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$1.50/APRIL 19 - 25, 2010

Vol. 31, No. 16

INSIDE Get your geek on Local colleges are reporting significant increases in the numbers of students who are seeking degrees in the STEM fields, or science, technology, engineering and math. These areas provide scholarship as well as career opportunities. Read Shannon Mortland’s story on Page 3.

Wind farm in uncharted waters Before offshore turbine project gets green light, task force first must navigate through red tape By CHUCK SODER csoder@crain.com

The group led by Cuyahoga County that plans to put wind turbines in Lake Erie can’t disturb the birds. Or the fish. Or the boaters.

And they can’t overload the electric grid. Or ruin the scenery. Or tick off an Indian tribe. Or destroy the remains of a shipwreck. The Great Lakes Energy Development Task Force has less than two years to address all those concerns

“We’re offering many of the same entrées, but we’re changing our menu to give customers more choices and smaller plates with lower price points.” – Jonathan Bennett (below), executive chef, Moxie

and more if its plan to build North America’s first offshore wind farm is to stay on schedule. The project has a few advantages that should make some parts of the permitting process easier. But cutting through all the red tape will take time, given that offshore wind turbines are new to this continent, said attorney Dave Nash, who is working with the task force. “We’re trying to do something that

has never been done before,” said Mr. Nash, a partner with McMahon Degulis LLP, which has offices in Cleveland and Columbus. The task force, through a nonprofit it formed called the Lake Erie Energy Development Corp., or LEEDCo, aims by the end of May to choose a developer that would build a handful of wind turbines in the lake, a few miles north of the See WIND Page 6

Credit unions become beneficiaries of economy as asset levels increase Fiscally conscious consumers seek better interest rates

WILLIAM BECK PHOTOGRAPHY

By ARIELLE KASS akass@crain.com

EATERIES SPICE IT UP New concepts and menus pepper restaurant scene as businesses adjust to diners’ consumption habits, economic realities By KATHY AMES CARR kcarr@crain.com

recession that has left a bad taste in the mouths of consumers is leading to a period of adjustment on the local restaurant scene. In an economy where many people have fewer discretionary dollars to dish out, some restaurants are switching up their menus

or undergoing physical makeovers to adjust to changing dining habits, while others are cashing out altogether. However, a hearty few are using a time of suffering for some establishments to expand their empires. Among the eateries changing with the times is Moxie in Beachwood, where executive chef Jonathan Bennett today, April 19, will unveil the See FOOD Page 12

Northeast Ohio’s credit unions and those statewide have experienced substantial growth over the past two years as consumers continue their flight to safety — and to better interest rates. As of the end of 2009, Ohio credit unions had seen a 19% increase in assets and a 13% increase in lending over Dec. 31, 2007, along with membership numbers that were up just over 1%. Ohio Credit Union League spokesman Patrick Harris said membership numbers had not increased in five years. The average Ohio credit union had more than 6,700 members, $51.8 million in assets and $31.7 million in loans at the end of 2009. In 2007, the average credit union boasted 6,090 members, $39.8 million in assets and $25.6 million in loans. In Northeast Ohio, at least a dozen credit unions saw their assets grow more than 10% as of Dec. 31, 2009, from Dec. 31, 2008, with five posting increases of more than 20%. Pete Grimm, president of Medina County Federal Credit Union, which saw its assets increase 11% over the course of 2009, said while membership at the credit union grew 3% or 4% last year, much of the deposit growth came from existing members who made new deposits. Mr. Grimm said credit unions tend to offer better rates than banks and the rest of the market, so members who

CREDIT UNION ASSETS These credit unions had the highest percentage of asset growth for the 12 months ended Dec. 31, 2009: ■ 1: Century Federal Credit Union: 28.9% ■ 1: Stark Federal Credit Union: 28.9% ■ 3: CSE Federal Credit Union: 22.2% ■ 4: St. Paul Croatian Federal Credit Union: 22.0% ■ 5: Vacationland Federal Credit Union: 20.9% *Associated School Employees Credit Union grew 117.8% because of two mergers. SOURCE: MARCH 15 CRAIN’S LIST

have paid attention to their finances have a greater incentive to keep funds there instead of at a bank. Medina County Federal Credit Union intentionally has kept itself from growing its deposits more quickly in order to keep from pushing its reserves too low, Mr. Grimm said, although he could attract even more new members, and new deposits from old members, if he tried by raising his rates. “We don’t want to grow way too fast if we’re not lending it,” Mr. Grimm said. Kevin J. Ralofsky, CEO of VacationLand Federal Credit Union in Sandusky, said he has been lending conservatively for the past 18 See ASSETS Page 18

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DEPENDS ON YOUR PERSPECTIVE

COMING NEXT WEEK

Talk about a gender gap. A Bain & Co. survey of 1,800 managers and executives worldwide about gender parity in the workplace found men and women offered sharply different views on the subject. Here are the percentages of respondents who agreed with the following statements:

Value of a degree Northeast Ohio colleges and universities are increasing tuition as they grapple with rising inflation, debt obligations and anticipated state funding cuts. We explore those plans in our Higher Education section.

Statement

Men

Women

I’m convinced of the benefits of workplace parity

79%

87%

Gender equality should be a strategic imperative

Men and women have equal opportunity in my firm to be:

REGULAR FEATURES Best of the Blogs .........19 30 and Counting..........10 Classified ....................18 Editorial ......................10

APRIL 19-25, 2010

Going Places .................9 Letter..........................11 Reporters’ Notebook....19 The Week ...................19

Recruited into junior positions

Recruited into management/executive positions

Promoted into middle management

Promoted into senior management positions

Appointed into key leadership roles

SOURCE: BAIN & CO.; WWW.BAIN.COM

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Just for geeks? Not anymore, as science, tech, math degrees now in high demand at area schools By SHANNON MORTLAND smortland@crain.com

STEM IS IN Petros cites ‘perfect storm’ in surrendering shopping center Lack of anchor tenant after Rego’s exit hurts plaza By STAN BULLARD sbullard@crain.com

High-profile homebuilder and commercial real estate developer Sam Petros has given the keys to his Timber Ridge Plaza in North Royalton to the mortgage holder Petros on the shopping center. “It was a perfect storm,” the CEO of Petros Homes said in an interview. “You lose your anchor tenant and the economy tanks. The (center’s) value dropped in my opinion to less than the loan amount. We tried to get the lender to lower the loan amount, but they were not in the mood. We couldn’t come to terms.” In the end, Mr. Petros said he believed the lender decided it could get more for the retail center at 9199 Sprague Road by selling it than it could by lowering the principal amount due. The original loan was for $7.2 million, according to county records. He did not disclose the debt remaining on it. Mr. Petros as president of Timber Ridge Investment Ltd. did not sign personally for the debt, so he is not liable for it. Mr. Petros surrendered the deed April 1 for the nearly 100,000square-foot shopping center he developed in 1990 to CSFB 2005-C1 Sprague Road LLC, according to Cuyahoga County land records. LNR Partners Co., a unit of LNR

Properties Co. of Miami Beach that manages investments for lenders and acquires distressed loans and properties, now controls the shopping center. The county assigns the property a $7 million market value for tax purposes. Michael Guggenheim, president of Guggenheim Realty in Beachwood, is handling management and leasing of the property. Guggenheim’s work is cut out for it, as Timber Ridge is more than 50% vacant. Mr. Guggenheim said it is too early to know how much appetite there is for the empty selling space. However, he said the shopping center has multiple smaller tenants who do quite well there. The center became problematic after Rego Bros. Markets closed its store there in 2008 after taking space formerly occuped by a Tops supermarket. Tops left the plaza when its Dutch parent, Royal Ahold, pulled out of the Northeast Ohio grocery market in 2006. Keith Hamulak, a retail specialist at CB Richard Ellis in Cleveland, said he has studied Timber Ridge and finds the empty supermarket a deal-stopper for most anyone unless the next owner has a large tenant ready to go into it. He said the property also could move if the next owner gets the plaza by paying See PETROS Page 4

cience, technology, engineering and math degrees aren’t just for nerds anymore. Local colleges are seeing significant increases in the number of students who are pursuing degrees in science, technology, engineering and math — the STEM disciplines — compared with even a few years ago. “Science is popular; geek is in,” said Timothy Moerland, dean of the College of Arts and Sciences at Kent State University. “That’s a sharp contrast to five years ago.” Since the 2007-2008 school year, the number of Kent State students in biology and pre-professional programs such as pre-medicine, pre-veterinary and pre-dentistry has risen 25% to 30%, Dr. Moerland said. However, the largest increase in student interest has been in earth sciences and life sciences, which enable students to pursue careers in

biotechnology and health care. Even more impressive, the number of STEM majors at Baldwin-Wallace College has more than doubled since 2006, said Patricia Rossman Skrha, director of undergraduate admissions at Baldwin-Wallace. In the 2006-2007 school year, 8% of B-W’s 2,616 applicants expressed interest in pursuing a STEM degree. So far, 19% of the 3,372 applicants starting college next fall have said they want to pursue a degree in science, technology, engineering or math, Ms. Rossman Skrha said. “The STEM majors are just growing,” she said. “Neuroscience wasn’t really on people’s radar screens four years ago.” Degrees in pre-medicine, predentistry, physical therapy and pre-veterinary are the most popular degrees sought by incoming students at Lake Erie College, said Robin McDermott, vice president of enrollment management and student affairs at Lake Erie. “Health care is now a big push for us,” Ms. McDermott said. “Every school that See STEM Page 4

PROOF’S IN THE NUMBERS Many Northeast Ohio colleges and universities are seeing more students aiming for so-called STEM degrees. A sampling:

■ At Baldwin-Wallace, 19% of fall applicants are interested in STEM programs, up from 8% in the 2006-07 academic year

■ Kent State students in biology and pre-professional programs are up 25% to 30% since the 2007-08 school year

■ The Association of Independent Colleges and Universities of Ohio reports a 5% increase in STEM degrees since 2004

THE WEEK IN QUOTES “People want to go out, but they’re not overextending themselves. We haven’t lost our dining-out culture.” — Douglas Katz, president of Cleveland Independents and chef and owner of Fire Food & Drink. Page One

“Microsoft and the manufacturers of hardware really learned with the whole Vista debacle.” — Chris Kiec, president of IT services firm Adventures in Automation. Page 8

“The expectation that jobs are more difficult to find, especially in Ohio, puts college graduates in a significant box right off the gate.” — Paul Kaboth, assistant vice president of supervision and regulation at the Federal Reserve Bank of Cleveland. Page 15

INSIGHT

Export experts hope CSU program becomes model Already recognized by federal government, GlobalTarget lends local companies a hand By DAN SHINGLER dshingler@crain.com

With the nation struggling to balance its trade deficit, manufacturers crying out for new markets and the Obama administration saying it Scherer wants to double U.S. exports in five years, a lot of eyes are watching Cleveland State University’s GlobalTarget program. The federal government, which just gave the program an Export Achievement award for its work in assisting local companies in export endeavors, even wants to see the program copied by other schools nationwide. “This is really recognized as a model program that we hope to see replicated around the country,” said Ro Khanna, a deputy assistant secretary for the U.S. Commerce Department. Mr. Khanna was in town April 6 to present Cleveland State’s Nance College of Business with the award, which normally is reserved for companies directly engaged in exporting. The Cleveland State program combines the expertise of area companies already well versed in

exporting, such as Solonbased valve manufacturer Swagelok Co., with that of MBA students, faculty and outside experts to provide local companies with a full complement of export services, said Bob Scherer, dean of the Nance College. “It’s very holistic. It brings together experienced business professionals in the area of international trade and exporting, folks that are new to exporting or have done a small amount of exporting, and it involves our student and faculty,” Dr. Scherer said. “So our students are getting exposure to international trade as well.” Participants get to network with mentor companies that help them with export strategies and also receive some free labor from advanced MBA students and faculty, who do company-directed research on specific export markets. They also can use the federal government’s “gold key matching service,” in which government officials pre-screen buyers, distributors or other business and governmental partners in a specific See EXPORT Page 7

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STEM: Jobs steady in these areas continued from PAGE 3

offers health care-type programs is seeing an increase.”

State push pays off In the fiscal year that ended last June 30, Ohio’s nonprofit colleges awarded 8,482 degrees in biological and agricultural sciences; chemistry; math and statistics; earth, atmospheric and ocean sciences; computer science; physics and engineering, according to the Association of Independent Colleges and Universities of Ohio. That’s about 5% higher than the 8,085 STEM degrees awarded in Ohio in 2004, said C. Todd Jones, president and general counsel of the association. One reason more students are

pursuing STEM degrees is that state and federal governments have created scholarship programs for students who declare a STEM major, Mr. Jones said. Also, schools such as Case Western Reserve University and the University of Dayton are working closely with local companies that focus on areas such as math and engineering to create scholarships and internship programs for students, he said. In addition, the state in recent years has begun requiring students who want to become math or science teachers to have a degree in one of those areas, which has steered more people into those programs that traditionally might have pursued education degrees, Mr. Jones said.

Last month, the state announced the Woodrow Wilson Ohio Teaching Fellowship Program, in which four universities throughout the state were chosen to host a combined 80 fellows in each of the next two years to spend a year earning teaching licenses in a STEM discipline. John Carroll University received a $500,000 grant to partner with the Cleveland Metropolitan School District to develop the program over the next year, said Brendan Foreman, chairman of the Department of Education and Allied Studies at John Carroll. Mr. Foreman said he’s planning a program in which the fellows would earn a license to teach any science on the high school level or earn a dual math and computer science licensure. The program is expected to boost the number of people who have STEM degrees and inspire students to pursue those fields later.

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Of course, an abundance of available jobs helps students choose a major as well, Lake Erie College’s Ms. McDermott said. “Students know there’s a pretty clear career path (in the STEM fields) and the media is saying that’s where the jobs are,” she said. Much of the job growth in Northeast Ohio is linked to the health care and bioscience fields. So, if students want to remain here after college, they need to prepare themselves accordingly to be valuable job candidates, Ms. McDermott said. Students at Notre Dame College have realized the fate of the local job market and have made the 4-yearold nursing program there one of the school’s biggest majors, said David A. Armstrong, vice president for enrollment at Notre Dame. The national debate continues on whether more public policies should address the country’s need for STEM majors, Mr. Jones said. In 2008, the United States ranked 20th among the countries whose 24-year-olds had degrees in natural science and engineering, according to the National Science Foundation. ■

Petros: Center hurt by vacancy continued from PAGE 3

nothing for the empty space, which would have been unlikely in the past. Timber Ridge finds itself in the eye of the storm for commercial properties. As a neighborhood shopping center, it is in a retail category with a vacancy rate of 13%. That’s higher than the record 12% vacancy rate for retail centers with more than 50,000 square feet in size, as tracked by CB Richard Ellis. Mr. Petros said he felt he did the right thing for the property: He renovated the shopping center to the tune of $450,000 and landed Rego as a tenant to replace Tops, but the Rego store failed as the economy collapsed. Timber Ridge was Mr. Petros’s first commercial real estate foray, which since was followed by other retail and office properties. At Timber Ridge, Mr. Petros said he recognized the demand created by the hundreds of houses he was building and selling nearby in multiple neighborhoods. Mr. Petros said his other commercial properties are in fine shape. “We made a lot of money there. It was a fabulous center. I wish I could have left it to my children,” Mr. Petros said. “You can’t be emotional about it. It’s just like love: It’s not forever. That’s the story here.” ■

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Wind: State also propels project continued from PAGE 1

downtown Cleveland shore.

Federal concerns

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All the while, LEEDCo is starting to conduct studies to satisfy the requirements of the federal National Environmental Policy Act of 1969. The act covers a lot of territory: Among other things, it requires LEEDCo to study the wind farm’s projected impact on the migratory patterns of birds and bats; whether noise and vibration from the towers will harm aquatic life; whether the towers will be in the way of aircraft; whether they will harm the view of the lake, and whether they will disturb anything historically significant, such as a shipwreck. The act even requires the group to communicate with Indian tribes that might have cultural ties to the location. That mandate has become an obstacle for a group in Massachusetts that aims to put 130 turbines in Nantucket Sound, near Cape Cod. Some steps in the process won’t be as difficult as others. For instance, the Federal Aviation Administration probably won’t have much problem with the project, given that the turbines would be at least three miles from Burke Lakefront Airport, Mr. Nash said. The environmental studies, however, will take more time, he said. He noted how LEEDCo already has started using radar and acoustic technology to study the northern and southern migratory pattern of birds and bats over the lake. The study, however, can’t be completed until the birds and bats fly back north this fall. The data will go to the U.S. Army Corps of Engineers, which will lead federal agencies with an interest in the project. The Corps’ standard environmental

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“In some sense we already represent the public.” – Dave Nash, partner, McMahon Degulis LLP assessment takes roughly 120 days from the time an application is filed, said Steven Metivier, a biologist for the Buffalo District of the Corps. However, though the Cuyahoga County group has been in conversations with the Corps, it has yet to file an application. Plus, the unusual nature of the offshore wind farm pilot project may extend the timeline, Mr. Metivier said. If significant environmental issues arise, the Corps may need to prepare an Environmental Impact Statement, which would take much longer than the standard assessment. It’s rare that the Corps must do a full statement — Mr. Metivier, for instance, hasn’t done one in his 16 years with the Buffalo District — but it does happen. The Cape Wind project in Massachusetts had to have one done, he said, but that project is much larger than Cuyahoga County’s. “If somebody would come in with 100 turbines, then likely we would look at it differently,” Mr. Metivier said.

State issues The state requires much of the same information on environmental and social concerns that the federal government asks for, said Kim Wissman, executive director of the Ohio Power Siting Board, which is leading several state agencies that must approve various aspects of Cuyahoga County’s project. A few issues, however, are the concern of the state alone. For one, it’s the Ohio Power Siting Board’s duty to make sure new power sources are properly connected to the grid. For the Cuyahoga County group to receive its approval, it first must get the approval of PJM International of Valley Forge, Pa., a regional transmission organization that coordinates electricity distribution in Ohio and several other states. Those organizations often take about two years to do studies that assess whether the existing grid can handle the new power source because they have so many studies to do, Ms. Wissman said.

“Timing is an issue,” she said. The length of the studies depends on the size and complexity of the project, she noted. Because the Cuyahoga County project is fairly small, it should speed up the process, said Mr. Nash, the task force’s attorney. “It will not be as complicated,” he said. The Cuyahoga County group has not yet filed to get approval from PJM, according to Cleveland Public Power marketing manager Shelley Shockley. The involvement of the city of Cleveland and its municipally owned electric utility in the project should make it move faster, she said. The task force also must receive a submerged land lease through Ohio’s Office of Coastal Management, part of the Ohio Department of Natural Resources, which has a presence on the Ohio Power Siting Board.

Key advantages Because the task force includes members from area nonprofits, universities and companies — and is led by a public entity, Cuyahoga County — opposition to the project should be limited, Mr. Nash said. “In some sense we already represent the public,” Mr. Nash said. By contrast, the Advisory Council on History Preservation earlier this month recommended that U.S. Secretary of the Interior Ken Salazar stop Massachusetts’ Cape Wind project, which is led by a private company. Mr. Salazar is expected to make his decision on that project this month. The task force has another advantage in the form of support from politicians such as Gov. Ted Strickland and U.S. Sen. Sherrod Brown. And, indeed, the effort already is receiving help from Columbus. State officials have started working out some regulatory kinks to ensure that this project and future offshore wind developments can move through the regulatory process smoothly. For instance, the state is trying to create more flexible rules regarding the acquisition of submerged land leases and to clarify confusion regarding how much say local governments have over whether to grant submerged land leases miles from shore. “Other projects should be able to build on what we do,” Mr. Nash said. ■

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E!CLEVELAND Every Thursday, Crain’s sends to more than 20,000 readers an arts and leisure e-mail called e!Cleveland. (Sorry for the exclamation point. That was the marketing department’s idea.) The e-mail highlights at least 10 events, and often more, that might be worth your time outside work. We’re fortunate in Northeast Ohio to have a vibrant arts community, and each edition of the e-mail features a mix of local music, theater, dance, film and other activities. To sign up for this and all our e-mails, visit www.CrainsCleveland .com and click the “Register for Crain’s alerts” icon at the top left of the home page. Like just about everything else on the Internet, it’s free. If you have events you’d like us to consider for inclusion in future editions of the e-mail, send information to managing editor Scott Suttell at ssuttell@crain.com. Here’s a taste of what makes it into the e-mail each week:

Master of disaster Event: Series of talks by Cleveland author John Stark Bellamy Venue: Sites in Willowick (April 22), Cleveland (April 23) and Parma Heights (April 24) When: Through April 24 Why you might be interested: If you enjoy tales of woe and mayhem. Crime and disaster expert Mr. Bellamy will talk about his new anthology, “Cleveland’s Greatest Disasters!,” which is published by Gray & Co. The publisher says he will share stories about “the most shocking and gruesome events in Cleveland history,” including the Collinwood School Fire of 1908,

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which killed 172 schoolchildren; the East Ohio Gas Co. explosion of 1944, which destroyed an East Side neighborhood; and a grisly 1928 episode in which two workmen were buried alive in cement beneath Terminal Tower. Mr. Bellamy, the author of five books about Cleveland crime and disaster, retired to Vermont in 2004. This is his first series of public talks in Cleveland since 2008. On the web: http://www.grayco .com/events/events1.shtml#Bellamy

Pure Biss Event: Recital by pianist Jonathan Biss Venue: EJ Thomas Performing Arts Hall, Akron When: Tuesday, April 20, at 7:30 p.m. Why you might be interested: If you want to see youth being served in the classical music world. The Tuesday Musical Association presents a performance by Mr. Biss, 29, who already has proved himself an exceptional musician with a flourishing international reputation through his recital, orchestral and chamber music performances in North America and Europe. “Noted for his prodigious technique, intriguing programs, artistic maturity and versatility, Mr. Biss performs a diverse repertoire ranging from Mozart and Beethoven, through the Romantics to Janácek as well as works by contemporary composers,” the association says. He appears at EJ Thomas Hall as the fourth Margaret Baxtresser Annual Piano Concert Artist. On the web: www.tuesday musical.org

Export: Overseas work vital today continued from PAGE 3

country, then personally make introductions on behalf of the client company from the United States. The access to the gold key service, which itself is valued at $700 or more depending on the assignment, was a selling point for some who’ve participated in the Cleveland State program at a cost of $1,295 per company. “When we heard they had that additional incentive, there was no question about it — we wanted to participate,” said Nate Ward, international coordinator for Vitamix Corp., a Cleveland manufacturer of specialty blenders and food processors. “It introduced us to a number of interested partners in South Korea.” The Cleveland State students also did research on how Vitamix could better penetrate the Chinese market. Although the company only received the students’ report and presentation in early April, Mr. Ward described it as “excellent and very helpful” and said the company intends to draw on it going forward. So far, about 30 companies have been through the local program, said Colette Hart, director of outreach and the business centers at Nance College. The school intends to start tracking the progress of the companies that graduate from the program, but in the five years it’s been up and running, Ms. Hart said she has seen some encouraging stories. Those include a Clevelandarea machine company that found a new market for its products in the Middle East and a consumer products company that began exporting into South America, she said. The export opportunities range in size, but for some companies, even a

“(Small U.S. companies) have extreme excess capacity because of the downturn, so they’re becoming more demanding about finding new markets.” – Randy Nemetz, director of local business development, Magnet little bit of added business overseas can boost their profitability significantly, say export experts such as Randy Nemetz, director of local business development at the Cleveland manufacturing advocacy group Magnet. Mr. Nemetz said finding that extra business is even more important in today’s business climate, yet only about 10% of the companies that could export their products ever get around to doing it. He expects that number to climb. “Traditionally, the way U.S. exports have worked for small companies is that they would try to sell their excess capacity outside of the U.S.,” Mr. Nemetz said. “Now, they have extreme excess capacity because of the downturn, so they’re becoming more demanding about finding new markets.”

Targeted strategies Mr. Nemetz said one of the keys to export success, both for individual companies and the region, is to focus on high-value-added goods, such as engineered parts and devices, rather than easy-to-make items that sell like commodities. Ms. Hart said many companies going through GlobalTarget are working with exactly those kinds of products and are looking for new

markets for the same reasons given by Mr. Nemetz. “There are quite a few manufacturers here who make large pieces of machinery that they may sell only one or two of a year,” Ms. Hart said. “So if they can sell one more (to a foreign market), that’s a big deal.” And it’s not just manufacturers that can export. Ms. Hart said the program is going to begin working more with service-oriented companies. Westlake-based Hyland Software, which sells document imaging and management systems around the world, went through the GlobalTarget program last year. Nicole Buehler, the company’s manager of international strategic projects, said she’s eager to see Cleveland State students present their research to the company in late April. Ms. Buehler said she hopes the research will help the company in its decision making with regards to China. But Ms. Buehler already has decided she wants Hyland to participate in GlobalTarget again this year. “It’s a unique opportunity to network with some local companies with experience in exporting,” she said. “It’s also a great opportunity to get people in all aspects of our business to think internationally.” ■

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APRIL 19-25, 2010

Area employers high on Windows 7 After Vista flopped, new software met with good early reviews By CHUCK SODER csoder@crain.com

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Northeast Ohio no longer is afraid to upgrade from Windows XP. Businesses and institutions throughout the region are starting to implement Windows 7 after spending the last three years avoiding Microsoft Corp.’s heavily criticized Vista operating system. Since its release last October, Windows 7 has gotten far better reviews than its predecessor. It’s also receiving good marks from information technology service providers and from area businesses and institutions that spoke with Crain’s. Among the early adopters is Lubrizol Corp. The Wickliffe-based maker of specialty chemicals in June will start rolling out Windows 7 as it replaces its 6,000 computers across the globe, said Brian McDonald, director of IT infrastructure for Lubrizol. The company, like many area businesses and institutions, skipped Vista and kept using Windows XP even after Microsoft stopped selling new licenses for the older operating system in June 2008. Most of the company’s computers were too old to run Vista, Mr. McDonald said. Windows 7, however, so far has performed well and proven easy to

WHAT THEY’RE SAYING A ckoser look at what some early Windows 7 adopters find useful about the software: ■ Business service provider Maloney + Novotny and security services firm SecureState LLC both recommend Windows 7’security features. ■ IT outfit Adventures in Automation cited its compatibility with older software, a problem with Vista. ■ SecureState also has found it work well with old software. use, he said. “I think people are going to be pretty excited about it,” he said. Other businesses are converting to Windows 7 as well, said Tom Aumiller, director of information technology for business services firm Maloney & Novotny LLC of Cleveland. He particularly likes Windows 7’s security features and recommends the operating system to companies unless a key piece of software they use doesn’t work with it. “We’ve been telling people to go buy it,” Mr. Aumiller said. So far, software compatibility hasn’t been a problem for the Windows 7 users among Chris Kiec’s clients. The president of Chesterland IT services firm Adventures in Automation said it’s much improved over Vista, which Ms. Kiec said is incompatible with some software — and the occasional printer.

“Microsoft and the manufacturers of hardware really learned with the whole Vista debacle,” she said. Notre Dame College, one of Ms. Kiec’s clients, plans to upgrade all its 550-plus computers to Windows 7 as it replaces them over the next two years. The college’s IT department already uses Windows 7 and likes it so far, said Mike Kiec, who is director of information technology and Chris Kiec’s husband. The computers Notre Dame is replacing for the most part run Windows XP, he said. “We never installed Vista anywhere,”Mr. Kiec said. MetroHealth Medical Center, which also skipped Vista, has yet to select an operating system for its scheduled 2011 hardware upgrade, but it has been testing Windows 7, said Greg Isenberg, director of information technology. The operating system appears compatible with its current software, and Mr. Isenberg said it works well. However, XP will remain an option: Microsoft plans to support the older system through April 8, 2014. “This platform is going to be available for a while,” Mr. Isenberg said. Security services firm SecureState LLC of Bedford Heights now uses Windows 7 on all its laptops except its Macintoshes, said company partner Matt Davis. It’s more secure, and it gets a lot of horsepower out of new computers while still working with old software, he said. “This is finally good stuff to compete with Mac,” Mr. Davis said. ■

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Bernadette Kerrigan to first chair; Nicole K. Wilson to second chair; Peter Ehlers to secretary; John A. Bonfiglio to treasurer.

GOING PLACES JOB CHANGES

REAL ESTATE

FINANCE

REALTY CORPORATION OF AMERICA: Jodi Peleg to sales associate.

FIFTH THIRD BANK, NORTHEASTERN OHIO: Greg Mulach to senior vice president, director, private banking; Matt Koch to senior vice president, manager, Mortgage Lending Division.

HEALTH CARE LAKEWOOD HOSPITAL: Shannan Ritchie to chief operating officer. PSYCHOLOGICAL & BEHAVIORAL CONSULTANTS: Deborah Barris and David Walters to counselors; Tamara Iwaszkiw to social worker; Jane Manno to psychologist; Dr. Jonathan Nehrer and Dr. Sanford Waldman to child and adolescent psychiatrists.

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GOODWILL INDUSTRIES OF AKRON: Shelby D. Morgan (W3 Wealth Management) to chairman; Barry E. Thoman to first vice chair; Pleas Ray Chambers III to second vice chair; Brent R. Thompson to treasurer; Carolyn Pizzuto to secretary.

Hill

JEWISH FAMILY SERVICES ASSOCIATION: Bob Immerman to chair; Bob Blattner and John Wirtshafter to vice chairs; Philip Cohen to treasurer; Ethan Cohen to assistant treasurer; David Inglis to secretary; Andrew Kohn and Steven Greenberg to at-large; Bill Wortzman to immediate past chair; Donald Jacobson and Alan Schonberg to special advisers.

CAREERCURVE: Kristine Ruhe to vice president, operations; Nicole Brey to operations manager; Jen Turi to manager, social media; Diana Snider to vice president, marketing. ENTRYPOINT CONSULTING LLC: Bob Moyer to vice president, supply chain management practice.

TECHNOLOGY SPEEDEON DATA CORP.: Amy Albert to director of operations and production.

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BOARDS ADOPTION NETWORK CLEVELAND: Madeline A. Cain to chair;

LAKEWOODALIVE: Jennifer Baker (The Bullock Group) to president; Sean McDermott to vice president.

AWARDS AMERICAN ASSOCIATION OF CRITICAL-CARE NURSES: Kathleen M. Hill (Cleveland Clinic) received the 2010 Circle of Excellence Award. GREATER CLEVELAND PARTNERSHIP: Art J. Falco (PlayhouseSquare) received the Richard A. Shatten Professional Leadership Award. OHIO ASSOCIATION OF GERONTOLOGY AND EDUCATION: David M. Bass (Benjamin Rose Institute) received the Researcher of the Year Award.

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

ST. AUGUSTINE HEALTH CAMPUS: Diane Hovan to director of home health care; Carolynn Guelker to director, clinical services, home health care; Debra Gibbs to admissions director; Dr. Hazem Nouraldin to medical director.

INSURANCE ADKINS BORLING: David Adkins and David Borling to partners. MCMANAMON INSURANCE: Walter L. Voyzey to account executive.

LEGAL BONEZZI SWITZER MURPHY POLITO & HUPP CO. LPA: Christine C. Covey to shareholder. SPANGENBERG SHIBLEY & LIBER LLP: Melissa Z. Kelly, Nicole VanderDoes and William B. Eadie to associates. STARK & KNOLL: Stephanie Kormanec to associate.

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MANUFACTURING OLYMPIC STEEL INC.: Richard A. Manson to vice president, human resources and administration; Lisa Christen to corporate controller.

NONPROFIT THE CLEVELAND METROPOLITAN BAR ASSOCIATION AND THE CLEVELAND METROPOLITAN BAR FOUNDATION: David R. Watson to executive director. PATHWAYS INC.: J. Penelope Kidder to clinical director.

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APRIL 19-25, 2010

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Shove off

ast week, the Cleveland-Cuyahoga County Port Authority sent out an e-mail with the subject line, “Navigating a new direction.” In it, port interim CEO Peter Raskind and board chairman Steven Williams outlined what were called “substantial improvements” that have been made recently in the port’s operations. Nice try, guys, but it would have been more accurate to label the e-mail “Cleaning up our mess” or “Returning to a saner course.” That’s because half the “improvements” cited in the e-mail cover steps taken by the port to undo ambitious, board-approved initiatives of jettisoned CEO Adam Wasserman that were putting the port over its head financially. As the temporary successor to the now-reviled Mr. Wasserman, Mr. Raskind deserves no scorn for his efforts to right the port’s listing ship. The former CEO of National City Corp. has helped restore a sense of stability to the taxpayer-supported body. Mr. Williams and his fellow port board members are another story. Neither he nor they deserve pats on the back — especially of the self-administered kind — for trying to extricate the port from a financial morass that could have been avoided had the port board exerted proper oversight over Mr. Wasserman by curbing his excessive spending on staff, while questioning far sooner his grandiose plans for a new port. Yet here in last week’s e-mail is Mr. Williams proclaiming, “We are proud of our past accomplishments, but we’re committed to making the port even better. While the port faces numerous challenges, it swiftly has been positioned to set upon a new, more focused course.” Oh, how can the taxpayers of Cuyahoga County ever repay you? Perhaps by voting down the next levy to support port operations unless board members who were part of the Wasserman era take the honorable step of tendering their resignations. You had your chance to provide guidance to the captain. You blew it. Do the taxpayers a favor and let others take the helm from here.

Press on

e hope the sudden death April 2 of Ohio Supreme Court Chief Justice Thomas Moyer doesn’t dampen the enthusiasm of his allies in the effort to end the costly and politicized election of justices to the high court. The greatest tribute the Ohio State Bar Association and League of Women Voters of Ohio could pay to Mr. Moyer would be to continue pursuing a change in the way state Supreme Court justices gain their posts. We still favor their idea for an “appointiveretention system,” where a diverse nominating committee would review justice candidates and would send a handful of names to the governor, who would appoint one of the nominees to the high court. The appointed justice later would need to go before voters in a retention election, where the jurist must receive a majority of “yes” votes to keep the job. We urge them to press on.

FROM THE EDITOR

The Marlboro Man would be proud

“thank you” letters from any of the 60s I sit at my desk gazing out the plus organizations in Cuyahoga County window, I’m impressed by the that received part of the nearly $15 number of patrons of the arts million in grants awarded late last year who spontaneously are gathered by Cuyahoga Arts and Culture. It’s the on the sidewalk across the street from group that’s responsible for distributing our offices in Cleveland’s Warehouse to local arts and cultural organizations District. the money raised through a county tax They aren’t carrying posters that read on cigarettes. “We ❤ our Cleveland Orchestra,” nor are Maybe if these death-defying they chanting slogans like “We patrons received some recognicare for PlayhouseSquare” or MARK tion for the continued sacrifice of “Whoop-dee-doo for Karamu.” DODOSH their health for the good of the However, they clearly are doing community, they’d smoke more, their part to keep our arts organior they could add to their ranks. zation in the pink financially. But, sadly, the numbers tell a They are smoking. different story. It’s a dirty, thankless job, but According to figures presented somebody’s got to do it, and last week to the Cuyahoga Arts these smokers, most of whom and Culture board, the amount appear to be in their 20s, are busy of the county’s cigarette tax puffing away during a break from revenue earmarked for the arts was down their jobs at the Metro Bar + Kitchen, nearly 7% in 2009 from 2008. A loss indeed. which will open this week in place of the All of which got me thinking — maybe Metropolitan Café at West Sixth Street and the arts organizations should lend a Saint Clair Avenue. hand to their remaining, tobacco-loving No one is running up to them to thank supporters and should push for a repeal them for their steadfast support of the of the state law that prevents smokers arts. I also doubt whether they got

from lighting up in nearly every public place you can think of, including bars. This suggestion comes without any self-interest on my part. I’m not a smoker, but I’m no renaissance man, either. I do not regularly take in the shows, performances and exhibits that are part of the cultural fabric of Northeast Ohio. I’m glad for people who do, and I hope their opportunities to partake of cultural offerings here remain abundant. Besides, I think we’ve gone overboard with ostracizing smokers. Before passage of the strict no-smoking law, if I didn’t want to be exposed to second-hand smoke, I could go to one of the many restaurants that voluntarily chose not to allow their customers to smoke. In a free-market system, that’s the way business should work. In the meantime, I doff my Cleveland Cavaliers cap to those hearty souls who, rain or shine, summer’s heat or winter’s cold, continue to make their contribution to the arts by consuming tobacco while huddled outside their places of work. In the name of Philip Morris, I salute you. ■

AND COUNTING ... What is your favorite song mentioning Northeast Ohio over the past 30 years, other than ‘Cleveland Rocks?’

Crain’s Cleveland Business is celebrating its 30th year as Northeast Ohio’s premier source of business news with a special double issue, which will feature profiles of the 30 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.

STEVEN RODGERS

AQIB SAKHIA

JANELLE REGOTTI

Brook Park

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Bay Village

“My Town,” by Michael Stanley. … It’s the only thing I can think of, really, besides “Cleveland Rocks.”

(Bruce) Springsteen has a song where he sings about Youngstown. ... I have his greatest hits CD in my CD player right now in my car. (The song is called “Youngstown.”)

It’s a Ryan Adams song. ... He mentions Cleveland. He says he bought a borrowed suit and he moved to Cleveland and he learned to dance. (The song is called “Oh My Sweet Carolina.”)

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CRAIN’S CLEVELAND BUSINESS

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Hurdles remain for Lorain County rebar plant By DAN SHINGLER dshingler@crain.com

A lot of people are pulling for Dwayne Dillingham, who wants to build a plant in Lorain County to turn basalt rock into a better form of rebar for use in the nation’s infrastructure. But no one is sure he can pull off the task of turning his dream into reality and much-needed jobs in the region. “We’re definitely supportive of him,” said Robert Gilchrist, interim economic development director for the city of Lorain, which along with Elyria is a possible site for Mr. Dillingham’s proposed plant. It could also be the headquarters for his new company, Go Basalt. “We’ve met with him several times,” Mr. Gilchrist said. “We’re impressed with the product and impressed with the process. Obviously, any time we have a chance to get a manufacturing firm here, especially one based on innovation, we’re going to put our best foot forward.”

The product is a black rod the same size as conventional rebar, except instead of being made of steel it is made out of basalt fibers bound together and encased in a special epoxy. It’s lighter than steel, stronger than steel, can be engineered with less concrete and, most importantly, will never rust, corrode or expand, Mr. Dillingham contends. It also can be spooled and run out in sections thousands of feet long, unlike traditional rebar that is laid out 40 to 50 feet at a time and then welded together at the overlaps. “It looked promising, enough for ODOT to look into,” said Mike Malloy, a former Ohio Department of Transportation bridge engineer who now is a civil engineer at KS Associates in Elyria. “I would have looked into it last year, but he wasn’t ready.” Currently, though, ODOT says it has no experience with the new form of rebar. Mr. Malloy said it would have to be tested before it could be put into widespread use. But convincing civil engineers

and government officials to believe in or even to test his product isn’t Mr. Dillingham’s greatest challenge. What Mr. Dillingham says he really needs is money, and he’s hoping the federal government will find a way to make him a loan. It will take $36 million to build the plant, Mr. Dillingham said. He is co-owner of a small chemical distribution company, K&E Chemical Co. in Cleveland, but he said he can’t finance the project himself. Private lenders won’t finance such a deal without collateral, so Mr. Dillingham wants the government to lend him all or most of the $36 million. There is, so far, no government entity stepping up with a big check. But Mr. Dillingham is tirelessly hounding politicians from across the region — from mayors and economic development directors in Lorain and Elyria, to U.S. Sen. Sherrod Brown — hoping one or more of them will champion his cause in the name of politically valuable job creation. Mr. Dillingham figures the plant would employ 150 initially. ■

LETTER

Third Frontier benefits certain ■ On May 4, all of us have a chance to become state economic policy chiefs, if only for a moment. On that day we can vote yes or no on Issue 1, the proposal to raise $700 million in bond funds to continue the Ohio Third Frontier economic development program. Our decision will be the final say in whether the state extends significant resources to organizations striving to create jobs for our state based on technology and innovation. And unlike other political events, there is little mystery in what happens if the measure is approved. It means Ohio Third Frontier will continue awarding grants to growthoriented entrepreneurs and busi-

nesses based on an independent, competitive process already in place. Since its formation in 2002, Ohio Third Frontier has created 48,000 jobs for Ohio by helping to launch 571 new businesses and by expanding existing ones, according to United for Jobs and Ohio’s Future, www .unitedforjobsohio.com. It also has yielded about $2.4 billion in wages and benefits. Very importantly, Ohio Third Frontier supports projects that can position Ohio, including Northeast Ohio, around the global shift toward clean technologies and other technological advances. More than half of the program’s award dollars have gone to companies or groups in

We believe in building lasting relationships

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APRIL 19-25, 2010

Food: Economy provides opportunities for reinvention continued from PAGE 1

restaurant’s first major menu change in 13 years. “We’re offering many of the same entrees, but we’re changing our menu to give customers more choices and smaller plates with lower price points,” Mr. Bennett said. Douglas Katz, president of Cleveland Independents, a group of local restaurant owners, said although independent eateries are more vulnerable in a bad economy because they don’t have another operation upon which to fall back, they also are more malleable and responsive to economic changes. “A small restaurant can change in a week, and they know their markets better,” said Mr. Katz, who also is chef and owner of Fire Food & Drink on Shaker Square. “People want to go out, but they’re not overextending themselves,” Mr. Katz said. “We haven’t lost our dining-out culture.” The Metropolitan Café in Cleveland’s Warehouse District has undergone a makeover and will reopen this Thursday, April 22, as the Metro Bar + Kitchen, not solely because of the declining economy but also because of consumers’ evolving dining preferences, said Joe Saccone, co-owner of Hyde Park Restaurant Group. The change cost more than $500,000, and the new place will offer smaller dishes with smaller

portions and less expensive prices. Metropolitan Café’s dinner entrees ranged from $16 to $28, while Metro Bar + Kitchen’s menu items will be $20 and less. The uber-chic Metro also will offer more “soft,” or social, seating and a larger inside bar, as well as a new patio bar. Metro boosted its staff by about 20 to 30 people, to a size of about 40 to 50, in anticipation of more business, specifically from its increased outdoor presence. “It was a conceptual change,” Mr. Saccone said. “It’s tough to compare the two establishments because Metro is entirely different. The Metropolitan was a kitchen with a bar. The Metro is a bar with a kitchen. It was time to change.”

Appetite for growth Zachary Bruell, another industry ace, has continued building upon his medley of restaurants with the addition in February of Chinato on East Fourth Street, although his expansion plans were not without challenges. The award-winning chef throughout the years has built a name for himself; since 2004, he opened Parallax in Cleveland’s Tremont neighborhood, and L’Albatros and Table 45, both in Cleveland, but a good name was not enough to get the financing he needed to build the Italian restaurant Chinato. “The banks would talk to me,”

“This market isn’t big enough to charge big bucks. There’s not a lot of outside business, so you really have to depend on the locals.” – Zachary Bruell, chef/owner, Chinato, Parallax, L’Albatros, Table 45 Mr. Bruell said. “They just couldn’t issue loans.” The credit crunch did not hinder Mr. Bruell’s plans to beef up his portfolio — he raised the money himself and through private investors — but he knew he needed to continue to keep his price points in line with economic realities. Mr. Bruell refers to his establishments as “casual fine-dining” restaurants — each with a different concept — that all offer quality service and menu items. The average per-person check ranges from $35 to $45. “This market isn’t big enough to charge big bucks,” Mr. Bruell said. “There’s not a lot of outside business, so you really have to depend on the locals.” As such, Mr. Bruell has expanded carefully, and because of the area’s stagnant economy, he’s not yet sure whether he will add another operation here, at least in the near future. “It’s a balancing act. I don’t want to cannibalize my customers,” he

said. “I’m not looking to just move my customers from one restaurant to the next. I’m giving them options.” Despite the recession, Mr. Bruell said his businesses are growing in sales except for Table 45, which is feeling the effects of lower occupancy rates at the InterContinental Hotel, where the restaurant is located. In response, Mr. Bruell last Thursday, April 15, introduced a new menu at Table 45 with street-vendor style foods that range from $6 to $12 for lunch. Mr. Bruell isn’t alone in adding to his properties. Matt Fish, chef of Melt Bar & Grilled in Lakewood, is slated to open on May 21 a second and larger Melt location in Cleveland Heights. Likewise, Iron Chef Michael Symon, owner of Lolita and Lola, grew last year with Bar Symon in Avon Lake, an American bar and brasserie. Mr. Symon also unveiled B Spot in Woodmere, which serves burgers, bratwurst and beer, and has said he envisions extending the concept into other Northeast Ohio suburbs, perhaps in 2011. He also in 2009 teamed up with the Cleveland Cavaliers and Aramark, the Cavs’ food and beverage provider, to bring his signature cuisines to Quicken Loans Arena.

At a loss Following in the footsteps of the Metropolitan Café, Italian

restaurant Fedeli in Canton closed this month while owner Dan Duplain works on developing a new concept that will be more casual upscale. According to an April 8 Canton Repository story, Mr. Duplain said the restaurant survived through the Christmas season by trying to reorganize without closing down, but Canton’s bad economy prompted the operation’s shuttering. The new operation likely will have a different name but still will offer high-scale amenities, such as valet parking. Mr. Duplain said his main goal is to implement a new concept and change the perception, according to the story. The Vue Restaurant & Lounge in Hudson was not as fortunate. The restaurant closed March 28 after five years of operation. Its electronic newsletter stated that the recession and growing operational costs made the business unsustainable for the owners. Even though the reasons restaurants close extend beyond the economy — it could be a death in the family, for example — Cleveland Independents’ Mr. Katz said local establishments in many cases are in a better place than chain restaurants when it comes to how they fare in bad times. “There’s a tendency to support the locals even more,” Mr. Katz said. “People would rather help out their neighbors.” ■

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APRIL 19-25, 2010

McDonald’s hopes consumers will be lovin’ new look Fast food chain to spend billions modernizing restaurants; franchisees’ cost burden a concern By DAVID STERRETT Crain’s Chicago Business

McDonald’s Corp. is gearing up for a major makeover that will give the fast food burger restaurants a more hip, coffeehouse design. In the next five years, McDonald’s plans to spend billions of dollars to remodel thousands of U.S. restaurants with new features such as plasma TVs, lounge chairs and electric fireplaces. In addition, the chain is replacing its signature mansard roof and brick exteriors with stone façades and contemporary, eyebrow-shaped arches on the sides of the roofs. McDonald’s CEO James Skinner still must persuade franchisees to shoulder more than half the cost of restaurant remodeling — an effort that could total as much as $1 million per store — only a year after asking them to shell out up to $100,000 per restaurant for improvements needed to launch specialty coffee. The sleek new look is critical to

McDonald’s as U.S. sales growth slows and it relies more heavily on pricier, new products such as Frappes and Angus burgers. “You can’t sell a $4 burger in a $2 (restaurant),” says Steve West, an analyst in St. Louis at Stifel Nicolaus & Co. “The restaurants can’t just be clean anymore, and if McDonald’s wants to boost its average check with more premium products, it has to have better-looking stores.” McDonald’s says it plans to remodel between 400 and 500 U.S. restaurants in 2010. The company has identified 5,500 of its 14,000 locations as major remodeling candidates, according to a note to franchisees. Company executives say the program is a way to “re-brand the system in a contemporary way,” and predict the improvements will help boost annual sales per restaurant to $3.1 million from $2.3 million — or by $11.2 billion across all McDonald’s outlets — in the next four or five years. Remodeling on average boosts

“A lot of the restaurants are owned by franchisees and McDonald’s might have to throw in money to entice them to put money back into the units.” – Jack Russo, analyst, Edward Jones & Co. sales 6% to 7%, according to the company, which won’t disclose the cost of the improvements. Industry analysts say remodeling costs could range from $200,000 per store to as much as $1.5 million. Based on that cost range and the number of restaurants to be remodeled, total spending on the project could come to somewhere between $1.1 billion and $5 billion. McDonald’s paid for about 40% of the cost of the coffee rollout for franchisees, and company executives say they expect to make a similar commitment for the remodeling.

Franchisees’ concerns Dick Adams, a franchisee consultant, says that during one of his regular surveys of McDonald’s restaurant owners, several raised concerns about spending money on remodeling stores

PHOTO PROVIDED

Over the next five years, McDonald’s will spend billions of dollars to remodel thousands of restaurants. Among the changes, the chain will replace its signature mansard roof and brick exteriors with stone façades and eyebrow-shaped arches on the sides of the roofs. so soon after the coffee investment and during a time when sales growth is slowing. McDonald’s U.S. samestore sales have fallen three out of the past five months. “The challenge for McDonald’s is, a lot of the restaurants are owned by franchisees and McDonald’s might have to throw in money to entice them to put money back into the units,” says Jack Russo, an analyst in St. Louis at Edward Jones & Co. “The remodels are all part of the company’s continued push to remake itself and impress upon people they are not the same old McDonald’s.” Last year, McDonald’s introduced its priciest burger, the $4 Angus, and rolled out lattes and cappuccinos, the company’s largest menu innovation in nearly three decades. With rivals such as Burger King and Starbucks stepping up competition at breakfast and on value menu items, McDonald’s is introducing more premium products. “The remodels are supposed to complement the coffee products and give you a more coffeehouse feel,” says Janna Sampson, a chief investment officer at OakBrook Investments LLC, which owns about 190,000 McDonald’s shares. “But it remains to be seen if they can get people to sit down and use McDonald’s like a coffee shop.”

Ms. Sampson notes that the new McDonald’s stores feature more wood paneling and earth tones. The company is adding Wi-Fi to its restaurants nationwide as it tries to encourage people to sip a cup of coffee and have an afternoon snack. The typical McDonald’s does more than 60% of its business via the drive-through window; remodeling will allow the chain to expand drive-throughs to two lanes. The plan also calls for replacing many play areas and adding outdoor seating. McDonald’s previous design was geared toward parents and children, and the new designs attempt to create a more inviting atmosphere for adults or teenagers looking for a place to relax. Among the challenges: attracting one group of customers without alienating the other. “They are trying to emulate the look and feel of places like Starbucks and Potbelly,” says Darren Tristano, an executive vice president at Chicago food consultancy Technomic Inc. “They have a lot of stores that need refreshing, and they are trying to appeal to those people looking to snack or graze.” ■ (David Sterrett is a reporter with Crain’s Chicago Business, a sister publication of Crain’s Cleveland Business.)

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APRIL 19-25, 2010

INSIDE

FINANCE

16 ADVISER: FUTURE, PRESENT MURKY FOR FEDERAL ESTATE TAX.

CARRYING EXTRA WEIGHT Young adults saddled by student loan and credit card debt find little relief in difficult job market By ARIELLE KASS akass@crain.com

elly Schroeder did not expect to be living with her parents two years after she graduated from college. But the cost of her student loans, compounded with a car payment, has made living on her own prohibitively expensive. So instead of thinking seriously about buying a house or applying to graduate school to break into her dream job of event planning, the 24-year-old graduate of Kent State University is saving money to pay back her loans by living with her parents. She also is contemplating asking her employer, Verizon Wireless, about its program to help workers obtain degrees. Ms. Schroeder is among the

many young adults today who are heavily leveraged. Edie Irons, communications director for the California nonprofit The Institute for College Access & Success, said the amount of student indebtedness is higher than in previous generations, and it nearly doubled over the past 12 years. In 2008, the last year for which there are figures available, students on average borrowed $23,200 to finance their educations. Many also have a large amount of credit card debt. According to a study released by Sallie Mae last year, 84% of undergraduates had at least one credit card, up from 76% in 2004, and the average balance on those cards grew to $3,173. And while students and new graduates had experienced steadily increasing levels of debt before the

recession hit, the tough job market is further complicating matters as high-paying jobs are proving to be elusive for some new graduates.

Trouble all around Ms. Schroeder, who studied communications and conflict resolution but wishes she had focused on marketing or business, likes her job as a customer service representative at Verizon Wireless and has found that she is good at it. But when she worked at Applebee’s and as an event marketing specialist at a travel company before starting full time at Verizon almost a year ago, she “worked really hard” to be able to pay her loans back on time, and she doesn’t want to increase her burden. “I think about going back to See DEBT Page 16

For ’08 grad, student loan debt pays off in opportunities, lessons learned Blake Peebles, a 2008 graduate of the Virginia Marti College of Art and Design, doesn’t for a minute regret his decision to take on loans that are costing him $200 a month. He also has a car payment and a “little bit” of credit card debt to contend with. The 25-year-old said before he

went to school, he worked in construction and hated his life. Now, he has a job in the admissions office of his alma mater and does alterations, fashion show production and freelance design. “If I did not take out loans, have this debt, I would not have these jobs,” he said. “None of these

doors would be open to me.” But when he graduated, his mother also was looking for work and Mr. Peebles said he at first fell behind on his student loans because he didn’t have the income to pay them. “I assumed everything was taken care of. I did not

communicate well with the federal government,” Mr. Peebles said. “They sent letters to my house. I waited until I got to default status.” During that time period, his interest rates rose and Mr. Peebles said it took him six months to get on a regimen

where he could pay the loans back each month. He also has taken responsibility for paying back a loan his mother took out on his behalf. “Always communicate with people you borrow money from,” he said. “Communication is key.” — Arielle Kass

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16 CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

APRIL 19-25, 2010

FINANCE

Government’s lapse on estate tax rules muddies present, future

he federal estate tax has been shrinking for a decade by order of a 2001 law, which also dictated a complete repeal of the tax in 2010. Most people expected Congress to amend this order before 2010, keeping the estate tax rate and its exemptions at 2009 levels. Surprisingly, Congress did not act, and the federal government has not collected estate taxes since Jan. 1. While the consequence of this lapse seems cut-and-dry — no limit on the amount of money that can be left to heirs without being subject to federal tax — complications arise when one considers how estate planners traditionally have designed wills and trusts. In addition, there is concern over the disappearance of limits and rules that were part of the estate tax language and a debate over whether

lawmakers can make the tax retroactive when they — as is expected— reinstate it in 2011. And, if it is retroactive, how far does it go back and at what rate? In light of these extraordinary and unexpected circumstances, high-net-worth individuals should re-examine their estate plans — even if readjustments are temporary. Uncertainties about the federal estate tax reach well into the future and doing nothing is risky. For example, most estate planners have worked according to the assumption that the estate tax would remain at 2009 exclusion limits and rates, which was a $3.5 million exclusion ($7 million for a married couple receiving an estate) and a tax of 45% on the remaining estate value. They also recommended charitable giving, gifting to grandchildren and

JEFFWASSERMAN

ADVISER other strategies to minimize taxable assets based on this assumption. With the federal estate tax rules no longer in play, such provisions could yield unexpected or undesirable results. (State estate taxes still apply.) Another concern is the estate tax specification that assets be valued based on the death date. This provision is gone, and it is unclear if it will return in future versions of the tax. Congress has authorized a stop-

Debt: Students cautious about loans, purchases continued from PAGE 15

school, but unfortunately I can’t afford it, now that I know how bad loans are,” said Ms. Schroeder, who estimated she owes about $32,000 for her college education. “I’m not going to go back to be further in debt to have the same job I have now.” Ms. Schroeder said many of her friends are in the same boat — living at home in order to pay off loans that in some cases are higher than the $264 she pays a month. Those that aren’t, she said, are

likely being helped by their parents. Tamara Draut, vice president of policy and programs at the nonpartisan public policy center Demos in New York, said while the stigma attached to moving home largely has ceased to exist as it becomes the norm for young adults, not all families are able to provide for their adult children. In some cases, Ms. Draut said, graduates and their parents are both unemployed and looking for work. “Everybody’s being squeezed in a lot of different directions,” she

said. “It’s really become hard to hit the ground running out of the gate.” Ms. Draut said across the board, recent graduates are worse off than graduates had been for years, and the recession only is enhancing the problem. “The debt picture has certainly gotten worse,” she said. “It’s going to exert a drag on their adult working life that will last at least a decade.” That’s because graduates who begin working during a recession often end up with lower salaries for at least 10 years, she said.

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gap measure exempting the first $1.3 million in capital gains and an additional $3 million for a surviving spouse, but these limits may not be enough to prevent unexpected negative consequences. If the estate is larger than those limits, survivors could need to determine the value of assets at the time of acquisition and pay capital gains on their appreciation. For some assets, such as stocks or long-held family properties, this could be an untenable legacy to leave loved ones. In addition to these concerns, the estate tax lapse and current economic conditions could allow for beneficial adjustments to estate plans. For example, a tax on “generation skipping” that was part of federal estate tax language no longer applies. This could make 2010 a good

year for wealthy grandparents to leave large gifts to their grandchildren as they will pay only a 35% gift tax on the gift amount that exceeds exemption limits. Additionally, with interest rates at an all-time low, another way to leave assets to loved ones is through the use of intra-family loans. This could be a suitable alternative to paying gift taxes. Reviewing your estate plan now can help prevent any pitfalls that may occur under the current laws. And, keep in mind that the current environment has provided favorable conditions in which to pass on your legacy to loved ones. ■

As if that isn’t bad enough, the constant need to set aside money to pay back student loans means those with debt are less able to save for a home, for retirement or simply for an emergency fund. If they choose careers that aren’t particularly lucrative, the burden resulting from student loans can be a “debilitating experience,” Ms. Draut said. “It has a real psychological impact,” she said. “It’s a pretty dispiriting situation to be in.”

with the recession, as is loan volume. The high cost of paying for school — and the trouble graduates have finding jobs when they get out — means many are delaying decisions like starting families while they work to control their debt. And Ms. Irons said she is concerned that with the recession, even fewer people will be able to keep up with loan repayments. The class of 2007 had a default rate above 6%; Ms. Irons said 5.4% is considered normal. The measurement is taken two years after graduation, so more recent figures are not available. Of course, lenders have ways to work with students who have trouble paying back their loans, including deferment for more schooling or due to economic hardship.

Looking for a helping hand Mark Evans, director of student financial aid at Kent State University, said for the 2009-2010 school year, Kent State saw an increase of 8,500 federal financial aid applications, up 22% from a year ago. Students already have begun to apply for financial aid for the 20102011 year, and Mr. Evans said he has 3,000 more applications for financial aid than he would ordinarily expect at this point. Mr. Evans called the increase in aid requests a national trend, though he said Kent’s large increase also could be attributed, in part, to increased enrollment. Kent also has seen a 300% increase in its requests for “special circumstances,” a way for parents to discuss a recent layoff or medical bills that would hinder their ability to pay for school. Mr. Evans said while he would expect to see 300 or 400 in a year, he has seen more than 1,000. About 80% of the requests are granted. Mr. Evans also said he has seen higher attendance at lending outreach programs sponsored by the school for soon-to-be-graduates about how to deal with loans after they’ve left Kent. “Financial aid is playing more of a role in college decisions than it had before,” he said. “It’s not unique to Kent.” Jennifer Minkiewicz, Virginia Marti College of Art and Design’s director of financial aid, said she has seen students be more careful about the loans they are willing to take out, or about purchases like a new car, which she said she often advises students against. The Institute for College Access & Success’ Ms. Irons said overall, financial aid applications are up

Mr. Wasserman is managing director of Oswald Specialty Life, the risk consulting and life insurance division of Oswald Companies. jwasserman@oswaldcompanies.com.

Credit check Some changes have been made to try to help new graduates manage their debt, including new legislation that was passed along with the health care bill that will restrict repayments on student loans to 10% of a graduate’s income; it is currently 15%. The new legislation also will forgive outstanding balances after 20 years if the accounts remain in good standing; that is now done after 25 years. If a graduate goes into a public service field, loans will be forgiven after 10 years. But none of those provisions go into effect until 2014. Another recent law requires credit card issuers to obtain proof that a student has income, or get a parent to co-sign for a card. Demos’ Ms. Draut said that likely means the number of students coming out of school with massive credit card debt will be lower in coming years. Paul Kaboth, assistant vice president of supervision and regulation at the Federal Reserve Bank of Cleveland, said that action was in response to concerns about growing credit card debt in the country. He said the recession has made things worse in that it puts an immediate drain on people already having trouble finding employment. “It becomes a significant burden,” he said. “It really puts them in a jam. The expectation that jobs are more difficult to find, particularly in Ohio, puts college graduates in a significant box right off the gate.” ■

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CRAIN’S CLEVELAND BUSINESS 17

FINANCE

Shift in IRA conversion rules may appeal to wealthy Individuals now can pay tax through 2012 By DAN SHINGLER dshingler@crain.com

ith April 15 finally behind them, local accountants just might have another busy season on their hands as they prepare to convert their clients’ traditional IRAs into Roth IRAS now that the federal government allows people making more than $100,000 a year to convert for the first time. Those who make the conversion this year can pay the taxes on their IRA balances in either 2010, or split the taxes between 2011 and 2012, which is adding a sense of urgency to the opportunity to convert large accounts. For high net worth individuals who don’t plan on dropping to a low tax bracket and living off their IRA at age 70½, the conversion might make a lot of sense, say local tax experts. “There’s a lot of interest in this because the income limits are off,” said Dave Reyes, a shareholder and CPA at the Cleveland-based accounting firm Maloney + Novotny. “This opens it up to a whole bunch of new people.” The government essentially is accepting a lower tax liability today over a longer stream of potentially greater tax payments over a period of many years — and that’s a very good deal for many wealthy holders of traditional IRAs, the experts say. To convert, an investor must pay income tax at their current tax rate on the full amount that is being converted, but can pay that tax between now and the end of 2012. In other words, if someone is in a 28% tax bracket and converts a $100,000 IRA over to a Roth IRA, they must pay $28,000 in taxes. Most financial advisers say it’s only wise to convert if those taxes can be paid out of other funds — not by reducing the amount in the IRA. While that sounds like a lot of money up front — and in fact it is for large IRAs belonging to people in top tax brackets — it still can be

much less than having to pay income tax on what those IRA assets might earn. Over the years or decades, that could amount to far more than $100,000 in taxable income.

Timing is everything So, investors have to look at a few things before deciding on the best course of action: their own finances now and in the future, their expected investment returns and also whether they think taxes in the future will be higher than today. “One thing that appeals to people is eliminating the unknown,” said Michelle Mahle, tax director at the SS&G accounting firm based in Solon. She said many clients believe tax rates will go up, and prefer to pay taxes at today’s known rates. “There’s some certainty to making this decision. If I do this, and pay the tax now, I’m guaranteed this tax-free income,” she said. Others agree. “If you assume that tax rates are low now, but think they’re going to be high in the future, it’s a good thing to do,” said Pete Chudyk, also a shareholder at Maloney + Novotny. Mr. Chudyk said most of his clients believe tax rates will rise and are considering Roth IRAs partly for that reason. Just as importantly, investors have to decide how they want to use their IRA. If it’s going to provide their retirement income, that’s one thing and a traditional IRA will suffice. After all, a person in that situation is not likely going to be in the same high tax bracket they were when they were working. “If a person says, ‘Listen, I need this to live on,’ then in most cases you stop right there,” said Karen McCarthy, vice president of the personal tax advisory group at the Cleveland accounting firm Meaden & Moore. “Why pay taxes on it at today’s rate if you’re going to be in a lower tax bracket later?” But if the intent is to leave the IRA to grow until its owner passes it on to heirs, then a Roth IRA likely

IN BRIEF ■ SOME POSITIVE NEWS: The Fed Beige Book, out last week, reports that overall economic activity increased “somewhat” since the last report across 11 of the 12 Federal Reserve districts, including Cleveland. St. Louis, which reported “softened” economic conditions, was the only district not to show improvement. Some Cleveland-centric highlights: ■ “District reports indicated that consumer spending increased during the reporting period. New York and Cleveland reported that recent sales strengthened, while sales rebounded in Richmond and Kansas City.” ■ In Cleveland, Atlanta, Kansas City and Dallas, retailers “expect sales to improve during the upcoming months.” ■ Commercial real estate activity was slow everywhere, but Cleveland “saw some development in the energy and industrial segments.” — Scott Suttell ■ FOR COMPARISON’S SAKE: Resilience Capital Partners has

created an online benchmark program that allows companies to compare themselves to their peers. The tool, which is free to use, also gives Resilience a chance to market itself and do preliminary readings of companies in which it might be interested in investing. The benchmark, available on the company’s web site, is a 75-question inventory of everything from human resources information to earnings to health and safety records. Users can compare their results to data across their industry dating to 2007. John Brandt, CEO of The MPI Group of Shaker Heights, said the benchmark is filled with information purchased from his company, which surveys manufacturers. Resilience also collects its own information. Doug Campbell, vice president of operations for Resilience, said about 150 companies have signed up. That’s in addition to the 7,000 or so that were part of MPI’s initial data. — Arielle Kass

is the best vehicle to do that, experts say. That’s because, unlike a traditional IRA, investors don’t have to start pulling money out and reducing their returns at age 70½. Then there’s the market timing aspect. Not all investors have participated fully in the recent stock market rally and as a consequence, their IRAs still are at depressed levels from the market crash of 2008 and 2009. For those investors, paying the tax on the smaller amount remaining in the IRA can be a good deal, especially if they expect to recoup some of those losses with future returns. “A lot of people are still looking at very depressed values in these accounts and saying, ‘If the values are depressed, maybe I should do the conversion now,’” Ms. Mahle said.

Tricky stuff Some investors are using newly converted Roth IRAs as a way to not only get back into the market, but as an asset allocation tool. Tax laws allow new Roth IRAs to be converted back to traditional IRAs anytime before Oct. 15, 2011, creating a sort of trial period for investors. As a result, some are splitting larger IRAs into several Roth IRAs and investing each in a different asset class or with a different investment strategy. Those that are performing best when the deadline nears can be left as Roth IRAs, with no taxes due on their investment returns. Those that aren’t performing as well could be converted back without the investor having to pay the taxes on the initial conversion from traditional to Roth. “If you put it all into one Roth IRA account, you can’t partially

convert it back,” said Mr. Chudyk. All of the ins and outs already are keeping local accountants busy. Right now, they say they spend more time helping clients strategize for conversions later this year than doing actual conversions — and then there were those taxes to get done. But, after April 15, many expect the pace of conversions to pick up considerably. “I haven’t done any yet, but I have a post-4/15 list of about 20 or 25 clients who want to do it,” Ms.

Mahle said. Experts also are advising their clients of another important aspect of the conversion opportunity — it could be taken away by Congress as quickly as it was handed out. “Waiting isn’t helping. It’s better to look at it now and get it in your plan if it’s what you want to do,” said Meaden & Moore’s Ms. McCarthy. “A stroke of the pen would make it all go away — so if it’s something you’re serious about, do it in 2010.” ■

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

APRIL 19-25, 2010

Assets: Number of credit unions shrinks continued from PAGE 1

months but has been working aggressively to get more people involved in the credit union. That approach resulted in a nearly 21% increase in assets in 2009. VacationLand normally has a $380,000 marketing budget, Mr. Ralofsky said, with $150,000 going to billboards, newspaper and radio. In 2009, the credit union spent half of that media allotment — $75,000 — to educate consumers about the differences between credit unions and banks. The result was a 10% to 12% increase in membership, he said, with many new members coming from large regional and bigger

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community banks. Mr. Ralofsky said as more people educate themselves about their money, they turn to credit unions. “Exponentially, it’s because of the anti-banking sentiment and the flight to safety,” he said. “Consumers are more cognizant.” Dave Fearing, vice president of credit union solutions for the Ohio Credit Union League, said credit unions had not grown this quickly since the Great Depression. The reason goes beyond the attractiveness of better rates, he said. “We have a great story to tell; it’s a great movement,” Mr. Fearing said. “People think credit unions and

collaborative nature and people helping people. … People look for a cooperative structure.”

‘A better alternative’ Mr. Ralofsky said the community nature of a credit union appeals to new members, who can join based on their connection to certain groups, be they employers, schools or places to live or worship. But even as the number of members and assets has risen, the number of credit unions in Ohio has shrunk. At the end of 2009, there were 393 credit unions in the state, down 8.8% from 431 in 2007. Mr. Fearing said there have been a

number of credit union mergers over the years as the CEOs of smaller credit unions retire. Indeed, such mergers led one Northeast Ohio credit union — Associated School Employees Credit Union, in Austintown — to show an increase in assets of more than 117% after it absorbed Cavalier Federal Credit Union a year ago and Greater Warren Community Federal Credit Union in August 2009. Those credit unions that have experienced more organic growth in some cases have done heavy

Volume 31, Number 16 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)9099111. REPRINT INFORMATION: 800-290-5460 Ext. 136

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marketing, like VacationLand, while others simply benefited from word of mouth, said Mr. Harris, the Ohio Credit Union League spokesman. Mr. Ralofsky, a former banker, said he has found that people who have deposit and other accounts at credit unions just tend to feel good about themselves for being members. “This is community banking at its best,” he said. “We have to not lose sight of that. That’s our challenge. We do have to convince them that we are a better alternative. ■

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APRIL 19-25, 2010

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THEINSIDER

THEWEEK APRIL 12 - 18 For the records:

Case Western Reserve University and the Akron Regional Hospital Association will be among the organizations that will help Ohio’s primary care doctors implement electronic health record systems over the next few years. The state of Ohio announced that seven organizations will receive a total of $26.8 million in federal stimulus money meant to help health care facilities implement electronic health records. Case Western Reserve will receive $7.94 million to help 1,765 doctors, while the Akron hospital association will get $3.93 million to assist 873 doctors. The Northeast Ohio HealthForce in Mahoning County will receive $1.45 million to serve 323 doctors.

Airing it out: Eaton Corp. was awarded what could be a lucrative contract from the U.S. Air Force. The diversified manufacturer said it will provide the Air Force’s Air Logistics Center at the Hill Air Force Base in Utah with power reliability products and services. Eaton said the contract could be worth as much as $568.7 million and will be divided among two suppliers over the life of the five-year contract, with a two-year option.

Healthy profit:

Grubb & Ellis Healthcare REIT II Inc. acquired Parkway Medical Center, a two-building medical office property in Beachwood. Cuyahoga County land records show the company paid $10.9 million for the two buildings, which total about 88,000 square feet. Parkway Medical Center LLC, a local investor group led by the King Group of Beachwood, bought the buildings for $4.7 million in September 2004. The buildings, at 3609 and 3619 Park East Drive, are just a half-mile from the Ahuja Medical Center that University Hospitals is constructing.

View from the top: Richard J. Kramer used the occasion of his first speech to shareholders as Goodyear Tire & Rubber Co.’s CEO to express confidence in the tiremaker’s ability to grow as global economies recover. Mr. Kramer, who on April 13 formally succeeded Robert Keegan as Goodyear’s top executive, said his confidence is supported by the company’s strong portfolio of brands, strength in emerging markets and innovative new products.

This and that:

Swagelok Co. in Solon acquired for an undisclosed price RHPS B.V. of Holland, a maker of relief valves and other pressure regulator products. ... Home listings from Howard Hanna Real Estate Services went up on Zillow.com, a popular real estate search web site. Under Zillow’s “automated feed” program, Howard Hanna listings go directly to Zillow’s site from the brokerage, with a detailed description of the property, photos and a link back to Howard Hanna’s web site.

To keep up with local business news as it happens, visit www.CrainsCleveland.com.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

All is fair in love and debating

comment from the other side. Usually, it’s not. — Jay Miller

■ Here’s another sign of the Internet’s impact on politics. At last Tuesday’s City Club of Cleveland debate between Lt. Gov. Lee Fisher and Ohio Secretary of State Jennifer Brunner, who are running to be the Democratic candidate for the U.S. Senate seat that Republican George Voinovich is vacating, the Fisher camp tried a high-tech way to get in the last word. Because answer time in debates is limited, some jabs between the candidates that may stretch the truth — or be flatly wrong — often go unchallenged. Reporters on Internet deadlines find themselves forced to settle for “he charged-she replied” reporting. Well, the Fisher campaign tried to solve that dilemma with a real-time “truth squad” of one as the debate was unfolding. During the debate, campaign aide John Collins e-mailed reporters with Fisher counterpunches, drawing from what must have been an extensive, well-organized database on his WiFi-enabled laptop. Over the course of the one-hour debate, Mr. Collins sent eight e-mails. When, for example, Ms. Brunner chided Mr. Fisher for stepping down as director of the state’s Department of Development to run for the Senate, Mr. Collins quickly shot back with a newspaper quote noting that Ms. Brunner had stepped down from her Franklin County judgeship to run for secretary of state. The dilemma for reporters, of course, is whether it’s fair to include one side’s effort to sway the debate in the absence of further

The Gong Show meets Wall Street

WHAT’S NEW

BEST OF THE BLOGS

COMPANY: Brennan Industries Inc., Cleveland PRODUCT: Presetting tools

Excerpts from blog entries on CrainsCleveland.com.

C’mon Steve, tells us what you really think

Brennan says its new tools are used to preset ferrules on tubing prior to final assembly into a fitting. They’re designed to accommodate installations that must be made in tight spaces or hard-to-work areas. The tools, which are made from carbon steel, are available in sizes 5/8 inches and up. “The presetting tool lets major portions of installation work happen in a more favorable work setting because it allows for the presetting of the ferrules onto the tubing in a safe, open and ground-level area,” says Bill Jarrell, vice president of marketing at Brennan. To use the preset tool, the user must secure the tool in a vise, remove the protective nut and assemble the fitting nut and ferrules loosely onto the tool, then insert the tubing through the nut and ferrules, the company says. For information, visit www.BrennanInc.com.

■ U.S. Rep. Steve LaTourette is not a fan of the transportation priorities of U.S. Transportation Secretary Ray LaHood. The Associated Press reported that Mr. LaHood says the government “is going to give bicycling — and walking, too — the same importance as automobiles in transportation planning and the selection of projects for federal money.” He went so far as to note in his government blog, “This is the end of favoring motorized transportation at the expense of non-motorized.” Bicycle advocates love the notion, but industry advocates and some in Congress are aghast. At a recent House hearing, Rep. LaTourette “said jokingly to a Transportation Department official that one explanation for the new policy is that the secretary’s thinking has been clouded by drugs,” according to the AP. “Is that a typo?” Rep. LaTourette asked. “If it’s not a typo, is there still mandatory drug testing at the department?”

■ Joseph Ficalora, chairman, president and CEO of Ohio Savings Bank parent company New York Community Bancorp, on April 7 solemnly beat the City Club of Cleveland’s gong five times to mark the closing of the New York Stock Exchange that Wednesday. The tintinnabulation was the first time the NYSE’s closing bell — or, in this case, gong — was rung from Cleveland, and Mr. Ficalora said he was prepared for the honor. “I had a lot of training for this,” he said after hitting the gong the final time, eliciting laughter from employees. The event marked the institution’s return to the Ohio Savings Bank name, after AmTrust Bank was closed by regulators and sold to New York Community Bank last Dec. 4. Employees who participated in the bellringing ceremony via satellite feed to New York received their own bells, which they rang wildly at the market’s close, prior to the gong being struck. — Arielle Kass

Picture this: 3D images to liven up trade shows ■ You could be the James Cameron of your next trade show. Gage3D Inc., with offices in Euclid and

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Medina, could make it happen. The company is starting to market a service that would allow companies to project 3D images of their products at trade shows or company events. Gage3D already makes 3D models, renderings and animations of industrial products, but a while back it bought a stereoscopic 3D projection system from RealD, which makes 3D technology that theaters use to make movies such as Mr. Cameron’s “Avatar” pop off the screen. Now Gage3D can render your products in 3D and even sell you projectors and specialized televisions to show your very own 3D movie. And if you want to make money on it, here’s the key: Charge a lot for the candy. — Chuck Soder

Count our reporter among the converts ■ When I returned from a short vacation to find a PNC tote bag on my chair, I chuckled. Paul Clark, regional president for PNC in Northern Ohio, told me in an interview in March that he would send a case of PNC pens once the bank officially converted from National City last week. This was after he caught me using a KeyBank pen in that interview, which he promptly had me put away, in favor of his own, unbranded pen. With a half-dozen new PNC pens to my name, now Key executives might need to be on writing-implement watch. “What a great weekend to start writing with this quality instrument!” Mr. Clark wrote in a note. — Arielle Kass

He added, “So is it his thought that perhaps we’re going to have, like, rickshaws carrying cargo from state to state, or people with backpacks?”

Man’s best friends, until they start chewing office supplies ■ If you’re a small business owner thinking about allowing pets in the workplace, check out an April 15 Wall Street Journal story featuring comments from Cleveland lawyer Jon Hyman. Four-legged friends can make the office more enjoyable, but they also can present problems. (Chewing phone cords and misbehavior when the owner has an appointment out of the office seem to be the biggies.) The Journal said experts “recommend doing a trial run and creating a policy that defines what the benefit entails to avoid problems.” “You want to set expectations,” said Mr. Hyman, a partner in the labor and employment group at Kohrman Jackson & Krantz PLL. For instance, he told The Journal that owners should determine if employees can leave a pet at work while they go off-campus to a meeting and where the animal should stay during their absence.

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