Lefton’s interests when he took the helm at Kent State in 2006. The three other universities where Dr. Lefton worked — University of South Carolina, Tulane University and George Washington University — all had public health programs. Kent State provost Robert Frank founded a public health college at the University of Florida in Gainesville, and Dr. Lefton asked him to evaluate whether a public health college would be a good fit in the already-crowded medical landscape in Northeast Ohio. “Public health focuses on the health of the community,” Dr. Frank said. “It needs to complement the traditional models of medicine and look at the broader picture. As we looked around at the big health issues, Northeast Ohio has a lot of the things public health addresses.” While at Tulane, Dr. Lefton also started an undergraduate public health program similar to the one now offered at Kent State, which he said will help mold students into well-rounded public health professionals ready to work. “Here’s an opportunity for students to get involved in a field where there’s a desperate need for workers who make a good living,” Dr. Lefton said.

Need in the region Graduates from Kent State’s public

health program will be able to help with efforts to address health disparities among people living in Northeast Ohio, which ultimately should bring jobs to the region, said Terry Allan, the Cuyahoga County Board of Health’s health commissioner. For example, Mr. Allan said, life expectancy in the inner city is about 25 years shorter than in suburban locales. Without dealing with such issues and fostering a healthy work force, employers will look elsewhere to expand or relocate their operations, according to Mr. Allan. Kent State already has reached out to regional health agencies to coordinate work programs and internships for its students. “These are folks who would be readily employable, and that’s important to us,” Mr. Allan said.

Moving forward Dr. James said he hopes to have at least 200 students enrolled at the college next year. At the moment, unofficial enrollment is at about 140 students — nearly 90 of whom are undergraduates, which Dr. James dubbed as “the cornerstone” of the program. Many of the undergraduates, he said, are transfers from other majors at the university. So far, the college has 18 tenure-track faculty and some adjunct professors and is on track for pre-accreditation by 2013, Dr. James said. Dr. Lefton said Kent State’s public health college will compete “very, very nicely” with other programs in the region and will become one of the university’s “shining stars” — like its fashion, nursing and architecture programs — within a decade. “Ultimately, public health should be a revenue enhancer rather than a draw,” Dr. Lefton said. “You’ve got to spend money to make money.” ■

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CRAIN’S CLEVELAND BUSINESS

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SEPTEMBER 13-19, 2010

PUBLISHER/EDITORIAL DIRECTOR:

Brian D. Tucker (btucker@crain.com) EDITOR:

Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:

Scott Suttell (ssuttell@crain.com)

OPINION

Top priority

on’t confuse last Tuesday’s low voter turnout in Cuyahoga County for the primary election with public disinterest in county government. In approving a change in the structure of that government last November, the people spoke loudly, clearly and in big numbers that they were sick of the self-dealing and cronyism that have been exposed amid the ongoing federal public corruption investigation in the county. And when they vote this November, they will expect — and deserve — a new collection of county leaders who should make the restoration of ethical behavior in government their No. 1 priority. There will be plenty of demands on the new county executive and the new, 11-member county council once they assume their posts in January. They will be pushed to streamline the operation of various county departments and to weed out the do-nothing job holders and overpaid, underworked employees from those who earn their keep. They will be urged to engage municipal governments and neighboring counties in collaborative efforts to reduce their bureaucracies and so hold down the cost of government. They will be encouraged to pursue economic development initiatives such as the creation of business-ready sites in targeted locations in Cleveland and the inner-ring suburbs, where available property for development is scarce. All these efforts are worthy of attention. However, the main reason voters endorsed the change in leadership was their disgust with the unethical, selfserving ways of county officials such as Frank Russo, who resigned as auditor last Thursday after the feds finally charged him with multiple counts of accepting bribes. It is imperative, therefore, for the new regime to implement as soon as practical whatever measures are appropriate and enforceable to restore the public’s faith that the employees of county government are working in taxpayers’ best interests, not their own. It’s encouraging to see the candidates for county executive emphasize the ethics issue in their campaign platforms. For example, Democratic candidate Ed FitzGerald’s “5 Point Plan” features as point No. 1 “Rooting Out Corruption in County Government.” He wants to establish an Office of Public Integrity, which would conduct investigations of possible ethical and legal wrongdoing, and to institute a “rigorous ethics policy” that would apply to county employees and vendors. Republican Matt Dolan’s four-point plan likewise puts “Restore honesty and integrity to Cuyahoga County” at the top of his list. Among other things, he plans to issue an executive order on his first day in office that would require ethics training for county employees and would establish a strict gift policy. And Ken Lanci, one of three independent candidates, says he’d create a Commission on Public Integrity, with the goal of conducting county business “in a clear and open manner so as to treat its vendors and citizens with complete fairness.” No matter who wins in November, restoring the integrity of Cuyahoga County government must be more than lip service. It must be the first order of business of the new people in charge.

FROM THE PUBLISHER

GM’s culture has come a long way

in my first couple reporting jobs out of ast week’s big launch party for college. It was just the monotony of working General Motors’ new midsize a 100-cars-per-hour assembly line that vehicle at the Lordstown plant wore on you, day after day, week after week. brought back a flood of memories More than that, however, it was the for this alumnus of that sprawling complex atmosphere that seemed counter-intualong the Ohio Turnpike. itive. It was my first experience with For the better part of four years, I union-management relations, and the paid my bills at Kent State University atmosphere ranged from toleraby installing heaters and air ble to toxic, depending on where conditioners in Chevy Vegas BRIAN we were in the contract cycle or (hold the jokes about my role in TUCKER how much a department’s the failure of that little car). workers disliked the foreman. Back then — in the early The most prized job was 1970s — Lordstown was a far sweeper because they worked different place, for a host of at their own pace. During a reasons, not the least of which labor war that broke out weeks was the economy. The steel after I hired, employees sabomills were still humming across taged cars to slow, or stop, the the Mahoning Valley and that line. new plant was populated — Years later, when I returned to the especially its second shift — by a lot of plant as an Associated Press reporter young people just like me. They were assigned to do a story leading up to that merely using that job as a means to an year’s contract talks, I found a different end, namely to get a college degree and place. Many of the young people who improve their lives. were my contemporaries were married, Not that a GM assembly job was a bad with kids, and a wildcat strike over a thing. In fact, I probably earned three perceived management injustice was no times more as an autoworker than I did

longer uppermost in their minds. Even back then, with all the changes that had happened in the decade or so since I worked there, I could never have imagined what was to come. Today, as the company — kept alive by a federal bailout — launches the Cruze, GM’s North American president calls Lordstown, Ohio, “ground zero” for the new company. Local high school marching bands played, while workers, executives, union officials and government officials — led by Gov. Ted Strickland — celebrated the ceremonial rollout of the first car. Production will be limited to 150 per day as production teams work out any bugs. The output slowly will build to 1,500 per day in two shifts. Union leaders and company officials are truly working together these days at Lordstown, and they have been for several years. It’s the future, and it makes enormous sense. They’ll have differences, but they’ve created a culture that respects a joint purpose — showing the world that an American car company can indeed reinvent itself and compete in a global marketplace. ■

LETTERS

New development shapes region’s identity ■ We are thrilled to see the amount of coverage being given to major economic development projects like the planned Cleveland Convention Center and Medical Mart, the downtown casino and the boutique hotel on the East Bank of the Flats. Add this to new restaurants, museum expansions, revitalized theaters and other additions going into visitor-friendly neighborhoods like University Circle and Gordon Square Arts District, and the region clearly is moving forward. All of these advances are hospitalityrelated. This is particularly encouraging, given that last year the U.S. hotel industry saw its lowest year-end room revenue since 2004, the exhibition industry recorded a 12.5% decline in overall business and the United States Tour Operators Association called 2009 one of the worst years in its

history. Tourism is a critical economic development machine for any region, and the positive indicators outlined above promise a more successful future. These projects will add to the region’s stable base of amenities that are appealing to residents and tourists, like our burgeoning culinary scene, our stellar arts and culture offerings, and our immensely popular family attractions. If we can maintain our pace booking events, trade shows and meetings into alternate venues (from May-August 2010, nearly 90,000 conference- and meetings-goers attended events in alternate venues for a direct spend of $99 million) and increase tourism visits with new and enhanced product like those mentioned above, the return on these investments and the benefit to the community as a whole will be even greater.

It’s important to step back and recognize what an economic driver tourism is for our region’s future. Currently, it’s the fourth-largest employer in Cuyahoga County, supporting 61,000 jobs. Northeast Ohio generates 36% of tourism sales in Ohio, and Cuyahoga County’s tourism industry alone generates $865 million in tax receipts and fees, $466 million of which are state and local. We’re not out of the woods, but we are beginning to see a little sunlight through the trees. Imagine what the tourism industry will do for our economy when all of these projects are complete. Dennis J. Roche President Positively Cleveland See LETTERS Page 11

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CRAIN’S CLEVELAND BUSINESS

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THE BIG ISSUE Do you expect to get a raise next year? If so, do you think it will be bigger or smaller than in years past?

is pleased to announce the recapitalization of

KALYN BROWN

KELLY WHEELER

JOHN WHEELER

GARRETT WEIDER

Cleveland Heights (J. Crew)

Brunswick (staff attorney, Cuyahoga County Domestic Relations Court)

Westlake (attorney)

Cleveland (part time, American Greetings)

I do expect to get a raise, at least I would hope so, and if it’s not bigger I don’t know if I’d be very happy about it. I don’t know if I’d want to stay, but yes, I do think it will be bigger than last year.

No, I do not expect to get a raise, but I am cautiously optimistic that we will because they are revamping the county government. If I were to get a raise I think it would be the exact same as a standard raise.

I work for myself and I’m the law director out in Westlake. … I know, working for a city, raises aren’t going to happen.

Bluffton Motor Works is actively seeking add-on acquisitions for its specialty electric motor manufacturing business

I was laid off from my job last year. It’s allowing me to try more entrepreneurial things. I don’t know for sure, but sales (of his art) have been great, and yeah, it definitely could be a raise.

CapitalWorks, LLC 1111 Superior Avenue, Suite 970 Cleveland, OH 44114 (216) 781-3233 www.capitalworks.net

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

Report: Lessons move beyond standards continued from PAGE 3

And the teaching tools they employ go well beyond textbooks: Students at both schools spend a lot of time working on group projects, and they often receive help from practicing engineers, inventors and scientists. The end result, according to MC² principal Jeffrey McClellan, is that students rarely ask the question that plagues so many a math teacher: “Why do I need to know this?” “You don’t hear that question very much,” Mr. McClellan said.

A tale of two cities Students at the MC² school — which houses freshmen at the Great Lakes Science Center, sophomores at General Electric’s Nela Park Campus in East Cleveland and juniors at the Cleveland Metropolitan School District’s former Health Careers Center — produced better test scores than their peers in the district and throughout Ohio. For instance, the school’s average score in writing, its best subject, was 96.9%, whereas the district average was just 67.2% and the state average was 84.1%. Science was the only subject where the statewide average score, 73%, exceeded the MC² average score, 69.2%. The school, which next year will move juniors and seniors to the downtown building that housed the Jewish Community Federation of Cleveland before that group moved to Beachwood in July, didn’t achieve the 75% average needed to get a passing grade in science from the state. Mr. McClellan, though,

said he’s pleased with the school’s progress in the subject. He noted that nearly one-third of the school’s 10th-graders produced science scores high enough to be considered “accelerated” or “advanced.” Two years ago, when they took the eighth-grade achievement test, just 13% hit those targets. Overall, Mr. McClellan said, he would have been unhappy with anything less than an effective rating. After all, this is a school where 95% of juniors worked summer internships and 30% are enrolled in college courses. “We’ve taken the approach from the beginning that this is what’s expected,” Mr. McClellan said. Their younger counterparts at the National Inventors Hall of Fame School in Akron produced similar test scores but managed to soundly beat state averages in every category. In fifth-grade math, however, average scores for both the school and the state as a whole fell below the 75% required to receive a passing grade from the state. The sixth-graders did better: They averaged 89.2% on the math test. Like the MC² school in Cleveland, the National Inventors Hall of Fame School expected good scores, despite its focus on projects over pop quizzes, principal Traci Buckner said. For instance, students last year started dreaming up ways to help reduce noise in the library at the school’s new building on South Broadway Street. They’re receiving help from Hall of Fame inductee Jim West, who with a colleague invented a

technology widely used in microphones and telephones. It was a student’s idea, however, to muffle sound with fiberglass covered in Tyvek, a water- and air-resistant material often used in construction. Ms. Buckner said the school doesn’t need to “teach to the test” because its lessons are designed to get students to learn more than what they need to know to meet state standards. “It’s the floor for us. It’s not the ceiling,” Ms. Buckner said. The two schools both receive in-kind and monetary donations from area companies and nonprofits.

Helping hands The schools deserve a lot of credit for helping students achieve such high scores, said David Burns, director of operations for the Ohio STEM Learning Network. About 80% of the MC² school’s students come from the Cleveland Metropolitan School District, and all of the National Inventors Hall of Fame School’s students come from Akron Public Schools. Students must apply to attend the two schools, but both use a lottery system to pick who gets in. One could argue that parents who take the time to research new schools and file an application might raise more motivated children. Many of the schools’ students, however, didn’t always post high test scores, Mr. Burns said. “You’re bringing some kids in here with third- and fourth-grade reading levels,” he said. ■

LETTERS continued from PAGE 10

U.S. a land of opportunity ■ I wanted to take a moment to let you know that I enjoyed reading Mark Dodosh’s Aug. 30 Commentary, “Let people make name for themselves,” on his immigrant roots. Similar to Mr. Dodosh, I frequently help people pronounce my name and have turned it into a sort of ice breaker when meeting new people. My father, grandparents, uncles and aunts all emigrated to our

great nation many years ago from Lebanon. I am still amazed at the stories I hear over holiday dinners and feel humbled when I think about how much courage it took for them to make new lives for themselves in this country. Even though I am a college graduate and work for one of the largest corporations in the world, I can’t help but feel a bit inadequate when I hear three to four different languages being spoken during those family holiday dinners.

While our country is not perfect, I cherish and value the opportunity that it provides all individuals who come here legally to forge a better life for themselves and their children and agree that others should be open to interacting with their new neighbors from overseas. Just think — they may provide you with some fresh insights that can help you continue to improve your own life! Emile James Gantous Twinsburg

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PolyOne sets keener eye on its suppliers

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PolyOne Corp. will start a supplier scorecard program with 30 of its strategic raw material suppliers in the fourth quarter. The program is expected to improve PolyOneâ&#x20AC;&#x2122;s ability to manage supplier performance and identify opportunities in innovation, technology and growth, said corporate supply chain director Steven Feliccia at PolyOneâ&#x20AC;&#x2122;s 2010 Supplier Symposium, held Sept. 1 in Westlake. PolyOne â&#x20AC;&#x201D; which ranks as North

Americaâ&#x20AC;&#x2122;s largest compounder and one of the regionâ&#x20AC;&#x2122;s largest resin distributors â&#x20AC;&#x201D; will expand the scorecard program to include all strategic suppliers in the first half of 2011, and will add additional metrics to the program in the second half of the year. Suppliers now will be expected to exceed 95% on-time delivery, said Tom Kedrowski, PolyOneâ&#x20AC;&#x2122;s senior vice president of supply chain, operations and process improvement. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve moved a substantial amount of business away from

companies that canâ&#x20AC;&#x2122;t meet our needs in the supply chain,â&#x20AC;? he said. Also at the event, Cecil Chappelow, vice president and chief innovation officer, updated PolyOneâ&#x20AC;&#x2122;s efforts in new technologies. The company is looking to use technology to penetrate several markets, including health care, electronics, specialty automotive and biomaterials. â&#x20AC;&#x153;Sustainability is a focus, but weâ&#x20AC;&#x2122;re taking a very pragmatic view of it,â&#x20AC;? Mr. Chappelow said. â&#x20AC;&#x153;We want it to help us drive profitable growth. â&#x20AC;&#x153;And it helps that weâ&#x20AC;&#x2122;re agnostic when it comes to material choice,â&#x20AC;? he said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re not basic in raw materials, so thereâ&#x20AC;&#x2122;s no bias. We want to bring a solution that meets our customersâ&#x20AC;&#x2122; needs.â&#x20AC;? PolyOneâ&#x20AC;&#x2122;s research-and-development efforts now have a $40 million annual budget and 350 employees worldwide. The unit typically spends no more than two weeks to evaluate a new product or new idea before deciding whether to pursue it, Mr. Chappelow said. Future research efforts will focus on liquid color and ultra-high-molecular-weight materials, among other areas. In the first half of 2010, PolyOne posted sales of just over $1.3 billion, up almost 38% from the like period in 2009. The company showed a profit of $64 million after losing almost $20 million in the year-ago period. â&#x2013; Frank Esposito is a senior reporter at Plastics News, a sister publication of Crainâ&#x20AC;&#x2122;s Cleveland Business.

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Weâ&#x20AC;&#x2122;re Cliffs Natural Resources Inc., a 163-year-old international mining and natural resources company. We are NYSE Euronext-listed, a member of the Fortune 1000 and S&P 500, and one of the largest and fastest-growing companies in Cleveland. cliffsnaturalresources.com/witness

By MIKE McNULTY Rubber & Plastics News

Kent Elastomer Products Inc. has expanded its product line with the addition of Vystar Corp.â&#x20AC;&#x2122;s Vytex Natural Rubber Latex, one of several new uses for Vystarâ&#x20AC;&#x2122;s material. Kent Elastomer, a producer of tubing products, is adding Vytex for customers who prefer low-protein products but still want to retain the benefits of natural rubber latex, the Kent-based company said. Kent Elastomerâ&#x20AC;&#x2122;s standard natural rubber latex formula generally is suitable for most customers, according to Cindy Harry, director of sales and marketing for the company. However, for those requiring a low-protein formula, â&#x20AC;&#x153;Vytex NRL will be a valuable addition to our line of dip-molded products,â&#x20AC;? she said. Vytex offers excellent barrier protection, tactile sensitivity, elasticity strength and comfort while retaining the positive characteristics of natural rubber latex, said William Doyle, Vystar president, CEO and chairman. Duluth, Ga.-based Vystar has been working with Kent Elastomer through numerous trials testing Vytex, according to Mr. Doyle. Strong test results led to Kent Elastomerâ&#x20AC;&#x2122;s decision to use Vytex in its extensive line of dip-molded parts, he said. â&#x20AC;&#x153;Kent Elastomer has been working with us for a long time,â&#x20AC;? Mr. Doyle said. â&#x20AC;&#x153;They have a lot of products and they tested several lines.â&#x20AC;? â&#x2013; Mike McNulty is a senior reporter with Rubber & Plastics News, a sister publication of Crainâ&#x20AC;&#x2122;s Cleveland Business.

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

SEPTEMBER 13-19, 2010

More businesses foster early childhood education Companies take active role in helping to develop future generation of workers By JAY MILLER jmiller@crain.com

“It takes a village to raise a child,” goes the old African saying that former First Lady Hillary Clinton borrowed for a book title in 1996. Well, businesses are realizing they’re part of that village and are coming to embrace the growing body of research that suggests taking a role in early education — either as a sponsor of an on-site day care center or as a philanthropic or volunteer supporter of early childhood programs — is a good investment. Recent studies have shown that graduates of early learning programs become better-skilled adults, which ultimately makes for a better labor pool for business. “There is a range of positive things that come out of (investing in) early childhood,” said William B. Doggett, senior vice president of public and community affairs for Cleveland-based Eaton Corp. “And if we (adults) don’t talk about this,

the 0- to 5-year-olds don’t have much of a voice to be pleading their case.” The diversified manufacturer is a longtime financial supporter of Invest in Children, a public-private partnership operated by Cuyahoga County that advocates for the wellbeing of young children and works to increase financial support for early childhood programs. “There is growing advocacy in the business community around this issue,” said Rebekah Dorman, director of Invest in Children. “Just seeing people who were unlikely advocates — business leaders — advocate for increased public and private spending is a big shift. “Now they get it; they understand return on investment because of their need for a competitive work force in this country,” Ms. Dorman said.

The infrastructure of life A year ago, the Business Roundtable, a national organization of corporate chief executives, reviewed

recent educational, scientific and economic studies and issued a report titled, “Why America Needs HighQuality Early Care and Education.” The report argued that business, which traditionally has focused its philanthropic resources on Kthrough-12 education, should turn its attention to birth-through-age-5 education as well. One particular study, called the Perry Pre-School Study, found that for every dollar invested in early childhood programs, society and the participants received $8 in benefits over the long term. That report and other similar studies have turned Nobel laureate economist James Heckman into an early childhood advocate. “If we think about an array of social problems — crime, teenage pregnancy, obesity, high school dropout rates, widening income inequality, low levels of skills and even adverse health conditions beyond obesity — I want to argue they can be traced in part, and I emphasize in part, to low levels of skill and ability in society,” the University of Chicago economist told a group of educators and community leaders at a seminar last March at Case Western Reserve University.

“Investing in early childhood education is as important as investing in infrastructure,” Dr. Heckman said. The Perry Pre-School Study, which followed a group of preschool children for more than 30 years, and Dr. Heckman’s research helped convince PNC Financial Services Group Inc. to commit in 2003 to a 10-year, $100-million effort to improve early childhood education. “In our industry, we’re only as good as the communities we serve,” said Paul Clark, PNC’s Northern Ohio regional president. “We have to do things for the future.” The company is investing in programs throughout its service area. In Northeast Ohio, it has committed more than $2 million to early childhood programs, including “Toddler Rock,” a pre-school arts program run by the Rock and Roll Hall of Fame and Museum that helps develop literacy skills. Dr. Heckman also made a believer out of Fred Nance, general counsel for the Cleveland Browns and a former chairman of the Greater Cleveland Partnership business advocacy group. Mr. Nance, who heard Dr. Heckman’s presentation in March, said, “If we’re going to have the most impact and change (educational outcomes) for the positive, the earlier we intervene the more impact we’re going to have.”

Setting priorities Several executives at JP Morgan Chase & Co. in Northeast Ohio volunteer with early childhood organi-

zations. James Malz, Northeast Ohio president of JP Morgan Chase, who puts time in with organizations as diverse as the Cleveland Zoological Society and the Hunger Network of Greater Cleveland, also supports the Child Development Center of the Achievement Centers for Children. “The business community should in my opinion make (early childhood education) a priority,” Mr. Malz said. “It’s important to the future of the community.” Improving the quality of the work force of the future may be the most important reason why businesspeople commit money and time to early childhood programs. But businesses also realize that providing strong programs for employees with day care needs makes sense. Dina Cornacchione, director of a Beachwood corporate child care center operated by Bright Horizons Family Solutions LLC, said the Watertown, Mass.-based organization is growing because businesses see value in meeting the needs of employees who want their children in structured programs that include reading, music and other stimulating activities for different age groups. “Employees who bring their children to work with them are far more productive and far more likely to stay with that company because if you’re happy where your child is, you’re not going to leave,” Ms. Cornacchione said. “Also, quality programs are hard to come by in the everyday early childhood program.” ■

UPCOMING CRAIN’S EVENTS The latest installment of the Crain’s Ideas at Dawn breakfast series is set for 8 a.m. to 9:30 a.m. this Thursday, Sept. 16, at the Ritz-Carlton in downtown Cleveland. Sponsored by Taft and Maloney + Novotny, panelists will discuss ways to prepare your business for new growth as the economy recovery. Topics include finding access to working capital and investing in and retaining top talent. And is your business properly prepared to assume its next generation of leadership? Explore ways to

shift your company to new management without loss of continuity, business expertise or client satisfaction during the following Ideas at Dawn breakfast, set for from 8 a.m. to 9:30 a.m., Wednesday, Oct. 13, at the Ritz-Carlton. This event is sponsored by Maloney + Novotny and Roetzel & Andress. For more information about these and other Crain’s events, call marketing manager Christian Hendricks at 216-771-5182, or visit www.CrainsCleveland.com.

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SEPTEMBER 13-19, 2010

TAX LIENS

Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $47,852.24

The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorderâ&#x20AC;&#x2122;s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a companyâ&#x20AC;&#x2122;s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorderâ&#x20AC;&#x2122;s Office.

Paul F. Smith Jr. DDS Inc. 20119 Farnsleigh Road, Suite 207, Shaker Heights ID: 34-1337892 Date filed: July 29, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $44,456.72

LIENS FILED Trusted Home Healthcare LLC 12808 Dexmore Road, Cleveland ID: 57-1186419 Date filed: July 29, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $827,737.38 Lakeshore Chevrolet LLC 1250 Superior Ave. E., No. 22, Cleveland ID: 34-1871492 Date filed: July 27, 2010 Type: Failure to file complete return Amount: $672,256.75 Trusted Home Healthcare LLC 12808 Dexmore Road, Cleveland ID: 57-1186419 Date filed: July 29, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, unemployment Amount: $211,826.49 Ohio Addressing Machine Co. 3040 Prospect Ave. E., Cleveland ID: 34-0890795 Date filed: July 27, 2010 Type: Corporate income Amount: $161,385.26

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

WWW.CRAINSCLEVELAND.COM

K B Trading Inc., Berea Metals and Recycling 6511 Eastland Road, Brook Park ID: 34-1800470 Date filed: July 20, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, corporate income Amount: $95,667.70 Step by Step Learn and Play Centers 5171 Mayfield Road, Lyndhurst ID: 31-1560853 Date filed: July 20, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $87,872.15 Andy Chevrolet 5180 Mayfield Road, Lyndhurst ID: 34-1896322 Date filed: July 27, 2010 Type: Section 7519 payment Amount: $79,813.38 MMS Investments Inc. 1843 Wadena St., East Cleveland ID: 55-0869055 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, unemployment Amount: $68,526.60 Middletech Corp. 29900 Cedar Road, Pepper Pike ID: 13-4254462 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $68,121.58 Action Calibration Services Inc. 17820 Englewood Drive, Suite 13, Middleburg Heights ID: 34-1879978 Date filed: July 27, 2010

Amount: $29,597.08 Service Contract Solutions 5800 Lombardo Center, Suite 200, Seven Hills ID: 02-0675352 Date filed: July 27, 2010 Type: Failure to file complete return Amount: $25,700.00 J. Schrader Co. 4603 Fenwick Ave., Cleveland ID: 34-0207795 Date filed: July 29, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $19,633.84

Global Tracking Services Inc. 1414 S. Green Road, South Euclid ID: 26-1733470 Date filed: July 20, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, unemployment Amount: $38,906.90 Metro Paving LLC 4873 Osborn Road, Garfield Heights ID: 80-0291494 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $36,396.27 CP Riebel Inc. 3635 Perkins Ave., Suite 1D, Cleveland ID: 34-1913469 Date filed: July 29, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, unemployment Amount: $30,443.95

Extreme Cabling Inc. 17216 Sedalia Ave., Cleveland ID: 25-1905442 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $16,570.08 Yellamo Inc. 17103 Detroit Ave., Lakewood ID: 34-1880062 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $14,143.98 Premium Technical Services Inc. 4760 Lander Road, Orange Village ID: 34-1743417 Date filed: July 27, 2010 Type: Corporate income Amount: $12,341.45

Leedy & Ginnard Inc. 3630 Cinnamon Way, Westlake ID: 34-1301956 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $29,975.03 Home & Garden Enterprises Inc. 20033 Detroit Road, Rocky River ID: 13-4210559 Date filed: July 20, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, failure to file complete return, unemployment

JFS Corp., TA Anago of Cleveland 7055 Engle Road, Middleburg Heights ID: 34-1924428 Date filed: July 22, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, unemployment Amount: $12,085.56 Urban One Builders Inc.

10211 Garfield Drive, Garfield Heights ID: 11-3784549 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, unemployment Amount: $11,776.92 Great Lakes Etching & Finishing Co. 7010 Krick Road, Bedford ID: 34-1136809 Date filed: July 29, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $10,944.86 You Two Inc. 3475 Fairmount Blvd., Cleveland Heights ID: 34-1645049 Date filed: July 27, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $10,745.29 Dunlop & Johnson Leasing Inc. 5340 Pearl Road, Cleveland ID: 34-1133209 Date filed: July 20, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding, unemployment Amount: $10,594.40 Little Miracles Child Care and Learning 22683 Euclid Ave., Euclid ID: 34-1691019 Date filed: July 20, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $9,477.77

LIENS RELEASED Rossi & Sons Inc. 4317 W. 130th St., Cleveland ID: 14-1944872 Date filed: July 2, 2008 Date released: July 20, 2010 Type: Employerâ&#x20AC;&#x2122;s withholding Amount: $6,111

A CALFEE ATTORNEY wears many hats. And occasionally, a cape.

There are times when a Calfee attorney SFTFNCMFT BO BJS USBGkD DPOUSPMMFS B UIFSBQJTU PS FWFO B USJBHF EPDUPS 8IFUIFS DPVOTFMJOH DMJFOUT PS MJUJHBUJOH PO UIFJS CFIBMG XF HVJEF UIFN UISPVHI DPNQMFY TJUVBUJPOT CZ SFNBJOJOH GPDVTFE EJTDJQMJOFE BOE BMXBZT GVMMZ FOHBHFE 'PS B $BMGFF BUUPSOFZ JU T BMM JO B EBZ T XPSL

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

SEPTEMBER 13-19, 2010

GOING PLACES

INSURANCE

MANUFACTURING

JOB CHANGES

FINANCIAL SERVICE

EDUCATION

LINEWEAVER FINANCIAL GROUP: Joe Cronauer to director, business development.

GENERAL TITLE INSURANCE CO.: Robert B. Holman to president; Jennifer O’Boyle to vice president.

CLIFFS NATURAL RESOURCES INC.: James R. Michaud to vice president, human resources.

MEDICAL MUTUAL OF OHIO: A.D. Borja-Barton to vice president, pharmacy management and business development.

PERRY FIBERGLASS PRODUCTS INC.: Ross M. Maenza to general manager.

LEGAL

TREMO ROOFING AND BUILDING MAINTENANCE: Ralph P. Velasquez to executive director, sustainability.

SAINT JOSEPH ACADEMY: Diane M. Kanney to director of admissions.

ENGINEERING OSBORN ENGINEERING: Scott E. Johnson to production software administrator; Emily Wellman to structural engineer; Brian R. Brainard to mechanical engineer; Inna Pivovar to senior mechanical engineer; Tracey A. Carlson to administrative assistant.

FINANCE OHIO COMMERCE BANK: Kristie Bond to operations manager.

RETIREMENT SOLUTIONS: Patrick Justice to financial consultant apprentice. WEINBERG & BELL GROUP: Cameron S. Miele to senior vice president.

BUCKLEY KING: Heidi Milicic and Lisa Lowe to partners; Susan Avsec to director of marketing.

HOSPITALITY

HICKMAN & LOWDER CO LPA: Andrea Aycinena to associate.

CROWNE PLAZA CLEVELAND CITY CENTRE HOTEL: Stephen Moran to general manager; Brian Colliton to assistant general manager; Don Frey to director of human resources; Michael Huff to food and beverage director.

NORCHI FORBES LLC: Paul J. Corrado to special counsel. ROETZEL & ANDRESS LPA: Brad Rimmel to partner. STARK & KNOLL: Harold M. Schwarz III to associate.

July 2010

Schwarz

Miller

Wagoner

Reesing

Limburg

Mujic

LAKE ERIE NATURE & SCIENCE CENTER: Ann F. Miller to director of development. SHOES & CLOTHES FOR KIDS: Monica Lloyd to program and volunteer associate; Kelly Heath to development and communications associate.

REAL ESTATE COSTAR GROUP: Jeffrey Rickbrodt to account executive.

Leading over $15 billion in debt capital markets transactions. August 2010

Corrado

NONPROFIT

Delivering results. August 2010

Borja-Barton Aycinena

July 2010

SIMON PROPERTY GROUP INC.: Renee Lanzara to director of marketing and business development, Great Lakes Mall.

SERVICE CAREERCURVE: Pattie Wagoner to president, CEO.

A portfolio company of

TECHNICAL

$775 Million

$300 Million

$140 Million

$1.435 Billion

$405 Million

Senior Secured Credit Facilities

Senior Unsecured Credit Facility

Senior Secured Credit Facilities

Senior Notes

Joint Lead Arranger & Joint Bookrunner

Lead Arranger & Administrative Agent

Joint Lead Arranger & Joint Bookrunner

Joint Lead Manager

July 2010

June 2010

$360 Million

$500 Million

$320 Million

$250 Million

$1.5 Billion

Private Placement Senior Secured Notes

Senior Unsecured Credit Facility

Senior Notes

Senior Unsecured Credit Facility

Joint Lead Placement Agent

Joint Lead Arranger & Joint Bookrunner

Joint Lead Arranger & Administrative Agent

Lead Manager

Joint Lead Arranger & Co-Documentation Agent

We know that successful, long-term business relationships depend upon delivering results for our clients. Leading over $15 billion in debt capital markets transactions by August speaks to that unwavering objective. At KeyBanc Capital Markets,® more than 500 professionals leverage extensive industry knowledge, equity and debt capital markets expertise, and a leading merger and acquisition advisory practice to deliver strategic solutions that help our clients capitalize on opportunities. Today, the markets are volatile, but at KeyBanc Capital Markets our dedication to delivering results for clients remains constant.

For information on how KeyBanc Capital Markets can help you reach your business objectives, call Randy Paine, Co-Head of KeyBanc Capital Markets, at 216-689-4119, Doug Preiser, Co-Head of KeyBanc Capital Markets, at 216-689-5944 or Amy K. Carlson, EVP and Group Head, Debt Capital Markets, at 216-689-4227.

MONGOOSE METRICS: Brian Maher to sales manager. MRI SOFTWARE: Matt Grill to vice president, global client support. SOFTWARE ANSWERS INC.: Mark Reesing to director, sales and marketing; Heather Cronbaugh, Dale Limburg and Tony Mujic to product managers.

BOARDS ASSOCIATION FOR CORPORATE GROWTH CLEVELAND: Theodore Wagner (Libman, Goldstine, Kopperman & Wolf) to president; Randy Markey to president-elect; David Hadley, Sean McCauley and Jeff Leonard to executive vice presidents; Joseph F. Maslowski to treasurer; M. Joan McCarthy to secretary; Patrick Gallagher to immediate past president. KENT STATE ALUMNI ASSOCIATION: Nicholas Sucic (Davey Tree Expert Co.) to president; John Garofalo to president-elect; Robert Maschke to vice president; Kathy Reid to secretary; Brian Marino to treasurer; Timothy Eippert to immediate past president. ST. AUGUSTINE HEALTH MINISTRIES: Edward Hack to chairperson; Karen McCarthy to vice chairperson; Linda Sheehan to secretary; William Beargie to treasurer.

AWARDS SOCIETY FOR CARDIOVASCULAR ANGIOGRAPHY AND INTERVENTIONS: Dr. Larry Latson (Cleveland Clinic Children’s Hospital) received the Pediatric Interventional Cardiac Symposium Achievement Award. KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A ©2010 KeyCorp ADL1753

SOCIETY OF PROFESSIONAL JOURNALISTS: Richard Hendrickson (John Carroll University) received the Distinguished Teaching in Journalism Award.

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

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CRAIN’S CLEVELAND BUSINESS

SEPTEMBER 13-19, 2010

SMALL BUSINESS

INSIDE

22 TAX TIPS: BEWARE THE IMPLICATIONS OF GRANTS.

o find businesses that started life during the worst recession in 80 years, Crain’s Cleveland Business looked at a list of new incorporations formed in Northeast Ohio between the fall 2008 and fall 2009. That resulted in a list of more than 2,500 companies. There were many we did not contact, often because the name of the business was vague or created the appearance that the business was a sideline for someone, rather than a full-time endeavor. Of the dozens of businesses that we did contact, most either had never gotten a telephone listing or their listing had since been disconnected. Of those we did reach, only about one-third agreed to speak to us and share their stories with readers. As you might imagine — and as we

TAKING ON THE ODDS

completely understand — business owners struggling to get by or who fear they might soon go under are often not eager to discuss their situations. Generally, more stable businesses are the most willing to share their stories with the media. Which brings us to the four businesses profiled this week. The businesses we’re featuring all are fighting against the odds. But they have niches, skill sets or other attributes that have allowed them to at least bring in enough revenue to remain open — and sometimes enough to turn a profit. But, as you’ll read, even these have had their setbacks. They also all had low cost structures and were flexible enough to react to rapidly varying business conditions — even those that have presented themselves during the unpredictable patterns of today’s economic storm. — Dan Shingler

Checking in on four companies that started up during the teeth of the recession

ENTREPRENEURIAL INS AND OUTS

BLUE MOON SCREENPRINTING

■ More than half of the companies on the 2009 Fortune 500 list were launched during a recession or bear market, along with nearly half of the firms on the 2008 Inc. list of America’s fastest-growing companies. ■ The number of new businesses created during the most recent recession has been increasing each year. In 2009, an average of 340 out of 100,000 adults started businesses each month, which amounts to 27,000 more starts each month than in 2008, and 60,000 more than in 2007. ■ Entrepreneurship growth in 2009 was highest among 35- to 44-year-olds. ■ Oklahoma and Montana had the highest entrepreneurial activity rates last year. Other states with high rates were Arizona, Texas and Idaho. The five states with the lowest rates of entrepreneurial activity were Mississippi, Nebraska, Pennsylvania, Alabama and Minnesota. (Ohio ranks in the bottom half of state activity.)

Source: Ewing Marion Kauffman Foundation

BUSINESSES THAT STARTED DURING A RECESSION ■ General Motors, 1908 (Recession, May 1907-June 1908*) ■ Disney, 1923 (Recession, May 1923-July 1924) ■ Burger King, 1954 (Recession, July 1953- May 1954) ■ Microsoft, 1975 (November 1973-March 1975)

(* Recessions are as determined by the National Bureau of Economic Research)

RUGGERO FATICA

Pierre Jamnicky founded Eastlake’s Blue Moon Screenprinting in the fall of 2008.

oday, Pierre Jamnicky considers himself to be one of the best printers in Northeast Ohio when it comes to getting images onto T-shirts or other fabrics. But, in the fall of 2008, when he was starting up Blue Moon Screenprinting in Eastlake, he had never even held a squeegee — a screen printer’s main tool. Mr. Jamnicky did have some things going for him, though. He previously had started four businesses, he had a partner who already had customers in the embroidery business, and he had the determination and work ethic to master a whole new skill and business model. Previously, Mr. Jamnicky had done everything from teaching skydiving to liquidating computer equipment as a contractor to IBM with his most recent other venture, PNP Group. When computer sales dried up and he shut down PNP in early 2008, Mr. Jamnicky figured he’d be a venture capitalist or would work at a private equity firm helping to analyze and select investments. He said he was basically told he didn’t have the Wharton-like credentials firms were looking for. After talking to his neighbor, Michael Popovic, who owned Blue Moon Embroidery, Mr. Jamnicky decided he’d give screen printing a try. Mr. Popovic already had customers who could probably use the printing services and Mr. Jamnicky could share shop space. To customers, the two appear as one business, but Mr. Jamnicky incorporated Blue Moon Screenprinting separately and the two companies operate independently from the same facility.

OTHERS PROFILED ■ Blair Marketing Group, Concord Township; PAGE 18 ■ Kelly’s Polishing and Metal Finishing Inc., Walton Hills; PAGE 18 ■ Aurora Packaging Inc./JIT Container Inc., Aurora; PAGE 19 Then Mr. Jamnicky set about researching and then mastering his craft. He spent $6,000 on his initial equipment — though he then used his revenues during the first year to spend another $20,000 upgrading. More than anything, though, was the investment of the time it took to learn the craft. “From June 1 to Sept. 1, I put in 20 hours a day and that was seven days a week,” he said. “I had a couple people who would help by answering questions but no one there to hold my hand.” Through talent, perseverance or both, Mr. Jamnicky said he succeeded. He’s gotten some tough accounts, like the Great Lakes Brewing Co., which he said is a demanding client that went through eight printers before him. He’s hopeful that one of his creations will win a national screen printing contest this fall — though he says there is one shop in Tennessee that he does not yet think he can match, yet anyway. Business would have been better had the economy not soured, he said, but so far, so good, nonetheless. It started out fairly strong, he said, then dipped with the economy in 2009 before starting to come back recently. “We’ve met all our projections, even though the economy has See BLUE MOON Page 19

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18 CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

SEPTEMBER 13-19, 2010

SMALL BUSINESS NORTHEAST OHIO REGIONAL SEWER DISTRICT

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TA K I N G O N T H E O D D S : B L A I R M A R K E T I N G G R O U P

hen Natalie Gronner started her company, Blair Marketing Group in Concord Township, it was fall 2008 and, though the financial crisis already was topping national headlines, she was confident her new company would succeed. Ms. Gronner had broken away from her business partner, with whom she had been running a Northeast Ohio agency that helped newspapers collect their advertising revenues. She instead went back to her roots, which extended to her time in New York City a decade ago, when she said she worked for L’Oreal and other companies. “I decided to go back to what I knew, which was marketing and sales,” she said. And it worked. Her firm quickly signed up new accounts, mostly newspapers with which Ms. Gronner already had done business, and Blair Marketing was growing fairly fast. The firm manages databases, researches e-mail addresses and phone numbers, handles opt-out/ opt-in programs and administers marketing programs online, via direct mail and by phone. “I had 24 accounts,” she said. “I was so proud of myself because I was doing it on my own.”

She hired an office manager, some contract help and outside vendors for special services such as direct mail or telemarketing, and employed some family members to do data entry or handle the phones. Until the spring of 2009. “Then the dive hit, and I lost half my accounts in a few months,” she said. Ms. Gronner has had to batten down the hatches and even take on another job, managing group sales for a hotel company. But she’s not closing down, and she’s not giving up. She runs her business, in part, from her office with the hotel company, with the blessing of her new employer. “They know I run a business. When I interviewed I was very honest, and they know there are times I have to take off,” she said. “My goal is to be out of the hotel industry by December.” Ms. Gronner got hit by two things at once, it seems — an ongoing downturn in the newspaper industry, amplified by a terrible downturn in the economy. But, she said, she did a lot of things that allowed her to keep the business going, no matter how bad things got. The firm initially had a small

inexpensive office, but now can be run remotely. It required no capital equipment and had a tiny payroll only briefly, before Ms. Gronner let her office manager go. “My overhead was very low,” she said. “I’m very budget-oriented, and I forecast everything I had. I knew exactly what my expenses were going to be and where my revenues were coming from.” That’s allowed her to not only keep it going, but to even keep marketing the firm — even while working outside of the company to support herself. And, it just might be working; Ms. Gronner said she’s recently signed up two retail clients. That’s good, she said, because not only is retail the sector she most likes, it also is more lucrative because retailers do more of the direct mail, social networking and other types of marketing that Blair Marketing offers. Ms. Gronner said she’s glad she’s kept at it even though family members and others have prodded her to give up at times. “I’m no quitter,” she said. “For two years I kept myself afloat, and I know I’ll get back there. I give myself five years to get into a new income bracket, and I’m determined to get there.” — Dan Shingler

T A K I N G O N T H E O D D S : K E L LY ’ S P O L I S H I N G A N D M E T A L F I N I S H I N G I N C .

hen Great Lakes Polishing in Walton Hills went out of business in 2008, foreman Kelly Novak could have gone out and looked for a new job. Instead, he bought the company’s

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assets — about 13 metal polishing machines and other equipment — from the bank that ended up taking over the company. He then renamed the shop Kelly’s Polishing and Metal Finishing Inc. “As soon as the doors closed, I started looking into the situation,” he said. “I chased down the bank, I started talking to the right people and found out it was going to auction, so I threw my own bid in there and lowballed it.” The bank bit, and the equipment never went to auction, instead staying right where it was. “They sent me a bill of sale that said I owned everything, including the trash can and everything in it,” Mr. Novak said. Next, he was able to renegotiate the company’s lease for favorable terms. It was a tough economy in which to start a business, Mr. Novak said, but it might also have been the only environment in which he could afford to do it. “I was able to take advantage of the economy, and that’s exactly what I did,” he said. Initially, he had enough work to keep seven people busy, as the business started with a backlog of work left over from former customers of Great Lakes. But the crew quickly got caught up, Mr. Novak said, and eventually he had to cut back to one regular employee and part-time help that comes in on an as-needed basis. The commercial work that should be the company’s bread and butter became hard to come by in the depths of the recession, and Mr. Novak fell back on small projects and even did some custom residential and automotive work, polishing brass beds or parts for show cars. But the company has an advantage in that its cost structure is low, it has excess equipment capacity and

“It’s the art of survival. Even if it’s slow, I can still pull through.” – Kelly Novak founder it can quickly find employees since the skills involved are not as tough to find as, say, CNC machining or advanced welding. And if something breaks, Mr. Novak usually can fix it himself, whether it’s a tow motor that needs a tuneup or an air compressor in need of an oil change. “It’s the art of survival. Even if I’m slow, I can still pull through,” Mr. Novak said. Now, he hopes, the hunkering down and waiting might be coming to an end. Business is starting to pick up, Mr. Novak said. He’s gotten some government work — he’s polishing parts of a fancy pedestrian bridge being built in California — and some of the machine shops and other commercial customers he served in the past are again sending him work. “It’s all picking back up again,” Mr. Novak said. That will be fine by him; nine of his 13 machines can accommodate two operators at a time, so he’s got plenty of capacity to put to use. “There’s nothing more I want than to have a shop full of employees,” he said. And he might have to hire soon. A big sandblasting job will begin later this month and he has some other projects likely after that, he said. “In October, it will be a year for me (being in business),” he said. “It’s been a good year. I’m definitely paying the bills and caught up on everything. … I haven’t gone out and bought myself a new vehicle or anything yet, but I’m not one to spoil myself.” — Dan Shingler

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SMALL BUSINESS T A K I N G O N T H E O D D S : A U R O R A P A C K A G I N G I N C . /J I T C O N T A I N E R I N C .

or most of his life, 33-year-old Josh Jones watched his father make a living selling corrugated packaging, largely to industrial users in and around Cincinnati. “When I got out of college I got interested in that and then I saw that a lot of people were looking for green packaging,” he said. So in March 2009, he decided he could take what he’d learned from his dad and emulate it — and then add to it by offering businesses durable pallets and containers made from recycled plastic that could either be leased or purchased with a lifetime guarantee. He moved to Aurora, leased 15,000 square feet and went into business doing just that with Aurora Packaging Inc. and JIT Container Inc. Aurora sells packaging, janitorial services and other products online, while JIT focuses on plastic collapsible bulk containers for industry. JIT supplies the containers and if they ever break, customers can return them for repair or replacement. The containers also can be leased at a fraction of the cost of buying them for shipping purposes, he said. Both companies are still up and

running, but JIT has been the star, Mr. Jones said. Today, JIT has nine employees, another 15,000 square feet of space in Parkman and a sales record that exceeded Mr. Jones’ expectations. Aurora Packaging, on the other hand, is an online business that does not hold inventory and does not need space or its own staffing, he said. “Out of JIT container, we’ve sold probably 12,000 containers this year, and they’re big, 200 to a truckload,” he said. “On the leasing side, we have 12 to 13 main leasing customers that keep coming back.” Starting the business was not terribly capital intensive, because

Mr. Jones doesn’t make the pallets and containers himself. He uses outside vendors, he said. What little startup capital he did need, he was able to get from banks, along with some of his own money. “Now, my wife is glad I did it,” said Mr. Jones, who admitted he’s been happy with the venture since he opened the doors. At first, growth was restrained, largely because Mr. Jones was afraid to send large numbers of containers to companies he feared were on the brink of closing. He ran credit checks on everyone — and many did not pass. “Someone would call and say, ‘I

need a thousand containers,’ and then you’d run their credit report and you couldn’t do it,” he said. “A lot of people got screwed because someone else didn’t pay them.” His caution might have paid off, in that Mr. Jones did not end up getting caught with a customer who could not pay. In fact, he said, he was fortunate in that his initial accounts not only paid, but paid quickly. That’s allowed Mr. Jones to continue to reinvest, partly by buying up as many plastic containers as he can find from businesses, which often are themselves closing. There’s no competition for those purchases, he said, and he can repair or recycle all of those containers into new ones. It only took three months for the

business to begin turning a profit, he said, and it’s grown steadily since then. It would have probably grown faster in a better economy, but Mr. Jones said he’s starting to think that his niche is so good that it helped him weather the storm. “We talk to people all the time who say, ‘There’s no one else doing what you do,’” he said. Now Mr. Jones has been emboldened by success to start another venture. This one will take plastic scrap from area manufacturers and other sources, grind it into pellets and then resell it to plastic resin makers looking for recycled content. That should start up before 2011, he said, and will have 10 employees. — Dan Shingler

BLUE MOON continued from PAGE 17

tanked and that makes me really happy,” he said. Mr. Jamnicky said he has the luxury of having a spouse who can help with the bills. That allows him to have one full-time employee and to use part-time help as needed, he said. He could live off the business if he had to, he said, but only by working more himself. “I would have to work a lot more hours and use less help, but I could certainly live off it. Now I leave at eight or nine o’clock — I’d have to start staying to midnight or one again,” he said. He also wants employees so that he can spend time marketing and growing the business, so that eventually it can be run with even less of his own time. Because, eventually, Mr. Jamnicky said he wants to start other businesses — either other screen-printing operations, or something entirely different. Even if he had to take a job, he’d have started something on the side, he said. He likes working for himself and has done so since 1994. “My last job was the U.S. Navy,” he joked. — Dan Shingler

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IN BRIEF Library offers series to help entrepreneurs The Cuyahoga County Public Library is offering a series of programs relating to business. The series, called “Smart Business at Your Library,” is designed to help entrepreneurs with incubating business ideas as well as initial startup and long-range plans. Classes are free and held at various branches throughout the system. Pre-registration is preferred. Information is available at all branches or can be found at http://tinyurl.com/26n4f8k.

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SMALL BUSINESS

Funeral homes plug into new ways to enhance services By TIMOTHY MAGAW tmagaw@crain.com

uneral homes have not escaped the sting of the recession, and as the economy starts to rebound, the centuries-old industry is learning to embrace new technology as a way to keep it from, well, dying. It’s not that people are dying less, but some families are looking at more cost-effective ways to send relatives on their final journey. But there are those who are looking to add more bells and whistles, and funeral homes are

scurrying to keep up with the latest technology to meet that demand. “By and large, the public is demanding it,” said David Tackett, a licensed funeral director and dean of the Cincinnati College of Mortuary Science. “This is a service profession. If the consumer wants it, we’re going to give it to them.” Funeral homes are moving away from what Mr. Tackett dubbed the “cookie-cutter funeral” and starting to personalize the services and offer a slew of new features. Perhaps the most eye-raising technology infiltrating Northeast Ohio’s funeral industry is webcasting,

which allows people to virtually attend a funeral. Mitch Babcock, the owner of Davis-Babcock Funeral Home in Willoughby, said it’s a service that’s typically geared toward family members who can’t attend a funeral for geographic reasons and it comes with a $165 price tag. “It’s filling a need,” said Mr. Babcock, who has done about 10 funeral webcasts over the last year. “Some people are put off by it and think it’s unnecessary or laugh at it, and that’s fine. It’s not going to be right for everybody.”

Meeting demand Although streaming funerals isn’t necessarily the norm, online obituaries have become fairly standard, said J. Mark Busch, funeral director and owner of Busch Funerals and Crematory Services, which has six Northeast Ohio locations. “This is a benefit to the families we serve because it represents a permanent, and not a one-day newspaper, record,” Mr. Busch said. Of course, online obituaries also are a source of revenue for the funeral homes. Busch, for example, partners with Tributes.com, a

A SECOND OPINION SAVED US *

nationwide online obituary service started by the entrepreneur who founded Monster.com. A portion of the fees charged to families goes to Tributes.com, while the rest sticks with the funeral home, Mr. Busch said. Also, forget the huge poster boards with dozens of pictures — funeral homes now are producing DVDs and other multimedia to show during services, which Mr. Busch characterized as the “most significant” area of technological growth. Mr. Tackett of the Cincinnati College of Mortuary Science agreed that DVDs have become an integral part of many services in that it allows the officiant to connect with the person whose life is being celebrated. “It makes the person come alive rather than just standing there and reading out of a book,” he said. Because the business is rooted in age-old traditions, some funeral home directors like to keep it simple and are philosophically against introducing new technology, according to several people in the industry. Some, however, simply are hesitant . “We just have to see how it’s going to really work and is this something people will really want,” said Mr. Tackett, who encourages his tech-savvy graduates to try new things. “Once we see that they do, we’ll embrace it. I think there’s always some kind of natural reluctance to try anything new.”

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As the industry has changed, funeral home directors have had to explore new avenues to attract business. Forget the phone book; funeral homes are using the web as the primary way to market their business. “With any business, you’ve got to have a web presence,” said Mr. Babcock of Davis-Babcock Funeral Home. “This generation — that’s what people are geared to. They’re not going to look in the Yellow Pages anymore.” In many ways, some funeral homes’ web sites have become one-stop shops to honor the dead. Busch’s web site, for example, allows visitors to leave a message on an obituary, send flowers though area florists, pick out a casket, find grief support or preplan a funeral. Funeral homes still are typically do-it-yourself operations and generally haven’t had to hire new employees to handle the new technology. Messrs. Busch and Babcock, for example, monitor obituary comments themselves to ensure nothing hateful is posted. Mr. Babcock added that he handles the webcasting but might have to add an employee to handle it if it booms in popularity. Stephen Gehlert, executive director of the Ohio Funeral Directors Association, said funeral home directors always have been good service providers but not necessarily the best business people. But as the business climate in the industry has changed, funeral homes have been able to adapt their business models. “From my standpoint, I think the bottom line is they are just remarkable in the fact in the good times or bad times, their main goal is to provide the service to that family at that time,” he said. “No matter how difficult it becomes, they continue to do it. They’re biting the bullet on these types of situations and working with families.” ■

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SMALL BUSINESS

THEINTERVIEW LISA M. DIETZ President Erdie Industries Inc.

isa M. Dietz started at Erdie Industries in Lorain as an office temp. Today, she’s in her first year as the Dietz company’s president. The 30-employee family business has specialized in mailing and shipping tubes for more than a quarter of a century. It also manufactures a variety of other paper tubes and cores and offers Twist-N-Pull end caps for shipping tubes. As with most industries, Erdie felt the impact of the recession — the firm saw a 25% drop in sales as well as staff and other cuts — but the company is now looking ahead and considering the possibility of adding new products. “We’re trying to listen to our customers,” Ms. Dietz said. Ms. Dietz recently answered questions regarding her new role and her place in the industry, as well as its future prospects.

at Erdie and creating a successful path for the future. Looking back, I don’t think I would change anything. I did things the hard way and obtained both my undergrad and graduate degrees in the evening while working full time … the best experience ever. I feel that taught me so much more

about the real world, and I could take what was being taught in class and apply it immediately into my workplace environment, allowing me practical application that I don’t believe a lot of students have the opportunity to do. Q: What do you consider the most important thing you can do for your employees as leader of a company?

opportunities and insight that was, and is, provided for me. Encourage them even when they feel they cannot do something because they most likely can. I have people around me that believe in me even when I question myself and I want to provide my employees that same support. We pride ourselves on being a close-knit family at Erdie Industries, and I don’t want that to change.

A: To provide for them the same

Q: What is the state of your

industry and what is its outlook? A: Our industry is contracting, as are many industries in North America. This is why we no longer focus on our primary line of business but have ventured out into a broader line of packing products and services to meet the current and future needs of our customers. We are fortunate enough to have the support of our bank, Huntington National Bank, during our rebranding and growth to support our ventures and ideas.

Q: What has most surprised you about serving as company president? A: There really aren’t a lot of surprises … just a lot more responsibility. More balls to juggle so to speak. Maybe one area that has been a bit of a challenge is there are more people to manage and learning each person’s individual needs and managing them has been interesting. My background is more accounting and having to step out of my comfort zone and do things that I don’t have a lot of experience doing is always a challenge. My boss always tells me, ‘It’s this or learning how to ride a bull, you decide.’ I think from there it’s an easy choice. Q: You advanced at Erdie Industries to company leadership within 16 years. What were the greatest challenges, and to what do you attribute your advancement? A: One of the greatest challenges was overcoming all the stereotypes and breaking through the barriers in the male-dominated industry that I work in. It took years for the industry to accept me, and now that they do, it has been wonderful. It took a while for me to find my way and make sure this was the career path that I wanted, but once I did it was smooth sailing from there. I have been accepted into the Erdie family as one of their own now. I attribute my advancement to hard work and dedication. I know it may sound like a cliché but it’s what works, that and the fact that Jason Erdie saw something in me when I was younger and has encouraged me ever since that I can do whatever I wanted to do as long as I wanted to do it. Q: When you first started at Erdie, what had you expected from the position? A: Looking back it’s hard to say. … During the interview process one of the questions that was asked of me was ‘Where do you see yourself in five years?’ I was terrified and just didn’t know how to answer, let alone even think about the next five minutes. I guess those first five years were a great foundation for my career here

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Grant consequences can be varied

GRANDOPENINGS

CHARMING CHARLIE

iven the current tenuous economic environment, grants to stimulate investment are becoming more readily available to businesses of all sizes. While those dollars may be important to a business owner’s growth plans, it’s also important to consider the tax implications. A corporate taxpayer recently asked the Internal Revenue Service to take a look at a grant the company was receiving to build a new plant under a government program. The funds would be provided to the taxpayer throughout the design and construction of the facility as well as the initial stages of operation. The taxpayer wanted some assurance from the IRS that the grant funds would not be included in the company’s income for tax purposes, and also wanted to verify how the funds would impact the depreciation schedule for the new asset. Based on the taxpayer’s specific circumstances, which were spelled out in detail to the IRS, the taxpayer would not be expected to include the grant funds in its gross income. That’s because in this particular case, the grant met some specific criteria that have been spelled out through court cases over the years. The criteria include: ■ The asset must become a permanent part of the company’s working capital structure. In this case, the company planned to operate the plant as part of its regular business operations to produce a product. ■ The grant may not be direct compensation for a good or a service that the company has provided to

PETERDEMARCO

TAX TIPS the entity that is offering the grant, so a sales contract can’t qualify as a grant for tax purposes. ■ The grant must be bargained for. ■ The asset that is obtained as a result of the grant must provide a benefit to the company that is commensurate with the grant amount, so the economics have to make sense. ■ The asset has to be used by the company to somehow earn future income. In addition to the income tax consequence, business owners also need to consider the impact on depreciation, or how an asset will be written off over time. The IRS generally requires that if an asset is purchased or constructed with grant money, the tax basis in that asset must be reduced by the amount of the grant. Basis refers to the value of an asset on the books that serves as the starting point for the depreciation calculation. So if the company received a grant of $1.5 million to construct a plant that has a starting value of $4 million, the company would begin the depreciation schedule with a basis for the asset of $2.5 million ($4 million minus the $1.5 million grant).

The idea is to assure the company gets a tax benefit for the grant amount only through the exclusion from gross income, not a second time through the depreciation process as well. There’s one further nuance to the tax implications that is particularly important for smaller companies to note. Tax law provides the exclusion of stimulus grant dollars from taxable income for entities that are structured as corporations, such as S corporations or C corporations. However, that same certainty does not exist for noncorporate entities. If companies organized under a different entity structure receive grant money, the IRS will likely take the position it is generally included in gross income for tax purposes. There is a possible path around such treatment, however, so long as companies do some planning before receiving any grant funds. If a partnership or other noncorporate structure has a corporate shareholder, the entity could negotiate to have the grant provided directly to the corporate shareholder. This would assure the grant is paid to a corporate entity that is eligible for the exclusion from income. As companies pursue every manner of grant or stimulus funding to emerge and ultimately prosper through these trying economic times, it’s wise to consider the tax implications to assure the best possible benefit from the grant program. ■ Mr. DeMarco is vice president and director of tax services for the regional accounting and business consulting firm of Meaden & Moore, headquartered in Cleveland.

Legacy Village 24503 Cedar Road Lyndhurst 44124 www.charmingcharlie.com Charming Charlie, a fashion accessories boutique known for presenting merchandise by color instead of category, has opened a 10,000square-foot store at Legacy Village between Crate & Barrel and Joseph Beth Booksellers. The store, founded in Texas in 2004 and targeted to teens and women of all ages, sells fashion jewelry, handbags, belts, scarves, hair accessories and eye wear. Hours are 10 a.m. to 9 p.m. Monday through Saturday, and noon to 6 p.m. Sunday. This is the first Northeast Ohio location of Charming Charlie.

Rose Zeid, Mo Rose and Jeff Rose own the Clothes Mentor store in North Olmsted and plan additional sites around Cleveland. They also own two Northeast Ohio Plato’s Closet locations. 440-617-6013 cmclev@gmail.com

PIC SYSTEM INC. P.O. Box 22913 Beachwood 44122 www.thepicsystem.com

WELCOMEPUP.COM

PIC System Inc. (Personal Information Collection System) began operations in April 2010. Started by Drew Kate, PIC System is designed to maintain personal family information in 25 collection categories, while maintaining an organized database for reference during one’s lifetime and in the event of death or disability. The program offers family members and advisers the information necessary to execute an estate.

Strongsville 44149 www.WelcomePup.com

216-990-8597 sales@thepicsystem.com

216-297-9214

WelcomePup.com, founded by Bonnie Sweebe, is an online gift store allowing consumers to purchase dog toys and products for delivery in gift boxes. Gift boxes cater to both new puppies and adult dogs.Themed arrangements include teething, get well, training, travel and escape (dog GPS). Eco-friendly toys also available. 216-346-0710 welcomepup@gmail.com

CLOTHES MENTOR 25373 Lorain Road North Olmsted 44070-2061 www.clothesmentor.com Clothes Mentor is a national resale chain for adult women, carrying brand-name items in a variety of sizes and styles. The store, which is the first location in Northeast Ohio, also has maternity clothes, jeans, suits, career separates, coats and jackets, purses, designer handbags, shoes, jewelry, belts, scarves and other accessories. Clothes Mentor buys good-condition clothing that is of current style and laundered. Randi

ADMIT INSIGHTS 1198 Mig Court Macedonia 44056 www.admitinsights.com Admit Insights is an online college admissions tool for high school students, parents, high school guidance counselors or anyone looking for information about college admissions. Admit Insights maintains detailed college admissions data on more than 1,100 colleges. Licenses for high schools also are available. 1-800-511-4776 service@admitinsights.com To submit a new business, send the following information by e-mail to Amy Ann Stoessel at astoessel@crain.com: business name; address; city and ZIP; web site; brief description of business; business phone number; business fax number; business e-mail address; and date that business opened. Call 216-771-5155 with questions.

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

LARGEST INDUSTRIAL PARKS RANKED BY TOTAL ACRES

Industrial Park Address Rank Web site

Total acres

Number of acres occupied

Number of businesses in park

1,693

1,237

Businesses located in park

Freeway access

Property manager Phone number

Avery Dennison, Momentive Performance Materials, The CSC Group, C.Trac, Clark-Reliance Corp.

U.S. Route 42, state Route 82, I-71, I-80

City of Strongsville

Medina Blanking, Ohio Welded Blank, Three D Metals, Fuserashi, MTD Products

I-71

MTD Products

Strongsville Business and Technology Park Foltz Parkway, Strongsville 44149 www.strongsville.org/content/strongsville_business_park.asp

Liverpool Industrial Park(1) Innovation Drive, Valley City 44280

900

400

Twinsburg Industrial Park Highland Road/Enterprise Drive/Case Parkway/Pinnacle Parkway/ Edison Blvd., Twinsburg 44087

571

530

120

Verizon, United Stationers, Pepsi America, Weatherchem, Rockwell Automation, Experient Inc.

I-271, I-480

Akcan Industrial Park Mt. Pleasant Road and Mayfair Road, Green 44720 www.dehoffdevelopment.com

400

250

Diebold Corp., Belden & Blake, Cintas, Lexington Technologies, The Ohio Lottery, Inventors Hall of Fame, Best Supply, Aramark, Massillon Plaque

I-77

DeHoff Development Co. Daniel J. DeHoff

Interstate Commerce Center Mondial Parkway, Streetsboro 44241 www.geisco.net

400

116

Playtex, DaimlerChrysler, Hammer Co., Pods, Millard, Aurora Plastics, Schwan's, Classic Honda, Classic I-80, I-480 Nissan, Classic GMC, Flexalloy

Geis Property Management Joe Perrow

NEOCOM I Navarre Road, Massillon 44646 www.massillondevelopment.com

380

Ziegler Tire, Case Farms, Kraft Power, E-Tank, Kendal U.S 30, I-77 Welding, PolyOne, Shearer's Foods

Miller Land Inc./Massillon Development Foundation

CAK International Business Park State Route 241 and International Parkway, Green 44720

359

130

ASC Industries, Sam's Club/ASW, Akron Logistics, state Route Diebold Inc., General Electric, InfoCision Management I-77, 241 Corp., SilMix of Ohio/Wacker Chemical Corp.

City of Green City of Green Planning Department

Wind Point Reserve Corporate Campus P.O. Box 21, Perry 44081

350

Deming Enterprises Inc., Northeast Masonry, Diversified Fittings, National Threaded Fasteners, TT Apsco

Deming Resources LLC

Progress Drive Business Park Pearl Road and Westwood Drive, Strongsville 44149 www.strongsville.org/content/progress_drive.asp

325

312

Route 42, DeMag Plastics Group, PPG Industries, Atlantic Tool & U.S. state Route 82, Die, Archway Marketing, Empco I-71, I-80

City of Strongsville

Midway Industrial Park Dutton Drive and Midway Drive, Twinsburg 44087

269

230

K & M International, General Electric, Production Tool, I-480, I-271 Glass Equipment Development

Dow Circle Research Park Sprague Road, Strongsville 44136 www.strongsville.org/content/dow_circle.asp

258

249

Akzo Nobel, Cintas, PNC Bank Technology Center, Enterprise Holdings, Telsource, Honeywell International

U.S. Route 42, state Route 82, I-71, I-80

City of Strongsville

Ascot Industrial Park State Road, Akron 44223 www.ci.akron.oh.us/ed/development/indparks/ascot_park.htm

220

109

Pneumatic Scale, Coltene/Whaledent, SpunFab Adhesive Fabrics, Proto Circuit, Linden Industries, Main Street Gourmet, Spectrum Plastics, Becker Pumps

State Route 8, I-76, I-77

City of Akron Rita Weinberg, Brent Hendren (330) 375-2133

Diamond Business Center Pettibone Road, Glenwillow 44142 www.geisco.net

200

Superior Beverage, Mat Holdings

I-480, state Route 422

Geis Property Management Joe Perrow

Frost Road Commerce Center Philipp Parkway and Frost Road, Streetsboro 44241 www.geisco.net

200

175

L'Oreal, Venture Lighting, Wine Trends, Andrews Moving, A. Duie Pyle, Seegott, Soft-Lite Windows

I-80, I-480

Geis Property Management Joe Perrow

Riverbend Commerce Park Colorado Ave., Lorain 44052 www.cityoflorain.org/community/economic_development.shtml

199

Camaco Lorain Manufacturing, U.S. Post Office Distribution Center, Horizon Daycare Center

Real Estate/The BEC State Routes 57, Cresco Joseph V. Barna, George 611 and 254, I-90 Group, J. Pofok, (216) 525-1469

French Creek Business Park East River Road, Sheffield Village 44054 www.barnacaplan.com/ourproperties/detail.asp?id=137

187

ZF Trading Co.

I-80, I-90, state Routes 301 and 254

Cresco Real Estate George J. Pofok (216) 525-1469

Geauga Industrial Park Industrial Parkway, Middlefield 44062

180

KraftMaid Cabinetry Inc., Mercury Plastics, Polychem Dispersions, Johnsonite, Sajar Plastics, Normandy Products, Penske

I-90, state Route 422

The Federal Improvement Co. David Ford

York Alpha Park York Alpha Drive, North Royalton 44133

180

120

108

Laszeray, Induction Tooling, Royal Wire, H & D Steel Services, May Industries, Valley Tool and Die

I-71, I-77, state Route 82

City of North Royalton Thomas John Jordan (440) 237-5484

Sweet Valley Business Park 9880 Sweet Valley Drive, Valley View 44125

160

132

XPedex, Dawn Enterprises, IBEW, ImaginIt, Pakrite, Sherwin-Williams

I-480, I-77

Cresco Simon Caplan (216) 525-1472

Heritage Business Park 23555 Euclid Ave., Euclid 44117

157

Eaton, Keene Building Products, TECT, Cuyahoga Community College, COAD, North American Plastics

I-90

Ohio Realty Advisors

Quarry Lakes Business Park Quarry Lakes Drive, Sandusky 45840

150

Encore Industries Inc., Northern Ohio Educational Computer Associates, SCC Resources Inc., North Coast Cancer Care, Praxair Inc.

State Routes 2 and 101

Cresco Real Estate George J. Pofok, Joseph V. Barna (216) 525-1469

Brunswick North Industrial Park 945 Industrial Parkway North, Brunswick 44212

150

120

Fogg multi-tenant, Inflatable Images, Destiny Manufacturing

I-71

All Construction Services David James LeHotan

Cleveland Business Park 17909-18601 Cleveland Parkway, Cleveland 44135 www.chelmproperties.com

150

I-480, I-71

Chelm Properties Inc.

Midway Industrial Park Schaden Rd,/Keep Ct./Freedom Ct./Liberty Ct., Elyria 44035

150

123

Sunbelt, AIT, CHP Cancer Center, Symrise, APR, Cleveland Plastic, Carpenter Steel, Marathon Steel, and others

I-90, state Route 57

Logos Realty Co. Bob Graham (440) 324-3550

Quantum Centre Greenwich Road, Wadsworth 44281 www.naicummins.com

150

Parker Hannifin Corp., E. C. Morris Corp., Ebner Furnaces Inc., Soprema Inc., Accel Group Inc.

I-76

NAI Cummins Real Estate

Columbia Road Industrial Subdivision Columbia Road, Richfield Township 44286

147

Marathon Oil, FedEx, Bath Development Corp., 3230 Columbia Road LLC

I-77, I-271, I-80

Taylor Woods Industrial Park Taylor Parkway, North Ridgeville 44039 logosrealtyco@windstream.net

143

Invacare, Norlake, Wolff Brothers, Tool & Die Systems, Poppeeâ&#x20AC;&#x2122;s, Cuyahoga Vending

State Route 57 from I-480, state Route 10

Logos Realty Co. Bob Graham (440) 324-3550

Mills Business Park Faircrest & Sherman Church, Canton 44721 www.dehoffdevelopment.com

141

Medline Industries Inc.

I-77

DeHoff Development Co. Daniel James DeHoff (330) 499-8153

Akron Canton Corporate Park 1525 Corporate Woods Parkway, Green 44685 www.camincorp.com

140

100

Hankook Tire, Goodrich De-Icing, Paychex, Prudential Financial, Bonnot, InfoCision Management

I-77, state Route 241

CAM Inc. Mike J. Mockbee

Stonegate Corporate Park Highlander Parkway, Richfield Village 44286 www.camincorp.com

140

Bureau of Criminal Identification, Cisco Systems Inc., Corporate Express, OEConnections

I-71, I-271

CAM Inc. Mike J. Mockbee

Northern Ohio Industrial Park 1400 Lowell St., Elyria 44035 www.centralohiowarehouse.com

138

114

Central Ohio Warehouse Co., PolyOne Corp., United Pipe & Steel Corp., True Value Co., Hall Contracting Inc., Monitorman Inc., Parker Hannifin Nichols Airborne Div.

State Routes 57 and 113, I-80, I-480

Northern Ohio Associates LP Larry V. Roop (419) 342-2045

State Routes 2 and 20, I-90

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Information is from the 2009 Industrial Parks list.

RESEARCHED BY Deborah W. Hillyer

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3:00 PM

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SEPTEMBER 13-19, 2010

Russo: Whistleblowers in demand continued from PAGE 1

who have been charged with greasing the skids of this corruption scandal. (See accompanying list, Page 25.) The corruption probe provided the push that convinced voters in Cuyahoga County to pass last November a charter for a new form of county government. Backers of the new government have pledged to sweep clean the corruption and install a strong ethics code to instill confidence in county government.

Other side of the coin But because a new government and a government ethics code can only do so much, Crain’s Cleveland Business went looking for ideas about how the private sector can clean up its act. Unfortunately, there are no rules or laws that can prevent breaches of integrity. “Sadly, corruption is endemic to politics and business,” said Robert Lawry, professor of law and director of the Center for Professional Ethics at Case Western Reserve University. “But surely we can do better.” Mr. Lawry said that while the community may be outraged at the depth and breadth of the corruption, it is difficult to find a way to translate the anger into action. He said the students he teaches appear to pay attention to the message he conveys about the importance of ethical behavior, but he admits that message probably doesn’t reach and stick with 100% of a class — nor is it embraced by all business people. Joe Roman, president of the Greater Cleveland Partnership, the regional chamber of commerce, said the organized business community is doing its part by participating in the transition process that is shaping the new county government.

“I think the number of businesspeople involved (in the corruption scandal) is such a small percentage of the overall business community, so the approach has been to say ‘Let’s change the current government,’” Mr. Roman said. “I don’t believe the core issue here is the business community.” Mr. Roman said he believes new county procurement policies and a new county code of ethics, which he and other business people are helping to shape, will begin to change the culture on both sides of the fence. “A code of ethics doesn’t just create a system of expectations for government; it creates a set of expectations for business leaders as well,” Mr. Roman said.

Code words Some companies, however, do set standards for their employees that cover their interactions with public officials. Diversified manufacturer Eaton Corp., which competes for defense and other public contracts, has a three-page code of ethics and a 48-page ethics guide to make clear what the company expects of employees. For instance, the policy states that Eaton employees must not “offer or accept gifts or entertainment of substantial value.” Some professional associations have similar codes. The legal profession in particular has a clear code of conduct that outlines the ethical boundaries. The code is impressed on law students and reinforced for practicing attorneys through continuing education programs. That code applies to interactions with public officials and is enforced by bar associations through a formal

grievance procedure, said Michael Unger, president of the Cleveland Metropolitan Bar Association and an attorney with Cleveland firm of Ulmer & Berne. Mr. Unger concedes that it’s not often that bar association procedures would uncover the kind of corruption Cuyahoga County is seeing. But he said the existing process, which can lead to a loss of a lawyer’s ability to earn a living, has an impact on attorney conduct.

Brave souls needed Mr. Unger said he expects any felony conviction of an attorney that could come out of the current federal probe would result in a suspension of a license to practice law for a significant period of time or even disbarment from the practice of law. Last month, former Cuyahoga County Recorder Pat O’Malley sought to return to the practice of law after serving 13 months in prison on an obscenity conviction. His license to practice law was suspended for two years in December 2008, and Mr. O’Malley petitioned the Ohio Supreme Court to get his license to practice back. But the court voted to deny Mr. O’Malley’s request, extending his suspension at least until the end of a three-year probationary period. The legal profession’s internal procedures and company policies such as Eaton’s are exceptions in a private sector made up of many small businesses. Mr. Lawry, though, did offer one suggestion — nurturing a culture of whistleblowers. “Brave souls are needed across the board,” the ethics professor said. “Good people are often silenced. “Vigilance is where it starts and stops,” he said. ■

Invest: Client familiarity plays big role continued from PAGE 3

market has substantially more going on than people outside of this market understand.” To that end, PricewaterhouseCoopers has positioned three key executives — Mr. Saada included — in Cleveland and plans to add over the next six months more than 50 jobs to the local office, which already employs 325 to 350. If need be, some positions will be filled by employees who move from other PricewaterhouseCoopers offices, Mr. Saada said. The company will hire across its tax, advisory and assurance services; likely job candidates will include MBAs, certified public accountants and lawyers, Mr. Saada said. Recent tax and health care reform are two reasons PricewaterhouseCoopers sees growth on the horizon, Mr. Saada said. The reforms impact businesses in a big way and PricewaterhouseCoopers anticipates that businesses will seek assistance to deal with them. In addition, many companies that invested in their computer technologies around the year 2000 — during the Y2K scare — are reassessing their systems, and PricewaterhouseCoopers offers technology advisory services, Mr. Saada said.

Complexities of growth Mr. Saada succeeds Louis L. Testoni, who was managing partner for the Lake Erie market and retired

Stovsky

Herrmann

in June. Richard P. Stovsky, who led the Cleveland office before he was named national leader of the company’s private company services practice, will lead the national audit and tax practice from Cleveland. In addition, Jeff Herrmann, who spent five years in Beijing building and leading the company’s advisory business in China, moved to Cleveland in July and now is Lake Erie market advisory leader. As the economy recovers, Mr. Saada expects more companies to expand, perhaps by acquisitions and expansion overseas. He anticipates such activity will mean growth for PricewaterhouseCoopers as it assists and advises businesses in updating their processes and systems. “As that (growth) happens, things become more complex,” he said. “Systems become more complicated. Tax implications become more complicated.” As managing partner, Mr. Saada is responsible for developing and executing the company’s strategy for its lines of service within the market.

Mr. Saada was chosen for the job because he brings a deep level of leadership, experience and knowledge of the Cleveland community, said Mr. Henderson, vice chairman of client service. “The ability to understand our clients’ issues and deliver the firm’s resources to support their needs is very important,” he said.

Beyond accounting Mr. Saada said PricewaterhouseCoopers has pushed to sharpen its existing focus on organizing consultants around sectors, which include health care, retail/consumer and utilities and energy. Ideally, Mr. Saada said, a consultant working with a chemicals company would be equipped with knowledge of leading practices in the chemicals sector. “It’s not enough to be an accountant,” he said. “You need to understand our clients’ industry. You need to understand our clients’ business.” Mr. Saada said he will measure his success by how happy company employees are — “We don’t want turnover” — and what clients say about PricewaterhouseCoopers. He accepted the new job because he and his family love Cleveland. Mr. Saada, his wife, Kristen, and their two children live in Hunting Valley. Mr. Saada said he also was attracted to the chance to engage clients in broader terms, rather than dealing solely in mergers and acquisitions. ■

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

WWW.CRAINSCLEVELAND.COM

WHOâ&#x20AC;&#x2122;S WHO IN CUYAHOGA COUNTY CORRUPTION The federal corruption probe has focused on the misdeeds of politicians, political operatives and Cuyahoga County employees. But 20 businesspeople and lawyers also have been charged with and/or pleaded guilty to a variety of crimes. They are as follows: â&#x2013; Timothy Armstrong was an attorney with the former Armstrong, Mitchell, Damiani & Zaccagnini law firm in Cleveland. He pleaded guilty in September 2009 to distributing kickbacks to county auditor Frank Russo and others in exchange for winning county appraisal contracts. Mr. Armstrong agreed to pay restitution in $1,573,345 and was sentenced in February to 42 months in prison. â&#x2013; Dinesh Bafna, president of Mont Granite Inc. of Solon, pleaded guilty to bribery charges in December 2009. He provided home improvements to Mr. Russo in exchange for a reduction in the tax valuation of his business property in Solon and his Pepper Pike home. â&#x2013; Joseph Bibbo, the owner of Midwest Paving Co. of Cleveland, in June pleaded not guilty and is awaiting trial on charges he paid bribes to Maple Heights school district officials, including to Santina â&#x20AC;&#x153;Sandyâ&#x20AC;? Klimkowski, an aide in Mr. Russoâ&#x20AC;&#x2122;s office. â&#x2013; Bryan Carlton, a principal of Solonâ&#x20AC;&#x2122;s Gemma Development Co., pleaded guilty in July to one count of bribery concerning programs receiving federal funds. He awaits sentencing. â&#x2013; Louis Damiani, an attorney who died in 2006, was implicated in providing kickbacks to Mr. Russo and Ms. Klimkowski in exchange for the awarding of appraisal contracts to VAS Enterprises, a firm associated with Mr. Damiani. Mr. Damianiâ&#x20AC;&#x2122;s wife has forfeited $1.95 million to resolve her late husbandâ&#x20AC;&#x2122;s activities. â&#x2013; Charles Edwards, owner of C.

Edwards Landscaping Inc. of Mantua, was charged Aug. 19 with three counts of bribery and conspiring to commit bribery. â&#x2013; Todd Gemma, a principal of Gemma Development, in July pleaded guilty to one count of bribery concerning programs receiving federal funds. He awaits sentencing. â&#x2013; Ferris Kleem, the owner of Blaze Construction of Berea, pleaded guilty in May to bribing public officials in exchange for getting public contracts and other favors. He is awaiting sentencing. â&#x2013; Kenneth Kushmider of Hudson, the sole owner of Landscape Design Associates, pleaded guilty in July to one count of bribery concerning programs receiving federal funds. He is awaiting sentencing. â&#x2013; Anthony Ma of Moreland Hills pleaded guilty Aug. 2 of promising to pay nearly $200,000 in kickbacks to county officials so that his firm, Broma Information Technology LLC, would receive county computer contracts. He awaits sentencing. â&#x2013; Ronald Monroe, a Gemma Development principal, was charged with one count of bribery concerning programs receiving federal funds. He pleaded guilty in July and awaits sentencing. â&#x2013; Todd Ozanich, owner of Imperial Heating and Cooling in Solon, pleaded guilty in July to three counts of bribery for providing $2,400 in services for the home of Christopher Krause, former treasurer of the Maple Heights school district, and receiving more than $270,000 in school district contracts. He is awaiting sentencing. â&#x2013; Nilesh Patel, an executive of the family owned East-West Construction Co. of Cleveland, was sentenced Aug. 4 to three-and-a-half years in prison for bribing former MetroHealth executives in exchange for more than $51 million in construction contracts with the

Hyland Software taking document management software overseas Growing demand the companyâ&#x20AC;&#x2122;s ON THE WEB Story from for the online version total number of www.CrainsCleveland.com. of Hyland Software data centers. Inc.â&#x20AC;&#x2122;s OnBase document manageDemand for OnBase OnLine has ment software is driving the been growing for several years, Westlake company to build new especially in other countries, the data centers across the world. release stated. Others companies The company, which by employin previous interviews with Crainâ&#x20AC;&#x2122;s Cleveland Business have ment is the largest software reported rising interest in online provider in Northeast Ohio, opened software, often called â&#x20AC;&#x153;software as a data center in Australia in late a service.â&#x20AC;? August, and it expects to open That model allows customers to another in the Netherlands later pay a monthly fee instead of this month, according to a news purchasing the software, which release from the company issued reduces their upfront cost, and last week. software delivered via the Internet is The expansion wonâ&#x20AC;&#x2122;t stop there: considered easier to install and Hyland plans to add two more data maintain. centers in Asia and South America â&#x20AC;&#x201D; Chuck Soder in 2011, which would bring to eight

county-subsidized hospital. â&#x2013; Steven Pumper, former CEO of DAS Construction, was charged and pleaded guilty to nine public corruption charges in July 2009. He awaits sentencing. â&#x2013; Shannon Riley, owner of Riley Industrial Services in Cleveland, pleaded guilty in July to one count of bribery concerning programs receiving federal funds and is awaiting sentencing. â&#x2013; Anthony C. Sinagra, an attorney and former mayor of Lakewood, pleaded guilty in August 2009 to charges of bribing former Parma school board member J. Kevin Kelley in exchange for consulting contracts and mail fraud. He is awaiting sentencing. â&#x2013; David Terry, a Hinckley real estate developer, was charged Sept. 8 with one count of bribing an as-yetunidentified Strongsville councilman. â&#x2013; John Valentin, a principal in Salva Stone Design of Cleveland, pleaded guilty in December 2009 and is awaiting sentencing on a charge he did home improvement work at the home of a public official whose description matches Cuyahoga County Commissioner Jimmy Dimora. Mr. Valentin sought help for a friend in need of a visa. â&#x2013; Bruce Zaccagnini, a partner in the former Armstrong, Mitchell, Damiani & Zaccagnini law firm, pleaded guilty in October 2009 for his role in steering contracts to VAS Enterprises. In February 2010 he was sentenced to 60 months in prison and he agreed to pay restitution of $3,215,845. He so far has paid over $1 million of the total. â&#x2013; Nicholas A. Zavarella, of Bedfordâ&#x20AC;&#x2122;s Zavarella Brothers Construction Co., pleaded guilty in March to bribing a public official matching the description of Jimmy Dimora in exchange for find jobs for Mr. Zavarellaâ&#x20AC;&#x2122;s daughter. He is awaiting sentencing. â&#x20AC;&#x201D; Compiled by Jay Miller

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20100913-NEWS--26-NAT-CCI-CL_--

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CRAIN’S CLEVELAND BUSINESS

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REAL ESTATE

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20100913-NEWS--27-NAT-CCI-CL_--

9/10/2010

SEPTEMBER 13-19, 2010

3:31 PM

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THEINSIDER

THEWEEK

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

SEPTEMBER 6 - 12

Invacare’s Mixon to mark return to investor circuit

The big story: With federal charges of bribery

■ Invacare Corp. chairman A. Malachi Mixon III is slated to make appearances at back-to-back investor conferences in New York City this week, which would mark his first meetings with investors since taking temporary medical leave after suffering a mild stroke last spring. Mr. Mixon and Robert Gudbranson, Invacare’s senior vice president and chief financial officer, are scheduled to present at the Morgan Stanley 2010 Global Healthcare Unplugged Conference Mixon this Tuesday, Sept. 14, and the CL King & Associates 8th Annual Best Ideas Conference on Wednesday, Sept. 15. Elyria-based Invacare — a provider of wheelchairs and portable oxygen — announced in July that Mr. Mixon would return as chairman of the company’s board but not yet as its CEO. James Boland, Invacare’s lead director and a board member since 1998, had filled in as chairman while Mr. Mixon was on leave. Gerald Blouch will remain as interim CEO. An Invacare spokeswoman said the company likely would make a decision at the end of the year about when — or whether — Mr. Mixon would return in that role. — Timothy Magaw

and mail fraud finally filed against him, Cuyahoga County Auditor Frank Russo did what he should have done a long time ago and submitted his resignation to county commissioners. The U.S. Attorney for the Northern District of Ohio filed a 21-count information against Mr. Russo that charges him with numerous bribery schemes beginning in March 1998 and continuing through May 2009, all during his time as auditor. See related story, Page One, and editorial, Page 10.

Material event: Associated Materials LLC in Cuyahoga Falls, a big producer of vinyl siding and windows and other exterior building materials, is changing hands in a $1.3 billion deal. Associated Materials said the company’s current owners, which include affiliates of Investcorp and Harvest Partners, signed a definitive agreement to sell the business to affiliates of private equity firm Hellman & Friedman LLC in a transaction expected to close in the fourth quarter. Tom Chieffe, president and CEO of Associated Materials, said Hellman & Friedman “understands our business and shares our vision for the future of the company.” Deal of the Century: First Federal of Lakewood signed an agreement to acquire Century Bank in Parma — a deal that, if closed in December as anticipated, will create a combined bank with total assets of $1.3 billion and 18 full-service branch locations across four counties. Century Bank will be merged into First Federal of Lakewood. The merged bank would have branches in Lake, Lorain, Medina and Cuyahoga counties, will maintain the five First Federal lending offices that currently operate in Ohio and will employ more than 275 people. The combination includes plans to retain all five Century Bank branch locations and its 35 employees.

Down to business: A former Cleveland Clinic patient and his wife donated $10 million to the Northeast Ohio medical institution to establish a leadership academy for health care executives. Eric Samson, a steel executive from South Africa, and his wife, Sheila, donated the funds in hopes of encouraging others to donate to programs that can make a difference and help develop future leaders. The Samson Global Leadership Academy for Healthcare Executives will begin in the fourth quarter of 2011 and will help train up-and-coming health care leaders as they work alongside business executives at the Clinic.

On the mend: Summa Health System and Pennsylvania-based Vibra Healthcare plan to break ground today, Sept. 13, on their new, $25 million acute rehabilitation hospital on the Akron City Hospital campus. Scheduled to open in late 2011 or early 2012, the 60-bed hospital — a joint venture of the two organizations — will integrate the rehab staffs of Summa’s hospitals in Akron, Barberton and Wadsworth.

Women’s health efforts get nice push at Summa

■ The Cleveland Rowing Foundation is

■ The Summa Foundation was scheduled to announce last Saturday evening it received an anonymous $1 million gift to establish an endowed chair for women’s health at the Akron-based Summa Health System. Dr. Vivian von Gruenigen, medical director of women’s health at Summa, will chair the position, which will guide the health system

WHAT’S NEW

BEST OF THE BLOGS

Rowing foundation pulls in key dollars for new home

Excerpts from blog entries on CrainsCleveland.com.

Foreclosures make bad neighborhoods

Fresh start: Akron Mayor Don Plusquellic announced that the city of Akron has a tentative deal to sell the site of the landmark Young’s Hotel on Nesmith Lake in Akron to Bennett Construction Management, a construction management and general contractor based in the city. The mayor said Bennett’s plan is conceptual but would incorporate a hotel or retail use. He said it likely will be oriented to the more than 2 million hikers and bicyclists who annually visit the Ohio & Erie Canal’s Towpath Trail. The building itself is too dilapidated to be restored due to damage sustained before the city bought it in 2007.

“tantalizingly close” to reaching its fundraising goal to buy the former Commodore’s Club Marina in the Flats as a new home for its boathouse and Rivergate Park plan. That’s the word from Jon Adams, co-chair of the foundation’s Rivergate Fund. He said the group is working on the last $12,000 to reach the $3 million it needs. A big help came Paul Buchheit, a rower while earning bachelor’s and master’s degrees at Case Western Reserve University before becoming an early employee of Google who later sold a company of his own to Facebook. The Silicon Valley tech entrepreneur, considered the father of Gmail, joined with CWRU and the Spartan Alumni Rowing Association to contribute $100,000 to the cause. The CWRU-Buchheit gift means the group met a $250,000 challenge grant from Progressive Corp. chairman Peter B. Lewis. Barbara R. Snyder, CWRU president, said the Rivergate project would be promising for the school’s students as well as the city. CWRU’s rowing club has plied the Cuyahoga River since 1991. — Stan Bullard

COMPANY: Ridgid, Elyria PRODUCT: Contractor-grade laptops Ridgid, which makes tools, equipment and video inspection devices for the professional trades, last week announced a new family of rugged laptops and convertible tablet PCs, based on the Dell Latitude E-Family and customized by Dell OEM Solutions, to meet the needs of original equipment manufacturers (OEMs). Pre-configured with customized software access to Ridgid informational resources and diagnostic tools, the contractor-grade laptops “are designed to work with Ridgid inspection systems and withstand the harshest of conditions encountered on job sites, including pounding rain, blowing dust and dirt, extreme temperatures and accidental drops up to four feet,” the company says. The Dell laptops, which will be Ridgid branded, are offered in four configurations: a military/contractor-grade rugged laptop; a fully rugged multi-touch tablet PC; a “business-rugged” laptop; and a laptop that provides all-day battery life. Visit www.Ridgid.com/Dell for information. Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.

■ Work by a Federal Reserve Bank of Cleveland economist was cited in an International Business Times article on the impact of foreclosures on the broader housing market. “Foreclosed homes are mostly auctioned for belowmarket prices, so they pull down overall prices in surrounding areas,” the U.K. newspaper reported. “So far, many foreclosed homes have not yet auctioned and there will probably be more foreclosures in the future. Economists refer to these homes that will be auctioned in the future as ‘shadow inventory.’ And because of the ‘shadow inventory,’ some economists expect housing prices to remain depressed for quite a while.” The International Business Times noted that some foreclosed properties also are abandoned and neglected, “which negatively affects the image of the neighborhood, so they also drag down prices this way.” Daniel Hartley of the Cleveland Fed has studied these two impacts of foreclosure and found that in areas of high vacancies, “the main impact of foreclosure is from the neglect of foreclosed properties, which can lower prices in the neighborhood by about 2%,” the newspaper reported. “Contrastingly, in areas with low vacancies, the main impact is from the auctions of foreclosed homes, which drags down price by about 1.6%.”

They put heart and soul into bringing limbs to life ■ Two Cleveland biomedical engineers

in finding ways to help women through new programming, faculty development, education and research opportunities. In a statement, Ms. von Gruenigen said the donation is “an infinite gift that will improve the quality of life for the women in our communities for generations to come.” The announcement was set for Summa’s 10th annual Sapphire Ball, which raises money for women’s health. Last year, the foundation raised $300,000 at the ball. This year’s totals weren’t available. — Timothy Magaw

Come back and wrap up that diploma, Cleveland St. says ■ Cleveland State University has 126 unexpected returning students on campus this fall thanks to a direct-mail marketing campaign that targeted people who left the school with only a year left until graduation. Rob Spademan, CSU’s assistant vice president for university marketing and admissions, said Northeast Ohio has thousands of people who are just a few credit hours shy of graduating, so the university decided to look back over the last five years and identify students who might come back to finish their degrees. After whittling down the list to focus on students who hadn’t left for other universities, CSU targeted about 1,900 prospects. “We employed an old-fashioned methodology and sent these folks a nice direct-mail piece saying, ‘Finish what you started. You’re close, so why not?’” Mr. Spademan said. Though only 126 of those 1,900 are back this fall, Mr. Spademan noted that anything above a 2% or 3% return on a marketing effort is a success. — Timothy Magaw

were quoted in a piece from The Economist about doctors’ efforts to reroute nerves to give patients more natural control of prosthetic arms and to bring paralyzed limbs back to life. Prosthetic limbs are becoming increasingly sophisticated, “but it can be very difficult to control them in a natural way,” said Paul Marasco, a biomedical engineer at the Louis Stokes Cleveland Department of Veteran Affairs Medical Center, according to The Economist. “For example, patients control some motorized devices by flexing muscles in their remaining stump, shoulder or chest. These muscle movements are detected by electromyography (EMG) sensors on the skin, and the signals are translated into movements by the prosthetic.” Dustin Tyler, a biomedical engineer at Case Western Reserve University, told The Economist that muscles in the legs are so large that the whole muscle does not contract. He and his colleagues have been looking at ways to activate these muscles by tapping into the femoral nerve, in the groin. “By moving back to the nerve you get the whole muscle,” Dr. Tyler said.

Talk about an amazing plan for the winnings ■ One of the new cast members of “The Amazing Race,” the CBS reality show that gets its season premiere on Sept. 26, is an impressive young man from Chesterland. Connor Diemand-Yauman, 22, is the student body president at Princeton. He lists his hobbies as “singing in our a cappella group, volunteering, speech/debate, acting and sports.” (Is that all?) His partner in the race, Jonathan Schwartz, is his best friend.

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9/9/2010

10:37 AM

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