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1/29/2010
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$1.50/FEBRUARY 1 - 7, 2010
Vol. 31, No. 5
“I think there are fewer construction companies than there are brokers.” – Mark Rantala (below), former commercial real estate broker; now director of business development at JL Moore & Co.
Business groups to lead push on Third Frontier As tech initiative heads for May ballot, backers see passage as critical for state INSIDE: Ohio Gov. Ted Strickland stops in Highland Heights to push his advanced energy agenda. Page 5
JESSE KRAMER
By JAY MILLER jmiller@crain.com
CHANGE OF COURSE As commercial real estate bottoms out, some brokers seek greener pastures By STAN BULLARD sbullard@crain.com
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fter 20 years in commercial real estate brokerage, Mark Rantala recently joined the JL Moore & Co. construction firm as director of business development. The reason: He sees little improvement in his bread-and-butter, retail-leasing arena for at least a year, and even then he expects the recovery to be spotty.
“I think there are fewer construction companies than there are brokers,” Mr. Rantala said from his new desk at JL Moore, which builds everything from churches to office and industrial buildings, but has a focus on restaurants, gas stations and retrofitting store interiors. Mr. Rantala is among a handful of commercial real estate agents joining residential brokers in exiting the commission-driven business during this harsh recession. See BROKERS Page 7
— Wendy Heiser-Higley, formerly of CB Richard Ellis’ Cleveland office and now a salesperson for an Orange County software company
Ohio-based businesses and colleges to develop and commercialize hightech products and processes. Senate Republicans, led by Senate President Bill Harris of Ashland, approved the lower bond limit partly because of worry that the public won’t support a larger issue, which would mean more interest payments from the state’s general revenue fund over the 10-year repayment period planned for the Third Frontier bonds. Business groups hope a compromise is reached closer to $950 million than $500 million, but they’re prepared to launch the campaign for whatever amount the legislature approves and are confident the issue will win voter approval. Joe Roman, president of the See THIRD Page 5
INSIDE PNC drops gloves in suing Huntington
WHAT OTHER FORMER BROKERS ARE SAYING “It was a really tough decision to leave because the earning potential in the long run is very high.”
With both houses of the Ohio Legislature agreeing in principle to put a Third Frontier bond issue on the May 4 ballot, business groups across the state are gearing up to mount what likely will be a $3 millionplus campaign to make sure the issue passes. The formal creation of a campaign committee is awaiting passage of HJR12, which would reconcile separate bills passed by the House and Senate. The House bill authorized the issuance of $950 million in research and development bonds, while the Senate bill pegged the bond limit at $500 million. The two chambers have until this Wednesday, Feb. 3, to reach a compromise on the dollar amount in time to put the issue on the May ballot. The Third Frontier program uses state money to finance efforts by
“Brokerage was my life. ... The problem came down to: the retailers were not doing anything.”
— Scott Smith, formerly of Beachwood brokerage Reisenfeld & Co.; now a national sales account rep for factoring concern TemPay Inc in Shaker Heights.
The owner of National City Bank charges Huntington National Bank and 10 former employees with breach of contract and misappropriation of trade secrets. Read Arielle Kass’ story on Page 3.
Banks say plenty of credit is available, but potential users aren’t biting Execs see use of borrowing lines decline as businesses pay down debt
Banks have money available, they say. It’s just that many businesses aren’t touching it. Executives at banks are reporting lower credit utilization — the amount of money unused that is available to businesses through their lines of credit — than they saw
a year ago. Throughout 2009, several banks said, they continued to see a decrease in the amount of available credit businesses were accessing. Paul Greig, president, chairman and CEO of FirstMerit Corp., said the credit utilization rate at the bank stood at 42% at the end of
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By ARIELLE KASS akass@crain.com
2009. At Dec. 31, 2008, it was in the mid-50s. Mr. Greig said in large part the decline is because businesses have focused on paying down their existing credit, not accessing more of it. “Business customers are managing their balance sheet,” he said. “They
aren’t reinvesting in the business.” Their actions show a lack of confidence in economic improvement, he said, and it’s a trend seen at banks across the country, not just in Northeast Ohio. At U.S. Bank, regional chairman Kurt Treu said credit usage has fallen
to 30% from 38% a year ago across the bank’s 24-state footprint, mostly in the West and Midwest. He said while the bank continues to look for loans to make, businesses often aren’t biting. “It’s the best indicator of loan demand,” Mr. Treu said of the low credit-utilization numbers. “They have it, they have the ability to use See CREDIT Page 16
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MANUFACTURING Companies debate whether to hire top-notch employees now or risk the wait ■ Page 13 PLUS: MORE WITH LESS ■ SUPPLY CHAINS ■ & MORE
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