Crain's Cleveland Business by Crain's Cleveland Business

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$1.50/OCTOBER 4 - 10, 2010

Vol. 31, No. 39

Hoping to bury fears, we’re saving more With net worth, property values down, Americans sock away more cash — for now

By MICHELLE PARK mpark@crain.com

ive months into what would become known as “The Great Recession,” John and Jane Doe made news because they finally had started squirreling away more than mere pennies. A headline in the May 19, 2008, issue of Crain’s declared: “Some Americans bucking trend of saving very little.” The collective consumer, many in the finance sector agreed, had behaved recklessly for years. It

had been hard to convince people to limit how much they spent on credit and to sock away more of their wages. Now, with a public chastened by the worst economic slump since the 1930s, saving little is the trend no more. Consider the following: ■ From June 2007 to June 2010, the total dollars invested in Huntington Bank consumer savings and money market accounts in Greater Cleveland more than doubled, region president Daniel Walsh said. See SAVINGS Page 12

KRISTEN WILSON

In shift, a healthy rise in home permit values Project costs up as buyers opt for more home By STAN BULLARD sbullard@crain.com

A ray of hope for the new-home market has peaked through recent state data that show the aggregate value of housing permits in the Cleveland and Akron markets was up solidly in July from the month before and also was higher than in July 2009. According to the Ohio Department of Job and Family Services, the valuation of housing permits in the Cleveland-Elyria-Mentor Metropolitan Statistical Area totaled nearly $39.4 million in July. That

figure was up 27.5% from $30.9 million in June and rose almost 9% from $36.2 million in July of last year. In the Akron MSA, housing permit values totaled $8.4 million in July, which was a 17% increase from $7.2 million in June and a 1% rise from nearly $8.3 million in July 2009. David Payne, president of the Homebuilders Association of Greater Cleveland trade group, said the statistics do “not surprise me at all.” “This is the bottom; from here it improves,” Mr. Payne said. Mr. Payne, vice president of Payne & Payne Builders in Chardon,

INSIDE No more scribbling out prescriptions A report by the leading electronic prescribing network in the United States shows the number of doctors electronically submitting prescriptions more than doubled to 156,000 in 2009 from 74,000 in 2008. Health care officials say billions of dollars in federal incentives have pushed the issue to the forefront, while doctors point to frustrations over lost prescription slips and delays in waiting for calls from pharmacists as reasons for shifting to e-prescriptions. Read Tim Magaw’s story on Page 3.

See RISE Page 5

Lighting outfits aim to keep LED manufacturing at home By CHUCK SODER csoder@crain.com

The compact fluorescent light was invented at General Electric Co.’s Nela Park campus in East Cleveland, and the first company to commercialize CFL bulbs successfully is based in Aurora. But none of that mattered as the market for CFLs evolved: The manufacturing went overseas anyway. So will the same thing happen with light-emitting diodes, an even more energy-efficient technology that’s expected to eclipse the CFL? Northeast Ohio companies that are developing LED products say no. Some manufacturing is bound to go overseas, especially for the LED-

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based bulbs under development to replace standard, screw-in incandescent bulbs. When it comes to producing more specialized LED fixtures, however, Northeast Ohio and the rest of the United States have a chance to compete, according to several companies. Just ask Jim Crowcroft, vice president of marketing for TCP Inc. — the Aurora company that was the first to mass-produce CFLs. The company, founded by Ellis Yan, a Chinese immigrant, started making CFLs in China in the mid1990s. At the time, producing the coiled bulbs was an extremely laborintensive process, requiring the glass See LED Page 22

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CRAIN’S CLEVELAND BUSINESS

COMING NEXT WEEK Remaining dealerships keep on truckin’ A number of car dealerships have closed over the past several years as the economy has taken its toll on the automobile industry. We cruise the scene to see how the remaining businesses are faring and what their prospects are for the future.

WWW.CRAINSCLEVELAND.COM

STAY IN SCHOOL It’s harder for everyone to find a job in Ohio today than it was a decade ago, but it’s considerably more difficult for those whose education is limited. Data compiled by think tank Policy Matters Ohio show with great clarity how educational achievement matters when it comes to finding a job. For instance, unemployment levels of those with less than a high school degree exceeded 21% in 2009, more than twice as high as they’d been back in 2000. Unemployment by level of education in Ohio, 2000-2009

Educational attainment

Unemployment rate 2000

Unemployment rate 2010

9.9%

21.6%

High school

4.5

12.2

Some college

3.8

8.7

Bachelor’s degree or higher

1.8

5.3

Less than high school

REGULAR FEATURES Big Issue ......................10 Classified ................20-21 Editorial .......................10 Going Places ................13 From the Publisher .......10

List: Advertising, marketing PR firms ..............18-19 Reporters’ Notebook ....23 The Week.....................23 What’s New ..................23

OCTOBER 4-10, 2010

SOURCE: “THE STATE OF WORKING OHIO 2010,” BY POLICY MATTERS OHIO; WWW.POLICYMATTERSOHIO.ORG

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CRAIN’S CLEVELAND BUSINESS

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Fiscal woes sink Quay 55 apartments Lakefront complex has new mortgage holder after HUD’s defaulted loan sale By STAN BULLARD sbullard@crain.com

Lake Erie, neighboring marinas and passing boats provide a pictureperfect backdrop to Quay 55 Apartments, but they do not reflect the ugly, behind-the-scenes financial ills that made the property become

the latest casualty of debt woes among downtown rentals. An affiliate of Boston-based Aspen Management Inc. swooped in last Thursday, Sept. 28, to acquire the $20 million mortgage on the 200-suite complex, according to Cuyahoga County land records. See LOAN Page 8

JESSE KRAMER

Tony Hyland, CEO of Tap Packaging in Cleveland, stands beside a Heidelberg four-color press that makes packaging materials. Formerly Chilcote Co., Tap made for most of the 20th century photo albums, folders and frames. As the market shrank for those products, Tap expanded its line to custom packaging for products ranging from confections to gourmet accessories.

PHOTO PRODUCTS MAKER’S NEW IMAGE Tap Packaging expands beyond traditional business as digital era reduces need for its frames, albums By DAN SHINGLER dshingler@crain.com

n the near East Side of Cleveland, in a huge old brick building where its prosperity still echoes along a block of East 22nd Street, Tap Packaging is tackling the toughest of business challenges. What to do when most of your market disappears almost as quickly as the light from a flash bulb? Those who don’t recognize the company in spite of its roughly 120 local employees might remember it as Chilcote Co. For most of the 20th century, it was busy producing photo albums, folders and frames to hold photographers’ proofs and prints — and boasting control of about two-thirds of that market for decades, with tens of millions in annual sales. See TAP Page 21

STAN BULLARD

THE WEEK IN QUOTES “It’s clear that Americans have been living on somebody else’s money for a long time, and the things that have happened over the last two years have made people realize ... we have to pay that back.”

“It’s not all roses in debt collection land. … They are struggling just like everybody else.” — Mark Schiffman, director of public affairs for ACA International, the collection industry’s largest trade association. Page 7

— Mike Losneck, CEO, Eaton Family Credit Union. Page One

“I don’t even know how to do a sales call in English anymore.” — Christopher J. Messina, vice president of sales and projects, Rad-Con Inc. Page 15

“And if we, as businesses, don’t vote literally all these people out ... I think we are in for one rough road.” — Brendan Slabe, vice president of sales, Slabe Machine Products. Page 15

INSIGHT

E-prescriptions fill need for new technology in medical field By TIMOTHY MAGAW tmagaw@crain.com

Federal incentives urge doctors to transition from pen and paper

A doctor’s scribble on a prescription notepad is often tough to decipher and, as of late, is becoming harder to find as more medical providers have ditched pen and paper in favor of routing medication orders electronically to pharmacies. Lured by billions of dollars in

federal incentives, the number of doctors “writing” prescriptions electronically has more than doubled to 156,000 at the end of 2009, from 74,000 at the end of 2008, according to a report issued this month by Surescripts, the largest U.S. electronic prescribing network. Ohio’s shift toward e-prescrip-

tions has been slower than other states, according to the data, but the state’s number of prescriptions sent electronically likewise climbed to more than 7 million last year from slightly more than 3 million in 2008. Also, the number of doctors e-prescribing in Ohio grew to 3,358 at the end of 2009, a 5% increase

from the previous year. Overall, only about 18% of Ohio’s doctors use e-prescribing services, according to Surescripts. That’s compared to 57% of physicians who do so in Massachusetts, which Surescripts ranked at the top of its list among U.S. states. Dr. Michael Nochomovitz, who

oversees University Hospitals’ 1,400 physicians as president of University Hospitals Physician Services, called it “transformational technology” that allows personnel at physicians’ offices to focus more on the patient rather than calling in prescriptions. University Hospitals was one of the first hospital systems to introduce e-prescribing in 2002 and was See DOCTORS Page 21

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OCTOBER 4-10, 2010

Brecksville IT firm makes new entry Software Answers’ deal with state group shows potential for its product By CHUCK SODER csoder@crain.com

Paul Chaffee is careful to note that he doesn’t consider his company’s new partnership a “win.” At least not yet. Software Answers Inc. has struck a deal with a statewide organization that will allow the Brecksville company to combine its classroom management software with the student information system used by

school districts across Ohio. The partnership will allow Software Answers to sell the combined product in other states, which could result in significant sales growth, said Mr. Chaffee, the company’s CEO. First, however, Software Answers must combine its ProgressBook software with the data collection system owned by the Management Council of the Ohio Education Computer Network, a group of information technology centers that provide IT services to Ohio school districts. Then it must convince schools in other states to adopt the combined product — a big deal for a company that does most of its business in Ohio. “If we do those two things, then we can start cheering,” Mr. Chaffee said.

That isn’t to say he’s not confident in the plan. Software Answers has hired 11 new people, bringing the size of its staff to 46, and it’s looking for nine more, all because of the partnership, Mr. Chaffee said. “If we didn’t have the partnership, we would still be flat,” he said, noting that the down economy had slowed the company’s growth. He declined to disclose revenue figures. Software Answers is hiring software developers, quality and assurance experts and at least four sales people, Mr. Chaffee said. The firm previously didn’t need a dedicated sales team, in part because for the past eight years its main customers have been Ohio’s information technology centers. Though Software Answers has customers in other states, 70% of its revenue comes from Ohio. Combining the two software products should help Software Answers broaden its customer base, Mr. Chaffee said. School districts will be more likely to buy ProgressBook — designed to help teachers track students’ grades and attendance, plan lessons and communicate with parents — if it is paired with the management council’s Data Analysis for Student Learning (DASL) software, which gathers student data needed to meet Ohio’s reporting requirements.

Share and share alike Software Answers will need to alter the management council’s software interface so it matches the look of ProgressBook, and the company will need to put both systems on the same database. More changes will be made on a state-by-state basis to account for differences in state reporting requirements. Software Answers’ goal is to begin selling the combined product in one or two states by fall 2011, Mr. Chaffee said. The four-year contract states the management council will pay Software Answers $2.4 million per year, with a cost-of-living increase, to continue developing DASL for use in Ohio, said Greg Spencer, executive director of the council’s DASL program. The agreement also entitles the management council to 15% to 20% of revenue from sales of DASL in other states. The partnership should help the council meet its goal of cutting the annual fee it charges schools that use DASL to less than $3 per student within a few years. The council charges $3.75 per student today. Three companies applied to sell DASL outside of Ohio. Software Answers won out partly because the company can sell the product broadly without compromising the version of DASL used in Ohio, according to Mr. Spencer. He said he has worked with Software Answers for years and believes the company cares about helping schools provide better services to students. “Behind the efforts are always, ‘What can we do for the kids?’” he said. ■

Volume 31, Number 39 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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Rise: Despite A $6K screwdriver? For precision, it’s on the money increase, fear Jergens’ prototype records data on how it is used still lingers By DAN SHINGLER dshingler@crain.com

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said he sees the change in his company’s own sales and those of some of his colleagues. “The number of our projects is up,” Mr. Payne said, “but the dollars per permit is significantly up.” He said Payne & Payne is undertaking 42 homes this year compared to 28 a year ago. However, last year’s average project cost was $280,000 compared to this year’s $480,000. The change in the number of singlefamily housing permits wasn’t as pronounced as the valuation figures in the Cleveland market, where the July permit total of 177 was up nearly 11% from 165 in June and rose 4.7% from 169 in July 2009. However, in the Akron market, the 48 single-family permits issued in July climbed 37% from 35 in June and was up 4% from 46 in July of last year. Economist Ken Mayland of ClearView Economics LLC of Cleveland sums up the situation this way: “Income has edged up over time and mortgage rates have fallen; thus people can afford a larger transaction price. But because home prices have fallen, they can afford ‘more home’ even for the same transaction price. At a higher transaction price, it’s more, more home.” Few observers see expensive luxury homes accounting for the increase; even at higher dollar values, there are still too few of them. That view is shared by both luxury custom homebuilder Dino Palmieri of Solon and Barbara Reynolds, vice president of global marketing and communication at Howard Hanna Real Estate. Some of the recent increase may be the aftereffect of the federal firsttime homebuyer and move-up buyer tax credits of earlier this year and last, which clearly took away sales from the future. Consider sales by Ryan Homes, the Columbia, Md.-based national builder with a big Northeast Ohio presence. According to a Crain’s analysis of data from the Medina County auditor’s office, Ryan had sold 70 homes in the county by Sept. 28 at an average cost of $200,803 this year compared to 60 for an average cost of $193,284 during the like period in 2009. This year, 36 sales were for upwards of $200,000 compared to 17 in that price range last year. Ryan’s Brecksville-based unit doesn’t comment on local activities as a matter of company policy.

Jergens Inc. CEO Jack Schron is part politician, part businessman these days — he is the Republican candidate for Cuyahoga County Council’s District 6 — so he’s always keen on discussing how his company creates jobs in Northeast Ohio. Now he can show people firsthand. His latest venture sounds at first like something that would rely on extravagant Defense Department spending, but Mr. Schron said he has found a way to make and sell

$6,000 screwdrivers to the private sector. The screwdrivers aren’t used to attach $40,000 toilet seats. However, what they do deliver is a highly precise amount of torque to screws, bolts and other fasteners handled at factories across the world. At the same time, they measure and record data that show exactly how the tool was used, including how much torque it applied to each fastener. Such a device pays for itself in increased productivity, better products through more exact assembly procedures and improved ability to track the assembly of those products

for quality control purposes. In the electronics and small-parts factories of the United States and Asia, such factors are increasingly important. Jergens picked up the technology to make the devices when it acquired a Schron company in Michigan last year, but it’s moving their production to its Cleveland plant near East 152nd Street. It won’t be a huge source of jobs, but it will add some positions here, according to Mr. Schron. He said Jergens already has hired two people to work on marketing and procurement for the devices and plans to hire about 10 production

workers and a few sales people. It also will use other Cleveland-area companies to make parts such as the metal enclosure for the device’s computer control unit. Jergens is working on building its first prototypes of the devices, and it will be hiring and gearing up for production soon, Mr. Schron said. The company already has received preorders for 40 devices. Though it may seem strange, Mr. Schron said he can sell on price to some degree. The current similar device with which Jergens hopes to compete costs about $8,000 per screwdriver, he said. ■

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Not out of the woods Not all see the rising permit values as a harbinger of a housing recovery. Peter Rubin, CEO of Coral Co., a developer based in University Heights that works in both the residential and retail markets, said it is dangerous to base a conclusion about housing on a single variable. “Fear remains the overriding factor in the housing market,” Mr. Rubin said. William Sanderson, vice president of joint ventures for the land group of Cleveland-based Forest City Enterprises Inc., frames the statistics in a broad context, adding: “Make no mistake: we are talking about year-over-year statistics that are at a depression level.” ■

COMMUNITY LEADERS Peter French Conway • William Timothy Conway • Jane Conway Barber Anne Conway Juster • In honor of their parents, Bill and Mary Conway

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Creditors prepare to descend upon Painesville debt collector Now in bankruptcy, Hudson & Keyse’s mounting liabilities force business to close By MICHELLE PARK mpark@crain.com

Creditors of a Painesville debt collection company that has filed for bankruptcy are to meet Oct. 14 at the Howard M. Metzenbaum U.S. Courthouse in Cleveland as the voluntary liquidation case proceeds. Hudson & Keyse LLC, which once collected bad debts, filed for debt relief of its own through a Chapter 7 bankruptcy Sept. 7 in U.S. Bankruptcy Court in Cleveland. The filing revealed the company owes more than $63 million to more than 200 creditors. The company reported assets of about $288,000. The 25-year-old company effectively closed and terminated its 40 remaining employees Sept. 1, said acting president and CEO Mark S. Finston. Its work force had been downsized from about 150 since 2008, he noted. An increasing number of small third-party debt collectors are going out of business, said Mark Schiffman, director of public affairs for ACA International, the collection industry’s largest trade association. He said that trend is anecdotal, but noted ACA International has seen some falloff in its small-firm membership. With 40 employees, Hudson & Keyse would be considered small to midsize, Mr. Schiffman said. Mr. Schiffman said the increasing failures of small firms are a reflection of a paradox: While the amount of defaulted debt is high because of the soft economy, this is no boom time for collection firms. When companies cannot collect on debt because people and businesses can’t pay, they cannot meet their business goals. “It’s not all roses in debt collection land,” Mr. Schiffman said. “They are struggling just like everybody else.” During the year prior to its failure, Hudson & Keyse did both first-party collecting on debt it owned and third-party collecting, for which it charged fees to collect debts other companies owned, Mr. Finston said. Speaking about Hudson & Keyse’s failure from Scottsdale, Ariz., where he lives, Mr. Finston said he’d reached out to multiple companies to see to it that the firm’s terminated employees had the opportunity to interview for local jobs. “I felt an obligation to try to do it for them,” he said.

According to the bankruptcy filing, the firm owes the most money — $60 million — to Atlanta-based Vion Holdings LLC. Vion bought Hudson & Keyse’s debt from a syndicate of banks in March 2010, Mr. Finston said. Mr. Finston said serious financial problems plagued Hudson & Keyse, among them a faulty business model that significantly overestimated what the company could collect on its assets every month. Between 2006 and 2008, the company locked itself into commitments to buy defaulted debt, such as unsecured credit card receivables, at a fixed price of 8 cents on the dollar. When the economy went

limp and debt portfolio prices sank to nearly 2 to 3 cents on the dollar, Hudson & Keyse remained locked into paying as much as double the going rate.

Debt millstone In May 2008, the company’s liabilities topped $90 million, including $76 million it had borrowed from a syndicate of five banks to buy defaulted debt portfolios, according to Mr. Finston. The loan agreements, however, “were not structured properly at all,” and the company’s cash flow was not sufficient to pay down the debt like the agreements required, Mr. Finston said.

The syndicate of banks wanted out of the debt agreement, and agreed to have Vion buy the debt last March 22. Vion’s purchase entitled it to Hudson & Keyse’s assets. According to Mr. Finston, Hudson & Keyse was left with two choices: find someone to invest significant equity into the business and try to rebuild, even with all its debt outstanding, or shut down. Its leaders chose the latter. The firm’s board members and all its executives — except Mr. Finston — resigned in June. Mr. Finston, who said he has 30 years of experience in financial investing, said he stayed to help the employees. New tenants already have signed

leases for two Painesville properties Hudson & Keyse returned to its mortgage holder, Dollar Bank. David Reak, chief operating officer of Vion Receivable Investments, the parent company of Vion Holdings, said Vion should not be affected by the bankruptcy because it bought Hudson & Keyse’s debt for an amount it believes it can collect on the debt. He compared Vion’s position to a man who buys a used car before a dealership goes out of business: The dealership’s bankruptcy should have no impact on the used car, he said, just as Hudson & Keyse’s bankruptcy should have no impact on the debt portfolio Vion now owns. ■

From expansion plans through succession plans. Opportunity at every step. Success is a journey of many steps. We work hand in hand to help you realize your goals in ways that can lead to more opportunities for your business. Strong relationships and a deep understanding of your business and industry help our dedicated client managers deliver relevant advice, expertise and a comprehensive range of commercial banking solutions including credit, treasury and liquidity. It’s a combination that can take businesses from up and comer to category leader. And yours from one era to the next.

Troubles from the past The irony of a debt collector drowning in its own debt was not lost on Mr. Finston. He blamed previous management. “When people are charged with financial responsibility of running a company, they need to understand that they have responsibilities for analyzing the company’s financials properly,” he said. “If they don’t, this is the kind of thing that can happen.” Mr. Finston, who joined Hudson & Keyse in 2008 in an effort to improve the firm’s financial health, wouldn’t identify the “inappropriate management” to which he was referring.

Learn more about our comprehensive solutions. Call Joseph DiRocco at 1.216.925.5396 or visit bankofamerica.com/businesssolutions

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Loan: Situation not unique to Quay 55 continued from PAGE 3

Through Lenox Mortgage XIII LLC, the operator of 15,000 apartment suites nationwide bought the mortgage in a sale of defaulted loans ordered by the U.S. Department of Housing and Urban Development. The sale followed Capmark Finance of Horsham, Pa., declaring the loan in default and assigning it to HUD, which sells such loans to recoup what it can under the HUD insurance program. If the Quay 55 Limited Partnership led by Cleveland developer Mark Coffin is unsuccessful in renegotiating the loan terms, the developer who spent nearly 20 years creating the lakefront project may lose it to a foreclosure sale. Quay 55 has lots of company. Other HUD defaults or foreclosures in downtown Cleveland include, most recently, the Bingham Place Apartments in the Warehouse District, as well as the WT Grant Building in the Gateway District, the 1900 Euclid

Building and Walker & Weeks Building in the Campus District and the Statler Arms Apartments in the Theater District. Dan Wright, the attorney for Quay 55 Limited and Mr. Coffin, said a combination of the poor economy and too much development of too many rental properties over the last decade spurred Quay 55’s problems. Mr. Wright said Quay 55 also was developed to serve as the eastern anchor of the Campbell administration’s waterfront district, which is no longer in place. Moreover, the recently abandoned plans of the Cleveland-Cuyahoga County Port Authority to relocate from the mouth of the Cuyahoga River to the East 55th Street area — which would have diminished Quay’s lake views — “definitely hurt the project.”

Financing options nil Mr. Wright said Quay 55 Limited Partnership had tried to refinance its loan but could not replace or

restructure it amid the tight credit market. “Right now, we are negotiating a restructuring or a resolution of the situation with Lenox,” Mr. Wright said. “There have been no operational changes. We are looking forward to continuing.” Jeff Strole, an assistant vice president at Aspen Management, declined to comment on the talks or the company’s plans for the property. Aspen and Lenox have common ownership. Mr. Strole said Aspen is “dealdriven” and has bought other loans around the country. HUD records show another Aspen affiliate, Lenox Mortgage XII, purchased six defaulted loans at a HUD auction last spring. Documents recorded with Cuyahoga County do not disclose a sale price for the loan. HUD and its private contractor, DebtX, which auctions the loans, will not disclose the price of the mortgage until later this month.

OCTOBER 4-10, 2010

Solo status hasn’t helped Not everyone is as down on the downtown residential market as Mr. Wright. Robert Rains, a partner with John Carney in Landmark Management, which has converted four downtown complexes to lofts or condominiums, said downtown occupancy is “the best ever, although rates are down a little.” He said Landmark’s portfolio is about 94% leased and downtown rentals overall are in the mid 80% range. “Wow. Wow,” was Mr. Rains’ reaction when informed of the Quay 55 default. “It’s a great project, really well done. I feel really sorry it didn’t work out for the guys who did it.” Mr. Rains blamed Quay 55’s woes on its status as a loner on the lakefront, compared to the neighborhoods of apartments that transformed East Fourth Street and the Warehouse District downtown. “When we did Grand Arcade in 1992” in the Warehouse District, Mr. Rains said, “we had a hard time leasing because there were no other apartments around us. When other projects came in, we leased up.”

Mr. Rains said Quay 55’s isolated location — which make it attractive to some consumers and on paper to some owners — would keep him from trying to buy it. However, others are interested if Quay 55 becomes available.

‘It’s a great project’ Among that group is Doug Price, CEO of K&D Group, which earlier this year finished and fully leased the Apartments at Six Six Eight, a downtown property that takes its name from its Euclid Avenue address. “It’s a great project,” Mr. Price said of Quay 55. He said it also is attractive because it has room to add townhouses immediately east of it. Tom Yablonsky, executive vice president of nonprofit Downtown Cleveland Alliance who has worked on many downtown loft conversion projects, said each defaulted project had a particular drawback. For example, he said, the 1900 Euclid and WT Grant projects suffered after a key member of the development team, Skip Chodak, suddenly died. Bingham’s woes stem from construction problems, he said. “We don’t see these individual problems shaping the market,” Mr. Yablonsky said, noting at least one more conversion of an old building complex to new living units is in the wings. Chris Warren, Mayor Frank Jackson’s director of regional development, said the city should not be faulted if other developments have not taken root near Quay 55. He noted the Quay developers themselves have not approached the city to expand their project during the Jackson administration. Mr. Warren said the challenges of Cleveland apartment conversion projects are a symptom of the national and global economic slump and the lack of real estate capital that has dried up most new development. Moreover, Mr. Warren noted the apartment market is more pricesensitive now than it was five years ago, which has challenged some downtown apartment managers. “Will it rebound?” Mr. Warren asked. “I think it will rebound eventually. This is not just a Cleveland problem.” ■

ON THE WEB

Story from www.CrainsCleveland.com.

State settles antitrust suit COLUMBUS — The state of Ohio has settled its antitrust suit against Marsh & McLennan Cos. for $4.75 million, Ohio Attorney General Richard Cordray said. The suit, filed in Cuyahoga County Court in 2007, had accused Marsh of participating in a scheme with several insurers and their subsidiaries “by using false statements, artificially high price quotes and other artifices to feign competition among themselves while raising premiums above competitive levels” to the detriment of Ohio commercial casualty insurance buyers. In a statement announcing the settlement, the attorney general’s office said it had recovered more than $27 million as a result of the lawsuit against Marsh and the insurers.

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

OCTOBER 4-10, 2010

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Watch out

on’t count us among the parties appalled by last week’s surprise revelation that Cuyahoga County officials had kept quiet a $50 million contingency fund for the proposed medical merchandise mart and convention center in Cleveland. We actually will give the beleaguered county commissioners points for not revealing the depth of their pockets as they negotiated with property owners for sites that cleared the way for the project. It is unsettling to know, however, that a big chunk of that contingency money already is spoken for because of recent changes in construction plans that have upped the project’s cost by $40 million from the long-promised total of $425 million. Contingency funds are good to have in reserve in the event of the inevitable cost overruns that plague large construction projects. But in this case, the county already is earmarking for use a substantial amount of those contingency dollars before a shovel has even hit the ground. Because the project’s developer, MMPI Inc., has agreed to accept $8.5 million less in development payments from the county than had been negotiated, almost $19 million of the contingency fund remains uncommitted. It’s also likely that the portion of the county sales tax designated for the project will produce more money than county officials have estimated. So, now is not the time to panic. But, the big cushion county officials thought they had for the project suddenly doesn’t look so large anymore. Let’s say the project’s cost, now estimated as of last week at $465 million, misses that target by just 10% — not an unusual figure. That’s an overrun of more than $46 million. Poof goes the contingency fund, and then some. It’s imperative, therefore, that the new county officials who will assume oversight of this project with the change in county government that will occur in January get a grasp of its details quickly. They will need to keep in mind that Cleveland has waited more than two decades for a new convention center and deserves an attractive, first-class property for its patience. But they also will need to keep watch on the cost of the project so that it doesn’t become a mammoth sponge sopping up county tax dollars.

FROM THE PUBLISHER

New Ford, GM cars bound to take off

building better cars that actually are or how many years have you fellow exciting consumers. foreign-car owners moaned that And Ford, under the steady, no-nonyou wanted to buy an American sense guidance of a former Boeing engicar, but couldn’t bring yourself neer, never needed to deal with the conto, until they matched the quality of the ditions that came with the government flood of imports made and sold here? bailout funds. Instead, CEO Alan Mulally Well, I haven’t tested these new products, straightened the ship quickly and makes but it’s hard not to be enthused about sure that every Ford employee Ford and General Motors’ new carries around a small, laminated compact-car projects. BRIAN card with the company’s core The Chevrolet Cruze is made TUCKER guiding principles. He does, down the turnpike at GM’s and he’s quick to show you his sprawling Lordstown facility. It copy. looks good, and the designers So at the recent Paris auto thoughtfully have added a lot of show, Ford unveiled a redesigned nice “standard” features that Focus, its popular compact American car companies once model, with snazzy features like only included in “upsell” packWiFi, rear-mounted camera and ages. an improved Sync system that Finally, they get it. The Japanese includes text-to-voice capability, as well as companies, namely Honda and Toyota, a new four-cylinder engine. wreaked havoc in our marketplace by Derrick Kuzak, who heads the company’s building dependable, long-lasting cars global product development group, told that had many creature comforts built our sister publication, Automotive News, into the basic pricing package. After recently that Ford wants the new Focus losing immense market share and being to “exceed the appeal” of Honda, Toyota taken to the brink of failure during this and VW “with leading fuel economy, economic tsunami, General Motors is

technology never seen before in this segment, top driving qualities and craftsmanship and safety innovations.” That seems very smart to me, what with the baby boomers starting to become empty nesters who might be concerned about fuel costs but don’t want to shortchange their driving experience. I’m sure GM has the same aspirations for the Cruze. Given the importance of our regional auto supply industry, as well as the thousands employed directly by the automakers in local plants, watching these oncehidebound automakers reinvent themselves has been a refreshing change. Now, the question remains: Will the American consumer buy now, or wait until he or she is convinced of that one last factor, namely long-term quality? My bet is that Ford and GM will gradually win over their share of returning customers. I know that as a foreign car (built here) owner, I plan to try models from both carmakers when I’m in the market next. And that’s something I surely would not have written just a few short years ago. ■

THE BIG ISSUE Who do you blame for the present state of the economy?

Rude dudes

cene, Cleveland’s alternative weekly, last week ran as its lead story an interesting collection of quotes from Jimmy Dimora, Frank Russo and other characters ensnared in the federal public corruption investigation in Cuyahoga County. As you might expect from a feature headlined, “FBI Wiretap Uncensored,” its content wasn’t for the easily offended. But what was even more offensive than the language is the brazenness of the county officials caught on tape. It only proves that the housecleaning in county government can’t come soon enough.

LAUREN BOVEINGTON

DOROTHY BAUNACH

STEPHANIE FRALEY

RICH ROBERTSON

Akron

Cleveland

Monroe, Mich.

Cleveland

“Wall Street. … Once the stock market tanked, everything else started to fall with it.

“I blame us all. Everybody is responsible for the economy. We were spending more than we were bringing in. We were buying stuff we couldn’t afford.”

“The majority of our economic situation is due to the instability of people not knowing what the future holds. Consumers don’t want to spend money. Our current government policies are contributing to that.”

“I think everybody is to blame. … It’s a ‘me’ generation, you know what I mean? Everybody’s about ‘What can I do for me?’ as opposed to ‘What can I do to help the community around me?’”

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

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OCTOBER 4-10, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Cuyahoga Falls firm wound up over water pump’s potential

CAREY Roofing Corp.

PHOTO PROVIDED

Gravitational Energy Corp. of Cuyahoga Falls is ready to commercialize its Feltenberger Pendulum Pump, which is designed to make it easier to pump water or generate electricity by hand. The device is helping displaced Haitians. water out of a reservoir that had been infested with mosquitoes. Mr. Feltenberger and Gravitational Energy senior vice president Art Drentlau think other nonprofits and government agencies also will find value in the pump, which is expected to cost between $10,000 and $35,000, depending on the features a customer wants. Gravitational Energy aims to build relationships with hospitals, schools and orphanages in developing countries and has had conversations with the U.S. military, Mr. Drentlau said. The company expects to develop smaller, more mobile versions of the pump that could provide either clean water or electricity to charge batteries for soldiers in remote areas. “That’s one of the big problems with troops is carrying all that bottled water,” Mr. Drentlau said.

Tall order Gravitational Energy has even bigger ambitions for its biggest pendulum, which nearly reaches the top of J&J’s 28-foot-high ceiling. The device is a prototype for a machine

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Take a look at a swing set and you’ll get the idea behind the invention that is helping provide clean water to thousands of Haitians displaced by the earthquake that rocked the country in January. They won’t be the last people to benefit from the Feltenberger Pendulum Pump, according to inventor Bruce Feltenberger. His company, Gravitational Energy Corp. of Cuyahoga Falls, is ready to commercialize the machine, which is designed to make it easier to pump water or generate electricity by hand. The device consists of a 4-foot long, 55-pound pendulum that powers a pump attached to a water filtration system. Once the pendulum gets going, it’s easy to keep it moving — like pushing a child on a swing. Operating the machine requires so little strength that little girls can do it, said Bob Thompson, president of One Life Missions, which is managing three camps of Haitians displaced by the earthquake. Mr. Thompson said Gravitational Energy, which leases space in a machine shop owned by J&J Precision Machine Ltd., gave a pre-production model of the pump to his Harrison, N.Y.-based nonprofit earlier this year. He described the gift as “a godsend.” Though not an expert on pumps, Mr. Thompson said he knows of no other device that can produce so much clean water with so little effort. “I have not found anything that has this type of ingenious pumping mechanism,” he said. Today, with just three hours of pumping, the machine provides drinking water to 4,000 people in two camps the nonprofit manages in an inland area of Port-au-Prince, Haiti’s capital, Mr. Thompson said. Before, people often drank dirty, delivered water that is supposed to be boiled even for cooking purposes. A third camp used the machine to pump

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Mr. Feltenberger says could help power plants produce electricity more efficiently. The company uses compressed air to push the 18,000pound prototype pendulum, but the plan is to build a version that can run on other fuels. Messrs. Feltenberger and Drentlau, along with chief engineer Matthew Butrick, founded the company in July 2007. They started working in 2004 on early prototypes inspired by a pendulum Mr. Feltenberger saw 40 years ago at the Buhl Planetarium in Pittsburgh. They remain the company’s only employees, but that could change as Gravitational Energy grows. For now, however, any orders it receives would be filled by J&J and other Northeast Ohio machine shops that the company lists as partners on its web site. “We’d love to fill up the shops around here,” Mr. Feltenberger said. ■

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

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OCTOBER 4-10, 2010

Savings: Fear of even worse tumble a motivator continued from PAGE 1

â&#x2013; In one year â&#x20AC;&#x201D; between August 2009 and August 2010 â&#x20AC;&#x201D; the number of new savings accounts opened at Fifth Third Bank in Northeast Ohio climbed 46%, regional president Todd F. Clossin said. â&#x2013; And nationwide, after more than two decades of heading south, the personal savings rate â&#x20AC;&#x201D; a measure of how much after-tax income is saved â&#x20AC;&#x201D; is trending upward. The most recent federal data revealed the average American saved 5.9% of his or her income in July, down slightly from June but up four percentage points from 1.8% in July 2007 â&#x20AC;&#x201D; not long before the recession began. That is consequential and significant change, said Mark Schweitzer,

senior vice president and director of research for the Federal Reserve Bank of Cleveland. Last month, the National Bureau of Economic Research announced the recession had ended in June 2009, revealing it was 18 months long and the longest recession in six decades. Many in the finance sector say it changed us. The question remains: Is it change for good, or change for now?

Shock to the system Many might assume savings typically increase during recessions, but economic slumps often become times when people need money and wind up depleting their savings, Mr. Schweitzer said.

People are saving more in response to this recession than they have in the wake of any downturn since World War II, Mr. Schweitzer said, because this one delivered the greatest shock to peopleâ&#x20AC;&#x2122;s net worth. The net worth of all U.S. households averaged about 6.4 times their after-tax income in the second quarter of 2007, Mr. Schweitzer said. For example, a family that earned $50,000 boasted an average net worth of more than $300,000. Then the stock market and property values fell, and the net-worth multiple fell to 4.5 times a householdâ&#x20AC;&#x2122;s after-tax income in the first quarter of 2009, Mr. Schweitzer said. As home values plummeted and it became tougher to qualify for

home equity loans, people realized they no longer could rely on homes as their â&#x20AC;&#x153;piggy banks,â&#x20AC;? said Mark Tepper, managing partner and president of Strategic Wealth Partners, an investment advisory firm in Seven Hills. So people turned to saving to cushion themselves.

Low returns? No matter Like the aforementioned banks, Eaton Family Credit Union has seen â&#x20AC;&#x153;tremendous growthâ&#x20AC;? in its deposit balances â&#x20AC;&#x201D; most of it in savings vehicles, said Mike Losneck, CEO of the credit union, which is based in Euclid and has two other branches in Northeast Ohio, plus one in Arkansas and one in Illinois. Excluding an increase in deposits

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the Eaton credit union recorded when members of St. Paulâ&#x20AC;&#x2122;s Croatian Credit Union joined it after the latter was taken over earlier this year, Eaton Familyâ&#x20AC;&#x2122;s total deposits grew 14% from August 2009 to August 2010, Mr. Losneck said. Considering how interest rates have dropped but savings deposits still are increasing, Mr. Losneck said: â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s really an indication that the spending has stopped â&#x20AC;&#x201D; that (people) are starting to put money away, that theyâ&#x20AC;&#x2122;re less confident that theyâ&#x20AC;&#x2122;ll have a job. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s clear that Americans have been living on somebody elseâ&#x20AC;&#x2122;s money for a long time, and the things that have happened over the last two years have made people realize, at some point in our lives, we have to pay that back,â&#x20AC;? Mr. Losneck said. Over the past year, Integrity Federal Credit Union in Barberton has seen such increased interest among its customers in money market accounts, or tiered accounts that reward higher balances with higher interest rates, that it plans to offer the accounts for the first time in early 2011, president and CEO Robb Poore said. In addition, there has been â&#x20AC;&#x153;phenomenal interestâ&#x20AC;? in a promotion that offers Integrity members a 4.25% fixed credit card interest rate for the life of balance transfers if they close other credit cards and consolidate their debt, Mr. Poore said. â&#x20AC;&#x153;I think some people have seen a forever change in their earning power or their perception of their earning power, and theyâ&#x20AC;&#x2122;re trying to make adjustments accordingly,â&#x20AC;? Mr. Poore said.

Deaing with debt Peopleâ&#x20AC;&#x2122;s interest in reducing debt is clear in the â&#x20AC;&#x153;record-breaking monthsâ&#x20AC;? Huntington Bank has experienced this year in its refinancing business, said Mr. Walsh, its region president. Other financial institutions reported the same. The Federal Reserve is reporting what Mr. Schweitzer called a â&#x20AC;&#x153;rareâ&#x20AC;? decline in household debt as a percentage of disposable income, which is a measure of how much debt households carry in relation to their after-tax income. In June 2010, the Fed reported that all U.S. householdsâ&#x20AC;&#x2122; debt was 118.66% of total disposable income, the lowest percentage it has been since December 2004. In June 2009, the percentage was 123.96% and in June 2008, it was 125.07%. Rewind 30 years, and the figure was dramatically lower: 68.4% in June 1980. Mr. Schweitzer didnâ&#x20AC;&#x2122;t know, however, why household debt was decreasing and noted it could be the result of banks tightening lending or households opting not to borrow.

Scared into saving

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Every recession has its shocks, but the recent recession, Mr. Schweitzer said, â&#x20AC;&#x153;is a recession where youâ&#x20AC;&#x2122;re seeing significant change to household balance sheets.â&#x20AC;? A lot of people are â&#x20AC;&#x153;unusually affected,â&#x20AC;? he said. Joe Arnold sees the impact in the behavior of his clients. â&#x20AC;&#x153;Fear is a great motivator,â&#x20AC;? said Mr. Arnold, president of Foundation Wealth Advisors LLC in Westlake. â&#x20AC;&#x153;People are scared, so theyâ&#x20AC;&#x2122;re putting money away.â&#x20AC;? Questions Mr. Arnold didnâ&#x20AC;&#x2122;t hear in early 2008 have become popular inquiries: â&#x20AC;&#x153;What safety vehicle should I be in? Should I be in money markets? Should I be in bonds?â&#x20AC;? Foundation Wealth Advisors increasingly is helping people draw continued on NEXT PAGE â&#x17E;¤

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9/30/2010

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

GOING PLACES JOB CHANGES

Kete to president, CEO.

ARCHITECTURE

MARKETING

DLZ OHIO INC.: Jim Seiple to director of architecture.

POINT TO POINT: Greg Thomas to creative director.

FINANCE

NONPROFIT

FIRSTMERIT CORP.: Brian Karrip to executive vice president, director of specialized banking.

FUND FOR OUR ECONOMIC FUTURE: Molly Johnson to communications manager.

OHIO COMMERCE BANK: Brian Smith to credit analyst.

OLD STONE EDUCATION CENTER: Traci E. Felder to executive director.

LEGAL

ORIANA HOUSE INC.: Illya McGee to vice president of correctional programs.

Seiple

DWORKEN & BERNSTEIN LPA: Joshua Strickland to associate.

REAL ESTATE

MANUFACTURING HORSBURG & SCOTT: Christopher up rudimentary budgets. “We had to kind of force that upon our clients in the past,” Mr. Arnold said. “Now people are talking about living on a budget more. That tells me that people are more conscious about their spending habits, what they have coming in compared to what they have going out.” Many people today speak anecdotally of relatives who continue to save and live frugally after enduring the Great Depression. Though the two downturns really aren’t comparable — after all, unemployment was 30% in Cleveland during the Great Depression and that crisis lasted a decade — many predict that some changes people have made during the Great Recession will stick. Bankers expect savings rates to stay up around 6%, a figure they note produces more long-term stability but slows economic recovery.

OCTOBER RESEARCH CORP.: Chris Crowell to editor, The Title Report.

Strickland

McGee

SERVICE DIRECT RECRUITERS INC.: Steve Berris to project coordinator.

TECHNOLOGY THE KARCHER GROUP: Giselle Bardwell to senior search engine marketing strategist; Julie Kephart to senior art director.

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

Piling the family into the car and driving to the Grand Canyon? Am I wrong to think you’re supposed to relax on vacation?

Lingering wants People’s optimism, or lack thereof, will influence whether they continue to save, Mr. Schweitzer said. And right now, people’s pessimism about their personal financial situation remains the highest it has been since the late 1970s, according to data from the latest Thomson Reuters/University of Michigan Surveys of Consumers. Stock market performance, too, affects savings, because many people tend to feel wealthier when stocks are up and will keep money in safer places when they’re down, said Mr. Walsh of Huntington Bank. But people’s behavior is unique to each individual, he noted. Those who have jobs, for example, may focus on saving for uncertain times, whereas those who don’t may not or cannot. Over time, uncertainty becomes a new normal and people do resume spending, Mr. Walsh said, though he doesn’t anticipate that happening for “a while longer.” Mr. Walsh’s intuition is backed by the findings of the August Reuters/ University of Michigan survey, which noted that consumers “expect lackluster income and job growth for an extended period of time.” “This ‘new normal’ outlook has encouraged consumers to pare down their debts and increase their reserve funds,” a report on the survey states. Most in the finance sector hope the collective consumer has learned its lesson. Some are skeptical, though. “I don’t think that the ‘we need it now’ mentality will change,” said Mr. Losneck of Eaton credit union. “You see that in the borrowing right now. There are still members that have to have that Harley-Davidson, that have to have that boat. People are still going to want all the toys.” ■

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CRAIN’S CLEVELAND BUSINESS

OCTOBER 4 - 10, 2010

INSIDE

17 ADVISER: MANY CLIENTS’ NEEDS NOW MORE GLOBAL.

MANUFACTURING M

n o s a e s n o t i n t e c e m el n r g e n v i o h g c t i t a n w a s s r a e h c d r t a i e e v p l e r y e n r v t a e s h f t u Ind closely reaches d o o more m com rain. c @ r gle dshin ■ LER HING S N DA y by Stor

anufacturers may be by nature an industrious, can-do sort fond of a laissezfaire ideology, but it’s doubtful they’ve ever been more antigovernment than they are today — or, perhaps, more filled with hope that things are about to swing their way. From cap and trade to “Obamacare” and the nation’s growing national debt, they have a list of grievances extending from Main Street to Washington, and many are in a throw-thebums-out sort of mood. “It’s insane,” said Brendan Slabe, vice president of sales for Slabe Machine Products in Willoughby, of government spending. “And if we, as businesses, don’t vote literally all these people out — all of them — I think we are in for one rough road, as this administration almost seems intent on ensuring that all manufacturing is done overseas.” Mr. Slabe and others like him hope the fall elections will bring a new crop of legislators, who will slash and burn their way to a smaller government with a balanced budget. Their sentiments sometimes even touch on subjects such as military spending, areas where even anti-government conservatives did not previously tread. “If they need to cut it — then cut it,” said Roger Sustar, CEO of Fredon Corp., a Mentor-based See VOTE Page 16

Accessing international markets can open up new possibilities By AMY ANN STOESSEL astoessel@crain.com

Presidential initiative aims to double exports within five years

performance blenders for home and commercial use that is based in Olmsted Falls. But reaching international markets can translate into opportunity — a possibility that should not be ignored, according to Ms. Berg, whose company exports to more than 80 countries, and others in Northeast Ohio’s manufacturing sector. “In the U.S., there’s a need (for products) that’s maxed out by the

resident Barack Obama’s National Export Initiative aims to double exports within five years — a goal that conflicts with the comfort level of some manufacturers, who see aiming beyond U.S. borders as a proposition fraught with uncertainty. Jodi Berg understands. “The reason most companies don’t export more is because of the unknown,” said Ms. Berg, president of Vitamix Corp., a maker of high-

growth of our population,” said Randy Nemetz, director of global business development for Magnet Inc., a manufacturing advocacy group. By contrast, there are markets where populations are surging and middle classes are thriving — and tapping into those markets can yield benefits for companies that do and for the economy as a whole. “As we expand our export base,

we’re building a production base,” Mr. Nemetz said. At present, Northeast Ohio is importing about three times more than it is exporting in terms of total dollar value — a ratio that has held steady over the past three years, Mr. Nemetz said. According to statistics from the World Institute for Strategic Economic Research, the total value of exported goods from the Cleveland customs district for the first six

months of 2010 was $11.5 billion compared to $31.6 billion in imports. For all of 2009, the value of exports locally totaled $21.3 billion compared to $55.8 billion in imports. For companies that already are adding to those export numbers, there is no question that President Obama has the right idea in pushing an export initiative.

A world of opportunity Christopher J. Messina, vice president of sales and projects for Rad-Con Inc., a manufacturer of See EXPORTS Page 16

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Exports: Risk great in standing pat Vote: S corps face challenge continued from PAGE 15

industrial furnaces in Cleveland, said a benefit to accessing international markets is that it helps to dampen down the cycles that are notorious for affecting capital equipment suppliers. Indeed, the value of one deal with a Steel Authority of India plant was worth more than one year of Rad-Con’s sales, Mr. Messina said. The bulk of that project was made and shipped in 2009, when the United States still was reeling from the effects of the recession. At present, 90% of Rad-Con’s business is in exports, a shift that first started during the recession of the 1980s and continued post-9/11, when the company “felt it critical to go into the export market in a big way,” Mr. Messina said. “I don’t even know how to do a sales call in English anymore,” joked Mr. Messina. Rad-Con, a $10 million firm, was one of 22 companies nationwide in 2010 to receive the Presidential “E” Award for contributions to growing U.S. exports. The award is the highest U.S. government honor for increasing exports. China, India and Taiwan are among the markets in which Rad-Con has done business, and contracts signed last year added Indonesia, Thailand and Vietnam to that list. “We would have been out of

business if we weren’t exporting, or a much smaller company,” Mr. Messina said. According to a Brookings Institution report issued this year, exports in 2008 contributed more than 13% of the gross metropolitan product in Cleveland, supporting 110,747 positions and ranking it 20th nationwide in terms of export jobs. At Vitamix, its president, Ms. Berg, said nearly one-half of the 400 people who work for that company touch the manufacturer’s international business. The company, which did $100 million in sales in 2009 and also received the Presidential “E” Award in 2010, first started making moves into international markets in the 1980s and ’90s, with its commercial business serving as a catalyst. By last year, 30% of the blender maker’s business was in exports, and international sales had increased sixfold since 2005. Ultimately, understanding the market and its customers is essential, as is taking advantage of resources that help foster a familiarity with a target market, Ms. Berg said. “You certainly can do without, but it could take you a lot longer and your risk is significantly higher,” she said.

Entering the unknown While there can be a slew of challenges and uncertainties

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“We would have been out of business if we weren’t exporting, or a much smaller company.” – Christopher J. Messina vice president of sales and projects, Rad-Con Inc.

Full slate of taxing issues

involved in looking beyond U.S. borders, “the risk of not exporting is higher,” said Rad-Con’s Mr. Messina. Not surprisingly, Mr. Messina is strong advocate for free trade. “When you put tariffs on something coming in, it just creates a poisonous atmosphere,” Mr. Messina said. He’s particularly critical of steelrelated restrictions on the ExportImport Bank of the United States, the country’s official export credit agency, saying they create an uneven playing field for competing on a world stage. “I personally am carrying a torch for U.S. companies that should be exporting,” said Mr. Messina, who has been to Washington, D.C., several times this year and written a letter to the International Trade Commission. A report last month to the president on the National Export Initiative made a number of recommendations to meet the president’s exporting goal. Among them was increasing export credit and raising awareness of export opportunities and government assistance for small and midsize companies. Sue Whitney, office director of the U.S. Commercial Service Ohio, Cleveland U.S. Export Assistance Center, along with four other trade specialists in her office, is part of the network of export resources in Northeast Ohio. Her office recorded about 2,000 export counseling sessions to nearly 700 companies in this past fiscal year, which ended last week. Ms. Whitney said while Brazil, Russia, India and China are typically considered to be key growth markets, companies new to exporting generally may be better off starting in countries with more similar business practices, such as those in Western Europe, Canada and Mexico. However, she stressed that the uniqueness of every market and every country make it difficult to pinpoint any one specific challenge universal to the exporting process, which is why her office works one on one with companies to arrange connections to international markets. “Companies have learned that the best way to survive during tough times is to diversify,” she said. ■

Such attitudes illustrate the degree to which cost-cutting proponents are willing to go. Bill Ridenour, an investment banker in Chagrin Falls who works primarily with plastics companies, said if he had his way the federal government would eliminate entire sectors such as the departments of education and housing and urban development. “In this next election, I think any incumbent who’s not actively engaged in an effort to shrink the federal government should be thrown out. I don’t care if he’s a Republican or a Democrat,” Mr. Ridenour said. “I want wage and fringe freezes on every single government employee. … Our economy is no longer a cornucopia; it is no longer expanding at a rate that can support expanding government spending.” On the tax front, many manufacturers argue that allowing the Bush tax cuts to expire for so-called “wealthy” Americans is really putting a tax on manufacturers and other small businesses. Small and midsize manufacturing companies often are formed as S corporations, so the entity’s income is taxed as the owners’ income. At the Precision Metalforming Association in Independence, about 60% of the group’s 1,100 North American members are either S corporations or similarly taxed limited liability companies, said association president Bill Gaskin. By and large, those members see a tax on wealthy individuals as a direct tax on their businesses, and therefore one that is bad for the economy, Mr. Gaskin said. “I know companies that are as large as 500 employees that are S corps — and, of course, the owner makes $250,000 or more. He’d better, or that company is going out of business,” Mr. Gaskin said. With health care, many worry that requiring insurance companies to insure more people will drive up their health care costs. Some already are citing health care insurance rate increases of as much as 15% this year, and they worry that the new health care law is the cause and that rates only will continue to rise. Some, such as Mr. Sustar, who often is a sounding board for politically active manufacturers, want

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the current health care bill repealed and replaced with a simpler piece of legislation that contains only popular key provisions, such as not allowing insurance companies to deny coverage because of preexisting conditions.

Wanted: ‘Clear-headed people’ More than anything, manufacturers want a government that makes no bones about being probusiness, which for many means a government that gets out of the way. “We need clear-headed people that believe in free enterprise,” said Mike Gordon, owner of Tendon Manufacturing in Solon. “There is one reason and one reason only this recovery is so timid — it is the constant barrage coming from Washington that leaves us all uneasy.” One local political favorite of manufacturers is Jack Schron, CEO of toolmaker Jergens Inc. on Cleveland’s East Side. Mr. Schron is a Republican candidate for Cuyahoga County Council and a proponent of leveraging Cleveland’s strong medical industry with manufacturers that can make medical devices. Manufacturers, however, say they’ll listen to any candidate with solutions, and that they do not universally oppose Democrats. “If the Democrats want to win in November, all they’d have to do is extend the Bush tax cuts,” Mr. Sustar said. Mr. Gaskin even went so far as to credit local Democratic U.S. Sen. Sherrod Brown for helping to push through a small business incentive package that the association backed and which President Obama signed into law last Monday, Sept. 27. He said legislators such as Sen. Brown and Tim Ryan, a Democratic congressman from Youngstown, have shown themselves to be in support of manufacturers. “I think Ohio’s representatives are more sophisticated about manufacturing than some from other states,” Mr. Gaskin said.

Calling for a revolution Democrats, however, may have a hard time because of the down economy. “(Gov.) Strickland can’t control a lot of our problems created by the federal government, but sadly he will most likely suffer the fallout,” predicts Glen Roberts, president of Cleveland Vibrator Co. In other races, manufacturers disagree over whether Democrats can be dislodged. For example, businesses generally oppose U.S. Rep. Dennis Kucinich and favor his rival, Republican Peter Corrigan. But, while many hope Mr. Corrigan can pull off the upset, others are less confident. “That’s probably hopeless,” Mr. Gaskin said. “The last time around we thought we had a candidate with a good chance against Kucinich. But Dennis runs his district well, he has good constituent services and so he keeps getting re-elected.” Still, this could be the year when even the impossible happens. The Tea Party is a new development in American politics — one that’s predicted to help bring about change by some manufacturers. Asked what he most wants to see happen in November, Mr. Sustar had a quick answer: “A revolution.” ■

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Study: Magnet funding gets results

THEINTERVIEW RICK FEDOROVICH Managing partner Bober Markey Fedorovich By AMY ANN STOESSEL astoessel@crain.com

ick Fedorovich’s firm gets to work with a wide range of manufacturers, counseling them on issues ranging from the day-today running of the business to mergers and acquisitions. Nearly 40% of the client base of the 50-year-old business advisory services firm, Bober Markey Fedorovich, works in manufacturing. “What we find is that ... many of their needs are now more global,” said Mr. Fedorovich, who is managing partner for the Akron company.

might include paying attention to any change of behavior among customers. He said the economic slump has “caused people to take a strong look at their balance sheet and clean it up.” Inventory “is something you’ve got to stay on top of,” Mr. Fedorovich said, which is where a good relationship with vendors and customers comes in. And while people are slow today to pull the trigger on investments, manufacturers who are able would be wise to pursue expenditures on fixed assets and capital improvements. “It’s a good time to put it in (the business) and prepare for the ramp-up,” he said. “Cash is king,” Mr. Fedorovich

“It’s really an interesting time right now. ... The world changed like many people have never seen it change.” – Rick Fedorovich Mr. Fedorovich recently answered questions regarding trends he’s seeing in the manufacturing sector and what he anticipates in the future. Q: What are some of the top issues that you are seeing among manufacturers? A: “It’s really an interesting time right now … the world changed like many people have never seen it change,” Mr. Fedorovich said. When things were going well, companies tended not to take note of how they were doing business. Now, everyone should have taken a look at how they should tighten up their operations, taking into consideration all stakeholders, including vendors and customers. “That’s not been an easy task for anybody,” he said. It’s time now to reset for a new normal and prepare to move ahead, he said. “There’s a bit of uncertainty that exists out there.” That uncertainty, Mr. Fedorovich said, is manifesting itself in a number of ways, from companies using temporary employment and overtime to renting space. One key to navigating that uncertainty is communication, Mr. Fedorovich said, both with customers and vendors. Q: Moving forward, what types of actions should manufacturers be taking to prepare for the unexpected? A: One of the most important things a manufacturer could do right now is to have a good working relationship with its financial institution. Also, a company should take a look at its own credit policies, which

said. “It’s really kind of come back to its simplest form.” Q: What are some of the lessons that manufacturers can take away from the recent past?

Group hopes data will prove worth to state, which finances some efforts By DAN SHINGLER dshingler@crain.com

Magnet, the Cleveland-based manufacturing and advocacy group, has just received a study of its economic impact on Northeast Ohio and, as far as report cards go, the organization thinks it got some good marks. Now it hopes the data will be enough to keep it a star pupil in the eyes of the state of Ohio — which provides about a quarter of the organization’s financing and is itself facing a huge budget deficit next year. “Everyone is trying to make their case, I’m sure,” said Magnet CEO Dan Berry, about the importance of the data in next year’s quest for state money. “We think we’ve made a better case than most.” The data show the state gets some bang for its buck by supporting Magnet. In the years 2005-2009, Magnet’s data show the organization had a total economic impact

of $775.8 million. The latest Magnet report is the result of a five-year federally financed study of the organization’s results, including interviews with clients, by Floridabased Turner Marketing. The total impact of Magnet is the direct result of the organization’s work to create jobs and promote investments, as well as the spin-off effects of those activities, said Magnet chief operating officer Fatima Weathers. In the five-year period, Magnet worked with client companies to create 5,604 jobs and to raise $157.3 million in investments, according to the study. Whether the findings will be enough to keep Magnet’s state support from dropping can’t be determined. A spokesperson for the Ohio Department of Development said the department’s own budget for next year has yet to be determined. Already, Magnet has seen some decreases in state support as state revenues have fallen during the

A: Companies should take a cue from China and find something that separates them from the competition, both nationally and globally, Mr. Fedorovich said. Companies also should embrace the idea of adapting lean processes, internally focusing on what they do and how to enhance proficiency. “Change isn’t always bad,” he said. Q: Are there unique issues that Northeast Ohio’s manufacturers are facing? A: Mr. Fedorovich stressed that Northeast Ohio has a great work force as well as outstanding higher education institutions and natural resources. “I happen to think this is a great place to do business,” he said. However, despite the region’s “phenomenal resources,” Mr. Fedorovich said the region must effectively use them. “Sometimes we just don’t seem to be as well-coordinated as we need to,” he said of the public and private sectors. Q: Other thoughts on the manufacturing sector? A: Now is the time for manufacturers to look at how they do business and how they can grow their business, according to Mr. Fedorovich. “The view of business now in my opinion has to be global,” he said. “No matter what aspect of your business you’re looking at, it really is a world view you have to take.”

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economic downturn. The state provided Magnet with $2.7 million in funds in 2008, before the recession hit, but only $1.9 million this year, said Magnet spokesman Greg Krizman. Magnet only can wait and see, but in the meantime it is at least keeping some of its local supporters happy, including Swagelok CEO Art Anton, who currently chairs Magnet’s board of directors. “The numbers show there is no question Magnet has had a very positive impact on the region’s manufacturing community,” Mr. Anton said in an e-mail to Crain’s. “The documented audit reveals hundreds of successful engagements with hundreds of manufacturers of all sizes and industry groups over the past five years,” Mr. Anton stated. “I don’t see how anyone can look at the total economic impact of $776 million and not be impressed. I’m certain we can look for even greater impact numbers from Magnet in the coming years.” ■

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

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OCTOBER 4-10, 2010

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

Name of firm Address Rank Phone/Web site

Full-time local employees

Specialties

Top local executive Title Creative director

Nestle, John Deere, Kimberly-Clark, Sherwin-Willams, BRP, HSBC, American Greetings, Karo

Shopper marketing, consumer packaged goods/retail

Fred Bidwell executive chairman Katie Butler

1940

Goodyear, Dunlop and Kelly Tires brands, KraftMaid Cabinetry, Carter Lumber, Tremco, LP Building Products, Choice Hotels, Akron General, Liquid Nails

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

Jack DeLeo chairman, CEO Nick Betro

1937

ADT, DuPont, Arby's, Sherwin-Williams, The UPS Store, Owens Corning, Things Remembered, Invista, University Hospitals, Oasis

Strategic planning, branding retail activation, integrated creative

Jennifer Deutsch executive vice president, general manager Mark Masterson

Liggett Stashower LS Brand Building, 1240 Huron Road, Cleveland 44115 (216) 348-8500/www.liggett.com

1987

AkzoNobel, Boral Composites, Boise, Barrette Outdoor Living, Catholic Diocese of Cleveland Foundation, Forest City, Hospice of the Western Reserve, Liquid Wrench, Robert Bosch Tool Corp.

Building brands for brands that build

Mark Nylander CEO David Moore

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

1974

Alside, Aultman, Bank of America, Gerber Foods, Goodyear, Guidestone Financial, Nickles Bakery, Parker Hannifin, Republic Steel, RTI, Shearer's Foods

Dick Maggiore Strategic brand positioning and execution president, CEO Jeff Monter

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

1992

Vitaminwater and Fuze, Fazoli's, Cleveland Hopkins International Airport, RTA, Great Lakes Brewing Co., Rainbow Babies & Children's Hospital, The Cleveland Museum of Art, Smuckers

Helping a handful of premiere global, national and regional brands rise above the blah blah

Tim Brokaw Gregg Brokaw co-CEOs Steve McKeown

DigiKnow Inc. 3615 Superior Ave. E., Cleveland 44114 (216) 325-1831/www.digiknow.com

1995

Ohio Tourism, Cleveland Browns, Downtown Cleveland Alliance, Steris, Scientific Games/MDI, Nestle, US Open, World Equestrian Games, Waste Management, FirstEnergy

Interactive advertising strategy, creative, online branding, web development, custom web apps, mobile marketing

King J. Hill president John Katila

Arras Group 50 Public Square, Suite 444, Cleveland 44113 (216) 621-1601/www.arrasgroup.com

1991

Alcoa, AkzoNobel, Procter & Gamble, AmRep Inc., Hershey's, Gojo, Home and automotive industry specialists, Jim Hickey MasterLock, Raybestos, Explorys, Moreland Partners, Dakota president interactive marketing, public relations Software, Paramount, Smithers Terri Pacifico

Melamed Riley Advertising 1468 W. Ninth St., Suite 440, Cleveland 44113 (216) 241-2141/www.mradvertising.com

2004

The MetroHealth System, Vitamix Corp., FMC Corp., Lake Erie Shores & Islands, Arizona Tile, CMI, Ohio University, Marketplace Events

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

Sarah Melamed president Rick Riley

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

1982

Sherwin-Williams, COSE, Fauquier Health, United Way, FlavorSeal, Schindler Elevator

Creative, media, analytics, interactive, public relations and social media

Mark Goren president Greg Thomas

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

1992

Sales promotions, consumer, sales incentives, merchandising, fulfillment, advertising, media

Richard Kenney COO Russ Kern

Keathley Advertising 57 E. Market St., Suite 3, Akron 44308 (330) 253-1004/www.keathleyad.com

1995

GE, Washington University of St. Louis, Americhem, Senders Pediatrics, Road Runner Akron Marathon, Stewart's Caring Place

Branding, integrated marketing, strategic planning, public relations, digital, social and emerging media

Tom Keathley president

Year founded Representative clients

Malone Advertising 388 S. Main St., Suite 410, Akron 44311 (330) 376-6148/www.malonead.com

225

1943

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

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

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Business lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Numbers as of June 30, 2010

RESEARCHED BY Deborah W. Hillyer

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

Name of firm Address Rank Phone/Web site

Full-time local employees

Year founded

Representative clients

Specialties

Top local executive Title

Rosetta Marketing Group LLC 3700 Park East Drive, Suite 300, Beachwood 44122 (216) 896-8900/www.rosetta.com

404

1988

Nationwide, Johnson & Johnson, OfficeMax, Borders, Genentech, AOL, Allergan, AT&T, NBC Universal, Marriott, Fifth Third Bank, Sunglass Hut, Hallmark, Abbott, AARP, National City

Consumer products, retail and technology, health care, financial services, B2B and emerging markets, travel and hospitality

Brad Wertz president

Marcus Thomas LLC 24865 Emery Road, Cleveland 44128 (216) 292-4700/www.marcusthomasllc.com

100

1937

Nestle, MTD, Diebold, Tarkett, Ohio Lottery, Swagelok, Akron Children's Hospital, Truseal, Bendix, Johnsonite

Integrated marketing, communications planning, primary and secondary research

James B. Nash managing partner

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

2002

Kraft Foods, Post Cereal, Gallo Wines, Wegmans Food Markets, Cadbury

Shopper marketing, consumer promotions, event marketing

Patti Conti president, CEO

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

2001

Farmers Insurance, Verizon Wireless, American Family Insurance, ONDCP, U.S. Army, National Guard, University of Cincinnati, U.S. Marines, Nationwide Insurance, AT&T, Walmart, Allstate, K-Swiss

Delivering integrated marketing campaigns into high schools and state high school athletic associations across the country

Peter Fitzpatrick president, cofounder

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

1994

American Greetings, Dorel Juvenile Group (Safety 1st), Downtown planning, market research, advertising, Akron Partnership, Parker Hannifin, PreGel USA, SummaCare, Team Strategic marketing, sales promotion, graphic design NEO

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

1999

Cedar Point, Prestolite Performance, The American Liver Foundation, Husqvarna Viking, Pfaff, Vintage Development Group, Ideastream Consumer Products

Integrated marketing agency; web, graphic design, Jason Therrien interactive media, video, public relations, social president, CEO media

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

2003

Positively Cleveland, Microsoft, Cleveland Clinic, CRESCO, Team Wendy, Rohrer, American Roll Form, Lilly Tremont

Integrated strategic marketing. Think-strategic planning, usability, market research; Design-web, print, environmental. Engage: e-marketing, public relations, search.

Andrew Halko CEO

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

1998

Marketing and brand advertising, corporate identity, media planning/buying, interactive/web, TV and radio, in-house editing, health care

Randy Godding president

Linkmedia 360(2) 4700 Rockside Road, Suite 310, Independence 44131 (216) 447-9400/www.linkmedia360.com

2004

Fortune 1000 companies

Lead generation, pay-per-call, pay-per-text, search engine marketing and mobile marketing

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

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

2001

Smithfield Foods, Reynolds Packaging Group, Domino Foods, Schwan's Food Service, Duck Tape Brands, Backyard Discovery, Schwebel's Baking Co.

Full-service online marketing agency: website strategy and design, email marketing through Silverpop partnership, SEO/SEM, banner advertising

Mark Vitullo partner

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

1984

ACRT Inc., Akron Area YMCA, Akron Metropolitan Housing Authority, Brand development, market positioning, web Buckeye Corrugated Inc., Edison Innovation Foundation, Steris enabled communications, advertising packaging Corp., Welty Building Co.

Steven L. Caler CEO

Crowl, Montgomery & Clark 123 Wilbur Drive NE, North Canton 44720 (330) 494-6999/www.crowlinc.com

1959

Continental Tire the Americas, General Tire, Ken-Tool, Alside, Pro Football Hall of Fame, Ultimate Jet Charters, Dutchman Hospitality

Digital media, print advertising, public relations, marketing, web design, media buying, social media, trade shows

Rod McGregor, president; Jeff Crowl, CEO

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

1997

The Timken Co., Progressive Insurance, Veyance Corp., Akron Children's Hospital, Oldham Kramer Professional Legal Services, Mercy Medical Center, Malone University

Strategic marketing communications plans, executing tactics on existing plans, writing

Sue Grabowski president

Information is supplied by the companies unless footnoted. (1) Numbers as of June 30, 2010. (2) Formerly National Yellow Pages Media LLC and YellowWord Interactive.

Keeven White president

RESEARCHED BY Deborah W. Hillyer

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

Name of firm Address Rank Phone/Web site

Full-time local employees

Year founded

Representative clients

Specialties

Top local executive

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

1952

A. Schulman, AkzoNobel, Dentsply, Diebold, Energizer, Exide, Forest City, GE Lighting, Jones Day, Kelly Services, Lubrizol, NetJets, UnitedHealthcare

Investor relations, crisis communications, customer communications, media relations, digital communications, health care, energy

Scott Chaikin chairman, CEO

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

1994

Calfee, Downtown Cleveland Alliance, Gunlocke, Huntington National Bank, Hylant Group, Lincoln Electric, Moen, SherwinWilliams, Tarkett, Vita-Mix, Walter & Haverfield

Media relations, marketing communications, interactive, business and reputation management, creative services

Robert F. Falls president, CEO

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

1996

Diebold, Wausau Paper, Smithers-Oasis, Forza Stone, OneCare Products, GrafTech, Parker Instrumentation, GE, AmTrust Financial Services, AMT Warranty, Edetech IG

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

Janice S. Gusich president

Fleishman-Hillard Inc. 127 Public Square, Suite 5200, Cleveland 44114 (216) 566-7019/www.fleishman.com

1999

Public relations and digital communications

Greg Connel, sr. vice president, partner, general manager

Stevens Strategic Communications Inc.(2) 1991 Crocker Road, Suite 500, Westlake 44145 (440) 617-0100/www.stevensstrategic.com

1976

Eriez, Automatic Door Manufacturers Assoc., Cleveland Furniture Bank, Lancaster Colony, Ghent, Brush, Waddell, King Nut

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

Edward M. Stevens president

Landau Public Relations 700 W. St. Clair Ave., 4th floor, Cleveland 44113 (216) 696-1686/www.landaupr.com

1983

MeadWestvaco, Daimler Trucks North America LLC, Giant Eagle, Kichler Lighting, Things Remembered, Fund For Our Economic Future, Cleveland Plus Marketing Alliance

Corporate communications, media and community relations, product marketing support, crisis management

Howard Landau president

Fahlgren Mortine Public Relations(3) 1100 Superior Ave, Suite 1600, Cleveland 44114 (216) 781-2400/www.fahlgrenmortine.com

1925

Sherwin-Williams, Leggett & Platt, Brush Engineered Materials, Scentsy, Kroger, Kidde, Elmer's, TransDigm, Cliffs Natural Resources

Reputation management, marketing communications, investor relations, publicity/ media relations, branding, social media

Aaron Brown, vice president, managing director

Roop & Co. 925 Euclid Ave., Suite 650, Cleveland 44115 (216) 902-3800/www.roopco.com

1996

KeyBank, Kirtland Capital Partners, Ohio Aerospace Institute, RPM International Inc., Sports Construction Group, Cleveland Thermal LLC

Marketing communication, public relations, financial communication, graphic design

James J. Roop president

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

1986

ASW Global, Care Services, Color Guild, Diabetes Daily, Gasco, Strategic marketing and public relations firm — James B. Homax, Kent State University, Lithonia Lighting, Plaza Group, consumer, retail, health care, insurance, Sweeney Yube, Westfield Shoppingtowns, ZymeAway environmental and franchise specialty practices CEO

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

1993

Cleveland Marathon, Akron Zoo, Lorain Public Library System

Marketing, advertising, public relations for notfor-profit organizations

Robert Zajac principal

Lief & Karson Communications 23533 Mercantile Road, Suite 118, Beachwood 44122 (216) 831-3767/www.liefkarson.com

1993

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

Lilli Lief Harris Crickett Karson managing partners

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. Business lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Numbers as of June 30, 2010. (2) Formerly Stevens Baron. (3) Formerly Edward Howard.

RESEARCHED BY Deborah W. Hillyer

RECAPPING CRAIN’S 2010 EMERALD AWARDS Crain’s Cleveland Business on Sept. 23 honored those Northeast Ohio individuals and companies most committed to sustainability and its “triple bottom line” — people, planet and profits — at the newspaper’s second annual Emerald Awards. The event, held at the Cleveland Museum of Natural History, was sponsored by Chardonbased Fairmount Minerals and Cleveland.com. David Beach, director of the GreenCityBlueLake Institute at the natural history museum, served as the keynote speaker and told the audience, “The most successful and innovative businesses pay attention to the triple bottom line.” The winners included Ruffing Montessori School; Doty & Miller Architects; BaldwinWallace College; Cuyahoga Community College; the Cleveland Clinic; Taylor Cos.; Shearer’s Foods; and Lube Stop Inc. Pete Accorti, president of Talan Products, a manufacturer located in Cleveland’s Collinwood neighborhood, was honored as the “Green Lantern” award winner for spearheading the company’s sustainability efforts. “You all have found the links between people, planet and profits,” said Kristin Lewis, communications and public relations manager for sustainable development at Fairmount Minerals.

JASON MILLER PHOTOS

LEFT: Christine Vernon, Birce Nash and Cheryl Combs of the Cleveland Clinic. RIGHT: “Green Lantern” award winner Pete Accorti, the president of Cleveland manufacturer Talan Products, addresses the crowd.

LEFT: Rick Parker of Brandstetter Carroll, Holly Harlan of E4S, and Gordon Maas and Carol Provan of Ruffing Montessori School. RIGHT: Crain’s technology reporter Chuck Soder with Kathy Gatto and Linnea Fox of the Hospice of the Western Reserve.

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OCTOBER 4-10, 2010

Amid tepid forecast, Ford looks to pull back on dealerships By DAVID PHILLIPS and JAMIE LAREAU Automotive News

Ford Motor Co. wants to reduce its U.S. dealership ranks by another 10%, or 300 outlets. At the end of July, Ford had an estimated 3,338 U.S. dealers, including 1,189 dealers with Lincoln franchises. With industry sales volumes forecast to rebound slowly, Ford and

Contact: Phone: Fax: E-mail:

Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com

other automakers want to rationalize and improve the profitability of their sales networks by consolidating dealerships. Ford aggressively has restructured to operate profitably at current sales volumes and adapt to consumers’ shift from big trucks and SUVs to cars and crossovers. Ford also is shuttering the Mercury brand by the end of the year, putting pressure on some of the

company’s 261 standalone Lincoln Mercury dealerships. There are no Mercury-only stores. “The dealers are full partners in every decision the company makes,” Jim Farley, Ford’s group vice president for global marketing, sales and service, said at an investor conference in San Francisco. “When you are trying to consolidate your network from 6,000 down to 3,000,

the dealers are on your side, and they will help you participate in the consolidation.” Because Ford’s dealer relations have improved in recent years to an all-time high, Mr. Farley said, the company is in a position of strength to encourage consolidation. At the same time, the value of many Ford dealerships has rebounded this year, so some dealers may be reluc-

REAL ESTATE

tant to give up a franchise. Separately, Mr. Farley said Ford plans to make its premium EcoBoost engines with turbo-charging the core powertrain across all model lines. Until now, Ford has said it wants to offer EcoBoost in nearly all models as an optional engine. The EcoBoost line also carries a price premium. ■ David Phillips is online deputy managing editor and Jamie LaReau is Ford reporter with Automotive News, a sister publication of Crain’s Cleveland Business.

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Own this magniﬁcent property before the end of tax year 2010!!! Perfect for corporate guests, holiday events, and the country home/lodge for out of town executives, or just buy it for your family!!! Suggested opening bid 3.5 million dollars. Property viewing dates by appointment, Thursday, October 7, 14, 21 and Sunday October 3, 10, 17, 24. Brokers participation is invited. Absentee and proxy bidding will be allowed by prior arrangement. This auction is being offered subject to the terms of sale as stated in the bidders information packet and purchase & sale contract.

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CRAIN’S CLEVELAND BUSINESS

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Doctors: Accuracy is key

Tap: Firm streamlines operations continued from PAGE 3

continued from PAGE 3

part of a handful of federally supported efforts in 2006 to explore the technical standards and clinical impact associated with it.

Docs ditch the pen Frustrations with lost prescription notes and waiting for callbacks from pharmacists are among the factors that ultimately led Dr. John Bertsch’s practice in Willoughby Hills to e-prescribing, which came along with a complete shift to electronic medical records about a year and a half ago. “There were times when things could be very difficult in what we were trying to do for the patient because of the paper world,” Dr. Bertsch said. The ability to write a prescription from practically anywhere with an Internet connection has been extremely beneficial, according to Dr. Bertsch, who said e-prescribing also helps he and his staff avoid potentially harmful drug combinations. Dr. Lawrence Kent, a physician at the University Suburban Health Center in South Euclid, said about 90% to 95% of the prescriptions he writes are done electronically. His office signed on when it started taking University Hospitals’ outpatients about three years ago. The biggest benefit to e-prescribing, he said, was the ability to track what medications his patients are taking. “When patients come in, they usually don’t come in with their meds even though they’re told to do so, and they’re usually clueless about what they’re taking,” Dr. Kent said. However, Dr. Kent said the “time-saving” argument for e-prescribing doesn’t really hold up. He said it saves time while refilling prescriptions, but adding new prescriptions can be somewhat of a hassle because of all the necessary data input. “It’s like anything else when you’re switching to a different way of doing it,” Dr. Kent said. “There’s always a learning curve with any electronic system; I don’t care how good it is.” Renowned for its electronic medical records system, the Cleveland Clinic moved to e-prescribing in 2005, said Dr. Rami

Boutros, the clinic’s manager of medical informatics. Since e-prescribing’s introduction, Dr. Boutros said the Clinic has enhanced the service significantly. Now, he said, its physicians automatically can prescribe lower-cost medications because of the software. “As a physician, I’m using the tool,” Dr. Boutros said. “It’s nice while I’m sitting with the patient and typing the name of medication to see if it’s covered (under their insurance) and I can send it electronically to the pharmacy. I’ve seen a lot of my patients satisfied with the process.”

Fuel from the feds In 2009, Congress established a five-year incentive program for providers who e-prescribe medications for Medicare patients. In 2010, those physicians will receive an additional 2% on top of their total Medicare payments for the year. That percentage remains steady through 2012 and drops in 2013. Starting in 2012, however, the federal government will penalize eligible physicians not on board with the new technology. In 2012 and 2013, they could be penalized 1% of their total Medicare payments and 2% by 2014. The penalties would sunset in 2015. “This measure is going to encourage doctors very, very significantly to adopt electronic prescribing,” Dr. Nochomovitz noted. Overall, Dr. Bertsch said even with the incentives, there still is a cost issue to implementing e-prescribing and electronic medical records systems. The hardware alone, he said, cost his office about $30,000. Training staff on the new systems, he said, also cut into the number of patients he could see each day, which could create financial problems considering family practices are a “volumedriven business.” Also, Dr. Bertsch said older physicians sometimes haven’t been willing to jump on board with e-prescribing. “There is an age bias,” he said. “The older the physician, the more rooted you are in your traditional ways. (Paper prescriptions) worked fine for them.” ■

Anyone with a digital camera and enough interest in business to be reading this can guess what happened over the last decade. “We used to do $10 million (a year) in the proof book business. This year, we’ll be lucky to do $1 million,” Tap chairman David Chilcote said. The digital demise did not hit the company as quickly as it swamped film companies such as Kodak and Fuji. Chilcote’s business peaked in 2003, said CEO Tony Hyland, when sales were nearly $60 million. They were slightly higher just afterward, but only because of some acquisitions. The market already was shrinking, he said. Today, instead of operations and subsidiaries in eight states, the company has facilities only in Ohio and Texas. And instead of the 470 employees it had in 2007, it employs about 215 today. Tap is on track to do about $26 million in sales this year, Mr. Chilcote said. Profits also have plummeted. But, instead of losing money as it did in 2008 and 2009, it should make a small profit this year, Mr. Chilcote said.

Plan B To get here, the company had to clean house, literally, and employees even painted its big Cleveland offices, factory and warehouse themselves. Mr. Hyland, who had worked at the company since sweeping its floors in college in 1993, was asked to determine a strategic direction for Chilcote in 2009 when he was vice president of operations. His team decided, he said, that the company had to be a packaging company, not a photo supply house, or it never would see growth again. It also decided to ask for some changes Mr. Hyland thought would test the resolve of his superiors. “When I came out and said to David Chilcote, ‘One of my suggestions is that we change the name of the company from Chilcote to Tap Packaging Solutions,’ I knew that’s where you’d find out if you really have the support of the family,” Mr. Hyland said. “They agreed to that in two minutes.” Mr. Hyland was named CEO and president

in January. He was told to institute what he said needed to be done and off he went. For the past eight months, Mr. Hyland has been implementing lean manufacturing practices to control waste and inventory, streamlining production processes and focusing on what Tap has decided is its business of the future: specialized, custom packaging for products ranging from photos to confections, gourmet accessories and small, point-of-sale items. Some of Tap’s newer products, such as photo frames with hidden pockets to hold a photographer’s CD, already were offered but were not broadly marketed. Others, such as small, fold-up boxes for tea bags or truffles, are new and often designed for specific customers. Tap’s nontraditional products have tapped into a growing niche, Mr. Hyland said, and should reach $6 million or more in sales this year from almost nothing five years ago.

Mind your core business Tap is doing about everything right, said Chris Schmitt, chief strategist for Clevelandbased Insivia, a marketing firm that also designs packaging for manufacturers of biotech devices, consumer goods and other products, but which has not been involved with Tap. “There’s no doubt that it’s a challenging endeavor to take on a completely new business line,” Mr. Schmitt said. “But there are certainly some keys to success that will help them. No. 1 is staying inside what you know — and in their case, that’s packaging.” “It’s not like starting from scratch. You’re probably 30% to 40% there with what you learned in your old business,” he said. “The companies that fail are the ones that try to go from making greeting cards to making tanks.” Mr. Schmitt said he also was impressed to hear what Mr. Hyland said will be Tap’s next product line: standardized yet customizable packaging that can be sold to small candy shops or other small retailers, or even home chefs and crafts enthusiasts. The company plans to launch those products before the end of 2010. “That’s a fantastic idea — mass customization is sweeping the market today,” Mr. Schmitt said. ■

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OCTOBER 4-10, 2010

LED: Keeping labor costs down crucial for U.S. operations continued from PAGE 1

to be bent by hand. That process took years to automate, Mr. Crowcroft said. Manufacturing LED fixtures, however, isn’t quite so labor-intensive, he said. “It’s a small portion of the overall cost,” Mr. Crowcroft said, noting that the materials they use are more expensive than the labor. Though TCP has no immediate plans to make its LED products in the United States — instead, it is raising money to build the country’s first CFL plant near its Aurora headquarters — other companies in Northeast Ohio are aiming to build LED products locally.

Fixing to make fixtures Next year, for instance, Eye Lighting International of North America Inc. could start assembling its first LED products at its Mentor headquarters, where it employs about 150, said president and chief operating officer Tom Salpietra. The company, a subsidiary of Iwasaki Electric Ltd. of Tokyo, will focus on LED fixtures for outdoor street and area lighting. Such products must meet specifications that vary depending on the customer. As a

result, it’s important for production to take place closer to the company’s engineers in the United States, Mr. Salpietra said. “You can’t easily do a custom product overseas,” he said. Only a few companies worldwide make the actual light-emitting diodes, which are tiny semiconductor chips that emit light when exposed to electricity. Companies that make the fixtures that house those chips, however, are “starting up here, there and everywhere,” said Terry McGowan, director of engineering and technology for the American Lighting Association in Dallas. There is room for more manufacturers to make them in the United States, if they keep labor costs down, Mr. McGowan said. “If it’s highly automated, then the U.S. can compete fairly well,” he said. Green Mill Global LLC of Akron also wants to make LED fixtures in Northeast Ohio. The company, which distributes fixtures made by Fawoo Technology, has received permission from the South Korean manufacturer to build a U.S. plant. Now Green Mill Global is seeking government incentives for such a project.

“Every region in the United States and around the world is going to try to (land LED manufacturing business).”

lighting products, as part of a $60 million investment in the factory. The presence of GE Lighting should be a boon to local companies that make parts for LEDs, Mr. Petras said, in part because GE Lighting likes to source parts from local suppliers. “We’re actively trying to move suppliers to Northeast Ohio,” he noted.

– Jim Crowcroft, vice president of marketing, TCP Inc. Cost pressures likely will drive residential LED bulb manufacturing overseas, said Ray Bucalo, head of sales for Green Mill Global. There is room, however, to serve the commercial and industrial markets from the United States — and Northeast Ohio — especially as the cost of making products overseas rises, he said. “All the pieces or components are available in Northeast Ohio,” he said.

Lighting up the market Green Mill Global was one of the companies that spoke up after Cleveland Mayor Frank Jackson unveiled plans to give Chinese LED maker Sunpu-Opto Semiconductor Co. a no-bid contract to replace the city’s 65,000 street lights with LEDs as long as the company committed to locating a manufacturing plant in the city. After much criticism, the city decided to seek bids for the work, though it still will require the winning company to set up a plant in Cleveland.

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GE Lighting in East Cleveland also sought a chance to bid on the project. The division of General Electric for years has provided LED fixtures for traffic signals, architectural uses, retail stores and refrigerated displays, and more recently it has started selling LED spotlights and street lights. Plus, over the next few months the company plans to release the GE Energy Smart LED bulb, a nine-watt product designed to replace a standard 40-watt incandescent bulb. The down side: The LED bulb is expected to cost $40 to $50, at least at first. Michael Petras, GE Lighting’s CEO, would not say where the Energy Smart LED bulb might be built, though he did say that Northeast Ohio eventually could win some work manufacturing LED fixtures. “I think down the road there is potential to do LED product assembly work in Northeast Ohio,” Mr. Petras said. In anticipation of phasing out the sale of incandescent bulbs, GE has closed several U.S. plants that make them over the past few years, including plants in Cleveland, Euclid, Willoughby and the Youngstown area. However, GE Lighting has shown a willingness to make products in Ohio: The company last week announced it had installed new equipment at its Bucyrus Lamp Plant, which will make fluorescent

‘All kinds of opportunities’ The rise of LEDs presents “all kinds of opportunities” for specialty materials companies in Northeast Ohio, said Steve Bardus, product line manager at Momentive Performance Materials Inc.’s Strongsville plant. He noted how Momentive is developing conductive materials for LED circuit boards and fixtures meant to prevent the semiconductor chips from overheating. Other Momentive plants in the United States provide other materials for LED products. The ability of LEDs to run for decades before replacement means they’ll often be customized or even designed to mesh with new buildings, which Mr. Bardus sees as an opportunity for U.S. manufacturers. “That’s where the strength of American industry will apply,” he said. But if Northeast Ohio wants the business, area governments and companies will need to work together, TCP’s Mr. Crowcroft said. “Every region in the United States and around the world is going to try to do the same thing,” he said. ■

Associated Estates plans Nashville site Associated rights from ON THE WEB Story from Estates Realty www.CrainsCleveland.com. Bristol, Associated Corp. hears the did not disclose call of Music City and plans to terms of the transaction. develop a 242-unit apartment John Shannon, AEC vice president community in Nashville. of operations, said in a statement Associated Estates, an apartment that “the diverse economic base ownership and management conand solid demographic trends in cern based in Richmond Heights, Nashville should bode well for the said it would develop the property apartment market for years to through a joint venture it controls come.” with Bristol Development Corp. of The real estate investment trust Nashville. Other than saying it owns 51 properties with 13,234 acquired the site and development units in eight states.

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THEINSIDER

THEWEEK SEPTEMBER 27 - OCTOBER 3 The big story: Dallas-based Southwest Airlines — the second-largest operator at Cleveland Hopkins International Airport — agreed to acquire Orlando, Fla.-based AirTran Holdings Inc., which operates about a third of the daily departures from Akron-Canton Airport. The deal, valued at $3.4 billion, may take as long as two years to win all regulatory approval.

Going up:

Cuyahoga County commissioners defended a $40 million increase in the cost of Cleveland’s long-planned medical merchandise mart and convention center. Money to cover the increase in the project’s cost now is estimated at $465 million, which will come partly from an until-now-secret contingency fund; another $8.5 million will come from the county’s reduced payments to the project’s developer, Chicagobased MMPI Inc. See editorial, Page 10.

Acquisition Central:

Cleveland aircraft supplier TransDigm Group Inc. plans to spend $1.27 billion in cash to buy McKechnie Aerospace Holdings, a company based in Irvine, Calif., that sells parts to commercial aerospace markets worldwide. TransDigm chairman and CEO Nicholas Howley said McKechnie’s growing aftermarket business and investments in new platforms made the company attractive. … Danaher Corp. of Washington, D.C., entered into a definitive agreement to buy Solon-based Keithley Instruments for an estimated $300 million in cash. Keithley, which makes electrical testing and measurement equipment, will join Danaher’s Tektronix business. … Diversified manufacturer Eaton Corp. agreed to acquire CopperLogic Inc., based in Houston and a maker of electrical and electromechanical systems.

Music to their ears: Bon Jovi, Neil Diamond and LL Cool J highlight this year’s class of nominees for induction into the Rock and Roll Hall of Fame and Museum. The eventual inductees — to be honored March 14 in New York City — will join 92 groups and 196 individual acts that already are members. Alice Cooper, the Beastie Boys and Tom Waits, among others, also are on the ballot.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Bidding adieu to the last of AmTrust Bank ■ The Federal Deposit Insurance Corp. plans to announce by mid-October the winning bidders of the last large asset of the failed Cleveland institution, AmTrust Bank. AmTrust was closed Dec. 4, 2009, and the acquiring bank, New York Community Bank, assumed all its deposits. As AmTrust’s receiver, the FDIC retained whatever assets New York Community Bank did not acquire, including the mortgage servicing rights that companies recently bid on. Mortgage servicing rights are a common asset of larger banks that enable them to charge fees for collecting on and otherwise handling home mortgage loans, explained Tim Kruse, resolutions and closing manager for the FDIC Division of Resolutions and Receiverships. MSRs, as they are called, can be bought and sold. Mortgage servicing rights are “very valuable” if there aren’t a lot of defaulted assets, Mr. Kruse said, but when more nonperforming loans exist, they become more costly. He said he wasn’t sure of the mix of performing and nonperforming assets within AmTrust’s MSRs, but noted that bidders were privy to that information. In selling the last large asset, the FDIC anticipates it can close the receivership of AmTrust Bank, Mr. Kruse said. The money made through this auction — and others that preceded it — will help recover some of the $2 billion the AmTrust failure is estimated to have cost the FDIC’s deposit insurance fund. This summer, the FDIC closed on two AmTrust assets, selling to a three-party

WHAT’S NEW

This and that: Progressive Corp. by Jan. 31 plans to hire a combined 260 workers at its Mayfield and Mentor phone center operations. … Chase Bank plans to hire 175 employees at its Cleveland mortgage operations center by the end of the year.

Hitachi set to roll into Blackburn Hubcaps’ digs ■ Realty types like to say — especially in dour days like these — that real estate investments reward the bold. Family-owned Blackburn Hubcaps & Wheels has proved it. The auto wheel supplier in Macedonia last June bought for $3 million the massive former Roll & Hold Building, also in Macedonia, to consolidate operations from multiple locations, even though it had to offer a good part of the building to the leasing market. Good luck with that in this bruising downturn, which emptied the building a year ago. As it turns out, it was a smart move. Hitachi Medical Systems America recently leased 54,352 square feet of the building for a warehouse and refurbishment center for medical imaging devices it sells, said the Cresco real estate brokerage of Independence and Crescendo Commercial Realty of Middleburg Heights. Hitachi’s U.S. headquarters and research center will remain in nearby Twinsburg. The lease means the 144,000-square-foot building at 8190 Roll & Hold Parkway soon will be full again. Blackburn completed its

Mongoose makes marketing money more meaningful

COMPANY: The Mill-Rose Co., Mentor PRODUCT: Blue Monster products Mill-Rose’s Clean-Fit Products division says it developed the Blue Monster trade character to differentiate the company’s high-performance line of abrasives, thread sealants and brushes for professional contractors and the do-it-yourself market. The line of Blue Monster thread-sealing tape has been expanded to include thread-sealing compounds, high-performance abrasives, twisted-in-wire brushes and scrubbing towels. Mill-Rose makes twisted-in-wire brushes for a variety of industries. Send new product information to managing editor Scott Suttell at ssuttell@crain.com.

■ Many small businesses continue to struggle in the sputtering economic recovery, but a CNNMoney.com feature highlighted eight that are hiring, including a marketing/technology company in Cleveland. Mongoose Metrics, which analyzes the marketing dollars of big companies and tells them what’s working and what’s not, has hired 12 people in the last year and now has 18 employees. “We are nowhere near tapping the customers that we want to tap for our products and services,” said CEO Brad Reynolds. CNNMoney.com noted that Mongoose uses an online tracking software and a program to analyze phone calls between a client and its customers. Businesses that made it through the recession “are taking a scalpel to their budgets and eliminating unnecessary spending,” the web site reported. That’s why Mongoose Metrics is expanding so rapidly. “If somebody has a marketing budget, we

Weatherhead Showcase

October 16, 2010 10:00am – 12:30pm Registration starts at 9:30am To learn more, visit weatherhead.case.edu/showcase

move into the building last week, and Hitachi should be in by the end of October. Torrey Blackburn, a partner with his brother, Jimmy, in the family-owned concern their father started in his garage, is humble. “We’re ecstatic,” Torrey Blackburn said. “Someone is watching out for us.” — Stan Bullard

The code of these docs is to rock out ■ You can bang your head, but don’t do it too hard. And if you do, don’t worry because a group of hard-rocking neurologists are standing by. The Codes — a rock band comprised of neurologists from around the country — are performing Oct. 8 at the Grog Shop as the entertainment portion of a global conference on neurocritical care and music hosted by Dr. Michael De Georgia, director of the Reinberg Neuroscience Intensive Care Unit at University Hospitals and the band’s drummer. “Each year is very rock and rollish,” Dr. De Georgia said about the conference. “That’s completely unheard of for a medical conference. Most medical conferences, to be honest, tend to be dry and just about the facts.” He said the goal of The Codes was not to be just another “cute doctor band,” which is why they went with the band name they did. It’s a reference to a “code blue” alert, which in hospital speak means “cardiac arrest.” “There’s nothing funny,” Dr. De Georgia said about the band. “No cute lyrics, just straight hard rock.” — Timothy Magaw

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

Symon to Strongsville: Star Cleveland chef Michael Symon announced he is taking his talents to Strongsville. Mr. Symon, who also operates FILE PHOTO/ MARC GOLUB restaurants in downtown Cleveland, Tremont, Avon Lake and Detroit, in January plans to open a B Spot in The Greens of Strongsville shopping center off state Route 82. The new restaurant, of the same name as another Symon restaurant in Woodmere, will seat 100.

consortium about $898 million of primarily non-performing residential loan assets and selling to another three-party consortium about $1.7 billion of primarily nonperforming commercial acquisition, development and construction loan assets and owned real estate. — Michelle Park

want to show them how every dollar they spend converts into an action,” Mr. Reynolds said.

In this case, credit technology with the assist ■ The Cleveland Cavaliers probably won’t be as good on the court this season as in the recent past, but they’re still leaders in at least one area: communicating with fans via mobile devices. The New York Times included the Cavaliers in an article about how pro sports teams are using technology to reach out to new fans and connect more deeply with current ones. More sports teams and leagues are communicating with fans intensively by mobile devices, largely because they are “incredibly passionate and identify with their teams so they are accepting of receiving a lot of information,” said Ben Davis, a founder of San Francisco-based Phizzle, which works with clients including the Cavaliers. The Times noted that the Cavaliers send 1.5 million text messages each month — including scores, statistics, news and other updates — to mobile subscribers.

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