Print drives branding,online generates more leads by Dan Fiore

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CRAIN’S CLEVELAND BUSINESS

FEBRUARY 2-8, 2009

INSIDE

REAL ESTATE

12 GOODYEAR’S NEW AKRON HQ STUCK IN NEUTRAL AS CREDIT ISSUES STALL PROGRESS.

COMMERCIALANDINDUSTRIAL

SPACE TO SPARE With retailers’ mass exodus in full stride, real estate firms expect continued struggle to find tenants By BRAD DICKEN clbfreelancer@crain.com

he retail industry has been taking a pounding in the battered economy, leaving a growing number of storefronts sitting dark and empty. In recent months, Circuit City, Value City, Linens-N-Things, Steve and Barry’s and Bennigan’s, to name a few, have gone out of business or significantly contracted their operations. “2008 was not a great year for retail, and the projections look like 2009 is going to be worse,” said Tom Flynn, senior vice president of the CB Richard Ellis retail sales division in Cleveland. Later this month, CB Richard Ellis, one of the world’s largest real estate firms, will release its annual report detailing just how much vacant space there is in the region. Mr. Flynn expects the numbers will be worse than they were a year ago, although he couldn’t say yet just how bad it will be.

While the recent rash of shutdowns certainly is notable, store closings aren’t uncommon, particularly in January after the holiday season, said Susan Godorov, vice president of marketing and lifestyle retail for Centro Properties Group, which owns Midway Mall in Elyria and the new Westgate in Fairview Park. Midway Mall lost its Dillard’s location a few years ago, and the retail area recently lost a Circuit City, Steve and Barry’s and several other stores. Compared to filling a smaller storefront in a shopping center or strip mall, getting a tenant in a cavernous big-box store or a larger anchor store isn’t quite as easy, said Kory Koran, Rocky River’s director of economic and community development. “You definitely have to look to particular retailers that could take a large space, or you look at nontraditional retailers, you subdivide,” Ms. Godorov said.

Mixing it up Finding alternatives for vacant retail See SPACE Page 13

JESSE KRAMER

Rockport Plaza on Center Ridge Road in Rocky River still is looking for a tenant for the space Target vacated in the big retailer’s move to nearby Westgate. Randy Goodman, principal at the Goodman Real Estate Services Group, which is handling the Rockport property, said the space will be hard to fill for a while.

CLOSING TIME A look at some of the store closings due to major retailers exiting the Northeast Ohio market: ■ Circuit City: In November, the embattled electronics company announced it would close six Northeast Ohio stores, in Brooklyn, Cuyahoga Falls, Elyria, Garfield Heights, Mayfield Heights and Mentor, and in January it closed two area stores, in Canton and Bainbridge Township. ■ Value City: Three stores closed in February, and three area locations — in Parma, Akron and Canton — closed in November when the company closed

all Value City stores. ■ Linens-N-Things: The retailer closed stores in Aurora, Cuyahoga Falls, Mayfield Heights, Avon and Mentor. ■ Steve and Barry’s: The discount clothing retailer closed four stores in September, and in November closed its remaining stores in Richmond Heights, Akron and Canton. ■ Bennigan’s: The company in July abruptly ceased operations, shuttering restaurants in Mentor, North Olmsted, Elyria, Cuyahoga Falls and Canton.

With glut of existing buildings, bargains available in office market By STAN BULLARD sbullard@crain.com

et ready for recession chic to remake the office market. In the same way that consumers switched to fast food from higher-priced restaurants, wary businesses shedding employees and slashing spending are developing an appetite for office-market bargains. With the planned Ernst & Young Tower in the Flats stalled due to the financial crisis and other plans falling aside, existing buildings

downtown suddenly look more attractive. And with little suburban office construction, the same focus on existing buildings is occurring regionally. Online data provider CoStar says 13 million square feet of empty office space is available in Northeast Ohio. Paul Voinovich, a principal at office design firm Vocon Inc. in Cleveland, said the environment is such that “not only are existing buildings becoming more of an opportunity, existing offices are becoming more of an opportunity.” He said tenants want to make

existing offices work or upgrade at little added cost. “It’s no longer a question of attracting and keeping employees,” Mr. Voinovich said. “It’s a question of, ‘can our employees live with this? They should be glad they have a job.’ It is a very different outlook from six months ago.” Tenants now want short-term deals of five years or less to be nimble so they can adapt to changes in the economy, said Rico Pietro, a vice president at the Cresco brokerage in Independence. Landlords need long-term leases for pricey updates or to construct

new buildings. Moreover, bargains are surfacing as companies vacate offices where they still are on the hook for rent. “There is a constant stream of new sublease space hitting the market that is aggressively priced,” said George Hutchinson, CEO of Valley View’s Allegro Realty Advisors. More empty space likely will hit the market from business mergers and failures, such as when PNC Bank of Pittsburgh consolidates operations with National City Corp. “We could have an organic building boom as this happens,”

said Al Wiant, a senior vice president in CB Richard Ellis’s Cleveland tenant representation unit. Mr. Wiant said the market’s challenges worry him as a resident of the region. “If you can put aside your selfinterested motives as a mid-career professional (who could make more money if landlords are hungry), the community and the city absolutely has to get a handle on this,” Mr. Wiant said. CB put downtown vacancy at 18% and suburban vacancy at 17% effective Jan. 1. CB calculates See OFFICE Page 13

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FEBRUARY 2-8, 2009

REAL ESTATE

New Goodyear HQ project caught in credit crunch By CHRISTINE GORDILLO clbfreelancer@crain.com

dd the Goodyear world headquarters project in east Akron to the list of proposed developments that have stalled due to the recent credit freeze. The $900 million, 600-acre project, originally scheduled to break ground this past fall, grew out of a partnership between Goodyear Tire & Rubber Co., Industrial Realty Group (IRG) of Los Angeles, the state of Ohio, the city of Akron, Summit County and the Summit County Port Authority. While the public financing portion of the project is in place, including a $30 million state tax credit to Goodyear for the retention of 2,900 jobs, the unwillingness of private lenders to finance almost anything these days has left the development in limbo. “The financial crisis in this country is the thing that’s keeping us from closing,” said Debra Harrell, IRG’s senior vice president who is overseeing the project, which if finished as planned would be the biggest development in Akron’s history. Ms. Harrell said a new start date cannot be determined until the final leg of financing is secured. The deal calls for IRG, a developer known for its adaptive reuse of older buildings, to construct and lease to Goodyear global and North American Tire headquarters buildings. IRG also plans to buy most of Goodyear’s existing properties that the tiremaker will lease back, including the company’s Tech Center and the building where it produces NASCAR tires. A 125-room Wyndham hotel, conference center and spa also will be part of the first phase of construction.

Goodyear’s current headquarters and other buildings along East Market and River streets that IRG plans to buy are scheduled to be renovated as part of the second phase of construction, which includes a retail town center, offices, an industrial park and residential components. That portion of the project has been dubbed Akron Riverwalk and will straddle the Little Cuyahoga River north of Interstate 76. Despite the brick wall IRG has encountered with private financing, the vested parties are proceeding with site preparations. Environmental cleanup already is under way, said Robert Bowman, Akron’s deputy mayor for economic development, and critical infrastructure improvements are forging ahead. “Based on the high level of commitment in the plan by all parties, a number of long-lead projects related to the project will be moving forward,” Goodyear spokesman Scott Baughman said by e-mail. “These include associated roadway construction projects, the relocation of a major sewer line … and the removal of an out-of-service power plant near Goodyear’s Technical Center.” The city of Akron in December secured a $3 million Clean Ohio Revitalization Fund grant for asbestos abatement, remediation and demolition of the old powerhouse. The city last spring also won a $750,000 Clean Ohio Assistance Fund grant to clean up and demolish the 99 Seiberling Street building, a large structure located in the heart of the planned mixed-use center. Until the final financing piece falls into place, all involved are doing what they can. “We’re keeping the wheels on it, and unfortunately, the lenders are behind us,” IRG’s Ms. Harrell said. ■

Executive Associate

Bradley H. Adams Associate

Robert C. Hartman Michael Pascucci Robert Speight

Heery International is proud to announce new appointments to Executive Associate and Associate. We applaud the high standards these individuals set and achieve on a daily basis. They are integral to our continued success. Terminal Tower - Suite 2175 50 Public Square Cleveland, OH 44113 (216) 781-1313 • www.heery.com

Sally Levine, owner of Levine Architecture & Design Ltd. and a proponent of universal design, provided the architectural services for the space plan and design of Any Lab Test Now in Richmond Heights, at which she is pictured. Ms. Levine said she designed that particular space to make it easy to navigate. JANINE BENTIVEGNA

A broad approach Proponents of forward-thinking universal design tout benefits enjoyed by majority of a space’s users By SHARON SCHNALL clbfreelancer@crain.com

rchitect Sally Levine, owner of Levine Architecture & Design Ltd. of Shaker Heights, is an active proponent of universal design, the discipline that addresses how thoughtful design can serve the broadest number of people while meeting specific user needs. “Universal design is a framework, not a stylistic approach,” said Ms. Levine, who was first introduced to the principles in 1997. “It can be incorporated into any style. It can be incorporated into every building type. It can be expressed in any number of materials.” Also known as inclusive design or design for all, universal design not only addresses users’ diverse and changing physical and cognitive abilities, it aims to benefit all people who use a space or item. The approach can be incorporated throughout, from a building’s design and landscape to furniture, signage, technology and gadgets. Universal design solutions can be as simple as raising electrical outlets so people with arthritis do not have to bend down. Ultimately, the practice emphasizes that the majority benefits from a universal design option developed to meet the needs of a focused user group. Consider the raised electric

outlets — toddlers cannot reach them. And other users — some with back pain, others wanting to remain ache-free — also reap the benefits. “Universal design looks at the human condition, across the board, and understands that it’s constantly in flux,” said Ms. Levine, who also is a lecturer at Cleveland State University and Case Western Reserve University.

Expanding users Although universal design dates to the 1950s, the movement didn’t take off in this country until the late ’80s, said Valerie Fletcher, executive director of the Institute for Human Centered Design of Boston. While not exclusively about accessibility and meeting Americans with Disabilities Act requirements, universal design did receive a boost from the accessibility movement. But, universal design goes beyond meeting a checklist of requirements. “Since the ADA’s design guidance focuses on a small portion of the spectrum of ability, primarily wheelchair users, and does not apply to products or residential design, universal design is more far-reaching,” Ms. Fletcher said. Big-handled flatware is an example of universal design that falls outside the scope of the ADA. Stephanie FallCreek, president and CEO of Fairhill Center of Cleveland, a nonprofit organization

that focuses on successful aging, said larger flatware handles allow for better grasping among older people with arthritis, and the design is also ideal for dexterity-mastering children and the “average butterfinger.” “And that’s what universal design means: Better for you, better for him, better for her, better for everyone,” Dr. FallCreek said. Ms. Levine has been an implementing and consulting architect at Fairhill Center, a multi-tenant, circa-1928 campus. She designed the center’s intergenerational playground and garden and advises regarding the incorporation of universal design features. Ms. Levine also encourages clients to offer multiple lighting options, including on- and off-task lighting at desks. Fluorescent lighting, she said, can’t serve all visual abilities. To address current and future hearing abilities, Ms. Levine recommends installing sound absorbent materials and small, private spaces amid a cubicled floor plan. “The idea is that you prepare ahead of time,” she said.

Catching on As construction operations director for Greater Cleveland Habitat for Humanity, Thomas Meyer includes universal design features in the homes the organization builds for families in need. In 2004, he became aware of universal design from attending a lecture featuring Ms. Levine. He has been instrumental in including counter space of different heights between dining and kitchen areas of new Habitat homes. Mr. Meyer, however, is in the minority of advocates, and for now, Ms. Levine may professionally be ahead of the curve. Further interest and incorporation of universal design is anticipated, but change takes time. Baby boomers, wanting to remain in their homes as they age, will be catalysts for adopting this philosophy, she said. Also, universal design will increasingly be suggested by design professionals as it is taught at colleges, she added. While curricula have expanded around the world, the United States is not a leader; courses, not majors, are offered at some universities, Ms. Fletcher said. Misperceptions that the look is clunky, industrial and expensive also must be overcome, Dr. FallCreek said. “We will have arrived when universal design is the default and not the exception,” she said. “And we’re not there yet.” ■

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REAL ESTATE

Space: Continued store closings likely

powerful tools we have for fighting sprawl,” Ms. Christiensen said.

continued from PAGE 11

Exactly how long the retail industry will have to endure the downturn is anybody’s guess, although most experts say that it will last at least until the fall, if not into 2010. And things will likely get worse before they get better. Over the past eight years or so, there was rapid expansion in the retail sector as retailers tried to grab more of the market share, but that’s changing now, Mr. Flynn said, as companies look to their bottom lines. “You will see them shed the unprofitable stores,” he said. Mitchell Schneider, president of

space is exactly what many in the industry are doing, particularly at the more traditional shopping centers, which have been struggling. The old Westgate Mall, for example, was torn down in 2006 to make way for an open-air shopping area. One of the tenants at Westgate — which has since dropped mall from its name — is Target, which closed a nearby location at Rockport Plaza in Rocky River to open a larger store. Randy Goodman, the principal of the Goodman Real Estate Services Group, which is handling the Rockport property, said it’s a good location, but it may be hard to fill for a while. A deal to bring Best Buy to the plaza, which also has a shuttered grocery store, fell apart, and there aren’t many prospects on the horizon for Rockport or any retail location, he said. “It doesn’t matter how good a space is, it’s not going to fill,” he said. Erin Hershkowitz, a spokeswoman for the International Council of Shopping Centers, said necessity is forcing property owners to look at less traditional tenants and uses for their larger empty spaces, including the creation of subdivisions, offices and residential areas. Those options have the benefit of creating a built-in customer base for the stores that remain and may outlast a bad economy better than a

troubled retailer, she said. “The trend has really been mixed-used development,” she said. “A lot of centers already have incorporated hotel, residential, retail, office. So if they lose a retailer during an economic downturn, they retain some other tenants.” But an empty big-box store can have other uses as well, said Julia Christiensen, the Henry R. Luce Visiting Professor of the Emerging Arts at Oberlin College, and author of the book “Big Box Reuse.” Some stores, for instance, have stipulations in their contracts defining who can take over the

vacant space when they close a store, she said. “You can bet a Wal-Mart building will never be a Kmart building,” she said. That’s prompted the transformation of some empty stores into something entirely different. In her native, Bardstown, Ky., Ms. Christiensen said an empty Wal-Mart was torn down and a courthouse was built on the land. But the idea of remaking an existing structure into something entirely different can also help the planet, she said. “Reuse is one of the most

Treading water

Lyndhurst-based First Interstate Properties Ltd., agreed. Mr. Schneider’s firm oversees properties such as Avon Commons, Steelyard Commons and Legacy Village. Of the approximately 4 million square feet in retail space held by First Interstate, Mr. Schneider estimates his company has 97% to 98% occupancy rate. The biggest hit the company took was the loss of a Linens-N-Things in Avon. “I’m sure that we’ll fill the space eventually. It’s just a question of when the economy turns around,” he said. Mr. Flynn said retailers are now in survival mode. “The benchmark is going to be to not lose ground, not growth,” he said. ■

MY BENESCH “We’re opportunity-focused and so is our law ﬁrm.” Richard & Steven Soclof Soclof Enterprises

Office: Cleveland highlights cheap downtown rent in sales pitches continued from PAGE 11

companies could shed more than 2 million square feet of office space. However, Mr. Wiant believes there is an opportunity lurking in the bedlam: Owners of existing buildings could quickly renovate at a much lower cost and catch this new frugality. A rent of $35 a square foot for a new building was a tough sell before; now, good space at $20 a square foot is doubly attractive as existing leases expire.

Drawn to the city Capitalizing on bargain rents is a city of Cleveland strategy, said Tracey Nichols, Cleveland director of economic development. She noted that as a factor in recent deals that attracted tech firms here from other regions. With funds for tenant updates tight, she noted the city of Cleveland’s vacant property initiative allows a company to obtain a partially forgivable loan of up to $300,000 to help retrofit office space if a building is more than 40% vacant or it occupies an office emptied by more than 50 lost jobs. The region might even catch a new tide rising in the recession. Mr. Pietro said there are multiple requirements afoot nationally to combine operations to slash costs that could be a fit for the region’s cheap offices — and aid its economy. ■

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 bfca.com/myteam

Cleveland • Columbus • Philadelphia • Shanghai • Wilmington

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FEBRUARY 2-8, 2009

LARGEST HOTELS

RANKED BY NUMBER OF GUEST ROOMS

Name Address Rank Phone/Web site

1 2 3 4 5 6 7 8 9 10 11

Kalahari Resort & Convention Center 7000 Kalahari Drive, Sandusky 44870 (877) 642-6847/www.kalahariresorts.com

Hotel Breakers One Cedar Point Drive, Sandusky 44870 (419) 627-2106/www.cedarpoint.com

Renaissance Cleveland Hotel 24 Public Square, Cleveland 44113 (216) 696-5600/www.renaissancecleveland.com

Crowne Plaza Cleveland City Centre Hotel 777 St. Clair Ave. N.E., Cleveland 44114 (216) 771-7600/www.clevelanddowntownhotel.com

Hilton Cleveland East/Beachwood 3663 Park East Drive, Beachwood 44122 (216) 464-5950/www.hiltonclevelandeastbeachwood.com

Cleveland Marriott Downtown at Key Center 127 Public Square, Cleveland 44114 (216) 696-9200/www.clevelandmarriottdowntown.com

Doubletree Hotel Cleveland Downtown/Lakeside 1111 Lakeside Ave., E., Cleveland 44114 (216) 241-5100/www.clevelanddowntownlakeside.doubletree.com

Cleveland Airport Marriott 4277 W. 150 St., Cleveland 44135 (216) 252-5333/www.clevelandairportmarriott.com

Holiday Inn Cleveland South/Independence 6001 Rockside Road, Independence 44131 (216) 524-8050/www.hiindependence.com

Breakers Express One Cedar Point Drive, Sandusky 44870 (419) 627-2106/www.cedarpoint.com

Holiday Inn Strongsville 15471 Royalton Road, Strongsville 44136 (440) 238-8800/www.intercontinentalhotels.com

Number of Number of guest meeting rooms rooms

Meeting space (square feet)

Name Address Rank Phone/Web site

884

95,000

650

2,898

491

62,000

472

28,000

404

16,000

400

17,000

379

10,347

372

15,500

364

18,100

350

303

12,500

299

35,000

13 14 15 16 17 18 19 19 21 22 23 24 25 26 26 28

Cleveland Marriott East 26300 Harvard Road, Warrensville Heights 44122 (216) 378-9191/www.clevelandmarriotteast.com

295

15,000

Hyatt Regency Cleveland at the Arcade 420 Superior Ave., Cleveland 44114 (216) 575-1234/www.cleveland.hyatt.com

293

7,100

Sheraton Cleveland Airport Hotel 5300 Riverside Drive, Cleveland 44135 (216) 267-1500/www.clevelandairportsheraton.com

287

22,000

Akron City Centre Hotel 20 W. Mill St., Akron 44308 (330) 384-1500/www.akroncitycentrehotel.com

274

18,000

Embassy Suites Hotel Cleveland Rockside 5800 Rockside Woods Blvd., Independence 44131 (216) 986-9900/www.embassysuites-rockside.com

271

17,500

Holiday Inn Elyria/Lorain 1825 Lorain Blvd., Elyria 44035 (440) 324-5411/www.holiday-inn.com/cle-elyria

250

9,552

Hilton Garden Inn Cleveland Downtown 1100 Carnegie Ave., Cleveland 44115 (216) 658-6400/www.clevelanddowntown.stayhgi.com

240

20,000

Sawmill Creek Resort & Conference Center 400 Sawmill Creek Drive, Huron 44839 (800) 729-6455/www.sawmillcreek.com

240

50,000

Holiday Inn Hudson 240 Hines Hill Road, Hudson 44236 (330) 653-9191/www.holidayinn.com/akron-hudson

239

15,000

Crowne Plaza Cleveland Airport 7230 Engle Road, Middleburg Heights 44130 (440) 243-4040/www.crowneplaza.com/clevelandarpt

238

16,000

Castaway Bay 2001 Cleveland Road, Sandusky 44870 (419) 627-2106/www.castawaybay.com

237

7,691

Cleveland Clinic Guesthouse 9601 Euclid Ave., Cleveland 44106 (216) 707-4200

232

Bertram Inn and Conference Center 600 N. Aurora Road, Aurora 44202 (330) 995-0200/www.thebertraminn.com

224

27,000

Embassy Suites Hotel Beachwood 3775 Park East Drive, Beachwood 44122 (216) 765-8066/www.embassybeachwood.com

216

5,878

Quality Inn and Suites Richfield 4742 Brecksville Road, Richfield 44286 (330) 659-6151/www.clevelandrichfieldhotels.com

216

30,000

Sheraton Suites Akron/Cuyahoga Falls 1989 Front St., Cuyahoga Falls 44221 (330) 929-3000/www.sheratonakron.com

214

23,000

5909 Milan Road, Sandusky 44870 (419) 621-0200/www.sanduskyhotels.com

Ritz-Carlton, Cleveland 1515 W. Third St., Cleveland 44113 (216) 623-1300/www.ritzcarlton.com

Wyndham Cleveland at PlayhouseSquare 1260 Euclid Ave., Cleveland 44115 (216) 615-7500/www.wyndhamcleveland.com

Hilton Akron/Fairlawn 3180 W. Market St., Akron 44333 (330) 867-5000/www.akronhilton.com

Hampton Inn Cleveland Downtown 1460 E. Ninth St., Cleveland 44114 (216) 241-6600/www.clevelanddowntown.hamptoninn.com

Doubletree Cleveland South 6200 Quarry Lane, Independence 44131 (216) 447-1300/www.clevelandsouth.doubletree.com

Sandcastle Suites One Cedar Point Drive, Sandusky 44870 (419) 627-2106/www.cedarpoint.com

Sheraton Independence Hotel 5300 Rockside Road, Independence 44131 (216) 524-0700/www.sheraton.com/independence

Quail Hollow Resort 11080 Concord-Hambden Road, Concord 44077 (440) 497-1100/www.quailhollowresort.com

Marriott Residence Inn - Cleveland Downtown 527 Prospect Ave., Cleveland 44115 (216) 443-9043/www.marriott.com/cleri

Residence Inn by Marriott Beachwood 3628 Park East Drive, Beachwood 44122 (216) 831-3030/www.marriott.com/clebd

Number of meeting rooms

Meeting space (square feet)

209

2,200

206

24,466

205

13,000

203

17,000

194

1,200

193

9,400

187

179

10,000

176

15,708

175

3,400

174

1,300

168

2,004

168

4,000

166

10,500

162

900

158

4,500

158

1,250

158

1,070

154

1,584

154

945

150

148

12,000

146

6,196

142

12,000

142

5,400

141

3,471

134

130

850

Hilton Garden Inn Cleveland Airport

InterContinental Hotel & Conference Center 9801 Carnegie Ave., Cleveland 44106 (216) 707-4100/ www.cleveland-conferencecenter.intercontinental.com

Comfort Inn Sandusky

Number of guest rooms

4900 Emerald Court S.W., Cleveland 44135 (216) 898-1898/ www.clevelandairport.gardeninn.com

Red Rock Inn 24801 Rockside Road, Bedford Heights 44146 (440) 439-2500

McKinley Grand Hotel 320 Market Ave. S., Canton 44702 (330) 454-5000/www.mckinleygrandhotel.com

InterContinental Suites Hotel 8800 Euclid Ave., Cleveland 44106 (216) 707-4300/www.cleveland-suites.intercontinental.com

Days Inn Cleveland Airport 16161 Brookpark Road, Brook Park 44142 (216) 267-5100/www.daysinn.com

Fairfield Inn & Suites by Marriott 3750 Orange Place, Beachwood 44122 (216) 831-3300/www.fairfieldinnandsuitesbeachwood.com

Residence Inn by Marriott Cleveland Airport 17525 Rosbough Drive, Middleburg Heights 44130 (440) 234-6688/www.marriott.com/cleoh

Courtyard by Marriott 5051 W. Creek Road, Independence 44131 (216) 901-9988/www.marriott.com/cleci

Courtyard by Marriott Middleburg Heights 7345 Engle Road, Middleburg Heights 44130 (440) 243-8785/www.courtyardclevelandairportsouth.com

Quality Inn & Suites Youngstown 4055 Belmont Ave., Youngstown 44505 (330) 759-3180/www.showhotel.com/qualityinn/4450501

Radisson Hotel & Suites Cleveland Eastlake 35000 Curtis Blvd., Eastlake 44095 (440) 953-8000/www.radisson.com/eastlakeoh

Holiday Inn Cleveland Airport 4181 W. 150 St., Cleveland 44135 (216) 252-7700/www.holiday-inn.com/cle-airport

Hilton Garden Inn Cleveland/Twinsburg 8971 Wilcox Ave., Twinsburg 44087 (330) 405-4488/www.clevelandtwinsburg.gardeninn.com

Radisson Hotel Cleveland Gateway 651 Huron Road, Cleveland 44115 (216) 377-9000/www.radisson.com/clevelandoh_gateway

Holiday Inn Express Downtown Cleveland 629 Euclid Ave., Cleveland 44114 (216) 443-1000/www.hiexpress.com/clevelanddtnoh

The Avalon Inn 9519 E. Market St., Warren 44484 (330) 856-1900/www.avaloninn.com

Comfort Inn Downtown 1800 Euclid Ave., Cleveland 44115 (216) 861-0001/www.choicehotels.com

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. The Book of Lists and enhanced versions of most lists, with more companies, are available to purchase at www.crainscleveland.com.

RESEARCHED BY

Deborah W. Hillyer and Kim Ratliff-Null

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Fed’s interest rate cut hurts Legal Aid Cleveland nonprofit expects 80% dip in chunk of funds from interest-bearing escrow accounts By ARIELLE KASS akass@crain.com

The Federal Reserve’s last rate cut was intended to stimulate the economy, but it’s strangling Cleveland’s Legal Aid Society. State money that’s used to fund the organization is just a fifth of what it was in 2007. The dropoff is the result of interest rates that have fallen to near zero as the Federal Reserve Dec. 16 set the federal funds rate — the rate at which banks lend to one another — to an unprecedented range of zero to 0.25%. In Ohio and elsewhere, a large portion of the activity of Legal Aid societies is financed by Interest on Lawyers’ Trust Accounts, or IOLTA. The money in these accounts consists of client funds held in trust by attorneys in interest-bearing escrow accounts; the interest is donated to statewide legal aid. When interest rates were high, the accounts were a boon to the nonprofits that provide legal assistance to the poor. But now that the Fed has dropped its target rate, Legal Aid societies are struggling to meet their budgets.

In 2009, Cleveland’s Legal Aid Society expects to receive just $660,000 in IOLTA money to help cover a budget that totals $8.5 million. In 2007, the society received $3.38 million in IOLTA funds. Statewide, the numbers are no better. The Ohio Legal Assistance Foundation expects to collect about $6 million in 2009 in IOLTA money after taking in more than $22 million in 2007. “And that’s pretty optimistic,” foundation executive director Bob Clyde said. “We’re trying to stem the tide.” Cleveland-area banks tend to provide more generous interest rates than do those in the rest of the state, Mr. Clyde said. He is trying to convince banks statewide to guarantee an interest rate of at least 1% on IOLTA money to keep the amount collected from those accounts from falling any farther. The local Legal Aid Society has a six-month reserve fund that it will dip into to finance its programs amid a shortfall of more than $1 million, Cleveland executive director Colleen Cotter said. She hopes rates go up or some solution is found before the fund is drained completely.

In the meantime, the society is reducing training and advertising to keep from cutting staff, as it anticipates that the volume of aid requests will increase as the economy remains troubled. “We’re at a difficult point, definitely,” Ms. Cotter said. “When folks have less money, it’s harder for them.” Already, the Legal Aid Society turns away at least half the people who qualify for services, or between 6,000 and 8,000 people a year, because it doesn’t have the resources to handle them, Ms. Cotter said. If the organization is able to weather the next two years by using reserves, it likely will be able to survive going forward, said Richard Panza, vice president of the board of trustees. But Mr. Panza said it was “impossible to say” if the nonprofit’s resources could carry it through. David Kutik, president of the board of the local Legal Aid Society, said the group is trying to leverage its resources by choosing cases that may have a broad impact. He said Legal Aid is trying hard not to cut services further. It’s difficult, Mr. Kutik said, because most of the organization’s expenses are in its 95person staff. “It’s not like we’re spending lots of money on expensive coffee and trips,” he said. “We don’t want to lay attorneys off; we don’t want to limit what attorneys can do.” ■

Refinance: Home value drop hurts some continued from PAGE 1

At Fifth Third Bank, total mortgage applications — which include both refinancings and new home applications — for December 2008 and January 2009 are up 60% from the like two-month period a year earlier. Over the last two months, home purchases have made up between 10% and 30% of that volume, said Marty Garrity, senior vice president and head of residential mortgage at the bank, leaving the rest to refinancing. “Absolutely, volume is at recordlevel highs due to record-level lows at interest rates,” Mr. Garrity said. “In my 20 years in business, I’ve never seen rates this low.” Last week, interest rates for 30year fixed mortgages at a number of local banks were below 5%. Mr. Garrity said at Fifth Third, they ranged as low as 4.375%. The savings, he said, could be considerable, especially with many adjustable-rate mortgages set to reset this year and rates preparing to balloon. “All the stars aligned,” Mr. Garrity said. Refinancing to a lower interest rate frees up more cash for the consumer and can help jumpstart the economy by allowing homeowners to spend more of their paychecks on other goods, Mr. Garrity said.

No time like the present Even some banks that have had little or no mortgage business in the past are starting to get into the game or bulk up their presence in it. Liberty Bank chairman, president and CEO William Valerian said the Beachwood-based bank began doing mortgages Jan. 5 after deciding that they are one of the lynchpins to improving the economy.

“Absolutely, volume is at record-level highs due to record-level lows at interest rates. In my 20 years in business, I’ve never seen rates this low.” – Marty Garrity, senior vice president and head of residential mortgage, Fifth Third Bank Dell Duncan, president and CEO of Ohio Commerce Bank in Beachwood, said his bank only has been doing mortgages for about three years but is seeing increased activity these days. He has closed about six refinances since the middle of December; normal volume in such a timeframe would be about half that, Mr. Duncan said. Despite the low rates, though, some possible refinancers may still be waiting for rates to drop even lower. Bankers caution them against it. “You’ll never find a better deal,” said Mark Fosnaught, senior vice president of retail banking for Park View Federal Savings. “Anyone who thinks they should do it, should do it.” Mr. Fosnaught said because rates are so volatile, there is no way to know how long it will be before they start to rise. With the demand to refinance so high, Park View chairman and CEO John “Jack” Male said, there is little downward pressure on the rates currently. “We’ve been inundated with applications,” Mr. Male said. “Mortgage brokers are out of business. We’re that much busier.”

Do the math Mr. Garrity, at Fifth Third, also said industry consolidation has helped drive his business. That situation means many customers coming in to refinance their homes — about 60% — have no prior relationship with the bank.

However, not everyone who wants to refinance a house can do so. Tom Finnegan, president and CEO of FirstMerit Mortgage Corp., said while he has seen applications for refinancings triple since the end of November, he’s had to reject a number of those applications, too. Because many homeowners bought their houses at the market peak, the worth of the homes they purchased has declined. If the loans that people are seeking to refinance are worth more than a home’s appraised value, any request to lower the interest rate will be rejected. More than half the refinance requests FirstMerit rejects, Mr. Finnegan said, are related to issues with the property value of a home. Even as people read about the decline of value in the housing market, no one wants to believe that his or her own home has been affected, he said. “It’s our biggest challenge now,” Mr. Finnegan said. While refinancing can save a consumer hundreds of dollars a month — Mr. Finnegan likened it to a permanent tax break — he also stressed that FirstMerit and other banks are negotiating with homeowners and doing what they can to keep people in their houses who are unable to reduce monthly payments to a manageable level. “We try to go through as many steps are we possibly can,” he said. “We try to restructure the deal. We’re not in the business of owning property.” ■

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Inventories: Credit may have stymied access continued from PAGE 1

capital spending and seeking other ways to cut costs in the year ahead.

It’s all in the timing But whether this is the end or the beginning of a destocking cycle is up for some debate. Economist Ken Mayland, president of ClearView Economics in Pepper Pike, said he believes industry acted quickly and aggressively to destock as soon as it became apparent that a slowdown was inevitable. “One thing I think made the numbers in October and November look particularly bad for the economy was this effort by companies to destock,” Mr. Mayland said. “More so this time than ever before, the combination of all the information technology and the Internet, I think, has compressed time. And (companies) were very quick to pull the trigger.” That contention might be sup-

ported by Omnova’s recent earnings announcement. The Fairlawn-based producer of emulsion polymers, specialty chemicals and wallcoverings said destocking had a negative impact last fall, but that destocking was slowing and order volumes for chemicals began to increase again in January. That’s exactly what economists such as Mr. Mayland would like to see happen. While destocking might have amplified the negative effects of the downturn early on, restocking could amplify the rebound when the economy begins to grow again, he said. “Inventory destocking can’t go on forever,” Mr. Mayland said. “At some point, when the inventories are down to some minimal level, you have to start reordering.” But not all agree that destocking has been fully accomplished. Eaton Corp. economist James Meil

“Inventory destocking can’t go on forever. At some point ... you have have to start reordering.” – Ken Mayland, president, ClearView Economics said at a Jan. 12 presentation to the Cleveland Association for Business Economics that he believed inventory levels had not fallen enough, particularly among automakers and their suppliers. That situation might have occurred, in part, because they simply did not have the production volume necessary to use the inventory they already had. And for those companies that did destock, there also might be a lessthan-desirable reason for their action: They might not have had access to the credit they needed in order to buy new supplies, said Ned Hill, an economist and professor of

economic development at Cleveland State University’s Maxine Goodman Levin College of Urban Affairs. “Even if companies had orders on their books, the question is whether they could get the working capital to purchase the inventory to make the product,” Dr. Hill said.

Waiting for a sign Manufacturers say it’s been a combination of reasons that has led to destocking. “We’ve got customers that have reduced their inventories,” said Tom Littman, managing director of Kirtland Capital Partners, which owns five companies that make products ranging from dump trucks to medical devices and plastic packaging. “Sometimes we see (destocking) at the end of the calendar year, when they are reducing their inventory for year-end purposes — but it was clearly a lot larger than normal last

year,” Mr. Littman said. “Our customers have reduced inventories and we have tried to match their requirements. Therefore, our suppliers are also seeing smaller orders.” Observers say two conditions will need to be in place before widespread restocking kicks in and buoys the fortunes of inventory suppliers everywhere. First, companies must see signs that their business will improve. Second, they will need to find available credit when they decide to pull the trigger on new orders. For now, most observers don’t believe the positive signs are yet in place to spur widespread restocking. “We haven’t seen it occur yet, but obviously it will come,” Mr. Littman said. “But people are still very conservative about how much inventory they want to hold. I just don’t think companies are willing to start building inventories on the if-come.” ■

State: Ohio’s current business Ads: Print drives branding, regulations hamper commerce online generates more leads continued from PAGE 3

untangle paperwork. The governor’s pledge also aligns him with the sentiments of many Ohio business people, who must navigate confusing state directives and slow-moving permitting processes. Joseph Mayernick, executive director of the Growth Partnership for Ashtabula County, told Crain’s Cleveland Business about the hurdles a plastics company based in Ashtabula County faced when it started planning an expansion of its manufacturing capacity. Mr. Mayernick said the company eventually chose to put its new equipment in a southern state, where it was able to get the machinery installed in six months. “In Ohio, the same exact project might take nine to 12 months to get the permit to install, and then go through another process to get the permit to operate that could take another 18 months,” Mr. Mayernick said. “We need to be operating at the speed of business. We really need to be competitive.” Linda Woggon, vice president of governmental affairs for the Ohio Chamber of Commerce, said her group’s members are looking forward to reform legislation. “What the governor did was a good first step, and what the Legislature is doing on a bipartisan basis is good,” she said.

Just what is small, anyway? The bipartisan task force, which held eight meetings around the state and heard from more than 50 witnesses, made 15 specific recommendations. First among them was a recommendation that the term “small business” be defined consistently throughout Ohio laws and regulations. For example, the Ohio EPA’s small business assistance program defines a small business as employing 100 or fewer employees, yet other agencies adopt the U.S. Small Business Administration definition, which can be 500 employees or more, depending on the industry. “The result of these varying legal definitions is that small businesses are regulated inconsistently throughout Ohio law,” the report says. The recommendations also ask that it be easier for small businesses in particular to challenge the fairness of rules and their impact on small operations.

‘Cumbersome’ system Among other findings, the task force reported Ohio makes it hard for businesses to

get the permits needed to install industrial equipment, collect and pay taxes and comply with safety regulations. The process, the report said, “is cumbersome and takes longer than in other states.” The report also said the state’s permitting systems “give the impression that Ohio’s regulatory fees and fines are more about generating revenue than obtaining common sense regulatory compliance.” In an interview with Crain’s, Mark Wilson, whose Land Stewards LLC consultancy helps farmers and other rural landowners navigate state paperwork, highlighted some of the snarls he has helped clients untangle. Mr. Wilson said one client, a very small business, had to get and pay for two separate state permits for a septic system because some septic systems also are defined as underground injection wells, which are used to dispose of industrial waste. Mr. Wilson, who testified before the task force, said some farmers believe they’re asked to maintain unrealistic standards for water quality in drainage ditches because of state environmental laws. “We have a public policy that directly conflicts with farmers’ rights to adequate drainage,” he said. He was referring to a policy enforced by the Ohio Environmental Protection Agency that requires the water quality of all waterways, including manmade ditches used by farmers to irrigate crops, be clean enough to support aquatic life. “But these ditches are intermittent,” Mr. Wilson said. “When they go dry, they are destined to fail” the state water quality standard. Environmentalists quarrel with some of Mr. Wilson’s characterizations, and the Ohio EPA says some of the water quality permitting issues Mr. Wilson raised are governed by federal law. To that point, Mr. Wilson said the broader problem of regulatory duplication and inconsistency should be addressed by the General Assembly. “This needs legislative focus because the administrative agencies in charge are not willing to make any changes to their own administrative rulemaking,” he said. “It needs to be a legislative change.” Ryan Augsberger, managing director of public policy services at the Ohio Manufacturers’ Association, agrees. Regulatory reform “may not be the most exciting thing going on,” but it is important work, Mr. Augsberger said. “This is a difficult animal to skin.” ■

continued from PAGE 3

The Google factor

budgets this year, and you’ve got big moves Dan Fiore, business development manager happening. at North American Coating Laboratories in “They definitely have a sense of urgency with Mentor, says he’s putting more efforts into anything online,” said Goldstein Group presipixels than pages these days as he posts dent Joel Goldstein. “Anything search-enginecustomer testimonials and white papers related, anything measurable. That’s where online as soon as they’re available. they’re putting what dollars they can.” “The big reason we’ve immediately put them According to the survey, print advertising will on the web site before we send them out to account for 20% of the average b-to-b spending anybody or before we even hand them out at a budget. While that percentage remains the trade show is that through Google searching, single biggest item in the mix, it’s less than half you’re able to pull up a white paper, or you’re the 47% anticipated to go toward online able to pull up a testimonial,” Mr. Fiore said. spending, which includes everything from “The success from the electronic (outreach) has banner and e-mail advertising to search engine been much more than the success from the marketing, online video, social media and web print ads.” development. David Honeycutt, director of e-business and The commitment to online marketing at marketing communications some companies is huge. Mr. at polymer producer PolyGoldstein cited the example “Online is where the One Corp. in Avon Lake, says of one unidentified company value is. You don’t give the company has made a with $600 million in annual that away for free.” “definite shift” away from revenues that estimated more its already scant print than 80% of its 2009 advertising – Warren Bimblick, senior campaigns, in part because budget will go toward online vice president of strategy and of the high response rate to efforts. business development, its online efforts. “It really is happening in Penton Media “We get about 110 e-mail some of the most conservainquiries a month” thanks to PolyOne’s online tive business-to-business accounts,” said marketing, Mr. Honeycutt said. “And I would Marilyn Chase, executive vice president, say that better than 50% of those are tangible brand director at communications firm business opportunities, which is a really high Liggett Stashower. “(And) it’s a much more number. Search engines are the biggest exciting process for us than ‘How much source, and then industry sites are second.” do you want us to spend on that ad and where do you want to run it?’ It’s a much more part‘Where the value really is’ nered, deeper and richer branding strategy.” Such experiences are requiring traditional Still, print advertising isn’t dead quite yet. b-to-b publishers to adapt to a new world. Ellen Modock, manager of marketing Penton Media senior vice president of communication at Keithley Instruments Inc., a strategy and business development Warren maker of sophisticated measurement instruBimblick said his company is benefiting from ments in Solon, said while there’s a shift toward several years of investing in and developing its online spending, print still has its place. online marketing offerings. “We use print advertising for our branding “The digital or online portion of our busiintiatives, and we really use online advertising ness is the growing part of our business, along as more of a lead generation tool,” Ms. with the conference part,” Mr. Bimblick said. Modock said. “Online, the real advantage for “We have a (publication) brand called Busius is that we can attach metrics to it. We ness Finance that, for several years, more than really can identify who’s clicking things, half of their revenue came from online.” who’s downloading information, so it gives us Mr. Bimblick noted that while print used to a better tool for communicating.” be where advertisers launched their efforts, he Ms. Modock could not offer specific dollar finds it more common now that marketing is amounts regarding Keithley’s ad spending, but first unveiled online and then followed with did say its online spending “is much larger than print ads to drive readers to a web site. even what we were doing just two years ago” “Online is where the value really is,” he even though its overall ad spending is little said. “You don’t give that away for free.” ■ changed.

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to about 121,800 households in the Cleveland market, and is more than double the 3.57 rating the broadcasts averaged over the same number of games in the 2007-2008 season. Charlie Knudson, general sales manager for Fox Sports Ohio, said the numbers mean that in this market, “When we have a Cavs game on, we’re typically the No. 1 (show) overall.” Perhaps more impressively, the Cavaliers are the league leaders in local TV ratings for the first time in their history. Figures provided by Mr. Knudson show the San Antonio Spurs average a 5.8 rating in their

market, and the Los Angeles Lakers garner a 4.4 rating. At the bottom of the rankings are the Los Angeles Clippers, Charlotte Bobcats and New Jersey Nets, all well below ratings of 1.0. The last three months show momentum building for the broadcasts as the team began to dominate opponents and to compete for the best record in the NBA. While October 2008 attracted a 6.62 rating compared with a 6.31 in 2007, November’s 6.92 rating dwarfed the previous year’s 3.46. In December 2007, the Cavs garnered a 3.47 rating, which ballooned to an 8.34 in December 2008, and through

the first half of January, Cavaliers games were attracting almost one in 10 households in the market, earning a 9.67 rating, almost triple the 3.42 rating they saw in 2008. “One of the strongest barometers of interest in any team franchise is ratings,” said Cavaliers president Len Komoroski. “Being able to reach that top spot for the first time speaks volumes.” And while the Cavs deepen their fan base locally, they’re also growing their reach regionally, Mr. Komoroski noted. He said 27% of the team’s individual ticket sales have come from outside the state, and broadcast deals beyond Northeast Ohio are

paying off, too. “Even in markets like Columbus, we’re getting a 1.4 (Nielsen television) rating,” he said. Though most of Fox Sports Ohio’s game-night commercial slots were sold before the season started, the higher ratings and subsequent demand for advertising airtime has buoyed the station at a time when ad revenues are tough to come by. Henry Ford, who just has succeeded Steve Liverani as the station’s general manager, wouldn’t give specific numbers regarding advertising revenues, but said the station is holding its own. “I’d say we’re doing well,” said Mr.

Reform: Obama’s openness offers industry leaders hope continued from PAGE 3

included in health care reform for it to be successful, and many believe the reform effort should and will start with the stimulus package that the president hopes to sign by Feb. 16. “The economic stimulus package can probably lay a lot of the groundwork for what’s going to happen,” said Leonard Marquez, director of government relations and federal affairs for the MetroHealth System. The House version of the stimulus package includes $20 billion for furthering the development of electronic medical records, which would

enable health care providers to share patient medical records immediately. As a result, Mr. Marquez said, health care providers could better coordinate patient care and reduce duplication of services and tests, thereby helping to achieve the government’s ultimate goal of creating a health care system that is more efficient and less expensive. The United States currently spends 16% of its gross domestic product on health care, compared with many other countries that spend an average of 9% to 10%, said Thomas Strauss, president and CEO

of Summa Health System. However, Mr. Strauss said the United States also has some of the worst patient outcomes in the world, so there’s a lot of room for quality improvement. Mr. Henkel said the Clinic is one of many stakeholders pushing to provide all Americans with a so-called “medical home,” which consists of a primary care doctor who would provide preventive care to patients and would coordinate their health care once they’re diagnosed with an illness. “The ongoing supervision of that person’s health is not ensured

unless you have a primary care doctor or a medical home,” he said. The Democratic Party’s version of the stimulus package includes $600 million to train more primary care doctors and nurses, Mr. Marquez said. Many new doctors have been shying away from primary care for less-demanding and higherpaying specialties. Mr. Strauss said it not only should be a priority to provide basic care to every American, but also to charge people with personal responsibility for obtaining their own health care coverage. For ex-

Ford, who has worked in markets on both coasts and most recently worked in Detroit. “When the team performs this way, it allows us to outperform our expectations.” Sales manager Mr. Knudson said the Cavs’ record and TV ratings are even drumming up new business. “If you have a highly rated program, people want to talk to you,” he said. “We have a number of new partners, and we have new people we’re talking to, even now this late in the season. Whoever’s out in the marketplace spending, they simply cannot avoid the fact that the Cavs’ ratings are tremendous.” ■

ample, he said, companies could pay into a fund that would help provide basic coverage to everyone if they can’t obtain coverage themselves. “If you are going to have a company in this country, you’ve either got to give coverage to your employees or pay into this fund that gives coverage for everyone,” he said. The Obama administration no doubt will need time to sift through the multitude of ideas on the table, Mr. Marquez said. “Even if reform doesn’t happen immediately, we have people who are willing to work with us,” Mr. Marquez said. “It’s night and day compared to where we were a few years ago. It’s almost like Disney World, people are so happy.” ■

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FEBRUARY 2-8, 2009

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THEINSIDER

THEWEEK JANUARY 26 – FEBRUARY 1 The big story: Students and a gaping budget deficit were at the top of Gov. Ted Strickland’s agenda in the State of the State address. To close a $7.3 billion budget gap, the governor said he will cut $3.2 billion from a state budget that was about $52 billion in 2008. To do so, he will reduce the budgets of FILE PHOTO/ many state programs by 10% MARC GOLUB to 20% and will increase many fees, fines and penalties. Gov. Strickland also said the state will take on a larger share of the financial burden of education from local school districts, though he offered no hint as to where the money will come. He also said he wants to extend the school year to 200 days from 180 days. Let’s roll: Under an agreement that could yield $2.5 billion in revenue over its life, Parker Hannifin Corp. said its Parker Aerospace unit has been chosen by Rolls-Royce as a supplier for its Trent XWB engine program. The Rolls-Royce Trent XWB is the sole engine currently available to power the new Airbus A350 XWB family of aircraft. Parker said Rolls-Royce already has received orders for more than 1,000 Trent XWB engines.

Then there were two: Eaton Corp. reorganized its businesses into two sectors — Electrical and Industrial — with a vice chairman and chief operating officer for each sector. The changes took effect Feb. 1. The diversified manufacturer said Thomas S. Gross was named vice chairman and chief operating officer – Electrical Sector. Craig Arnold was named vice chairman and chief operating officer – Industrial Sector. In addition, Richard H. Fearon was named vice chairman and chief financial and planning officer for Eaton. Mr. Fearon had been executive vice president and chief financial and planning officer. An Affinity for dealmaking: Private equity firm Morgenthaler Partners has entered into a partnership with Michael DiMino, the former CEO of lawn care products company Lesco Inc., to form Affinity Specialty Apparel. Affinity will be based in Cleveland and will focus on acquiring companies with established brands in the uniform and specialty apparel market. The new company will draw on the expertise of Mr. DiMino, who besides running Lesco is a former president of Uniforms to You, one of the largest direct sale uniform companies in the United States prior to its acquisition by Cintas. Morgenthaler said it and Mr. DiMino have committed $25 million in equity capital to the venture. Mr. DiMino will serve as its CEO. Fresh vision: The Cleveland Clinic announced a multimillion-dollar expansion and renovation plan for Lakewood Hospital. The Vision for Tomorrow plan is a multiyear project in which the 400-bed hospital will be transformed to offer only private patient rooms, will expand outpatient care, will forge more partnerships with community organizations on wellness programs, will strengthen management of chronic diseases and will better align Clinic services and community doctors with the hospital. Nosedive: Traffic at Cleveland Hopkins International Airport was off 9.2% in December and 3.1% for 2008, ending what was a year to forget for the airline industry. Passengers through the airport totaled 792,646 in December, down 80,694 from a year earlier. For all of 2008, Hopkins handled 11,106,194 passengers, 352,704 fewer than in 2007. To keep up with local business news as it happens, visit www.CrainsCleveland.com.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

How big is small? Ask Magnet ■ Cleveland’s Manufacturing Advocacy & Growth Network, or Magnet, is looking to attract more small manufacturers, in part by upsizing its definition of what a small company is. Magnet’s Community of Smaller Manufacturers has begun offering its benefits and services to manufacturers with annual revenues of up to $25 million. Prior to January, companies had to have sales of $10 million or less to be eligible for the program. Expanding the eligibility brings another 900 Northeast Ohio manufacturers into the Community’s universe of potential new members, said Magnet program director Steve Gonosey. There are 89 area manufacturers currently signed up for the program, paying either $175 a month, $500 a quarter or $2,000 a year for membership. Of those, 68 companies are active in the program, meaning they meet each month with one of the program’s five regional coordinators. The coordinators work with and coach the companies on concepts such as lean manufacturing, growth planning, product marketing and exporting. Leaders of the companies also meet quarterly with CEOs from other member companies to share best practices. Mr. Gonosey said he hopes to bring the number of active companies up to 100 this year. He also hopes the Community’s existing

WHAT’S NEW

services, along with new flat-fee service “modules,” will help him attract new participants. The service modules allow members to pay $5,000 for discounted consulting services provided by area accounting firms, law firms and other professional service providers. For the flat-fee, manufacturers can choose from a menu of consulting packages that includes business improvement planning, performance benchmarking, information system planning or a slew of other consulting services. — Dan Shingler

A partnership fit for a King ■ Kent State University has inked a $3.4 million deal to send instructors to King Saud University in Saudi Arabia to teach students there about entrepreneurship. The first phase of the partnership is slated to start Feb. 15 — the beginning of King Saud’s semester — and will continue through June 2010. A team of seven Kent State professors will teach King Saud students the basics of idea development, planning, management, marketing and seeking public and private capital. Kent State hopes the partnership will open the door for the university to forge ties with more educational institutions in the Middle East. If the agreement is successful, Kent State and King Saud could work together on other academic programs. “This is a major step forward in continuing

He’s willing to give more than just a little bit

Moen says the “heart and soul” of a good faucet is its cartridge, and for the first time in nearly 30 years, the company is making a change in this key piece of equipment. The new 1255 Duralast ceramic-disc cartridge “provides a consistently smooth handle feel for the life of the faucet,” the company says. It’s smooth handle movement, according to Moen, that offers precise control of the single-handle faucet and allows a user to fine-tune temperature balance. The new cartridge will be featured in more than 100 Moen single-handle faucets (both kitchen and bath) this year. Specific features of the cartridge include a stainless steel shaft and pin, overmolded seals to ensure integrity and leak-free performance, and compact dimensions to enable broader design opportunities and sleeker, modern faucet styles. For information, visit www.moen.com. Send new product information to managing editor Scott Suttell at ssuttell@crain.com.

Guess we shouldn’t quit our day jobs ■ Mary Anne Sharkey, former communications director for ex-governor Bob Taft and a former reporter and editor at The Plain Dealer, put newspapers’ woes in context at a seminar the Cleveland Chapter of the Society of Professional Journalists held Jan. 24 to help jobless journalists retool. “I’m really concerned for the society as a whole,” said Ms. Sharkey, now a Clevelandbased writer and government crisishandler. “Who’s going to cover City Hall? Or the school board? How are we going to know what the government’s really doing? That concerns me more than the method of delivering the news.” She also offered a juicy story from her Columbus days. Telling ex-journalists they could impact policy by diving into government, she noted Mr. Taft’s “Third Frontier” program for financing technology initiatives came from the need to say something important — for his third State of the State address. About half the 52 people in the audience were veteran broadcasters and newspaper reporters looking for work. — Stan Bullard

CHOICE BITS Excerpts from recent Editor’s Choice blog entries on CrainsCleveland.com.

COMPANY: Moen Inc., North Olmsted PRODUCT: 1255 Duralast cartridge

the diligent work of expanding Kent State’s global footprint,” said Steve Michael, Kent State’s vice provost for diversity and academic initiatives. “Saudi Arabia is an important player in the financial and policy worlds.” King Saud chose Kent State over numerous proposals from universities in Asia, Europe and North America. — Shannon Mortland

■ Progressive Corp. chairman Peter B. Lewis earned a spot on the Slate 60, an annual listing of the largest charitable contributions of the years. Mr. Lewis was ranked No. 54 on the Slate.com list with $29.7 million in donations in 2008 to “more than 90 nonprofit organizations in the areas of the environment, human rights, progressive causes and youth.” Slate.com found a statistical anomaly: In 2007, the Slate 60 comprised donations totaling $7.8 billion, while in the worse economy of 2008, the total was $15.8 billion. It turns out there was a relatively simple explanation. “Upon closer examination, it’s apparent that the breadth and depth of our economic crisis is such that even the wealthiest Americans are giving cautiously,” the online magazine reported. “Most obviously, the great bulk of the giving on this year’s list comes from those who have died. An unprecedented eight of the top 11 gifts are bequests, including the late Leona Helmsley’s $5.2 billion gift at No. 1 and the late James LeVoy Sorenson’s $4.5 billion gift at No. 2. In all, 13 of the 61 contributions appearing on our list are bequests, accounting for $11.6 billion of the $15.8 billion total.”

They’re driven to succeed, despite budget pressures ■ Greater Cleveland Regional Transit Authority boss Joe Calabrese was one of the primary voices in a Jan. 27 Los Angeles Times story examining the financial pressures faced by transit agencies across the country. Those pressures are leading to service cuts in most big cities, including Cleveland, even as bargain-hunting consumers step up their use of public transit. Mr. Calabrese summarized the situation nicely: “For the layperson, it’s very difficult to understand that if ridership is at all-time high levels, how can we be cutting service?” In Northeast Ohio, RTA ridership increased for the sixth consecutive year in 2008. “But like every major public transit system in the country, Cleveland’s (transit system) relies on both fares and tax revenue for funding — and county sales taxes, a key component of the budget, have plummeted in the stalled economy,” the Times reported. “In the last 13 months, Cleveland riders have seen their fares raised twice and services cut by 8%,” the newspaper added. “Calabrese said another fare increase and 6% service cut may be necessary this year.” The newspaper noted that the shrinking tax revenues “are particularly painful to transit systems that continue to be hammered by high fuel costs: Many of them, Calabrese said, are still locked in to high-price fuel contracts that they thought were good bargains when gas was $4 per gallon.”

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