Crain's Cleveland Business

Page 1

20110207-NEWS--1-NAT-CCI-CL_--

2/4/2011

3:50 PM

Page 1

$1.50/FEBRUARY 7 - 13, 2011

Apartments may rise at Flats East Bank

COULD THIS SPACE ...

INSIDE Banking on the future Many Northeast Ohio banks in 2010 reported less delinquent debt and set aside less to cover future loan losses. After negotiating the highest levels of debt they’ve seen in decades, institutions here and nationwide say they believe the worst is over. Read Michelle Park’s story on Page 3.

As project’s construction proceeds, developers mull reviving dormant residential component

NASA Glenn perplexed amid budget quandary

By STAN BULLARD sbullard@crain.com

... HOUSE APARTMENTS?

Federal spending cuts could affect programs By CHUCK SODER csoder@crain.com

So far, fiscal 2011 is not turning out like Ramon Lugo III had hoped. NASA Glenn Research Center this year had been expecting to get more money and a leadership role in a new NASA program aimed at developing new technologies for deep space exploration. But those things might not happen because of uncertainty at the federal level, said Mr. Lugo, the center’s director. Congress hasn’t approved the federal budget for fiscal 2011, which began Oct. 1, 2010. That delay has put new programs at NASA and other agencies on hold. Plus, a strengthened push to cut federal spending could hurt NASA’s budget, which likely would hurt NASA Glenn, Mr. Lugo said. Any cuts also might hurt NASA Glenn’s chances of keeping its leadership role in the new Exploration Technology Development and Demonstration program, he said. No decisions about NASA’s budget have been made yet. House Republicans have said they aim to cut spending within many federal agencies to 2008 levels or lower, though they likely would face opposition in the

06

See NASA Page 6

FILE PHOTOS/MARC GOLUB

Development of the Flats East Bank project is under way. The plan originally called for a mix of condos and rental units, but developers, such as Doug Price of K&D Group — whose Stonebridge residential complex is shown directly above — said apartments may be a more lucrative and attractive option for the project.

With construction workers laboring again on the 18-story Ernst & Young Office Tower at the Flats East Bank Neighborhood project in downtown Cleveland, steps are afoot that further may change the riverfront district’s skyline. The Wolstein Group of Beachwood and Fairmount Properties of Cleveland are looking at how to revive the “neighborhood” part of what started out as a $500 million project before tough economic times forced developers to split the Flats East Bank into phases. Adam Fishman, a Fairmount Properties principal, said last week during an interview that efforts are under way to rekindle plans for theproject’s residential component, perhaps exclusively as apartments rather than the mix of for-sale condominiums and rental units originally envisioned. The idea is so attractive that developer K&D Group has discussed creating the apartments with Wolstein Group and Fairmount, according to its CEO, Doug Price. K&D Group built Stonebridge Apartments and Condominiums in the Flats and the Residences at Six Six Eight at that address on Euclid Avenue downtown. “We’ll see where it goes,” Mr. Price said of the talks. “It can’t be condos.

The green space immediately west of the planned hotel in the above rendering may house apartments rather than for-sale condominiums.

INSIDE: Other stakeholders seek representation as development proceeds. Page 4 There’s no condo market in Cleveland now.” He should know. Mr. Price said K&D sold just six condos last year at Stonebridge Plaza on the west bank of the Flats. However, the company See EAST BANK Page 4

Manufacturers adjust as raw materials prices rise Relationships guide purchasing decisions By DAN SHINGLER dshingler@crain.com

For area manufacturers, the recovery is beginning the same way the reces-

sion did — with rising prices for steel, plastic resins and other critical raw materials. “The last time we saw prices rise like this was back in 2008,” said Terry Brown, purchasing manager for Astro Manufacturing and Design in Willoughby, a custom machine shop and specialty manufacturer. Mr. Brown mostly buys

steels and special alloys that are machined into precise parts for products including medical devices and military components. Companies such as Astro, as well as countless other machine shops, stamping plants and metal fabricators across Northeast Ohio, have seen the price of just about everything they can cut, bend, shape and

weld go up in recent months. For instance, the price of copper, which is used in cables, has risen 41% in the last five months, said Astro vice president Rich Peterson. And since July, the worldwide average price for carbon steel has gone from about $732 a metric ton to more than $800 today. See STEEL Page 17

0

NEWSPAPER

71486 01032

6

SPECIAL SECTION

HEALTH CARE Northeast Ohio a mecca for patients seeking quality health care ■ Page 13 PLUS: HEART HEALTH ■ TEAMING UP ■ & MORE

Entire contents © 2011 by Crain Communications Inc. Vol. 32, No. 6

20110207-NEWS--2-NAT-CCI-CL_--

2

2/4/2011

11:18 AM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

CRAIN’S FAMILY BUSINESS SECTION Crain’s Cleveland Business for the second year will recognize some of the region’s best-run, financially stable family businesses. On April 4, we’ll profile three companies each in three categories: second-, third- and fourth-generation or greater businesses. We’re looking for companies regarded as good employers and that have earned the respect of their peers. Factors such as growth and a company’s involvement in its community

also will be considered. The deadline is Feb. 21. You may nominate family businesses by sending an e-mail nomination to editor Mark Dodosh that should include the company’s name, how many generations it has been in business and an explanation of no more than a single page as to why it should be recognized. E-mails to mdodosh@crain.com should say “Family Business” in the subject line.

REGULAR FEATURES Big Issue ......................11 Classified .....................18 Editorial .......................10 Going Places ................12

Letters .........................10 List: Largest hotels ......16 Tax Liens .......................9 Reporters’ Notebook ....19

FEBRUARY 7 - 13, 2011

HEALTHY MARGINS About 1.3 million Ohioans do not have medical insurance — and Ohio is better off, relatively speaking, than the rest of the country, according to a new report by The Center for Community Solutions and the Mental Health Advocacy Coalition. Ohio’s percentage of uninsured is four percentage points below the national average, and its share of people with private insurance is five percentage points above the United States as a whole. Here’s how Ohio residents’ health insurance status compares with people nationwide:

Health insurance status

Ohio

United States

59%

54%

Medicare

14

12

Medicaid

13

16

Uninsured

13

17

Other public

1

1

Private

SOURCE: “BY THE NUMBERS: “DEVELOPING A COMMON UNDERSTANDING FOR THE FUTURE OF BEHAVIORAL CARE,” BY THE CENTER FOR COMMUNITY SOLUTIONS AND THE MENTAL HEALTH ADVOCACY COALITION

Anyone can keep your money active; We keep your money proactive.

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: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Tim Magaw (tmagaw@crain.com) Health care & education Michelle Park (mpark@crain.com) Finance Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Marketing/Events Coordinator: Jessica Snyder (jdsnyder@crain.com) Advertising sales director: Mike Malley (mmalley@crain.com) Account executives: Adam Mandell (amandell@crain.com) Dirk Kruger (dkruger@crain.com) Nicole Mastrangelo (nmastrangelo@crain.com) Dawn Donegan (ddonegan@crain.com) Business development manager & classified advertising: Genny Donley (gdonley@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Production manager: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com) Circulation manager: Erin Miller (emiller@crain.com) Customer service manager: Brenda Johnson-Brantley (bjohnson-brantley@ crain.com) 1-877-824-9373

Crain Communications Inc.

Great Treasury Management should be a 24/7/365 commitment. At FirstMerit, we have specialized and seasoned Treasury Management Officers who will help you get the most out of your money by sweeping it, moving it, adjusting it and simply being proactive with it. We even have a dedicated Treasury Management Call Center. Get FirstMerit and get more. More Bank For Your Business™

Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996)

firstmerit.com Call Maureen Murman, your local Treasury Management Representative, at 216-694-5637.

Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation

20110207-NEWS--3-NAT-CCI-CL_--

2/4/2011

1:12 PM

Page 1

FEBRUARY 7 - 13, 2011

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

3

Wind tax credit extension cheers area suppliers

INSIGHT

But, they say, long-term assistance also is vital By DAN SHINGLER dshingler@crain.com

The holiday season was a good one for Cleveland-area suppliers to the wind energy industry, as the sector got an important one-year extension of a federal tax credit that wind backers say is crucial to creating sustained growth. The new year would be even better, they note, if the wind industry could receive some incentives or mandates that are long term in nature, and therefore better able to induce billion-dollar investments in projects that take years to pay off. Nonetheless, industry leaders are

happy Congress acted on at least one helpful action before 2010 ended. “It’s a great thing,” said John Grabner, president of forged bolt maker Cardinal Fastener in Bedford Heights, of the December passage of a one-year extension of renewable energy tax credits. “I met with (U.S. Treasury Secretary Timothy) Geithner and (Department of Energy Secretary Stephen) Chu when this first came out in 2010, and we listened to guys who said they pulled all their projects out of South America and moved them to the U.S. because of the tax credit,” Mr. Grabner said. See CREDIT Page 7

THE WEEK IN QUOTES

BANKS DITCH BAD DEBT Restoring credit quality allows them to extend more loans

By MICHELLE PARK mpark@crain.com

B

anks have faced in recent times the highest levels of delinquent debt they’ve seen in decades, but it appears the worst is over, which positions institutions to focus less on shoring up credit and more on extending it. During 2010, many banks in Northeast Ohio and nationwide reported less delinquent debt and set aside less per quarter to cover future

— Doug Price, CEO, K&D Group. Page One

“Prices are moving, it almost seems weekly right now. It looks like a good sign for the economy, because material is moving fast and furious.” — Matt Hlavin, president, Thogus Products. Page One

See DEBT Page 8

PERFORMANCE ART A look at area banks’ nonperforming loans and nonperforming assets as of Dec. 31, 2010:

Bank

“We’ll see where it goes. It can’t be condos. There’s no condo market in Cleveland now.”

Total assets

% of nonperforming loans

% of nonperforming assets

PNC Financial Services

$264.3B

3.6%

2.5%

Fifth Third Bank

$111.0

4.9

3.9

KeyCorp

$91.8

2.3

1.5

Huntington Bancshares

$53.8

3.4

2.9

FirstMerit Corp.

$14.1

1.9

1.5

Median, top 50 banks

$22.0

3.4

2.4

SOURCE: PARAGON CAPITAL GROUP LLC, MAYFIELD HEIGHTS; DATA: SNL FINANCIAL

“These patients find their way to Cleveland. … Our process has focused on the unique physician and their area of expertise.” — Dr. Michael Nochomovitz, president, University Hospitals Physician Services. Page 13

“We actually are looking to improve quality of care across the country. … Even though we’re competitors, we’re all kind of in this together.” — Dr. Joseph Cacchione, director of clinical integration, Cleveland Clinic’s Heart and Vascular Institute. Page 15

Cleveland railroad quietly, quickly moves on expansion projects Company saw its chance when bigger operators left behind short lines By JAY MILLER jmiller@crain.com

What do railroad buffs nearing retirement age do for a second act? If they are William Brown, Douglas Fink and Michael Kole, they start a railroad. The three men own — and sometimes work as locomotive engineers for — Cleveland Commercial Railroad Co., a young and growing short-

line railroad serving customers along its track, which starts in Cleveland and runs southeast through several suburbs. In just the last month, the 7-yearold railroad took steps forward on two expansions. First, it won approval Wednesday, Jan. 19, of a contract with the Cleveland-Cuyahoga County Port Authority. The railroad will run a pilot program beginning this spring to operate a locomotive on the docks that will move loaded rail cars to the tracks of long-distance, or Class I, freight rail haulers. The Port Authority is building new track on the docks to make it

more attractive for shippers to move water-borne cargo onto a rail line through the Port of Cleveland. In addition, the 10-employee company on Thursday, Jan. 20, won approval from the Ohio Rail Development Commission for a $170,000 loan and grant package to improve one of its lines in the eastern suburbs. It plans to extend rail 2,300 feet to a loading facility it will build that would serve four steel processors in Bedford Heights. The company’s proposal to the rail development commission says the steel processors can save $3 to $5 a ton if they can ship to a customer See RAILROAD Page 7

From left, Douglas Fink, Michael Kole and William Brown have doubled Cleveland Commercial Railroad’s operating revenue over the past five years. RUGGERO FATICA

20110207-NEWS--4-NAT-CCI-CL_--

4

2/4/2011

3:29 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

FEBRUARY 7 - 13, 2011

Flats interests jockey for inclusion By STAN BULLARD sbullard@crain.com

:+<

le e arn. eaarn n. intt e rn n.

"

>> FREE INTERNSHIP POSTINGS CONNECT YOU TO TALENT

>> ONE-STOP ACCESS TO NORTHEAST OHIO’S COLLEGES AND UNIVERSITIES SIMPLIFIES YOUR SEARCH PROCESS

>> TRAINING MATERIALS AND WORKSHOPS ENHANCE YOUR RETURN ON INTERN

Renewed interest in real estate development in Cleveland’s Flats is occurring as a push is under way to insert another local development corporation into the role of the Flats Oxbow Association, a stakeholder group that has represented interests of Flats businesses since 1976. “There is $2 billion of investment set for the Flats. I’ll be damned if I’ll miss the chance to get this right,” said Cleveland City Councilman Joe Cimperman, referring to development that includes the Flats East Bank Neighborhood, an aquarium at Nautica and the planned Caesar’s Horseshoe Casino at Tower City Center. “In 13 years as a councilman, one thing that has frustrated me is the ‘Us vs. Them’ philosophy in the Flats. The ‘Us’ is always different but the ‘Them’ is constant,” Mr. Cimperman said, referring to Flats Oxbow. “We need an organization,” Mr. Cimperman said, “that speaks with one voice for the Flats.” Over the years, Flats Oxbow has followed a free-wheeling, libertarian course for the Flats, favoring existing interests and counting on big development projects for success rather than the incremental, service-focused

to find your next intern

got a full house when it opened the 232 rental units at its Residences at Six Six Eight last year. He said occupancy at K&D’s downtown rentals has rebounded to 95% as the recession has eased. Last year, the residential portions

Thank you With deepest gratitude we thank the following corporations and corporate foundations who supported Y.O.U.’s mission with financial contributions of $2,500 or more in 2010.

Aleris International, Inc. ArcelorMittal Benesch Friedlander Coplan & Aronoff LLP Booz & Company Calfee, Halter & Griswold, LLP Cleveland Clinic Deloitte LLP Dominion East Ohio Eaton Corporation Findley Davies, Inc. FirstMerit Bank, NA Forest City Enterprises, Inc. GrafTech International LTD Huntington National Bank

Alliance, was designed to get “everyone in the room to talk” about the future of the Flats, Mr. Cimperman said. He said others in the room included two Flats Oxbow board members. The session was to stress the value of one voice, Mr. Cimperman said. He said “the whole world” will be invited to a Feb. 22 planning session at Nautica for ideas for improving the Flats. Longtime Flats business and property owner Mike Samsel attended the Jan. 31 session after he called for an invitation. “I was suspicious,” Mr. Samsel said of the session. “After listening to (Mr. Cimperman) and the others, I decided if they want to get the Flats going in one direction, that’s OK by me.” Less accommodating is Kyle Fries, Flats Oxbow chairman, who said Mr. Cimperman has been looking for ways not to fund the organization. “Other organizations have staffs. We have two people,” Mr. Fries said. “We want to do as much as we can with as little as we can.” Asked if Flats Oxbow is a target as development interest in the Flats rises, its executive director, Tom Newman, said, “When the Flats was not sexy, no one paid attention to us.” Counters Mr. Cimperman: “I know dysfunctional when I see it.” ■

East Bank: Housing market may alter plans continued from PAGE 1

log on to www.neointern.net

approaches of most neighborhood organizations. For example, Mr. Cimperman said, five pieces of legislation went through Cleveland City Council on one day last summer that dealt with items from the Flats East Bank mixed-use project to a loan for the new home of the Cleveland Rowing Foundation. “No one from Flats Oxbow was there,” Mr. Cimperman said. “When other (community development corporations) have funds for a storefront renovation project before council, they get three people to City Hall.” Efforts to reorganize representation in the Flats surfaced with a meeting last Monday evening, Jan. 31, in the first-floor conference room of ka architecture in the Western Reserve Building, 1468 W. Ninth St. Albert Ratner, co-chairman of real estate giant Forest City Enterprises Inc., talked that evening to a room of people who included Doug Price, CEO of apartment developer K&D Group; Adam Fishman, a co-developer of the Flats East Bank project; and David Grunenwald of Jacobs Entertainment, which owns the Nautica complex. The session, coordinated by the nonprofit Downtown Cleveland

Jones Day JPMorgan Chase Foundation Kaiser Permanente KeyBank Lincoln Electric Foundation Matco Tools Medical Mutual of Ohio PNC Quicken Loans RPM, Inc. Swagelok Company Thompson Hine The TJX Foundation Inc. Turner Construction Company Zashin & Rich Co., LPA

Youth Opportunities Unlimited, a non-profit youth workforce development organization founded in 1982, empowers youth to succeed in school, in the workplace, and in life by graduating high school and preparing for a career.

of Flats East Bank were relegated to park-like green space status for an indeterminate future as a second phase of the project. That decision left the developers plus state and local officials free to focus on the office, hotel and retail portions of the project. In so doing, they broke a development logjam created by the financial crisis and ensuing recession. With a $270 million financing package that closed late last year and included money from a staggering 30 sources, construction work has begun on the office building, hotel and parking garages.

Let’s roll The project’s restart also has set the table for planning how to redevelop the rest of the property near the mouth of the Cuyahoga River. “Our charge from (Mr. Wolstein) is to start working on phase two immediately” Mr. Fishman said, referring to Scott Wolstein, executive chairman of publicly traded Developers Diversified Realty Corp. and a principal of privately held Wolstein Group, the project’s co-developer. Mr. Wolstein is pursuing the project with his mother, Iris Wolstein, in memory of the late Bertram “Bart” Wolstein, their father and husband, respectively. Phase two of the project originally was the key feature of Flats East Bank; it was envisioned as multiple residential buildings between the office tower and riverfront. The residential units were seen mainly as for-sale condos to ride the housing boom of the mid-2000s.

However, Mr. Fishman said he and others are studying the feasibility of constructing apartments because they are desirable investments and easier to finance. Cleveland City Councilman Joe Cimperman, whose Ward 13 includes most of the Flats, said city-approved plans speak to residential development in general, not the type of residences, and he supports either apartments or condos. “The key for me is having people down there,” Mr. Cimperman said in an interview last Thursday, Feb. 3.

A market tightens up Reviving the residential component of Flats East Bank as rentals makes sense. Apartments regained luster as lagging home sales and epidemic foreclosures reduced home ownership rates. A report issued last week by the Marcus & Millichap real estate brokerage on the apartment market in key cities nationwide projects the Cleveland apartment market will tighten as apartment vacancies will fall to 5.6% in 2011 from 6% at the end of 2010. However, Marcus & Millichap actually dropped Cleveland’s ranking as a desirable place for new apartments to 40th out of the 44 markets it follows from 32nd last year. One reason: Affordable home prices are providing strong competition for apartments. The brokerage forecasts 80 new units will be added to the Cleveland market this year compared with 290 in 2010. The expected decline in apartment construction reflects difficulty some developers face in obtaining attractive financing. ■

Volume 32, Number 3 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 © 2011 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. 1-877824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

20110207-NEWS--5-NAT-CCI-CL_--

2/4/2011

2:11 PM

Page 1

FEBRUARY 7 - 13, 2011

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

5

Parts shortage slows EcoBoost Union boss says outsourcing ‘is killing Ford’ By DAN SHINGLER dshingler@crain.com

Ford’s Brook Park-made EcoBoost engine might be going a little too fast — it’s outpacing the ability of parts suppliers to keep the automaker’s production lines running. Both Ford and its major union at the engine plant, United Auto Workers Local 1250, confirmed that the plant has experienced slowdowns, including at least two instances when the entire EcoBoost engine line was shut down and its workers were sent home. “Even this week it’s causing a problem,” said Local 1250 president Mike Gammella, speaking to Crain’s last Friday, Feb. 4. “The whole line’s been shut down a couple of times.” Ford spokeswoman Megan Whatman said the plant did “have an engine parts shortage that temporarily reduced some EcoBoost production in January,” but that it continued to make other products during the affected periods. Mr. Gammella declined to say exactly how long the lines were down, but noted that all of the EcoBoost line’s 155 workers were sent home on at least two occasions. Workers still receive nearly all their pay in such a situation, though work stoppages brought on by parts shortages have had ramifications for Ford that extend beyond Brook Park. Ms. Whatman confirmed a parts shortage also resulted in the shutdown of Ford’s truck plant in Dearborn, Mich., after reports came out of Detroit that 3,000 workers had been sent home in that shutdown on Jan. 25. There are various reasons for the problems, including a tight supply

chain and poor weather that hampered some deliveries, Mr. Gammella said. Mr. Gammella said he hopes Ford will address the problem not only by working more closely with suppliers, like it’s doing now, but also by bringing some parts production in-house. Over the past two decades, Ford and other U.S. automakers have outsourced more of their parts production. Mr. Gammella said that cost-cutting strategy now is hampering its production — especially in an era when Ford and its workers are focused on the quality of both finished vehicles and the parts that go into them.

“This outside machining is killing Ford. They can’t get cams, they can’t get rods — we need to bring this stuff back in-house,” Mr. Gammella said. Ford so far has announced no such plans, but Mr. Gammella said he hopes it’s something that will be discussed when his union’s contract is renegotiated in September. On the bright side, Mr. Gammella said the shutdowns are a sign of the popularity of the engine made at the plant — a V-6 turbocharged engine, which Ford boasts can achieve V-6 mileage while delivering power similar to a V-8. The company has been increasing the number of vehicles in which the engine is available, and added it as an option for its popular F-150 pickup trucks in 2010. ■

United Auto Workers Local 1250 president Mike Gammella FILE PHOTO/ MARC GOLUB

ON THE WEB

Story from www.CrainsCleveland.com.

Higbee Building mainstays will move to E. 4th Positively Cleveland and the Greater Cleveland Sports Commission will be moving to the southwest corner of Euclid Avenue and East Fourth Street. David Gilbert, who runs both organizations, said the nonprofit tourism organizations will take over the space that was used temporarily for “Bodies … The Exhibition,” the gallery that displayed plasticized and dismembered human bodies. Positively Cleveland, the region’s convention and visitors’ bureau, must move from the Higbee Building to make way for the temporary Horseshoe Casino Cleveland that will occupy four floors in the former department store. It is leaving space at the corner of Ontario Street and Public Square. The sports commission’s lease in the Terminal Tower expired at the end of 2010. The two organizations’ 50 employees will occupy 17,000 square feet in the Windsor Building, an apartment block.

It’s time for your business to accomplish big things again.

Now’s the time to reinvest in your business’ future. The last few years haven’t been easy. It’s been work just to maintain the business you’ve built. It’s time to get back to growing it. Whether that means buying new equipment, improving your working capital, or reinforcing your overall finances, Fifth Third Business Bankers can help you take action to get your business moving forward with confidence. Stop in your local Fifth Third Banking Center, call 1-866-534-7249, or visit 53.com, and let’s get your business moving.

Loans subject to credit review and approval. Fifth Third Bank, Member FDIC.

Equal Housing Lender.

20110207-NEWS--6-NAT-CCI-CL_--

6

2/4/2011

1:42 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Salt for Ice Control Bag and Bulk

• Halite • JiffyMelt • Calcium Chloride

Big Savings on Truckload Orders! Minimum Delivery = 1 Pallet Forklift Delivery Available

John S. Grimm, Inc. 1-800-547-1538 Authorized Dealer

DISCOUNT CORPORATE MASTERCARD Save up to 20¢ per gallon at over 40,000 gas stations nationwide. No fees. Monthly CASH rebate opportunity. Use for fuel only and/or for travel, entertainment & your accounts payable.

A preferred partner of

CALL NOW 440-386-4085 www.momentumgroups.com

E!CLEVELAND Every Thursday, Crain’s sends to more than 20,000 readers an arts and leisure e-mail called e!Cleveland. The e-mail highlights at least 10 events, and often more, that might be worth your time outside work. To sign up for this and all our e-mails, visit www.CrainsCleveland .com and click the “Register for Crain’s alerts� icon at the top left of the home page. Here’s a taste of what makes it into the e-mail:

Beyond the sea Event: “The Little Mermaid� Venue: Studio One Theatre, Cleveland Play House When: Now through Feb. 19 Why you might be interested: If you haven’t seen enough puppetbased entertainment lately. The Play House’s excellent Theatre for Children revisits the art of puppeteering with an imaginative retelling of the Hans Christian Andersen story in which a young girl learns the beauty and power of her own voice. Put the fine Disney movie out of your mind and take the kids (it’s designed for grades K-5) to this one-woman show starring Nina Domingue. Tickets start at $10. On the web: www.Cleveland PlayHouse.com

Close to their hearts Event: “Cleveland Collects: An Exhibition of Members’ Favorite Regional Artwork�

Thursday, February 17, 2011 11:30 am Registration • 12 Noon Lunch & Program DR. STANTON L. GERSON, MD

Moderated By DR. DEREK RAGHAVAN, MD, PH.D. MONICA ROBBINS

For more info: www.ExecutiveCaterers.com and click on Corporate Club or call 440.449.0700

1255 Euclid Avenue, Cleveland, Ohio

$YDLODEOH )RU 6DOH ‡ 6) %XLOGLQJ ‡ 6) $YDLODEOH ‡ 3DUNLQJ 6SDFH ‡ &RYHUHG 6SDFHV ‡ *UHDW 7HOHFRP %XLOGLQJ ‡ 'DWD &HQWHU 6SDFH ‡ 6HFXULW\ Thomas K. Gustafson

216.861.5447 thomas.gustafson@omcle.com

G. F. Coyle III, SIOR 216.861.5286 geoff.coyle@omcle.com

Global commercial real estate expertise

Venue: Beck Center for the Arts, Lakewood When: Now through March 12 Why you might be interested:If you’re a believer in Northeast Ohio’s arts scene. The Cleveland Artists Foundation, which preserves, researches, collects, exhibits, documents and promotes significant visual art from this region, is staging its biennial celebration that celebrates the patronage of local artists. For this exhibition, members of the Cleveland Artists Foundation have selected their favorite Northeast Ohio works from their own collections. They also share a few words about what the art means to them in comments that are posted on the gallery walls. There are no limitations on time period, subject matter or medium, so visitors will see a hugely diverse — and hugely impressive — collection. On the web: www.Cleveland Artists.org

A meaningful journey Event: “The Trip to Bountiful� Venue: The Cleveland Play House When: Through Sunday, Feb. 27 Why you might be interested: If you’re looking for a fresh take on a modern classic. This marks the first time the Play House has produced a show by Academy Award and Pulitzer Prize-winning playwright Horton Foote, and it’s the world premiere of “The Trip to Bountiful� featuring an African-

American cast. Hallie Foote, the Tony-nominated actress and daughter of the late playwright, has authorized the production, which is directed by Timothy Douglas and is a co-production with the Round House Theatre near Washington, D.C. Veteran actress Lizan Mitchell leads the cast as widow Carrie Watts, who yearns to visit her childhood home one last time but has to break free from an ineffectual son and an overbearing daughter-in-law. On the web: www.Cleveland PlayHouse.com

Life in the fast lane Event: “Becky’s New Car� Venue: Greystone Hall in Akron, across the street from the John S. Knight Center When: Thursday, Feb. 10, through Sunday, Feb. 27 Why you might be interested: If you’d like your life to shift into a new gear. In this Actor’s Summit play written by Steven Dietz, the lead character, Becky, is in a rut. She has a dull job, a boring marriage and a 26-year-old son who still lives at home. But things liven up when a widower millionaire mistakenly assumes that Becky is single and falls for her at first sight. Becky fails to correct the mistake, and she finds herself leading a double life. As in any farce, Actor’s Summit says, “her two lives collide and accelerate out of control.� On the web: www.ActorsSummit.org

NASA: Contractors could suffer from cuts continued from PAGE 1

Democrat-controlled Senate. NASA’s fiscal 2010 budget was $18.7 billion, up $1.4 billion from $17.3 billion in 2008. And it was projected to increase in future years. If NASA’s budget is cut, there’s no telling which of the agency’s 10 centers would absorb the hit, but Mr. Lugo said it is unlikely any particular center would be spared. Should that happen, NASA Glenn first would cut discretionary spending and defer some purchases, but it might need to cut staff, he said. It’s a disappointing situation, Mr. Lugo said. “It looked like 2011 was going to be our year,� he said.

No fretting

THE STERLING BUILDING

FEBRUARY 7 - 13, 2011

Last October, President Barack Obama signed the NASA Authorization Act of 2010, a bill that scrapped the agency’s Constellation program, which aimed to build two new rockets in an effort to send astronauts to the moon by 2020 and then to Mars. The bill instead provided money to pay private companies to develop rockets for low-Earth orbit, while NASA would develop a heavylift rocket and generally focus more on developing technology for deep space exploration. The bill also included plans to send astronauts to an asteroid by 2025 and to Mars by the mid-2030s. The bill was opposed by several members of Ohio’s congressional delegation, who said it provided too much money to private companies and not enough for research conducted by NASA. However, Mr. Lugo said the new plan’s focus on research and technology development should be good for NASA Glenn, playing

into the center’s strengths. The bill also allotted $250 million of NASA’s budget to the new Exploration Technology Development and Demonstration program. NASA Glenn had been assigned to lead the program. The role would involve doling out much of the money to other centers, but it would create a handful of administrative jobs at NASA Glenn, and NASA might allow NASA Glenn to set aside a relatively small amount of the money for in-house research, Mr. Lugo said. Though the bill passed, the federal government still hasn’t passed a budget for fiscal 2011. Since then, the entire government has been operating under a continuing resolution, which funds federal programs at the previous year’s levels until an official budget it passed. So, the Exploration Technology Development and Demonstration program has yet to begin. If NASA’s budget is cut, Mr. Lugo said NASA headquarters might take over the program to keep costs down. He added, though, that he expects NASA Glenn would win its share of assignments from that program even if the research center doesn’t manage it. “We can fret over what we don’t have, or we can take advantage of what we do have,� he said.

Holding pattern The bill passed in October prevents NASA from laying off any government employees for three years, but the agency is allowed to cut private contractors, who make up roughly half of NASA Glenn’s work force of about 3,500. Two private contractors who declined to be identified said they

understood that cuts could hurt NASA Glenn contractors, though neither expected their own companies to be hurt much. One noted that the continuing resolution was preventing his company from winning some new work for which it had been preparing. An official from the union representing NASA Glenn scientists and engineers who left a phone message last Thursday, Feb. 3, did not return a follow-up phone message or an e-mail. Because of the continuing resolution, NASA Glenn is prevented from working on other projects related to the new space exploration plan. In an effort to follow the law without wasting time and money, Mr. Lugo said the center has tried to work on projects that could be used in whatever rocket NASA ends up developing. “It’s going to have a power system, it’s going to have a propulsion system, it’s going to have a communications structure,â€? Mr. Lugo said. Some members of Ohio’s congressional delegation have told Mr. Lugo they don’t expect Congress to reach an agreement on the fiscal 2011 budget before the continuing resolution expires on March 4. That situation leads Mr. Lugo to think Congress might keep NASA at 2010 budget levels until fiscal 2012 begins in October, depriving the agency of a slight budget increase it was supposed to receive this year. He said Ohio’s delegation has pushed to make sure NASA Glenn isn’t forgotten at the federal level. “They are making sure that NASA Glenn’s capabilities are going to be used,â€? Mr. Lugo said. â–

20110207-NEWS--7-NAT-CCI-CL_--

2/4/2011

2:49 PM

Page 1

FEBRUARY 7 - 13, 2011

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

7

Credit: Standard would Railroad: Number of cars moved rises lead to more U.S. turbines continued from PAGE 3

continued from PAGE 3

The credit, which functions as a grant from the U.S. government, has been extended to include all wind and other renewable energy projects begun before the end of 2011. It provides developers a grant equal to up to 30% of their project costs and allows for the accelerated depreciation of new equipment for tax purposes. The day after the credit cleared its final hurdle in the House of Representatives on Dec. 16, Denise Bode, CEO of the American Wind Energy Association, called it “a great holiday present for the 85,000 American workers in the wind energy industry.” She added, “Orders will be on the rise for new wind power, and investors will put more capital into the U.S. economy.” People such as Mr. Grabner say while the extension is great, the industry also needs long-term sustenance. His view is important, because not only does Mr. Grabner head one of Ohio’s most prominent small manufacturers related to the wind business, he’s a board member of the American Wind Energy Association, the nation’s largest wind trade organization and lobbying group. (In case you were wondering why a small manufacturer in Bedford Heights has the ears of policymakers such as Messrs. Geithner and Chu.) Others agree, and Ms. Bode blamed the industry’s weak performance in 2010 — when U.S. wind energy installations dropped by about half, to about 5,100 megawatts of new capacity — on the inability of investors to count on short-term or on-again/off-again tax incentives. “Our industry continues to endure a boom-bust cycle because of the lack of long-term, predictable federal policies,” Ms. Bode said in announcing the tally for last year’s U.S. wind installations.

‘It’s got legs’ What Ms. Bode, Mr. Grabner and others in the industry want is something called a Renewable Energy Standard (RES) — a piece of federal legislation that would mandate that the United States get a certain, probably increasing percentage of its energy from wind and other forms of renewable power. President Barack Obama in 2009 proposed a federal RES of 25% by 2025, but the measure never took hold, to the chagrin of wind energy developers. “They were banking on an RES, and when it did not make it, they pulled back,” Mr. Grabner said. He and other manufacturers will try again this year to push for such a standard, beginning with an intensive lobbying effort in Washington, D.C., at a Feb. 15 industry conference. “It’s got legs,” Mr. Grabner said of the effort. “Polls show that 87% of this country wants renewable electricity, even if it’s at a greater expense. … But it’s not going to come without some effort.” An RES would result in the installation of more wind turbines in the United States, said Ed Weston, president of the Great Lakes Wind Network, a Cleveland-based group formed by manufacturing advocacy group Wire-Net that has grown to include more than 1,200 members nationwide. Mr. Weston said a standard also would yield more revenue for suppliers like Cardinal. “It would make the pie bigger, no

doubt,” Mr. Weston said. But an RES would not solve another problem, one that in the eyes of Mr. Weston is more important for the long-term success of U.S. wind industry suppliers. A standard by itself would not increase the domestic content of wind turbines; at present, about half the typical wind turbine installed in the United States is made overseas, according to Mr. Weston.

Playing catch-up with China The problem isn’t just that Asia and other developing markets have cheaper labor— that’s only part of the reason that they can produce wind turbine parts for less than some domestic manufacturers, Mr. Weston said. It’s also that they often have better, more modern factories, especially in the wind industry. While U.S. manufacturers are working with plants and machinery that sometimes are decades old, their Chinese competitors are working with brand-new equipment — and using not only cheaper labor, but less of it. China’s industrial base is almost all new growth, while much of the industrial base of the United States is aging. “There aren’t as many people working in a Chinese wind turbine factory as there are in the typical U.S. factory,” Mr. Weston said, recalling his tour of Chinese factories in 2010. Overcoming that will be tough. “No one I talk to in the wind industry wants protectionism, but there’s a growing sentiment that the U.S. needs to develop a national manufacturing strategy that will support domestic competitiveness,” Mr. Weston said. Even what has been passed so far in the way of legislative aid for wind industry development has been a tough sell, said U.S. Sen. Sherrod Brown, a Democrat from Avon. “We had trouble getting (the 30% tax credits) even for one more year,” Sen. Brown said in a recent interview.

Everyone wants to be ‘clean’ President Obama, arguably renewable energy’s most powerful supporter to date, appears to be backing off on his exclusive support for a Renewable Energy Standard. In his Jan. 25 State of the Union speech, Mr. Obama proposed a national Clean Energy Standard, rather than the Renewable Energy Standard he supported in the past. The difference is huge to many in the wind industry, because nuclear, natural gas and even some coalfired generation projects could argue for support as “clean energy” projects. There may be some hope for additional help this year. Sen. Brown hopes to secure $5 billion in new federal tax credits for renewable energy by getting Congress to renew the 48C tax credit program. Part of the American Recovery and Reinvestment Act of 2009, the 48C program provides tax credits for manufacturers that provide the wind and other renewable energy sectors with parts and supplies. That program was allotted $2.3 billion when it was put in place at the end of 2009, but quickly used up its funds. Sen. Brown said he hopes Congress will renew it, in an even larger form, this year. “I think I can get that as part of a bigger tax bill this year,” he said. ■

through the new spur rather than putting the steel on a truck at their plants. The railroad’s proposal estimates the processors will generate 29 rail cars a month of traffic for the railroad. The railroad has its admirers. “You talk about a bootstrap operation, but they’ve done very well,” said Stuart Nicholson, spokesman for the Ohio Rail Development Commission. “They’ve really revived what was a moribund set of tracks.” Cleveland Commercial Railroad leases track owned by Wheeling & Lake Erie Railway and Norfolk Southern Corp. One line runs from Solon, the other from nearby Glenwillow; they together account for 33 miles of track. The two lines join in a former Erie Lackawanna Railroad yard owned by Norfolk Southern near downtown Cleveland. Mr. Brown said the railroad has grown from one locomotive moving about 1,500 rail cars a year in its early years to four locomotives moving about 5,400 cars in 2010. According to an annual report the company filed with the Public Utilities Commission of Ohio, its operating revenue more than doubled to $1.01 million in 2009 from

$473,841 in 2004.

On the right track

Short-line railroads are taking advantage of the freight rail renaissance of the last decade. Before the recession, railroads were setting cargo-hauling records. In 2007, the industry matched the record it set in 2006 for the number of ton-miles of freight it carried — 1.8 trillion ton-miles. A ton-mile is the movement of one ton of freight one mile. The industry also was increasing its share of the freight traffic compared with trucking and other modes of transportation. Mr. Brown and his partners believe as the economy shakes off its gloom, the business will continue to grow. Freight that moves by rail spends most of its time on larger, or Class I, freight railroads such as Norfolk Southern and CSX Corp. Those industry giants prefer to concentrate on their efficient mainlines that move rail cars long distances to large intermodal centers, where cargo, usually containers, is moved from rail cars to trucks. Mr. Nicholson said as the Class I railroads grew — in particular after

the absorption of what had been the lines of federally owned Conrail by Norfolk Southern and CSX in 1999 — the major railroads chose to dispose of their least profitable track. So, they divested or abandoned short stretches of rail that served customers moving coils of steel, scrap metal or bulk commodities. That change opened up opportunities for short lines such as Cleveland Commercial Railroad. Indeed, Ohio has 36 short-line rail companies, according to Mr. Nicholson. Mr. Brown said it is “more costefficient for (the major railroads) to use a short line” than tie up their own capital and highly paid labor delivering directly to customers, Mr. Brown said. “The labor-intensive part of railroading is the first mile and the last mile,” he said. “We save the Class Ones insurance, fuel, crew; we lease the locomotives.” Cleveland Commercial Railroad’s customers include scrap metal dealers, a lubricant maker and the Nestle USA plant in Solon that makes Stouffer’s and Lean Cuisine frozen meals. “We take (Nestlé) tomato paste and semolina (flour),” he said. ■

20110207-NEWS--8-NAT-CCI-CL_--

8

2/3/2011

3:36 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

FEBRUARY 7 - 13, 2011

Debt: Local banks follow long road to upgrading quality continued from PAGE 3

loan losses — a sign they believe they’ve turned the corner. Fourth-quarter reports in January delivered word of more progress. Two examples: KeyCorp and Huntington Bancshares Inc. now have reported five consecutive quarters of declining nonperforming assets, which include delinquent, nonaccruing loans and repossessed property. Both banks also reduced their loan loss allowances every quarter in 2010. Improving credit quality drives up earnings for banks, many of which have reported fourth-quarter profits compared to year-earlier losses. And as credit quality improves,

the flow of credit should, too. “That’s the key to banks being willing to make more loans,” said Fred Cummings, president of Elizabeth Park Capital Management in Beachwood. “To the extent that they feel good about their current portfolio, that’ll give them confidence to make more loans.” Plus, Mr. Cummings noted, banks likely will be more willing to consider acquisitions as they spend less on credit problems.

The patients stabilize Most of the nation’s top 50 banks have shown a decent progression in credit quality improvement, said Charlie Crowley, managing director

of Paragon Capital Group LLC, an investment banking firm in Mayfield Heights. Cleveland-based KeyCorp, which reported a fourth-quarter profit of $279 million compared to a loss of $265 million in the year-ago period, noted that its nonperforming assets stood at $1.3 billion as of Dec. 31 — the lowest they’d been since third quarter 2008. Key’s net loan charge-offs, or loan losses, also dropped every quarter last year. Asked to identify the main driver of improvement, spokesman Bill Murschel said Key was among the first to sell a large portfolio of problem real estate loans and

“Unless you missed something, you shouldn’t be seeing a lot of new (problem loans) all the time.” – Jay Gould, investor relations director, Huntington Bancshares repossessed properties. That action, combined with a modestly improving economy, resulted in lower nonperforming loans and net charge-offs. FirstMerit Corp. in Akron reported a fourth-quarter profit of $27 million, nearly double its profit in the year-ago quarter. However, its nonperforming assets and loan losses rose for the second straight quarter. The bank’s nonperforming assets and loan losses, though, remain some of the lowest among its Midwestern peers, said Paul G. Greig, chairman, president and CEO. “Some of those who’ve reported declines are coming from astronomical levels,” said Mr. Greig, who blamed the ongoing difficult economy for the increases to FirstMerit’s problem assets and losses. One bank that fits Mr. Greig’s description is Columbus-based Huntington, which said its nonperforming assets posted a “huge decline,” dropping nearly 60% to $844.8 million on Dec. 31, 2010, from an unprecedented $2 billion on Dec. 31, 2009. “You stop finding (problem loans) eventually,” explained Jay Gould, Huntington’s investor relations director. “You’ve got your borrowers stabilized. The ones that have had the most problems, you’ve addressed. Unless you missed something, you shouldn’t be seeing a lot of new stuff all the time.”

Upbeat about asset quality

GOOD HEALTH IS A GREAT BUSINESS MODEL. Good health and a safe work environment are always good for business. Which is why we encourage the employers who choose us to implement programs that increase physical activity and decrease daily stress in the workplace. Because keeping employees healthy and happy is not only good for your bottom line, it’s good for theirs. Learn more at businessnet.kp.org.

Huntington has seen increasing upgrades of loans that previously were nonperforming, Mr. Gould noted. Such upgrades are outpacing downgrades, added Daniel P. Walsh Jr., president of the bank’s Greater Cleveland region. “The most important takeaway is … macroeconomic conditions are improving for our clients,” Mr. Walsh said. “As that list (of problems) shrinks, it frees up a lot of parts of the bank to turn its attention on new opportunities,” such as increasing lending, he said. Mr. Murschel agreed that lower credit costs combined with stronger capital, liquidity and reserves put KeyBank in a position to lend to its clients, though he noted the bank’s lending activity ultimately will depend on economic improvement and loan demand. Banks’ expectations for asset quality were “significantly more upbeat than in past years,” according to the Federal Reserve Board’s January 2011 Senior Loan Officer Opinion Survey. The poll also revealed that banks expect improvements in delinquency and chargeoff rates in every major loan category this year. Ohio’s banks likely are rebounding more quickly than markets such as California, Florida, Michigan and Nevada that were harder hit by the recession and the housing bust, Mr. Crowley said. “In general, banks in this region have been doing just what they needed to do,” he said, citing their tightened underwriting and efforts to recoup delinquent debts. “It just takes time. It’s a long process.”

The worst is over Progress at community banks has

been more uneven, Mr. Crowley said. Smaller banks do not have the same access to capital markets as larger banks and thus don’t have the ability to raise large amounts of capital the way Huntington and Fifth Third Bank of Cincinnati did recently, Mr. Crowley explained. As a result, smaller banks may be less likely to sell assets and swallow losses to get nonperforming assets off the books, particularly if they anticipate the economy and real estate markets are improving. PVF Capital Corp., parent of Park View Federal Savings Bank in Solon, announced a $3.7 million loss in its fiscal second quarter that ended Dec. 31, but said its nonperforming assets had decreased $11 million, or 14%, to $67 million during the quarter. That’s the single biggest quarterly decline in problem assets in five quarters, president and CEO Bob King said. He credited most of the improvement to the sale of residential and commercial real estate collateral in Northeast Ohio. “There are actually buyers out there,” Mr. King said. “Obviously, improved credit quality gets us one step closer to resolving our regulatory issues,” Mr. King added, referring to a cease-anddesist order the institution received in October 2009 from the Office of Thrift Supervision. “I do believe that the very worst is behind us. By no means is it great, but it’s better than it was.” LNB Bancorp Inc., parent of Lorain National Bank, reported its nonperforming assets rose as of Dec. 31, 2010, to $44.9 million, or 3.9% of total assets, compared to $40.1 million, or 3.49% of total assets, a year ago. However, it did see improvement year-over-year in its levels of past-due loans that are not yet 90 days past due. While Middlefield Banc Corp., parent of The Middlefield Banking Co., reported that its asset quality issues have stabilized, it noted it had increased its provision for loan losses by 39% over 2009 levels to address potential credit quality issues.

Time for discipline No one source is to blame exclusively for the credit quality issues that have plagued banks, Mr. Crowley said. Some banks weren’t careful enough in lending. Some consumers bit off more than they could chew. Legislators wanted to see home ownership increased and encouraged Freddie Mac and Fannie Mae to help make it happen, but some of those new homeowners couldn’t withstand a severe recession, Mr. Crowley said. So who’s to be credited for the turnaround? Bank management teams, Mr. Crowley noted, have been prudent in their lending standards, and regulators — though “sometimes they shoot too far” — are injecting an appropriate amount of discipline. In some cases, too, people are catching up on their payments. “I think a lot of it is the normal functioning of the business cycle,” Mr. Crowley said. “It doesn’t necessarily feel like an economic recovery, but things are getting better.” ■

20110207-NEWS--9-NAT-CCI-CL_--

2/3/2011

2:21 PM

Page 1

FEBRUARY 7 - 13, 2011

Date filed: Jan. 7, 2011 Type: Employer’s withholding Amount: $14,696

P.O. Box 14100, Cleveland ID: 20-5546327 Date filed: Jan. 11, 2011 Type: Employer’s withholding, unemployment Amount: $9,321

Elegant Interiors & Design 37177 Lake Shore Blvd., Eastlake ID: 34-1912978 Date filed: Jan. 3, 2011 Type: Failure to file complete return, unemployment Amount: $13,840

Pioneer Environmental Systems Inc. 20536 Krick Road, Walton Hills ID: 06-1682390 Date filed: Jan. 3, 2011 Type: Employer’s withholding Amount: $8,827

Clarkes Family Trucking Inc. 5669 Columbiana Drive, Bedford ID: 20-2603805 Date filed: Jan. 11, 2011 Type: Employer’s withholding, heavy highway vehicle use tax Amount: $12,007

Innovare Solutions LLC 20820 Chagrin Blvd., Shaker Heights ID: 16-1633182 Date filed: Jan. 11, 2011 Type: Employer’s withholding Amount: $7,790

Trifecta Cleveland III Inc. T/A Cowboys

Thomas A. Rak Landscaping Inc. 1773 Rauland Drive, Walton Hills

TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.

LIENS FILED Baker Motors Towing Inc. 12214 Detroit Ave., Lakewood ID: 20-5027878 Date filed: Jan. 19, 2011 Type: Employer’s withholding, unemployment Amount: $254,448

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

ID: 34-1142864 Date filed: Jan. 11, 2011 Type: Employer’s withholding Amount: $7,500

Alsoussou & Sons Inc. 1240 E. 55th St., Cleveland ID: 34-1901453 Date filed: Jan. 4, 2011 Type: Employer’s withholding, corporate income Amount: $6,585

Caito Brothers Co. 4000 Orange Ave., Cleveland ID: 34-1151301 Date filed: Jan. 19, 2011 Type: Employer’s withholding Amount: $7,261 Victoria Health Care Inc. 2560 Buckhurst Drive, Beachwood ID: 31-1702565 Date filed: Jan. 4, 2011 Type: Unemployment Amount: $7,220 Glass Block Headquarters Inc. 673 Dover Center Road, Westlake ID: 03-0531238 Date filed: Jan. 4, 2011 Type: Employer’s withholding Amount: $7,133

Harold Pollock LPA 590 Harper Road, Suite 107 ID: 34-1530164 Date filed: Jan. 11, 2011 Type: Employer’s withholding Amount: $6,132 Abel Counseling & Associates Inc. 14100 Cedar Road, Suite 300, University Heights ID: 34-1805036 Date filed: Jan. 11, 2011 Type: Employer’s withholding, unemployment Amount: $5,581

K Klass Masonry Inc. 15293 Sandalhaven Drive, Middleburg Heights ID: 34-0874223 Date filed: Jan. 28, 2011 Type: Employer’s withholding Amount: $135,870 Central Ohio Group Homes Inc. 2500 Country Club Blvd., Suite 255, North Olmsted ID: 20-0030020 Date filed: Jan. 11, 2011 Type: Unemployment Amount: $63,650 Simpsons EZ Enterprise Inc. 14218 Euclid Ave., East Cleveland ID: 34-1963963 Date filed: Jan. 11, 2011 Type: Corporate income Amount: $56,265

BNY Mellon Wealth Management congratulates: Ronald Ambrogio on his recent appointment to Regional President — Ohio

Full Circle Check LLC 6887 Ridge Road, Parma ID: 26-2787010 Date filed: Jan. 3, 2011 Type: Employer’s withholding Amount: $27,825 Euclid Foreign Motors Inc. 20020 Saint Clair Ave., Cleveland ID: 34-1087596 Date filed: Jan. 13, 2011 Type: Employer’s withholding Amount: $26,338

and welcomes: Ron Ulle Team Leader and Senior Director — Portfolio Management

Roth Sign Studios Inc. 26241 Cannon Road, Bedford Heights ID: 34-1378126 Date filed: Jan. 11, 2011 Type: Employer’s withholding Amount: $20,940

30195 Chagrin Boulevard Suite 350 West Cleveland, OH 44124

Lobecks Hot Rod Parts Inc. 560 Golden Oak Parkway, Cleveland ID: 34-1454604 Date filed: Jan. 28, 2011 Type: Employer’s withholding, unemployment Amount: $19,976

216-464-4244

Alpha Tool & Mold Inc. 83 Alpha Park, Highland Heights ID: 34-1258012 Date filed: Jan. 7, 2011 Type: Employer’s withholding Amount: $19,604 Ohio Natural Stone LLC 760 W. Bagley Road, Berea ID: 30-0260193 Date filed: Jan. 3, 2011 Type: Employer’s withholding Amount: $18,785 Rockport Medical Center Inc. 3665 W. 117th St., Cleveland ID: 34-1206629 Date filed: Jan. 19, 2011 Type: Employer’s withholding Amount: $14,994 Haylo Manufacturing Co. 5100 Richmond Road, Bedford Heights ID: 34-0905327

Investment Management

t

Wealth & Estate Planning

bnymellonwealthmanagement.com

t

Private Banking

t

Family Office Services

©2011 The Bank of New York Mellon Corporation.

9

20110207-NEWS--10-NAT-CCI-CL_--

10

2/3/2011

4:43 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

FEBRUARY 7 - 13, 2011

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Jump aboard

N

ortheast Ohio? A cradle of entrepreneurial thought? Yes, and a program to which the region gave birth seven years ago to spur the development of new businesses now is serving as a model for other cities to follow. We’re speaking of JumpStart Inc., which civic organizations that included the Cleveland Foundation, the George W. Codrington Foundation and Cleveland Tomorrow (now the Greater Cleveland Partnership) helped get off the ground. Its mission was to assist early-stage businesses with advice and modest monetary investments in order to help build those ventures into job-creating machines. Its CEO from the beginning, Ray Leach, has gained a national reputation for himself and his organization because of the role JumpStart has played in encouraging angel investors and venture capital firms to invest in companies in Northeast Ohio. How? By putting JumpStart’s money where its mouth is and Leach investing in the companies it talks up. Now, Mr. Leach is about to take on an even bigger assignment while remaining in his position here. As announced last week, the Obama administration has selected JumpStart to create a nonprofit, called JumpStart America, that aims to raise $2 billion to fund programs that promote entrepreneurship and innovation in other parts of the country. Mr. Leach will be CEO of both JumpStarts. As JumpStart Inc. chief marketing officer Cathy Belk told Crain’s technology reporter Chuck Soder, it’s unclear exactly how JumpStart America will work. However, Ms. Belk said it likely will draw inspiration from JumpStart Inc.’s “community advisors” division, which already is working with six other cities — Akron, Detroit, Fort Wayne and Minneapolis-St. Paul, among them — to figure out how to spur entrepreneurship in their regions. Officials of JumpStart Inc. believe the new, national nonprofit will help increase Northeast Ohio’s visibility among national foundations and policy makers. We suspect they’re correct, which would be a big plus for a region that itself still is undergoing a transformation in how it thinks about itself and how it approaches economic development. Northeast Ohio has yet to embrace the swashbuckling, risk-taking mentality of California’s Silicon Valley. Nonetheless, thanks to JumpStart and other people and organizations that have encouraged and invested in early-stage companies in our market, a greater entrepreneurial spirit exists here today than it did a decade ago. We may have a long way to go, but we’ve already come a long way, baby — and the recognition received by a group such as JumpStart affirms that we’re on the right track.

FROM THE PUBLISHER

System serves departing Sanders well

T

announcement that he is among 25 being he departure of former Cleveconsidered for the presidency of Bowling land public schools CEO Eugene Green State University, his alma mater. Sanders gets increasingly bothIn his press conference, and during ersome as we get further from his some interviews since, Dr. Sanders abrupt retirement. spoke of his desire to relax and ponder I don’t meet many people who knew the next stage of his life. He joked about Dr. Sanders — even a little — who didn’t being able to wear blue jeans for a while. respect and like him. He seemed Then why ask for a contract engaged and involved, especially extension just a few months in the six months or so since the BRIAN earlier? ballyhooed announcement of TUCKER So in came Peter Raskind, his radical “transformation plan” former National City Bank CEO for the school system. who helped guide the CleveIn the middle of last year, Dr. land-Cuyahoga County Port Sanders asked the school board Authority in the turbulent period and Mayor Frank Jackson (their after the top exec there was boss under state law) for a fired. Again, Mr. Raskind will three-year extension of his work for the princely sum of $1, contract (at $263,000 per year while a search committee plus generous benefits). The begins its work for the school system. mayor and board agreed, only to have Then, as all this news is breaking Dr. Sanders jolt the community six months around the schools comes a story last later with news of his retirement. week in The Plain Dealer that Dr. “Mystifying” is a common word I’ve Sanders also will receive $110,000 for heard from folks in business and civic his accrued, unused vacation days. And leadership roles. A few probably used because of the way public contracts are less flattering terms, given the news that done and pensions are calculated, he surfaced just days after his retirement

qualified for a monthly pension payment of $15,000. That’s $180,000 a year at age 54. Tell me that makes sense. I don’t care how many years he spent in education, retiring at 54 with a pension that large and then starting a second career, perhaps as a highly paid college president, doesn’t seem right. Examples like his — and there are thousands upon thousands of “double dippers” like him (assuming he works again) — show just how messed up the public pension systems are, and how much they need to be changed, at every government level. We know that pension liabilities are a massive problem for all governments right now, and there will be increasing pressure for radical change. Perhaps Gene Sanders saw that coming and really did decide to retire now. He will be among all the other publicly paid employees who do so, under the rationale that they’re simply “doing what they’ve earned under the contracts as they’re written.” Tell that to the parents of the Cleveland students who fear that theirs will be the next school to close. ■

LETTERS

Governmental organization behind times ■ Our traditional way of organizing government service delivery on national, state and local levels is out of touch with how commerce, communications and community have evolved. In fact, the new model of service delivery should reorganize along neighborhood, regional and global levels; that’s how business, the Internet and human beings interact in the 21st century. Why shouldn’t the way government serves people begin shifting toward this new model, too? Imagine how our community maps would look if we revised our 200-yearold government service lines to reflect the way we really live. The new maps would show clusters of neighborhood districts and innovation zones where education, technology and social amenities

converge in regional marketplaces. That’s the actual metropolitan dynamic most of us live in today. Now imagine if geopolitical boundaries were reorganized along government service lines that seamlessly crossed district boundaries with efficiency and economy of scale. That would be reorganizing for our future success. Brian Tucker’s Jan. 24 commentary, “Eighty-eight counties just won’t cut it,” was on the money in highlighting the problem of an anachronistic Ohio county system, originally organized to accommodate people’s day trips by horse and buggy from their homes to the county seat. Aligning governments to those ancient maps leaves Ohioans with predictably ancient service models. Redundant

governments and inefficient services entangle us like a giant cobweb in Ohio. Because we haven’t changed, Ohio is a government of 3,000 independent and competing counties, cities, townships, villages, and school districts. Yet 70% of our people and their patents, and 80% of our State GDP and knowledge jobs, are located in our seven largest metropolitan regions of Ohio. It’s time to stop tinkering with tepid, incremental approaches to regionalism. It’s time we start designing a new model that competitively positions Ohio’s metropolitan regions in the global economy. The clarion call comes from our population problem. Cleveland’s metro region is the 26th most populous in the nation, but it’s also See LETTERS Page 11

20110207-NEWS--11-NAT-CCI-CL_--

2/3/2011

3:34 PM

Page 1

FEBRUARY 7 - 13, 2011

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THE BIG ISSUE The Cleveland Metropolitan School District is searching for a new CEO. Can anyone be successful in that job or are the district’s problems too daunting?

11

Investors watch Egypt’s impact on Middle East Oil prices could rise if unreast spreads By JEFF BENJAMIN Investment News

ROBERT STAIB

KERMIT LIND

GILBERT BLOMGREN

BECKY GRIMM

Cleveland

Cleveland Heights

Cleveland

Strongsville

Yes, I think someone can be successful in that position. It’ll take someone who can really confront all the vested interests. The vendors and the unions.

It (the solution) will come from some group that includes the superintendent. Just the superintendent alone is not going to be an answer.

I don’t think they’re too big to be solved. They’ve got to find the right person.

I would say in any situation, if you have somebody new, it can make a difference.

➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.

Public pensions tout recent improvements Concerns mount over potential regulations By TIMOTHY INKLEBARGER Pensions & Investments

A group of organizations representing state and local governments and public pension plans released a fact sheet that it says aims to set the record straight on the operations and funding of public employee pensions. Released Feb. 1, the fact sheet notes that state and local governments have funded the majority of their pension costs and collectively hold $2.7 trillion for current and future retirees. The fact sheet — issued by 10 organizations, including the National Association of State Retirement Administrators (NASRA), National

Council on Teacher Retirement and National Conference of State Legislatures — also notes that public pension investment returns have exceeded their assumptions over a 25-year period — at 9.25% vs. the assumed 8%. It says state and local governments also have changed benefit levels, contribution rates and made other adjustments to help rebound from losses incurred from the world financial crisis. “The great strides made in the ability of state and local government retirement systems to ensure that more than 20 million working and retired public employees have financial security in retirement have been achieved without federal intervention,” the group states in

LETTERS continued from PAGE 10

one of only three in the top 30 U.S. metro areas losing population. And while Ohio is the nation’s seventhlargest state, it ranks 47th in expected population growth. It’s clear that our old and inefficient way of delivering government resources is a major contributor to our lack of competitiveness. Winning precedents for reorganization exist in places like Oregon, where 40 years ago the state’s Republican governor teamed with Portland’s Democratic mayor to develop a metropolitan strategy for growth, forming a Metro Council of government to guarantee it. The results speak volumes. In four decades Portland has achieved 48% growth, and Oregon’s population has exploded by 83% in its regional centers where development has been targeted. Ohio’s seven major urban centers make it a perfect place to start incorporating a new way of governing that embraces a neighborhood, regional, and global approach — targeting investment in neighbor-

hood districts, delivering services across metropolitan regions, and competing in the global marketplace. There is a better way, and it’s the metro way.

the fact sheet. Keith Brainard, the Georgetown, Texas-based research director for NASRA, said the decision to issue the fact sheet was prompted by the increased attention paid to public pension plans and by proposals at the federal level to “require certain reporting among state and local pension plans.” “We’re concerned about a onesize-fits-all approach to regulate, monitor or measure state and local pension plans,” he said. “Every one of these plans is unique.” ■

From a fixed-income perspective, the ongoing unrest in Egypt should not rattle investors, according to Sara Zervos, head of the global debt team at OppenheimerFunds. Ms. Zervos, who manages more than $13 billion in global fixedincome assets, said her investment strategy has not materially changed since the political unrest began in Egypt more than a week ago. She did note, however, that she will be paying close attention to the way the Egyptian army handles the protestors. “The only way this can be a real (investment) issue is if it spreads throughout the entire Middle East and causes oil prices to spike,” she said. Crude oil prices hovered around $92 a barrel last week as Egypt’s 30-year president Hosni Mubarak announced that he would not seek re-election in September. “Oil is everyone’s favorite indicator of Middle East risk,” Ms. Zervos said. Even though Egypt controls the Suez Canal, which is responsible for 8% of global sea trade, the country’s oil production is not the issue, Ms. Zervos said. “Egypt is not a significant trading partner of any major emerging or developed country,” she said. “The potential impact of what’s happening in Egypt is that it could lead to contagion in places like

Saudi Arabia.” Ultimately, Ms. Zervos believes the risks of such a contagion are minimal, which is why she has not adjusted her benchmark weightings in Egypt. Indeed, she has begun increasing her weighting in dollar-denominated Egyptian bonds. In a research report issued last week, Ms. Zervos wrote that she expects there will be “noise surrounding Egypt and the Middle East for days, if not weeks, and our base case is there will likely be some pressure on the exchange rate of the Egyptian pound, while sovereign yields on local debt are likely to be fairly steady.” Meanwhile, the local equity markets have been volatile. The Egyptian equity markets, measured by the MSCI Egypt Index, fell by more than 21% between Jan. 14 and Jan. 28. The S&P 500 fell by 1.3% over the same period. But the fact that the S&P rallied by more than 2% since Jan. 20, as the protestors in Egypt started clashing with the police, is evidence that the global financial markets are managing to keep the political unrest in context, according to Ms. Zervos. In an attempt to “view Egypt through the lens of the global landscape,” she pointed out that the country of 83 million, which generates $200 billion in gross domestic product, represents 0.3% of global GDP. ■

MARCUS & MILLICHAP CLEVELAND PROUDLY HONORS THE TOP PRODUCERS FOR 2010

Chris Ronayne President University Circle Inc.

Contract story on target ■ Congratulations on a lucid and accurate article in publishing “Kasich push for contract rule changes faces pitfalls” on Page 3 of your Jan. 30 issue. I’ve been reading labor relations newspaper articles for decades. This is the very first one I’ve read that didn’t confuse arbitrators with mediators, binding arbitration with advisory arbitration, and/or mediation with meditation! Kudos.

Michael Barron

Jon McClellan

Ben Baker

Josh Wintermute

National Coverage – Local Expertise How Can We Support Your Strategy in 2011? To Access the Investment Market, Contact the Market Leader.

Michael L. Glass Vice President/Regional Manager Cleveland Office (216) 264-2000

Susan Grody Ruben Labor and employment arbitrator/mediator Cleveland

5005 Rockside Road, Suite 1100 Cleveland, OH 44131

WRITE TO US Send your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 e-mail: mdodosh@crain.com

Dan Burkons

Offices Nationwide

www.MarcusMillichap.com

20110207-NEWS--12-NAT-CCI-CL_--

12

2/3/2011

2:19 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Schoeb to manager, accounting and tax services.

GOING PLACES THE AUSTIN CO.: Michael G. Pierce to president.

FEDERAL RESERVE BANK OF CLEVELAND: Office of Minority and Women Inclusion, Peggy Velimesis to director and Diana Starks to assistant vice president, diversity officer.

CBLH DESIGN: Kevin Kantz, Adam O’Brien and Jeffrey Valus to associates.

WESTFIELD BANK: Timothy E. Phillips to president; Kevin P. Vonderau to chief lending officer.

CONSTRUCTION

FINANCIAL SERVICE

PCS: Steve Abraham to estimator.

APPLE GROWTH PARTNERS: Michael Markowski to principal, health care services; Brett Mangon to senior tax manager; Lindsay Cooper to tax associate; Will Michael to senior tax associate; Rebecca Miller to marketing coordinator; Brigitta Gut to bookkeeper.

JOB CHANGES ARCHITECTURE

RUHLIN CO.: Melissa Martie to marketing coordinator; Nassim Kanj to project engineer.

FINANCE CHASE: John Batcho to middle market division manager, Akron, Canton, Youngstown.

BEST TAX + ACCOUNTING: John

CLAIMS RECOVERY FINANCIAL SERVICES LLC: Anthony DiStaulo to assistant vice president, client relations and marketing. COHEN & CO.: Kim Palmer and Paul Gregory to partners; Adam Hill to principal; Matt Cunningham to senior manager; Bob Beatty to application solutions manager; Nicole Herman, Aly Cottam and Matt Riccomini to managers; Jon Dombrady, Jeremy Smith, Robert Venables, Matt McCall, Lindsay Munaretto, Andrew Sturgill and Katey Vanderwyst to senior accountants.

FEBRUARY 7 - 13, 2011

HEALTH CARE CASE WESTERN RESERVE UNIVERSITY SCHOOL OF MEDICINE AND UNIVERSITY HOSPITALS CASE MEDICAL CENTER: Dr. Clifford V. Harding to chair, Department of Pathology. Abraham

Batcho

Harding

INSURANCE MEDICAL MUTUAL OF OHIO: Kevin Lauterjung to executive vice president, managed care; Irene Koler to director of commercial sales, northeast region.

LEGAL

KPMG: Brian G. Greenberg to director, advisory services.

FAUVER, KEYSE-WALKER & DONOVAN: Kristina M. King to shareholder.

RETIREMENT SOLUTIONS: Kristine Charkosky to internship coordinator.

THOMPSON HINE LLP: Erin C. Hewitt to associate.

ULMER & BERNE LLP: Andrew G. Fiorella to associate.

MANUFACTURING A. SCHULMAN INC.: Sanja Valentic to manager of corporate marketing and business development.

NONPROFIT BIG BROTHERS BIG SISTERS: Lois Pozega to Northeast Ohio regional manager, Amachi Ohio program. HOSPICE OF THE WESTERN RESERVE: William E. Finn to CEO; David Simpson to CEO emeritus. JD BREAST CANCER FOUNDATION: JT Aguila to executive director.

SERVICE FINDLEY DAVIES: Caroline Smith to associate attorney; Jill Leitner and Tara Morey to senior consultants. FLEET RESPONSE: Mike Bonacci to midwest regional sales manager.

Piling the family into the car and driving to the Grand Canyon? Am I wrong to think you’re supposed to relax on vacation?

NEWRY CORP.: Ted Evans Jr. to senior consultant.

TECHNOLOGY OECONNECTION: Alice Lewis to manager, quality.

UTILITY FIRSTENERGY CORP.: Dennis M. Chack to president, Ohio operations.

BOARDS FIRST TEE OF CLEVELAND: Mike deWindt Jr. (Gates Group Capital Partners) to chairman; Craig Donnan to chair-elect; Suzanne Day to secretary; Larry Cruise to treasurer. JD BREAST CANCER FOUNDATION: Karen Lippmann (Cuyahoga County Juvenile Court) to president; Erin Adams Armstrong to vice president; Hayley Williams to second vice president; Anne Curry-Smith to secretary; Mark Royle to treasurer. SHOES AND CLOTHES FOR KIDS: Terence J. Uhl (Landau Public Relations) to chair; Scott Simon to chair-elect; Allan C. Krulak to chair emeritus; vic gelb and Rockette L. Richardson to life directors; William R. Joseph to vice chair; Stephanie McHenry to secretary; A. Lamont Mackley to treasurer.

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

GET DAILY NEWS ALERTS FROM CRAIN’S ! Register for free e-mail alerts and receive:

HOME

THERE ARE PEOPLE WHO DON’T UNDERSTAND THE WAY

AUTO

YOU LIVE. THERE’S AN INSURANCE COMPANY THAT DOES.

MOTORCYCLE DO MORE.

To get the policy you need for the life you want,

The Evarts-Tremaine-Flicker Co.

talk to an independent Safeco agent at:

1100 Chester Ave., Suite 300, Cleveland, OH 44115

© 2011 Safeco Insurance Company of America, Member of Liberty Mutual Group, 1001 4th Ave., Seattle, WA 98154. All rights reserved.

etfco.com | 216-621-7183

■ The Morning Roundup: A collection of the day’s business news from Ohio’s daily papers ■ Breaking news alerts: When major news happens, you’ll know ■ Daily headlines: A collection of Crain’s-produced news and blog items from the day ■ e!Cleveland: A weekly guide to arts and leisure in Northeast Ohio

SIGN UP NOW AT: CrainsCleveland.com/register

20110207-NEWS--13-NAT-CCI-CL_--

2/3/2011

2:20 PM

Page 1

CRAIN’S CLEVELAND BUSINESS

FEBRUARY 7 - 13, 2011

INSIDE

15 HOSPITAL SYSTEMS TEAM TO BOOST PATIENT CARE.

13

HEALTH CARE A MEDICAL MECCA Area institutions benefit as reputation for quality care draws patients from beyond region’s borders By AMY ANN STOESSEL astoessel@crain.com

I

t’s been just about a year since Mooresville, N.C.-based home improvement giant Lowe’s entered into a partnership with the Cleveland Clinic allowing employees and dependents enrolled in the company’s self-insured medical insurance plan to seek cardiac care in Northeast Ohio. The voluntary program covers all medical deductibles and coinsurance amounts as well as travel

and lodging expenses for the patient and a companion. “If we had 10 people use the Clinic in the first year, that would be a win-win,” said Lowe’s spokeswoman Karen Cobb of the company’s initial expectations. Chalk one up in the win category. Since the Cleveland Clinic benefit became available last March 1, 29 Lowe’s employees and dependents from across the country have had procedures performed in Northeast Ohio, Ms. See MEDICAL Page 14

Out-of-state resident a case in point

MARC GOLUB PHOTOS

Nelson Bobb, of Greensboro, N.C., visited University Hospitals last week for a post-surgery checkup. Mr. Bobb underwent surgery in December for an implantable diaphragm pacing device, which provides electrical stimulation to his diaphragm.

Nelson Bobb (left) isn’t a fan of Cleveland snow, but that hasn’t deterred him from traveling from his home in Greensboro, N.C., to seek treatment for his diaphragm, which had stopped functioning properly, and a collapsed lung. Under the care of Dr. Raymond Onders of University Hospitals Case Medical Center, Mr. Bobb recently underwent minimally invasive surgery to implant the same type of diaphragm pacing device, pictured at right, used on the late Christopher Reeve. “This process has made a tremendous difference in my everyday life,” said Mr. Bobb of the device that now delivers electrical stimulation 14 times a minute to his diaphragm, ultimately aimed at improving his breathing. Mr. Bobb — a Kent State University

graduate who for 26 years was the athletic director at the University of North Carolina at Greensboro — came to Cleveland for a second opinion at the suggestion of his sister, who lives in the area with her husband. Mr. Bobb’s sister has a nursing background, and she has a friend who works at UH. “The way that I’ve been handled, the whole professional approach to my needs is phenomenal,” he said. Today, Mr. Bobb isn’t only a proponent of the health care he has received; the city itself has gained a fan. “Take away the winter … Cleveland is a nice city to visit,” said Mr. Bobb, noting that he’s had a chance to take in some of the local flavor with his brotherin-law, specifically sampling some of the region’s eateries. — Amy Ann Stoessel

Providers aren’t missing a beat in building up cardiac care BY JOEL HAMMOND jmhammond@crain.com

Private physicians join ranks of larger hospitals amid industry changes

C

aiming to stay there, and others are trying to keep pace? MetroHealth Medical Center and Akron General Medical Center each recently hired six cardiologists, Metro from a variety of hospitals and medical schools and Akron General from the North Ohio Heart Center, a private cardiology practice with seven locations in Northeast Ohio.

ardiac care is one of a hospital’s most lucrative areas. And Northeast Ohio — with a myriad of care options, including the No. 1 heart care center in the nation, and an aging population with a higher rate of heart disease than the rest of the nation — is ripe for the picking. Is it any wonder, then, that the region’s top dogs in cardiac care are

The latter group’s joining Akron General represents a growing trend nationally, according to the American College of Cardiology. In a September survey, the college found 48% of cardiologists in private practices were considering or already in the process of integrating with a hospital system. A decline in Medicare reimbursements has put the squeeze on those private

practitioners; most famously, the Arizona Heart Institute, founded 40 years ago by globally known cardiovascular surgeon Ed Diethrich, in August went bankrupt, saddled with millions in liabilities. “The private practitioner is becoming extinct,” said Daniel Simon, the director of the Harrington-McLaughlin Heart & Vascular

Institute at University Hospitals. “Cardiology’s golden age is gone with declining reimbursement. Doctors are finding it increasingly difficult to compete.” Additionally, compliance with the federal health care reform law that newly empowered House Republicans want repealed also has played a role, the biggest part being known as “accountable care organizations.” It’s a fancy way of saying hospitals, in order to cut costs for patients, See CARE Page 15

20110207-NEWS--14-NAT-CCI-CL_--

2/3/2011

3:34 PM

Page 1

14 CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

FEBRUARY 7 - 13, 2011

HEALTH CARE

Medical: Savvy patients find their way to Northeast Ohio continued from PAGE 13

Cobb said. Of course, the Cleveland Clinic is not the only heath care institution in Northeast Ohio that’s caring for patients from outside the area. In fact, more savvy patients, increased access to information and specialized medicine all are serving as drivers when it comes to health care travel — and many working in the medical community say it’s a trend they expect will continue and grow. Often referred to as “medical tourism,” the phenomenon of people traveling for health care is not a new one, but it is one that appears to be gaining some traction, according to some in Northeast Ohio. According to information from the Ohio Hospital Association, roughly 3.4% of U.S. patient visits to the large majority of Ohio hospitals were by out-of-state residents in 2009. This compares to 3.1% in 2007 and 2008. “People tend to want the best health care their money can buy,” said Tiffany Himmelreich, the association’s spokeswoman.

Star performers Indeed, Michael McMillan, Cleveland Clinic executive director for market and network services, said the Clinic is in active and broad-based discussions with about a dozen Fortune 50 and 100 companies for deals similar to that with Lowe’s. Additionally, the arrangement with Lowe’s may be expanded to include other specialties.

“We are building an important new marketplace,” Mr. McMillan said. “People are increasingly comfortable with the idea that there are specialized centers of care.” Both University Hospitals and MetroHealth Medical Center agree that having a certain reputation and level of expertise can serve to attract patients from outside the area — whether it’s through physician referral or patient research. “Over the last few years … we were fortunate enough to bring to Cleveland a number of specialized physicians,” said Dr. Michael Nochomovitz, president, University Hospitals Physician Services. There are UH doctors known for a wide range of specialties, from cochlear implants and cancer care to hernia repair, just to name a few, according to Dr. Nochomovitz. “It’s certainly part of our strategy to promote our physicians nationally and internationally,” he said. Dr. Mauricio Arruda, for one, was featured on “The Today Show” for a novel procedure to treat atrial fibrillation, for which patients have traveled from Brazil and Canada and several other states. “These patients find their way to Cleveland,” Dr. Nochomovitz said. “Our process has focused on the unique physician and their area of expertise.” Similarly, MetroHealth Medical Center has seen interest from outof-area patients in part due to its designation by the National Institute on Disability and Rehabilitation Research as one of 14 model systems nationally for Spinal Cord Injury Rehabilitation, according to

On average, Dr. Weiner said 30% of his patients are from outside of Northeast Ohio, and 60% are from outside of Summa’s coverage area. While Dr. Weiner, who has been in practice for 18 years, said the types of conditions that would necessitate care from an orthopedic oncologist are not all that common, it still does mean that he often is treating patients from outside of the area. “Patients have to travel to get the care that they need,” he said.

‘An advocate on your side’

MARC GOLUB

Nelson Bobb, of Greensboro, N.C., receives a checkup for a procedure he had in December at University Hospitals. Mr. Bobb underwent surgery for an implantable diaphragm pacing device, which provides electrical stimulation to his diaphragm. Dr. Greg Nemunaitis, the hospital’s director of spinal cord injury rehabilitation and director of the Spinal Cord Injury Model System. “It’s one thing to know you’re good, but to have someone else say you’re good is even better,” he said.

Unique commodities Shawn Lyden, executive vice president for Akron Children’s Hospital, said while it is not necessarily part of his institution’s strategic plan to market its services outside the region, patients often are drawn to physicians with high profiles or unique expertise. According to patient demographic information provided by Akron Children’s, of 369,673

patient visits in 2010, 3,601 were from patients from outside of Ohio. Within the state, 1,751 of 366,072 visits were from outside Akron Children’s 25-county service area. “The more informed consumers get the more I see them shopping for services,” Mr. Lyden said. Additionally, he said specialists, such as those in cardiac care, orthopedics and neonatal care, often are hard to come by in pediatric medicine. Similarly, Dr. Scott Weiner, chairman of the Department of Orthopaedics for Summa Health System’s St. Thomas and Akron City Hospital, is one of about six in the state who practice the specialty of orthopedic oncology.

At the Cleveland Clinic, there is an entire full-service department dedicated to helping out-of-area patients. Dr. Bill Ruschhaupt, chairman of the department known as Global Patient Services, said patients were seen last year at the Clinic from every state and 135 countries (although international patients make up a small percentage of total patient volume). Domestically, there were 40,000 unique Clinic patients from outside Ohio last year, contributing to 25% of hospital discharges. In 2003, 21% of discharges came from other states. The growth in the number of patients traveling to University Hospitals for treatment even prompted the formation of a concierge-type service to help coordinate visits. Patient concerns can range from lodging and travel issues to making sure a pet or child is accommodated for while in Northeast Ohio. “It really helps to ease anxiety … to know you have an advocate on your side,” said Erin Slay, patient relations officer. ■

Clinic hotels cater to unique needs

4455 Glenbrook Road-Willoughby,Ohio (800) 331-7327

Solutions for Your Medical Imaging Needs

Alpha Imaging is the Midwest’s Premier Distributor of Medical Imaging Equipment Our Product Line Includes Equipment Manufactured by: Shimadzu Medical Systems ~ Hologic ~ Omega Medical Imaging Neusoft Medical Systems~ Konica Minolta ~ Del Medical ~ Infinitt Canon Medical ~ Sapheneia ~ RiverRain

www.alpha-imaging.com Celebrating Our 25th Year!

For hoteliers Neville Erasmus and Michael Cooper, “Please come back again,” is not always an appropriate statement to make when guests are checking out. Mr. Erasmus is executive assistant manager at the InterContinental Suites Hotel while Mr. Cooper is executive assistant manager, InterContinental Hotel. Both properties are owned by the Cleveland Clinic and on the health care system’s main campus in Cleveland. “The guests here … their needs are very different,” Mr. Erasmus said. “You have to be careful saying to someone, ‘Have a great day.’” Roughly 70% of the guests staying at Mr. Erasmus’ property — and 50% of those at Mr. Cooper’s property — are patients of the Cleveland Clinic or family members of patients, for whom discounted rates are available. “You feel like you’re doing more than what a normal hotelier would do,” Mr. Cooper said. “You share in the joy and sadness of life here.” To that end, Mr. Cooper said it is critical the right employees are hired — people who can be empathetic and sensitive to a variety of needs, including those that might occur with a patient pre- and post-operation. Blood-borne pathogen education and cultural sensitivity are top of mind. “A lot of what we focus on is how we train our team,” said Mr. Cooper. “Our employees are very calm and

professional.” On the facility side, the InterContinental Suites Hotel, opened in 1999, is in the midst of a propertywide renovation, all planned for with the patient and their family in mind, Mr. Erasmus said. From aromatherapy to color and food choices to more practical amenities such as in-room freezers, attention was paid toward promoting a sense of wellness. The hotel even makes available specialized technology aimed at reducing stress. “We’ve really thought of every detail to really relax the guest and make them feel comfortable,” Mr. Erasmus said. Comfort is especially important at both properties since some guests are long-term, ranging from two to three months to longer than a year. That also means going the extra mile for family members who might be looking for ways occupy themselves while away from home for such an extended period of time. “We have family members staying here … and their whole lives have been turned upside down,” Mr. Cooper said. Mr. Cooper said he only expects to see health care travel increase as the economy improves. “It’s really a new area for the hotel industry,” he said. “Medical tourism is a new part … I think it’s going to be very important.” — Amy Ann Stoessel

20110207-NEWS--15-NAT-CCI-CL_--

2/4/2011

11:10 AM

Page 1

FEBRUARY 7 - 13, 2011

CRAIN’S CLEVELAND BUSINESS 15

WWW.CRAINSCLEVELAND.COM

HEALTH CARE

Institutions benefit from collaboration By TIMOTHY MAGAW tmagaw@crain.com

T

he sheer number of Northeast Ohio health care providers offers a fertile ground for spirited competition, but it also presents an opportunity for strategic collaborations aimed at improving care in the region and beyond. Examples are strewn throughout the area’s medical landscape. Akron Children’s Hospital, for instance, announced in December it would provide pediatric care at the MetroHealth System starting this year. Also, the Cleveland Clinic’s Heart and Vascular Institute has partnered with six hospitals in the country — most recently one in Kentucky — and more are in the pipeline. The growing stream of partnerships and affiliations between health care groups allows providers to capitalize on each other’s resources and gain access to new revenue streams. Meanwhile, health care observers note that such collaborations are going to continue to surface, especially as the federal health care reform law takes hold. “From an institution receiving the service, there’s that ability to

position yourself as being able to credibly deliver the care,” said Bill Ryan, president and CEO of the Center for Health Affairs, an association representing local hospitals. “From the perspective of the institution bringing care, it’s about extending market reach, increased market share and long-term referrals.” Akron Children’s move to offer its services in Cuyahoga County is part of a strategy of regional growth, according to Dr. Norm Christopher, Akron Children’s chairman of the department of pediatrics. The strategy, he noted, is driven by health care providers who want to increase the scope of services provided for children and their families close to home. Still, some patients with particularly acute needs may need to receive care at the Akron campus, but the idea is to broaden Akron Children’s Hospital into an accountable care organization — a still-evolving component of the federal health care reform law that aims to band together medical providers and reward them with financial incentives for providing quality care at a controlled cost. “We want to be situated in a good way going forward, and we want to improve health and wellness in the

entire community when that’s possible,” Dr. Christopher said.

Spreading the specialties Meanwhile, Dr. Christopher said it’s difficult for some hospitals to recruit certain specialists, particularly in pediatrics, to create a robust network of providers. Systems such as MetroHealth are branching out to tap into other health care providers’ resources to fill that void. “There is a tremendous shortage in subspecialty service providers,” Dr. Christopher said. “Regionalism is evolving as a strategic response to those shortages.” Similarly, University Hospitals offers several of its services at community-based hospitals. The health system recently announced that certified neonatal nurse practitioners from Rainbow Babies & Children’s Hospital will care for newborns with serious medical issues at Parma Community General’s special care nursery. UH also has cancer centers located at hospitals throughout the state, including Firelands Regional Medical Center in Sandusky, Trumbull Memorial Hospital in Warren and Southwest General Health Center in Middleburg Heights, which are led by clinical staff from UH’s Seidman Cancer Center.

“It’s really shown from a cost standpoint, it’s cheaper to do it that way than to duplicate services,” according to Richard Hanson, president of UH community hospitals and ambulatory networks. As for the Clinic’s move to align its heart and vascular institute with other hospitals, the strategy is to spread the Clinic’s expertise and ultimately improve patient outcomes across the country, according to Dr. Joseph Cacchione, the director of clinical integration at the Heart and Vascular Institute. The Clinic is paid for its services, but the benefit for partnering institutions is the ability to align with the Clinic’s brand and improve care. “We actually are looking to improve quality of care across the country,” Dr. Cacchione said. “Even though we’re competitors, we’re all kind of in this together.”

Pinching the pennies The stresses of health care reform and the uncertain Medicare and

Medicaid reimbursement climate have been significant drivers of such collaborations and partnerships, said Thomas Strauss, president and CEO of the Summa Health System. Mr. Strauss noted that it’s become a necessity for health care providers to come together and find how best to leverage their resources and not duplicate services. Summa, for instance, tapped Akron Children’s Hospital last fall to maintain its special care nursery at Summa’s Akron City Hospital. MetroHealth recently affiliated with a large independent physician collective — Premier Physicians Group — in Cuyahoga County. Dr. William Lewis, chairman of the market development campaign and chief of clinical cardiology, said the arrangement also allows Premier’s physicians to remain independent while allowing them to receive some services offered to those employed directly with MetroHealth, such as the electronic medical record system. “I think that those types of relationships will go on as long as they’re viable,” he said. “We want to embrace that. That’s what accountable care is all about.” ■

BUSINESS. Private medical practice credit & special physician mortgage loan program*

Care: Providers seek to improve expertise continued from PAGE 13

need to ensure every one of a patient’s needs are met under one roof, and more specialists can help accomplish that. “There’s a financial incentive for providers to work together or become part of the same organization,” said Tom Campanella, the director of the health care MBA program at Baldwin-Wallace College. “The theory behind it is that health care is fragmented, so they’ve tried to incent everyone to come together.”

Recent moves Metro’s No. 1 priority, according to Dr. David Rosenbaum, the director of the hospital’s Heart and Vascular Research Center, is to intervene much earlier in the heart care timeline; in other words, to attack disease before it’s too late. “We want to change the natural evolution of the disease,” Dr. Rosenbaum said. “The emphasis has been on applying technologies to the very end stages of heart disease, but we don’t do nearly a good enough job more upstream in the process, where it will have more impact.” Two of the new physicians specialize in electrophysiology, and Dr. Rosenbaum said Metro hopes to develop a heart failure program to work in tandem with its robust team of arrhythmia specialists. Akron General’s move comes as the hospital’s cardiac center was “losing steam,” said Dr. Dennis Wright, the executive medical director of the Heart and Vascular service line for Akron General. So the hospital scooped up five physicians who previously worked for the North Ohio Heart Center. The new physicians bring expertise in imaging, an area in which Dr. Wright said Akron General previously lagged.

The lucrative nature of heart care also played a role, and Dr. Wright said the hospital is set up well to meet accountable care mandates. “We looked at it as, ‘How do we reinvigorate and reimagine what our future will be in heart and vascular?’” Dr. Wright said. “If we were going to continue to make progress, we needed a group of cardiologists that were dedicated to our facilities.”

The whys According to the Center for Studying Health System Change’s latest Cleveland Community report, the region’s heart disease rate is 5.3%, higher than the 4.1% in other metro areas with more than 400,000 residents. As the area’s population continues to age, the need for quality heart care, and plenty of it, only will intensify. At UH, the heart and vascular department has continued to grow since Dr. Simon came to Cleveland from Harvard Medical School in 2006, when he found that the cardiovascular operation at UH was profitable, but “not appropriately sized.” Since then, the division of cardiovascular medicine has grown from 21 to 58 faculty members, and the amount of committed National Institutes of Health research grants has grown from about $2 million to $18 million, Dr. Simon said. All the while, the Cleveland Clinic continues to be the national leader in heart care, according to U.S. News & World Report, which has named the Clinic’s heart program No. 1 in the U.S. for 16 years running. Dr. Steven Nissen, the chair of the department of cardiovascular medicine at the Clinic, said the department has grown continuously, most recently in imaging and electrophysiology, the latter an area where it

will add three more doctors in July. And keeping up with those two giants also has played a big role in recent hiring, B-W’s Mr. Campanella said. In addition to the lofty statuses enjoyed by the Clinic and UH, Summa Health System two years ago scooped up a major Akron-area cardiology practice. “There are defensive and offensive strategies at work,” he said. “Metro is competing against the Clinic and UH, and Akron General and Summa are competing. (Metro and Akron General) want to protect the heart surgeries they perform and referrals they get, and bring in new referrals.” ■

LIBERTY BANK, N.A. N.A. BANK,

C

MEMBER FDIC

BEACHWOOD HQ

216.359.5500

Building our bank one quality relationship at a time. *CONTACT US FOR THE B BEST EST & MOST CURRENT TERMS AVAILABLE, SUBJECT TO CREDIT APPROVAL APPROVAL..

Patient Satisfaction is one of our top priorities – and our patients agree! How do we know? We asked them, and they told us. We’re proud that our patients and their families recognize our service and dedication, and we’ll continue to work to maintain and exceed their expectations. For more information about the VNA or for more comments from our patients, go to www.VNAohio.org. £ nÇÇ 96 " "ÊÊUÊÊ£ nÇÇ È n ÈÓÈ{

20110207-NEWS--16-NAT-CCI-CL_--

16

2/4/2011

11:11 AM

Page 1

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

FEBRUARY 7 - 13, 2011

LARGEST HOTELS

RANKED BY NUMBER OF GUEST ROOMS(1) Number of guest rooms

Number of meeting rooms

Group room rate ($)

Full-time employees (12-1-2010)

1

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

Hotel owner

General manager

884

26

95,000

95-195

94-594

960

Todd Nelson

Brian Shanle

2

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

650

3

2,898

NA

97-279

NA

Cedar Fair LP

Katie Wobser

3

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

491

33

62,000

239

109-299

320

CTF Hotel Holdings Inc.

Gary McGauley

4

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

472

20

28,000

89-109

79-129

NA

Driftwood Hospitality Management LLC

Stephen Moran

5

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

404

17

16,000

149-179

115-135

200

Twin Tier Hospitality LLC Satish Duggal

Ali Chiani

6

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

400

16

17,000

179-269

99-199

NA

Wells Real Estate Funds

Bob Megazinni

7

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

379

10

10,347

119-189

79-179

118

The Hotel Group

Leonard Clifton

8

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

372

16

15,500

149+

109+

NA

Thomas Point Ventures

Rick Bertram

9

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

364

18

18,100

130

85-99

NA

Janus Hotels & Resorts Inc.

Tom Moore

10

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

350

0

NA

NA

89-199

NA

Cedar Fair LP

Mike Levy

11

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

303

10

12,500

139

79-99

125

Hospitality Ventures

Joe Isernia

12

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

299

13

35,000

NA

NA

NA

Cleveland Clinic

Campbell Black

13

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

295

15

15,000

209

NA

70

Western and Southern Insurance-Eagle Realty

Keith Shopnick

14

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

293

9

7,100

239

129-199

100

Cleveland Arcade LLC

Robert Kallmeyer

15

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

274

20

18,000

129

NA

NA

David and Ann Brennan

Tom Finley

16

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

271

13

17,500

159-209

129-169

NA

AP/Aim Independence Suites TRS LLC

Kendall Clay

17

Holiday Inn Westlake 1100 Crocker Road, Westlake 44145 (440) 871-6000/http://www.ichotelsgroup.com/h/d/hi/1/en/hotel/clewl

266

11

11,000

89-119

79-119

100

Twin Tier Hospitality

Janet Remalius

18

Embassy Suites Cleveland Downtown 1701 E. 12th St., Cleveland 44114 (216) 523-8000/www.clevelanddowntown.embassysuites.com

252

10

10,541

129-229

109-159

NA

K & D Group Inc.

Kenric Hall

19

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

242

14

20,000

179

NA

138

Oakbrook Hotels

Marc Jacobs

20

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

240

14

20,000

159

99-149

100

Gateway Hospitality Group George M. Iannacone Harvey Schach

20

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

240

25

50,000

85-165

105-195

NA

Gregory Hill

Gregory Hill

22

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

238

14

16,000

109-149

79-149

90

Toledo Inns Inc.

Kathy Jennings

23

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

237

8

7,691

99-259

99-259

NA

Cedar Fair LP

Tyler Adams

24

Cleveland Clinic Guesthouse 9601 Euclid Ave., Cleveland 44106 (216) 707-4200/www.hotels.clevelandclinic.com

232

0

0

NA

NA

NA

Cleveland Clinic

Campbell Black

25

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

216

6

30,000

79

72

NA

Sandip Thakkar

Sandip Thakkar

25

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

216

7

5,878

159-249

99-229

NA

IA Urban Hotels Beachwood TRS LLC

Mark Herron

27

Ramada Plaza Cleveland East 28600 Ridgehills Drive, Wickliffe 44092 (440) 585-0600/www.ramada.com

213

15

10,000

49-99

59-109

10

Inn at Wickliffe LLC

Atul K. Patel

28

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

209

14

23,000

189

99-149

NA

Riverside Community Urban Redevelopment Corp.

Robert Trammell

29

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

205

13

24,466

249-299

149-229

NA

Forest City Enterprises Inc. Joseph Mattioli

29

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

205

9

13,079

119-205

89-169

60

PlayhouseSquare

Name Rank Address Phone/Web site

Meeting space Corporate (square feet) room rate ($)

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) All information as of Dec. 1, 2010.

Brian Moloney

RESEARCHED BY Deborah W. Hillyer

20110207-NEWS--17-NAT-CCI-CL_--

2/4/2011

2:07 PM

Page 1

FEBRUARY 7 - 13, 2011

WWW.CRAINSCLEVELAND.COM

CRAIN’S CLEVELAND BUSINESS

17

Steel: Fewer mills back online continued from PAGE 1

Economists and those who advise manufacturers on price trends say steel and other metals are going to get more expensive still, even as mills and service centers already give their customers notifications of surcharges and price hikes. Several manufacturers shared with Crain’s Cleveland Business recent correspondences they had received from their steel providers informing them of price increases on steel from Timken Co., Nucor, Republic Steel and Severstal — companies that supply much of the stock for area machine shops. Manufacturers such as Astro say they stay in close communication with their customers, so they’re able to resolve pricing issues. But raw materials also represent a fairly small portion of the overall cost of their goods — highly engineered, labor-intensive components, often stuffed with expensive electronics.

Relationship advice Others have a more immediate problem. For companies that make simple products, such as bolts, washers or stamped brackets, most of what they charge customers goes to pay for their raw materials. At Master Products Co. in Cleveland, raw materials make up 80% to 90% of the total cost of the company’s washers and other stamped products, said owner Jeff Walters. On the supply side, he’s facing ongoing price increases from steel mills that were slow to restart all their plants. On the sell side, he’s facing customers who are themselves constantly under price pressure. Building good relationships with the service centers that cut and sell him his steel has allowed the company to cope, Mr. Walters said. “The price increases (Master Products is seeing) are coming from the mills, not the processors,” Mr. Walters said. “We are fortunate to have relationships with processors that have helped ease the burden by warning us of increases before they happen and directing our purchase decisions in light of this information.” But Mr. Walters resents that so often of late he has had to justify price increases at the mills with his own customers. In the end, Master Products and other companies say they must sell themselves over and over again to the same customers — once to get the initial business, and then repeatedly to keep it in the face of price increases that they must explain. “It’s like selling for the enemy,” Mr. Walters said.

Economics 101 Steel companies cite strong demand for their products as the reason for both longer lead times and higher prices. But the lead times also are long, manufacturers say, because too few steel mills have come back online in the economic recovery so far. Cleveland’s ArcelorMittal mill was brought back up in the fall of 2009, but it largely supplies flat-rolled steel to large stampers that make auto body parts and large consumer appliances. Too few of the mills that produce the type of steel that machinists need have come back, though. Timken doesn’t comment on specific pricing issues, but it says it’s working hard to bring up capacity

and efficiency at its steel works in Canton. It has announced $85 million in new investments at its Canton works since last August. But, as an indication of how long it takes to add that capacity, the company has said some of those capital investments won’t be in place and running until 2013. It’s no different for the companies working in plastics, where prices also are moving up within a system constrained by capacity issues. “Prices are moving, it almost seems weekly right now,” said Matt Hlavin, president of Thogus Products, a plastic molder in Avon Lake. “It looks like a good sign for the economy, because material is moving fast and furious.” Like those who work in metal, Mr. Hlavin said he’s trying to manage not only higher prices, but also longer lead times. His customers specify the material he uses — and therefore the price they pay for it — but the lead times present a greater challenge, he said. Just as with steel, the plastic industry is affected by too little capacity among suppliers of plastic resin to meet surges in demand quickly. “The producers cut capacity” when the economy went in the tank, Mr. Hlavin said — and so far, they’ve not ramped up production sufficiently to meet resurgent demand. “It’s not like flicking a switch to bring it back, so we were out to 16 weeks on some lead times” for the supplies Thogus needs for its own production.

Big guys not exempt Even with their better bargaining and buying power, public companies also are feeling the effects of rising raw material prices. In the most recent round of quarterly earnings announcements, local manufacturing giants such as Invacare Corp., Lubrizol Corp. and PolyOne Corp. all have noted that they’re contending with rising prices. PolyOne, a polymer producer, announced a 12% rise in fourthquarter revenues, but said only half that increase represented an actual increase in shipping volumes. The rest was due to price increases for raw materials that ended up also increasing the prices PolyOne charged for its products. At Invacare, a maker of wheelchairs and home health products, the company in announcing yearend results last week said its sales growth and interest savings this year “will likely be partially offset by the potential for continued increases in freight and commodity costs, particularly in aluminum and steel, which are already being incurred in 2011.” The Institute for Supply Management’s Prices Paid Index for January lists 30 major commodities, from steel and plastic to corn and nuts, that increased in price over the month. Not a single item posted a price decrease. Almost two-thirds of its membership, 64%, reported rising raw material costs for the month, while only 1% said they’d seen a price drop. Bill Stone, chief investment strategist of PNC Asset Management Group, said many factors are driving up raw material prices, including an increase in the monetary supply and the effects of economic growth on basic supply and demand. Even investors buying up

commodities as a hedge against inflation can increase the prices manufacturers pay, Mr. Stone said.

Working with the customer For manufacturers, they have little choice but to pass on the price increases to customers — or to swallow them in part or in full and see their profit margins erode. Thogus has it easier than most when it comes to passing along its costs. Mr. Hlavin said the price of raw materials is decided largely by his customers, who usually are specific about which plastic they want in their Thogus-made parts. But Thogus uses another strategy as well, Mr. Hlavin said, by always offering customers an alternative material, one that might be cheaper or more quickly available. Mr. Hlavin said whenever Thogus gets a new contract or customer, one of the first things it does is assign its own engineers to the project. Their job, he said, is to determine what alternative materials could be used for a job in addition to the materials the customer specifies. That way, he said, both Thogus and its customers have options if the original material becomes expensive or difficult to obtain. ■

FILE PHOTO/JANINE BENTIVEGNA

Willoughby-based Astro Manufacturing & Design Corp. — where expeditor Mark McDougle works in this file photo — says it is able to resolve raw material pricing issues by communicating regularly with its customers.

20110207-NEWS--18-NAT-CCI-CL_--

18

2/4/2011

11:11 AM

Page 1

CRAIN’S CLEVELAND BUSINESS

Contact: Phone: Fax: E-mail:

Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com

WWW.CRAINSCLEVELAND.COM

FEBRUARY 7 - 13, 2011

REAL ESTATE

AUCTIONS

Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card

OFFICE SPACE For Sale

PUBLIC AUCTION By Order of Court of Common Pleas, Lucas County, Ohio Farmers & Merchants State Bank vs Hare Krishna LLC, et al Case #CI200907238 1704 Tollgate Drive, Maumee Ohio 43537 Thurs., March 3, 2011 @ 12:00PM (Noon)

Tangletown/Beachcliff Rocky River

INDEPENDENCE CORPORATE CENTER 7100 E. Pleasant Valley Rd. Premium First Floor Space Available up to 5,500 contiguous sq. ft.

Also FOR LEASE from 500-10,000 sq. ft. 440-333-0000x777

DOWNTOWN OFFICES Bonus Perks Included for 2,000 s.f. + Tenants Perks included in rent: 2-5 megs of internet bandwidth* 1 Storage room 3-9 early bird parking booklets @ $60/mo each*

Free Conference Room (paid by Landlord)* Exterior Signage (Superior Building Only) Free kitchen/breakroom (paid by Landlord) In Office Safe Other Amenities

Smaller Offices and Suites Also Available Superior Building 815 Superior Ave. Directions: Conant St. & I-80/90 (OH Tnpk) Exit 59 Just North of Dussel Rd.

Owner Operated Contact: Abram Schwarz, Sales Manager * Based on square footage of leased space Parking Garage Nearby **Some restrictions apply 216-255-3913 or aschwarz@evbco.com

Situated in Tollgate Subd in City of Maumee, OH, 36,740 SqFt, 2-story Hotel w/150 rooms built 1987 on 2.6+/- Acres. Close to Shopping, Movie Cinemas, Walleye Fishing, Rec Parks, (Softball, Soccer) & variety of restaurants. 45 min South of Detroit & 60 min West of Cedar Point on Ohio 80/90 Tnpk. NEXT TO TOLEDO'S ONLY INDOOR WATER PARK, SPLASH BAY. Taxes are $17,980.28/half yr

BUSINESS SERVICES

Landerhaven

FLYNN ENVIRONMENTAL

440.449.0700 executivecaterers.com

(800) 690-9409

When You Need The Best

www.flynnenvironmental.com

ATTENTION BUSINESS SERVICE OWNERS!

SUBSTANTIAL DISCOUNT off your ad price.

Toll Free: 866-870-5500 Auctioneers: Wayne M. Wilson CAI, Brent J. Wilson CAI Denver N. Geitgey CAI, Fred Nott, Keith Whitman, William H. Retcher, Shad T. Ridenour CAI, Richard Reed, Sam Kunsman www.WilsonAuctionLtd.com

REAL ESTATE AUCTION, MAR. 9th • BANK DIRECTED SALE

TINKER’S CREEK TAVERN & RESTAURANT

14000 Tinkers Creek Road Walton Hills, OH 44146

BIDDING COMMENCES AT:

$100,000

Step right into this turn-key business opportunity. This multi-award winning 108 yr. old restaurant has been fully restored, is currently operating & seats 74 inside & 54 outside with parking for over 60 cars. This creekside tavern/restaurant’s patio was voted one of the top 4 most desirable in the Greater Cleveland Area with its 600+ ft. of frontage along the creek that makes for a fabulous setting. Truly an opportunity of a lifetime to own an operate a wonderful landmark tavern/restaurant. All kitchen equipment, furniture, inventory & 7day liquor license w/carry-out is included.

ON-SITE INSPECTIONS: Thursdays, Feb. 17, 24 & Mar. 3 from 1 - 3:00 PM For Brochure & Terms of Sale call:

To find out more, contact Genny Donley at 216.771.5172

INVESTMENT OPPORTUNITY Hollywood Movie Being made in Cleveland Writer/Director with “A list” script credits is seeking investors to fund a “G” rated film to be shot in Cleveland this summer. Already in Place: Proven Writer/Director, Experienced Hollywood Assoc. Producer, Discussions with Distributor for Theatrical Release, Script, Actors, State of Ohio Tax incentives, Site Permits, cameras, cranes, Special Effects staff and equipment. Low Cleveland cost film for lucrative “G” market. Offers high return on investment – Full or percentage of film investments available.

Michael Berland or Mark Abood

216-360-0009 Chartwell Auctions/Chartwell Group, LLC

440 951-1665

For Details Contact Keith Kornell kkornell@crown-kornell.com

GORDON GREENE, OH RE BROKER / AUCTIONEER

INVESTMENT PROPERTY

TENNIS CLUB

INVESTMENT OPPORTUNITY - CHAGRIN FALLS AREA Rare opportunity to own an operating first rate Tennis, Swimming Club with an Active Membership! • 10 Tennis Courts (5 Indoor) • Indoor/Outdoor Pool • 4 Paddle Tennis Courts • 13,000 SF Clubhouse on 10 Acres

• Bar and Dining • Full Fitness and Aerobics • Locker Rooms • Sand Volleyball Court

Will consider creative financing/deal structure with or without Real Estate!

The Wembley Club Priced at a Fraction of Replacement Value! For further information, please call:

R. M. “Mac” Biggar, Jr., SIOR, CCIM 216-839-2020 or mbiggar@chartwellgroup.com

COMMERCIAL SPACE SUBURBAN MEDICAL CENTER 30,000 sqft, A-1 Condition Great Location & Parking NOI 174k, Asking 1.55M

440-899-7887 Prudential Lucien & Assoc.

DON’T FORGET: Crain’s Cleveland Business on-line @ CrainsCleveland.com For all the latest business news...online

For daily on-line updates, sign up @ CrainsCleveland.com/Daily FOR SALE Stys Inc. Expanding, Relocating, Closing? Do you have asset machinery? Forklifts, Warehouse Equipment, etc. We Buy and Sell

216-641-7897 www.StysInc.com

Crain’s Executive Recruiter

For Assessments

Submit your business card to promote your service and receive a 825 N. Main St. Bryan, OH 43506 / 419-636-5500 241 S. Main St., Bowling Green, OH 43402 / 419-354-7653

216-674-0525

CLASSIFIED

Call the Auction Co., for Appt. to view & more info. Look property over & be prepared to bid. DON’T MISS THIS OPPORTUNITY!! Terms: All bids begin at 2/3’s of the appraised value of $1,200,000; Opening bid will be $800,000. Successful Bidder will deposit 10% Down Day of Sale by Cash or Cashier’s Check. Purchaser shall pay the Balance of the Purchase Price by Cash, Cashier’s Check, Certified Funds and/or Wire Transfer within 30 days. The deposit shall be subject to forfeiture in the event that purchaser fails to pay the balance due. The successful purchaser will receive a sheriff’s deed for the property. Taxes will be paid from sale proceeds in accordance with the Lucas County method. Other sale terms are in accord with the Sale Guidelines for Lucas County Sheriff Sales and the Orders of the Court of Common Pleas, Lucas County, Ohio. 2% Buyers Premium Added.

City Club Building 850 Euclid Ave.

www.independencecorporatecenter.com

Liquor License For Sale $35k. Clean Cleveland Full D1, D3, D3a & D6 Available Immediately

Call Sam at 216-367-2348

FMC Technologies, Inc. (NYSE:FTI) is a leading global provider of technology solutions for the energy industry. Named by FORTUNE® Magazine as the World’s Most Admired Oil and Gas Equipment, Service Company in 2010, the Company has approximately 11,000 employees and operates 25 production facilities in 15 countries.

%XVLQHVV 'HYHORSPHQW 0DQDJHU FMC designs, manufactures and services technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. FMC is backed by more than a century of accomplishments in a wide range of complex and exacting business specialties. While there is great strength in the diversity of our business and product portfolio, there is a common denominator that ties each of our businesses together - knowledge-based solutions engineering. Through our deep understanding of customers’ businesses and our relentless obsession with performance, we develop innovative real-world solutions that put even the most daunting challenges within reach. We seek a Business Development Manager to provide on-going input on marketing information, competitive benchmarks, trends and opportunities, and customer expectations. In this highly visible position, the Business Development Manager oversees the Global Product Marketing and Product Marketing areas. A MBA is strongly desired with 7 – 10 years (combined) of Engineering, Marketing and/or Product Management experience in an industrial environment. The ideal manager will also have 5 years of experience in the fluid flow measurement arena. Please submit your resume to: FMC Technologies, Human Resources Department, PO Box 10428, Erie, PA 16514 0428, or email MeasurementSolutions.HR@ fmcti.com EOE

www.fmctechnologies.com To place your Executive Recruiter ad Call Genny Donley at 216-771-5172

20110207-NEWS--19-NAT-CCI-CL_--

2/4/2011

2:11 PM

Page 1

FEBRUARY 7 - 13, 2011

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

19

THEINSIDER

THEWEEK

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

JANUARY 31 - FEBRUARY 6

MedCity Media trims the management fat

The big casino: If all goes as planned, Cleve-

■ One of MedCity Media’s co-founders left her position in December as vice president of operations with the Cleveland-based health care news provider to help the company cut costs while it continues to grow. Mary Vanac said she remains a MedCity Media investor but now is looking into other entrepreneurial opportunities beyond the media world. “We were growing quickly but were too executive heavy,” she said. “So to save costs and preserve investments, my position was eliminated, and some of the functions, like accounting, were outsourced.” Chris Seper, MedCity Media’s president and other co-founder, said Ms. Vanac’s departure was an internal decision. “We were balancing our budget, looked at our staff of eight full-time people and saw three managers,” he said, speaking also of Amanda Todorovich, vice president of business development and marketing. “It was a mutual decision.” The decision came around the timing of JumpStart Inc.’s announcement that it would invest $250,000 in the startup as MedCity Media continues to expand into other markets, including the RaleighDurham area in North Carolina. The company already covers health care news in the Cleveland and Minneapolis regions. The startup to date has received about $500,000 in grants and investments, including

■ The Cleveland Indians take a ton of abuse, but this one may take the cake. The Columbus Dispatch on Jan. 31 ran a scathing column taking the team to task for skipping the state capital on its annual winter caravan. (Read the column at http://tinyurl.com /4n7nso3.) The Indians hit four cities — Beachwood, North Olmsted, Akron and Strongsville — in four days, with the racing hot dogs, Slider and selected players and team personalities. But not Columbus, and column author Bob Hunter was none too happy about it, offering eight sarcastic bullet points in an attempt to explain why. They included this neverheard-this-one-before gem: “The Indians can’t afford the bus trip to Columbus. The way this team has jettisoned veteran players and their salaries, it should have the money to finance the construction of a bullet train between Cleveland and

MILESTONE

BEST OF THE BLOGS

land will have the first casino in Ohio in early 2012 when the Cleveland Horseshoe Casino opens its temporary, $350 million first phase in the Higbee Building at Tower City Center. That money is in addition to the $600 million investment planned for the permanent casino south of Tower City. Cleveland Cavaliers owner Dan Gilbert and Gary Loveman, president and CEO of Caesar’s Entertainment Corp. — the leaders of a joint venture called Rock Ohio Caesars LLC — unveiled the four-floor, 300,000-square-foot gambling hall at a news conference Thursday. “You’re going to see something very spectacular,” Mr. Gilbert said. He said the temporary casino will create 2,000 temporary construction jobs and 1,600 full-time jobs.

Downtown shuffle:

New office building moves are in the cards for the Council of Smaller Enterprises, the Greater Cleveland Partnership and Liggett Stashower, with each shuffling their office locations to make way for downtown’s planned casino. GCP and COSE are moving their 100 employees from the Higbee Building at Public Square to the LS Brand Building at 1240 Huron Road, which is the home of branding agency Liggett. The two organizations will occupy 50,000 square feet on the first four floors of the building. Liggett, which now occupies the first three floors of the LS Brand Building, will move to a fourth-floor space of 39,000 square feet in the nearby Hanna Building at month’s end.

Time to sell: TransDigm Group Inc. entered into a definitive agreement to sell its fastener businesses to Alcoa Inc. for about $240 million. The fastener business was acquired last December as part of TransDigm’s $1.27 billion deal to buy McKechnie Aerospace. The business is made up of Valley-Todeco Inc., located in Sylmar, Calif., and Linread Ltd. in the United Kingdom. The business makes fasteners, fastening systems and bearings for commercial, military and general aviation aircraft. End of the line:

Premier Manufacturing Corp. of Cleveland, a supplier of fabricated wire products for the HVAC industry, plans to shut its headquarters and plant at 12117 Bennington Ave., resulting in the loss of 100 jobs. Tony Burdock, general manager of the Cleveland plant, wrote in a notice to the state that layoffs will begin March 28 and will be completed within six to nine months. Eighty-four of the 100 workers are represented by Local 48U of the United Steelworkers Union.

California dreaming: Forest City Enterprises Inc. sold its 50% share of the Met Lofts apartment complex in Los Angeles to the California Public Employees Retirement System. The transaction valued the 264-unit complex at $74 million. Forest City expects to net $13.2 million from the sale. Forest City developed the eightstory loft apartment in 2005.

Or maybe the GPS went haywire

Columbus.” It could be that, or that the Indians don’t value Columbus. Or, it could be that the Indians on March 30 are playing an exhibition game in Columbus against the minor league Clippers, two days before the Tribe’s home opener against the White Sox. Even better: The Dispatch reported on the exhibition game in October. The paper’s archives search must have been down. The Indians, of course, value Columbus enough to have agreed in September 2008 to one of the most logical organizational affiliations in professional sports, after the parent club’s Class AAA affiliate played in Buffalo for 14 seasons. — Joel Hammond

Give Cardinal credit — it’s ready to lend ■ Even as some banks finally begin channeling more resources to increase their loans to business, one local credit union plans to begin business lending March 1. Though the new business line has been planned since roughly August, the president and CEO of Mentor-based Cardinal Community Credit Union noted the 2011 start date is great timing. “You don’t want to wait till 2012 because the need exists today,” Christine Blake said. In response to demand from some of its 17,000 members, the credit union decided last year it would offer lines of credit to businesses and small business and commercial loans, Ms. Blake said. The CEO noted that there could be a need to add staff in a year or two depending on how the business offerings grow. — Michelle Park

Excerpts from recent blog entries on CrainsCleveland.com.

Buyer’s market: VWR International LLC, a company in Radnor, Pa., that provides laboratory supplies and services, bought Amresco Inc., a company in Solon that makes and supplies biochemicals and reagents for use by customers in molecular biology, biotechnology and other research specialties. VWR did not disclose a purchase price for Amresco, which was founded in 1976 and employs 235. Amresco will be a subsidiary of VWR, and CEO David Camiener will remain in his position.

an initial $40,000 private investment in late 2008 made by Mr. Seper and Ms. Vanac. They received that money as part of a buyout package from their former employer, The Plain Dealer. “We wouldn’t be where we are today without Mary,” Mr. Seper said. “She’s very talented. Her track record speaks for itself.” MedCity Media creates content not only for its own web site but also for other publications. The company has more than 30 clients who pay for content. — Kathy Ames Carr

COMPANY: McKinney Advertising & Public Relations, Concord Township THE OCCASION: Its 75th anniversary McKinney Advertising & Public Relations is kicking off its 75th year with a new name in a new location. The firm founded in 1936 by Harris D. McKinney now is known formally as McKinney-Cerne Inc., reflecting its long tenure under the headship of president and CEO Judy Cerne. Ms. Cerne joined McKinney in 1985 when the agency was in the Cerne Hanna building in downtown Cleveland. It later moved to the Terminal Tower and after 15 years moved to the Penton Media Building. Ms. Cerne and her husband, agency chairman Roger Cerne, bought the Cleveland operation of McKinney in 1997, incorporating the business as McKinney-Cerne Inc. However, until now, it had not changed its identity publicly. “While we thought about dropping the McKinney from our new agency name, we thought better of it as the name McKinney and its heritage means a great deal to me personally,” Ms. Cerne said. The firm also has moved out of Cleveland to new offices on Auburn Road in Concord Township in Lake County. Ms. Cerne said the location provides easy access to Interstate 90 and state Route 44. Send information about significant corporate anniversaries to managing editor Scott Suttell at ssuttell@crain.com.

Nutrisystem — or a local heart surgeon — because the club’s newest food additions are ridiculously unhealthy,” according to a post on the site. The Aeros already offer the “3 Dog Night,” a 3,300-calorie treat featuring a “hot dog stuffed inside a bratwurst, stuffed inside a ■ Fortune highlighted a telling Cleveland kielbasa, topped with sauerkraut and anecdote from the Financial Crisis Inquiry mustard, and served on a hoagie.” The team Commission’s 662-page report that underis about to add the “Nice 2 Meat You” burger, scores the Federal Reserve’s lax approach to which consists of a 1¼-pound hamburger, regulation in the past decade. stuffed with a ½-pound hot dog and ¼ The report names former Federal Reserve pound of bacon, cheese chief Alan Greenspan and and onions. current Chairman Ben “If the team continues Bernanke “as two of the to offer fare this filled with main enablers of the credit calories, fat and sodium bubble that led to the 2008 (let’s add cruelty), the encollapse,” Fortune said. trances to the friendly Mr. Greenspan, commitconfines of Canal Park ted to the cause of deregAKRON AEROS may need to be widened,” ulation, “simply refused to enforce regulations that The Nice 2 Meat You burger. Yum! the web site noted. “Somewhere the Americould have prevented some can Heart Association frowns in disbelief of the worst subprime lending abuses and disappointment while a factory farmer during the bubble, the panel said,” according grins ear to ear.” to Fortune. The magazine cited as typical the experience of former Cuyahoga County treasurer Jim Rokakis, who warned a Fed governor in 2001 about the wave of easy money-fueled ■ The Wall Street Journal’s Ideas Market house-flipping that was endangering the area. blog mentioned the Museum of Contempo“I naively believed they’d go back and tell rary Art Cleveland in a post on the wideMr. Greenspan and presto, we’d have some ranging influence of architect Rem Koolhaas. new rules,” Mr. Rokakis told the commisThe blog picked up on a story in Metropolis sion. “I thought it would result in action magazine that said Mr. Koolhaas and his being taken. It was kind of quaint.” Office for Metropolitan Architecture (OMA) are the forces behind some of the most striking structures built in recent years. MOCA Cleveland, for instance, “is moving ahead with construction of a striking new ■ We should expect no less from a vegetarbuilding, which features triangular facades ian web site, but ThisDishIsVegetarian.com that, from certain angles, allow luminescent is pretty disgusted by the menu at Akron peeks at the museum’s interior,” the Aeros games. Journal blog noted. It’s the handiwork of “Apparently the Double-A affiliate of Foreign Office Architects, an OMA offshoot. the Cleveland Indians is in cahoots with

Faith in the Fed as regulator? A ‘quaint’ idea, Rokakis says

MOCA Cleveland building has a cool (and Koolhaas) look

The ‘Man vs. Food’ guy should make a trip to Akron

20110207-NEWS--20-NAT-CCI-CL_--

2/4/2011

2:50 PM

Page 1

Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.