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Vol. 31, No. 11
Slow go for school change likely Mayor Jackson’s call for collaboration among districts draws welcome but muted response By JAY MILLER jmiller@crain.com
For the second year in a row, Cleveland Mayor Frank Jackson closed his State of the City address expressing his desire that Cuyahoga County school districts work together more closely and efficiently.
It is a concept that isn’t falling on deaf ears. But for as much as government consolidation and collaboration have become hot topics in the region, the comments of school leaders and elected officials indicate that any close alliances among school districts likely will be at the bottom of most to-do lists.
Mayor Jackson in his March 4 speech at the City Club of Cleveland advocated creating a countywide school authority that would look for a common solution to the financing woes of local school districts, would create countywide magnet schools and would find ways for school districts to better share resources and consolidate their purchasing power. “If we are going to have educational excellence, and become globally competitive, then making systemic changes in education has to happen at
“We’re not going to build for building’s sake, but there’s more building we can do.” – Dr. Ronald Berkman (below), president, Cleveland State University
OPINION: Cleveland needs to see a more visible Mayor Frank Jackson in his second term. Page 8 the county level,” he said. “If we fail to act on creating educational excellence throughout the county,” Mayor Jackson continued, “we will have squandered the greatest opportunity this community has seen in decades to reinvest in and reinvent itself as a thriving city and county for generations to come.” See JACKSON Page 15
FILE PHOTO/MARC GOLUB
New incubator gets blood pumping for cardio startups Global innovation HQ to open near Cleveland Clinic
JANET CENTURY
By CHUCK SODER csoder@crain.com
CSU OVERVIEW Cleveland State’s formula for growth includes more campus development, business community interaction By SHANNON MORTLAND smortland@crain.com
A
11
s Ronald Berkman looks out over Euclid Avenue from his office, he sees a mountain of possibilities and challenges for Cleveland State University. The public university is on solid financial footing, but it could better
support its students by working more closely with the local business community and by providing more resources to help students succeed academically, Dr. Berkman said. He also envisions development beyond the $400 million spent since 2004 to overhaul and expand the downtown campus. “We’re not going to build for
The effort led by the Cleveland Clinic to commercialize more heart technologies soon will have a heart of its own — conveniently located across the street from some of the city’s biggest brains. Construction of the Global Cardiovascular Innovation Center’s headquarters is scheduled to finish in May, on time and within the group’s $19 million budget. Once finished, the building will serve as an incubator for cardiovascular startup companies as well as home base for the center, a broader $250 million economic development effort meant to attract cardiovascular technology companies to Ohio, create new ones and help existing ones grow. Leaders of the center haven’t waited for the completion of the Cedar Avenue headquarters to get to work. They’ve already awarded nearly $14 million in grants and
loans to 47 cardiovascular researchers and companies across Ohio, and they started wooing cardiovascularrelated companies to the state shortly after receiving in 2006 a $60 million grant from the Ohio Third Frontier Project, a 10-year effort aimed at stimulating the state’s economy through investment in technology. The grant to date is the largest in the history of the Third Frontier program, which will expire in 2012 unless voters decide to extend it for five years by approving a $700 billion bond issue on the May ballot. The center’s early efforts already have helped influence 11 companies to set up offices in Ohio, according to Tom Sudow, who works for regional business attraction agency Team NEO and is director of business development and company attraction for the Global Cardiovascular Innovation Center. Among them are medical device company Proxy Biomedical Ltd. of Ireland, See GCIC Page 15
INSIDE GE Lighting needs to flip a switch Incandescent bulbs no longer will be available after 2012, and with that date quickly approaching, GE Lighting in East Cleveland must make sure its consumers know it. The company needs to convert General Electric’s $2.5 billion lighting business from the old incandescents to more energy-efficient, yet more expensive, LED light bulbs. Read Dan Shingler’s story on Page 3.
See CSU Page 5
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REAL ESTATE More builders eliminate spec houses from new-home construction plans ■ Page 11 PLUS: ARCHITECTS ■ HALLOWED HALLS ■ ADVISER ■ & MORE
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COMING NEXT WEEK We look at what tactics — such as waiving minimum-balance requirements — banks are using to lure people in urban centers.
MARCH 15-21, 2010
SEEMS LIKE OLD TIMES You already have received, or soon will receive, the 2010 Census form. This year marks the 200th anniversary of the Census in Ohio, and the nonprofit Community Research Partners in Columbus has put together a snapshot of how the state has changed since 1810. Here are some of the highlights:
1810 Census 1900 Census 1960 Census 2000 Census
CORRECTION
Total population
A March 8, Page 10 story on a new venture between eSearch Inc. and Alliance Staffing Solutions misrepresented the work in which eSearch has an expertise. It focuses on high-level financial hiring and will be relying on Alliance to help staff more junior-level positions, such as accounting clerks.
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231,000
4.2 million
9.7 million
11.4 million
urban
1%
48%
73%
77%
rural
99%
52%
27%
23%
African-American share of population
0.8%
2.3%
8.1%
11.7%
Homeownership rate
N/A
52.5%
67.4%
69.1%
Women in work force
N/A
N/A
42%
70%
Car as primary means of getting to work
N/A
N/A
71%
91.5%
SOURCE: COMMUNITY RESEARCH PARTNERS; WWW.COMMUNITYRESEARCHPARTNERS.ORG
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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, $59; 2 years, $102. Outside of Ohio: 1 year, $102; 2 years, $180. 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. 1-888-909-9111 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation
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THE WEEK IN QUOTES
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Financial aftershocks may take many forms
INSIGHT
“The next 12 months will be the most financially challenging for public higher education in the last half century.” — Daniel Hurley, director of state relations and policy analysis for the American Association of State Colleges and Universities in Washington, D.C. Page One
Joblessness, commercial real estate woes may bring a ‘second wave’
“The really big win here is to use this technology in the context of doing real work.” — Estee Solomon Gray, managing partner with management consulting firm Congruity Inc. and senior adviser to Within3 Inc. of Cleveland. Page 4
“Energy costs are critical to steel manufacturers.” — Tom Tyrell, former CEO of American Steel & Wire in Cleveland. Page 6
“The builder will not have the confidence to build on spec until the public has the confidence to know their house will sell.” — Gary Stouffer, president of Stouffer Realty Inc. in Fairlawn. Page 11
“The diocese maintained these buildings well. … It’s not like taking on a 100-yearold industrial building that hasn’t been well maintained.”
3
By ARIELLE KASS akass@crain.com
FILE PHOTO/JESSE KRAMER
GE Lighting, based at General Electric Co.’s plant at Nela Park in East Cleveland, must jump out quickly in the budding LED lighting market, says CEO Michael Petras (above).
GE EYES A GOOD FIRST IMPRESSION Lighting arm has tall task at hand, educating public on benefits of expensive bulbs and nailing those first sales By DAN SHINGLER dshingler@crain.com
A
t Nela Park in East Cleveland, General Electric Co. is taking on the big job of replacing the incandescent light bulbs it helped make ubiquitous with new, more efficient — and more expensive — LED lighting. “We’ve got plants all over the world making incandescent bulbs, and they’re being shut down every year,” said Michael Petras, CEO of GE Lighting, which is based at Nela Park. Mr. Petras’ challenge is to convert GE’s $2.5 billion lighting business from technology that was developed at the start of the last century over to new technology still being perfected in the 21st century.
— Michael P. Petrigan, senior vice president with Grubb & Ellis. Page 13
See FIRST Page 17
We’ve come a long way since the fall of 2008, when it seemed like each day held new, worse news of the edge of financial ruin. But are we out of the woods, or is there more trouble to come? Local economists and others who watch the financial system say there still is work to be done to produce a sustained recovery, and there are major issues that remain for banks and the economy to work through. Kevin Jacques, the Boynton D. Murch chair in finance at Baldwin-Wallace College and a former economist for the U.S. Treasury Department and the Office of the Comptroller of the Currency, described the potential issues in terms of an earthquake, saying the region — and perhaps the country — are “sitting around with the “It’s like a possibility of aftershocks still massive heart coming.” attack. You One concern comes from don’t get out of the number of bank failures on the horizon. The Federal the hospital and Deposit Insurance Corp.’s immediately troubled bank list has ballooned run a marathon. to include more than 700 It takes time.” financial institutions. Banks are graded on their capital – Bruce McCain, adequacy, asset quality, manchief investment agement quality, earnings, strategist, Key liquidity and sensitivity to Private Bank market risk. Those that have an average score of more than three on a scale of one to five, where one is the best possible score, land on the watch list. “It suggests we’re not out of the woods at all,” Dr. Jacques said. Banks are at the root of several issues the economy still faces, including some concerns about whether smaller banks that did not take part in a government stress test have enough capital to cover expected losses. But there are many other issues the economy must face. Some are what economist call lagging indicators — issues that always pop up toward the end of a recession — while others are unique to this downturn. Economist Ken Mayland, president of ClearView Economics of Pepper Pike, said corporate bankruptcies tend to lag the rest of the economic cycle, and he expects to see even more of them in coming months. Another laggard is commercial real estate, and economists seem See AFTERSHOCKS Page 18
Brains behind exec training program shelve next year’s class, citing cost Cleveland Foundation will search for financing assistance, hopes to restart after year hiatus By JAY MILLER jmiller@crain.com
A program designed to groom a new generation of leaders in Cleveland is being put on hold. The Cleveland Executive Fellowship, created by the Cleveland Foundation in 2005, is going on hiatus after the 2009-2010 class of
seven fellows completes its 12month immersion in Cleveland political, educational and nonprofit organizations this summer. The Cleveland Leadership Center, which now runs the program, and the foundation are rethinking what has proven to be a costly program that the foundation could not continue to fund alone in the down
economy. The hope is that it can be restarted in a year. “It’s a Rolls-Royce program,” said Lee Friedman, president and CEO of the Leadership Center. “This is a high-end product in a Pontiac economy right now.” The fellowship was created to develop a pipeline of civic leaders by immersing them over the course of a year in a variety of short-term jobs in government, nonprofits and the private sector. “The fellowship program provided a great opportunity for someone
like me who is interested in civic life,” said Ahmed Abonamah, a current fellow who returned to the area from a law firm in Boston to participate in the program and build a career in Northeast Ohio. “What made the program different is it has the capacity to get talented people to move here.” The Cleveland Foundation has been the fellowship’s sole financial backer, investing about $2 million in the program over five years, including $565,000 for the most recent class of fellows.
Ms. Friedman said she and Cleveland Foundation staffers are looking for a less-expensive way to operate a similar program. “We believe a career-focused immersion program is important to the community,” Ms. Friedman said. “But we have to find a model that has some long-term financial feasibility.”
Good fellows The Cleveland Leadership Center was created in 2006 as an umbrella See EXECS Page 17
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Secure info exchange within reach Within3’s tech-focused social media sites a hit with hospitals, others By CHUCK SODER csoder@crain.com
So just why the heck does Estee Solomon Gray spend so much time flying from Silicon Valley to Cleveland? She gets the question all the time. Within3 Inc., however, has enough potential to make the technology guru occasionally leave the home of Apple and Google to serve as a senior adviser to a company in the Midwest. Unlike some other social media
sites that simply provide a forum for people to connect, the sites Within3 builds for health care organizations actually help people do their jobs, said Ms. Solomon Gray, a managing partner with management consulting firm Congruity Inc. “The really big win here is to use this technology in the context of doing real work,” said Ms. Solomon Gray, who has studied the nature of online and offline communities for decades. Founded in 2004, Within3 is in growth mode after developing custom social media sites for its first 20 customers. All those customers — which include hospitals, associations and drug companies — have paid to renew their site subscriptions for 2010, said CEO Lance Hill.
The company is taking a second floor in its building in Cleveland’s Flats, doubling its space to 6,400 square feet, and it’s adding five people to its staff of 25. By contrast, Within3 employed just 12 people in mid-2008, when it shifted its focus to sales from product development. Within3 should employ 40 by the end of 2010, said Mr. Hill, who would not disclose sales figures. “We are growing every department in our company,” he said. Though Within3 customizes its sites to look and work the way customers want, it can build them quickly, Mr. Hill said. The company has created several features that it assembles like puzzle pieces for each customer. Those features make Within3’s sites more than just a “LinkedIn” for doctors. The customized sites can be designed to allow users to exchange clinical trial data, for instance, or to pull information from government databases so that doctors’ profiles show what papers they’ve written and what clinical trials they’ve conducted. And the sites are designed with security in mind, so doctors can discuss medical problems without worrying about violating patient privacy laws. Plus, Within3 conducts background checks of site users so people can’t post under fake names, Mr. Hill said. “We don’t get the ‘Let me rant about Barack Obama for 27 paragraphs’ interactions,” he said. Akron Children’s Hospital soon will launch its own site developed by Within3. The children’s hospital saw value in providing a forum for its own physicians as well as an avenue to connect with private practice doctors who refer patients to Akron Children’s, said Dr. Norm Christopher, chairman of the hospital’s department of pediatrics. “It’s the perfect tool to build relationships, to improve communications and to expedite referrals,” Dr. Christopher said. The Within3 team should go far, Ms. Solomon Gray said. They have the three things she believes are essential to developing a social media product: smart developers, an understanding of how communities work and a vision that’s not clouded by egos and individual interests. “Within3 wins on all three,” Ms. Solomon Gray said. Mario Morino, one of the company’s investors, agrees that the team has “their stuff together” and that the product has plenty of potential. The Rocky River resident should know: In the early 1970s he founded Morino Associates, a systems management software company that merged with another firm in 1989 to form Legent Corp. The Herndon, Va.-based company was acquired by Computer Associates International Inc. for $1.7 billion in 1995. “I think there’s enormous potential for the work they’re doing,” Mr. Morino said. ■
Volume 31, Number 11 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. (888)909-9111. REPRINT INFORMATION: 800-290-5460 Ext. 136
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CSU: University targets investment priorities continued from PAGE 1
building’s sake, but there’s more building we can do,” said Dr. Berkman, who has been president of Cleveland State since last July after serving as provost, executive vice president and chief operating officer at Florida International University in Miami. To accomplish those goals, Cleveland State likely will launch come June a large campaign of a yet-undetermined size that will focus mainly on raising money for student scholarships. In the meantime, university leaders are creating a 10-year campus plan that will include multiuse housing and possibly new classrooms, as well as updated labs and research space, Dr. Berkman said. Next month, he said, the board of trustees is expected to award a developer a contract to begin construction on the first phase of the North Campus, a mixed-use housing development that will surround the school’s soccer and tennis fields on Chester Avenue between East 21st and East 24th streets. The North Campus development will consist of a yet-undetermined number of apartments that will range from one to three bedrooms and will accommodate about 600 residents, said Rob Spademan, a university spokesman. The North Campus, estimated to cost $40 million to $50 million, will be financed by the developer and will aim to encourage more than students to live near Cleveland State. “We wanted mixed-use housing, not dormitories, so it would bring different constituencies onto campus,” Dr. Berkman said. The first phase of the project is scheduled for completion in summer 2012, with plans for the second phase still on the drawing board. Student housing options will improve next August when the 300room first phase of the $61 million Euclid Commons opens at Euclid Avenue and East 24th Street. The second phase calls for 300 more rooms and is slated to open in 2011. A new, $55 million student union also will open in June, he said.
for the American Association of State Colleges and Universities in Washington, D.C. The federal government allotted a total of $54 billion in stimulus money to cover state shortfalls in K-through12 and higher education, and most of it will be spent by June 30, he said. Dr. Berkman said Cleveland State will need to walk a fine line when it comes to recruiting more students, providing financial aid, constructing buildings and balancing the budget. He said the university now is figuring out where cuts can be made in anticipation of state budget reductions. Mr. Hurley suspects many colleges will consider cutting traditional liberal arts programs that aren’t linked to
specific jobs in favor of majors that answer current work force demands in science, technology, engineering and math. Colleges also tend to reduce overhead by mixing more adjunct professors in with full-time professors and by increasing class sizes, which can present a different challenge to schools. “They have to make sure the integrity and marketplace value of a degree from Cleveland State continues to be high,” Mr. Hurley said.
Student prep One area Dr. Berkman has committed to focusing on is bioscience. Cleveland State is creating a partnership with the Northeast-
nership with Cleveland State might help spur more primary care doctors who want to practice in the inner city, Ms. Ruff said. Dr. Berkman said the university also needs to place a greater emphasis on helping students succeed academically. To that end, he wants to involve local businesses in a mentoring program that would help students through the first two years of college. He also hopes businesses will participate in an enhanced paid internship program that would encourage students to stay in Northeast Ohio upon graduation. Besides aiding current students, Dr. Berkman said Cleveland State must better communicate with high schools on equipping students with what they need to be successful in college. Many Cleveland State students, he said, also need help financially and some are single parents, which produces more hurdles for these students to clear. ■
MY BENESCH MY TEAM
WE’RE
Financial balancing act With the transformation of Cleveland State into a residential campus in full swing, Dr. Berkman said it’s time to consider the needs of faculty. A new, $36 million education building will open at the end of this month, but another main classroom building is needed to replace aging classroom, laboratory and research spaces that are not configured for today’s technology, he said. Though it seems like a tall order in an economy that hasn’t officially emerged from the recession, Dr. Berkman said he was surprised to find out that Cleveland State had been “managed extremely well financially” before his arrival. Its solid financial standing resulted in the university landing $60 million in bonds issued by Cuyahoga County to build Euclid Commons, he said. Of course, there still will be financial challenges, Dr. Berkman said. The state is expected to cut support to its public university system to close coming budget gaps as federal stimulus money — which propped up the state budget — runs out. And Ohio won’t be alone. “The next 12 months will be the most financially challenging for public higher education in the last half century,” said Daniel Hurley, director of state relations and policy analysis
ern Ohio Universities Colleges of Medicine and Pharmacy, which is a collaboration among the University of Akron and Kent and Youngstown state universities. Kathleen Ruff, vice president for strategic alliances and chief of staff at NEOUCOM, said details on the partnership with Cleveland State have not yet been ironed out but likely would include adding Cleveland State to its B.S./M.D. program. Students in that program earn an accelerated bachelor’s degree in two or three years at one of NEOUCOM’s partner schools and then move on to NEOUCOM for their medical degree. There is a growing shortage of primary care physicians, so a part-
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Mittal producing power using furnace exhaust Steelmaker predicts eventual $6M annual savings By DAN SHINGLER dshingler@crain.com
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If you think an Energy Starapproved refrigerator saves electricity, check out ArcelorMittal’s Cleveland Works steel mill. ArcelorMittal won its third straight Energy Star award last month, in part because in Cleveland it has begun generating its own electricity using exhaust gases from its blast furnace — a move it says will save the company $3 million in 2010 and $6 million a year beginning in 2011. Last month, a new generator at the plant began taking the plant’s blast furnace gases and using them to produce about 10 megawatts of electricity, or enough to power 10,000 average homes, the company says. “We take the gas, burn it inside a boiler and that boiler then generates steam to run the turbines,” said Michael Ritz, ArcelorMittal’s project leader for the plant. ArcelorMittal uses all that power itself, but it represents power it no longer buys off the region’s electric grid. ArcelorMittal actually found the generation equipment for the energysaving effort in a shuttered mill it owned in Lackawanna, N.Y. Surrounded by overgrown weeds and ironically lacking electricity, the equipment was idled along with that plant in 1982. The turbines were made in 1951 and the boilers were made in 1956
— but the company says they work as well or better than what could be purchased new today. The generator, which weighs about 90 tons including its turbines, has steel walls that are 10 inches thick, and the company had to pour 900 cubic yards of new concrete at the Cleveland plant just to support its weight. But, aside from that bit of work, the equipment didn’t need much. “It’s a 1951 Wind River turbine,” said ArcelorMittal’s Cleveland manager of utilities and energy conservation, David Perenic, with a tinge of fondness for the mammoth device. “It operates better than any comparable new turbine — you can’t build something that heavy today.” The move to generate its own power was a good investment for ArcelorMittal, in part because making steel is one of the most energyintensive industries. “Energy costs are critical to steel manufacturers,” said Tom Tyrell, former CEO of American Steel & Wire in Cleveland and a board member of Cleveland’s Entrepreneurs for Sustainability group. The plant at ArcelorMittal at some point will produce substantially more power than it does now, said Mr. Perenic. It’s producing about 10 megawatts now largely because of the limited amount of fuel or flue gases available to power it. As production increases at the plant, it should generate even more electricity, he said. ■
ON THE WEB
Story from www.CrainsCleveland.com.
Growing QED lands cash for MRI aid device Quality Electrodynamics LLC of Mayfield Village has received a $487,000 federal contract to develop a way to mass produce small devices that improve the quality of images produced by magnetic resonance imaging machines. The company’s tiny preamplifiers augment the signal given off by a patient’s body, making the signal easier for MRI machines to read. Quality Electrodynamics already makes preamplifiers for various MRI machine makers, including Siemens Healthcare of Erlangen, Germany, and Toshiba Medical Systems Corp. of Tokyo. Such business helped the company add a 27,000square-foot office across the street from its 7,200-squarefoot headquarters on Beta Drive about a year ago. The federal contract comes from the National Institute of Biomedical Imaging and Bioengineering, which is part of the National Institutes of Health. Hiroyuki Fujita, the president and chief executive of Quality Electrodynamics, is a former physics professor at Case Western Reserve University. — Chuck Soder
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Wage dispute spurs suit against Cleveland law firm By ARIELLE KASS akass@crain.com
Wage and employment lawsuits are on the rise, labor attorneys say. But to see one against a law firm is still a rarity. In Cleveland, there is one such case in U.S. District Court against Turocy & Watson, a boutique intellectual property firm. A former legal secretary there sued in December, claiming the firm did not pay her and others for overtime work, as required by law. The suit recently has been conditionally certified as a collective action under federal law and a class action under Ohio law, making it a hybrid action; named as members of the class are 38 legal secretaries, paralegals and docket personnel who either had worked at the firm since February 2007 or still are working there. Thus far, just six have opted out of the suit entirely, plaintiff’s attorney Anthony Lazzaro said. Members of the class automatically are entered into the Ohio portion of the suit, but can decide not to participate at all; they also can elect to opt into a federal claim, which 13 people have. The rest have not responded. The affected employees have until March 23 to decide if they want to participate. Mr. Lazzaro, who is representing former Turocy & Watson legal secretary Karla Osolin, is owner of the Lazzaro Law Firm in Cleveland. He said Ms. Osolin, a former legal secretary at Jones Day and other firms, went from receiving overtime pay in addition to her salary at
Jones Day to receiving only a salary at Turocy & Watson despite a schedule that included working more than 40 hours a week. “She immediately knew something was wrong,” he said. Barry Freeman, an attorney at Littler Mendelson who is representing the 61-employee Turocy & Watson, said the firm would not comment about ongoing litigation. Ms. Osolin worked at Turocy & Watson from September 2008 to April 2009. Mr. Lazzaro said while many small firms may assume that paying a salary means there is no need to pay overtime, they’re wrong. In order to be exempt from receiving overtime, employees must manage two or more individuals and have the ability to hire and fire people, or must have an administrative position where they set policy. There also are exemptions for advanced specialists, such as lawyers and doctors, even if they do not fall into either category. Mark D. Katz, vice chairman of the employment and labor group at Ulmer & Berne, said there had been some question previously regarding whether paralegals were exempt, but that issue was solved years ago, in a 2004 regulation. “It’s published. If you look for it, you’ll find it,” Mr. Katz said. “Either they’re very naïve or they’re not compliant.” Mr. Katz said wage and hour cases continue to grow, and not only against mom-and-pop stores. Retail giant Walmart has been struck by them, he said, as have other large
corporations. The numbers have started to pick up over the last five years or so, he said. In the past, such lawsuits were brought almost exclusively by the U.S. Department of Labor. Now, more nongovernmental attorneys are getting in on the action, which Mr. Katz said can be lucrative for an attorney. At least one other law firm, Drinker Biddle & Reath of Philadelphia, has seen a similar lawsuit in its Washington, D.C., office. Mark Tabakman, a partner in the labor and employment group at Fox Rothschild in New Jersey, said he has seen the possibility for such suits at other law firms he has represented, but that complaints were made internally, instead of to the Department of Labor. In almost every case, Mr. Tabakman said, the issue was misclassified employees. As workers continue to research wage laws online, Mr. Tabakman said he expects individual issues will trigger other actions. Brian Kelly, a partner in the labor and employment group at Frantz Ward, said an employer doesn’t need to intend to violate the law to be liable for doing it. Employees who take work home of their own volition or check voice mails and emails from afar may still be entitled to overtime pay. Even if supervisors didn’t authorize the work, they may have a reason to know it is being done off the clock. As smartphones become increasingly ubiquitous, Mr. Kelly expects the prevalence of such suits to continue to rise. ■
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7
Incentives spark local interest in ‘solar SIDs’
By JAY MILLER jmiller@crain.com
The state of Ohio is trying to make it cheaper and easier for property owners to invest in energy-saving improvements, and a few Northeast Ohio communities are taking a shine to the idea. The General Assembly, in the biennial state budget, last year created something called a “solar special improvement district,” or solar SID, and this year the Legislature is looking for more ways to make renewable energy systems more attractive to commercial and residential property owners. Homeowners, businesses and property owners can receive rebates and tax credits for installing solar photovoltaic systems that provide electric power and solar thermal collectors to heat water. The goal is to reduce reliance on fossil fuels and to reduce utility bills. While the legislation is new and untested, conversations are beginning among Northeast Ohio communities about jointly developing policies to create solar improvement districts. In Northeast Ohio, the First Suburbs Development Council — a nonprofit that provides development assistance and expertise to the governments of 16 of Cuyahoga County’s inner-ring suburbs — has been leading talks about creating
solar SIDs collaboratively. Nathan Kelly, economic development director for the city of Lakewood and chair of the development group’s board, said officials from cities including Cleveland, Euclid and Lakewood are participating in the discussions. Mr. Kelley does not have a timetable for when communities might be ready to create SIDs and finance projects. “We’re working very hard” to put together model legislation, he said. “It’s a priority for us.”
Smoothing out the cost The incentives are needed because renewable energy systems have high upfront costs but long-term paybacks. That means property owners often could pay for the improvement and sell the property years before the investment pays off. The SID concept is a way to stretch out the repayment cycle to better match the payoff cycle, in the same way communities pay for sidewalk or sewer improvements. “You don’t have to have your own credit tied up,” said Raymond Headen, an attorney with the Bricker & Eckler law firm who helped craft the legislation. “This credit is tied to the property, not the property owner’s credit.” Mr. Headen said the cost of a photovoltaic solar system ranges from $15,000 to $40,000 for a home system to into the six figures for commercial building systems. With a solar SID, property owners who want to bypass the national power grid would get a cost esti-
mate and then petition to be part of the SID. Unlike a sewer or sidewalk assessment, however, property owners aren’t forced into a special assessment.
Expansion in the wings Kimberly Dyer, project manager for Bold Alternatives Inc., a Shaker Heights designer and installer of solar electric systems, said the financial incentive should make solar energy investments more attractive. “Most of my clients are commercial property owners and they are doing all they can to optimize the money that’s available,” she said. The concept is so attractive that even before communities have had a chance to implement the new legislation, the General Assembly is working to include other renewable energy technologies, including wind, geothermal and biomass systems, in the projects that qualify for special improvement district financing. The expanded legislation, in the form of Senate Bill 223, was introduced in January by state Sen. Jimmy Stewart of Athens and had a first hearing on Feb. 9. It’s supported by the League of Women Voters of Ohio, the Ohio Consumers’ Counsel and the Ohio Environmental Council. Bricker & Eckler, in a legislative report to clients, says that the power companies may get on the bandwagon if certain amendments are adopted. They want the legislation to exclude solar systems that might generate power that could be sold onto the public power grid from the special financing. ■
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BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s, highlighting positive business news in Northeast Ohio. To submit information, please e-mail Scott Suttell at SSuttell@crain.com. ■ Patina Solutions, a professional services company from Milwaukee with a growing office in Westlake, said it has raised $1.5 million in capital from angel investors to fuel its growth plans. Patina deploys experienced, successful professionals, generally over the age of 50, to help companies meet workload needs or fill knowledge gaps. Mike Harris, co-founder and CEO of Patina, said the firm now has three offices — in Milwaukee, Westlake and Chicago — and more than 450 professionals in its portfolio of talent. The Westlake office, formed in February 2009 with two people, now has six employees and is on track to become the largest Patina office in 2010, Mr. Harris said. ■ Cleveland entrepreneur Carolyn Grossi of Little Flower Products LLC wants to instill in kids the desire to save money, and she’s doing it in a fun way. Ms. Grossi has developed what she calls the Princess Money Manager Coin Bank to inspire young girls to become money managers. (A SuperStar Money Manager for boys is on the way later this year.) She says she got the idea for the princess coin bank when she realized the traditional symbol of savings
by
— a pig — was “not exciting for young girls.” The bank is available at www.a princesslovestosave.com. Redbook and Working Woman both have featured the princess bank. ■ Darice Inc. of Strongsville said it has acquired the cardstock supplier Core’dinations, further expanding the breadth of quality paper-crafting products that it supplies to the retail craft market. This acquisition combines Core’dinations product lines with Darice’s existing portfolio of paper crafting products. As a result of the acquisition, which was completed Jan. 22, Darice will add more than 500 cardstocks to its current line of scrapbook and papercrafting products. Terms of the transaction were not disclosed. “Bringing Core’dinations product lines into the Darice family of products allows us to provide the most comprehensive and highest quality paper-crafting assortment for our retailer customers,” said Mike Birkholm, Darice’s president. ■ Mobility Works of Akron said it has been named the exclusive U.S. distributor and manufacturer for the Martin Conquest wheelchair accessible motorcycle. Bill Koeblitz, one of the founders of Mobility Works, said he was “honored to be chosen to introduce the first production wheelchair accessible motorcycle to our physically challenged community here in the United States.”
E ROauthor E L SE of Th EC GE e Big TU O NecesRE RG sity E
Mobility Works was chosen by Martin Conquest based on its longstanding commitment to the physically challenged community. The companies formed an entity called Mobility Conquest (www .MobilityConquest.com) to manufacture and distribute the motorcycles in the United States. The heart of the vehicle is the front end and engine of a BMW R 1170. At a glance, the bike offers a 0-60 speed of just 7.6 seconds (with wheelchair adaptation), 15second quarter-mile time and a top speed of 105 mph. ■ Berea Children’s Home and Family Services has been designated to receive $4.9 million in federal stimulus money over three years to improve and expand its Northeast Ohio Nurse Assistant Training program. In partnership with the American Red Cross of Greater Cleveland, the program offers life skills and nurse assistant training to unemployed, displaced workers, veterans and those without a high school diploma. The program also provides a combination of job placement and retention services. Berea Children’s Home said it will work with 15 organizations throughout Lorain and Cuyahoga counties to help maximize the impact of the program. Hospitals and nursing homes will attend job fairs and will consider hiring program graduates, while local colleges will provide them with information about future educational opportunities.
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Special improvement districts could lead to energy system upgrades
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PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
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OPINION
Frank talk
C
leveland needs more from Frank Jackson than he gave the city during his first four years as mayor. That may seem like a harsh statement to make about someone who last fall was elected to a second term by a landslide. However, these trying times require a visible leader who serves as a community beacon offering people and businesses encouragement and hope for a brighter tomorrow. And that hasn’t been Mayor Jackson. A reserved man who shuns the spotlight, Mayor Jackson would prefer to be known as a quietly effective administrator. And, in that regard, he largely has done as good a job as could be expected in the current economic environment. The mayor is proud that he has balanced the city’s budget without resorting to a tax increase or massive layoffs at a time when tax revenues are slumping. That’s no small achievement — though we wonder whether the city, in the course of watching its pennies, is not reinvesting in its streets to the extent that it should and will leave a massive infrastructure bill for a future administration. We also give the mayor credit for his cooperative spirit in encouraging economic development initiatives. A prime example is his central role in hosting a broad-based summit last summer around the hot topic of sustainability. The summit drew hundreds of participants, and the mayor’s decision to follow up the event with the creation of a sustainability council could help position Cleveland as a national leader in the green movement. But there is an element to the job of a big-city mayor that goes beyond the delivery of city services or even advancing worthwhile causes. It involves emerging from City Hall on a regular basis and serving as the man or woman who rallies his or her community to be more than it is today. Simply put, Mayor Jackson should exit his comfort zone and should adopt a more public persona. We don’t expect him to be the ebullient former mayor, Mike White. But he also shouldn’t be the Invisible Man, the name with which he has been tagged by some civic and business leaders. We need more of the Frank Jackson who gave a fine State of the City address just a couple weeks back. The mayor spoke from the heart and articulated a vision of a Cleveland that is broader than the city’s borders. It was a thoughtful and thought-provoking speech for the ideas it raised, such as the creation of a county authority that would develop countywide academic standards, review ways to fund education countywide and work to help the 30-plus school districts in Cuyahoga County share resources. We’re setting the bar higher for your next four years, Mr. Mayor. We don’t expect fire and brimstone or soaring oratory; that’s not your style, and it would fit you about as well as your glove would fit someone’s else hand. But as the city’s top public official, you need to get out there for more than an annual address and to express again and again your vision of where Cleveland should go. With sincerity as your secret weapon, you might be surprised how far that message will take your city.
FROM THE PUBLISHER
The topsy-turvy world of automaking
I
and exemplary products, doesn’t want to know that after all that has happened be associated with something that will in the past 18 months, nothing drag it down,” marketing consultant should surprise us much in the John Grace told Bloomberg News. “With world of business news. But Cadillac GM’s bankruptcy comes lower credibility distancing itself from the shadow of the in the ability to build quality products.” General Motors brand? Think about how outrageous that How many times can we ask ourselves, quote would have been, say, 10 years “Can you imagine, if someone told you ago. five years ago that …”? It’s much like this quote: “I After all, it wasn’t that long BRIAN am pleased that Secretary ago that Cadillac was the dowdy TUCKER Slater has accepted our invitabrand inside GM, written off as tion to lead the distinguished an old person’s luxury car. Now, group of safety and quality it’s the darling of GM CEO Ed experts who will help Toyota to Whitacre and his team’s efforts improve its quality controls in to remake the troubled car North America.” company that once dominated That was Toyota’s North the world. American operations president In its post-bankruptcy world, Yoshi Inaba in an interview last GM is getting rid of half its week with our sister publication, Autobrands as it tries to reinvent itself under motive News, explaining why Toyota had partial ownership by the federal governhired Rodney Slater, a former U.S. Secrement. While the executive team tries to tary of Transportation. plot its future, Cadillac is moving farther And don’t make any mistake about it. from the fold, even removing the onceToyota says Mr. Slater, transportation storied GM logo from the signs at Cadillac secretary under President Bill Clinton, dealerships. was “invited” to join the team; what that “Cadillac, which has really turned really means is they paid him a boatload itself around with new levels of quality
of money because their company’s oncevaunted reputation is in the garbage. And now for the numbers: Toyota, a carmaker whose brand name was once synonymous with the word “quality,” has recalled more than 6 million vehicles in this country for problems related to unintended acceleration. And yet, Toyota is getting what forecasters predict will be a 30% boost in sales this month after the carmaker resorted to dreaded incentives such as zero-percent financing and subsidized leases. That will only help Toyota for a while, and it shows that not everyone is convinced of the danger of their product offerings. But what happens in April and thereafter? And will the angst on the part of the American car buyer bleed over to the Lexus, Toyota’s luxury brand? So we have Cadillac dealers taking down the GM signs for fear of tarnishing both their reputation and sales numbers, while Toyota is trying to buy market share with incentives to ease the fears of the consumer. Did I take a wrong turn and end up in Oz? ■
PERSONAL VIEW
Communities, schools lack unified values By JOHN FLOWER
Q
uiet openness and charity are part of our society. They can be found in a grandmother in Peoria whose white hair has a touch of blue, or a schoolteacher in South Chicago who subordinates her own needs in order to help students cope with problems no student should have to cope with in a civilized society. Being quietly unselfish usually involves a forfeiture of privilege or resource of some sort by the person who offers help. The grandmother might cancel a long-anticipated vacation trip to Florida in order that a granddaughter’s college tuition be paid. The teacher might regularly delay her commute home so she might interact with her students beset with problems. But
Dr. Flower is president emeritus of Cleveland State University. there is also an opposite characteristic of selfishness where the legitimate interests of one person are thwarted by another who substitutes his or her own personal wishes and desires. In today’s communities, a common approach to human values is not present. In the context of the conflicting perceptions of values held by the citizens of today, we have not figured out how to teach those values that lead to developing character. This has left a gaping void in the curricula. Also, a coherent set of values perceived and accepted as basic to the unity of the nation does not exist today, or at least not to the extent that it did in the past when people were clustered in smaller neighbor-
hoods and towns with a human scale. The lack of coherence is felt in many ways. At one extreme it might consist of bland, uninvolved citizens who would select whatever values they are attracted to from a virtual smorgasbord, or none at all, leaving a wishy-washy state of affairs. But another set of conditions has arisen over the years in the inner cities where the population is almost exclusively minority. Within these urban borders, family life is essentially nonexistent. Fatherless households are the norm. The drug culture, knives, guns, violence and murder rates usurp any semblance of a civil community. Statistics that set forth what life is like send shivers up the spine. For example, 70% of young male minorities who are See VIEW Page 9
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AND COUNTING ... What is the top Northeast Ohio tourist attraction of the past 30 years?
Crain’s Cleveland Business is celebrating its 30th year as Northeast Ohio’s premier source for business news with a special double issue, to be published May 24. That edition will will feature the stories of 30 of the most influential Clevelanders. As part of the celebration, we also are reflecting on the most memorable events of the past three decades with weekly polls — some of which can be found in this space — trivia questions, online content and video interviews. You can get in on the fun by visiting CrainsCleveland .com/30thanniversary.
JOE ROSSI
RUSS WEBBER
LIZZY CASTON
Lyndhurst
Pittsburgh
Cleveland Heights
Cedar Point. People like to go on rides. … It has a nice location.
It’s the Rock and Roll Hall of Fame that brought me here.
The Cleveland Museum of Art. It’s internationally known (and) it has one of the best reputations nationally for an art museum.
View: Profs can emphasize human component continued from PAGE 8
high school dropouts can expect to be sent to prison during their lifetimes. These citizens exist outside the mainstream of the nation. They have no connection to the values that made the nation great. Estimates of their numbers have now reached 20% of the population. Namely, one-fifth of the nation’s citizens do not partake of the values that made America what it is. To say that this poses one of the most serious national problems encountered today stands as an understatement. Politicians do not like to talk about it, and it is not being confronted in ways consistent with the dimensions of the problem. So what does the future hold? A mixed bag at best. Looking at the total U.S. population, a current
majority continues to believe in traditional values, although the size of that majority diminishes, accompanied by trends that continue its decrease. Moral relativism grows, for example, and citizens pay less attention to the meaning of the words in the Declaration of Independence, “We hold these truths to be self evident.” Moral relativism, widespread, tends to deny absoluteness in truth. If these negative trends continue, it will not be too long before the percentage of the citizenry that hews to traditional American values will cease to be a majority but will recede into being a minority. The implications are staggering. From where we stand today can these negative trends be reversed? Yes. How? By recourse to simple and straightforward probity in how
Achieve.
we interact and work with our younger people. We need to emphasize not only subject matter, but the human component in which it exists. This not a new idea. It was perhaps best exemplified by the schoolmarm in the one-room schoolhouse. She taught not only the three Rs, but she taught the young persons themselves in terms of the life that lay ahead of them. Perhaps our distinguished full professors might consider the values these schoolmarms displayed, learn from them and adjust their teaching skills accordingly. ■
MAUREEN O’CONNOR OHIO SUPREME COURT JUSTICE CLASS OF ‘80
Learn how our alumni engage at: www.csuohio.edu/alumni
LETTER
Close CMSD; bus students to ’burbs ■ Observers and participants in Cleveland’s school district can only hope that Ronn Richard, CEO of the Cleveland Foundation, is correct in his assessment that this is the last chance to save the district. When this effort fails, as it must given the pressures of politics, unions and poverty, I hope leaders will consider outside-the-box options. My favorite is closing the district and busing the students to the dozen or so inner-ring suburbs. It
would be both merciful to the students and hardly a burden to the well-run suburban districts that have faced their own depopulation problem. Do the math: 70,000 kids divided over 15 districts is but 4,666 per district. Actual results may vary. But put the kids first once and for all. William Ferry Bay Village
Entrepreneur may run for county exec Entrepreneur Tim neur who is vice ON THE WEB Story from Mueller says he is www.CrainsCleveland.com. chairman and “strongly contemCEO of Phylogy plating a run” for Cuyahoga County Inc., a company that develops and executive. markets equipment for telecommuIn a telephone interview last week nications companies. He earlier with Crain’s Cleveland Business, Mr. served as Cleveland Mayor Jane Mueller said he is weighing his Campbell’s chief development officer. options and would run as either a He said he is not yet ready to make Democrat or an independent. He a decision on whether he will run. He said the county executive job could said he is in the process of making use someone who would bring good on a promise made to Phylogy sound business principles to the investors to sell the 7-year-old new county government. company, which has offices in Mr. Mueller is a serial entrepreCleveland and Sunnyvale, Calif.
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GOING PLACES
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JOB CHANGES CONSTRUCTION ENERGY MECHANICAL CORP.: Ed Moran to controls sales engineer.
MURTIS TAYLOR HUMAN SERVICES SYSTEM: Lovell John Custard to president, CEO.
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THE VISITING NURSE ASSOCIATION OF OHIO: Michelle B. Gillcrist to chief government relations officer; Sally Moennich to chief of clinical partnerships; Ralph E. Knull to director of legal affairs.
FIRSTMERIT CORP.: Daniel F. Waldeck to senior vice president, commercial banking team leader. HUNTINGTON NATIONAL BANK: Jon Hornung to business banking team lead; Craig Richmond to business banking client manager; Chris Clegg to senior vice president, commercial banking; Alex Cooper to assistant vice president, commercial banking.
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NORTHEASTERN OHIO CHAPTER: Alicia Hansen to director of special events.
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REALTY CORPORATION OF AMERICA: Shari Rossi to sales associate.
Gillcrist
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TRANSACTION REALTY: Dan Merkle, Karl Nussbaum, Danielle Molino and Lou Bottone to sales associates.
vice chairman; Ernest Bailey to recording secretary.
REAL ESTATE
SERVICE NORTHERN OHIO ASSET SERVICES LLC: David McGlynn to operations manager. PATINA SOLUTIONS: Jay Simon to client solutions. RADCOM: Dan Konfal to director, human capital services.
TECHNOLOGY MCPC INC.: Mark Keider and Joe Metzger to network engineers; David Tiedman to field service technician; Jon Barker to configuration specialist; Joe Stesny to warehouse specialist; Bill Cannon to vice president, business development; Jane Raber to director of shared services; Liann Moser to licensing business development manager; Matt Paul to helpdesk level II; Scott Brosius to on-site systems administrator/technical support; Kevin Cannon to solution architect; Rick Lindhe to senior account manager.
THE ARTHRITIS FOUNDATION,
THE MECHANICAL CONTRACTORS’ ASSOCIATION OF CLEVELAND INC.: Stephen Comunale (S.A.Comunale Co.) to president; Geoff Engel to vice president; Michael Brandt to treasurer; David Williams to past president and chairman. NORTHEAST OHIO TRADE AND ECONOMIC CONSORTIUM: Larry Saulino to chairman; Rick Hale to vice chairman; Rod Crider to secretary; Steve Paquette to treasurer. UNITED CEREBRAL PALSY OF GREATER CLEVELAND: Michael S. McMahon (KeyBanc Capital Markets) to chair; Matthew R. Cox to vice chair. THE VISITING NURSE ASSOCIATION OF OHIO: Carol F. Dakin (Squire Sanders & Dempsey LLP) to chair; Richard M. Knoth to vice chair; Janis E. Lyons to treasurer; Thomas R. Hanson to secretary. THE WHARTON CLUB OF NORTHEAST OHIO: Rebecca L. Bar-Shain to president; Kiara Cox Berglund to events chairman; Randy J. Samsel to membership chairman/secretary; Ralph W. Lindeman to treasurer.
BOARDS ACHIEVEMENT CENTERS FOR CHILDREN: David Dunstan (Western Reserve Partners LLC) to president; Stephen B. Perry to vice president.
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THE CLEVELAND FURNITURE BANK: Michele M. Ferrara to president; Michelle B. Creger to vice president; William H. Jackson to secretary; John M. Klipfell to treasurer. THE HARD-KNOCK BOXING FOUNDATION: Kenneth Walker to
AWARDS INTERNATIONAL TEXTILE AND APPAREL ASSOCIATION: Linda Ohrn-McDaniel (Kent State University) received the ATEXINC Award for Textile Design; Vincent Quevedo received the Design With Historical Reference Award and the Lectra Outstanding Faculty Award.
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REAL ESTATE
INSIDE
13 FIRMS FACE CHALLENGE OF SELLING CHURCHES.
Architects mobilize to promote services AIA plans program to remind NE Ohio about local design profession By STAN BULLARD sbullard@crain.com
T
SPEC HOMES SHELL OF PAST Once structures that enticed buyers, builders now shed risky speculative houses from construction plans amid market, consumer uncertainty By STAN BULLARD sbullard@crain.com
A
fter years of fewer prospective new-home buyers showing up, the “build-it-and-they-willcome” mantra is gone from the lips of Northeast Ohio homebuilders. Instead, “build it when the buyer commits” is the practice that holds sway. While builders are a little less direct — referring instead to new homes as custom homes or semicustom homes, and presenting “to-be-built” plans for suburban home sites — five years into a record downturn in the homebuilding market, speculative homes, or those erected without a buyer, are becoming scarce. Thank a combination of factors: growing caution among surviving builders, changes in lending policies and the impact of a market for
new homes that pales in comparison to years past. The closest thing to a newly erected spec home is a model that a builder constructs to display current designs — but may be willing to sell. Buyers now typically have to wait for builders to finish their new homes. “There are speculative homes out there,” said Patricia Modica, a Howard Hanna agent who sells in the Solon area. “But that is because they are still available. They are not new construction. I have five listings for speculative homes from $544,000 to $844,000 that are 2 or 3 years old. Other specs have gone in and sold. But no one is starting any now.” The supply of speculative, or inventory, homes is so tight among local homebuilders that Gary Stouffer, president of Fairlawnbased Stouffer Realty Inc., said so few spec homes are available it’s as See HOMES Page 14
hey’ve watched as local businesses and nonprofits give big-name, out-of-town architects a menu of projects they feel their colleagues here easily could handle. They’ve seen houses go up where they might have contributed design expertise, but families who order them opted for a homebuilder’s plans. Now, as their counterparts endure the worst recession of their professional lives, leaders of AIA Cleveland, the city’s chapter of the American Institute of Architects, are trying to stand up for local members of their craft. That’s the motivation behind “AIA Cleveland Architecture Week: Connecting Cleveland through a Celebration of Architecture.” It’s an exhibit and series of programs that will take place April 16 to April 25. Bruce Jackson, AIA Cleveland president and owner of Square One Architects Inc. in Shaker Heights, raised the idea of a local Architecture Week with fellow architects Kurt Weaver and Robert Maschke as they drove last November to a state AIA meeting in Columbus. “AIA Cleveland needs to advocate for Cleveland architects and do a lot better promoting the profession,” Mr. Jackson said. “A lot of major jobs go to out-of-town firms. It’s not just a Cleveland syndrome; it’s worldwide. In this economy, you need to help people locally and your economy locally.” Some programs in the week highlight local architects; others weigh community issues with design implications. A cornerstone of the week is an exhibit by local architects at Convivium33 Gallery, 1433 E. 33rd St. in Cleveland. AIA wants at least 40 members to contribute display boards that will “tell that architect’s story with an image, a design, historic preservation or furniture; whatever it is they do,” said Mr. Maschke, AIA Cleveland’s vice president. “There are architecture firms of different sizes and (specialties) in the city,” Mr. Maschke said. “We will give them a canvas.” Another design-focused event is See EXHIBIT Page 14
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Door soon closes on ability to file review of real estate taxes Frail economy warrants scrutiny of assessment
R
eal estate taxes tend to provoke more emotion and angst than any other tax. These taxes are the single largest nonproductive expense a property owner will incur. It also is the only major Ohio tax that is based upon someone’s opinion. These facts, even in a stable or growing market, should be enough to make property owners regularly review their tax assessments and determine whether those taxes should be challenged. In the current economic climate, such a review is an absolute necessity. The amount of tax savings often can be significant for both small and large properties. The time is rapidly running out, however, to complete that review in the state of Ohio. Any complaint contesting a property’s real estate tax assessment for tax year 2009 must be filed by March 31 with the county board of revision where the property is located. Since Ohio real estate taxes are paid in arrears, complaints filed this year would challenge the Jan. 1, 2009, value of the property. Before rushing off to file a complaint, several issues should be considered. First, proper analysis is necessary. Filing a complaint puts the value of the property at issue and the value of the property can, as a result, be increased or decreased.
TERESAMETCALFBEASLEY
ADVISER in this area will work with you to find the best possible fee arrangement, which will generally either be hourly or a contingent fee based upon the savings generated. There are several procedural traps in this area. Thus, finding an experienced attorney is important. Finally, find and work with legal counsel to position your case not only for the best resolution, but also to aggressively move the case forward. The system is currently experiencing an unprecedented volume of cases while funding challenges, particularly at the Ohio Board of Tax Appeals, are decreasing the capacity of the system. The old way of handling these cases, in most situations, no longer is the right way, unless a property owner is willing to wait years for a resolution. A stronger, more focused approach
These taxes are the single largest nonproductive expense a property owner will incur.
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A true in-town estate, this remarkable brick Georgian has been painstakingly restored to utter perfection offering Old World elegance with every modern amenity imaginable. Grand entrance foyer with magnificent staircase opens into formal living and dining rooms and extraordinary paneled library. The kitchen is the epicenter of this home and is quite simply remarkable. 5 bedroom suites highlight the second floor. In-ground pool and exquisite garadens grace the almost 2 acres of park-like grounds.
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We are flooded with news reports of problems in the real estate market but, for real estate tax purposes, the value is the market value for a specific property. Market factors could make a specific property more or less desirable, and it is possible that market conditions already have been taken into account in the opinion of value derived by the county auditor. Your adviser should be able to provide market support for recommendations on whether a complaint is warranted. Additionally, since the focus is on the Jan. 1, 2009, value of the property, many subsequent events, such as loss of tenants that occurred after that date, may not be relevant for the Jan. 1, 2009, value, and a property owner may want to wait until next year to file. Filing a complaint too early may negate the owner’s ability to seek a reduction for a later year, so such analysis is critical. Second, while the list of those parties who can file a complaint has expanded, it is clear that presentation of a case to the board of revision remains the practice of law. If a property is held in an individual’s name, the individual may file a complaint; legal representation is required for all other properties, such as properties owned by a corporation or limited liability entity. Law firms that regularly practice
to these matters at the earliest possible level may bring the case to a quicker resolution. Such approaches should be discussed and evaluated by the owner and counsel. Tax savings can have a significant impact on all properties. For properties offered for sale or lease, a reduction in the taxes and the resulting decrease in occupancy costs can lead to higher sale prices and make the property more attractive for potential buyers and tenants. For those properties where the owner is occupying the property or is responsible for the real property taxes, any savings will increase directly results from operations. In this market, property owners should be analyzing every property they own in order to evaluate whether tax savings are available. A decision to file a complaint should be focused on the market value for a specific property and supported by market evidence. Filing because taxes are perceived to be too high, rather than focusing on the opinion of value, actually could lead to tax increases. Find and work with counsel who will work to best position your case in an overburdened system. ■ Ms. Metcalf Beasley is an attorney in the commercial and real estate group in the Cleveland office of Vorys, Sater, Seymour and Pease LLP.
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Firms face challenge of selling churches Halls, schools that are closing can be harder to repurpose but have potential for new life By JAY MILLER jmiller@crain.com
A
s if the commercial real estate market wasn’t already in a secular sort of purgatory, you can add about 50 churches the Catholic Diocese of Cleveland expects to close and put up for sale in the months ahead. Former churches, and schools for that matter, can be a tough sell as real estate. They often are in residential neighborhoods and have floor plans and architectural details — especially in the case of older churches — that make them hard to reuse as commercial buildings. “Look at the Vatican,” said Farley Helms, senior vice president in the office services group of the Cleveland office of Colliers Ostendorf-Morris commercial real estate brokerage. “Try to sell that.” Catholic Diocese of Cleveland financial officer John Maimone said several real estate firms have been hired to market the churches that are slated to close as part of the diocese’s consolidation plan. The buildings are spotted across the diocese — which covers Ashland, Cuyahoga, Geauga, Lake, Lorain, Medina, Summit and Wayne counties — though most are in the cities of Akron, Cleveland and Lorain. Grubb & Ellis, CB Richard Ellis, the Chartwell Group and Colliers
Ostendorf-Morris will market the Cuyahoga County properties. NAI Cummins of Akron will sell the Akron-area churches, and Grubb & Ellis will put the Lorain-area churches up for sale. Michael P. Petrigan, a senior vice president with the Grubb & Ellis brokerage, said he’s had “an unbelievable response” to the half-dozen Lorain County Catholic churches, some of them 100 years old, that he is marketing for the diocese. Reached last Wednesday, he said he had four appointments scheduled that day to show the churches. One church, Holy Cross Catholic Church in Elyria, sold late last year. A former storefront ministry, House of Healing and Outreach, paid $200,000 for the church in December. Mr. Petrigan said churches and social service agencies, such as homeless shelters, have been consistent lookers, and he believes the relatively modest asking prices and the quality of the buildings account for the high level of interest. “The diocese maintained these buildings well,” he said. “It’s not like taking on a 100-year-old industrial building that hasn’t been well maintained.”
LEFT: The former First Church of Christ, Scientist, in Lakewood about five years ago became an office for a plastics trading business. BELOW LEFT: St. Stanislaus Parish Campus in Lorain is for sale. PHOTOS PROVIDED
big-box retail stores, which can be converted to office space more easily. But, he also can attest to how such facilities can be transformed into other uses. Five years ago, Mr. Helms sold the First Church of Christ, Scientist, to the Maxxum Group, a plastics trading firm. Maxxum spent $1 million fixing up the Detroit Avenue church across the street from the Lakewood Public Library, which could seat 900 people in its 23,000 square feet. The company created work space in the nave and, after putting up an etched glass wall, used the elevated altar area as a lunch room. “The Lakewood church is a gorgeous building, but not an ornate or highly decorated structure that says ‘church, church, church,’” Mr. Helms said. Now, Maxxum is changing its business and has put the 91-yearold building up for sale for $2.5 million, Mr. Helms said. One advantage that made this Lakewood church attractive as office
space was its ample parking, something many churches built before the automobile age don’t have. For example, Mr. Helms said the former Pentecost Evangelical Lutheran Church in Lakewood he is marketing could seat 350, but it only has eight parking spaces. The asking price for that complex is $425,000; it was built in stages beginning in 1926 and is described as an 18,326square-foot space. “A good portion of its members (originally) walked to church,” Mr. Helms said. “Without much in the way of off-street parking, the demand goes down.” Other schools and churches in Northeast Ohio have been turned into residences. For example, the First English Lutheran Church in Cleveland Heights was turned into the Brownstones at Derbyshire condominiums by developer Andrew Brickman after it closed in 2002. West Tech High School on Cleveland’s West Side was less fortunate. A succession of developers has been
trying, with little success, to convert the 98-year-old building and its campus into rental apartments and single-family home housing.
Nothing sordid Exactly when the diocese will begin selling off the bulk of the churches isn’t yet settled. The congregations originally were given until June 30 to pack up artifacts and move on to other parishes. But appeals to the Vatican, the need for property surveys and appraisals and concerns about moving too fast for congregations could stretch out the time before a slew of for-sale signs appears. Church law clearly states that a diocese may sell a church no longer needed for worship for “profane, but not sordid use,” the diocese’s Mr. Maimone said. Profane use is simply the conversion of a church from use as a house of worship to a more secular use, such as a school or an art gallery. Sordid uses, though, are not acceptable and will be avoided by the use of deed restrictions, Mr. Maimone said. Among sordid uses would be an abortion clinic or a strip club. Joining the churches as available real estate will be a number of school buildings the Cleveland Metropolitan School District will close at the end of this school year. While the school district won’t be evaluating buyers on their profane or sordid uses, it will be giving preference to charter school operators or education management organizations, said district spokeswoman Angela Buford in an e-mail. The Cleveland school sales plan is less firmed up. Ms. Buford in her e-mail said once classes end the school board will adopt a plan for the closed schools within a year. ■
Finding salvation Colliers’ Mr. Helms said churches can be far less adaptable than schools or old manufacturing facilities, which can be broken up for multiple tenants, or abandoned
Preparing a New Generation of Teachers John Carroll University selected to serve in the Woodrow Wilson Ohio Teaching Fellowship program
The Ohio Board of Regents and the Woodrow Wilson National Fellowship Foundation announced that John Carroll University, in partnership with the Cleveland Metropolitan School District, will be one of four sites in Ohio—and the only private school—to host the distinguished Teaching Fellowship program. This funding will help us re-imagine and revise science and mathematics teacher education for the 21st century. Our goal is to make a deep and sustainable impact in Greater Cleveland by inspiring individuals to excel in teaching, learning, leadership, and service to the education community in keeping with our mission as a Jesuit university. The Teaching Fellows will be provided with $30,000 in stipends while spending a year enrolled in a pioneering teacher education program. They will then agree to teach for three years in low-income urban and rural secondary schools. Through this program, we aim to attract talented, forward-looking people with a strong background in science, technology, engineering, or mathematics to the field of education to create a brighter future for others.
Learn. Lead. Serve.
www.jcu.edu
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Homes: Curbing specs holds down costs continued from PAGE 11
if there were none, given the size of the home market. There are some out there, he said, but they are so scarce they are not a factor in the market. The seller, with the exception of the strongest local builders, likely is the bank that financed the house because the builder turned it over to his lender.
Know when to hold ’em As the new-home market contracted the last few years, homebuilders protected themselves by taking fewer risks — and that means fewer available or inventory homes, particularly those in the slowermoving price range above $300,000. “We’re just not building specs at this point,” said Perry Bourn, president of Hudson-based Prestige Homes, who builds homes ranging from the mid-$400,000s to $1 million. “We may put in a model home that we are willing to sell. The last time we did speculative homes was several years ago. We had three to five speculative homes at all times. When you sold one, you started another one. Now that’s just a part of your business — perhaps a third of your business — that is gone.” The scenario Mr. Bourn sees regularly is that buyers expect to be able to find a speculative house available at a discount. Often, they will find a house that the first owner occupied such a short time they, or a bank owning it, describe it as new. “When they find one, it’s usually a house that was finished a few years ago and was not sold,” Mr. Bourn said. “It’s not unusual to
see someone buy a home that’s 3 to 5 years old and then hire us, because we built it, to change it. We also have to constantly change models to make them different from homes that are a few years old.” Likewise, Sam Petros, CEO of Broadview Heights-based Petros Homes, said the national builders are the only builders with much speculative inventory, and they are typically in lower price ranges than his firm targets. “About 10% of the homes each year were (built as) specs,” Mr. Petros said, referring to his company. “We used to use them to even out production. Now the only time we do a speculative home is when we have a good feeling it would sell. When you do one, it’s an educated guess on the market. There’s no winging it now.” That is the lesson of the shrinking new home market amid the realty credit crunch and recession. Now, builders as a group “don’t have to go out and sing ‘Happy Birthday’ to our specs any more,” Mr. Petros said. Likewise, H.R. “Bucky” Kopf, president of Avon Lake-based Kopf Builders Inc., said his concern does fewer speculative homes than in the past, although it likes to have a few on hand to capture sales to people who are transferred into the region and home buyers who sold their home before starting their search for a new home. “I don’t think builders are gambling much anymore,” Mr. Kopf said.
Being conservative Builders say the decline in the number of speculative home stems from several trends. The market for homes is so small the market for speculative homes shrank with it. Not to mention, only a handful of builders have relationships with their banks strong enough that the lender will fund speculative homes. Some builders are resorting to private equity, or well-heeled investors, to raise money to build a speculative home since lenders generally will not fund them. For his part, Prestige’s Mr. Bourn said he no longer has a model home in each of the eight communities where he builds. Instead, he said, there are models in half the communities to show prospective buyers different designs. Salespeople, he said, then point out where the company has land available to build. Many of the builders who are surviving the downturn are the more conservative ones, said Enzo Perfetto, manager of Munson Township-based Enzoco Homes LLC. “We are finishing a new home on Nicole’s Way in Munson that is a decorated model we will use as a sales center,” Mr. Perfetto said. “We will sell it as a speculative home, but we used to do two or three a year.” Now, Mr. Perfetto said, eschewing speculative homes is one of the ways builders keep down costs. With unsold specs, builders had to raise their prices to recoup from other buyers the expense of carrying unsold homes, he said.
Even national builders talk about how many fewer spec homes they erect today. For example, Pulte Homes, the Birmingham Hills, Mich.-based builder active in Northeast Ohio, is cautious about speculative homes. Richard Dugas, CEO of Pulte Homes, said in a Feb. 9 conference call that the company is willing to miss some sales by carrying fewer speculative homes in order to avoid having to risk discounting homes in the future. He said the company has about 2,800 homes ready for buyers in 880 subdivisions nationally — or about three per neighborhood.
‘Vicious circle’ Builders and brokers argue the decline of speculative homes is unlikely to have much impact on the market as a whole because the residential market remains weak. Howard Hanna’s Mrs. Modica and several builders say buyers will need to plan carefully to build new homes because it takes at least four months to build one. More buyers may have to store belongings after selling their homes until workers finish their new home. Increasingly, the buyer of a newly constructed home will have to take the risk of selling their home before their new home is ready. It is a vicious circle, Mr. Stouffer said: “The builder will not have the confidence to build on spec until the public has the confidence to know their house will sell.” While things are looking up in the residential home market, it may be a year or more before that stability returns, Mr. Stouffer said. ■
Exhibit: Firms hope to boost their visibility continued from PAGE 11
“PechaKucha Cleveland Night,” which gives presenters four minutes each for a rapid-fire computer presentation on design, from photography to buildings, beginning at 8:20 p.m. April 23 at Convivium33. Another panel discussion, “No Building Left Behind” — which suggests reuses of sacred spaces inspired by the closing of local Catholic churches — is set for 4 p.m. April 20 at Maxine Goodman Levin College of Urban Affairs, 1717 Euclid Ave. Cleveland city planners will discuss “Envisioning the Future of Cleveland” at 5:30 p.m. April 21. The only event with a fee, a $20 donation, is an opening reception and lecture by George Hartman, an internationally acclaimed architect, teacher and writer, on “The History of Architectural Education and The Community of Architects.” That event takes place at 5:30 p.m. April 15 at the Union Club, 1211 Euclid Ave. Even if the effort fails to boost business, AIA Cleveland’s Architecture Week may benefit the profession. “Unless you are building a house or a building, you could spend your entire life and never meet an architect,” Mr. Jackson said. “Yet we are here.” For a complete schedule, visit www.aiacleveland.com. Make reservations at 216-575-1242 or by sending an e-mail to aiadocs @aiacleveland.com. ■
IN BRIEF Former basketball coach scores with business Michael Friedman’s ReVision Group markets resort properties for sale Since Michael Friedman sold his seven Captain Tony’s pizza franchises in 1999, the former college basketball coach has kept his home in Northeast Ohio but scored in yet another league far afield — resort real estate. Mr. Friedman, perhaps best known as the winning roundball coach at the former Dyke College, now Friedman Chancellor University, for the past decade has been selling resort properties for developers in areas ranging from Florida to California and Mexico. His specialty is organizing highly publicized weekend or day-long events to move a substantial number of condos or timeshares. But since the resort and vacation market has a worse hangover than residential realty since the recession and credit crunch ruined the party, Mr. Friedman has had to change his playbook. That is why he has formed ReVision Group, a company designed to market vacation and resort properties for developers looking to swiftly unload them, or, more likely, for bigticket investors and lenders who funded the developments. The company recently won a contract to sell properties at 12Shores at Ute Lake, N.M., a 900acre golf-course community developed by Carma Developers of Calgary, Canada. More are on the
way, he said, and he expects to be busy. Mr. Friedman anticipates that he will see lenders and investors market an astounding volume of distressed vacation properties the next few years because the extent of problems is not yet apparent. BILLING NOW LESS TAXING: Geauga County has become the first county in Ohio to provide an electronic real estate tax billing program, according to Treasurer Chris Hitchcock. Called eBILL, it allows taxpayers who choose the service to receive an e-mailed tax bill instead of a paper bill. Payments can be made by mail or they can be made online through the bank or with a credit card. Mr. Hitchcock said about 840 people signed up for the electronic program’s first mailing. “So far, so good,” he said, noting that almost everybody paid in a timely manner. The program is saving the county money, said Mr. Hitchcock, who estimates that each mailed tax bill costs the county about $3, taking into account postage and other preparation costs. He plans to share the results of the program with the state’s other county treasurers during the group’s annual meeting.
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Jackson: Consolidation an issue continued from PAGE 1
Mayor Jackson’s message clearly was directed not only at members of school boards and school administrators with direct responsibility for school districts, but to suburban mayors, whose support of educational collaboration will be critical. Beachwood Mayor Merle Gorden, who came downtown to hear Mayor Jackson’s speech, is on the same page, though like Mayor Jackson, he doesn’t yet know what a county education authority should look like. “If we don’t get together and talk about it and try to forecast where we want to go with this region as far as education, we are truly missing the boat,” Mayor Gorden said in a telephone interview. “If we as community leaders don’t focus on something and start some discussions, it’s just not going to happen.” Pointedly missing from Mayor Jackson’s call to action was any mention of school district consolidation, a move that likely would be resisted by more affluent districts. Though some school officials believe some measure of consolidation must happen as education finances tighten, and the state of Ohio’s budget crunch may force the issue on some districts, Mayor Jackson realizes that he, as head of the region’s most troubled district, can’t be the one to initiate the conversation. Richard Markwardt, superintendent of Beachwood City Schools, said there is an aversion to consolidation,
particularly among smaller districts, and that even larger districts have created small learning communities within large schools, suggesting that bigger isn’t necessarily better. He conceded, however, that consolidation “might make sense from a bureaucratic perspective.” Added Mayor Gorden: “There are positive ways to approach all of (the subjects Mayor Jackson discussed) that are non-threatening to all communities.”
Signs of progress Ohio counties at one time did have county school districts that were supposed to monitor educational standards. Cuyahoga County’s school district, though, has morphed into the Educational Services Center of Cuyahoga County, a 1,000employee organization that provides specialized teachers and staff, such as occupational or speech therapists, for school districts that can’t support full-time professionals. Northern Ohio also has the Ohio Schools Council, a regional council of governments that serves 22 counties. It’s where school districts now come together for such things as buying school buses and liability insurance. Districts also have joined ad hoc buying groups for health insurance, said Robert Mengerink, superintendent of the educational services center. In addition, the 15 school districts that ring the city of Cleveland have joined together in the First Ring
Superintendents Collaborative to focus on issues that affect older, more urban school districts, and on developing future school district leaders. The South Euclid-Lyndhurst school district already is involved in a number of those efforts to pool resources. However, William Kent, president of the South-Euclid Lyndhurst Board of Education and president of Snow Bros. Appliance Co. in Lyndhurst, said he believes tight budgets will push the district to collaborate more. “We’re going to have to look at something,” he said. “Tax dollars are too hard to come by.” Mr. Kent mentioned a so-far successful program by the Rittman and Orrville school districts in Wayne County. There, since 2007, the two districts have shared top administrators. “It’s something that’s worth looking at,” Mr. Kent said. “Everyone has a superintendent and a treasurer; it seems to be a little redundant. But it would be a huge challenge.” James Connell, former superintendent of the Berea schools, currently is the facilitator of the First Ring superintendents group. He said district consolidation “is not something on our table yet,” but he acknowledged that the subject comes up in conversation. “Everything I hear about consolidation having to happen is that it has to happen for somebody else,” he said. ■
GCIC: Proximity to Clinic big benefit continued from PAGE 1
diagnostic devices company NI Medical Ltd. of Akron and Aim Pharmakon Inc., a company based in Centereach, N.Y., that provides consulting services to companies selling pharmaceuticals and nutritional supplements. Mr. Sudow said the center’s effort to recruit cardiovascular companies and influence opinion leaders in the field has helped it gain name recognition, as shown by the comments of attendees at a recent medical device conference in Anaheim, Calif. “We were talking to people and they’d say, ‘I know who you are,’” Mr. Sudow said.
The right neighbors Still, the existence of a building will allow the center to do more. For one, the young cardiovascular companies that set up shop on the second and third stories of the 50,000-square-foot building will be located just across the street from the Clinic’s Lerner Research Institute. From there it’s just a short walk to the Sydell and Arnold Miller Family Heart & Vascular Institute, which is the Clinic’s main center for treating heart patients. The benefits of being next to the Clinic and just down the street from center partners University Hospitals and Case Western Reserve University are enormous, said Mark Low, managing director of the center, which also lists Ohio State University, the University of Cincinnati, the University of Toledo and several economic development groups as partners. For one, a lot of cardiovascular companies in Northeast Ohio were founded on technology developed
at University Circle institutions and would like to remain close to the researchers who created the intellectual property, Mr. Low said. Plus, other cardiovascular companies wouldn’t mind the presence of a large amount of expertise so close. Mr. Low described how, while working for Hewlett-Packard Group’s Medical Products Group in Andover, Mass., he took part in a “very inefficient and very expensive” process that involved shipping new product designs to clinical experts in California or flying across the country to visit them. “The proximity is really one of the strengths,” Mr. Low said. Tenants will have access to more expertise on the first floor, which will house the administrative offices of both the Global Cardiovascular Innovation Center and Cleveland Clinic Innovations, the technology commercialization arm of the Clinic. Mr. Low expects the startups to learn a lot from each other, too, given that they will be focused on cardiovascular technologies, which could range from medical devices to drugs to software. Companies have claimed about 40% of the available space on the building’s second and third floors, where construction crews are putting finishing touches on 34 offices and 20 laboratories that eventually will be fully furnished. The rest of the space likely will be taken by companies already in conversations with center officials, Mr. Low said. “We’ve got leads probably to fill the building,” he said.
More room at the inn The University Circle area needs more space for startups, said
Michael Haag, who is director of technology transfer for biomedical licensing at CWRU. Room isn’t always available at the nearby incubator run by BioEnterprise Corp., a nonprofit that assists health care companies, Mr. Haag said. “Most of the time we go over there, the inn is full,” he said. Located in BioEnterprise’s building, CardioInsight Technologies Inc. isn’t considering moving into the new incubator, though CEO Steve Arless said he knows firsthand the benefits of being close to University Circle researchers. However, the cardiovascular center has had a “big impact” on the CWRU spinoff through the grant it awarded the company just over a year ago, Mr. Arless said. He declined to disclose the size of the grant. Not only has the money been useful, but officials with the center have provided valuable advice to CardioInsight, which is developing a device meant to help diagnose heart rhythm problems. The backing of a group led by the Clinic also makes it easier to raise capital, he said. The company earlier this year closed on a $6 million investment that involved both local and out-ofstate investors. “It’s a great validation of what we’re trying to do,” he said. The Global Cardiovascular Innovation Center is still young, but it has done a good job at attracting companies, awarding grants and building a name for itself, said Andy Hansen, who oversees the project for the Ohio Department of Development. “Within the (cardiology) community, people are very aware of it,” Mr. Hansen said. ■
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CREDIT UNIONS
RANKED BY DEC. 31, 2009 ASSETS
Name Address Rank Phone/Web site
Assets (millions) Dec. 31, 2009
Dec. 31, 2008
% change
Loans (millions) Dec. 31, 2009
Shares & deposits (millions) Number of Dec. 31, 2009 members
Membership groups
Top executive Title
1
Seven Seventeen Credit Union 3181 Larchmont Ave. NE, Warren 44483 (330) 372-8100/www.sscu.net
$765.3
$723.2
5.8%
$522.5
685.5
76,587
Live, work, worship, attend school in Trumbull, Mahoning, Columbiana, Portage or central Stark County communities
Gary Soukenik CEO
2
Century Federal Credit Union 1240 E. Ninth St., Room 719, Cleveland 44199 (216) 535-3200/www.cenfedcu.org
$310.2
$240.7
28.9%
$216.3
268.3
26,183
Open to federal government agencies and any Northeast Ohio business, association, municipality or educational institution
Tony Coniglio president, CEO
3
St. Paul Croatian Federal Credit Union 34900 Lakeshore Blvd., Eastlake 44095 (440) 269-1243/http://stpaulcroatianfcu.com
$238.8
$195.8
22.0%
$231.7
208.5
5,400
Ethnic based
Anthony L. Raguz COO
4
Firestone Federal Credit Union 1200 Firestone Pkwy., Akron 44317 (330) 379-6400/www.fofcu.com
$233.7
$204.5
14.3%
$51.1
201.1
13,186
Bridgestone/Firestone employees
Wayne A. Chapman president, CEO
5
BFG Federal Credit Union 445 S. Main St., Akron 44311 (330) 374-2990/www.bfgfcu.org
$172.5
$170.8
1.0%
$113.0
152.7
28,221
Individuals who live, work, worship, Michael J. Owens volunteer or attend school in Summit County president, CEO
6
GenFed Federal Credit Union 85 Massillon Road, Akron 44312 (330) 784-5451/www.genfed.com
$171.7
$173.4
-1.0%
$103.7
144.6
17,790
Ford, ASW, Reiter Dairy, Quality Mold, Rubbermaid and many other local companies
Joyce R. Jones president, CEO
7
Cardinal Community Credit Union 8500 Westport Drive, Mentor 44060 (440) 266-2200/www.cardinalcu.com
$160.7
$152.2
5.6%
$85.0
144.1
18,168
All who work, live, attend school or worship in Cuyahoga, Lake, Geauga and Ashtabula counties
April McLeod interim CEO
8
Associated School Employees Credit Union(1) 1690 S. Canfield Niles Road, Austintown 44515 (330) 792-4000/www.asecu.com
$147.5
$67.7
117.8%
$93.5
133.3
22,602
Lives, works, worships or attends school in Mahoning, Trumbull and Columbiana counties
Michael Kurish president, CEO
9
Ohio Catholic Federal Credit Union 13623 Rockside Road, Garfield Heights 44125 (216) 663-6800/www.ohiocatholicfcu.com
$141.2
$132.8
6.4%
$96.4
127.9
17,320
Any person connected with the Catholic Diocese of Cleveland and/or Diocesan parishes, schools, or organizations
Randall A. Trimm CEO
10
Lormet Community Federal Credit Union 2051 Cooper Foster Park Road, Amherst 44001 (440) 960-6600/www.lormet.com
$140.1
$122.8
14.1%
$83.1
120.5
21,000
Lorain County residents
Daniel R. Cwalina CEO
11
Firefighters Community Credit Union(2) 2300 St. Clair Ave., Cleveland 44114 (216) 621-4644/www.ffcommunity.com
$139.3
$134.2
3.9%
$123.0
119.7
24,000
NA
Ben Laurendeau CEO
12
Vacationland Federal Credit Union 2409 East Perkins Ave., Sandusky 44870 (419) 625-9025/www.vlfcu.org
$135.4
$112.0
20.9%
$77.5
120.9
15,282
Lives, works, worships or attends school in Erie County
Kevin Ralofsky CEO
13
School Employees Lorain County Credit Union Inc. 340 Griswold Road, Elyria 44035 (440) 324-3400/www.selccu.org
$129.5
$115.4
12.2%
$72.8
118.1
11,743
NA
Brent T. Binkley president, CEO
14
CSE Federal Credit Union 1380 Market Ave. North, Canton 44714 (330) 452-9801/www.csefcu.com
$116.3
$95.2
22.2%
$83.3
105.7
22,545
Open to persons who live, work, worship or attend school in Stark County
R. Stanley Barnes CEO
15
Ohio Educational Credit Union 2554 E. 22nd St., Cleveland 44115 (216) 621-6296/www.ohioedcu.com
$111.6
$110.3
1.2%
$88.5
97.7
20,814
Employees, students and alumni of public and private schools and colleges in Ohio
Jerome R. Valco CEO
16
Best Reward Credit Union 5681 Smith Road, Brook Park 44142 (216) 367-8000/www.bestrewardcu.coop
$104.4
NA
NA
$40.1
74.5
14,200
Membership is available to those who live or John J. Shirilla work in Cuyahoga, Lake, Geauga, Medina, president, CEO Summit, Lorain, Portage counties
17
PSE Credit Union Inc. 5225 Regency Drive, Parma 44129 (440) 843-8300/www.psecreditunion.org
$102.0
$93.3
9.2%
$58.3
88.6
23,375
Anyone who lives, works, worships or attends school in Cuyahoga or Medina counties
Janice L. Thomas president, CEO
18
Golden Circle Credit Union 4118 Lincolnway E., Massillon 44646 (330) 479-3130/http://goldencirclecu.com
$98.1
$94.1
4.3%
$37.9
81.9
16,529
Live in Stark County
Jeffrey McClain CEO
19
Stark Federal Credit Union 4100 Dressler Road NW, Canton 44718 (330) 493-8325/www.starkcu.org
$91.2
$70.8
28.9%
$36.2
74.8
12,321
Anyone who lives, works, worships or attends school in Stark or Carroll counties
Ronald Ginther president, CEO
20
Buckeye State Credit Union 155 E. Voris St., Akron 44311 (330) 253-9197/www.buckeyecu.org
$78.0
$76.2
2.3%
$49.0
69.6
21,417
Community membership in Shaker Heights and the counties of Summit, Stark, Lake and Ashtabula
N. Sue Preston CEO
21
Cleveland Self Reliance Federal Credit Union 6108 State Road, Parma 44134 (440) 884-9111/www.clevelandselfreliance.com
$77.8
$75.2
3.6%
$47.3
64.9
4,416
Ukrainian American community
Orest Liscynesky treasurer, manager
22
Taleris Credit Union Inc. 1250 E. Granger Road, Cleveland 44131 (216) 739-2300/www.taleriscu.org
$76.4
$76.9
-0.7%
$39.0
62.4
14,155
Individuals who live, work, worship or attend Robin D. Thomas school in Cuyhoga County president, CEO
23
Lakeview Federal Credit Union 2909 State Road, Ashtabula 44004 (440) 998-2707 /www.lakeviewfcu.com
$70.0
$62.0
12.9%
$49.2
60.8
7,882
Live, work or worship in Ashtabula County
Sherry S. Cornell CEO
24
Towpath Credit Union(2) 645 N. Main St., Akron 44310 (330) 664-4700/www.towpathcu.com
$67.7
$59.9
13.1%
$35.7
59.0
NA
Lives, works, worships or attends school in Akron, Fairlawn, Cuyahoga Falls, Bath and townships of Copley and Richfield
Alan McArthur CEO
25
Unity Catholic Federal Credit Union 5839 Ridge Road , Parma 44129 (440) 886-2558/www.unitycatholiccu.org
$64.4
$59.0
9.2%
$29.1
58.4
11,079
Parishioners, families, students, employees and organizations within the Catholic Diocese of Cleveland
Tamlyn StraightSchervish CEO
26
Community First 2043 E. Prospect Road, Ashtabula 44004 (440) 997-5919/www.hereforeveryoneonline.com
$62.5
$58.3
7.3%
$24.3
52.4
6,677
Live, work, worship in Ashtabula County
Mike Riesterer CEO
27
Community One Credit Union of Ohio 6583 Frank Ave. NW, North Canton 44720 (330) 305-3050/www.c1cu.com
$57.7
$52.8
9.4%
$22.7
53.2
5,383
Serving Stark County
Evelyn L. Canterbury president, CEO
28
Medina County Federal Credit Union 1353 Reimer Road, Wadsworth 44281 (330) 334-1023/www.mcfcu.com
$52.1
$46.9
11.0%
$27.8
43.6
7,374
Open to anyone who lives, worships or educates in Medina County
Raymond G. Cassell chairman
29
CommStar Credit Union(2) 832 Cleveland St., Elyria 44035 (440) 365-7342/www.commstar.org
$47.2
$43.6
8.4%
$35.1
42.8
NA
Membership is open to the public
Ernie Jackson president, CEO
30
Ohio Edison Penn Power Credit Union 45 South Ave., Youngstown 44503 (330) 746-8621/www.oeppcu.com
$43.8
$37.5
16.7%
$22.1
36.7
8,171
Mahoning and Columbiana counties, Severstal Steel employees
David B. Beckhorn CEO
Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) ASECU merged with Cavalier Federal Credit Union on April 1, 2009 and Greater Warren Federal Credit Union on Aug. 1, 2009. (2) Financial data is from American Share Insurance, www.americanshare.com.
RESEARCHED BY Deborah W. Hil
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First: GE needs consumers to switch continued from PAGE 3
But he’s going to get a little help. Governments the world over are turning against incandescents, with some high-wattage bulbs already outlawed in Europe and Australia and the United States set to do away with 100-watt incandescents in 2012. Job No. 1 for Mr. Petras and GE might be to educate the public, not only about the huge energy savings LED lights offer, but about the inevitability of change. For instance, GE’s research shows that nearly three-quarters of Americans are unaware that 100-watt incandescent bulbs no longer will be available after 2012, Mr. Petras said. Then, GE must convince customers a $20, $30 or even a $40 LED light is a good value when those customers are used to buying incandescent bulbs for no more than about $4 for a four-bulb pack. The initial price tags no doubt will surprise many consumers, but the bulbs provide energy savings of up to 80% over traditional bulbs, and they last many times longer. For that reason, Mr. Petras said, it’s important for GE to be a dominant player in the new market from the very beginning. “These bulbs last so long (that) in a lot of cases the fixture will need to be replaced before the bulb,” Mr. Petras said. “So it’s important to get that first sale, because the light might outlast the socket.”
Business lights the way Commercial and institutional buyers already are becoming convinced. Mr. Petras said consumers
will come on board later, because they won’t reap the huge cost savings that a Walmart store or some other big facility gets from changing bulbs. To that end, GE is going after the commercial and institutional markets with LED fixtures unheard of just a few years ago. Those new products include LED street and parking lot lights that use only a fraction of the electricity of metal halide bulbs, last longer and emit more controllable light patterns. While a metal halide streetlight might last 15,000 hours, an LED version lasts about 50,000 hours, Mr. Petras said. That saves users additional money on maintaining lights that might be 30 or 40 feet in the air. Businesses are easy to convince because nearly all of them are looking for ways to save on energy, and lighting is a way to save energy fast, said Bob Taussig of Lighting Services in Twinsburg, which sells high-tech T5 florescent lighting to companies looking to replace incandescents or metal halides. Tax credits assigned to businesses that increase their energy efficiency, combined with lower electric bills, make new lighting systems an easy sell, Mr. Taussig said. “Between the tax reduction and the 50% energy savings, people are buying this,” he said. “Our business is better than it’s ever been.” Those same business factors are helping GE sell its new lights commercially. But for Mr. Petras truly to succeed, he needs consumers, not just businesses, to spend more on their electric lights. And he needs
them to choose GE lights over the cheaper imports that Mr. Petras expects to compete with him in the United States and abroad. GE plans to combat them by producing bulbs that are more efficient and last longer, Mr. Petras said.
Perennial front-runner It will be a tough job, but many think GE will succeed. Among them is Ron Runkles, industry director for electric lighting at the National Electrical Manufacturers Association in Rosslyn, Va. Mr. Runkles predicts we’re only seeing the tip of the iceberg in terms of new lighting products — and LEDs still might be years from fully overtaking incandescents. But incandescents definitely are on the way out, and GE is bound to continue to be an industry leader, in LEDs or any other type of lighting to come, Mr. Runkles predicts. “There’s a lot that can be done, and GE is out on the forefront,” he said. “They say, ‘Let’s grow the entire market and we’ll (various lighting companies) fight it out amongst each other,’ but they’re in front.” As for consumers balking at $30 light bulbs, Mr. Runkles said they might at first. But that too will pass, he predicts. “People thought the same thing about the first incandescents,” he said. “They said, ‘This is expensive, all this wiring and expense for a couple of incandescent bulbs.’” Eventually, they saw value in what were then expensive light bulbs, and they will again, he said. ■
Execs: Participants gain wide array of experience continued from PAGE 3
group to run several local leadership development programs and took over management of the fellowship program in May 2007. “They approached us and said (the fellowship program) made sense to fit it into theirs,” said Robert Eckardt, senior vice president for programs and evaluation at the Cleveland Foundation. “And we agreed to three years of funding.” Mr. Eckardt agrees with the Leadership Center’s desire to get the program on track and said the foundation is willing to at least partially finance the program if it’s restarted. The fellowship differs from other leadership development programs run by the Leadership Center, such as Leadership Cleveland and Cleveland Bridge Builders, in that it is essentially a full-time job for a year. Fellows, who have ranged from graduate school graduates to 40year-olds, are paid a $40,000 stipend for the year and spend three-month rotations at various organizations and businesses. Mr. Abonamah, for example, has worked for Cleveland city councilman Joe Cimperman and at Citizens’ Academy, a charter school on Cleveland’s East Side. Leadership Cleveland and Bridge Builders are less intensive, and neither is designed to steer participants into full-time careers in government or with civic organizations. Instead, those programs are designed to help participants become better volunteer board members. Ms. Friedman said the Leadership Center has been looking, unsuccessfully so far, for new sources of support for the fellowship.
To create the fellowship program, the Cleveland Foundation partnered with the Coro Fellowship program, which began operating a similar program in San Francisco in 1942. Coro has operated for at least a decade in five other cities. “After five years, we’ll have a cadre of 40 or 50 people who have experienced, in a broad, high-level way, a bird’s-eye view of the city,” said Ronn Richard, the foundation’s president in announcing the program. “We’re going to pick very bright folks and hope that they will be the next generation of leaders.” That is happening. Fellows have moved on to a variety of civic-oriented jobs since their fellowship year. Jeff Epstein, a law school graduate, is director of development with the
Coral Co. real estate development firm. Jeff Pesler is assistant director of MidTown Cleveland Inc.; Jeanne Romanoff is director of development at the Greater Cleveland Film Commission; and Eric Wobser recently was named executive director of Ohio City Near West Corp., a community development nonprofit, after serving as an aide to Cleveland Mayor Frank Jackson. “This program has offered an incredibly unique experience,” said Mr. Pesler, who spent one of his three-month rotations on incoming Cleveland Mayor Frank Jackson’s transition team and serves on the fellowship’s advisory board. “It has accelerated the careers of just about every participant in the program; the success rate is staggering.” ■
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Aftershocks: Consumer spending, confidence could remain low continued from PAGE 3
Teplitzky, chairman of the commercial finance and banking practice group at Cleveland law firm Benesch, Friedlander, Coplan & Aronoff. Jack Kleinhenz, a regional economist who is CEO of Kleinhenz & Associates in Cleveland Heights, said it seems like commercial real estate is a worse problem in this recession than it had been in the past, “just like residential real estate” was. Bruce McCain, chief investment strategist at Key Private Bank, said he is a little more optimistic about the impact commercial real estate will have on the economy, but he still sees risk in the sector’s problems. But the potential for a surge in foreclosures isn’t limited to commercial property. A number of adjustable rate mortgages on homes are due to reset in the coming year or so, and the fear is that as those mortgage rates change, it could lead to more home foreclosures.
to agree that when it catches up, it could leave behind an aftershock of enormous proportions.
The coming wave As vacancy rates continue to rise, there is more weakness in commercial properties, Dr. Mayland said. Bill Mahnic, a banking and finance professor at the Weatherhead School of Management at Case Western Reserve University, said that with a weak economy, companies are closing stores and asking to renew leases at discounted rates. An inability to refinance commercial real estate is another issue facing the class. All those factors could lead to a wave of commercial foreclosures that could stress banks already dealing with high residential foreclosure rates. “Everything you read, it’s the next shoe to drop,” said Ron
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Dr. Schweitzer is most concerned about the continued impact of long-term unemployment. As of January, the average duration of an unemployment spell was 30 weeks, he said. That’s much higher than in the recession of the 1980s, when people were unemployed for 22 weeks on average. The increased length of time could
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mean degradation of employees’ skills, he said, and it strains the resources of the social safety net. Craig Thomas, senior economist at PNC Financial Services Group, said a large pool of unemployed workers also could indicate that workers who have lost their jobs are no longer able to perform desirable work. There is a chance, he said, that their skills wouldn’t “match the opportunities that are going to emerge in recovery.” All of these issues combine to create another possible aftershock in regard to consumer spending. Dr. McCain at Key said he is not sure the retail sales increases that have occurred of late are sustainable. He wonders what will happen once stimulus money is no longer a factor for such goods as cars and appliances. People who still are experiencing a crisis of confidence are unlikely
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Mark E. Schweitzer, senior vice president and director of research for the Federal Reserve Bank of Cleveland, said the possibility that adjustable rate mortgages will reset at lower rates because interest rates have dropped means the problem is not as dire as others might believe. But he said the Fed has been particularly worried about whether small businesses have access to credit — something that is highly important to keep the economy functioning.
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to move forward with large purchases that would help stimulate the economy, Dr. McCain said. “It’s like a massive heart attack,” he said. “You don’t get out of the hospital and immediately run a marathon. It takes time.” Dr. Mayland suggested that people would continue to keep their purse strings tight, while Benesch’s Mr. Teplitzky said extended job loss may lead to “real trouble” in credit card debt as people are unable to pay the unsecured loans. The real concern, said Dr. Jacques of B-W, is that the whole idea of an aftershock is driven by the possibility of an entirely new group of people running into trouble. “At some point in time, if a new job doesn’t materialize, your ability to afford a car, to afford a credit card payment is just going to run out,” he said. “And ding, there comes your second wave.” ■
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THEINSIDER
THEWEEK
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
MARCH 8 - 14
Unwelcome surprise for Wyndham guests
The big story: Equipment
■ Stayed at a Wyndham hotel over the past few months? Check your credit card statement. A hacker stole customer credit card information from as many as 37 Wyndham-brand hotels — including the downtown Cleveland location on Euclid Avenue — between Oct. 25 and Jan. 29. The company says it shut down the security breach in late January, but whoever broke in still has information on an untold number of customer credit and debit cards. I know some of the victims. Twelve friends and family members of mine fell victim to the scam when they stayed at the downtown Wyndham following my wedding reception at PlayhouseSquare’s Allen Theatre (which is a great venue, by the way). The thieves got a lot more than their card numbers: They also took cards’ expiration dates and information from their magnetic strips. They then used that information to create new cards and distributed them all over the world. Whoever ended up with the cards has swiped them to make purchases at locations as far away as Arizona, Florida, Spain and India. The upscale hotel chain still is trying to figure out all the people who have been affected, according to information from Wyndham Worldwide Corp. of Parsippany, N.J. The company knows which cards the hacker gained access to but doesn’t expect to be able to pair them all with customer names
from the Chrysler stamping plant in Twinsburg likely will go on the auction block by the end of this year, marking the end of the building’s life as a major employer for the city and region. Taso Sofikitis, president of the Detroit division of Canada’s Maynards Industries, a major liquidator of industrial equipment, said the company agreed to pay $45.5 million for the plant. FILE PHOTO/ The city of Twinsburg, workers MARC GOLUB at the plant and companies that have supplied it with service and materials all hope that a buyer will be found to operate the plant. Mr. Sofikitis said Maynards will look for one — and would love to find one — but he isn’t holding out much hope that it will.
He’s the boss: Tucker Ellis & West has a new managing partner. Joe Morford, the former co-chair of the mass tort and product liability practice group, has taken over the role. He is succeeding Curt Isler, who had been the managing partner since 2008. Mr. Morford, 44, is a Shaker Heights resident and a magistrate judge for the city of Shaker Heights’ Juvenile Court Diversion Program. He has been with the firm since it was founded in 2003.
Passage to India: Babcock & Wilcox Power Generation Group Inc. in Barberton formed a joint venture with Indian energy-environment products company Thermax Ltd. to build efficient boilers and pulverizers for the Indian utility market. The new company will have its headquarters in the Maharashtra state of India. The joint venture will have the full capability to engineer, manufacture and manage large power projects for the Indian power sector. The partners will construct a pressure parts fabrication plant in India.
WHAT’S NEW
Listen up: Venture development group JumpStart Inc. invested $250,000 in Melody Management LLC, a Columbus startup that plans to move to Northeast Ohio in April. Melody Management has created web-based software that lets musicians upload music to the Internet and sell it online via social networking web sites such as Facebook. The company sends a majority of the money directly to the musicians weekly via a Melody Management-branded debit card. This and that: Summa Health System plans to spend $65 million to upgrade its network of emergency services. Summa will build new, freestanding emergency departments at Summa Health Centers at Green and Lake Medina. Emergency departments at Summa’s Akron City, Barberton and Wadsworth-Rittman hospitals also will be expanded. … OM Group Inc. said it entered into a new $250 million secured revolving credit facility with a syndicate of lenders, led by PNC Bank. The new credit facility replaces a $100 million facility due to expire in December.
Film festival takes a shine to Apple ■ The Cleveland International Film Festival is fast approaching … and guess what? There’s an app for that. The 34th Cleveland International Film Festival’s free application for the Apple iPhone and iPod touch allows users to browse the festival’s films by title, category, program or day. Users can view film details, multiple images and real-time screening information. It also features contact information and maps.
Even Google needs a hand, and Cleveland offers it
COMPANY: Recreation Solutions Ltd., Medina PRODUCT: Stake Buddy Recreation Solutions is trying to make it easy for people who want to pull up stakes — literally. Steve Cheslock, co-owner of the company with his wife, Kristin, says he came up with the idea for the Stake Buddy following a week-long camping trip last year with his family. Anyone who has spent time taking down a tent knows the stakes don’t always come out easily, and attempts to remove them often lead to broken stakes or mallet handles and ripped tent seams. His solution: A device in which a camper puts his or her hand through a large loop and grasps a comfortable handle, adjusting the slide to secure to the wrist. The camper then attaches the other loop to the stake and pulls, and leverage does the rest of the work. Stake Buddy, which costs $15, isn’t just for campers. It can work on an awning at an office picnic, on holiday inflatables in the front yard and anything else that eventually requires a stake to be removed from the ground. For more, visit www.StakeBuddy.com. Send information about new products to managing editor Scott Suttell at ssuttell@crain .com.
“The app gives our festival-goers a whole new way to interact with us,” said Marcie Goodman, executive director of the festival. “We wanted to create a simple, easy-to-use tool that would allow both first-time fans and our die-hard supporters to check out this year’s films anytime and anywhere.” This year’s festival runs from March 18-28 at Tower City Cinemas in downtown Cleveland. The link to download the app can be accessed at the film festival’s web site, www.clevelandfilm.org, by selecting the “downloads and media” tab in the festival drop-down menu. — Amy Ann Stoessel
Courting lawyers at the Ritz ■ It’s a good month to be a lawyer. Throughout March, The Ritz-Carlton Cleveland is offering complimentary room upgrades, overnight shoe shines and free highspeed Internet access, along with a lawyer preferred booking rate. Attorneys also will get 10% off meals at Muse restaurant with the presentation of a special welcome letter. But the legal eagles don’t need to stay at the Ritz to benefit from the hotel chain’s appreciation of their business. There will also be an Attorney-tini taster on March 31 at the hotel’s sixth-floor lobby. Hors d’oeuvres and the first cocktail are complimentary; the event will take place from 5:30 p.m. until 7:30 p.m. “This event allows us the chance to express our gratitude to the city’s legal professionals,” business travel sales manager Corey Strzalka said. — Arielle Kass
BEST OF THE BLOGS Excerpts from blog entries on CrainsCleveland.com.
Right on schedule: Software company Acme Express Inc. of Cleveland received a $550,000 Small Business Innovation Research grant financed by the National Institutes of Health’s National Institute of Nursing Research. The money will aid development of software that improves efficiency in scheduling nurses and technologists to alleviate health care worker shortages. Don Scipione, president of Acme Express and principal investigator for the grant, said with the aid of the company’s scheduling technology, “fixed shifts are replaced with flexible shift parameters with a range of start times and shift lengths.”
and addresses for at least a few more weeks. Wyndham plans to send letters to cardholders that it can confirm were affected. It already has sent the exposed numbers to Visa, MasterCard, American Express and Discover. “We’re trying to be as proactive as we can,” said Evy Apostolatos, director of media relations for Wyndham Hotels and Resorts, which manages Wyndham-brand properties. The company is paying Equifax to provide free credit monitoring for one year to anyone Wyndham believes could be affected by the break-in. The hacker did not access credit card information from other hotel brands owned by the parent company, which posted an open letter to its customers at tinyurl .com/bempr9. The page includes links to a frequently asked questions section as well as actions customers can take to protect themselves. — Chuck Soder
■ Cleveland is one of the places providing a template for Google Inc. as the technology giant seeks to build an ultra-high-speed Internet network for up to a half-million U.S. residents. The Wall Street Journal reported that since its ultra-high-speed announcement last month, Google has reached out for advice to several communities, including Cleveland, that have embarked on such projects. Among other things, Google asked about the need to have online programs that prove the benefits of an ultra-high-speed service, said Lev Gonick, chief information officer at Case Western Reserve University. The Journal reported that in an e-mail Mr. Gonick received from a Google contact last month about the project, he recalls the company said “we have a lot to learn.” Mr. Gonick is leading an initiative that would connect 104 houses, several hospitals and Case Western Reserve to a 1-gigabit per second ultrahigh-speed Internet service, the newspaper noted. “The service, expected to go live this month, is about 100 times faster than the top speed available to most Americans,” according to The Journal. A Google spokesman said of its outreach effort, “We’re not pretending to have all the answers.”
All of a sudden, Sutton’s a target in health care vote ■ Get ready, Betty. That’s the message U.S. Rep. Betty Sutton,
a Democrat from Copley Township, should get from a Washington Post blog entry noting that the American Future Fund, a conservative interest group, “is spending $900,000 on television ads in 18 Democratic-held districts calling on members to scrap the current (health reform) plan.” Ms. Sutton’s 13th district, which cuts through parts of Cuyahoga, Lorain, Medina and Summit counties, is one of the districts targeted. The ads decry the plan’s “massive spending” and “backroom deals,” including the now infamous “Cornhusker Kickback” in the legislation, and they quote President Barack Obama’s “lipstick on a pig” comments during the campaign, The Post blog noted. The Post blog said the American Future Fund ads “are almost certainly the leading edge of a cavalcade of spending by independent groups — both conservative and liberal — in the run-up to the vote.”
For Metro Bar + Kitchen, it’s time to spring back to life ■ Metro Bar + Kitchen, the new name of the former Metropolitan Café, hosted two job fairs last week as the popular spot in Cleveland’s Warehouse District prepares to reopen later this month. The establishment closed Jan. 1 for a $500,000 renovation. “Having been a part of this downtown neighborhood for more than 10 years, we feel now is the best time to update the restaurant to better reflect the urban chic atmosphere and sophistication of the Cleveland food scene,” said Joe Saccone, co-owner of Hyde Park Restaurant Group. “We look forward to showing our regular guests and new visitors the fresh new look and feel of the restaurant.” Executive Chef David Culi is developing the restaurant’s new menu concept.
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