Crain's Cleveland Business by Crain's Cleveland Business

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$1.50/NOVEMBER 8 - 14, 2010

Vol. 31, No. 44

Kasich to find no shortage of budget advice Organizations jockey to voice suggestions to governor-elect on plugging $8B hole By JAY MILLER jmiller@crain.com

John Kasich during his run for governor largely avoided specifics about how he’d fill an expected $8 billion hole in the next two-year state budget. But the man who now is the governor-elect is finding no shortage of outside interests who are willing to lend him a hand in that effort. The Greater Cleveland Partnership is among the business groups eager to gain the ear of Mr. Kasich, who last week defeated Gov. Ted Strickland by a 49%-47% vote. So, too, is the Ohio Society of CPAs, whose vice president of govern-

JESSE KRAMER

Dr. Jeffrey Galvin ran a solo private practice in Fairview Park for about 10 years before joining MetroHealth in August.

RISING TO NEW LEVELS Hospitals shore up staffing by partnering with independent doctors amid projected rise of newly insured patients By TIMOTHY MAGAW tmagaw@crain.com

rea hospitals are trying to strengthen their ranks of physicians in a concerted effort to ramp up for an expected influx of newly insured patients brought on by federal health care reform. The movement comes as hospitals address the concept of accountable care organizations — a small facet

INSIDE: Federal government may provide incentives to entice students to pursue medicine. Page 22 in the new health care reform law that could have major implications for the ways care is delivered. Exactly what these organizations will look like has yet to be determined, but the idea is to band together medical providers and reward them with financial incentives

ment affairs, Barbara Benton, was among the 750 lobbyists and policy advocates gathered last Thursday, Nov. 4, at the Columbus Convention Center for Impact Ohio, a post-election conference sponsored every two years by a Columbus lobbying firm. A year ago, the Columbus-based trade group for the accounting profession created a state budget task force and in June released a 23page report that offered large and See BUDGET Page 7

Casino developers gamble with Cuyahoga River space Rock Ventures wants to narrow channel for complex By JAY MILLER jmiller@crain.com

Cleveland casino developer Rock Ventures LLC and lake shippers could be on a collision course at Collision Bend. Rock Ventures has proposed narrowing the channel of the Cuyahoga River at Collision Bend to accommodate its planned, $600 million gambling complex

behind Tower City Center. But it will take an act of Congress to allow it, and the plan is alarming ship operators and their captains who must navigate their ships through the narrow, winding river channel. In August, Cleveland Cavaliers owner Dan Gilbert’s Rock Ventures bought from Forest City Enterprises Inc. a 16-acre site for the new

INSIDE Start me up Northeast Ohio startups say venture capital investments are percolating. Local firms raised $143 million in venture capital during the first three quarters of 2010 — a big increase from a year earlier. Read Chuck Soder’s story on Page 3.

See DOCTORS Page 22

SPECIAL SECTION NEWSPAPER

71486 01032 0

EDITORIAL: John Kasich must act now to devise a budget blueprint by working with legislative leaders and other organizations. Page 10

SMALL BUSINESS Lake County store owners find value in their own brand, RediGo ■ Page 17 PLUS: HOLIDAY HIRING ■ MARKETING LEADS ■ TAX TIPS ■ & MORE

See CASINO Page 26

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NOVEMBER 8-14, 2010

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CRAIN’S CLEVELAND BUSINESS

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

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

VC funds still flowing to startups Helped by that financing through recession, young companies blossoming at right time By CHUCK SODER csoder@crain.com

Northeast Ohio startups say it’s still tough to find venture capital. Somehow, though, they’re starting to find it.

Local companies raised $143 million in venture capital during the first three quarters of 2010, more than double the $63 million raised through the third quarter of 2009, according to figures from startup business development group Jump-

Start Inc. More capital is on the way: North Coast Angel Fund, a group of individuals who finance high-tech companies in the region, last Thursday, Nov. 4, was scheduled to put $4 million into its second fund, which could grow to $8 million. Plus, the Ohio Public Employees Retirement System has committed another $100 million to the Ohio-Midwest Fund, which invests in venture capital and

Digital marketer seeks bigger piece of global pie

Reluctant at first, developer finds boost in military community work

By CHUCK SODER csoder@crain.com

By STAN BULLARD sbullard@crain.com

See MILITARY Page 26

DOUG BARDWELL/FOREST CITY ENTERPRISES

Forest City Enterprises now manages 12,000 units of military housing, like this Marine Corps Base in Hawaii’s Kaneohe Bay area.

THE WEEK IN QUOTES “We’re concerned, because this is a tight river to start with. Every inch of that river is needed for commercial navigation.” — Glen Nekvasil, vice presidentcorporate communications for the Lake Carriers’ Association. Page One

See VC Page 8

Rosetta’s growth goal to benefit local office

A NEW KIND OF FOREST CITY

hen actors for the steamy CBS action drama “Hawaii Five-O” recently ran through a neighborhood of contemporary suburban homes occupied by families of U.S. Navy personnel, it gave a national audience a peek at one of Forest City Enterprises Inc.’s less-heralded — but quite significant — projects. The Battleship Cove development on Ford Island in Hawaii is part of the giant developer’s Military Communities subsidiary — a segment of Forest City’s business that has blossomed from an unheralded start. In just six years, projects for the military have produced billions of dollars of construction work and millions in management fees for Forest City. It now manages 12,000 units of military housing for the Navy and Marines in eight locations, and it recently won an Air Force contract that will add 2,000 more. That’s 14,000 military housing units in a half-decade, compared with 33,000

private equity funds throughout the state. Programs such as those have helped keep Northeast Ohio’s most promising young companies alive through the recession, according to several industry experts. Now many of those startups are maturing just as the economy starts to improve, which helped boost the region’s investment numbers, said

“We’re excited about the (Cleveland Metropolitan School District) plan itself. We’re now looking to see how it can be sustained over the next five, seven or 10 years.” — Joseph Roman, president of the Greater Cleveland Partnership. Page 9

“The consumer still believes more water is better, and that’s not always the case.” — Kevin Campbell, director of retail marketing for Moen Inc. Page 16

Chris Kuenne has his sights set on the other half of the pie. And Northeast Ohio stands to get a piece. Acquisitions have helped interactive marketing firm Rosetta LLC grow to more than 1,000 people from about 600 in July 2008, when it bought Brulant Inc. of Beachwood. All those employees are based in the United States, which accounts for just half of the worldwide market for digital marketing services, said Mr. Kuenne, CEO of Rosetta. That’s why the Hamilton, N.J.-based company plans to start Kuenne looking abroad for future acquisitions. “It’s now time to really globalize Rosetta,” Mr. Kuenne said. Northeast Ohio can expect to benefit from coming growth, Mr. Kuenne said. Rosetta has added about 50 people to its Northeast Ohio staff since buying Brulant, bringing the company’s local staff to about 400. The company is positioned to expand its presence in the region further now that it is consolidating its three previous Northeast Ohio offices into new space in downtown Cleveland. Rosetta a few months from now will finish occupying 80,000 square feet on six floors at 629 Euclid Ave. Before, the company’s largest local office consisted of 33,000 square feet on Park East Drive in Beachwood. The company plans to move into more space as needed. Plus, Mr. Kuenne said he’s “bullish” on the Cleveland office’s ability to win clients and recruit top talent. He expects it will grow as quickly as the rest of the company. “Our intent is to grow this business 15% to 20% per year,” he said. Rosetta has done plenty of growing lately. The company bought Level Studios of San Luis Obispo, Calif., in See ROSETTA Page 24

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Big Lots gets bigger in NE Ohio By STAN BULLARD sbullard@crain.com

Big Lots, a closeout retailer based in Columbus, is taking advantage of high retail vacancies to snap up higher-quality shopping center space and add new locations in Northeast Ohio. Big Lots just opened a new store at Strongsville Town Center in Strongsville and plans to open another this Friday, Nov. 12, at the Marketplace at Four Corners shopping center in Aurora. The retailer also is negotiating for locations in Geauga, Lake and Medina counties for stores it plans to open next year, according to Big Lots spokeswoman

Toni Fink. Including the Aurora and Strongsville stores, Big Lots has 18 stores in Cuyahoga, Geauga, Lake, Lorain, Medina and Summit counties. Among them is a store it opened in October in Cuyahoga Falls. “The real estate market has been really good for Big Lots,” Ms. Fink said. “We’ve been able to make it into nicer shopping centers that we have not been able to get into before.” She declined to disclose sales, but said a store Big Lots opened this year in the posh Polaris shopping center in Columbus is “doing really well.” In Aurora, Big Lots is going into a former Linens ‘N Things store, she

said. In Strongsville, it occupies space emptied by an MC Sports store. Keith Hamulak, a CB Richard Ellis retail sales associate, said some owners of higher-quality shopping centers aggressively are courting Big Lots and other discount stores such as Family Dollar and Dollar General because they are among the few expanding retailers. “In the past, they were afraid closeout stores would stigmatize the center,” Mr. Hamulak said. “Or it would show weakness from the landlord’s side. Now it’s a good deal; it generates revenue.” Owners of better shopping centers are reducing rents to win discounters, he said, but discounters are paying more for better locations. Historically, discounters went into weaker shopping centers costing $3 to $6 per square foot. Now, Mr. Hamulak said, they are paying rents of $10 or more per square foot. There’s another incentive for landlords to make space available to deep discounters. Shopping center owners may need higher occupancy levels to satisfy lenders or the lease requirements of other tenants. Downturn chic also aids discounters. “Now it’s cool to say, ‘I can get this at Big Lots. I’m not afraid of being seen in the store,’” Mr. Hamulak said. Big Lots stores average 20,000 square feet of selling space and employ at least 40. ■

ON THE WEB

Story from www.CrainsCleveland.com.

FirstEnergy taps fuel cell FirstEnergy Generation Corp. said it has installed a fuel cell energy storage system at its coal power plant in Eastlake. The company, a subsidiary of FirstEnergy Corp. in Akron, plans to test the performance of the fuel cell system for five years, said Mark Durbin, senior communications representative for the utility. The system was developed recently by Ballard Power Systems Inc. of Burnaby, Canada. The one-megawatt unit, designed to provide enough electricity for 500 homes, will be used when demand for electricity is high. It is housed in a trailer so it can be moved by truck to other sites if needed. The fuel cell system produces electricity, as well as water and heat, by combining hydrogen and oxygen, FirstEnergy said. — Chuck Soder

Volume 31, Number 44 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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Change to overdraft protection rules hurts bank revenue Officials say high opt-in rates for service suggest strict regulations were unnecessary By MICHELLE PARK mpark@crain.com

It is one of the first measurable blows of financial reform: Banks are blaming multimillion-dollar drops in third-quarter revenue on a regulatory change that prohibits them from charging overdraft fees unless customers elect for overdraft protection on electronic transactions. Several banks that do business in and around Cleveland cited in their quarterly reports a negative impact from amended overdraft rules that became effective for new bank customers July 1 and for existing ones Aug. 15. The amended rules, under the Federal Reserve Board’s Regulation E, pertain only to overdrafts at automated teller machines and debit card transactions, not written checks. Huntington Bank reported that revenue from service charges on deposit accounts in the third quarter fell $10 million, or 13%, from the second quarter and nearly $15 million, or 18%, from a year ago. Those

declines, it stated, represented a decrease in overdraft fees. Likewise, KeyCorp cited the change to Regulation E, which covers various aspects of the electronic transfer of funds, as the reason for a $5 million decrease in service charges from $80 million in the second quarter. Pittsburgh-based PNC, with significant operations here, said its service charges on deposits in the third quarter fell $45 million, or 22%, compared with the second quarter mainly due to the implementation of the change. The bank also indicated that it anticipates revenue from service charges to drop about $55 million in the fourth quarter for a two-quarter decrease of $100 million. And Fifth Third Bank said the new policy was largely the reason its retail service charges declined 13% from the previous quarter and 24% from the third quarter of 2009. David Schamer, a 16-year banker and director of deposits for Huntington, said the amendment to Regulation E has been one of the

biggest disruptions to the banking industry he has seen. “A lot of banks have come to rely on these fee revenue streams,” said Mr. Schamer, who noted that banks “are having to recast their strategies” when it comes to how they make money. “A lot of the industry is going the path of, ‘OK, how do we replace these fees? How do we fill the bucket back up?’” A spokeswoman for the Federal Reserve Board, which approved the changes to Regulation E last November, said the Fed would offer no reaction to the banks’ statements.

Are you in, or out? The Fed’s final rule and commentary about the electronic overdraft changes, issued Nov. 12, 2009, highlighted arguments for and against overdraft protection as it used to be, when many banks automatically enrolled customers for the service. The banking industry asserted the overdraft protection provides customers access to funds in urgent situations and also spares them the embarrassment of declined transactions. On the flip side, consumer advocates called overdraft transactions a high-cost form of lending that traps low- and moderate-income

THE SKINNY ON ‘REGULATION E’ Banks doing business in Northeast Ohio are blaming a change in the Federal Reserve Board’s Regulation E for millions in lost revenue. The change: Banks customers now are required to opt in to allow banks to cover overdrafts on ATM and debit card transactions for a consumers into paying high fees. Banks have found that more customers are opting in — or electing for overdraft protection — than anticipated, though fee revenues still declined much as expected, said Nessa Feddis, vice president and senior counsel for the American Bankers Association. Opt-in rates of 50% to 60% are not unusual, she said. According to Huntington’s Mr. Schamer, 80% to 90% of customers who’ve returned election forms to Huntington chose to have overdraft protection. He would not disclose how many returned the forms, but said it was hundreds of thousands of the bank’s more than 1 million customers. Daniel E. Klimas, president and CEO of Lorain National Bank, estimated his bank’s rate of opt-ins are similar, while David Shaw, senior vice president and secretary for First Federal of Lakewood, said his bank saw a low return rate of election forms from consumers and a lower opt-in rate of 33%. Mr. Klimas sees the high opt-in rates as proof that overdraft fees were “not something that consumers were looking for someone to protect them from.” The real impact of Regulation E is the added expense, he said, noting banks are spending money and time just to provide customers the same service they’d been receiving. From June to September, Lorain National saw a slight drop in service charge income, Mr. Klimas said. The full impact of Regulation E will be more evident after the holiday season, he said, because it’s a time when people who don’t typically overdraw their accounts and who may not have opted in to overdraft protection tend to overspend. Credit unions have been affected, too, but minimally, said Patrick Harris, spokesman for the Ohio Credit Union League. Some have felt no impact, he said, while others have lost up to 10% in overdraft fee revenue. Mr. Harris noted credit unions “typically charge lower fees, so the impact will naturally be less.”

Checking into checking Several local banks said they have not made and are not planning to make changes to fees or offerings to offset their lower fee revenue. Many

fee. Otherwise, those electronic transactions simply would be declined. Since the change, many banks say a great majority of customers have opted in to the service, proof they didn’t need protection in the first place; they also say the process and paperwork required are quite costly. noted that overdraft fees are an important revenue stream, but not the most important. KeyCorp executives are keeping recent regulatory and legislative changes in mind as they review the bank’s free checking products, spokesman David Reavis said. The bank is considering a variety of options — possibly new offerings — that Mr. Reavis said he cannot disclose. Huntington has widely publicized its changes. It announced in midSeptember its new “24-Hour Grace” benefit, which provides customers 24 hours to resolve an overdrawn account before they incur fees. In addition, Mr. Schamer said the bank has eliminated so-called nuisance fees, such as fees charged for balances that are negative by less than $5. Asked if the measures were introduced to entice more customers to opt in, Mr. Schamer said, “Not necessarily.” The intention, he said, is to increase Huntington’s market share of deposits. “We feel like a lot of the banks are going the other way — ‘We just lost X percent of fee revenue, where do we make it up?’ ” Mr. Schamer said. “We view this as an opportunity to go the other way.” Bob Patten, managing director and senior bank analyst for investment firm Morgan Keegan, follows some 20 banks, including Huntington, Fifth Third and Key, and predicted institutions will try to recoup what they can. Both Mr. Patten and Ms. Feddis of the American Bankers Association noted some banks already have eliminated free checking. Banks that continue offering it, Mr. Patten predicted, will begin bundling accounts, or requiring consumers to accept multiple products from the bank in order to have free accounts. Ms. Feddis said there already has been a re-emergence of monthly fees on checking accounts where specific minimum balances are not maintained. She also said there will be a movement toward limited service checking accounts, such as accounts that only process electronic deposits and electronic payments. “Ultimately what impacts the bank impacts the customer,” she said. “If the bank’s costs increase, the customer’s price increases.” Either that, she said, or services will be reduced. ■

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Budget: Groups advocate for reduction in spending continued from PAGE 1

small ways to trim state spending and streamline government. Since then, it has issued five more reports offering more detailed analysis. The CPA group’s latest round of reports examined ways other states have tightened their budgets in five areas: pension reform, performance audits, privatization, strategic planning and streamlining and efficiency. “We have already reached out to governor-elect Kasich’s staff and expressed our willingness to do whatever we can to help,” said Ms. Benton, speaking by phone from the conference.

Call for shared sacrifice John Begala, executive director of the Center for Community Solutions, a human services advocacy nonprofit in Cleveland, also was in Columbus last week, speaking to Ohio Senate staffers and moderating a panel looking at the budget challenges at the Impact Ohio conference. Mr. Begala’s group completed its own comprehensive state budget analysis last June and titled it, “Thinking the Unthinkable: Finding Common Ground for Resolving Ohio’s Fiscal Crisis.” Reached in Columbus last Wednesday, Mr. Begala, a former state representative, said his report favors what he calls a balanced approach to closing the budget gap. “Everybody needs to sacrifice a little something,” he said. To that end, Mr. Begala doesn’t expect cutting costs alone will fill the breach. “We think still that spending reductions and reductions in tax expenditures and some new revenue are all going to have to play a role in this,” he said. Mr. Begala said promises that former Gov. Bob Taft’s business tax reforms would maintain existing state revenue levels aren’t being met, falling short by as much as $2 billion. Ohio in 2005 replaced the corporate franchise and tangible

personal property taxes with the commercial activity tax, or CAT, a broad-based tax on business revenue. To close the gap, Mr. Begala’s group will advocate strategies such as expanding the reach of the state sales tax to include taxing services and cutting tax credits and tax deductions.

Chambers to chime in Nine of Ohio’s largest chamber of commerce groups also will be weighing in with one voice on the budget issue. They hope to deliver to the governor-elect before the end of this month a report that outlines a long list of their own proposals to cut

costs and streamline government. “There are indications that John Kasich will be a positive thing for us,” said Carol Caruso, senior vice president of the Greater Cleveland Partnership, one of the regional chambers. “We believe he will be open to ideas to make government more efficient.” Ms. Caruso wouldn’t discuss the specifics of the chambers’ report, which has been months in the making, saying final decisions on what will be included have not yet been made. However, GCP revealed in a post-election report to its constituents last week that it already had reached out to Mr. Kasich and his key advisers to brief them on the

study. Speaking only for the Greater Cleveland Partnership, Ms. Caruso said her group is likely to support Governor-elect Kasich’s intention, which he disclosed last week, to abandon the proposed ClevelandColumbus-Cincinnati passenger rail line. But she said GCP would advocate for an east-west lakeshore line running west to Chicago and would like him to consider a line that links Cleveland, Youngstown and Pittsburgh. Although Mr. Kasich to this point has offered few details for how he’d handle the budget, the Republican insisted throughout the campaign that he would balance the budget

without raising taxes. His comments that he believes school districts should look to save money by sharing the cost of administrative services with neighboring districts also suggests possible cuts to education. While billions of dollars are involved in bringing the budget into balance, Mr. Begala and others maintain the problem is not beyond repair. “It’s important for people not to panic,” Mr. Begala said. “If shared across the board, we have cause to be optimistic that we can come through this process with minimum damage and maybe some new initiatives that will help make government more efficient.” ■

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ON THE WEB

Story from www.crainscleveland.com

Even colleges develop apps All five of Northeast Ohio’s largest higher education institutions are going mobile and are planning to release — or have done so already — applications for smart phones. Kent State was the latest to release such an application. Its iPhone application includes university news, a map and phone directory. More features, including the ability to access the university’s library database, will be available in the future. A version for Blackberry and Android also will be released. Cleveland State University released an iPhone app in September that allows users to locate buildings and check out information about academic programs. Representatives from University of Akron, Cuyahoga Community College and Youngstown State University said they are all in the process of developing smart phone applications that will be released in the coming months.

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VC: ‘Early stage pipeline’ fares better here than nationally continued from PAGE 3

Cathy Belk, JumpStart’s chief marketing officer. Nationwide, venture capital investing has fluctuated throughout 2010, according to statistics from the MoneyTree Report, compiled by PricewaterhouseCoopers and the National Venture Capital Association. Venture investments dropped to $4.8 billion in the third quarter from $6.9 billion in the second quarter, which was the best threemonth period since the stock market plummeted in fall 2008, according to the report. Venture investments in the third quarter of 2009 were higher, too, at $5.2 billion. However, Ms. Belk and others

expect venture investing to improve slowly but steadily, because both the economy and the market for acquisitions appear to be improving. “I think the national trend is still positive,” Ms. Belk said.

The return of ‘old mo’ A few big deals helped Northeast Ohio’s numbers. The biggest was the $50 million that payment processing firm Financial Transaction Services LLC of Highland Hills raised in the third quarter. That three-month period also included $20 million raised by medical imaging firm ViewRay Inc. of Oakwood Village and $14.6 million that went to spinal implant developer AxioMed Spine Corp. of

Garfield Heights. Baiju Shah, president of BioEnterprise Corp., which assists health care companies in Northeast Ohio, noted that the region’s health care sector showed solid improvement during the first three quarters. That improvement came even though investors are concerned about the effects of health reform and the expectation that federal regulators are about to tighten standards for new devices. “The momentum is once again with us,” Mr. Shah said. The state’s Third Frontier economic development program and several initiatives meant to promote entrepreneurship in Northeast Ohio have helped the region maintain

what Mr. Shah called a “rich early stage pipeline,” while startups elsewhere have suffered as venture investors have turned their attention to later-stage deals. “We are able to fill the gap that has been created as venture moves downstream,” he said. Mr. Shah referenced the recapitalization of the Ohio-Midwest Fund as a sign of continuing progress. The size of the $100 million commitment shows the Ohio Public Employees Retirement System’s confidence in the fund. The system invested just $50 million when it created the fund in 2005 before adding another $50 million in 2007. The system also plans to increase the amount the fund invests each

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year to $33 million from $25 million, said OPERS spokeswoman Julie Graham-Price. She noted that the retirement system wants to increase its private equity investments and expects to find good deals because of the recession. Fund manager Permal Capital Management of Boston has committed another $2 million to the fund, bringing its total size to $102 million.

‘The money is out there’ North Coast Angel Fund also is often cited as an important part of Northeast Ohio’s venture capital continuum. Fund executive director Todd Federman said he isn’t sure if it’s gotten easier for startups to find money lately, but he noted that North Coast Angel Fund was able to get individual investors to pony up $2 million to match a $2 million Third Frontier grant the group received in May. Other individuals have committed to putting in another $2 million if the group receives a second grant. Some companies the group has financed recently have been able to raise money from other investors, but Mr. Federman said he’s unsure whether that’s a sign of improvement. “It certainly remains a challenging environment,” he said. SparkBase LLC of Cleveland was scheduled to be the first company to receive money from North Coast Angel Fund’s second fund. With that money, the company, which processes transactions made with gift cards and loyalty cards, will have raised more than $1 million over the last few months from North Coast Angel Fund, the Ohio TechAngel Fund in Columbus and individual angel investors. SparkBase CEO Doug Hardman said investors are still “a lot more protective of their money” than they were before the recession. Thus, the company — which is in the process of hiring a few executives and expanding its sales team — started looking for money earlier than it otherwise would have. “It just takes longer, but the money is out there, especially in Ohio,” he said.

Windows start to open A startup aiming to raise money will have an easier time doing so today than it would have a year ago, said Warren Goldenberg, CEO of Fluence Therapeutics Inc., an Akron company that uses light to activate a topical drug meant to fight skin diseases. Many investors, however, are focusing on companies that are further along in the commercialization cycle, Mr. Goldenberg said. “The window is open and deals are getting done, but they tend to be later-stage companies,” he said. John Steidley, CEO of mobile software provider Intelligent Mobile Support LLC in Solon, said investors he’s talked to are putting more emphasis on companies with some form of revenue. Still, the economy is improving, which should translate into increases in venture investing, he said. Mark Heesen agrees. The president of the National Venture Capital Association in Arlington, Va., said that, despite a slow third quarter, venture investing appears to be on the way back up. “I’d say that most VC’s believe that we’ve hit bottom and things are slowly coming back,” he said. ■

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Business community waits to back school plan financially Transformation would take $12M from private sector, but aid is slow to come By TIMOTHY MAGAW tmagaw@crain.com

Eugene Sanders needs cash, and a lot of it — but a big chunk of the money isn’t going to come without some heavy-duty convincing of the business community. The CEO of the Cleveland Metropolitan School District is counting on as much as $12 million from the business community to help finance his five-year, $72 million transformation plan to remake the struggling district. But business leaders, while supportive of the concept, are holding back on putting their money behind an ambitious initiative that may lack the financial legs to be carried out over the long haul. Dr. Sanders said he has met regularly with business leaders over the last several months through the Greater Cleveland Partnership, the city’s chamber of commerce, to drum up support for his transformation plan, which he introduced in January. The organization endorsed the plan in June, but stopped short of encouraging its members to open their checkbooks. “There’s hesitancy to make sure the plan can be a sustainable one,” said Joseph Roman, president of the Greater Cleveland Partnership. “We’re excited about the plan itself. We’re now looking to see how it can be sustained over the next five, seven or 10 years.” Dr. Sanders said the district counted on support from the private sector when it initially looked at how to pay for the bold reform effort, and he hopes to lock down the rest of the money by the end of the current school year. Dr. Sanders wouldn’t go as far as saying a lack of financial support from area businesses would scuttle the transformation plan, but he noted that “we cannot achieve our goals completely” without that aid.

Evaluating the long term The district’s projected budget deficit for its next fiscal year, which begins in July 2011, is roughly $58 million. It’s an amount Mr. Roman characterized as a “challenging number,” and it’s indicative of the budget pressures the district is likely to feel going forward. Mr. Roman noted that the district hasn’t passed a new operating levy

in 15 years, which, in addition to dwindling property values and a loss of population, have contributed to the district’s financial woes. So, determining how the district is going to implement and pay for an expensive overhaul plan over the next several years is paramount. “These issues not only have to be addressed for the private sector and foundations, but they have to be addressed for the citizenry,” Mr. Roman said. Mr. Roman said his group is seeking volunteers from the private sector to pair up with the district’s financial team to offer ideas on how to better manage the school system’s finances. Mr. Roman said the Greater Cleveland Partnership also is counting on its members to help fund a $250,000 study to evaluate the financial sustainability of the district, which he noted was the organization’s “sole goal” in deciding whether to encourage its members to financially back the reform effort. Dr. Sanders agreed with Mr. Roman that, considering the economic climate, it makes sense for the business community to be somewhat timid before investing millions of dollars. “This is the most comprehensive reform initiative placed before the business leaders in a generation,” Dr. Sanders said. “It rightfully requires careful and reflective thought.” So far, the district has about $60.4 million committed toward the transformation plan from a variety of sources, but nothing from the business community. Considering the district had nothing on hand when it announced the plan earlier this year, Dr. Sanders said that’s a good start. The money thus far comes from federal grants and nonprofits, such as the Cleveland and Gund foundations. Much of the government money, however, relies on the district over the next few years meeting a combination of objectives, which include improving student graduation and attendance rates and boosting proficiency in math or reading. Under the terms of the state’s school improvement grant program, the objectives are set by the district and a failure to meet them could put continued financial support in jeopardy.

Here comes the pitch … Besides working through the

Software specialist Easy2 taps interim CEO Ethan Cohen has He lauded ON THE WEB Story from been named interim www.CrainsCleveland.com. Easy2’s product CEO of software lineup as well as developer Easy2 Technologies Inc. technologies it’s developing, including in Cleveland. a way to automate the process of Mr. Cohen fills a position that has creating online product demos. He been vacant since former CEO John also noted that Easy2 works with Bukovnik Jr. died in July, after big names such as Amazon and Dell. collapsing at the company’s down“It’s a very cool company,” he town headquarters. The company said. “It’s great to have a company sells products and services for like this in Cleveland.” online retailers, including software Mr. Cohen most recently was that allows them to create their own president of medical transcription online product demonstrations. services provider SPi Healthcare, Mr. Cohen will help Easy2 develop based in Tinley Park, Ill. He also has a strategic plan and will stay on held top positions at two local telafterward if the company’s board eradiology firms: Franklin & Seideldecides he is the best fit to execute mann and Telerad Express. — Chuck Soder that plan, he said.

Sanders

Roman

Greater Cleveland Partnership, Dr. Sanders has made direct pitches to various area businesses. For instance, Dan Davis, a spokesman for KeyCorp, said the banking company is in talks with the school district about a possible contribution but has yet to sign on to support the transformation plan financially. Mr. Davis noted that KeyCorp already is in the final year of a three-year, $600,000 commitment to provide money for the city’s “STEM” schools, which stress science, technology, engineering and math coursework. Like KeyCorp, Lubrizol Corp. in Wickliffe also has voiced its support for the plan through the Greater Cleveland Partnership. However, Lubrizol spokeswoman Julie Young said the only financial support the maker of lubricant additives and specialty chemicals has extended to the district to date is by funneling an

undisclosed amount of money through the Greater Cleveland Partnership for the financial sustainability study. It isn’t that local companies loathe putting their money behind urban education. Cliffs Natural Resources Inc. recently pledged $1 million to E Prep Schools, a charter school operator, to help fund the expansion of its elementary school building on East 36th Street in Cleveland. Cliffs spokeswoman Patricia Persico said the Cleveland-based iron ore and coal producer donated to the charter school, which is affiliated with the Cleveland school district, because it was “impressed with the high standards and disciplined environment the school has.” Cliffs, however, would not comment whether the foundation has considered contributing to the district’s reform efforts.

Unusual bedfellows? It isn’t unusual for school districts to tap businesses for money because at the end of the day, “money is money,” said Ned Hill, an economist and dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University. For instance, Dr. Hill noted that

the Harlem Children’s Zone in New York, which runs three public charter schools, is financed largely by Wall Street firms. But Dr. Hill was quick to say Cleveland is no Wall Street. “Most companies can only really contribute time and personnel and sometimes internship experiences,” Dr. Hill said. “You can’t look at private businesses as a major revenue source for public schooling. That is a public responsibility.” Dr. Sanders, however, cited the recent $100 million donation to the Newark, N.J., schools by Facebook CEO Mark Zuckerberg as an example of the private sector supporting a financially troubled public school system. Like Dr. Sanders, Newark Mayor Cory Booker had looked for support from business. Mr. Roman said businesses already are supporting the city’s public schools through property taxes and agreed with the notion that it shouldn’t be the private sector’s responsibility to continually finance public education. However, a one-time investment could make sense in the long run. “It’s a matter of understanding the value of the plan and the value of a competitive school system to our economy,” Mr. Roman said. ■

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NOVEMBER 8-14, 2010

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Get to work

ohn Kasich and Ed FitzGerald — the two men who with their election last week suddenly may be the most powerful figures in Ohio politics — can’t afford to celebrate their victories for long. Not with the budget woes that face the state’s governor-elect and the first Cuyahoga County executive, respectively. Unless the economy unexpectedly perks up, the gap between revenues and expenses in the state’s two-year budget that begins next July could reach $8 billion. Mr. Kasich during his campaign did a good job of beating up incumbent governor Ted Strickland over Ohio’s recession-induced job losses, but the Republican standard-bearer avoided specifics of how he planned to bring the budget into balance. The time for political coyness is over. The governorin-waiting should begin meeting with legislative leaders — both Republican and Democrat — in the Ohio House and Senate to devise a budget blueprint. There is no shortage of organizations willing to feed them ideas of how to go about this process. Last week, the Greater Cleveland Partnership revealed in a post-election report to its constituents that it already had reached out to Mr. Kasich and his key advisers to brief them on a study by GCP and eight other chamber of commerce groups that explores ways to reduce the state’s cost of doing business. GCP said the joint study “outlines numerous steps Ohio’s state government can take to cut costs and implement long-overdue efficiencies.” The chamber groups expect to release the study later this month, and it will be interesting to see how their ideas intersect with recommendations already made last June by the Budget Advisory Task Force of the Ohio Society of CPAs. The task force’s report smartly lays out short- and long-term strategies for addressing government inefficiencies. For example, it pushes for state officials in putting together the 2012-2013 budget to determine whether various agencies, divisions and programs provide a core function of government and should continue to receive money, while also calling on leaders to develop a plan to sunset state agencies by evaluating all of them at least every 10 years. Mr. Kasich also can draw on the contents of the surprising report, “Thinking the Unthinkable: Finding Common Ground for Resolving Ohio’s Financial Crisis,” put forth last June by the Center for Community Solutions in Cleveland. It advocated a giveand-take approach toward achieving a balanced budget by recommending such steps as eliminating dozens of special-purpose tax credits while increasing cost controls on Medicaid spending. In Cuyahoga County, Mr. FitzGerald can tap the advice of multiple task forces that have examined how the operations of county government can be improved under its new structure of a single county executive and an 11-member county council. He’ll need the help. As current county Commissioner Tim Hagan noted a couple weeks back, the county’s budget picture “is worse than it’s ever been.” So, Messrs. Kasich and FitzGerald, get to work. You’ve got big jobs ahead of you.

FROM THE PUBLISHER

No time to celebrate big GOP wins

away generations of legislated loopholes. he Grand Old Party better spend Then the governor and his team could no more time celebrating its rearrange government to do the things broad victories in Ohio last week most needed by Ohioans and make the and buckle down to what very hard choices about those programs and well could be the singularly most imporservices that the state helps finance but tant project they’ve ever faced: crafting that aren’t critical to the future. the next biennial budget. During the campaign, the governorPundits already are speculating a gap elect kept to his script of getting of some $8 billion (that’s right, government out of the way of “billion,” with a “b”) and pre- BRIAN business, making government dicting cuts in one of the only TUCKER smaller, instituting no new taxes, areas they can — and the worst and so forth. Heck, he even said area they can — education. Few he’d like to do away with the Ohioans spend time trying to income tax. Well, now the candecipher the two-year budget didate must govern and that cycle, but understand one means making brutally hard thing: Government-mandated choices. programs such as Medicaid eat This is what I would like to up more and more of the state’s hear from Mr. Kasich in his general revenue funds, and inaugural speech: those same funds are at historic lows “Ohio and its residents face tough because of record unemployment. times ahead, and there will be no easy Governor-elect John Kasich — even answers to what we face. We are getting though it will be against his nature and older and poorer and federal mandates not instinctively the right thing for a require that more and more of our revenues first-term governor to tackle — should must be spent serving those in most need. assemble a bipartisan task force to tear “We must find a way to turn around apart Ohio’s bloated tax code and strip

Governor-elect John Kasich ... should assemble a bipartisan task force to tear apart Ohio’s bloated tax code. our economy. We can’t wave a magic wand and conjure up new jobs, so we have to stay the course with programs like the Third Frontier, which has a successful track record of creating thousands of new, well-paying jobs in Ohio. “And while we might have to cut everywhere — including higher ed — I’ll do my best to minimize those because our best hope is to raise the education levels of our citizens. “We might not be able to fund things like parks or local arts programs. It’s not that I don’t consider them important; I just know that we should look at this as a blank canvas. We need to have a competitive tax system that pays for essential services but enables businesses to grow. “Let all of us — regardless of party — set aside personal or party politics and concentrate on doing what’s right for the state, and our future generations.” ■

PERSONAL VIEW

Manufacturers save with energy efficiency By LONZO COLEMAN

t’s no secret that manufacturers in Ohio and across the nation have been forced to slash costs to survive the recession. Too often, these cuts come at the expense of workers in the form of layoffs, hiring freezes and salary reductions. Meanwhile, another top cost is frequently overlooked, and that’s energy. Among the most economically beneficial opportunities for savings, energyefficiency initiatives can help improve business competitiveness and profits for years. One particularly ripe area for Ohio, and one that could also reduce the state’s carbon footprint, is called energy recycling. Dating back to Thomas Edison and

Mr. Coleman is past president of the Mechanical Contractors Association of America and CEO of Coleman Spohn Corp. in Cleveland. the dawn of the electrical age, energy recycling is now helping economies around the world produce more goods with less fossil fuel and lower pollution, yet it is woefully underused in the United States. When fossil fuels like gas and coal are burned to produce electricity, as much as two-thirds of their energy is lost in the form of waste heat. For energy-intensive businesses — such as Ohio’s paper and petrochemical plants and the metal and glass makers vital to Ohio’s auto assemblies — this waste heat is simply vented into the atmosphere. Recycled energy tech-

niques allow manufacturers to capture that waste and turn it into 100% clean power, thus lowering energy costs and raising productivity. Here’s one example just west of us in Indiana. At ArcelorMittal’s East Chicago steel plant, energy recycling projects capture and harness the manufacturer’s waste heat to generate 220 megawatts of power — more clean electricity than all the solar panels connected to the U.S. electric grid. Recycling energy saves the plant $100 million annually, while reducing CO2 emissions by the equivalent of removing 166,000 cars from the roads. Industrial energy efficiency experts estimate that smelters here in Ohio could generate similar amounts of power See VIEW Page 11

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

WWW.CRAINSCLEVELAND.COM

THE BIG ISSUE What kind of message do you think the American people sent with the outcome of Tuesdayâ&#x20AC;&#x2122;s elections?

BOB RAINS

BECKY FINNICK

DAN MARDOVIN

BILL HEGARTY

Cleveland

Chagrin Falls

Medina

Newbury

We donâ&#x20AC;&#x2122;t like Barack Obama or his policies or the people around him.

Jobs were on the forefront and the economy.

Definitely that it was time for change. The people did not like the direction of the country.

A more balanced legislative agenda, and I think what we heard from President Obama (Nov. 3) is that heâ&#x20AC;&#x2122;s more inclined to in his cabinet have improved representation for business.

END-OF-YEAR NUMBERS WORTHY OF A HIGHLIGHT REEL? CELEBRATE HERE.

â&#x17E;¤â&#x17E;¤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.

A. Schulman plans expansion into India Move comes as countryâ&#x20AC;&#x2122;s consumer market booms By FRANK ESPOSITO Plastics News

Plastic resin supplier A. Schulman Inc. will open its first plant in India by the end of 2011. Derek Bristow, A. Schulman Asia general manager and chief operating officer, said in an interview at the recent K 2010 plastics industry trade show in Germany that the 25employee Indian plant will make additive masterbatches for polypropylene film and other products. Indiaâ&#x20AC;&#x2122;s flexible packaging sector has enjoyed strong growth in recent years as Indiaâ&#x20AC;&#x2122;s massive consumer market has blossomed.

The plant will be A. Schulmanâ&#x20AC;&#x2122;s fifth in the Asia Pacific region, joining locations in China, Indonesia, Malaysia and Australia. The latter two plants were added to the A. Schulman stable earlier this year when the company acquired ICO Inc. Mr. Bristow said the Asian market in 2010 has recovered from any slowdown in business it may have experienced in 2009. â&#x20AC;&#x153;There was a bit of a slowdown, but now thereâ&#x20AC;&#x2122;s a lot of activity,â&#x20AC;? he said. â&#x20AC;&#x153;A lot of (processing) machinery guys are selling equipment to Asia.â&#x20AC;? Fairlawn-based Schulman just

View: Recycling action needed continued from PAGE 10

through energy recycling. In fact, Ohio is home to nearly one-quarter of the countryâ&#x20AC;&#x2122;s integrated steel mills, many of which are ideal candidates for this technology. If every Ohio manufacturing plant recycled its waste heat, companies could save millions, create thousands of jobs and reduce pollution. Just across our southeast border, West Virginia Alloys melts quartz rock and converts it into silicon, a metal used to make hundreds of products. For 75 years, the company vented its 1,400Â° F waste heat into the atmosphere. Now, the company has embarked on a project to recycle this heat and convert it into 65 megawatts of pollution-free power. In addition to slashing their emissions, savings from lower energy costs will allow the plant to increase its work force, expand production and bring more silicon manufacturing back from overseas. These need not be isolated examples. In Ohio, nearly 60 industrial facilities are prime candidates for energy recycling projects. According to Oak Ridge National Laboratory, a large-scale expansion

of energy-recycling efforts could provide up to 20% of U.S. electric capacity by 2030 and create nearly 1 million new jobs. With Ohioâ&#x20AC;&#x2122;s 10.1% unemployment rate, is there anything more important? Despite its significant savings, energy recycling requires a great deal of capital investment. With a stillsputtering economy, this is a tough sell for many business owners who lack access to that level of capital. Fortunately, Congress is considering investment tax credits for industrial energy efficiency, including combined heat and power and other energy recycling projects. The proposed bipartisan legislation, supported by numerous Ohio businesses, will maximize the economic and environmental benefits of energy recycling, giving business the means to make their energy work twice. With that help, more Ohio businesses can thrive, putting more Ohioans back to work. Ohioâ&#x20AC;&#x2122;s congressional delegation from both parties should support this legislation. Itâ&#x20AC;&#x2122;s an opportunity to help keep industrial jobs in Ohio while massively slashing greenhouse emissions. â&#x2013;

completed a fiscal year in which overall sales grew 24% to almost $1.6 billion. The company also showed a $44 million profit after losing more than $2 million in fiscal 2009. In the Asia Pacific region, A. Schulmanâ&#x20AC;&#x2122;s sales grew 87% to almost $85 million, while gross profit from the region shot up 83% to almost $12 million. â&#x2013;

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With the holidays soon approaching, the time to plan is NOW! Call 330.456.8207 or visit us at profootballhof.com today.

Frank Esposito is senior reporter at Plastics News, a sister publication of Crainâ&#x20AC;&#x2122;s Cleveland Business.

Larry Pollock Leading Change in a Consumer-Centric World?

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College of Business Administration and Graduate School of Management

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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents

were filed in the Recorder’s Office.

LIENS FILED Sentinel Consumer Products Inc. 127 Public Square, Cleveland ID: 34-1140498 Date filed: Sept. 23, 2010 Type: Employer’s withholding Amount: $47,799

WWW.CRAINSCLEVELAND.COM

American Piping and Mechanical Inc. 20710 Miles Parkway, Warrensville Heights ID: 20-2170400 Date filed: Sept. 14, 2010 Type: Employer’s withholding Amount: $38,169 Kraft Builders LLC 29444 Euclid Ave., Room 5, Wickliffe ID: 20-8674935 Date filed: Sept. 8, 2010

NOVEMBER 8-14, 2010

Type: Employer’s withholding Amount: $35,223 Mac Fire Corp. 1441 Dille Road, Euclid ID: 34-1855401 Date filed: Sept. 23, 2010 Type: Employer’s withholding Amount: $31,619 Lake Land Employment Group P.O. Box 93446, Cleveland ID: 34-1931056 Date filed: Sept. 28, 2010 Type: Employer’s withholding, unemployment Amount: $30,786 Passov Real Estate Group Inc. 6001 Landerhaven Drive, Suite D, Mayfield Heights ID: 34-1774002 Date filed: Sept. 14, 2010 Type: Employer’s withholding, civil penalty assessment Amount: $27,841 Hurricane Labs LLC 4401 Rockside Road, Suite 310, Independence ID: 20-0516053 Date filed: Sept. 8, 2010 Type: Employer’s withholding Amount: $27,625 Target Human Resource Co. 13605 Detroit Ave., Lakewood ID: 34-1563994 Date filed: Sept. 14, 2010 Type: Employer’s withholding, failure to file complete return Amount: $27,189

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J R Fine Construction Co. 25100 Euclid Ave., Suite 27, Euclid ID: 34-1398889 Date filed: Sept. 8, 2010 Type: Employer’s withholding, civil penalty assessment Amount: $23,767 Tree of Life Daddys Daycare 14920 Euclid Ave., East Cleveland ID: 20-8354916 Date filed: Sept. 23, 1020 Type: Employer’s withholding Amount: $22,203 Industrial Glove Cleaning Inc. 11004 Avon Ave., Cleveland ID: 34-1788500 Date filed: Sept. 14, 2010 Type: Employer’s withholding, unemployment Amount: $20,705

Date filed: Sept. 8, 2010 Type: Employer’s withholding, unemployment Amount: $16,559 NRC Staffing Inc. 2120 S. Green Road, South Euclid ID: 20-0461614 Date filed: Sept. 8, 2010 Type: Employer’s withholding Amount: $15,890 Rubystone Masonry Inc. 7609 Euclid Ave., Cleveland ID: 34-1852324 Date filed: Sept. 8, 2010 Type: Civil penalty assessment Amount: $14,994 Healthsource of Brooklyn Inc. 4370 Ridge Road, Brooklyn ID: 26-3489393 Date filed: Sept. 30, 2010 Type: Employer’s withholding Amount: $14,474 Essen-II Inc. Subway 6268 Sunnywood Drive, Solon ID: 34-1679860 Date filed: Sept. 28, 2010 Type: Employer’s withholding, unemployment Amount: $14,010 E-Z Electric Motor Service Inc. 23440 Miles Road, Bedford Heights ID: 34-1051853 Date filed: Sept. 8, 2010 Type: Employer’s withholding, failure to file complete return Amount: $13,954 Parts Rite Ohio Inc. 3401 Brookpark Road, Cleveland ID: 76-0834982 Date filed: Sept. 8, 2010 Type: Employer’s withholding, unemployment Amount: $13,667 Pest Patrol Exterminating Inc. DBA The Bug Man 2710 Cleveland Road W., Huron ID: 20-2544835 Date filed: Sept. 23, 2010 Type: Employer’s withholding, unemployment Amount: $12,776 MJS Logistics Inc. 6111 Carey Drive, Suite 1, Valley View ID: 76-0714459 Date filed: Sept. 14, 2010 Type: Employer’s withholding Amount: $12,906

Ko-Am Enterprises Inc. Todds Cleaners 150 Bell St., Chagrin Falls ID: 34-1850351 Date filed: Sept. 23, 2010 Type: Employer’s withholding Amount: $20,427

Xtra Hands Home Healthcare Inc. 14330 Claremont Ave., Middleburg Heights ID: 34-1955690 Date filed: Sept. 14, 2010 Type: Employer’s withholding Amount: $11,999

Euclid Corridor Pizza LLC Teresas Pizza 240 Euclid Ave., Cleveland ID: 20-5681802 Date filed: Sept. 14, 2010 Type: Employer’s withholding Amount: $19,980

Wrightway Care LLC 1081 E. 168th St., Cleveland ID: 42-1696536 Date filed: Sept. 8, 2010 Type: Employer’s withholding Amount: $11,146

Great Lakes Etching & Finishing Co. 7010 Krick Road, Bedford ID: 34-1136809 Date filed: Sept. 23, 2010 Type: Employer’s withholding Amount: $18,516 Collaboration Station AKA Technology Paradigms 5005 Rockside Road, No. 600, Cleveland ID: 02-0574567 Date filed: Sept. 8, 2010 Type: Employer’s withholding, return of organization exempt from income tax, failure to file complete return Amount: $17,931 Ali Mohammadpour LLC 1962 Warrensville Center Road, South Euclid ID: 34-1969186

AC Health Service Inc. 15322 Waterloo Road, Cleveland ID: 86-1144041 Date filed: Sept. 23, 2010 Type: Employer’s withholding, unemployment Amount: $10,175 DMC Restaurant Inc. Diamonds Mens Club 1628 Fall St., Cleveland ID: 54-2077841 Date filed: Sept. 8, 2010 Type: Employer’s withholding Amount: $10,149 LAD Technology Inc. 730 Beta Drive, Suite B., Mayfield Village ID: 34-1611134 Date filed: Sept. 30, 2010 Type: Employer’s withholding Amount: $8,893

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GOING PLACES

RESERVE: Janice K. Snyder to mission outreach liaison.

branch manager; Natalie Zalenga to account manager; Rich Struble to vice president, Cleveland and Cincinnati. QUADEX INC.: Anthony W. Petras to executive vice president, chief operating officer, EDI Services division.

JOB CHANGES

MANUFACTURING

REAL ESTATE

EDUCATION

CHART INDUSTRIES: Rita Carroll to director of corporate development.

DEVELOPERS DIVERSIFIED REALTY CORP.: Robert McGovern to leasing director, northern region.

MARKETING

MOHR PARTNERS INC.: Adam Wolinetz to account executive.

KENT STATE UNIVERSITY: Wanda Thomas to dean, Regional College and associate provost, Kent State system integration.

FINANCE HUNTINGTON BANK: Mike DiCecco to senior vice president and chief commercial officer, Equipment Finance division; Angela Neal, Monica Masterson and Bryan Pogue to senior business bankers; Steve Lucas to business banking team leader; Kelli Cox to vice president, senior business banker. OHIO COMMERCE BANK: Steven Skaggs to vice president, credit manager.

Thomas

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

WWW.CRAINSCLEVELAND.COM

Gardner

Shwab

Moulagiannis Bozzelli

Snyder

Fowler

Pokorny

Steward

Klein

DeLong

Zelman

FINANCIAL SERVICE BROCKMAN, COATS, GEDELIAN & CO. AND BCG SYSTEMS INC.: Claire Marron to marketing and communications associate. COHEN & CO.: Haleigh Berg, Angel Rice, Joe DiFranco, Maggie Donnelly and Marilyn Surbey to staff accountants; Laura Keck to senior staff accountant. Cohen Fund Audit Services, Robert Cross to senior staff accountant; Gordy Jones, Ashley Tonkovich, Anna Ingleright and Kevin McNamara to staff accountants; Tim Allen to manager; Nicole McTaggert to office services assistant; Erin Clark to marketing assistant; Christine Picard Bowers to marketing communications specialist. CROWE HORWATH LLP: Andrea Molitoris and Aaron Pike to staff, audit and financial advisory.

LEGAL BENESCH: Carrie Benedict, Kristen Cady and Julia Leo to associates. DREYFUSS WILLIAMS & ASSOCIATES LPA: Jennifer L. Gardner to associate. SCHOTTENSTEIN ZOX & DUNN LPA: Melanie Shwab to associate.

HITCHCOCK FLEMING & ASSOCIATES INC.: Adriane Smith to research and database analyst.

SERVICE

LIEF KARSON COMMUNICATIONS: Emily Ouzts to account executive.

ATLAS ELECTRIC CO.: Tim Fowler to vice president.

TRIAD COMMUNICATIONS INC.: John Moulagiannis to director, interactive and digital marketing.

BROCKMAN DESIGNS: Michelle Hritz to interior designer.

NONPROFIT AKRON GENERAL DEVELOPMENT FOUNDATION: Karen. A. Bozzelli to president. LUTHERAN HOME AT CONCORD

FINDLEY DAVIES: Nancy Pokorny, Gail Steward and Matthew Klein to managing consultants. KELLY SERVICES: Terri Criss and Lori Lange to area managers; Frank Zamary to Ohio sales leader; Robin Eglin to Cleveland district

THINK MEDIA STUDIOS: Chris Wiegand to video editor/animator. TIMELESS LASER AND SKIN CARE: Jaudon Sunde to permanent cosmetics technician/instructor. UTILITY CHOICE INTERNATIONAL: Jim DeLong to director of energy services.

TIONS ADVOCATES: Jim Tabaczynski (JPT Group) to president; Dick Clough to past president; Jean Gianfagna to vice president.

AWARDS LUTHERAN METROPOLITAN MINISTRY, CLEVELAND: Janice K. Snyder (Lutheran Home at Concord Reserve) received the 2010 Peacemaker Award.

TECHNOLOGY

ORT AMERICA, CLEVELAND REGION: Dan Zelman (Paro Services Co.) received the Man of the Year Award.

EVOLVE CREATIVE GROUP: Stephanie Kress to senior web/video designer.

WOODRUFF FOUNDATION: Vady Vega (Recovery Resources) received the 2010 Woodruff Prize.

BOARDS NORTHEAST OHIO COMMUNICA-

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

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E!CLEVELAND Every Thursday, Crain’s Cleveland Business sends to more than 20,000 readers an arts and leisure e-mail called e!Cleveland. The e-mail highlights at least 10 events that are worth your time outside work. We’re fortunate in Northeast Ohio to have a vibrant arts community, and each edition of the e-mail features a mix of local music, theater, dance, film and other activities. To sign up for this and all our e-mails, visit www.CrainsCleveland .com and click the “Register for Crain’s alerts” icon at the top left of the home page. If you have events you’d like us to consider for inclusion in future

editions of the e-mail, send information to managing editor Scott Suttell at ssuttell@crain.com.

What a crime Event: “Inside Job” Venue: Cedar Lee Theatre, Cleveland Heights When: Now playing Why you might be interested: If you enjoy a crime story. A really big crime. The well-reviewed “Inside Job” bills itself as a comprehensive analysis of the global financial crisis of 2008, which caused the worst economic downturn since the Great Depression. Through film it offers exhaustive research and interviews with key financial insiders, politicians, journalists and academics,

and it traces the rise of rogue elements in the financial industry. It’s directed by Charles Ferguson, whose Academy Award-nominated 2007 film “No End in Sight” stands as the best documentary about the war in Iraq. On the web: www.Cleveland Cinemas.com

Body work Event: “Anatomica Aesthetica” Venue: Cleveland Institute of Art, Reinberger Galleries, 11141 East Blvd. in University Circle When: Now through Saturday, Dec. 18 Why you might be interested: If you have sick tastes. “Anatomica Aesthetica: Photographs from the Mütter Museum, and H. F. Aitken Illustrations from the Dittrick Medical History Center,” looks at how disease, tumors and teratology have been fertile subjects for artists. The

NOVEMBER 8-14, 2010

exhibition includes contemporary works by renowned photographers of Philadelphia’s Mütter Museum in a collection that extends “the boundaries of traditional photographic subject matter,” according to CIA. Images from the museum’s historical photography archive are included, as is a collection of biomedical art. On the web: www.cia.edu/ anatomica

Starry night Event: “Moon Over Buffalo” Venue: Kleist Center for Art and Drama, 95 E. Bagley Road, Berea When: Wednesday, Nov. 10, through Sunday, Nov. 14, and Wednesday, Nov. 17, through Sunday, Nov. 21 Why you might be interested: If you enjoy a madcap flavor to your comedy. This popular comedy by Ken Ludwig has the same flair and

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A scene from “Moon Over Buffalo” energy that made the playwright’s “Lend Me a Tenor” a big hit. In “Moon Over Buffalo,” George and Charlotte Hay, fading stars of the 1950s, are performing “Private Lives” and “Cyrano De Bergerac” in repertory in upstate New York. They’re on the brink of a split due to George’s dalliance with an ingénue, but then they receive word that Frank Capra is coming to town, and if he likes what he sees, he might cast them in his movie remake of “The Scarlet Pimpernel.” Bonus points to you if you guessed that everything that can go wrong does go wrong in this show, staged by Baldwin-Wallace’s theater department. On the web: www.bw.edu/ academics/theatre/season/mob/

Glory days Event: Book discussion with author John Vacha Venue: Hudson Library & Historical Society When: Wednesday, Nov. 10, at 7 p.m. Why you might be interested: If you want to go back to a time when Cleveland was America’s sixthlargest city. That’s just what it was in the mid-1930s, the period featured in Mr. Vacha’s new book, “Meet Me on Lake Erie, Dearie! Cleveland’s Great Lakes Exposition, 1936-1937.” The exposition along Lake Erie was scheduled to commemorate the centennial of Cleveland’s incorporation and was conceived as a way to energize a city hit hard by the Depression. (Hey, maybe we should try this again!) In its first summer, the exposition drew 4 million visitors, and 3 million more came for the second. The main entrance of the Exposition was on the mall between St. Clair and Lakeside avenues. Online: www.HudsonLibrary.org

Kiss and makeup Event: “Pagliacci” and “La Voix Humaine” Venue: State Theatre, PlayhouseSquare When: Thursday, Nov. 11, Saturday, Nov. 13, and Sunday, Nov. 14 Why you might be interested: If you’ve always been a little afraid of clowns. Leoncavallo’s “Pagliacci” is among the most popular of all operas. It’s a play within a play featuring an acting troupe presenting a comedy to the audience while being torn apart behind the scenes by jealousy and betrayal. It’s fraught with lurid, emotional turmoil — exactly what you want in opera. In Poulenc’s “La Voix Humaine,” based on a play by Jean Cocteau, the torment and despair of a jilted lover emerges in an enthralling monologue. Sounds like this Opera Cleveland show will make a very intense date night. On the web: www.OperaCleveland .org

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ON THE WEB Crain’s

WHAT’S COOKING To submit business news about Northeast Ohio restaurants, breweries, wineries or the agriculture industry, send an e-mail to assistant editor Kathy Carr at kcarr@crain.com. ■ Zagat Survey on Oct. 27 released the results of its 2011 America’s Top Restaurants Guide, which names the highestrated restaurants in large cities throughout the U.S. The Cleveland area’s top five are: Chez Francois, Vermilion; Johnny’s Bar, Cleveland; Parallax, Tremont; Lola, Cleveland; and Crop, Cleveland. Other notable restaurants include Downtown 140, Hudson; Red The Steakhouse, Beachwood; Dante, Tremont; Flying Fig, Ohio City; and L’Albatros, University Circle. The conductor of consumer surveys also released its annual report on the habits of more than 153,000 diners nationwide. Not surprisingly, the overarching theme is that the limping economy continues to cut into dining habits, with 39% of participants saying they are more attentive to prices and 33% eating in less expensive places. “The percent of meals eaten out and taken out has steadily decreased from 52% pre-recession to 47% this year,” said Tim Zagat, CEO of Zagat Survey. “These changes are subtle yet powerful when looking at longterm behavior.” Green restaurants are drawing

CRAIN’S CLEVELAND BUSINESS

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greenbacks, however. When it comes to healthy eating, 68% of surveyors say it’s important that the food they eat is locally sourced, organic or sustainably raised, and 60% are willing to pay more for it. About 61% Ohio surveyors are willing to pay more for healthier food; Portland, Ore., had the highest number of consumers, at 76%, willing to pay more. Miami/ South Beach had the fewest, at 49%.

Let’s put on a show ■ This year’s Fabulous Food Show at the International Exhibition Center in Cleveland — which runs this weekend, Nov. 12-Nov. 14 — will feature two new food-writing seminars, one of which aims to help local chefs and industry-related businesses build their brand through cookbooks, memoirs or blogs. Cleveland-based food writer Laura Taxel and California-based writing coach and author Dianne Jacob, during the two-hour session that begins at 10:30 a.m. on Friday, will discuss the process of writing and publishing a book, how to navigate the world of agents and photographers, and whether blogging benefits a business. The cost of the seminar is $50 — which includes all-day admission to the show — and is open to chefs, restaurant owners and staff, culinary entrepreneurs and other

What’s Cooking blog appears on our web site each Monday and at other intervals throughout the week. Visit www.Crains Cleveland.com for the latest news from the restaurant industry.

food and hospitality industry professionals. The other two-hour workshop that also costs $50 begins at 10:30 a.m. on Saturday, is for amateur writers and food enthusiasts who want to articulate their interests either in written form or through a blog. Topics include how to start and maintain a blog, how to write a recipe and a cookbook, and how to break into freelancing. Ms. Taxel is the author of “Cleveland Ethnic Eats, A Guide to Authentic Ethnic Restaurants and Markets in Greater Cleveland.” Ms. Jacob is the author of “Will Write For Food: The Complete Guide to Writing Cookbooks, Blogs, Reviews, Memoir, and More.” For more information, visit the show’s web site at www.FabulousFoodShow .com.

This event was a monster Attendance at Cleveland Beer Week’s Oct. 23 Brewzilla event was 1,500, double last year’s figure because the beer tasting extravaganza was moved to The Galleria at Erieview from the Arcade, according to event organizer Christine Montague.

“The Arcade is a beautiful and historic venue and we would have loved to have stayed there, but we sold out so early in our first year that we realized we needed a larger space to accommodate community interest in our event,” she said. “We are very pleased with patron and brewery response to the new venue.” More than 80 breweries and 207 beers were offered at Brewzilla. Cleveland Beer Week plans to announce late this month the event’s net proceeds, which will benefit the Malone Scholarship Fund. The fund has raised more than $1 million to help 100 students attend college. During its second year, more than 100 breweries featured their craft beers at about 400 events throughout Northeast Ohio Oct. 15Oct. 23. Cleveland Beer Week, a nonprofit that is dedicated to craft beer education, is distributing this week independent surveys to ticket purchasers, breweries, distributors and retailers about attendance and revenue, as well as to patrons about their experiences so the organization can develop an action plan for 2011.

Cleveland-Columbus culinary connections? A Columbus-based food blogger is intrigued by the depth of Cleveland’s culinary scene, and plans to continue researching Northeast Ohio’s mecca of restaurants through several visits in the coming months.

Jim Ellison said in his Oct. 28 CMH Gourmand blog entry that he is seeking more inspiration and collaboration with Cleveland’s food industry and hopes Columbus can take more cues from his experiences so it can develop its local food scene. “In Cleveland, innovation in food (plus green restaurants, sustainable agriculture and urban gardens) comes from the collaboration among chefs, suppliers and the community,” he wrote. “We have some of that in Columbus but we do not have the same zeal and passion for it — yet. Jeni’s Splendid Ice Cream is soon to open a location in Chagrin Falls. Maybe that can be a link to bring our two cities into the start of a culinary collaboration.” Positively Cleveland earlier this month hosted a culinary press trip for eight travel and/or food writers, including Mr. Ellison, from around the country, during which the convention and visitors bureau escorted them on a three-night, four-day tour of Cleveland’s culinary scene. “I want to find a way to support and work on growing a culinary connection between Cleveland and Columbus. Our cities count and cannot be discounted as flyover cities, rust belt write-offs or third rate restaurant regions any longer. Columbus and Cleveland are going to have a role in the future of food in this country. We can collaborate on promoting two Ohio cities that are proud of our food and the people preparing it,” Mr. Ellison wrote on his blog.

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NOVEMBER 8-14, 2010

Moen aims to turn customers on to perks of water-saving faucets By DAN SHINGLER dshingler@crain.com

Company hopes products, environmental awareness grow market share

Moen Inc. has a new strategy: more faucets using less water. The North Olmsted company hopes consumers will increase their focus on water conservation — going blue, as well as going green — and Moen has been working to develop faucets and showerheads that use less water. The company’s efforts garnered this year’s WaterSense Partner of the Year award from the U.S. Environmental Protection Agency, an honor for which it unseated a main rival, Kohler. The strategy also is providing Moen with a new marketing pitch for consumers.

Yes, Moen’s executives and marketing people have seen the “Seinfeld” episode in which the cast fights against low-flow showerheads incapable of removing shampoo from hair. (Hard to believe we worried about such things in the ’90s, isn’t it?) “We know all about that,” said Kevin Campbell, Moen’s director of retail marketing. That’s one reason it first targeted bathroom sinks, he said. Faucets for bathroom sinks are the low-hanging fruit. They’re simpler in design than showerheads, and

Moen said it has designed a new aeration system that makes a little water feel like a lot. Moen became the first company to convert all its lavatory sink faucets over to the new system in 2009, Mr. Campbell said, which was one reason it won the EPA’s award. Next are showerheads, but those are more complex and have more varied designs. Perhaps more importantly, they are a greater risk, Mr. Campbell said, because consumers are more wary about buying water-saving showerheads. “The consumer still believes

more water is better, and that’s not always the case,” he said. So Moen tests its products extensively. That includes letting people take showers in its testing facility in Cleveland, where over the years it has learned a lot about people’s showering habits and how they use faucets and showerheads.

Is it, or isn’t it? Moen does not disclose sales for its specific models, but Mr. Campbell said about 10% of the company’s showerhead sales are represented by water-saving devices, and the

company says it now can engineer them so well that consumers can’t tell them from regular faucets. “We’ve gotten to the point where we test them against other, nonwater-saving showerheads and they tell us it’s a better shower,” Mr. Campbell said. Moen has not said how many of the new devices it is selling so far. The sales don’t necessarily represent new revenue, but the company thinks the new products will help it gain and keep market share as consumers become more water-conscious. Next, it hopes the EPA’s WaterSense label, which it applies to approved products, will become as popular with consumers as the EnergyStar rating for appliances. “Over time, as the confidence builds with WaterSense as it has with EnergyStar, we believe it will,” Mr. Campbell said. Holly Harlan, president of Cleveland-based Entrepreneurs for Sustainability, or E4S, applauded Moen’s efforts and says consumers are becoming more conscious about how they use water. “Water is going to be what wars will be fought over in the future, not oil,” Ms. Harlan said. “It’s not always obvious to us in Ohio, because we have the Great Lakes, but it is more obvious to people in other parts of the country — and the world — how important water is becoming.” ■

Ohio firms partner on program to recycle glass By CHRISSY KADLECK Waste & Recycling News

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A landmark agreement between two high-profile Ohio businesses will begin to close the loop on glass recycling in the state. Facilitated by the Ohio Department of Natural Resources’ Division of Recycling and Litter Prevention, the agreement will enable waste hauler Rumpke Inc. to provide recycled glass feedstock to Owens-Illinois Inc. — the world’s largest manufacturer of glass containers, which is headquartered in Perrysburg. “Instead of looking outside of the state, Ohio companies, such as OwensIllinois, can now utilize a valuable resource — locally recycled glass materials from Ohio’s community recycling programs — which provides economic as well as environmental benefits to Ohioans,” Gov. Ted Strickland said. “This partnership with the private sector will provide an important service and help encourage glass recycling throughout Ohio while also facilitating the growth of two major Ohio companies.” The agreement calls for OwensIllinois to provide technical assistance to Rumpke in the development of a recycled glass treatment center that will provide up to 40,000 tons of ground glass annually. OwensIllinois agreed to buy the majority of recycled glass cullet handled by Rumpke. Rumpke’s plan to expand its Dayton processing plant will create at least 20 jobs. ■

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INSIDE

20 TAX TIPS: CELL PHONES NO LONGER RED FLAG TO IRS.

SMALL BUSINESS Companies cautious on adding staff for holidays By TIMOTHY MAGAW tmagaw@crain.com

JANET CENTURY

John Mazhar, the owner of a new RediGo store in Perry, said there was no question as to the benefits of signing on with RediGo, the concept of which was formed and branded in 2007 by a group of store owners in Lake County.

MINDING THEIR STORES TOGETHER A group of Lake County shop owners who founded their own brand, RediGo, touts benefits of operating through partnership By AMY ANN STOESSEL astoessel@crain.com

here can be strength in numbers. Just ask a group of store owners in Lake County who banded together in 2007 to form their own brand. And now the group behind RediGo Food Marts is looking to get stronger with the addition of two stores this fall and potentially more on the horizon. Three years ago, the owners of six formerly franchised convenience-style stores formed their current partnership in search of a better way to do business. “The amount of experience that brought this group together is tremendous,” said See REDIGO Page 20

PHOTO PROVIDED

The founders of RediGo stores, seen in 2007, are from left, Bill Stange, Betty Stange, Lynn Mitchell, Woody Jedlicka, Frank Gross, Angela Broski, Steve Broski, Joe Prezioso and Bill Stange Jr.

obby Colagross would like to do some seasonal hiring, but he’s still concerned how business might pan out this holiday season. That’s the mood echoed by many small business owners who would like to hire some holiday workers — or perhaps workers in general. And if they’re lucky enough to hire any seasonal work, it’s oftentimes no more than last year. Mr. Colagross’ Avon Lake company, Awesome Wares Inc., customizes apparel and other merchandise — typically a hot commodity for corporate customers who often woo clients or employees with personalized gear over the holiday season. His business took a dip last year when his clients’ budgets for such expenses evaporated, but so far this year, Mr. Colagross said he has seen a slight rebound. And if that translates to the holiday season, he might have to beef up his ranks from more than a handful of people, even if it’s only for the short term. “We do have a couple temp agencies that we might need to call on,” Mr. Colagross said, “but we’re kind of waiting to see.” On the national front, analysts expect seasonal hiring to be slightly up from last year. The Chicago-based recruiting firm Challenger, Gray & Christmas Inc. forecasts that retailers will add as many as 600,000 jobs during October, November and December. Last year, there was a net gain of about 500,000 holiday jobs. While an increase in sales over the last two months may trigger a slight increase in seasonal hiring, it is not expected to propel seasonal hiring to pre-recession levels, according to the firm. Best Buy, for one, is hiring 29,000 employees, the same as last year. Hudson-based fabric and crafts retailer Jo-Ann Stores Inc. announced plans in October to hire 3,000 seasonal workers nationwide, increasing its work force by 15% for the holidays. Toys R Us, meanwhile, is increasing its holiday hiring by about 10,000 workers to a total of 45,000. SueAnn Naso, president of Staffing Solutions Enterprises, a Mayfield Heights-based temporary hiring agency, said her firm has seen about a 50% increase in business this year compared to the same point last year. Still, she doesn’t necessarily attribute that to an uptick in seasonal hires. See HOLIDAY Page 21

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SMALL BUSINESS

Marketers have bevy of ways to pursue new leads Companies increasingly tap social networks, though telemarketing still serves a purpose By KATHY AMES CARR kcarr@crain.com

hen Laurie Mitchell began her career as an executive recruiter at her one-person firm 26 years ago, she made 100 cold calls a day to companies on behalf of marketable candidates whom she was trying to place in jobs. She now makes the occasional cold call to a prospective client, but not without researching or connecting first through social media. In fact, Ms. Mitchell said social media has helped to promote her operation, Laurie Mitchell Marketing & Communications Executive Search, to a whole new level. “Social media has made it easier for people to find me, review my experience and comments from other clients on my LinkedIn page, and ask better questions when we connect,” the Cleveland marketing headhunter said. Ms. Mitchell’s experience is not unique, with others agreeing that social media channels — such as Twitter, LinkedIn and Facebook — have become virtual Rolodexes in generating business leads.

For many, gone are the days of blindly making phone calls and dropping in on potential new customers. Instead, the layers of information available through social media are enabling companies to more directly target new customers, with whom they are communicating through blogs, tweets and messaging. “(Social media) has led to significant assignments for me,” Ms. Mitchell said.

Social media clicks Dominic Litten, founder of the Social Media Club Cleveland chapter, said businesses are becoming more familiar with how to apply social media to their new business efforts, rather than just viewing the medium as a consortium of personal diaries. Indeed, companies appear to be investing in social media, continuing to shift marketing spending toward those resources and away from more traditional forms of generating leads, such as telemarketing. According to data provided by eMarketer, a New York-based marketing research firm, telemarketing advertising and marketing spending will grow about 2% each year between 2008 and 2012, from

$47.1 billion in 2008 to a projected $51 billion in 2012, while Internet spending during the like period will rise by double digits each year. Internet marketing and advertising spending in 2008 was $17.8 billion, and it is projected to increase about 76%, to $31.4 billion, by 2012. “Telemarketing spending still comprises a larger share of spending overall, but companies are cutting back on how much they spend on it, while increasing their allocation to online,” said Clark Fredricksen, an eMarketer spokesman. However, while Twitter, Facebook and LinkedIn all are useful in connecting to potential customers and sharing a firm’s brand, the work cannot stop there. “The most important site is still your web site,” said Mr. Litten, who also is leader of interactive marketing at Beachwood-based Point to Point Inc. “That’s the hub of activity.” Web sites should be updated with information about new products and services and unique content, which can be relayed through blogs and e-mail blasts. “When someone gets to your web pages, they are one step away from becoming a lead or buying a product. That’s half the battle,” Mr. Litten said.

Doing it the old-fashioned way One of the pitfalls businesses face

“Telemarketing spending still comprises a larger share of spending overall, but companies are cutting back on how much they spend on it.” – Clark Fredricksen spokesman, eMarketer in using social media is becoming lost in the noise of followers and connections. Joel Goldstein, president of the Greater Cleveland chapter of the Public Relations Society of America, said firms have more of a chance at generating leads if they make sure their “sweet spot” is identifiable among the clutter. “It’s marketing 101. There are certain areas and disciplines each firm can highlight that distinguishes them,” said Mr. Goldstein, president of Goldstein Group Communications, a Solon-based full-service public relations agency that serves business-to-business clients. “An electronics firm located in New York City saw our firm’s specialty on LinkedIn, and now they’re a potential client.” Still, some firms are more restrained with how and whether they use social media because it actually can deter new business, depending on the industry. Mitch Frankel, a financial adviser at Pepper Pike-based Lakeside Wealth Management Group of

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Wed. 11/10

Maple Heights Library 5225 Library Lane, Maple Heights

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For more information, visit neorsd.org/cso or contact Jean Chapman at 216.881.6600 or chapmanj@neorsd.org.

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DAZZLE … WHERE A GIRL CAN SHINE 100 N. Main St., Suite 145 Step North Chagrin Falls 44022 Dazzle … Where a Girl Can Shine, owned by Marcy Wrobel and Missy Natale, is a retail shop with girls fashions in sizes 4 through 16, accessories and room décor. The store also

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Wells Fargo Advisors, said he primarily uses LinkedIn as a networking resource. “We have strict guidelines. Our compliance department has to approve what we write,” on the page, Mr. Frankel said. “I tend to use LinkedIn mostly for connecting people with one another, such as job seekers for potential jobs, and for overall networking.” Meanwhile, employees are not permitted to mention their association with the firm on their Facebook and Twitter pages, which is not uncommon in fields such as law and finance in which social and professional worlds are meant to be more definitive. Mr. Frankel said he and other financial advisers at Lakeside Wealth still have the option of reaching out to potential clients through cold calling or going doorto-door, as well as meeting prospects through traditional networking and referrals. “I don’t think social media is going to ever replace those ways. It’s just one more way of connecting with people,” he said. ■ offers birthday parties, both in a tea party and fashion party style. 440-247-4858

BUILD A DREAM PLAYHOUSES P.O. Box 264 Gates Mills 44040 http://buildadreamplayhouses.com Build a Dream Playhouses of Gates Mills sells blank cardboard designs — in the form of everything from spaceships and cars to houses and lemonade stands — that supply a blank canvas for children to paint and create oneof-a-kind playhouses. The firm was founded by Clevelander Mike Welsh, who recruited recent college grads Andy Carcioppolo and Sam Cahill, and in collaboration with NottinghamSpirk Design Associates and the Smurfit Stone Container Corp.’s Ravenna plant. 877-404-DRMS (3767) info@buildadreamplayhouses.com

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CRAIN’S CLEVELAND BUSINESS 19

SMALL BUSINESS

Security threats, viruses unfortunate realities in workplace Educate employees on common problems to help prevent issues

iruses. Spam. Malware. Botnets. Chances are you’re at least somewhat familiar with these words — and you should be — since these threats are impacting the security of local businesses, including small and midsize companies. It has become imperative for business owners to be aware of these security risks and of actions to take to educate a work force in safer security practices. Where do you begin? Conducting a general online search for security threats will bring up a plethora of information. Wading through all that data can be time consuming, and it can distract one from focusing on business priorities. There are free resources. Microsoft, for one, has its Security Intelligence Report, which compiles all relevant security information and provides proactive tips for businesses based on the most prevalent threats. Some of the most common security threats a small business owner should be aware of include: ■ Viruses: Typically, viruses are spread from computer to computer by way of a network or the Internet and also can be carried on removable devices, such as CDs and USB drives. Often, a virus is contracted through a malicious web site that has the look and feel of a legitimate site. If one person’s computer becomes infected with a virus in your company, the virus can stealthily spread it to other computers, potentially damaging your work computer or, worse, your entire business network. Luckily, today’s more advanced web browsers come equipped with automatic filters to track and alert users of potentially harmful web pages and files. It’s important to ensure that your office computers are using one of the newer web browsers to eliminate the guesswork on whether a certain web site may pose a security risk. ■ Spam: Yes, we’ve all received unsolicited e-mail, commonly referred to as spam. Not only does spam mail clog inboxes for you and your work force, but it also creates a security risk where phishing — attempts to access and compromise such critical company data as user names and passwords — can proliferate. To prevent these threats, your company can take a few proactive measures to reduce the risks and overall inconvenience of unwanted e-mail, including implementing e-mail authentication techniques for your work force, which often can be activated in your e-mail account settings. Additionally, knowledge is power. It’s best to educate your employees and implement guidelines for sending and receiving e-mail — such as not opening mail from an unknown sender or messages that look suspicious — so personnel are equipped to observe these best practices. Look for obvious misspellings in

PATRICKCOOK

ADVISER e-mail messages, and be sure to copy and paste links into your browser, instead of clicking on the link directly from the e-mail.

■ Malware: Malware is software designed to access a computer system secretly, without the owner’s informed consent, to impact your businesses’ computer network. The types of malware that most commonly affect businesses include worms, Trojans (programs that appear legitimate but are malicious) and unwanted software. To protect your business from malware, a business consistently should install the latest security updates as they are released for the purposes of automatic protection. ■ Botnets: Botnets are a network

of compromised computers. The creators of botnets — called bot herders — actually make money by selling access to cyber criminals who then distribute scam e-mails and phishing and spam attacks that can lead to identity theft. Botnets are one of the most common security threats facing today’s businesses. They are reported to be responsible for 87% of unsolicited e-mail, which amounts to nearly 151 billion spam e-mails that are sent each day. To prevent botnet attacks, your organization must be certain to

have the latest security protection from a trusted software or service vendor that automatically scans (and deletes) these potential threats. Also, by educating oneself on the current security landscape, a business owner can be equipped to share best practices with the team, ensuring that the business information remains, in a word, secure. ■ Patrick Cook serves as Dynamics sales manager for Microsoft Corp. and is based in the company’s Independence office.

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NOVEMBER 8-14, 2010

SMALL BUSINESS

Law ends call for cell phone scrutiny RediGo: Owners issue Proprietors no longer need to document use on tax returns

s common as cell phones have become, it may come as a relief to small business owners that claiming a deduction for a cell phone no longer will be viewed as a potential red flag to the Internal Revenue Service. The 2010 Small Business Act included a provision to update the tax law regarding cell phones. The recent law provided that cell phones no longer will be treated as â&#x20AC;&#x153;listed property.â&#x20AC;? â&#x20AC;&#x153;Listed propertyâ&#x20AC;? is an IRS label for issues in tax returns that require extra documentation and plenty of scrutiny because the taxpayer might be using it to try to avoid paying taxes related to them. The documentation requirements for anything â&#x20AC;&#x153;listedâ&#x20AC;? in tax law are onerous. In the case of cell phones, if a company wanted to take a deduction for a cell phone used in business without any worry of having it disallowed by the IRS, it would have to document the amount of time and the reason the cell phone was used for business purposes, not to mention the actual expenditures related to the cell phone. The only way for a company to provide that kind of documentation is to require employees who use company-paid cell phones for business purposes to keep a log of all business-related calls they make or receive, documenting how long they are on the phone for each call and what each call is about.

PETERDEMARCO

TAX TIPS Although this has been the law around cell phones for some time, few business owners have gone to such lengths to substantiate their deductions for cell phones. Imagine the toll it would take on employees and the loss of productivity if every business owner were to require every employee to document their cell phone use to such lengths. The change in cell phone treatment gives business owners a greater measure of comfort that claiming a deduction related to cell phones no longer will put the taxpayer at increased risk if the business is under audit. But it also produces some other consequences. First, it means the IRS no longer will demand evidence that the cell phone is used at least 50% or more for business purposes. If a company pays for a cell phone for its employees, itâ&#x20AC;&#x2122;s automatically understood the cell phone is meant for business purposes and no further documentation of that will be required. Second, it means providing a cell phone to an employee no longer will raise questions with the IRS about whether the cell phone should be regarded as an excludable â&#x20AC;&#x153;working condition fringe benefit.â&#x20AC;? That means the IRS no longer will

look at a cell phone as a possible source of taxable income to the employee for the business-use portion of the cell phone. The law still requires the employer to include the â&#x20AC;&#x153;valueâ&#x20AC;? of any personal use of a cell phone as income taxable to an employee unless it qualifies as a â&#x20AC;&#x153;de minimis fringe benefit.â&#x20AC;? It also means companies wonâ&#x20AC;&#x2122;t face as many limitations on depreciating cell phone costs. If a company decides to claim a cell phone contract as a capital purchase, for example, it may have more options to consider with regard to how the cost of that contract will be depreciated over time. Finally, it also makes it easier for employees who pay for their own cell phones to claim deductions for their business use of their personal cell phones. Under the old rules, employees had to be able to show that they used their cell phones for the convenience of the employer and as a condition of employment, which are conditions that can be difficult to document. Now that cell phones are no longer listed property, employees still must be able to show that the deductions they claim are in connection with their employment, but thatâ&#x20AC;&#x2122;s an easier documentation standard for most employees to meet. Beginning with the 2010 tax year, business owners and their employees can take some comfort in knowing their cell phones are a little less likely to trigger an audit. â&#x2013; Peter A. DeMarco is vice president and director of tax services for the regional accounting and business consulting firm of Meaden & Moore.

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licenses, rather than franchise operation continued from PAGE 17

Angela Broski, one of the original store owners who now is president of RediGo. Woody Jedlicka, another of the original store owners, described the collaboration as a group of independent business owners who knew each other very well that now shares a name and buying power. All eight of RediGoâ&#x20AC;&#x2122;s stores are in Lake County, with the two newest in Perry and Painesville. Collectively, the stores do about $15 million in inside sales a year, not including gas or lottery sales; and they employ about 70 to 75 people. In addition to sharing an advertising program, the store owners say that as a group they can bargain for better rates on products that the stores sell. Working together also can mean more leverage in other negotiations, such as with banks and credit card companies and for workers compensation and health insurance. Additionally, the store owners

ments that are put in place for owners, the closer the arrangement moves toward being a franchise, which then opens it up to more outside regulation. As for RediGo, Ms. Broski said there are a handful of general requirements it looks for from its licensees: Stores must use the RediGo name; comply with certain standards, such as a minimum sales amounts; maintain clean, orderly businesses; and promote advertised items. As for the future, the members of the original group are open to more licensees, but they are inclined to stay local at this point. â&#x20AC;&#x153;Right now, we want to hold our cards close to our chest,â&#x20AC;? Mr. Jedlicka said. The next step may be to add smaller shops to the brand in a RediGo Express format. But nothing is set in stone, which by its very nature is the beauty of the partnership, according to the owners. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re about as flexible as they come,â&#x20AC;? Mr. Jedlicka said.

â&#x20AC;&#x153;Right now, we want to hold our cards close to our chest.â&#x20AC;? â&#x20AC;&#x201C; Woody Jedlicka store owner, RediGo meet once or twice month to share information and collaborate. â&#x20AC;&#x153;We all kind of knew each other before, but weâ&#x20AC;&#x2122;re twice as close now,â&#x20AC;? said founding member Lynn Mitchell, who has owned his store in Painesville for more than 25 years.

â&#x20AC;&#x2DC;As flexible as they comeâ&#x20AC;&#x2122; Instead of operating in a more traditional franchise format, the founders opted instead to issue licenses to the brand â&#x20AC;&#x201D; a business setup that generally means more autonomy for the individual stores. The cost savings for the store owners, they say, also has been substantial in comparison to when they were part of a larger franchise. Yearly costs to be part of RediGo can range from $3,400 to $3,600, depending on the payment plan, compared with an amount that previously could reach into the tens of thousands of dollars in fees depending on store sales. There is no additional startup fee for a licensee. John Mazhar, the owner of the new Perry store, said there was no question as to the benefits of signing on with RediGo. Coincidentally, he was drawn to the store brand when he moved to the area because in Texas he operated a store under the same name, but with no connection. For the annual cost of participation, Mr. Mazhar said he could barely buy an advertisement. â&#x20AC;&#x153;Plus, I got a lot of help from the group,â&#x20AC;? he said. Jack Kurant, an attorney with Wachter Kurant LLC in Pepper Pike, said while there is no specific test in determining the difference between a franchise and licensing arrangement, it all comes down to one word: control. However, Mr. Kurant said it can be a fine line; the more require-

Making a name One of the biggest hurdles for the group in the beginning was pretty basic: deciding on a name. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a convenient stop. All of us had that in mind,â&#x20AC;? said Ms. Broski, who sold her store to a licensee in 2008 to lead the brand and work with vendors. â&#x20AC;&#x153;It was truly the first big obstacle we had.â&#x20AC;? Laura Sheridan, president of Viva La Brand, a Cleveland-based marketing strategy and ad agency search firm, said in marketing, a business should first consider what it is about â&#x20AC;&#x201D; what problem is being solved. â&#x20AC;&#x153;The strongest brands â&#x20AC;Ś own a place in a consumerâ&#x20AC;&#x2122;s mind,â&#x20AC;? said the 25-year marketing veteran, whose clients include Post-Up Stand, Resilience Capital Partners and ToolingU. A name should be selected that reflects the organizationâ&#x20AC;&#x2122;s mission, is memorable, easy to read and short, she said. Itâ&#x20AC;&#x2122;s also beneficial to make sure that the corresponding Internet domain is available. As for RediGo, after months of the owners considering various names, the brand and look evolved from the concept of a stoplight. (A consulting group actually suggested the name Red Go, to which the owners added the â&#x20AC;&#x153;i.â&#x20AC;?) Once the name was developed, Ms. Broski said it was essential to send the message to customers that the look and name may have changed, but the stores were still the same. The stores sent out between 3,000 and 5,000 mailers â&#x20AC;&#x201D; twice â&#x20AC;&#x201D; with the store ownersâ&#x20AC;&#x2122; photos, emphasizing â&#x20AC;&#x153;weâ&#x20AC;&#x2122;re still here.â&#x20AC;? â&#x20AC;&#x153;A lot of our customers thought we were bought by a national chain,â&#x20AC;? Ms. Broski said. â&#x2013;

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SMALL BUSINESS

Holiday: Some operations planning for uptick in hiring continued from PAGE 17

“Business is picking up, which is a good thing, so hopefully it will last even longer,” Ms. Naso said. “It’s been a nice mix of some special project work as well as permanent hiring.”

’Tis the season Like large retail stores, holiday destinations long have been a source of temporary work. The jobs are short-lived and typically low-paying, but in this tepid economy, a job is a job. For James Langa, producer at

Kringle’s Inventionasium at Tower City Center in downtown Cleveland, his business is seasonal by nature. Therefore, he only needs enough staff to squeak through the 20 days that his holiday spectacular is open from Black Friday to just before Christmas. Even so, the interactive holiday extravaganza has seen such an uptick in business each year that Mr. Langa hired an additional eight people, boosting his staff to 33 this season. “Hiring on our end is definitely up,” Mr. Langa said. “We had to

come up with some additional characters for children to meet inside as well as revamp our whole host of activities for our guests to experience.” Mr. Langa, who opened Kringle’s Inventionasium in 2007, expects at least a 20% increase in visitors this year. Last year, Mr. Langa said he had to turn people away because there weren’t enough performers to handle the influx of visitors. Meanwhile, A Christmas Story House — you know, the place where Ralphie almost shot his eye out — hired five seasonal employees

this year, which is typical, according to Angela Dickerson, the museum’s business manager. Ms. Dickerson said there usually isn’t much turnover in the seasonal help year to year. Seasonal hiring is completed around September for the few slots that might be available. She noted there wasn’t a barrage of people looking for work this year mostly because the house didn’t post any employment ads and instead relied on word of mouth. After a newspaper published a story a few years ago, however, Ms. Dickerson said the house was

flooded with phone calls, faxes and knocks on the door from people looking for work. “It was ridiculous,” she said. “We had to keep the doors locked. So many people were showing up.” In Akron, Don Drumm Studios & Gallery hired six seasonal workers, which gallery manager Maggie Guthrie said is pretty usual. She said business this summer was fairly good, and she’s hopeful it’ll translate to holiday sales. “It’s looking to be a good holiday business wise,” she said. “We’re hoping and preparing for it.” ■

IN BRIEF ■ BUNDLING UP: Weiss Furs is back in the region with a store in Westlake that opened last Monday, Nov. 1, and plans for a 15,000square-foot facility in Woodmere slated to open in March. Justin Weiss, a fourth-generation member of the Weiss furrier family, is leading the current business effort, which also includes a temporary store location in Legacy Village. Last year, Weiss Furs shut its Northeast Ohio stores after more than 100 years in business in Northeast Ohio. Following a career in New York, along with a current venture in Alaska, Mr. Weiss said he had a desire to return to his roots. “It was important to me to return to Cleveland to carry on the family business,” he said. ■ LOOKIN’ GOOD: Lee Zapis, principal of Westlake-based Zapis Capital Group, has created 9Threads, a new multimedia marketing agency specializing in the fashion, beauty and retail industries. The agency is a merger of Westlake-based Symphony Publishing Group publishers of Earnshaw’s and Footwear Plus and digital marketing services firm ‘peeps creative in Akron. 9Threads provides strategic marketing and custom content services to companies in the fashion, beauty and retail segments that are seeking ways to broaden their online exposure. 9Threads is headquartered in New York City, with an office in Akron. ■ SHINING BRIGHT: Vanity Lab Salon Spa Shop has added an onsite local artisan jewelry collection under the name Sparkle Jewelry. Sparkle features the work of more than 50 local artists, and a portion of the proceeds, along with a match from Sparkle, support an area nonprofit. Contributions currently are benefiting The Gathering Place. ■ THE BUZZ: Acclaimed pianist Jim Brickman has teamed up with Cleveland-based Beecology for a special promotion to mark the release of Mr. Brickman’s new CD, “Home.” Beecology is a manufacturer of natural skin care, hair and body products. Through this Thursday, Nov. 11, the first 1,000 people who purchased Mr. Brickman’s CD from his web site got an autographed copy of the CD plus a tube of Beecology’s “Brick Balm.” The lip balm normally sells as “Buzz Balm” but was renamed in a limited edition run for inclusion with the CD.

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Doctors: Health care reform prompts action continued from PAGE 1

for providing quality care at a controlled cost. Hospitals are encouraging independent physicians either to align closely with their systems — with perks, of course — or simply to sign on as full-time employees. It’s not a new idea, but it’s becoming more

common as physicians are lured by incentives such as access to top-notch electronic medical records systems. “It seems like physicians are feeling they’ve got to make a choice to go somewhere,” said Thomas Campanella, director of the health care MBA program at Baldwin-Wallace College and a longtime health care observer.

The tighter connections also are beneficial for hospital systems, Mr. Campanella said. More physicians and specialists under the systems’ umbrellas can boost their market share and leverage in given communities.

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NOVEMBER 8-14, 2010

launched an aggressive effort to entice independent practices of physicians and specialists in the suburbs of Cuyahoga County to join the health system. The move is part of an overall growth strategy for the county-subsidized hospital, which has charted a new course over the last few years after facing a series of financial setbacks. At the moment, MetroHealth has about 500 physicians on staff, including about 130 at its community health centers located around Cleveland. The idea isn’t only to take over existing practices but to form partnerships with those doctors that would prefer to remain independent, said Dr. Bill Lewis, a MetroHealth cardiologist leading the effort. Dr. Lewis wouldn’t cite the number of physicians MetroHealth is looking to employ or partner with, but said MetroHealth is interested in “as many quality physicians as we can find.” Incentives MetroHealth is touting are better pay, enrollment in the system’s benefits packages, access to the Ohio Public Employee Retirement System and the handling of administrative functions associated with running a doctor’s office. Those interested in just partnering for the sake of remaining independent, Dr. Lewis noted, can have access to some of the benefits, such as MetroHealth’s electronic medical records system or some administrative support. “We want to give them support to be doctors, not be chief, cook and bottle washer,” Dr. Lewis said. Dr. Jeffrey Galvin was one of those doctors. He ran a solo private practice in Fairview Park for about 10 years but joined MetroHealth in August. He uprooted his practice and moved to a facility in Cleveland’s West Park neighborhood, and so far, most of his patients have come along with him. The administrative work, long work days and the cost of installing an electronic medical systems were among the factors that ultimately led Dr. Galvin to join MetroHealth. “Oh my lord, it is amazing how much I put up with for so long,” Dr. Galvin said about his time as a private practitioner. If anything, the change has made him a more peaceful and collected physician, he said. “I’ve had three patients just look at me and cock their heads to one side and say, ‘What’s different? You’re just so much calmer,’” Dr. Galvin said. “In my mind, I’m still

the ornery pain in the backside I’ve always been, but they look at me and see some other kind of demeanor.”

A simple partnership The Cleveland Clinic has made a name for itself by acquiring physician groups and branding them in its image across the region. For instance, the Clinic formed its Community Physician Partnership almost four years ago when it merged the physician groups at Fairview Health System, Lakewood Hospital, Marymount Hospital and the Meridia Health System. Earlier this year, the Clinic broadened its efforts of integrating care with the formation of its Quality Alliance, in which private practice doctors must agree to maintain the Clinic’s quality standards and, in return, the Clinic will work with the doctors to negotiate reimbursement rates from insurers. Dr. Tarek Elsawy, medical director for the Quality Alliance, said the model of buying practices is a thing of the past as some hospital systems are so large that physicians wouldn’t want to be so far from their central hubs. However, partnering with physicians will help integrate all aspects of a patient’s care to better prepare for changes to reimbursement models and ultimately to form an accountable care organization. “At some point, we’re all going to be judged by how we’re doing in terms of outcomes. It’s very difficult to do that in a solo private practice by yourself,” Dr. Elsawy said. University Hospitals has looked to partner with independent doctors since the health system created its physician services group late last year Furthermore, University Hospitals has laid the groundwork for its own accountable organization and is looking for more independent physicians to take part in that initiative, according to Dr. Eric Bieber, president of the system’s accountable care organization. Dr. Bieber said the hospital system sent about 550 letters to independent providers inviting them to partner on the system’s accountable care project. University Hospitals’ accountable care organization will focus on caring for a group of 25,000 patients, who are enrollees in the system’s benefits plan. “We value our colleagues that are independent and part of our staffs, so it’s really about agreeing to work with us on optimizing the care delivery for, in this case, employees and families,” he said. ■

TAKING INDUSTRY’S TEMPERATURE Primary care physicians are going to be a key component of the health care overhaul when 32 million more people join the insurance rolls in 2014, but these doctors are becoming increasingly difficult to find. Between now and 2015, the shortage of primary care doctors likely will increase significantly, according to the Association of American Medical Colleges. Previous projections, according to the group, showed a baseline shortage of 39,600 in 2015, but new estimates bring that number to 63,000. Thomas Campanella, director of the health care MBA program at Baldwin-Wallace College, said because of a stronger need for primary care doctors, the federal government ultimately will need to come up with inducements to encourage young people to shift to primary care, such as loan forgive-

ness or increasing Medicare support for residency training. Meanwhile, the Northeastern Ohio Universities Colleges of Medicine and Pharmacy, based in Rootstown, is looking to encourage its students to practice medicine in underserved rural and urban communities, which have the greatest need for medical providers. To do so, the school is building an endowment for an “education for service” program to provide full-tuition scholarships to student doctors or pharmacists who agree to practice in an underserved community for four years. “We want to place people in appropriate places,” said Dr. Jay Gershen, the university’s president. “Whether it’s an accountable care organization or an independent clinic, we just want the providers to be out in the community and provide the care.” — Timothy Magaw

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

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LARGEST HOSPITALS

RANKED BY 2009 NET PATIENT REVENUE

Company Address Rank Phone/Web site

Net patient revenue ($ millions) 2009

2008

Gross patient revenue % change (millions)

Staffed beds

FTE employees as of 6/30/ 2010

Year founded

Parent system

Top executive Title

Cleveland Clinic(1) 9500 Euclid Ave., Cleveland 44195 (216) 444-2200/www.clevelandclinic.org

3,190.3

2,844.7

12.2

9,139.3

1,270

19,758

1921

Cleveland Clinic Health System

Delos M. "Toby" Cosgrove president, CEO

University Hospitals Case Medical Center and Subsidiaries(2) 11100 Euclid Ave., Cleveland 44106 (216) 844-1000/www.uhhospitals.org

1,327.3

1,221.3

8.7

3,170.5

847

10,041

1866

University Hospitals

Thomas F. Zenty III CEO

Summa Akron City Hospital and Summa St. Thomas Hospital 525 E. Market St., Akron 44309 (330) 375-3000/www.summahealth.org

644.1

629.7

2.3

2,153.0

578

7,000

1989

Summa Health System

Thomas J. Strauss president, CEO, Summa Health System

MetroHealth Medical Center 2500 MetroHealth Drive, Cleveland 44109 (216) 778-7800/www.metrohealth.org

618.2

594.5

4.0

1,731.1

410

5,169

1837

MetroHealth System

Mark J. Moran president, CEO

Aultman Hospital(1) 2600 Sixth St. S.W, Canton 44710 (330) 452-9911/www.aultman.org

444.9

430.4

3.4

769.4

578

3,038

1892

Edward J. Roth III president, CEO

Akron General Medical Center 400 Wabash Ave., Akron 44307 (330) 344-6000/www.akrongeneral.org

416.4

410.0

1.6

1,277.4

473

2,650

1914

J. McCorkle Akron General Health System Vincent president, CEO

Akron Children's Hospital(1) One Perkins Square, Akron 44308 (330) 543-1000/www.akronchildrens.org

390.2

335.6

16.3

700.0

336

2,886

1890

William H. Considine president

Fairview Hospital(1) 18101 Lorain Ave., Cleveland 44111 (216) 476-7000/www.fairviewhospital.org

369.1

371.3

(0.6)

1,170.6

389

2,027

1892

Cleveland Clinic Health System

Janice Murphy president

Hillcrest Hospital(1) 6780 Mayfield Road, Mayfield Heights 44124 (440) 312-4500/www.hillcresthospital.org

305.6

291.7

4.8

966.9

383

1,822

1968

Cleveland Clinic Health System

Jeffrey A. Leimgruber president

Saint Elizabeth Health Center 1044 Belmont Ave., Youngstown 44501-1790 (330) 746-7211/www.hmpartners.org

298.6

257.9

15.8

965.6

413

1,989

1911

Catholic Health Partners

Robert Shroder president, CEO

Southwest General 18697 Bagley Road, Middleburg Heights 44130 (440) 816-8000/www.swgeneral.com

284.9

261.5

9.0

887.8

265

1,814

1920

partnering with University Hospitals

Thomas A. Selden president, CEO

Mercy Medical Center 1320 Mercy Drive N.W., Canton 44708 (330) 489-1000/www.cantonmercy.org

247.1

243.5

1.5

509.1

475

1,946

1908

Sisters of Charity Health System

Thomas E. Cecconi president, CEO

West Medical Center(3) 36000 Euclid Ave., Willoughby 44094 (440) 953-9600/www.lakehealth.org

199.5

186.4

7.0

494.3

267

1,095

1961

Lake Health

Cynthia Moore-Hardy president, CEO

Parma Community General Hospital 7007 Powers Blvd., Parma 44129 (440) 743-3000/www.parmahospital.org

184.5

187.7

(1.7)

273

1,491

1961

Terrence G. Deis president, CEO

Mercy Regional Medical Center 3700 Kolbe Road, Lorain 44053 (440) 960-4000/www.mercyonline.org

180.0

177.1

1.7

570.6

1,308

1892

Catholic Health Partners

Edwin Oley president

Firelands Regional Medical Center(1) 1111 Hayes Ave., Sandusky 44870 (419) 557-7400/www.firelands.com

179.7

171.1

5.0

433.4

231

1,412

1876

Firelands Regional Medical Center

Charles A. Stark president, CEO

EMH Regional Medical Center 630 E. River St., Elyria 44035 (440) 329-7500/www.emh-healthcare.org

176.9

174.3

1.4

398.4

251

1,375

1908

EMH Regional Healthcare System

Donald Sheldon, MD president, CEO

Marymount Hospital(1) 12300 McCracken Road, Garfield Heights 44125 (216) 581-0500/www.marymount.org

162.7

170.7

(4.7)

630.4

304

1,097

1949

Cleveland Clinic Health System

David J. Kilarski president, CEO

Summa Barberton Hospital 155 Fifth St. N.E., Barberton 44203 (330) 615-3000/www.summahealth.org/barberton

140.8

134.3

4.8

120

1,016

1915

Summa Health System

Thomas A. DeBord president

South Pointe Hospital(1) 20000 Harvard Road, Warrensville Heights 44122 (216) 491-6000/www.southpointehospital.org

134.2

135.2

(0.7)

452.1

226

982

1957

Cleveland Clinic Health System

David J. Kilarski president

St. John Medical Center 29000 Center Ridge Road, Westlake 44145 (440) 835-8000/www.stjohnmedicalcenter.net

134.0

131.0

2.3

379.7

217

759

1981

UHHS/CSAHS - Cuyahoga, Inc.

Cliff J. Coker president

Lakewood Hospital(1) 14519 Detroit Ave., Lakewood 44107 (216) 521-4200/www.lakewoodhospital.org

126.7

138.8

(8.7)

443.2

236

894

1907

Cleveland Clinic Health System

Janice G. Murphy president

Robinson Memorial Hospital 6847 N. Chestnut St., Ravenna 44266 (330) 297-0811/www.robinsonmemorial.org

121.4

120.8

0.5

394.9

141

1,091

1894

Summa Health System

Stephen Colecchi president, CEO

Saint Vincent Charity Medical Center(1) 2351 E. 22nd St., Cleveland 44115 (216) 861-6200/www.stvincentcharity.com

113.6

121.5

(6.5)

288.3

163

927

1865

CSAHS~Cuyahoga, Inc.

Judith Ann Karam president, CEO

Fisher-Titus Medical Center(1) 272 Benedict Ave., Norwalk 44857 (419) 668-8101/www.fisher-titus.com

108.7

98.0

10.9

199.6

144

689

1957

Patrick J. Martin president

Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual business lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Information is from the American Hospital Directory, www.ahd.com. Employee numbers represent total employees, not full-time equivalent employees. Staffed beds is the number of total complex beds. (2) Includes Rainbow Babies & Children's Hospital and MacDonald Women's Hospital. (3) Numbers are estimates.

RESEARCHED BY Deborah W. Hillyer

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Rosetta: Acquisitions diversify expertise continued from PAGE 3

Each deal has helped broaden the company’s skills and in some cases the geographies it serves, Mr. Kuenne said. For instance, Level Studios strengthens Rosetta’s skills in mobile marketing and user interface design. It also gives the company three offices on the West Coast, where it wanted a larger presence. Now, in addition to plans to make acquisitions outside the country,

September, upping its staff by 215 and its revenue by $45 million. Rosetta also acquired Wishbone of New York City at the start of the year, adding 60 to its staff and $15 million to its sales. Those acquisitions are expected to help boost Rosetta’s revenue to $215 million this year. They are about more than just numbers, though.

Contact: Phone: Fax: E-mail:

Rosetta is looking for companies that would increase its skills in areas such as customer relationship management and search engine marketing. The company’s goal is to become a firm that can help a company transform the way it markets itself, Mr. Kuenne said. “It’s all about finding the right company, the right culture, the right capability,” he said.

NOVEMBER 8-14, 2010

Even without acquisitions, Rosetta’s sales would be in the $150 million range today — up significantly from $125 million in 2008. Combined, sales at Rosetta and Brulant totaled $98 million in 2007. Mr. Kuenne attributed the organic growth to the company’s entrepreneurial culture, its broad range of capabilities and a “massive shift from traditional marketing to digital and direct marketing.” Rosetta was the ninth-largest digital marketing firm in the country in 2009, according to Advertising

REAL ESTATE

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

LEGAL NOTICE FOR LEASE

Notice is hereby given that sealed proposals will be received in the Board of County Commissioners Office of Procurement & Diversity, Room 100, County Administration Building Annex, 112 Hamilton Court, Cleveland, Ohio 44114 until 11:00 A.M. local time on December 01, 2010 for lease of office space for a Juvenile Court Westside Regional Probation Office for the period July 01, 2011 to June 30, 2016. Note: The Office of Procurement and Diversity is moving and may be relocated by the time the proposals are due. Please be sure to call ahead 216.443.7200 for their new address. Required geographic locations: The space must be in an area bounded approximately by: East: West Blvd. West: Western border of Cleveland

The official closing time shall be determined by the wall clock located in the Office of Procurement & Diversity. (SAME ADDRESS) Late proposals will be returned unopened. There will be a Pre-proposal Conference on November 16, 2010 at 10:00 A.M. local time at The Department of Central Services, 2nd floor conference room, 1642 Lakeside Avenue, Cleveland, Ohio 44114. IT IS STRONGLY RECOMMENDED THAT INTERESTED VENDORS ATTEND. Specifications and proposal blanks may be obtained at the Board of County Commissioners Office of Procurement & Diversity. (SAME ADDRESS) Questions may be addressed to Mr. John Myers, Real Estate Manager at 216.698.2517. Payment will only be made upon approval of the Board of County Commissioners and payments will be warrants issued by the County Auditor upon notification from the Commissioners. The Board of County Commissioners reserves the right to accept or reject any proposals or any part or all parts of any proposal submitted, and waive all technicalities. Each proposal must state in full the name and address of each person, firm or corporation interested in the proposal submitted. BY ORDER OF THE BOARD OF COUNTY COMMISSIONERS OF CUYAHOGA COUNTY JIMMY DIMORA

TIMOTHY F. HAGAN

Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card

OFFICE SPACE

NOTICE TO VENDORS

North: I-90 South: West Avenue / Chatfield

Age, a sister publication of Crain’s Cleveland Business. AdAge also has referred to Rosetta as “the last remaining independent digital agency with major scale.” Many other independent agencies have been bought or are pursuing acquisition, according to the publication. Brad Nellis, president of the Northeast Ohio Software Association, described Rosetta as a “great company” that could have a large impact on the region. “I know that they’re growing like crazy,” he said. ■

PETER LAWSON JONES

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3 MONTHS FREE 1000 to 6200 sq ft build to suit. Single furnished offices $500. Rocky River Beachcliff area.

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REALTORS: Now is a great time to promote your Luxury Properties to high-end prospects AND receive reduced rates on your advertising.

Call Genny Donley at (216) 771-5172 for more details.

REAL ESTATE SERVICES

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Faulkner, Hoffman & Phillips (216) 781-3600

REAL ESTATE AUCTION

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• 5,600 SF free-standing building • Built in 1985 • 30 parking spaces • Drive-through window • 52’ frontage on Market St. • Near intersection of East Market St. and St. Rte. 46 Contact Auctioneer for property tours and terms & conditions. Subject to prior sale.

Looking for property? Search thousands of local listings Selling or leasing a property? Get your property featured through Crain’s www.CrainsCleveland.com/LoopNet

For advertising opportunities contact Genny Donley gdonley@crain.com 216-771-5172

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Submit your business card to promote your service and receive a SUBSTANTIAL DISCOUNT off your ad price. To find out more, contact Genny Donley at 216.771.5172

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POSITION WANTED 2010 Case Western Reserve University, Weatherhead Business School Graduate, seeks opportunity in Business, Banking, Finance and or Sales and Marketing Fields. Contact TCowdrick@yahoo.com

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NOVEMBER 8-14, 2010

Casino: River constriction concerns ships just sneaking by continued from PAGE 1

casino; the site runs from Huron Road behind Tower City down to the river bank. The purchase included a parking lot along the river at Collision Bend, the tightest turn on the narrow river. “We’re concerned, because this is a tight river to start with,” said Glen Nekvasil, vice presidentcorporate communications for the Lake Carriers’ Association. “Every inch of that river is needed for commercial navigation.” The association is a Clevelandbased nonprofit that represents the 18 companies that operate Americanflagged ships on the Great Lakes. The vessels bring iron ore, stone and bulk chemicals to docks along the Cuyahoga, with the farthest trips ending at the ArcelorMittal Steel ore dock five miles upriver. Schematics for the change presented last month by Rock Ventures at a meeting with the U.S. Army Corps of Engineers show a desire to move the existing shoreline bulkheading out into the river almost 29 feet. The plans indicate the casino operator would like to replace 686 feet of the existing bulkhead to accommodate more parking and to provide a buffer for a cantilevered

section of the casino building that, without bumping out the shoreline, would reach the river’s edge. Rock Ventures spokeswoman Jennifer Kulczycki responded to a phone call about the proposed change to the channel with an e-mail that stated the company has “had brief exploratory discussions with the Corps and (Greater Cleveland Partnership) to inform our discussions, but no final decisions have been made.” Rock Ventures representatives met Oct. 21 with the Army Corps of Engineers officials in Buffalo, said Alan Sisselman, chief of the Corps of Engineers’ Ohio Application Evaluation Section. He described the session as a pre-application meeting. The Corps of Engineers is responsible for dredging the channel to keep it navigable for commercial vessels. Mr. Sisselman said proponents of the shoreline change were told that any modifications in the depth or width of a federally authorized and maintained navigation channel, such as the upper Cuyahoga River, would require congressional action.

Twists and turns Such legislation for a specific project is possible, if not routine.

Allison Preiss, a Washington, D.C.-based spokeswoman for U.S. Sen. Sherrod Brown, D-Avon, said staff members in the senator’s Cleveland office have been contacted by casino officials and are working to find an amicable solution. “While the project is still in the preliminary stages, Sen. Brown believes that it’s important to find a solution that allows this project — which would bring hundreds of construction and permanent jobs to Northeast Ohio — to move forward in a way that works for all users of the Cuyahoga River,” Ms. Preiss said in a prepared statement. Carol Caruso, vice president of government advocacy for the Greater Cleveland Partnership, said her business advocacy group has been speaking with Sen. Brown’s office and is setting up a meeting with all the concerned parties. “We’re optimistic we can find a happy solution,” she said. Mr. Nekvasil of the Lake Carriers’ Association said navigating the twisting river requires considerable precision for the big ships, some of which, at more than 700 feet long, would be taller than the Terminal Tower, which the captains can see above them as they make the turn

at Collision Bend. He said one of the biggest ships, the American Republic, which regularly brings iron ore to the ArcelorMittal steel mill, was fitted with eight rudders to allow it to steer precisely through the narrow channel without tugboat assistance. Mr. Nekvasil said he has been hearing from captains of the big ships who are concerned about any constriction of the river channel. Several have told him that now, when their ships make the turn at Collision Bend, they come within 30 feet or less of the bulkhead. The ship owners and ArcelorMittal

are concerned that a narrowing of the channel could require using more smaller ships to make deliveries upriver, which could increase the cost of iron ore and other materials. In a statement, an ArcelorMittal spokeswoman said the steel company “is reviewing the proposed plan for the casino and its potential impact on the Cuyahoga River.” “ArcelorMittal Cleveland’s primary objective is to ensure that waterborne vessels have the ability to efficiently transport materials to our operations and other businesses along the river,” the spokeswoman said. ■

Military: Work helps to increase company’s stability continued from PAGE 3

apartment units it has retained in its portfolio from over the past 60 years. Ironically, Cleveland-based Forest City was reluctant to enter the military arena — a surprise for a real estate company that has taken on pioneering roles in the past. Robert O’Brien, Forest City chief financial officer, recalled that when a Hawaii-based builder approached the company about partnering on a Navy project in 2004, Forest City’s investment committee questioned the assignment because it resembled simple fee-income work. That’s the stuff for builders who construct projects to sell and move on rather than a diversified real estate company that prides itself on ownership and a long-term approach to projects, even if it manages them for others. However, Forest City decided to pursue a job that would wind up incorporating 4,200 homes in that first agreement because it was similar to senior housing and other work it performs for public entities and uses the company’s entire skill set. David LaRue, Forest City’s chief operating officer, said the company originally thought working on military housing would mean renovating 1950s- and 1960s-vintage singlefamily homes. However, it generally found the properties so dilapidated they needed to be replaced. “It’s a great service we’re providing to the families,” Mr. LaRue said.

The long view The original Hawaii assignment is now nearing completion of its $1.3 billion building phase, but Forest City will continue providing leasing and management services for the homes, which military personnel receive a stipend to rent. Military families may rent from Forest City or from competing private complexes nearby. “It’s turned into a great long-term value,” Mr. LaRue said. Forest City manages the privatized properties under 50-year leases with the federal government, the ultimate creditworthy tenant. Moreover, the military portfolio has continued to grow even while Forest City spent the last two years meeting the desires of securities analysts and investors that it reduce its development risk and slash debt. The work for the military has put Forest City employees in communities such as the Puget Sound area in Washington state, the Air Force

Academy in Colorado, and, increasingly, in the southeastern United States. And it isn’t Forest City’s only diversification effort in the face of a tight credit environment that makes pursuing megaprojects a challenge. Another avenue Forest City has pursued is undertaking property management and third-party consulting work on a fee basis for banks and others with troubled properties or development plans. In one case, Forest City analyzed and devised strategies for 15 retail and office properties in the loan portfolio of a financial concern with billions of dollars of properties. Forest City estimated how to maximize the values of the assets, and in some cases, Mr. O’Brien said, recommended the lender to foreclose immediately. “We have experience in multifamily, in retail and mixed use all in one company. That’s why they asked us,” Mr. O’Brien said. He declined to identify the company. Through that assignment and others, such as helping the city of San Juan, Puerto Rico, plan to redevelop its waterfront, Forest City continues to use the skills of its development team, Mr. LaRue said.

A ‘good first step’ All the work on military housing occurred amid a severe recession that many in the real estate field considered a depression. Charles Ratner, Forest City CEO, put the company’s mission during this period in a single word: survive. If Forest City had not had a diversified, $12 billion portfolio and a diversified team, Mr. LaRue said, “We wouldn’t be the ones sitting here talking to you.” Recognizing the company’s efforts, Moody’s Investor Service recently increased Forest City’s credit outlook to stable from negative. “It’s a good first step,” Mr. O’Brien said, because the other big credit rating agency, Standard & Poor’s, left the company’s rating unchanged at B+, or speculative. The military work has put Forest City in some unusual situations. Last May 15, for example, a levee on the Cumberland River gave way, flooding a Forest City-operated Navy family community in Millington, Tenn. Forest City employees helped Navy personnel pluck Navy families from their homes and place them in temporary quarters. Afterwards, Forest City repaired the damage so the Navy families could return home. ■

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NOVEMBER 8-14, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THEINSIDER

THEWEEK NOVEMBER 1 – 7 The big story: Republicans came up big statewide in last Tuesday’s election, with John Kasich winning the gubernatorial election against incumbent Gov. Ted Strickland and Rob Portman winning in the U.S. Senate race to replace the retiring George Voinovich. The GOP also swept all state offices and will hold a 13-5 edge in the delegation to the House of Representative. Closer to home, Lakewood Mayor Ed FitzGerald, a Democrat, won the race for the new Cuyahoga County Executive position. He and the county’s new 11-member council will be sworn in on Jan. 1. See story, Page One, and editorial, Page 10 He’ll manage: Developer MMPI Inc. named Tyrone Williams project manager for the Cleveland Medical Mart & Convention Center complex. MMPI said Mr. Williams, a Cleveland native, will be responsible for managing construction schedules and budgets, reviewing submittals, and handling general coordination with contractors and engineers. Mr. Williams has served in a variety of capacities with Hammond Construction Co. in Canton for the past seven years. Big temper (mill): Steel distributor Olympic Steel Inc. plans to invest about $25 million in a new temper mill and cut-to-length line at U.S. Steel’s Gary Works in Gary, Ind. Olympic Steel said the temper mill equipment is expected to be operational in the first half of 2012. The company also has an option with the equipment manufacturers to buy a second temper mill and cut-tolength line. Once fully operational, the new equipment will add 150,000 to 180,000 new tons per year of high-quality tempered sheet capacity for Olympic Steel.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

L.A.: City of angels Cleveland: City of marts

Akron Law sets up rent-a-clerk site

Hospice doesn’t brush off offer of Brush office space

■ Cleveland eventually is going to have a medical mart (or so we’ve been told), so why not a manufacturing mart as well? Two women who long have advocated for innovation in manufacturing in Northeast Ohio think it can, and on Dec. 1 they plan to open The Manufacturing Mart at the Galleria at Erieview. Mary Kaye Denning, founder of Capital of Know-How, a for-profit organization that links inventors and manufacturers, and Pamela Holmes, a former vice president of Cleveland manufacturing support group Wire-Net, are teaming up for the effort. They’re starting out small, as marts go, with about 3,500 square feet in what used to be a Williams-Sonoma store. They have two tenants signed up — New Wave Plastics of Medina and Richard’s Grinding of Cleveland — but said they’re talking to others they hope will be on board by opening day. Manufacturers will be able to display their products and capabilities at the mart, while inventors and others with product-innovation ideas will be able to present their potential products to manufacturers. Ms. Holmes and Ms. Denning will serve as sales reps for the companies that display at the mart. They hope to expand to take up more space in the Galleria mall. “We intend to pump up their work. I want to be known as the lady with the new business orders,” Ms. Denning said. — Dan Shingler

■ Employers seeking a law clerk but who don’t need or want one on a permanent basis now may hire students of the University of Akron School of Law through the school’s online tool, Law Clerk for Hire. The school’s career planning and placement office unveiled the service in late October. It allows firms to hire law students on an as-needed, hourly basis to complete tasks such as document review and legal research, said Barbara Weinzierl, director of the school’s career planning and placement office. More than 25 students have signed up, creating profiles and résumé pages that employers who also sign up can search. Ms. Weinzierl said the page was launched for a number of reasons, not the least of which is the cutback in hiring by firms. “We kind of saw it as a perfect match between students needing practical, substantive experience and those small firms and solo practitioners needing someone on an as-needed hourly basis,” she said. Amid an intensely competitive job market, the more experience students can gain during law school, the better, Ms. Weinzierl said. Pay is negotiated between students and employers. The service, developed by the school along with the Small and Solo Practitioners Section of the Akron Bar Association, is free to students and employers. To register, employers can log on to http://lawclerk .uakron.edu; they also can contact the office at 330-972-5321 or at lawcareerplanning @uakron.edu. — Michelle Park

■ Brush Engineered Materials Inc., a maker of beryllium alloys and specialty metals based in Mayfield Heights, has donated 40,000 square feet of office space at its former headquarters on St. Clair Avenue in Cleveland to Hospice of the Western Reserve, which will use the space as the home for the nonprofit’s leadership team. The property is on 18 acres with ample parking and storage, which hospice CEO David Simpson said will allow for further expansion. The agency already plans to start construction early next year of a $20 million, 32-bed facility in Westlake. “With the addition of this building, our agency is poised to continue to provide the community with the support and care they deserve, while reaching underserved populations,” he said. The new building will house about 200 of the hospice’s employees. It’s about 2.5 miles from the nonprofit’s current headquarters, which is alongside its 42-bed hospice facility on East 185th Street near Lake Erie. Brush spokesman Patrick Carpenter said the company had owned the property since the mid-1940s. The property served as Brush’s headquarters and research-anddevelopment center at various times during the company’s history. In 2008, Brush moved its headquarters to Mayfield Heights. “This transaction was viewed by our company as the best possible outcome for the building,” he said. — Timothy Magaw

WHAT’S NEW

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

State of the art: Directors of the Museum of Contemporary Art Cleveland voted to proceed with construction of a $26.7 million home for the institution in the Uptown development in University Circle. Groundbreaking for the building should take place in December. MOCA Cleveland by fall 2012 expects to open the building, which is designed by Foreign Office Architects in London. The four-story, 34,000square-foot building at the intersection of Euclid Avenue and Mayfield Road will be 42% larger than MOCA Cleveland’s current leased space at 8501 Carnegie Ave.

Howdy, partner: Lincoln Electric Holdings Inc. of Euclid, a maker of welding equipment, said it has formed a strategic partnership with IPG Photonics Corp., a company based in Oxford, Mass., that makes high-power fiber lasers and amplifiers. The two companies said they will work jointly to provide “welding solutions to industrial customers around the world” by creating high-power laser welding equipment.

This and that: Apple Growth Partners, a regional accounting and business advisory firm headquartered in Akron, has opened a new office just off Interstate 77 at Rockside Road in Independence. ... Medical therapies developer Athersys Inc. of Cleveland received $730,000 in grants made available by the health care reform bill that President Barack Obama signed in March and another $140,000 grant from the Michael J. Fox Foundation. To keep up with local business news as it happens, visit www.CrainsCleveland.com.

COMPANY: Ferro Corp., Cleveland PRODUCT: Front and rear contact pastes The company’s Ferro Electronic Materials unit, a supplier of materials for fabricating photovoltaic silicon solar cells, last month introduced the contact pastes at trade shows in Taiwan and India. The two new products “improve solar cell efficiency and throughput rates, enabling solar energy to become a more cost-competitive energy generation alternative,” Ferro says. Both are RoHS-compliant (Restriction of Hazardous Substances Directive) and are lead- and phthalate-free. NS 33-512 front contact paste increases electrical efficiency by up to 0.6% and enables fast printing of three bus bar cell designs. Aluminum BSF paste AL 53-140 lowers cell costs by reducing paste lay down by as much as 25%. “These new products address both factors in the equation to make solar energy more cost-competitive — they increase cell efficiency and reduce manufacturing costs,” said Todd Williams, business manager for Ferro Electronic Materials. The company said it believes the products meet all global environmental regulations. For information, visit www.Ferro.com. Send information about new products to managing editor Scott Suttell at ssuttell@crain .com.

■ Slate.com came up with a formula to rank the most vain U.S. senators, and Ohio Democrat Sherrod Brown earned the No. 15 spot in the world’s greatest deliberative body. In a slideshow, Slate.com noted that Sen. Brown has six pictures of himself in his office and that he “frames not only his own speeches but also statements from fellow senators commenting on his speeches.” It should shock no one that the most egotistical senator is John Kerry, D-Mass., whose office has 99 pictures of the senator with celebrities including Bono, the Dalai Lama and Ronald Reagan.

The largest component of the expenses for the period is $15.8 million in legal fees to Baker Hostetler, which is bankruptcy trustee Irving Picard’s law firm. Bloomberg said most of the money recovered in that time, $771,000, came from Madoff investors who received payouts in the 90 days before the investment firm’s bankruptcy filing, according to Picard’s report. “The trustee said he has evaluated 14,030 investor claims; including 1,781 from April 1 to Oct. 22,” according to Bloomberg. “He said he has allowed a total of 2,280. The report, which was made public Oct. 30, is the fourth filed by Picard.” Mt. Picard told U.S. Bankruptcy Judge Burton Lifland in his latest report that he recovered a total of about $1.5 billion for creditors of Bernard L. Madoff Investment Securities LLC, Bloomberg reported.

In Cleveland, there’s a silver lining to Madoff’s misdeeds

Alcoa’s local wheel unit takes a shine to new Ferrari

■ The Bernie Madoff mess was a disaster for most involved, but the bankruptcy of the Ponzi schemer’s investment firm has been quite lucrative to Cleveland law firm Baker Hostetler LLP. Bloomberg reported that the trustee overseeing the bankruptcy of Madoff’s investment firm “spent $26.9 million in the six months ended Picard Sept. 30 while recovering $849,000 over the same period for victims of the money manager’s Ponzi scheme, according to a report filed in Manhattan federal court.”

■ There’s a little bit of Cleveland in the beautiful and pricey new Ferrari 458 Italia. Web site iStockAnalyst.com noted that the Cleveland-based Alcoa Auto Wheels unit of aluminum giant Alcoa is supplying lightweight forged aluminum wheels for the luxury sports car. The wheels are forged at Alcoa’s Cleveland works plant. The use of forged aluminum wheel technology pioneered by Alcoa “ensures that the front wheel weighs just 22.8 lbs., while the rear wheel weighs 25.3 lbs., a saving compared to a cast aluminum wheel and a result that is only achievable with a forging process,” the web site reported. If you want the Ferrari 458 Italia, it will set you back about $220,000.

They all look in the mirror and see a president, right?

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