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Vol. 31, No. 30
INSIDE Asian carp has some NE Ohioans fretting We hit the water to gauge locals’ interest level in and fear of Asian carp, which has the potential to threaten species in the Great Lakes. Read Chuck Soder’s story on Page 3.
Bold manufacturers buck fears Stronger firms reinvest in operations, even as Fed calls business owners’ spending restrained By DAN SHINGLER dshingler@crain.com
Fear and loathing be damned — from buying land to investing in new equipment and workers, some of the area’s strongest manufacturers are plugging money back into their
businesses. “You have to invest,” said Matt Hlavin, CEO of Thogus Products, a plastic molding and design company based in Avon Lake. “By the time the year’s over, we’ll probably have put $1.5 million of new investment into the business.”
It has been a good year for Thogus, which has seen profits rise more than 80% so far in 2010 from levels during the like period last year, and Mr. Hlavin wants more good years in the future. That’s why he’s reinvesting in his company despite econo- Hlavin mists’ uncertainty about the length and strength of the recovery. The latest Federal Reserve Board Beige Book report, released last
week, indicates not every company is willing or able to make such investments. The report said capital outlays in the Fed’s Cleveland district “continue at relatively low levels, and business owners are approaching spending decisions with caution.” But there’s also evidence that Thogus is far from alone. See REINVEST Page 17
Edgepark Medical to stay, grow after deal
A TIGER-LESS TOUR? SHHH As PGA pros tee off in Akron this week, what effect will a wobbling Woods have?
New ownership assumes control of Twinsburg outfit
By JOEL HAMMOND jmhammond@crain.com
By SHANNON MORTLAND smortland@crain.com
A
s the Bridgestone Invitational hits Akron’s Firestone Country Club this week, the tournament’s most prominent figure is in a funk. Tiger Woods, when healthy and in contention, draws big crowds and television audiences and gives corporate sponsors a good reason for milliondollar outlays. And the Bridgestone could be just the tonic for Mr. Woods, who has been slumping this season but also has won at Firestone seven times. However, the loss of his luster makes some wonder what a Tiger-less tour would look like.
The holding company that owns Twinsburg’s Edgepark Medical Supplies and Independence Medical soon will have a new owner that will look to grow the medical supply distributors in Northeast Ohio. The Jordan Co. L.P. of New York announced it has signed a definitive agreement to sell its majority interest in HGI Holdings Inc. to private equity firms Clayton, Dubilier & Rice and GS Capital Partners, both in New York. Terms of the sale were not disclosed, and officials at both Clayton Dubilier and GS Capital, which is an affiliate of investment giant Goldman Sachs, did not return calls last week from Crain’s for more information on the deal. Although some media reports put the deal’s value at $850 million, that figure did not come from anyone close to the transaction, said Adam Max, a managing principal at Jordan. However, Mr. Max would not disclose the purchase price. Mr. Max said Edgepark and Independence Medical will not be moved by GS Capital and Clayton Dubilier, which will be the majority owner once the deal closes this fall.
See TIGER Page 10
REUTERS/ AARON JOSEFCZYK
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See MEDICAL Page 15
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SPECIAL SECTION
REAL ESTATE Despite sour hotel occupancy across city, plans for new ones keep popping up ■ Page 11 PLUS: MODELING TECHNOLOGY ■ ADVISER ■ & MORE
CrainsCleveland.com
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CRAIN’S CLEVELAND BUSINESS
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INSIGHT 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Shannon Mortland (smortland@crain.com) Health care and education Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Research editor: Deborah W. Hillyer (dhillyer@crain.com)
Businesses fret over carp threat Sectors dependent on lake for livelihood fear possible invasion of Asian species By CHUCK SODER csoder@crain.com
C
raig Lewis is worried about what Asian carp might do to Lake Erie. And not just because he owns a bait shop in Sheffield Lake. To be sure, Mr. Lewis’ store, Lake Erie Outfitters, would be an early casualty if Asian carp take over the Great Lakes like some biologists say they might. After all, who would need fishing poles and lures if the massive, ravenous carp starve out the walleye, perch and other sought-after fish? But the impact of the Asian carp would extend well beyond bait shops if the fish successfully get into Lake Michigan and spread through the Great Lakes, Mr. Lewis said. Commercial and sport
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See CARP Page 6
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ABOVE: Craig Lewis, owner of Lake Erie Outfitters in Sheffield Lake, says that if the Asian carp enters the Great Lakes, its invasion ultimately could put commercial fishermen and others — such as his bait and gear shop — out of business. LEFT: A fisheries biologist with the Illinois Department of Natural Resources holds a 20-pound bighead carp caught in Lake Calumet on June 22, the first time the voracious invader had been found beyond twin electric barriers designed to keep them out.
Polar Products’ Cool Max vest pretty hot
GE spins off new turbine for lake use
New markets warm up to Akron firm’s chill gear
Gearless product may advance wind farm
By DAN SHINGLER dshingler@crain.com
By CHUCK SODER csoder@crain.com PHOTO PROVIDED
Seven years ago, while building a small wind farm in the Irish Sea, General Electric Co. engineers learned that wind turbines designed for use on land just don’t cut it in water. The corporate giant is applying that lesson to its plans for Lake Erie: GE is finalizing the development of a gearless offshore wind turbine that will be bigger and easier to maintain than land-based turbines. It plans to give the new product a test run a few miles off the shores of Cleveland as part of a Cuyahoga County-led effort to put wind turbines in Lake Erie. A turbine without gears is less likely to break down because the gearbox accounts for the bulk of a wind
INSIDE: Team NEO touts potential for region as a base for wind energy manufacturing facilities. Page 4 turbine’s maintenance problems, said Richard Reno, general manager of offshore platform wind energy for GE. And maintenance is difficult when that turbine is surrounded by water. “You want to spend as little time offshore as possible,” Mr. Reno said. Instead of a gearbox, the GE 4.0-110 would use a direct-drive system, where the hub between the blades would connect directly to an 85ton generator capable of efficiently See TURBINE Page 15
Bill Graessle has some cool customers, and they thank him for that. An executive turned entrepreneur, Mr. Graessle took a small company in Akron that was helping health care providers increase patient comfort and reduce swelling and turned it into a bigger company that keeps people from bikers to oil spill workers comfortable in the heat. Recently, his company sold more than 1,000 of its specialized cooling vests to workers cleaning up oil in the Gulf of Mexico, Mr. Graessle said. When he bought Polar Products in 2000, the company strictly made therapeutic devices — things that look like freezer packs and fit on elbows, knees and other common sources of bodily pain and inflammation. But within a couple years, Mr. Graessle started thinking that perhaps people
who weren’t injured or ill still might like to be cool. By 2004, Polar launched its first non-health care product — a vest it calls Cool Max that is covered with pockets, which each hold one of those little blue cooling packs. If it sounds like basic stuff, it is, though Mr. Graessle is quick to add that the stuff that goes into the frozen packets is a patented material. When the Cool Max vest started selling, Polar Products began looking for new products to sell into its newfound market of construction workers, firefighters, football teams, roofers, agricultural workers and just about everyone else whose job involves lots of sweat. “What we’ve got is a really nice little niche,” Mr. Graessle said. “We sell nationwide and, more and more, worldwide.” The company in 2006 introduced See POLAR Page 10
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Team NEO gets wheels turning Business attraction group to court consultants with wind energy interests By JAY MILLER jmiller@crain.com
The promoters of the idea of putting wind turbines in Lake Erie always have looked at the big picture. It isn’t just about generating electric power from wind in the lake. It’s about announcing to the wind energy business that Northeast Ohio could be a good place to make the pieces and parts that go into the power generators. Now, with the plans for a pilot Lake Erie wind turbine project under way, Team Northeast Ohio, the business attraction nonprofit, is moving ahead with promoting the region as a place to put wind energy manufacturing facilities. Later this week, a handful of site selectors — the consultants who advise businesses on where to locate plants — will arrive in Northeast Ohio to be pitched on what the region has to offer companies that build the turbines. They will get a first look at a research study, “A Comprehensive Look at Wind Energy in Northeast Ohio,” that argues that the region’s central loca-
tion in the Midwest — and, more importantly, its pool of manufacturers and workers skilled in producing the gears, lubricants and fabricated metal products that go into a wind turbine — make Northeast Ohio a strong site candidate for the expanding wind energy manufacturing industry. “We asked ourselves, ‘How can we differentiate (Northeast Ohio) from other states pitching wind and advanced energy?’” said Carin Rockind, Team NEO’s vice president of marketing and communications, in explaining the decision to combine a site selectors’ tour with a regionspecific report on the advancedenergy capabilities of its companies and work force. “This is an approach we haven’t seen anyone take before,” she said. The study reports that the 16 Northeast Ohio counties covered by Team NEO are home to more than 400 companies that supply advanced energy manufacturers with gears, bearings, blade control systems and even nuts and bolts. It also calculates that the region has nearly 200,000 workers with skills that are either applicable to, or can be transferred easily to, advanced energy industries.
Big doings this week Five to six site selectors who specialize in advanced energy site selection
are expected to attend. They’ll arrive this Thursday, Aug. 5, and will go directly to NASA Glenn Research Center to learn about NASA’s advanced energy research. The next day, they’ll head to Timken Co.’s technical center in North Canton and then on to the nearby Rolls-Royce Fuel Cell Systems Inc. headquarters at Stark State College. These familiarization tours — or “fam tours” as they are called — usually have a little pizzazz, and this one is no different. The group will take in the Pro Football Hall of Fame enshrinement dinner Friday night in Canton. “It’s a solid strategy,” said Dennis Donovan, a principal in Wadley Donovan Gutshaw Consulting, a Bridgewater, N.J., site selection adviser, of Team NEO’s plan. Mr. Donovan said fabrication of huge turbine blades will tend to be done as close to wind farms as possible because they are expensive to ship, so Northeast Ohio should be able to get some of that work if offshore wind in Lake Erie takes off. But Mr. Donovan said Northeast Ohio’s work force also should be attractive to companies that make the gearboxes, shafts and other parts that can be made anywhere and shipped to a wind farm. “That’s a great fit for Northeast Ohio because its metalworking (industry) has those skills in droves at a reasonable cost,” he said. ■
Solon firm starts pilot to clean up water By CHUCK SODER csoder@crain.com
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Look out, mercury. Mar Systems LLC late last month set up a pilot manufacturing line to produce more of the proprietary compound the Solon company uses to pull toxic heavy metals from water. The startup already has found a few places to use the material, called Sorbster. Mar Systems in late May installed an elevator-size machine at an out-of-state plant that has been pumping an unpermittable amount of mercury into an Ohio waterway, and it has a contract to set up a second pilot system at a plant in Tennessee next month. It is working to secure a location for a third pilot system. Of course, if the test runs go as planned, Mar Systems eventually will need way more than the 5,000 pounds of Sorbster that it aims to make during its first run. The market for technologies to remove heavy metals from water is growing, and the main methods used to remove mercury from water are expensive and inadequate, according to the Ohio Environmental Protection Agency. It also doesn’t hurt that people need clean water more than, say, electricity, said Mar Systems CEO Tony Lammers, who until March 2009 lived in China, where heavy metals have contaminated water, consumer products and even vegetables. “If you run out of clean water, we’re all going to die,” Mr. Lammers said. It’s always hard to predict whether
“If you run out of clean water, we’re all going to die.”
enough to house both operations, Mr. Lammers said.
– Tony Lammers, CEO, Mar Systems LLC
Cleveland venture capital firm Early Stage Partners and several other investors committed $1.5 million to the startup last October. In April, the investors upped the total by $300,000 because of the company’s early successes and because they wanted to give Mar Systems more time before it will need to raise additional funds, given the economy, said Richard Stuebi, a managing director at Early Stage who specializes in clean technology companies. Mr. Stuebi said Early Stage Partners was interested in the company because its technology is “far superior to anything else available” for removing mercury from water. Carbon can be used to remove the toxic metal, but it is more expensive and must be disposed of as a hazardous material after use, unlike Sorbster, Mr. Stuebi said. The lack of an effective, affordable method of removing mercury from water has forced the Ohio EPA to give variances to many northern Ohio plants that say they can’t meet the EPA’s 1.3 parts per trillion goal, said Mike Settles, media relations coordinator with the Ohio EPA. “For these wastewater treatment plants to reach that level, it would require millions of dollars of upgrades to the plants,” Mr. Settles said. Northeast Ohio could help solve such problems, given its industrial heritage and its presence on Lake Erie, Mr. Stuebi said. ■
a startup will succeed, but what is clear is the once rust-colored water that sits in a cup in Mar Systems’ conference room. The water used to contain roughly 4,000 molecules of mercury for every trillion molecules of water — far exceeding the 1.3 parts per trillion that the U.S. EPA wants to see in the Great Lakes. Now, after it was filtered through Sorbster, the water is nearly free of mercury, which contaminates both the water we drink and the fish we eat. “Its mercury levels are undetectable,” Mr. Lammers said. Mar Systems is aiming to prove that Sorbster — which can be made from alumina, iron or a combination of both — can do the same thing at factories and power plants. The company also is working to figure out how to build a system for wastewater treatment plants, where water volumes are larger and mercury concentrations are lower. It eventually plans to sell a Sorbster-based product designed to capture arsenic as well. The new manufacturing line will give the company more material for its pilot projects. Mar Systems is housing the line in 2,000 square feet across the street from its current, 4,000-square-foot headquarters on Solon Road, but the company is looking for a new headquarters big
Investors line up
Volume 31, Number 30 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-8249373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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Carp: Lake Erie could suffer most continued from PAGE 3
fishermen will have a tough time finding fish that are more likely to bite a lure. Charter boat captains will go out of business. Demand for boats and the marinas that serve them will drop. Area restaurants will need to look elsewhere for fish. And fewer people will travel to the region to enjoy the lake and spend their money nearby. The impact extends so far that last week Mr. Lewis drew up a list of the businesses and professions that would be hurt. Customers who saw it on a table at his shop kept wanting to add to it, he said. “It’s not the just the bait store owners or the charter captains. It’s right down the line,� he said. There’s no evidence that silverhead or bighead carp have gotten into the Great Lakes yet, but the fish — which feed on plankton that supports an ecosystem for other fish — have gotten close. Fishermen in June caught a 20-pound bighead carp, a species that can grow to 100 pounds, in a lake on Chicago’s south side, about six miles from Lake Michigan. It somehow got past an electric barrier meant to stop Asian carp from getting into the Great Lakes. It is unclear whether enough carp could get past the barrier to reproduce and form a sustainable population in Lake Michigan. If they do, they could spread from one lake to the next — or do it the quick way, by hitching rides on freighters, said Roger Knight, Lake Erie Fisheries
Program Administrator for the Ohio Division of Wildlife. Mr. Knight said he’s unsure how successful Asian carp would be at multiplying in the Great Lakes, and, if they are, he said it could take them decades to set up shop in Lake Erie. However, our lake, in particular, has lots of what they like: Shallow, warm water. The same stuff that has made Lake Erie easily the most productive fishery in all of the Great Lakes. “We have the best habitat, and we have the most to lose because of it,� Mr. Knight said.
All ears People and organizations in Ohio and elsewhere are trying to force the federal government to close the locks connecting Chicago-area rivers to Lake Michigan. The state of Ohio two weeks ago joined four other Great Lakes states in a lawsuit against the U.S. Army Corps of Engineers and the Metropolitan Water Reclamation District of Chicago, which operates the locks. The Greater Cleveland Partnership and several other chambers of commerce near the Great Lakes also are putting together a letter to President Barack Obama urging him to support bills in the House and Senate that would approve a study to analyze the best way to separate permanently Chicago waterways from Lake Michigan, said Carol Caruso, senior vice president of advocacy for the Greater Cleveland Partnership. “If it’s going to affect the lake, it’s
everybody’s issue,� Ms. Caruso said. Rick Unger is pushing for action on Capitol Hill, too. When several state and federal legislators visited Port Clinton on July 12 for “Fish Ohio Day,� the president of the Lake Erie Charter Boat Association asked the 15 captains who took the legislators out fishing to tell the lawmakers how important it is to stop the carp. Mr. Unger and group vice president Paul Pacholski also made a two-day trip to Washington, D.C., a few months ago, hopping from one meeting to the next in an effort to convince more members of Congress to separate permanently Chicago waterways from Lake Michigan — a move opposed by many in that area’s shipping and tourism industries. “Every congressional aide we met with got an earful about Asian carp,� Mr. Unger said. A retired Cuyahoga Heights police chief, Mr. Unger said Lake Erie’s 800 charter boat captains can’t make a living off of chartering alone, but that their income from the business would disappear if Asian carp made a home in Lake Erie. The fish already dominate much of the Mississippi River, Mr. Unger said last week, just after docking his boat in Port Clinton. Asian carp have made their way north toward Chicago for about 20 years, ever since floods helped the fish escape from aquaculture and wastewater treatment ponds in the South 20 years ago. “This would devastate Ohio,� he said. “Ohio just can’t afford to take
that kind of hit.�
Take a leap Most commercial fishing in Lake Erie is done near Canada. Sport fishing on Ohio’s side of the lake, however, has an $800 million economic impact on the state, according to the Ohio Division of Wildlife. Plus, Ohio boaters spend $1.9 billion on their boats and on trips in the areas near Lake Erie, according to a 2007 study by the Great Lakes Commission. Should Asian carp take over, boat sales could take a big hit: Two-thirds of boats sold in Ohio do some fishing, and half are bought primarily for that purpose, according to figures from the Lake Erie Marine Trade Association. A quarter of all boats in the state are used just on Lake Erie, and even more are used on both the lake and other bodies of water, according to information from the group. Ken Alvey, president of the association, said he’s unsure how big of an impact the carp would have on the Great Lakes. Regardless, he favors separating Chicago’s rivers from Lake Michigan, to be safe. “Once you open Pandora’s box, it’s hard to close it,� Mr. Alvey said. Many marinas in Ohio focus on recreational boating moreso than fishing, he said. However, even recreational boaters might be concerned that the sound of motor boats is known to cause silver carp to leap from the water, Mr. Alvey said. Online videos show hundreds of carp leaping from a river as boats motor by, but he noted that the jumping might not be as big of a problem in a lake. Kevin Meehan is worried about the jumping. The owner of Great Lakes
Watersports in Cleveland’s Flats said a few bad accidents could deter people from renting his jet skis and motor boats for use on the lake. He added, though, that manufacturers could always build windshields onto their products to stop flying carp from hitting people head on.
Impact at the table? Mr. Meehan also is worried about the Asian carp’s potential impact on the fishing industry, as is David Blystone, owner of Blystone’s Marine in Mentor-on-the-Lake. The company sells parts and accessories for boats. “If it gets into this ecosystem it could wreak havoc here,â€? he said. People with a taste for Great Lakes fish will have a hard time finding cheap eats under the scenario of an Asian carp takeover, said Sean Sullivan, a partner with food distributor Euro USA Inc. of Cleveland. Euro USA serves 12 states, but Ohio is its biggest market. Its Northeast Ohio customers include Giant Eagle, Heinen’s, the Blue Point Grille in Cleveland, Salmon Dave’s Pacific Grille in Rocky River and all of “Iron Chefâ€? Michael Symon’s restaurants. The company, which employs 110, would take a hit, too. Fish from the Great Lakes can account for as much as 15% of the seafood that Euro USA distributes, and seafood accounts for half its business. A month ago the company held a contest seeking the best recipe for Asian carp, which aren’t popular in the U.S., to capitalize on the problem. Still, Mr. Sullivan would rather not see the fish starve out the rest of the Great Lakes fish he sells. “It would be devastating,â€? he said. â–
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PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
How foul
F
rom out of the mouth of babes and crusty old men. Both tell it like it is, and Gerald McFaul was no exception as Cuyahoga County’s disgraced former sheriff uttered comments last week confirming what most voters already know — that too many so-called public servants serve themselves ahead of the public. The revealing words from McFaul came at his sentencing last Monday in county court, where he previously had pleaded guilty to two felony charges of theft in office and a misdemeanor ethics violation. His rambling remarks seemed like half excuse and half explanation for the use — and abuse — of his office for personal gain and for the cronyism that was prevalent in the sheriff’s department. “But that’s the way things were done; that’s the way things are done,” McFaul would tell the court. He should know. The 76-year-old McFaul was around the halls of county government for more than three decades as sheriff. If anyone would be versed in the way things were and are done, it would be the self-serving McFaul. Over the last two years, the public has gotten a taste of how things have been done in county government because of the ongoing federal public corruption investigation in Greater Cleveland. The digging by the FBI, IRS and federal prosecutors has produced to this point nearly three dozen guilty pleas from public officials and private contractors. However, what will never be known is just how many palms have been greased, how many needless patronage hires have been made and how many millions of taxpayer dollars have been wasted in the county over the last 10, 20 or even 30 years. We’re not sure the public is going to like the new county government — with its single county executive and 11-member county council — any better than the longtime form of government in Cuyahoga County that will come to an end this year. But the contemptible actions of those elected officials who, like McFaul, have run the various compartments of county government as though they were their personal kingdoms gave voters little choice last November but to blow up the current structure and replace it with a new one. That’s how foul the smell emanating from certain county offices had become. We only can hope a fresh form of government will clear the stench.
Keep carping
W
e applaud the attorneys general of five Great Lakes states, including Ohio, who filed a lawsuit late last month demanding aggressive and immediate federal action to prevent the ravenous Asian carp from entering the world’s largest system of freshwater lakes. The White House last week agreed to name a socalled “carp commander” to address concerns about the Asian carp. But we urge the states to keep up the legal pressure on the feds to block those waterways that could allow the carp to progress into the Great Lakes and destroy the ecosystem there.
FROM THE PUBLISHER
Let’s correct city violence properly
I
buildings for a basketball arena, which s the old adage that if we don’t learn eventually was built on rural land in Richfrom the mistakes of history then we field. are bound to repeat them playing Good thing, because those buildings out in Cleveland’s Warehouse that weren’t razed to make way for parking District? Or do we have a mayor and lots offered an opportunity for redevelpolice force taking adequate steps to opment. Crain’s has long been an advoensure the safety of the weekend revelers cate of the neighborhood, and it was and neighborhood residents there? a big reason we moved our Only time will tell. But it clearly offices there 26 years ago. What is an acid test for Mayor Frank BRIAN happened was the creation of a Jackson, who presides over a city TUCKER restaurant/office/residential diswith too few success stories such trict that offered a different as the Warehouse District. entertainment option than the The district was never much of Flats, which catered to a a warehouse district at all, unless younger crowd. you count the period when the Sadly, violence would destroy mostly vacant buildings there the Flats, an outgrowth of the were used to store stuff because type of big, young crowds that no businesses wanted to locate are starting to overwhelm a onenear the intersection of West block stretch of nightclubs in the WareSixth Street and St. Clair Avenue. house District. Two deaths there in the It was the early part of “downtown” past couple years have touched me Cleveland as it spread from the banks of personally. One shooting victim was a the nearby Cuyahoga River, and later was nephew of a good friend, and Michael a vibrant garment district and publishing Corrado, the young man who had moved center. Then business moved further east, here from Detroit and later was killed in a toward Public Square and beyond. In the closing-hour fight, was a family friend I 1970s, there was talk of bulldozing the
had known since he was a 4-year-old. When George Forbes inserted the race issue into this, I had mixed emotions. I don’t accept the notion that the problems stem from the presence of one club and restaurant there that have attracted a largely black clientele. That sort of stereotyping continues to tear our community apart. What we should recognize, however, is that the same problems that did in the Flats have begun to plague the Warehouse District. The difference is that the Warehouse District is exactly the kind of mixed-use neighborhood Cleveland desperately needs to succeed. Consequently, I was relieved to read that Mayor Jackson wasn’t interested in this situation as a race issue but would treat it as a public safety problem. Thus, the recent photos of a fleet of police cars stationed along the club section at closing time. This may not be the best use of scarce police resources, but it’s necessary to show that the city intends to ensure a vibrant neighborhood stays that way. We cannot let the tragedy of the Flats repeat itself. ■
PERSONAL VIEW
Let LeBron go, and learn from experience ■ I read Brian Tucker’s “From the Publisher” column in the July 19 issue about how LeBron James “killed more than his legacy.” I understand the emotional letdown and anger caused by his decision to leave the Cavaliers. I agree with the criticisms of his method of informing his hometown of “the decision.” With that being said, I have a huge concern for Cleveland. For all of us to completely blame LeBron for leaving condemns us to learn nothing. Yes, LeBron chose to leave. But we also need to face the fact that we lost LeBron. Somewhere along the way, another town and another team did a better job of attracting LeBron. As a community, we learn nothing if we blame this all on LeBron. We should ask ourselves, “What could we have done different or better to win
LeBron?” My understanding is that the Cavaliers developed a cartoon as their compelling case to keep LeBron. I read that Miami Heat general manager Pat Riley started his conversation with LeBron by pouring his NBA championship rings on the table. In general, I have found it to be true in my personal life and in my business, when I blame others for my problems or setbacks, I learn nothing. It is only when I ask myself, “What could I have done different or better to secure a better outcome? that I begin to learn and improve. At some point, Cleveland needs to heal and move on. At some point, this town, our leaders and the Cavalier ownership and management need to ask, “What could we have done different or better to have secured a better out-
come?” Then, and only then, will we learn, improve and move forward as a smarter community with valuable lessons learned from this experience. Gregory P. Muzzillo Founder Proforma
Crain’s in murky waters ■ The Illinois Chamber of Commerce would like to clarify several points in Crain’s July 19 editorial, “Cut the carp.” Primarily, the evidence is that the electric barrier is working. One Asian Carp has been found above the barrier during ten months of intense fishing and poisoning of the Chicago Area Waterways killing See LETTERS Page 9
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manager; Paul M. Renzulli to director of operations; Harry Turner to certified computer examiner.
GOING PLACES JOB CHANGES
TECHNOLOGY
EDUCATION JOHN CARROLL UNIVERSITY: Jeanne Colleran to dean, College of Arts and Sciences. KENT STATE UNIVERSITY: James K. Bracken to dean, University Libraries; Walter F. Wagor to dean, Kent State University at Stark.
FINANCIAL SERVICE RETIREMENT SOLUTIONS: Tyler Feldman to associate financial consultant. RIVERSIDE CO.: Jack Nestor to principal.
HEALTH CARE PREMIER PHYSICIANS CENTERS: David Appel to CEO. SOUTHWEST GENERAL: Karen Raisch-Siegel to director, Comprehensive Woman’s Health Care.
INSURANCE MEDICAL MUTUAL OF OHIO: Jeff Rechner to manager, financial disbursements; Mackenzie Smith to marketing communications specialist.
LEGAL ROETZEL & ANDRESS LPA: Brad Rimmel to partner.
Howell
Pillar
manager; Annette Pillar to program manager. SWAGELOK CO.: Dave Krabill to director, business systems transformation program; Andy Curtiss to director, customer service; Jim Cavoli to director, strategic accounts.
MARKETING LANDAU PUBLIC RELATIONS: Hallie Fisher to vice president; Jessica Conner to senior account executive; Katrina Moyer to account executive; Abby Millsaps to assistant account executive.
NONPROFIT BOYS & GIRLS CLUBS OF CLEVELAND: Christa A. Vesy to treasurer.
REAL ESTATE ATWELL LLC: Timothy Briggs to field services project manager. DEVELOPERS DIVERSIFIED REALTY CORP.: Mark Bratt to executive vice president and chief investment officer.
SERVICE SAFEGUARD PROPERTIES: Tod Burkert to vice president, business development; Anthony Golden to director, strategic initiatives.
MANUFACTURING
STRATEGIC EMPLOYEE BENEFIT SERVICES: Shelley A. Chornak to president.
LIBRA INDUSTRIES: Jennifer Howell to marketing and communications
VISUAL EVIDENCE/E-DISCOVERY LLC: Lisa M. Anderson to project
CLEVELAND ZOOLOGICAL SOCIETY: Patrick S. Mullin (Deloitte & Touche LLP) to chairman; Robert J. Rogers to president; Eric Hall to treasurer; James M. Malz to secretary.
Science and technology still are the only methods to truly control Asian Carp or any invasive species, which takes longer than filing lawsuits, writing editorials and proselytizing. It is in everyone’s interest to keep the carp at bay. Rather than harp about carp, report progress like the harvesting and export agreement done last week by the State of Illinois. Jim Farrell Executive director Illinois Chamber of Commerce, Infrastructure Council
Continuing ed key ■ Your July 26 article, “Community colleges draw quite a crowd,” was right on point. It mostly referred to Cuyahoga County, but this is happening in Barberton, also. After becoming mayor in 2008, I began discussions with Stark State College and the University of Akron about offering adult education courses in Barberton. While some wanted to do studies to decide if this type of programming would succeed, I continued to push for delivery as soon as possible. I knew the demographics and the needs of the business community. After Chancellor Fingerhut visited my office on Aug. 7, 2008, the program began to take shape. It has been successful, well beyond the expecta-
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ICASI SCHOLARSHIP FUND INC.: C. Diane Gregerson (Symax Ltd.) to president and treasurer; Carole F. Cashion to vice president, assistant secretary and assistant treasurer; Dr. Emil P. Paganini to secretary. LAKEWOOD CHAMBER OF COMMERCE: Terry Vincent (Brouse McDowell) to chairman; Steven Clark to treasurer; Lucinda Einhouse, Nicole Farley, Diane Helbig and Brian Salem to vice chairmen. LIFEBANC: John Geller (Medical Service Cos.) to president; Mariann Pacak to president-elect; Donna Luebke to secretary; Cynthia Rosa to treasurer. NORTHEAST OHIO REGIONAL SEWER DISTRICT: Darnell Brown (City of Cleveland) to president; Ronald D. Sulik to vice president; Dean DePiero to secretary. OHIO ASSOCIATION OF HEALTH UNDERWRITERS: Bob Lackey (First Place Insurance Agency LTD) to president; Randy Klein to president-elect; Ken Statz to legislative committee chair; David Petno to media relations co-chair.
Send information for Going Places to dhillyer@crain.com.
LETTERS thousands of pounds of other fish. The public, and the press, must understand that a multi-agency coalition is committed to tactically addressing the matter every day on many levels. Hysteria by the other states is being fed for political and philosophical purposes, not truly economic or ecological best interest. Factually, the Asian carp situation is not remotely parallel to the horrifying Gulf circumstances. A modest review of the web site, www.AsianCarp.org, will identify an unprecedented level of cooperation, communication, transparency and flexibility to respond quickly to changing circumstances. A czar, lawsuits, or a “Chinese wall” will not lock out the Asian carp. Professionals from agencies ranging from Illinois EPA to U.S. Fish & Wildlife have indicated closure of the locks is not a solution of any merit. It would be foolish to “do something” at great expense just for appearances. It is shallow for Crain’s, in an election year, to leap to an assumption that the president is protecting home state shippers as opposed to addressing the needs of many states. As advocates for Illinois and the region’s businesses, be assured the Obama administration has been even-handed in protecting both commerce and environmental interests of the Great Lakes.
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tions of the two institutions. Our first semester in Barberton was the fall of 2009 and we had 170 students. We have reached 270 for spring 2010, at a cost of $127 per credit hour. People are looking for affordability and accessibility. This is right in line with the Board of Regents’ strategic plan. This is very exciting news for Barberton and the surrounding area. I am a firm believer that economic development will be driven by education. Last week, I held a breakfast for our 10 largest employers to engage them with Stark State and Akron. This also provided a forum for the institutions to gain a better understanding of the needs of the local employers. The institutions have indicated they will customize curriculum to fit the needs of the employers. This education initiative is ramping up to be a very successful program, even though we do not have a standalone facility. Courses are being offered at various locations, such as the YMCA, high school, library and elsewhere. However, I am working daily to find the resources to renovate a building to be used exclusively for adult education college courses. My goal is to have that facility in place within three years. Thanks again for the article. Bob Genet Mayor City of Barberton
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Tiger: Casual fans drawn to big names continued from PAGE 1
“Not many sports can make it without an eye on the future,” said Max Muhleman, head of Charlottebased Private Sports Consulting. “It’s a matter of not putting all your eggs in one basket. If you tie too much up in a couple guys, like the PGA did with Tiger, when those guys struggle you lose the people who bought into them.” If the tour is worried, executive vice president of communications Ty Votaw isn’t showing it. He cites the 16 new or renewed title sponsorships (including Bridgestone’s) the tour has signed since 2009, and noted that the tour’s top five charity money generators are tournaments Mr. Woods typically doesn’t play. Mr. Votaw also said the tour is on track to meet or eclipse its 2008 record of $124 million in money donated to charity, after that figure was down 10% to 15% last year. “(Mr. Woods) has had absences from the tour in the past (knee surgery after he won the 2008 U.S. Open, for instance), and we’ve not only survived but thrived in those absences,” Mr. Votaw said. “Advertisers recognize the value proposition we provide.” Bridgestone tournament director Don Padgett, too, has little room for worry: This will be Mr. Woods’ 12th appearance in Akron, and as a World Golf Championships event, the Bridgestone annually draws one of the top fields of any tour stop. But others aren’t so quick to minimize the possible impact of a potentially extended Tiger Slump. Paul Roetzer’s Cleveland-based PR 20/20 for seven years handled the public relations and promotions for the Westfield Junior PGA Championship, the PGA of America’s world junior major that now is held in Fort Wayne, Ind. PR 20/20 also assisted the PGA with last May’s Senior PGA Championship, held at Canterbury Country Club in Beachwood. Through that experience, Mr. Roetzer said, one thing became
clear: People get excited about stars. Michelle Wie greatly moved the meter when she played in the junior tournament — held at Westfield Country Club — at age 12, and when well-known golfers such as fan favorite Greg “The Shark” Norman committed to the Senior PGA, PR 20/20 took advantage. “The names are what draw,” Mr. Roetzer said. “People will come to see a phenom, a prodigy. Everyone markets the superstars, because that’s what draws; I’m not sure the tour would have done it any differently.”
lishman Rory McIlroy has been the popular choice, even appearing on the cover of EA Sports’ “Tiger Woods 11,” a first for that game series. (As an indication of Mr. Woods’ struggles, sales of that game are down 32% compared to last year. His endorsement earnings are off 31%, though at $70 million, he’s not starving.) Americans Anthony Kim and Lucas Glover have big wins, and 21year-old Rickie Fowler is something of a phenom. However, they have been inconsistent and haven’t captured the imagination of fans. Phil Mickelson is popular among fans, but turning him or any other player into the new Tiger isn’t as easy as one of Tiger’s knocked-stiff approach shots, as none have been able to replicate Mr. Woods’ longtime superiority over the opposition.
But who? Mr. Woods’ play has suffered since revelations last November of extramarital affairs and the ensuing media circus. This season, Mr. Woods has averaged a 19th-place finish in five events; he withdrew from another and missed the cut for the seventh time in his career, in May at Quail Hollow in North Carolina. His best finish, a tie for fourth, came in April at the Masters; two weeks ago, he finished tied for 23rd at the British Open in St. Andrews, Scotland. In sharp contrast, Mr. Woods last year finished in the top 10 14 times in 17 events, including six victories and three second-place finishes. South African Louis Oosthuizen’s landslide victory at the British, coupled with Mr. Woods’ fade, doomed television ratings for the final round: ESPN drew a 2.1 rating, the lowest for a final round in the event’s history, according to Nielsen Co. By comparison, Nielsen numbers show Tiger’s first Masters win, in 1997, registering a 14.1 rating, and his 2001 victory finished with a 13 rating. (Rating is the percentage of all U.S. households tuned in to an event; Mr. Votaw says advertisers are plenty pleased with the tour’s global TV reach, despite low ratings.) To keep the casual fan — and to a degree, sponsors — interested, the Bridgestone may need Tiger or a new Tiger to emerge. Young Eng-
Numbers game Another factor working against the next Tiger is the sport’s numbers, which guard against any one player dominating each week — and make Mr. Woods’ previous dominance even more impressive. While the Bridgestone typically fields about 80 players (and doesn’t have a cut), most events field about 140 players. Eleven players have won their first PGA Tour event this season. “It’s tough to see who’s going to break out from those numbers,” said New York sports television consultant Lee Berke, “and when someone does, you hope he has the charisma to go with the talent. It’s tougher in golf for one player; you hit one ball in the rough, your chances are hurt.” Perhaps Tiger Curiosity will keep fans’ interest. While the British Open ratings might suggest otherwise, both Mr. Roetzer and Bill Sutton, formerly the NBA’s vice president of team marketing, said a struggling Tiger provides perhaps even more intrigue than a constantly dominant one. “People are curious now: Will he shoot 68 or 78?” the Orlando-based Mr. Sutton said. ■
Polar: Vests aid doc, patient comfort continued from PAGE 3
its Phase Change vest, along with an evaporative model. The Phase Change works like the Cool Max, except its cooling elements freeze solid at 58 degrees. It’s designed for those who don’t want the ice-cold temps of the Cool Max or who might have access to a refrigerator or portable cooler, but not to a freezer. In 2007, Polar Products introduced its latest product, the Cool Flow, which pumps cold water from a chiller through tubes that run through the vest. It’s not as mobile as the other devices, but it lasts as long as power is available and has proven a hit with motorcyclists and military personnel in vehicles with no air conditioning. However, it does require electricity to work. All the products have helped the company turn around. Mr. Graessle, who won’t disclose financial figures, said Polar Products has gone from a money-losing company when he bought it to one that is profitable and growing fast today. Even in the recessionary year of 2009, sales rose 15%, Mr. Graessle said, and they’re increasing by about that same amount again this year. Meanwhile, the company has
gone to 18 employees from four and it soon might outgrow its 10,000square-foot plant in downtown Akron, Mr. Graessle said. The company’s best-selling Cool Max vest sells for about $100, while its more expensive Cool Flow model can cost over $1,000 if an electric chiller is included. The company has sold thousands of them so far, Mr. Graessle said — and it keeps finding new markets, such as the workers in the Gulf of Mexico oil spill, where hazmat suits can make for extremely hot working conditions.
Aid for MS patients And a funny thing happened on the way to the mainstream market and its greater sales. It turned out that the medical and health care communities embraced Polar Products’ new vests. As operating rooms seek to keep patients comfortable, they are becoming warmer, which has led to some surgeons wearing Polar Products vests to keep them cool and steady during long operations, Mr. Graessle said. An even bigger market has come out of the multiple sclerosis community, he said, because the disease’s symptoms often are exacerbated by
Polar Products’ evaporative vest heat. The vests have helped some of the estimated 350,000 Americans with MS to lead more active lives — including about 20,000 people in Ohio, said Greg Kovach, director of outreach services for the National Multiple Sclerosis Society’s Ohio Buckeye Chapter. “For many people with MS, heat temporarily worsens their symptoms,” Mr. Kovach said. “They might notice their vision becomes blurry when they’re heated, or they might become weaker.” The chapter helps find financing sources for people who can’t afford the vests, and it often hears of how they’ve worked. “We’ve seen thank yous from people who have been able to attend things like family picnics or even go to work because those products allow them to do that when they otherwise could not, “Mr. Kovach said. ■
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INSIDE
11
REAL ESTATE
12 ADVISER: TENANTS NOW REQUIRE SUSTAINABLE SPACES.
Miami Beach, Fla.-based Optima International LLC, the new owner of the Huntington Building, is considering putting a hotel in a portion of the 21-story structure.
PROPOSED CLEVELAND HOTELS ■ Cleveland Athletic Club hotel, 1118 Euclid, 160 rooms. ■ Doubletree at Tudor Arms Hotel, 10650 Carnegie Ave., 154 rooms. Renovation is under way. ■ Ernst & Young Conference Center Hotel, proposed as part of the Flats East Bank Neighborhood, 150 rooms. ■ Huntington Building, potential hotel in major renovation, 916 Euclid, room count undisclosed. ■ Kimpton Hotel at the Schofield Building, 2000 E. Ninth St., 120 rooms. A preliminary phase of renovation is under way, but the total project is not yet funded. ■ University Circle Hotel, developer selection pending for site that University Circle Inc. and University Hospitals control at Cornell Road and Euclid, 160 rooms.
An affiliate of real estate services firm CRM is planning a hotel and apartments in the Schofield Building — shown before renovations began — at East Ninth Street and Euclid Avenue.
Cleveland developer MRN Ltd. is spending $22 million to turn the former Tudor Arms Hotel at University Circle into a 154room Doubletree Hotel.
By STAN BULLARD sbullard@crain.com
CLEVELAND: P A HOTEL HOTBED?
roposals for new hotels are cropping up in downtown Cleveland and nearby University Circle at a ferocious rate. That would be the order of the day in a normal time, when a new convention center and casinos go in — though in Cleveland, the new convention center is cast as a medical merchandise mart and Ohio voters approved plans for just one casino each in Cleveland and two other cities. However, these are not normal times. Hotels are suffering in the recession. The hotels developers are building or proposing in or near downtown also are See HOTELS Page 13
Contractor, architect acceptance of modeling technology grows By STAN BULLARD sbullard@crain.com
3-D drafting software allows for more precision, fewer post-build fixes
S
“BIM is a better way of building a building,” Mr. Newkirk said. “Construction is pretty inefficient. A lot of money is spent on rework and fixing mistakes that can be eliminated by giving it more forethought.” Bothered by inefficiency he found in the construction business as a new mechanical engineer 15 years ago, Mr. Newkirk has schooled himself in BIM software
teve Newkirk, an estimator at Donley’s, the Valley Viewbased general contractor and design-build company, describes himself as a “boots in the mud” construction project manager. However, he finds something not normally associated with job sites thrilling: the growing acceptance of architecture software that provides building information modeling, or BIM, in the industry.
and now carries the title of Donley’s BIM coordinator and runs its efforts to use it. Mr. Newkirk has a lot of company in embracing the software, which is a dramatic step forward from two-dimensional computer-aided design that swept the industry two decades ago. Essentially, BIM software allows designers and engineers to draft in three dimensions, essentially building it in the
computer before hammers bang in the field. As individual items go into the planned building, they incorporate the weight, strength and other attributes of the real thing, such as steel beams. What is more, BIM provides “clash detection” capability so designers can find when one part of a building prohibits installing another — something difficult to
do in two-dimensional computer drawings. For example, a steel beam may prevent installing pipes for a toilet where plans say they should go — which requires a conference of owners, architects and builders to resolve that slows the job’s pace and costs money. “Errors that are normally found during construction can be found in the design phase,” said Alan Ritchie, an attorney practicing in the construction area who is of counsel with Thompson Hine LLP See SOFTWARE Page 14
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or owners and managers of existing commercial space, retaining tenants — and attracting new ones — seems more challenging than ever. Why? Economic conditions, certainly. But more commercial tenants, from small businesses and large corporations to government agencies, demand the spaces they occupy be more sustainable. Altruism only is a partial driver. Tenants increasingly are aware that green buildings are more efficient and less costly. As smaller businesses contract, corporations and government entities have emerged as key potential commercial tenants. Cuyahoga County prefers the buildings it occupies conform to the United States Green Building Council’s Leadership in Energy and Environmental Design program. The federal government, meanwhile, demands LEED compliance for its newly occupied spaces, and corporations require it for many reasons. On top of that, nearly all major new commercial projects that are on the drawing board in Northeast Ohio will be designed with LEED certification in mind. Simply put, existing commercial structures will be hard-pressed to compete if their owners don’t embrace LEED — and make it possible for prospective tenants to LEED-certify individual spaces. Yet many still view a move in that direction as costly, time intensive and generally overwhelming. Developers and landlords are becoming open to the possibility of LEED-certifying their existing properties, but they are unsure of how to evaluate the green viability of those properties and of how to place them in compliance with LEED. The LEED Existing Buildings Operations and Maintenance (LEED EBOM) program helps building owners and managers measure operations, improvements and maintenance consistently in order to maximize efficiencies and minimize environmental impacts. LEED EBOM addresses wholebuilding cleaning and maintenance issues, recycling programs, exterior maintenance programs and systems upgrades. It can be applied to existing buildings seeking LEED certification and to projects previously certified. Meeting LEED EBOM requirements for existing buildings certainly is achievable. But in reality, the path should be charted through a holistic process that enlists ongoing participation from stakeholders — architects and engineers, accountants and legal professionals, and particularly owners and tenants. Many elements of existing commercial properties already may be LEED EBOM compliant, thus putting them within close reach of certification. Assembling a team of professionals, therefore, is necessary in order to properly identify sustainable elements that exist within a given property, including site characteristics, and build strategies to garner points. Equally important, a qualified team can streamline the process,
ROBERTBAJKO
ADVISER ensure that it unfolds in a timely manner, rally owners and tenants to the cause and engage them as long-term stakeholders. When a landlord makes the decision to pursue LEED EBOM certification the first call often is made to an architect or engineer. A cohesive project team of complementary professionals should be formed, and a well-structured LEED EBOM certification process should be established. Component-wise, this process includes a careful evaluation of doors and windows, ceiling systems, walls, flooring and fixtures. It also includes HVAC, lighting, electrical and plumbing fixtures. Each process is unique to the property under consideration, but some representative steps might include: ■ Conducting a building-wide Energy Star analysis ■ Identifying specific refrigerants used in the building systems ■ Meeting minimum indoor air quality performance requirements, as determined by the Indoor Air Quality Association ■ Evaluating water consumption and plumbing fixture efficiency ■ Establishing a building operating plan and a preventive maintenance plan through an energy audit that identifies no-cost and low-cost improvements ■ Implementing recycling and green cleaning programs and a sustainable purchasing policy Results from this process are then measured against LEED EBOM guidelines. In areas where a property falls short, the LEED EBOM team develops go-forward recommendations designed to garner the additional points necessary for certification. While a qualified team can help a property owner understand and apply for grants, utility rebates and other incentives, it also can help that owner engage tenants in long-term sustainable practices by organizing tenant-focused sustainability workshops and developing tenant handbooks on sustainable operating procedures. The bottom line: Nearly every aspect of green building technology carries a direct and ongoing financial benefit. The steps you take down a green path can streamline your property’s operating costs and make it more attractive to existing and potential tenants during the critical years ahead. ■ Mr. Bajko, AIA, is a principal with Cleveland-based HSB Architects + Engineers. Mr. Bajko is a LEED accredited professional in interior design and construction.
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REAL ESTATE
Hotels: Skepticism of projects’ completion remains continued from PAGE 11
in the 100-room range rather than the single 500- to 1,000-room hotel the city might need if both the convention center and casino prove wildly successful — at some point in the distant future. However, local hospitality experts and hotel operators are not working up a sweat over the six hotel proposals that have surfaced so far, in part because these are not normal times for realty development plans. That is because skepticism runs high that most of the ideas will fall by the wayside. Vern Fuller, president of Cleveland-based Marathon Associates, which manages the Radisson Hotel Gateway, puts it succinctly: “I have no clue where they think demand will be with (current) occupancy at the 50% level. It also will be virtually impossible to get hotel financing any time in the near future. It’s not a worry I have for my business life.” Dennis Roche, president of Positively Cleveland, which serves as the city’s convention and visitors bureau, sees the hotels, well, positively. First, if the medical mart and convention center achieves any portion of estimates for the new property in Cleveland, the market stands to see a jump in demand. Early studies for the mart estimate it will draw 300,000 visitors annually. Mr. Roche said a University of Cincinnati study forecast the casino might get 8 million visits yearly, which also could produce additional room demand. “This is a very significant jump in demand, though no one can estimate it directly,” Mr. Roche said. He noted promoters of both the medical mart and Cleveland casino have promised not to build a 500- or 1,000-room hotel initially because there is ample current hotel supply.
hotel occupancy to 70% once more — as in the 1990s. Smith Travel Research estimates 52% occupancy in Northeast Ohio through this June. However, other hoteliers share Mr. Fuller’s wariness. Jeff Elstro, regional sales director for Twinsburg-based Gateway Hospitality Group and sales manager for Hilton Garden Inn downtown Cleveland, said more hotels for the short term would “not be a positive. With occupancy at this level you do not want to build a new hotel.” Moreover, he said his hotel and others were added in the late 1990s in anticipation of a new convention
center — a dream only now on the cusp of reality.
Build it and they will come Developers, however, see it differently. Most of the proposals are hotels designed in order to woo specialized financing important in the downturn, such as the Doubletree that MRN Inc. of Cleveland is installing at the former Tudor Arms Hotel at University Circle. It incorporates federal New Markets Tax Credits, which aid job growth in high-unemployment areas. The projects also use state and federal historic tax credits,
which help land loans. Ironically, hope of the proposed convention center and casino may foster the hotel rush. Tom Yablonsky, executive vice president of the Downtown Cleveland Alliance nonprofit group, said developers and others have told him hotel proposals are on the rise because lenders who might not look at other uses will give the area a look for hotels due to the convention and casino plans. Most developers see the advent of a viable convention center and casino in town as a boon. However, each developer’s plan
has its own pluses or minuses. For example, in the Kimpton’s case, Steve Calabrese, who heads the development group proposing the $40 million makeover of the Schofield, sees it as a strategy beyond the casino or convention center. That is because the Kimpton site would benefit from a base of loyal Kimpton followers. Moreover, the central location would allow it to garner guests who want to go to the Theater District, East Fourth Street or ballpark and arena. Mr. Sangree takes the long view. “Existing hotels would much rather wait and see what happens,” he said. “That’s not the American way. Developers like to build things, anticipate market improvements and be there when they occur.” ■
MY BENESCH “We’re opportunity-focused and so is our law firm.” Richard & Steven Soclof Soclof Enterprises
Rooms for debate The proposed hotels themselves, such as the potential Kimpton Hotels-operated boutique hotel at the Schofield Building, 2000 E. Ninth St., will not sap as much demand as it might appear because they would hit the market at various times and attract niche customers who stay at exclusive luxury properties, Mr. Roche said. “Boutique hotels tend to be small enough that they don’t vacuum up enough business to set back the big hotels,” Mr. Roche said. “We interpret these projects as a significant addition to hotel inventory in terms of quality and quantity for the Cleveland market. We’re in better shape than if there were no supply available at existing hotels.” David Sangree, president of the Lakewood-based Hotel & Leisure Advisors consultancy, said while the six hotel proposals may total more than 700 rooms — the Cleveland Renaissance Hotel alone offers 491 — they will likely open at different times and not all will be built because of the difficulty landing financing. Although Mr. Sangree declined to disclose his proprietary estimates of how much demand the medical mart and casino might create, he said the increase would be considerable, enough to support some additional smaller properties and to aid existing hotels. He notes the new convention center and casino may boost local
M Y
T E A M
Soclof Enterprises is a growing business with an entrepreneurial spirit. This commercial real estate company is focused on acquiring, developing and managing properties to enhance the long-term value of their TRIMAX Real Estate Funds. Their business moves quickly and they need to be able to react to opportunities as they arise. The Benesch team approach provides Soclof Enterprises with the necessary legal expertise and business experience to make sound decisions. To learn more about our relationship with Soclof Enterprises, visit beneschlaw.com/myteam
Cleveland • Columbus • Indianapolis • Philadelphia • Shanghai • White Plains • Wilmington
Featured team members (left-right): Jeffrey Wild, Lee Korland, Kevin Margolis, Marilyn Dulic, Pete Elliott, Theo Verginis and Leslie Drockton. © 2008 Benesch Friedlander Coplan & Aronoff LLP
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14 CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
AUGUST 2-8, 2010
REAL ESTATE
Software: Technology helps LEED goals THEINTERVIEW continued from PAGE 11
DOUG STEIDL
and a member of Project Management Consultants, a Cleveland construction and finance consultancy. “There are thousands of these errors in the typical construction project. It’s part of the process. BIM saves contractors and owners money.�
Dean Kent State University’s College of Architecture and Environmental Design By DAN SHINGLER dshingler@crain.com
I
f now is the time for architectural students to be both business savvy and in tune with the latest practices in sustainability and environmental design, Kent State might just have found the right man to be the new dean of its College of Architecture and Environmental Design. Doug Steidl, who took the job July 1, brings with him decades of real-world experience, a reputation as a national leader in the discipline and a passion for making buildings both beautiful and sustainable.
Saved by the software Industry estimates for BIM software produced by several manufacturers indicate BIM can reduce costs as much as 20%, although Mr. Ritchie and others decline to provide their own estimates. Reducing errors and omissions at the planning level attacks a key source of litigation dogging the building business. BIM also provides a foundation for integrated project delivery, Mr. Ritchie said, a collaborative construction strategy now gaining favor. Some of the savings come from doing more planning earlier. Laura Rees, director of architecture at the Cleveland office of URS Consultants Inc., said the threedimensional computer models aid the cost-estimating process. “You have cost estimates as you design the building,� Ms. Rees said. “There is less need to redesign or value engineer a project to bring it in on budget. That keeps elements in the design that clients have their hearts set on.� BIM also aids efforts to hike a building’s energy efficiency or qualify for Leadership in Energy and Environmental Design ratings. Dale Swearingen, senior technology manager at Cleveland-based
sustainable design — but also to be artists as well. “The best building is when the aesthetics and the performance are one and the same thing,â€? he said. Mr. Steidl won’t be teaching, however, he’ll be running and setting the direction for the department — something he has plenty of experience with after managing Braun & Steidl Architects, an Akron-based firm that he founded in 1983 and which still bears his name. “I think Doug will be a very, very good fit, for a number of reasons,â€? said Chas Schreckenberger, now president of Braun and Steidl, but a long time protĂŠgĂŠ of Mr. Steidl during their 14 years together at the firm. Mr. Steidl no longer works with the firm directly, but is still a source of advice, Mr. Schrecken-
STAN BULLARD
Discussing designs for a new health care property in building information modeling software are (from left) Marla Caserta and Kevin Krol, architects at the Cleveland office of URS Consultants. Middough Inc., an architecture, engineering and management concern, said that previously improving the energy efficiency involved detailed calculations of how different window sizes, glass types and designs would shape energy. “Now (with BIM) you can take a design and rotate it in terms of movement of the sun over the site,� Mr. Swearingen said.
Growth spurt Although BIM software has been available for nearly a decade, insiders say it gained traction the last three years. Mr. Swearingen,
for one, said his firm embraced BIM last year after electrical engineering software, one of Middough’s key disciplines, improved. Part of BIM’s growth stems from the U.S. General Services Administration requiring it for federal building projects and more clients asking for it. Many observers expect BIM to transform the industry. “BIM and (integrated project delivery) will separate the winners and the losers,â€? predicted Paul Westlake, managing partner of Westlake Reed Leskosky architecture firm of Cleveland. â–
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“My push was to get architects to be more environmentally oriented. When you are talking about sustainability, you are talking about working with nature.� – Doug Steidl Mr. Steidl is perhaps best known nationally for his stint as president of the American Institute of Architects from 2003 to 2005, where he not only improved the organization’s management, according to some observers, but also worked to get architects around the country to embrace concepts that would put the discipline and its products more in harmony with the natural world. “My push was to get architects to be more environmentally oriented,� he said. “When you are talking about sustainability, you are talking about working with nature.� That might not be tough to do in his new role, considering that students generally are ahead of the rest of the population when it comes to embracing the latest trends and envisioning the future — and Mr. Steidl says he’s already learned that the students of his department are worldly and cosmopolitan. “I talk to students about where they’re going to work and they say, ‘everywhere,’� he said. “More than 75% of our students have already spent time abroad.� That’s welcome news to Mr. Steidl, who wants students from Kent to be well-versed in the basics, like site planning, building systems and
berger said. “He owned his own firm and worked in the industry for a number of years, so he’s not just academic,â€? Mr. Schreckenberger said. “Sometimes, people come out of school and they have a very idealistic way of looking at the world of architecture. ‌ I think Doug’s experience in the actual business of architecture, I think he can offer some insight to students that others can’t.â€? Purposefully, Braun and Steidl never adopted a signature look for its work — like the wavy metalwork of a Frank Gehry building or the long roof lines of a Frank Lloyd Wright design — because it didn’t want to have to force that signature into projects where it did not belong, Mr. Schreckenberger said. But there is another quality of Mr. Steidl’s that might be the most important — his leadership abilities. Even in a brief meeting, he displays a confident, thoughtful nature. His speech is soft, but deliberate, and easy for a listener to trust. “No matter what venue you’re in, he immediately rises as the leader, whether it’s a church meeting for a project of a staff meeting here at the office,â€? Mr. Schreckenberger said. â–
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20100802-NEWS--15-NAT-CCI-CL_--
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Turbine: Device could save money continued from PAGE 3
producing power despite the lack of a gearbox to boost the rotation speed. The new turbine will play a big role in the effort to hold down the cost of the Great Lakes Energy Development Task Force’s $100 million plan to put wind turbines in Lake Erie in 2012. About 25% of the cost of some offshore wind farms is related to maintenance, said Lorry Wagner, president of Lake Erie Energy Development Corp., or LEEDCo, a nonprofit the task force formed to lead the effort to put wind turbines in the lake. Dr. Wagner said he’d like to see maintenance fall to 10% of the cost of offshore wind power, which today is about twice as expensive as onshore wind energy. GE will help LEEDCo get there, Dr. Wagner said. “We’ll rely on them to provide the equipment that takes us in that direction,” he said. GE bought the direct-drive technology last year when it acquired ScanWind Group AS of Trondheim, Norway. Mr. Reno said he expects direct-drive systems to be “crucial” to making offshore wind affordable. “I think it’ll be the leading configuration of offshore wind going forward,” he said.
ScanWind five years ago erected a few direct-drive turbines on land, and GE plans to put up a few more that have been updated with its technology on land in Sweden next year, Mr. Reno said. The company expects to erect the new turbines in water for the first time either off the shores of Norway or in Lake Erie, he said. Both projects are slated for completion in 2012.
Bigger and better The direct-drive system is one of several features that differentiate the new turbine. For one, it’s bigger than most wind turbines, which is hinted at in its name: It will be capable of producing 4 megawatts of electricity, making it GE’s most powerful turbine. The diameter of its rotor, which includes the machine’s blades and the hub in the middle, is 110 meters, which is 20 meters bigger than other GE rotors. Added size means added efficiency, Mr. Reno said. The machine also will include a built-in crane to make it easier to haul large parts up and down its tower, thus reducing the need for cranes to be shipped to the turbine’s site for repairs. Another feature will be built into the direct-drive system. Its generator consists of three units that run independently of each other. If one
breaks down, the others keep going. The need for such features became clear as GE worked to erect seven of its own 3.6-megawatt turbines in the Irish Sea in 2003, Mr. Reno said. For instance, more than half the time, GE couldn’t get boats out to its turbines because of bad weather. GE realized it needed both a boat that was better at handling waves and fewer reasons to use it. “We learned something new every day,” Mr. Reno said.
And down the road… Once the turbine is finished, more technological challenges will remain. For instance, LEEDCo will work with Case Western Reserve University to design a foundation that could be used for turbines in Lake Erie and could withstand sideways pressure from floating lake ice in the winter. Should offshore wind become more popular in the Great Lakes, however, GE might locate a manufacturing plant in the Cleveland area, Mr. Reno said. The larger a turbine gets, the more reason there is to build it near where it will be used, he noted, adding that GE already is talking to potential suppliers in the region. “It wants to be built where it’s installed,” he said. ■
CRAIN’S CLEVELAND BUSINESS
We’re going to party like it’s 1934. Not many people mention party and sewage treatment in the same sentence. But we’re not afraid to do it. We’re offering an opportunity to see the science and history behind the service all of us use and pay for every day: wastewater treatment. Our oldest treatment plant, built in the 1930s, will host the Northeast Ohio Regional Sewer District’s OPEN HOUSE on Saturday, August 7, complete with walking tours and fun for the kids. NORTHEAST OHIO REGIONAL SEWER DISTRICT
THIRD ANNUAL
SATURDAY, SA A AUGUST 7 | 10am–2pm Easterly Wastewater Treatment Plant, 14021 Lakeshore Boulevard, Cleveland
RSVP TODAY! Call (216) 432-7304 or visit neorsd.org/openhouse
Medical: Firm has private sector clout continued from PAGE 1
“They are not planning on relocating the business,” Mr. Max said. “If anything … they’re looking to grow the business where it is.” Indeed, Ron Harrington, Edgepark’s CEO and a minority owner in HGI, said the company has added 350 employees over the last five years to reach a staff of about 800. “We project consistent trends going forward as we strive to reach our long-term vision,” he said in response to e-mailed questions from Crain’s. “The growth translates into opportunities and promotions for our existing employees and the need to hire new employees in Northeastern Ohio and the other cities supporting our six distribution centers.” Mr. Harrington said revenue in 2009 was about $500 million, a figure that is expected to reach nearly $600 million this year. HGI’s Edgepark Medical subsidiary was ranked by Crain’s in its June 14, 2010, list of private companies as the eighth-largest privately held company in Northeast Ohio. Mr. Harrington and Steve McLaughlin will continue to hold a minority stake in HGI after it changes hands in the fourth quarter. Mr. Harrington said their operating roles have yet to be determined. Jordan bought its stake in the company for an undisclosed
amount two years ago and chose to put it on the market last spring because one of the two funds it used to buy HGI was nearing the end of its investment cycle, Mr. Max said. Several operating managers also had retired since Jordan bought HGI and new managers had come on board, so the timing seemed right to find a buyer, Mr. Max said. HGI attracted strong interest from multiple “private equity and strategic buyers” once Jordan retained investment banking firm Jefferies & Co. to help sell the business, Mr. Max said. Such interest wasn’t unexpected, said Baiju Shah, president of BioEnterprise Inc., which fosters the creation and growth of health care and bioscience companies in Northeast Ohio. “Several years ago (the Harrington family) sold part of the business to a private equity firm, so it’s absolutely not surprising that they are trading up the chain” to larger private equity firms, Mr. Shah said. Clayton Dubilier brings expertise in creating growth strategies for companies, Mr. Harrington noted. “They also will help us create a broader and deeper employee ownership team; this is important for any growing organization,” he stated. Edgepark Medical contracts directly with more than 600 managed
COMING UP IN CRAIN’S Forty Under 40 Crain’s Cleveland Business is accepting nominations for our annual Forty Under 40 feature, which profiles 40 people under the age of 40 who are making their marks on Northeast Ohio. Nominations can be submitted via the nomination form on Crain’s web site, CrainsCleveland.com. Nominations also can be sent to editor Mark Dodosh via e-mail at
mdodosh@crain.com or via regular mail to 700 W. St. Clair Ave., suite 310, Cleveland 44113. E-mail nominations must include “Forty Under 40” in the subject line. All nominations should be no longer than a single page; longer submissions will be rejected. Self-nominations are welcome, but people eligible for the feature should still be under the age of 40 as of the section’s Nov. 22 publication date. The deadline for submissions is Aug. 9.
care organizations to deliver various medical products to the homes of more than 300,000 patients. Independence Medical is a supplier for about 5,500 commercial clients. ■
15
TAKE A TOUR! SEE THE TRUCKS THAT DO THE DIRTY WORK! MEET WALLY! Space is limited. Walking tours will be scheduled on a first-come basis.
TOURS WILL BE WALKING TOURS. Our Easterly plant does not accommodate bus tours, so tour guests will be required to walk the route. If you have any questions about accessibility, please leave your message at (216) 432-7304.
20100802-NEWS--16-NAT-CCI-CL_--
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
AUGUST 2-8, 2010
LARGEST LAW FIRMS
RANKED BY NUMBER OF LOCAL ATTORNEYS(1)
Firm Rank Local address Phone/Web site
Local attorneys Partners
Female partners
Minority partners Associates Of counsel
Staff
Worldwide attorneys
Salary for associate hired from law school
Managing partner Offices Title
1
Jones Day North Point, 901 Lakeside Ave., Cleveland 44114-1190 (216) 586-3939/www.jonesday.com
236
86
13
4
108
42
442
2,500
$145,000
32
Stephen J. Brogan, managing partner, firm; Lyle G. Ganske, partner-in-charge, Cleveland
2
Baker Hostetler(2) 1900 E. Ninth St., Suite 3200, Cleveland 44114 (216) 621-0200/www.bakerlaw.com
171
104
24
2
49
11
381
658
$135,000
11
R. Steven Kestner, national executive ptnr.; Hewitt B. Shaw, Cleveland office managing ptnr.
3
Calfee, Halter & Griswold LLP 800 Superior Ave., Suite 1400, Cleveland 44114 (216) 622-8200/www.calfee.com
148
73
15
2
42
9
301
166
NA
2
Brent D. Ballard, managing partner Thomas F. McKee, chairman
4
Squire, Sanders & Dempsey LLP 127 Public Square, Suite 4900, Cleveland 44114 (216) 479-8500/www.ssd.com
145
70
14
5
58
17
397
799
$117,000
32
Frederick R. Nance, regional managing ptnr.; David Goodman, Cleveland managing ptnr.
5
Thompson Hine LLP 127 Public Square, Suite 3900, Cleveland 44114 (216) 566-5500/www.thompsonhine.com
135
66
19
3
63
6
342
379
NA
8
April Miller Boise, partner-in-charge David J. Hooker, managing partner
6
Ulmer & Berne LLP 1660 W. Second St., Suite 1100, Cleveland 44113 (216) 583-7000/www.ulmer.com
105
63
10
2
33
9
223
171
NA
4
Kip Reader
7
Benesch, Friedlander, Coplan & Aronoff LLP 200 Public Square, Suite 2300, Cleveland 44114 (216) 363-4500/www.beneschlaw.com
104
51
12
1
40
7
226
162
$110,000
7
Ira C. Kaplan
8
Roetzel & Andress LPA 1375 E. Ninth St., 9th floor, Cleveland 44114 (216) 623-0150/www.ralaw.com
99
68
15
3
31
0
235
208
NA
12
Bradley A. Wright, Akron partner-incharge; Douglas E. Spiker, Cleveland partner-in-charge
8
Tucker Ellis & West LLP 925 Euclid Ave., Suite 1150, Cleveland 44115 (216) 592-5000/www.tuckerellis.com
99
35
6
0
24
40
228
151
NA
5
Joe Morford managing partner
10
Hahn Loeser & Parks LLP 200 Public Square, Suite 2800, Cleveland 44114 (216) 621-0150/www.hahnlaw.com
89
49
7
3
38
2
194
116
$105,000
6
Lawrence E. Oscar managing partner, CEO
11
Reminger Co. LPA 101 Prospect Ave. W., Suite 1400, Cleveland 44115 (216) 687-1311/www.reminger.com
82
64
11
2
16
2
211
125
NA
10
Stephen E. Walters CEO, president
12
McDonald Hopkins LLC 600 Superior Ave., E., Suite 2100, Cleveland 44114 (216) 348-5400/www.mcdonaldhopkins.com
79
45
1
0
28
6
150
132
NA
5
Carl J. Grassi, president Shawn M. Riley, managing partner, Cleveland
13
Brouse McDowell LPA 388 S. Main St., Suite 500, Akron 44311 (330) 535-5711/www.brouse.com
78
43
12
1
27
8
128
79
$83,000
3
Jeffrey T. Heintz, managing partner; Linda L. Bluso, partner-incharge, Cleveland
14
Buckingham, Doolittle & Burroughs LLP 1375 E. Ninth St., Suite 1700, Cleveland 44114 (216) 621-5300/www.bdblaw.com
69
51
12
0
16
0
161
85
NA
4
John P. Slagter managing partner, president
15
Frantz Ward LLP 2500 Key Center, Cleveland 44114 (216) 515-1660/www.frantzward.com
62
37
NA
NA
18
5
113
62
NA
1
Partnership
16
Taft Stettinius & Hollister LLP 200 Public Square, Suite 3500, Cleveland 44114 (216) 241-2838/www.taftlaw.com
60
37
4
1
17
6
106
318
$105,000
8
Stephen M. O'Bryan partner-in-charge, Cleveland
17
Gallagher Sharp 1501 Euclid Ave., 6th floor, Cleveland 44115 (216) 241-5310/www.gallaghersharp.com
54
36
9
2
20
2
122
58
NA
3
Thomas E. Dover managing partner
17
Vorys, Sater, Seymour and Pease LLP(3) 1375 E. Ninth St., Suite 2100, Cleveland 44114 (216) 479-6100/www.vorys.com
54
19
2
0
22
9
80
355
NA
7
F. Daniel Balmert, managing ptnr., Akron; Anthony J. O'Malley, managing ptnr., Cleveland
19
Walter & Haverfield LLP 1301 E. Ninth St., Suite 3500, Cleveland 44114-1821 (216) 781-1212/www.walterhav.com
52
32
4
1
18
2
100
52
NA
1
Ralph E. Cascarilla
20
Weston Hurd LLP 1301 E. Ninth St., Suite 1900, Cleveland 44114 (216) 241-6602/www.westonhurd.com
51
34
4
1
9
8
89
60
NA
4
Carolyn M. Cappel managing partner
21
Krugliak, Wilkins, Griffiths & Dougherty Co. LPA 4775 Munson St. N.W., Canton 44718 (330) 497-0700/www.kwgd.com
42
26
4
0
16
0
85
42
NA
5
Terry A. Moore managing director
22
Fay Sharpe LLP 1228 Euclid Ave., 5th floor, Cleveland 44115 (216) 363-9000/www.faysharpe.com
39
19
3
1
16
4
90
39
$90,000
1
Management Committee
23
Buckley King LPA 600 Superior Ave., 1400 Fifth Third Center, Cleveland 44114 (216) 363-1400/www.buckleyking.com
37
18
7
3
16
3
70
70
NA
8
Brent M. Buckley managing partner
24
Day Ketterer Ltd., Attorneys at Law 200 Market Ave., Suite 300, Canton 44702 (330) 455-0173/www.day-ketterer.com
35
26
3
0
5
4
67
35
NA
3
James R. Blake managing attorney
24
Kohrman Jackson & Krantz PLL 1375 E. Ninth St., 20th floor, Cleveland 44114 (216) 696-8700/www.kjk.com
35
22
7
0
9
2
63
NA
NA
2
Marc C. Krantz
26
Brennan, Manna & Diamond 75 E. Market St., Akron 44308 (330) 253-5060/www.bmdllc.com
34
20
6
1
14
1
59
44
NA
3
Lee S. Walko Matthew A. Heinle co-managing members
26
Pearne & Gordon LLP 1801 E. Ninth St., Suite 1200, Cleveland 44114 (216) 579-1700/www.pearne.com
34
16
1
1
16
2
63
34
NA
1
Management Committee
28
Littler Mendelson P.C. 1100 Superior Ave., 20th Floor, Cleveland 44114 (216) 696-7600/www.littler.com
33
22
6
1
10
1
58
758
NA
49
Sue Marie Douglas office managing shareholder
28
McCarthy, Lebit, Crystal & Liffman Co. LPA 101 W. Prospect Ave., Suite 1800, Cleveland 44115 (216) 696-1422/www.mccarthylebit.com
33
20
2
0
7
5
64
33
$70,000
1
Kenneth B. Liffman managing principal
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Numbers as of June 1, 2010. (2) Starting salary for associates includes a $5,000 stipend. (3) Starting salary for the Akron office is $100,000; starting salary for the Cleveland office is $120,000.
RESEARCHED BY Deborah W. Hillyer
20100802-NEWS--17-NAT-CCI-CL_--
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AUGUST 2-8, 2010
NORTHEAST OHIO'S TOP SBA LENDERS
RANKED BY DOLLAR VALUE OF 7(A) LOANS THROUGH THIRD QUARTER FY 2010
This Company name year Headquarters
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Dollar value of approved loans
Number of loans
1
Huntington National Bank Columbus
45,647,000
255
2
Fifth Third Bank Cleveland
10,849,200
23
3
KeyBank NA Cleveland
9,102,600
61
4
JPMorgan Chase & Co. New York, N.Y.
6,897,400
59
5
Lorain National Bank Lorain
5,626,500
21
6
CFBank Fairlawn
5,177,000
21
7
Ohio Commerce Bank Beachwood
3,895,000
7
8
FirstMerit Bank NA Akron
3,507,200
31
9
First Place Bank Warren
3,339,000
5
10
Grow America Fund Inc. New York, N.Y.
3,271,000
6
11
Westfield Bank FSB Westfield Center
3,178,400
11
12
Citizens Banking Co. Sandusky
2,951,000
7
13
PNC Bank Pittsburgh
2,857,800
10
14
Charter One Bank NA Providence, R.I.
2,411,000
44
15
Citizens Bank Flint, Mich.
2,373,100
15
16
Genoa Banking Co. Genoa
2,309,000
7
17
United Western Bank Denver
2,103,000
2
18
Consumers National Bank Minerva
2,082,100
9
19
First Western SBLC Inc. Dallas, Texas
1,965,000
2
20
U.S. Bank NA Cincinnati
1,843,500
28
21
CIT Small Business Lending Corp. Livingston, N.J.
1,543,000
2
22
First Colorado National Bank Paonia, Colo.
1,500,000
1
23
First National Bank Orrville
1,425,000
5
24
First Financial Bank El Dorado, Ark.
1,409,400
1
25
The Henry County Bank Napoleon
1,350,000
1
26
Compass Bank Birmingham, Ala.
1,328,400
2
27
Enterprise Bank Alison Park, Pa.
1,300,000
1
Reinvest: Activity gears up continued from PAGE 1
Sales of machine tools, for example, are strengthening in Northeast Ohio, said Blaise Buholzer and Joe Tenebria, co-owners of WSM Technology Inc. in Warrensville Heights. The two founded their company and began selling Mitsubisi machine tools in February, and said so far they’ve seen strong demand for machines that cost between $150,000 and $500,000 apiece. “We enjoyed success immediately; after we started, we got our first order three weeks later,� Mr. Buholzer said. Added Mr. Tenebria: “It’s a smaller market than it was — and that’s a reflection of the Cleveland economy, which just got killed. But the companies that survived the recession have more work, because there’s still work that needs to be done.� Other companies are investing in more than just new machines, with some leasing, buying or building new facilities in which to expand. “We’re gong to be close to 375 people by the end of the year. We’ll have added 50 people over the end of last year,� said Tony Siracusa, chief operating officer of U.S. Endoscopy in Mentor. “So one of the things that we’re currently working on is getting into another facility by the beginning of next year.� The maker of medical equipment is seeing its market grow as baby boomers age and need more medical procedures. At the same time, U.S. Endoscopy has hiked its sales force this year to 47 people from 42, is gaining market share and is introducing new products, Mr. Siracusa said. As a result, it needs more space for its office personnel and its production. “We’re looking at leasing about 70,000 square feet of additional space over the next three years. We might
get it all at once, we might get a portion at a time,� said Mr. Siracusa, who added that the company plans to keep all its operations in Mentor if it can.
Capital ideas And while filling that space with equipment won’t be cheap, U.S. Endoscopy is used to investing money back into its business. “From a capital investment standpoint, we’ll spend anywhere from two to three million a year,� Mr. Siracusa said of the next two- to three-year period. “It’s accelerating, but we have reinvested into the business anywhere from one and a half to two and a half million, year over year.� Mr. Hlavin at Thogus is investing in both equipment and people. He’s hired 17 additional workers to bring the company’s work force to 70, made offers to three co-op engineering students from Penn State University and installed two molding machines at his main plant. He also has bought equipment to make prototype plastic parts for a new venture, Rapid Prototype and Manufacturing, also in Avon Lake, that was unveiled just this month. “Now we’re negotiating for some new extruding and thermoforming equipment,� Mr. Hlavin said last Thursday, July 29. “Tomorrow, we’re going to look at it and probably buy our first piece of that equipment.�
A skeptic takes the plunge Even some usually skeptical manufacturers are putting new money into the game. “I really don’t want to do this, because I’m old and I don’t need this — but for the future of the company we decided we needed to do it,� said Roger Sustar, owner and president of contract machining shop Fredon
Corp. in Mentor. Mr. Sustar often views the economy and the government from beneath a brow furrowed with worry and skepticism, if not outright anger over their direction and policies. Nonetheless, he said, he’s investing millions more in increasing his plant space to 60,000 square feet from about 30,000 square feet as he prepares for new business. Fredon just bought 10 acres in Mentor and probably will spend about $3 million building and outfitting itself in new digs, Mr. Sustar said. Soon, he said, the company will be certified by the Federal Aviation Administration to work on a broader array of aerospace projects. Asked whether his investment plans indicate faith in the direction of the economy and the country, Mr. Sustar said, “Faith? I don’t know if it’s faith. But we’re going to improve, we’re going to get better and we’re going to move into a new facility and get into a new area of business.�
You’re fired Nationwide, business spending on capital goods has risen by nearly 16% this year, excluding aircraft purchases, and has been continuing to rise, albeit slowly, in May and June, according to the U.S. Commerce Department. Economists say many businesses still are slow to hire out of anxiety about the future. But some Northeast Ohio manufacturers say a failure to invest to improve their productivity is just not an option. “At some point, the future’s going to be bright, and we have to be ready for the future,â€? Mr. Sustar said. Mr. Hlavin wants to devote his production to customers that will continue to expand and drive his own growth down the road. “We’ve done an in-depth analysis of our entire customer base to see who’s growing and investing in their business,â€? he said. “I actually fired one of my largest customers because of it.â€? â–
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This list was compiled from information provided by the Cleveland District office of the SBA through the third quarter of FY 2010 ending June 30, 2010. The Cleveland District covers 28 northern Ohio counties. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.
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Researched by Deborah W. Hillyer
!+2/. s #).#)..!4) s CLEVELAND s #/,5-"53 s &/24 ,!5$%2$!,% s &/24 -9%23 .!0,%3 s .%7 9/2+ s /2,!.$/ s 4!,,!(!33%% s 4/,%$/ s 7!3().'4/. $ #
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CRAIN’S CLEVELAND BUSINESS
Contact: Phone: Fax: E-mail:
Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com
WWW.CRAINSCLEVELAND.COM
AUGUST 2-8, 2010
REAL ESTATE
AUCTION
RETAIL SPACE
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
OFFICE SPACE
• SEALED BID LIQUIDATION • By Order of Court Appointed Receiver Commercial Retail Shopping/Business Center 34,200 SqFt on 5.782+/- Acres
INDEPENDENCE CORPORATE CENTER 7100 E. Pleasant Valley Rd. Award Winning Building • Class A Office Space • Up to 15K Contiguous SqFt Available
Amberwood Shopping Center 75-85 Amberwood Parkway Ashland, OH 44805
www.independencecorporatecenter.com
Sealed Bids DUE Wednesday, Sept. 1, 2010 @ 5:00PM
Crain’s Online Property Search
216-674-0525
Powered by LoopNet, No. 1 in Commercial Real Estate online Looking for property? Selling or leasing a property? www.CrainsCleveland.com/LoopNet
For advertising opportunities contact Genny Donley 216-771-5172
CLASSIFIED
•GREAT INVESTMENT OPPORTUNITY• HIGH TRAFFIC AREA w/frontage on 2 Roads Corner of Amberwood & Walmart 34,200 SqFt Multi-Tenant Shopping Center 5.782 +/- Acres 243 Parking Spaces • Pylon Signage on Rt. 250 Located just West of I-71 on Rt. 250 Adjacent to NEW Wal-Mart Super Center Great Location Newer Facility & Good Cash Flow!!
BUSINESS SERVICES
FLYNN ENVIRONMENTAL For Assessments
(800) 690-9409 www.flynnenvironmental.com
Landerhaven The Face-to-Face Place 440.449.0700
ExecutiveCaterers.com
The Skutch Company, Ltd. - Receiver For More Info., Terms & Bidding Procedures go to Our Website www.wilsonauctionltd.com Or, contact any of the following for more detailed information, Due Diligence Packets & to Register for a Bidders Packet
E-MAIL US YOUR AD GDONLEY@CRAIN.COM
FOR SALE Ohio Desk Showroom Clearance Sale 1122 Prospect Avenue 8 to 5 Mon-Fri.
BUSINESSES FOR SALE Business for Sale
Call Charlene Joyce, Showroom Manager for details
Established sml. bus. provides svcs/products to companies. Can be run by 1 person. Good growth potential Age forces sale. Pls respond to:
216-623-0600
jaspur95@gmail.com
Must sell two showroom floors of workstations, files, and seating to make room for new product.
Crain’s Executive Recruiter Auctioneers: Wayne M. Wilson, CAI Brent J. Wilson, CAI www.WilsonAuctionLtd.com
AUCTION MULTIPLE COMMERCIAL PROPERTIES 8/12/2010 - Columbus, Ohio 19+ Office, Medical & Industrial Some 100% Occupied Investments For further information contact:
List your Industrial, commercial or retail space Here!
Fred J. Graft Auctioneer - Broker
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Crain’s Cleveland Business’ classifieds will help you fill that space..
Contact Genny Donley at 216.771-5172
Sales Support Assistant Job Responsibilities: • Support event and conference manager with logistics, promotions, event set-up and tear down as needed. • Assist marketing manager with marketing and promotional coordination as well as execution on an as needed basis • Handle all classified ad sales including prospecting, order entry and online additions. • Fulfill Media kits/info requests • Track monthly competitive magazines, compile info on a spreadsheet and distribute. • Phone and Reception back up for Office Manager • Other duties as assigned.
Qualifications: • Associates degree in business, marketing, administrative support or equivalent • 2-4 years of experience in a sales support and administrative capacity • Proficient with MSWord, Excel, PowerPoint and the Internet required • Must be able to multi-task, be detail oriented, meet deadlines, have professional demeanor and previous experience with customer contact required • Proven customer service skills Crain Communications offers a competitive salary, a generous benefits package, profit sharing, and a friendly work environment. This is a great time to join our organization -- a profitable, well established publishing leader. Crain Communications Inc. is a Equal Opportunity Employer
ATTENTION REALTORS: Now is a great time to promote your Luxury Properties to high-end prospects AND receive reduced rates onyour advertising.
Call Genny Donley at (216) 771-5172 or e-mail GDonley@Crain.com for more details.
To apply for this position please visit our website at http://www.crain.com/careers/ and search under latest positions.
The Cleveland-Cuyahoga County Port Authority is currently seeking the following: Vice President of Maritime Business Development The Vice President of Maritime Business Development is responsible for directing and administering the maritime programs of the Port, promoting the use of water transportation both internationally and Interlake as the most cost effective, environmentally sound mode of transportation for goods shipment, and insuring that the industries of Northeast Ohio have a competitive advantage through access to the waterborne movement of goods. This position is responsible for overall leadership, design and planning of the current/proposed maritime facilities, and marketing and trade development programs to attract new customers, carriers and cargo shippers to the Port and increase sales of current Port customers.
Director of External Affairs This position will require development, implementation and management of governmental affairs and public relations. Including developing and maintaining strong relationships with federal, state and local elected and appointed officials, staff, trade organizations, local media and all relevant external stakeholder groups. Direct public relations function through the management of outside contractors.
Application Deadline: August 13, 2010 For a complete description of each position, please visit our website at www.portofcleveland.com or Send cover letter and resume to: Cleveland-Cuyahoga County Port Authority 1375 E. Ninth Street – Suite 2300 Cleveland, OH 44114 Email: melisa.freilino@portofcleveland.com
Solar Outside Salesperson Third Sun Solar is a 10 year old market leading solar energy firm experiencing rapid growth. Full time sales position, based in greater Cleveland. Activities include: developing existing leads, prospecting for new opportunities and creating and delivering customized, financially based, proposals to close sales. You must possess successful sales experience, college degree, excellent writing, presenting and computer skills. To apply, please see the About Us: Job Opportunities section of our website: www.third-sun.com.
To place your Executive Recruiter ad Call Genny Donley at 216-771-5172
Third Sun Solar and Wind Power is an equal opportunity employer and does not discriminate against on the basis of race, color, creed, religion, ancestry, age, sex, marital status, national origin, disability or handicap, or veteran status
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THEINSIDER
THEWEEK JULY 26 – AUGUST 1 The big story: The Cleveland Clinic broke ground on a $75 million home for its Pathology and Laboratory Medicine Institute and Cleveland Clinic Laboratories — a move that will create hundreds of new jobs. Consisting of steel and glass, the three-story, 135,000-square-foot structure will be located at East 105th Street and Carnegie Avenue. Upon its planned completion in the fourth quarter of 2011, the building will become the easternfacing cornerstone of the main campus. The Clinic plans to expand its current laboratory staff of 1,300 by about 350 over the next five years.
Come together: Cleveland’s convention and visitors bureau and the Greater Cleveland Sports Commission are joining in what the two nonprofits describe as a “coordinated alliance,” which they say means operating separately but under one chief executive, the sports commission’s David Gilbert. Dennis Roche, who now heads Positively Cleveland, the updated name for the convention bureau, will step down at the end of 2010 into a consulting role. End of the road: Solon-based Insurance.com was sold to a California online marketing company, which will shut down the company’s Solon office and will eliminate 144 positions over the next year. According to a notice filed with the Ohio Department of Job and Family Services, Insurance.com on July 26 agreed to sell its assets to QuinStreet Inc. of Foster City, Calif. Insurance.com’s headquarters will close in the next several months. A source close to the deal said Insurance.com will keep a small team of people at its Solon office during a threemonth transition. QuinStreet went public last February after buying Insure.com in fall 2009 for $16 million.
Healthier numbers: Health care companies in Northeast Ohio attracted more venture capital dollars during the first half of 2010 than they did during the like period last year, but not nearly enough to rival money raised in 2008 or 2007, according to BioEnterprise Corp.’s Midwest Health Care Venture Investment Report. Seventeen health care companies attracted a total of $36.7 million, up about 20% from $30.5 million during the first half of 2009, but down 39% from $59.9 million during the first half of 2008 and off 82% from $199.1 million during a record-setting first half of 2007. Beige Book blahs: The latest Beige Book report by the Federal Reserve Board indicated that economic activity continued to rise in most Fed districts except Cleveland and Kansas City, where “the level of economy activity generally held steady.” Zeroing in on the Cleveland Fed district, the Fed said manufacturers reported the rise in production that began late last year “is leveling off.” According to the report, capital outlays “continue at relatively low levels, and business owners are approaching spending decisions with caution.”
This and that: Great Lakes Pharmaceuticals Inc. of Beachwood raised $3.1 million to finish a clinical study of a technology it is developing to reduce infections caused by catheters. … Bird Technologies Group, a Solon-based supplier of radio frequency measurement and management technology, said it has acquired X-Com Systems of Reston, Va., for an undisclosed price. X-Com, founded in 1994, makes radio frequency (RF) test equipment, among other things.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Effort on to straighten out roundworm problem
■ It sounds so bad: The U.S. headquarters
of a German wind developer leaves Cleveland for Boulder, Colo. The reality is much kinder to Cleveland, if not ideal, according to Michael Rucker, CEO of juwi wind, which is part of juwi group, a German renewable energy company. A few executive and administrative positions at juwi’s office at 1900 Superior Ave. are gone, but the company so far this year has added a few people to the office, keeping the size of its staff consistent at about 15. Plus, they’re getting a bigger office. They’re about to move into a space that’s more than twice as big, at the corner of Euclid Avenue and East Fourth Street, so juwi can keep hiring locally, Mr. Rucker said. The company plans to hire at least two more people in Cleveland this year. The Cleveland office now consists mainly of project developers and the company’s real estate team. The Boulder office, however, is growing faster for the moment. Juwi wind plans to add 20 people in that city, which also is home to the parent company’s solar business. Mr. Rucker is one of the additions. Hired in April, he spoke with Crain’s via phone while driving a car full of his belongings to Boulder from California, where he previously worked for wind turbine maker Clipper Windpower. Hiring should continue in Cleveland, too, depending on the strength of the U.S. wind energy market, Mr. Rucker said. “I really don’t want to give the impression that we’re abandoning Ohio,” he said. — Chuck Soder
WHAT’S NEW
BEST OF THE BLOGS
■ An estimated 14% of the American population suffers from roundworm passed from animals, but a new foundation aims to put an end to that problem in Cleveland. The van Bakeren Foundation is a new nonprofit consisting of veterinarians, doctors, researchers and public health professionals that is raising money to stop the spread of zoonotic diseases such as parasitic roundworms through research, education and the care of animals, said Dr. Anna van Heeckeren, a veterinarian and executive director and chair of the foundation. In its first initiative, the foundation is trying to raise $500,000 by next July to launch a mobile vet clinic that would provide subsidized animal care in underserved communities, which is where zoonotic diseases are most prevalent, and to collect data for future research, she said. Cuyahoga County is estimated to have 10,000 dogs infected with roundworm, she said. The foundation also has created programs to educate students, veterinarians and allied health professionals about zoonotic diseases, Dr. van Heeckeren said. Over the long term, the foundation hopes to build a veterinary health campus that would perform more difficult procedures on animals and to develop a vaccine for parasites, she said. — Shannon Mortland
A fair wind still blows in Cleveland
Excerpts from blog entries on CrainsCleveland.com.
As Cramer sees it, Eaton’s CEO Cutler is a cut above
COMPANY: Ridgid, Elyria PRODUCT: K-45 manual and K45AF Autofeed drain cleaning machines Ridgid says its new drain cleaning machines are ideal for uses such as sinks, bath tubs and showers, and they come with variable speed up to 600 RPM. The K-45 drain cleaners are designed for ¾- to 2½-inch drain lines. Cable is available in three sizes — ¼, 5 16 and 3 8 each in varying of lengths of up to 50 feet. Ridgid says the K-45AF drain cleaner features a two-way Autofeed function, enabling the operator to “clean drains better and faster, quickly working back and forth through drain blockages to completely clear lines.” The ability for users to advance and retrieve the cable without stopping to reverse the motor reduces job times by about 15%, the company says. An inner drum on the machines prevents leakage to reduce on-site cleaning and cleanup times. The K-45 machine weighs 12.6 pounds and the K-45AF machine weighs 13.8 pounds, making both easy to carry and store, Ridgid says. For information, visit www.ridgid.com. Send new product information to managing editor Scott Suttell at ssuttell@crain.com.
■ Eaton Corp.’s Sandy Cutler is one of the top CEOs in America. So says no less an authority than CNBC’s Jim Cramer, who maintained recently on his “Mad Money” show that top-quality CEOs give some companies, including Eaton, a huge edge in the still-rough economy. “If you’re wondering how the Dow can rally 202 points (on July 22), with the S&P 500 popping a sizable 2.3%, all in the face of weak home sales, disappointing jobless claims and little to no growth, look no further than some of Cutler America’s top CEOs,” according to the CNBC recap of the show. “They were the driver behind stocks’ big push up.” Mr. Cutler and the CEOs of companies including 3M, Pepsico and UPS “are delivering results in spite of a struggling U.S. economy,” Mr. Cramer said. Indeed, Eaton posted great secondquarter numbers, and it projects strong demand for projects for the rest of the year.
Cleveland Research says huge retailer has its back to wall ■ A report about a strategy change at Walmart Stores Inc. from Cleveland Research Co. caught the attention of the Bloomberg news service. The Cleveland-based independent equity research firm noted that Bill Simon, the new U.S. stores chief at Walmart, is “shifting
If the name is Amsdell, the business is self-storage ■ The sun rises. The sun sets. The Amsdells are buying new self-storage warehouses again — and just added two to the fold. Todd Amsdell, president of Compass Self Storage, announced last Friday, July 30, that Compass acquired two properties in Novi and Rochester Hills, Mich. In a news release, Mr. Amsdell said the miniwarehouses are the company’s first acquisitions in the Detroit area. Compass’ web site says it owns eight other properties in Florida. Mr. Amsdell did not return two calls by mid-day Friday, but it looks like a classic sign Mr. Amsdell is ramping up the family business he, his father, Bob Amsdell, and uncle, Barry Amsdell, know so well. The Amsdells parted ways with the bulk of the 377-property self-storage empire that they had taken public in the U-Store-It Trust after a public spat with Dean Jernigan, a CEO they recruited who wrested control of the company from them and moved most operations from here. (The company retains a Cleveland headquarters address.) Compass operates from the Amsdell family’s original Middleburg Heights headquarters. And, to boot, Steve Hryszko, a Cleveland-based CB Richard Ellis vice president and former Amsdell acquisition specialist, represented the seller in the deal. Terms were not disclosed, and Mr. Hryszko declined comment on them. — Stan Bullard
away from widening profit margins through inventory reductions to focus on sales growth,” according to Bloomberg. “We are seeing the ‘old’ Wal-Mart approach surface on merchandising as well as pricing,” wrote Jeff Stinson, a Cleveland Research analyst. “Rebuilding top-line sales looks to be the No. 1 objective.” Bloomberg noted that sales at U.S. stores open at least a year have fallen for four consecutive quarters after the removal of grocery products and increases in gasoline prices, putting pressure on Mr. Simon to lure back shoppers. Walmart did not make Mr. Simon available to Bloomberg to discuss any changes the retailer is making.
For job-hunting grads, Cleveland’s not bad ■ College graduates should take a hard look at coming to Northeast Ohio. That’s the opinion of Bloomberg BusinessWeek, which puts Cleveland at No. 17 on its list of “Best Cities for New College Grads,” up 11 spots from its 2009 ranking. The city comes out ahead of several places, including Charlotte and Seattle, that have much better reputations as good spots for young talents. (No. 1 on the list was Houston.) “Although manufacturing remains (Cleveland’s) primary industry, science and engineering run a close second, and the city is emerging as a research base for biotechnology,” the magazine reported. Now obviously, calling any city a “best place” for new grads these days is relative, since it’s awfully hard for anyone just out of college to find a good job. But we hope your cynicism doesn’t run quite as deep as that of one commenter, who noted of this blog post, “And unemployment checks go a long way in Cleveland!”
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