Crain's Cleveland Business
January 9 - 15, 2012 issue
$2.00/JANUARY 9 - 15, 2012 FitzGerald to put his stamp on MetroHealth County boss faces new board appointments, CEO choice head on By TIMOTHY MAGAW email@example.com WHO'S COMING AND GOING? A look at MetroHealth's trustees and when their terms expire: Polly H. Clemo Appointed: 1995/Ends: 2015 Ronald Fountain, chairman Appointed: 1997/Ends: 2013 William Gaskill, vice chairman Appointed: 1980/Ends: 2012 Thomas M. McDonald Appointed: 2008/Ends: 2014 Terry Monnolly Appointed: 2005/Ends: 2016 John M. Moss Appointed: 2010/Ends: 2016 Donna Kelly Rego Appointed: 1983/Ends: 2013 J. B. Silvers Appointed: 2011/Ends: 2017 Charles Spain Jr. Appointed: 1990/Ends: 2014 Vanessa L. Whiting Appointed: 2011/Ends: 2017 A changing of the guard is in store for the leadership at the hardpressed, 175-year-old MetroHealth System, and Cuyahoga County Executive Ed FitzGerald is likely to have his fingerprints all over the transition. Over the next two years, Mr. FitzGerald plans to replace three members whose terms are expiring on the 10-member board of trustees for the county-subsidized health system. Those appointments would be on top of the two picks Mr. FitzGerald has made since taking office last year. Mr. FitzGerald also expects that he and other county officials will be, as he put it in an interview with Crain's Cleveland Business, "consultative" partners in the nationwide search for the replacement for MetroHealth CEO Mark Moran, who announced last month he would step down from the post once the board named his successor. See METRO Page 17 Former JumpStart aide joins chorus of nonprofit critics AxioMed co-founder takes issue with group's board makeup, staffing By CHUCK SODER firstname.lastname@example.org JANET CENTURY PHOTOS ABOVE: Karl West, director of the Cleveland Clinic's Medical Device Solutions unit, runs the hospital system's mechanical prototype shop. BELOW: Mr. West holds an aortic valve with calcification created by the shop's Connex 3D printer. THE OTHER MR. FIX-IT Out of view of patients, docs, Clinic shop allows for tool rehab, new idea development 02 6 By DAN SHINGLER email@example.com A former employee of JumpStart Inc. has joined the critics of JumpStart. Chuck Birchall Jr., co-founder of AxioMed Spine Corp. of Garfield Heights, last week sent JumpStart a six-page-long list of criticisms and recommendations regarding how the Cleveland-based nonprofit that assists and invests in young companies could save money and provide better services to entrepreneurs. Mr. Birchall, who spent more than three years as an entrepreneurBirchall in-residence at JumpStart before the nonprofit eliminated his position about a year ago, is one of a handful of local entrepreneurs who have criticized JumpStart publicly over the past year. However, he is the See JUMPSTART Page 4 S urgeons and other doctors who perform miracles get most of the limelight at the Cleveland Clinic, but in the basement of its main campus, a crew of machinists, fabricators, engineers and researchers does impressive work, too -- though mostly on steel and plastic, as well as the occasional human body part. Unknown to most, the world-renowned hospital and research institution has a full machine shop and other manufacturingrelated rooms housed below its medical buildings near University Circle. The shop gives the Clinic the ability not only to make, modify and repair tools for its own See FIX Page 8 INSIDE Westlake may change water works Cleveland is butting heads with the western suburb as it considers leaving the city's water system. PAGE 3 ALSO: Energizer's local unit is making more consumer products. PAGE 6 Cohen & Co. takes more space for growth. PAGE 7 SPECIAL SECTION NEWSPAPER 74470 01032 SMALL BUSINESS Exploring the benefits and potential pitfalls of business partnerships Page 13 PLUS: GETTING AHEAD TAX TIPS ADVISER & MORE Entire contents � 2012 by Crain Communications Inc. Vol. 33, No. 2 0 Can we ever thank you enough? (We hope not.) Once again, for the third year in a row, we want to say `thank you' for making us the #1 volume Mercedes-Benz dealer in the Central United States. We'll continue to earn your business by finding you just the Mercedes-Benz you want when you want it and offering exceptional service that includes pick-up and drop-off wherever you are. We can't thank you enough for your continuing trust in us. The #1 Volume Mercedes-Benz Dealer in the Central U.S. Mercedes-Benz of North Olmsted 28450 Lorain Road � 855-218-1285 Mercedes-Benz of North Olmsted Lorain Rd. Great Northern Blvd. � www.mbohio.com Based on MBUSA YTD regional sales results 12/31/11. Stearns Rd. Clague Rd. GREAT NORTHERN MALL 71 480 AIRPORT 10 minutes from the Airport 5 minutes from Crocker Park 28450 Lorain Road JANUARY 9 - 15, 2012 WWW.CRAINSCLEVELAND.COM CRAIN'S CLEVELAND BUSINESS 3 Industrial real estate vacancies inch down Office market, though, sees slight uptick By STAN BULLARD firstname.lastname@example.org INSIGHT Pressure rising in Westlake water war Cleveland disputing west 'burb's estimate on costliness of exit By JAY MILLER email@example.com Flat. Despite big events that ranged from the sale of the closed Chrysler stamping plant in Twinsburg to companies gobbling up large chunks of space at the 200 Public Square office building in downtown Cleveland, that one word sums up the condition of Northeast Ohio's industrial and office markets in 2011 versus 2010. Such is the picture gained from Grubb & Ellis Co.'s just-released report on those two markets. For the first time in three years, the report shows, vacancy declined in Northeast Ohio's industrial market, to 11.9% as of year-end 2011 from 12.8% at the end of 2010. By contrast, the vacancy rate of the office market inched upward, to 21.9% at the end of 2011 from 21.6% a year earlier. Much of the progress on the industrial front came from a shrinkage of INSIDE: A the market due to closer look demolition of masat Grubb and sive old factories. Ellis statistics. That space was all Page 16 empty, so it accounted for a sizable amount of the 7% drop in vacant industrial space, to 36 million square feet at the end of 2011 from 39 million a year earlier. However, due to the industrial market's massive size, Grubb & Ellis reports the amount of rentable industrial space was down a little less than 1%, to 301 million square feet from 303 million. A pickup in industrial property transactions last year along with the smaller size of the market combined to reduce the vacancy rate, said Terry Coyne, executive vice president at Grubb & Ellis' Cleveland office. "Manufacturing is still strong here," Mr. Coyne said, citing a plethora of buildings in the region bought by manufacturers to expand. "We're not back to normal, but getting close to it," he said. "Banks are making real estate loans and competing for real estate deals again. Liquidity is like oxygen in this See VACANCIES Page 16 THE UNIVERSITY OF AKRON The University of Akron plans to extend its public-private partnership strategy for upgrading its residence halls -- like it did at its Exchange Street project, above -- to its academic buildings. The interior of Leigh Hall (below), a 1940s-era building, already has been renovated with state-of-the-art classrooms and equipment. DEVELOPMENT, DESPITE DEBT In lieu of borrowing, University of Akron hopes to expand recent spate of public-private deals to continue on-campus momentum By TIMOTHY MAGAW firstname.lastname@example.org T he University of Akron isn't going to let a steep pile of debt stop the school from continuing to develop its campus and the blighted areas surrounding it, as it plans to use other people's money to make capital investments happen. The university has dabbled in the public-private partnership arena in the past to finance capital projects, but administrators expect the number of such deals to ramp up in coming years given the school's lofty debt load -- about $425 million -- and its desire to continue to build to accommodate further enrollment growth. "We don't want to lose that momentum, and we have others trying to catch us because they see our formula is working," said Ted Curtis, the university's vice president for capital planning and facilities. "There's a point in borrowing where we still have the demand, but you run out of funds, so now we're leaning heavily toward public-private partnerships." See DEBT Page 7 The city of Cleveland is raising the stakes as it watches the city of Westlake move to disconnect its water hose from Cleveland's spigot and re-connect to Avon Lake. Cleveland is casting doubt on the financial and engineering estimates the western suburb is relying on to substantiate its plan to switch water suppliers. It's also raising legal issues that, if sustained, would add substantially to Westlake's cost of a move. A departure would be a blow to Cleveland's Division of Water, which has excess capacity in its system and is working to overcome critical customer service failures that angered public officials and residents across the 70 communities it serves. Westlake has been mulling a switch since at least 2008, when the city of Cleveland announced a four-year rate increase phase-in that would boost the cost of water 35%. In addition, its residents have complained about botched billing and poor repair service. In a telephone interview last Wednesday, Jan. 4, Westlake Mayor Dennis Clough said his city also would like water mains replaced or rehabilitated when Westlake makes major repairs of streets. He's annoyed when a freshly repaired street is torn up after a water line breaks. Cleveland's Division of Water, like most utilities, is reluctant to replace equipment before the end of its useful life. The tentative plan is for Westlake to buy water wholesale from Avon Lake. Westlake would handle billing and maintenance on its own. Westlake's consultant, HNTB Corp. of Kansas City, Mo., hasn't offered a new rate schedule for Westlake's sale of Avon Lake water to its residents. But when asked if maintaining its own water distribution system would result in rates higher than what Cleveland now charges, Mayor Clough said, "We don't anticipate that." Westlake is relying on its consultant's See WATER Page 6 THE WEEK IN QUOTES "The (Cleveland) Clinic is really pushing the envelope as far as folding in prototype development and product development activities into their commercialization effort." -- Mark Coticchia, founder, Red Wind Innovations. Page One FEATURES "They fail to consider what happens when the honeymoon is over." -- Frank Manning, attorney, Manning & Manning Co. LPA in Mentor. Page 13 "That's really strong growth in this profession. Virtually all of that growth is internal growth. We didn't do any big acquisitions." -- Randy Myeroff, president and CEO, Cohen & Co. Page 7 "People really do get stuck a lot. ... They don't see what else is possible." -- Sunny K. Lurie, CEO of Beachwood-based Fast Focus Careers. Page 14 Classified .....................18 Editorial .......................10 Going Places ................12 List: Northeast Ohio's Top SBA Lenders ......16 Personal View ...............10 CORRECTION The Dec. 19 list of Largest Private Schools reported incorrect high school enrollment numbers for Hawken School and Cuyahoga Valley Christian Academy. The correct enrollment numbers are 429 and 645, respectively. 4 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 Critic(s) works hard to make points By CHUCK SODER email@example.com THURSDAY, JANUARY 19, 2012 11:30 am Registration � 12 Noon Lunch & Program If you've ever read negative online comments about JumpStart Inc., Mike Burkons may have had something to do with it. Mr. Burkons, a local entrepreneur and an outspoken critic of JumpStart, is not the only member of the region's business community to criticize the nonprofit online, but he easily is one of the most active. Not all the comments are under his own name, however. Mr. Burkons has admitted that he has anonymously posted critical comments on CrainsCleveland.com, Cleveland .com and Tech.MN, a technology blog in Minnesota, where JumpStart is helping economic development groups create a plan to boost entrepreneurship in that region. He occasionally has used multiple anonymous names to comment on a single news story or blog item. In those posts, he sometimes would write that he agreed with previous comments that he made under another name, making it look like multiple people held the same point of view. All three websites have removed at least some of Mr. Burkons' comments. Mr. Burkons also recruits other critics of JumpStart and encourages them to post comments on blogs and news stories about the organization, which gets nearly half its money from the state of Ohio. Some of those comments are anonymous, too. Mr. Burkons -- who founded Charitee Golf LLC, a small business in Shaker Heights that provides a video monitoring service designed to help golf courses award prizes to people who get a hole-in-one or win a closest-to-the-pin contest -- said he would respond to the posting issue only if Crain's agreed to include his entire quote. Here it is: "As for posting under different names, I guess my poor writing is easy to spot. In some instances it is because Cleveland.com will take down a post and if written under a different name it will stay up. Other times it is to keep some anonymity. The group we are trying to shed transparency on has a state-funded $13 million budget allotting much of it to support a large number of marketing and PR professionals as well as interns. "Jumpstart's marketing and PR efforts used to be larger until those pesky anonymous bloggers publicly questioned if this was an effective use of our tax dollars. Here is a solution ... if Jumpstart gives us half of the funds used to support their marketing and PR efforts, I will always post under Mike Burkons. With so many resources dedicated towards defending and promoting themselves one would think they would address the content of the criticism instead of the source?" JOE TAIT TERRY PLUTO Moderated By JOHN TELICH JumpStart: Board needs tech expertise continued from PAGE 3 Board makeup targeted JumpStart encouraged Mr. Birchall to leave because it was planning to have an affiliated organization, the Youngstown Business Incubator, provide more services to information technology companies on behalf of the nonprofit, Mr. Leach said. Mr. Birchall, who worked with IT companies at JumpStart, said he does not hold a grudge against the organization, adding that the group even helped him look for other opportunities. He acknowledges in his document that JumpStart also turned him down last year when he applied to receive an investment for Sports Director Online LLC , a software company he started. Besides helping start AxioMed, Mr. Birchall was an executive at spinal implant maker AcroMed Corp. of Cleveland, which was acquired by DePuy Inc. for $325 million in 1998. He also served as a part-time chief financial officer for Clevelandbased eBlueprint Holdings LLC, helping sell the electronic blueprint company to American Reprographics Co. for an undisclosed price in 2007. Mr. Birchall said if he could make one change at JumpStart he would add to its board more technology entrepreneurs, early stage tech investors and people with expertise in the fields that are the group's focus. "A good, solid board would address all the other issues," he said. Mr. Leach and JumpStart chairman Doug Weintraub, both of whom have started and sold companies of their own, agree that only a few of the 21 people on JumpStart's board have started technology companies. There are a total of 10 entrepreneurs on the board, when including those who have formed companies in other industries. Three board members are investors and eight are considered "functional experts" who provide advice in areas such as finance, accounting and community engagement, according to information from the organization. Authors of... Joe Tait: It's been a real ball. Book Signing For more info: www.ExecutiveCaterers.com and click on Corporate Club or call 440.449.0700 Penske Logistics, a supply chain management consulting firm, has renewed its lease. IntelliCorp, Intellcorp, a comprehensive pre-employment a screening service for employers, comprehensive pre-employment has for employers, screening service signed a lease. We appreciate the participation of has signed a lease. Ryan C. Jeffers, LEED AP of CBRE. We appreciate the participation of Ryan Jeffers of CB Richard Ellis CapitalWorks, Capital Works, a private equity investment funds firm, has signed a firm, a private equity investment funds lease. We appreciate the participation of has signed a lease. Jeffrey D. Cristal, SIOR and David Hollister, Vice President of Grubb & Ellis. We appreciate the participation of Jeffrey D. Cristal, SIOR of Grubb & Ellis. Leased and managed by: Chagrin Highlands Ltd. is a joint venture development of The Richard E. Jacobs Group, Inc. and Scott Technologies, Inc. For leasing information, phone JRES's John Klayman or Cindy Greiner at 440-871-4800 For leasing information, phone JRES's www.ChagrinHighlands.comGreiner at 440-871-4800 John Klayman or Cindy Chagrin Highlands Ltd. is a joint venture development of www.ChagrinHighlands.com The Richard E. Jacobs Group LLC. and Scott Technologies, Inc. first to have worked for JumpStart, which will receive from the state of Ohio 43% of its $13.8 million budget for the fiscal year that ends next June 30. Mr. Birchall's recommendations echo criticisms of JumpStart that three area entrepreneurs made last April in a lengthy series of emails they forwarded to business leaders and politicians throughout Northeast Ohio. For instance, Mr. Birchall said JumpStart should place more technology entrepreneurs on its board, spend less on marketing and on salaries for its management team, and revamp the way it measures its economic impact in Northeast Ohio. Public criticism -- which since April has continued on blogs and in the comment sections of online news stories, often in the form of anonymous posts -- hasn't convinced JumpStart CEO Ray Leach to make significant changes to the organization. Mr. Leach said one reason why is because none of JumpStart's financial backers, including the state of Ohio, have suggested it change course. And the funders, he said, are making informed decisions. According to Mr. Leach, JumpStart regularly submits to the state the number of hours its employees spend working with young technology companies in the region, the number of dollars the group has invested in area startups and the number of new dollars -- be they in the form of sales, investments or grants -- that those companies bring in after working with the nonprofit. Similar organizations that receive money from Ohio's Third Frontier economic development program submit the same information to the state. The data play a big role in how private consultants rank grant requests those organizations submit to the Third Frontier, Mr. Leach said. "When scored against everyone else in the state, we rank No. 1 and have for the last five years," he said. "People have different interpretations on what it is to be an entrepreneur," said Mr. Weintraub, adding that JumpStart also wants the board to reflect the broader Northeast Ohio community. Many tech entrepreneurs don't want to join the board because they are too busy running businesses or because doing so would prevent them from receiving money from JumpStart, Mr. Leach said. Now's the time Mr. Birchall said JumpStart has too many layers of management and spends too much on marketing. The organization has 46 employees, including seven who work mainly outside the region as part of a business development effort supported by federal grants. JumpStart has six marketing positions. One employee works in marketing part time. "They have a bigger marketing team than (AcroMed) had for a $100 million company," Mr. Birchall said. Mr. Leach says JumpStart has grown only because the state and its other funders have asked it to do more, which includes getting the word out about JumpStart, affiliated groups that provide entrepreneurial services and the companies they serve. JumpStart's responsibilities may grow again this year: The Third Frontier program has increased by about 30% the amount of money it will award through its Entrepreneurial Signature Program, which funds programs for entrepreneurs. JumpStart, the hub through which all Northeast Ohio organizations receive that money, is putting together a grant application this month to secure money from that program. And if anyone knows of a better way to serve entrepreneurs trying to start technology companies, they're welcome to become one of the many groups that will join JumpStart's application, Mr. Leach said. "If they have an idea ... if there was ever a time to bring it, it's now," he said. Volume 33, Number 2 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 � 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain's Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-8249373. REPRINT INFORMATION: 800-290-5460 Ext. 136 6 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 Energizer Westlake unit sees the light Water: Cost reports Company expands from consultants differ consumer products By CHUCK SODER firstname.lastname@example.org The lighting products division of Energizer Holdings Inc. has moved beyond flashlights. The big battery maker since last August has released several products designed to give the company a foothold in a new market: lights designed to stay in one place. So far, the St. Louis-based company has released a desk lamp, an under-cabinet light, an accent light, two electric candles and a nightlight. Each one was developed by the company's research and development center in Westlake, which employs about 400 people. The lineup of consumer products is just the beginning of Energizer's foray into the stationary lighting market, according to Tony Mazzola, director of technology for Energizer's lighting products division. "You will see more," said Mr. Mazzola, who works in Westlake. The move represents a big change for Energizer. The company -- which can trace its roots to 1896 -- commercialized the world's first flashlight more than 100 years ago and has sold them ever since. It wasn't until 2009, however, that Energizer released its first stationary lighting products. First came a series of fixtures that ran on rechargeable batteries, which are no longer being manufactured but helped the company "test the waters" in the space, said Anne Bannister, general manager MARC GOLUB Energizer's lighting products division in Westlake is expanding its product line beyond its traditional line of flashlights. "LED technology has enabled us to get into form factors and product designs that we never thought of 10 years ago," said director of technology Tony Mazzola. of strategic ventures at Energizer. The company followed that up in 2010 by releasing through Target a nightlight equipped with a motion sensor. The six products that Energizer just released, which includes a different nightlight, are available exclusively through Amazon.com, though the company aims to sell them in stores eventually, Mr. Mazzola said. They range in price from $15 to $80. Each one uses light-emitting diode technology, which has improved and become more affordable over the past several years. That's a big reason why Energizer, which already makes LED flashlights, decided to start developing more products that use the technology. LEDs, which are essentially computer chips that emit light, are more expensive than incandescent bulbs, but they also are more efficient and last longer. They are more versatile as well. For instance, Energizer's accent light looks like a newage lamp that uses four rectangular plastic panels instead of a fabric lampshade. However, there's no bulb in the middle. Instead, light emits from the panels themselves. The user can turn the light on or off and can control its intensity by touching the base. "LED technology has enabled us to get into form factors and product designs that we never thought of 10 years ago," Mr. Mazzola said. The initiative also gives the company the chance to capitalize on the growing demand for LED products. That demand is driven in part by the U.S. government and other countries that are passing regulations limiting sales of incandescent bulbs, said Ms. Bannister, who is leading the new product initiative. Ms. Bannister said the company is "very satisfied" with sales of the new lineup so far, though she declined to give sales figures. Energizer plans to learn from this first product launch and will expand its lineup of stationary lighting products "based on what works," Ms. Bannister said. "We have no interest in getting into this and getting out of it quickly," she said. continued from PAGE 3 estimate that it would cost between $17 million and $19 million to switch water service from Cleveland to Avon Lake Municipal Utilities. However, Cleveland hired its own consultant, Arcadis US, an arm of Dutch consulting firm Arcadis NV, and the results were quite different. Arcadis came back with a cost estimate of at least $47 million to make the switch and an even higher estimate if Cleveland were to argue successfully in court its interpretation of the 21-year-old legal agreement between the two cities. "The more we looked at this, the more we were concerned about the (switch of service Westlake) proposed," said Cleveland chief operating officer Darnell Brown. He said Westlake's proposed plan "is fraught with a number of risks to the customer base it would serve." The biggest difference between the HNTB and Arcadis analyses are the cost for a water storage system and for the cost to reroute water lines to suburbs around Westlake. HNTB estimated those costs at $2.1 million and $3.7 million, respectively; Arcadis put them, respectively, at $11.2 million and $15.6 million. Those higher figures, Mr. Brown said, would result in Westlake water rates at least 18% higher than the rate Cleveland now charges Westlake residents. While the two consultant studies analyze costs and engineering options, part of the dispute stems from the differing expectations of both sides. Westlake is an affluent community that expects premium services. Cleveland's Division of Water serves 1.5 million customers in 70 communities and must provide a service that is affordable to all. "I know instances of smaller systems connecting to larger suppliers. I've not heard of going in the other direction." � Michael Arceneaux, deputy executive director, Metropolitan Water Agencies water suppliers but backed off and decided to watch Westlake's effort. Now, he says, if Westlake makes the move, "We could soon follow. We'll look at any option." Bay Village Mayor Debbie Sutherland rejects a switch for her community but is concerned about potential added costs for her suburb's plumbing should Westlake reroute its pipes, because the two cities' water pipes are a maze of interconnections. "I am not interested in making a move," she said. "Cleveland is not going to let them get out (without a legal fight). In this environment, I don't see an overall benefit to the city of Bay Village." Common ground? But there might be an option that both sides might find acceptable. "I would hope that the city of Westlake would be able to enter into a wholesale purchase agreement with Cleveland," said Westlake city councilman Edward Hack. That way, Westlake would go ahead and set up its own water department to handle billing and maintenance but buy its water wholesale from Cleveland. Mr. Brown has said Cleveland might agree to that setup. That solution would avoid a costly legal fight over exactly what costs Westlake would be responsible for if it were to leave the Cleveland system. The two cities are interpreting differently a clause in their service agreement that may or may not require five years' notice before Westlake can terminate the agreement. Mr. Brown said the five-year notice clause continues in force; Mayor Clough said the city believes the five-year notification requirement ended 10 years after the 1990 water service agreement was signed. Cleveland also argues that Westlake would be obligated to pay millions of dollars, as much as $39 million, for what it calls stranded costs -- the cost of water mains and pipes paid for with bonded debt that has not yet been fully recovered. Bay Village's Mayor Sutherland is watching that aspect as well. "I think there would be some costs," she said. "Why should we, Bay Village, have to pay for the installation of (new lines) if Westlake wants to pull out?" Going against the flow Westlake's proposed move would go against the tide of a national trend, and mayors in neighboring cities are watching this rift to see how to best serve their own residents. Neither Michael Arceneaux, deputy executive director of the Washington, D.C.-based Association of Metropolitan Water Agencies, nor Thomas Laughlin, editor of Waterworks magazine, could recall a similar situation. Both said the trend in the water business is for a consolidation into larger systems, not away from them. "I know instances of smaller systems connecting to larger suppliers," Mr. Arceneaux said. "I've not heard of going in the other direction." The mayor of North Olmsted, Kevin Kennedy, is watching the trail Westlake is blazing so he can decide if his community should follow suit. In 2008, North Olmsted considered a feasibility study for a switch of "I TRUST NATIONWIDE� WITH MY EMPLOYEES' BENEFITS." -- Dale Earnhardt Jr. You can rely on Nationwide Employee BenefitsSM, too. Life/AD&D Dental Disability Accident and Hospital Ca$hBackSM GET DAILY NEWS ALERTS FROM CRAIN'S ! 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Nationwide, the framemark and On Your Side are service marks of Nationwide Mutual Insurance Company. � 2011 Nationwide Mutual Insurance Company. All rights reserved. Underwritten by Nationwide Life Insurance Company. NEB-0502 SIGN UP NOW AT: CrainsCleveland.com/register JANUARY 9 - 15, 2012 WWW.CRAINSCLEVELAND.COM CRAIN'S CLEVELAND BUSINESS 7 To house new hires, Cohen to expand at U.S. Bank building Accounting firm applies new `touch'; revenue growth outpaces others By MICHELLE PARK email@example.com Cohen & Co. needed more space before its current growth spurt. By next June, the regional accounting firm expects to add 45 to 50 employees, which would be an increase of about 20% from its existing staff of 230, said president and CEO Randy Myeroff. The firm already has extended offers to the new hires, and it's possible another five to 10 will be hired by June, too, Mr. Myeroff said. To handle the new staffers and to better accommodate current employees -- some of whom are working in cubicles, but would have offices if there was space -- Cohen & Co. is finalizing an agreement for more space at its Cleve- Myeroff land headquarters in the U.S. Bank building. The plan is to occupy a total of 38,000 square feet, up about 65% from 23,000 square feet at present, Mr. Myeroff said. Renovations to the additional space, Debt: Rating agencies keep watchful eye on finances continued from PAGE 3 and furniture for it, are projected to cost about $1.5 million. The company's current lease expires in 2013, but the firm will commit to its downtown location for another 10 years, Mr. Myeroff said. Cohen executives expect to conclude the current fiscal year, which ends Jan. 31, 2012, with revenues 14% higher than those in the previous fiscal year. That growth is evenly divided among the firm's tax, attest and consulting services. "That's really strong growth in this profession," he said. "Virtually all of that growth is internal growth. We didn't do any big acquisitions." `You guys are everywhere' Mr. Myeroff said Cohen positioned itself for the growth it's posting today via a "culture" instituted seven or eight years ago. He said the firm began requiring all its employees to have a certain number of "touches," which range from meetings with clients to writing an article and public speaking. "The growth we see today is really a result of that discipline," Mr. Myeroff said. "It's a result of all of our people being committed in terms of raising the bar. We have been told more Until now, public-private partnerships involving the university had been reserved for student housing. The university, for example, in 2004 developed a $22 million residential complex with Signet Enterprises, an Akron-based developer. Likewise, Signet is building a $35 million, 520bed residence hall on 1.2 acres of University of Akron property on Grant Street. This time, however, the university is courting developers to create new academic buildings because several of the school's current teaching facilities are nearing the end of their useful lives -- a problem facing many of the region's colleges and universities. Mr. Curtis said such buildings would be financed and constructed by outside developers on University of Akron property and leased back to the school over 20 or 30 years. Though he couldn't provide details about the prospective partnerships, Mr. Curtis said such arrangements are the best way to continue muscling up the urban campus to attract students without risking the university's fiscal health. When Mr. Curtis arrived in 1998, enrollment at the University of Akron hovered around 21,000. Last fall, enrollment was 29,699 -- an increase he attributes to the campus's dramatic facelift over the last decade. "What I like to say is that we've developed a new architectural welcome mat," Mr. Curtis said about the school's capital investments. The school's plan to revamp some of its academic buildings via lease arrangements with private developers is a far cry from that of its main rival, Kent State University, which looked to finance the overhaul of a number of its academic buildings through a $210 million bond sale that would be repaid by a slew of student fees. That bond sale, which has been stonewalled by state lawmakers who are concerned about rising college costs for students, would have added significantly to Kent State's debt load, which sits at about $326 million. Though the University of Akron is shying away from the bond market for now, it's still keeping a watchful eye on its debt obligations. So is Moody's Investors Service, which has cautioned the University of Akron in recent years about its mounting debt. Last spring, the credit rating agency noted that the chances of a rating upgrade were unlikely in the near term and that more borrowing could push the university's rating downward. times in the past two or three years, `You guys are everywhere.'" Also, the firm four or five years ago moved away from exclusively charging by the hour, improving client satisfaction and affording the firm a competitive advantage when it bids for new work, Mr. Myeroff said. Year-over-year revenue growth of 14% is pretty exceptional, said Clarke Price, president and CEO of The Ohio Society of CPAs in Dublin. "That's a growth rate that is outstripping the majority of firms," Mr. Price said. "A lot of firms are saying they've had very good years, but there are also a lot of firms that are saying, `Boy, it's really tough out there.'" Mr. Price doesn't discount the impact a strategy requiring everyone to have "touches" can have. "This is a highly competitive business and a very difficult environment and a firm that says, `We are going to reinforce to our clients and others the personality of our firm,' I think (that) is a very strong marketing strategy that could lead to that sort of growth," he said. No plans to supersize Not all of Cohen's growth has come from existing operations. Cohen in November opened an office in Milwaukee, bringing its total offices to nine, and last February acquired The Lipson Group Inc., a Cleveland firm focused on tax, financial and estate planning for affluent families, in a deal that added a couple people and a "little business," Mr. Myeroff said. He is confident Cohen will make more than one acquisition over the next several years. "We think that there are some great firms in the region where the math will be one plus one will be something much larger than 2," he said. Is the aim to build Cohen into a super-regional firm -- a firm with 1,000 or more employees? "No, no, no, absolutely not," Mr. Myeroff said. "We love servicing the middle market. We love servicing private companies." About 75% of the company's new hires are young professionals, while 25% are experienced lateral hires, including Pete Constantino, who recently joined Cohen from Ciuni & Panichi, a smaller firm where he worked for more than 25 years. Asked why he joined Cohen, Mr. Constantino said, "It's just getting harder and harder for smaller firms to keep adding services. A lot of the clients I was dealing with were growing, and I could see they needed added services." There's more specialization at Cohen, he said, and its Florida offices afford him proximity to clients who live there part time or year round. Thursday, April 19, 2012 7:00 - 8:00 a.m. � Breakfast & Networking 8:00 - 9:30 a.m. � Panel Discussion The Ritz-Carlton, Cleveland OHIO SHALE BOOM Tapping new profits Shale energy producers project a $200 billion Ohio investment over the next 20 years. mpany Is your company prepared to capitalize? DISCUSSION: � Current industry status � Supplier and investment opportunities pportunities � Financing and real estate needs eeds � Federal and state regulations ns � Long-term outlook The old double-edged sword While Fitch Ratings assigned the University of Akron a stable outlook, the school is the only public university rated by Moody's that carries a negative outlook. The University of Cincinnati and Ohio State University, the two universities carrying more debt than the University of Akron, both are assigned stable outlooks. Also, the Ohio Board of Regents, which assigns a score determining the fiscal health of each public higher education institution, assigned the university one of the lowest scores among four-year colleges and universities -- a 3.3 out of 5 for fiscal 2010. That score ties the school with the University of Cincinnati and makes Central State University in Wilberforce as the only institution worse off than Akron. State officials still are hammering out the final numbers for fiscal 2011, which ended June 30, but University of Akron officials expect their fiscal health score to rise modestly to 3.6. "We are on the high end relative to other universities in Ohio" in terms of how much debt the school carries, said David Cummins, the University of Akron vice president for finance and administration and chief financial officer. "You have to be careful. It's a double-edged sword. You can use debt in a way to significantly transform the campus, but you have to manage it well." A decade of debt Under the watch of president Luis Proenza, the University of Akron has added 21 new buildings, undertaken 18 major additions or renovations and created 34 acres of green space -- all at a staggering cost of $626 million. While those lofty investments have transformed the campus, they've also placed the university among the most debt-laden in the state, according to the most recent figures available from the Ohio Board of Regents. The university's debt load is the main driver in the school's pursuit of creative arrangements with developers to continue the campus overhaul because, as Dr. Proenza put it, there's still plenty to be done. "I don't see a point where we'll stand still," he said, "but how fast we'll develop (new buildings) depends on the rate of growth for the university." SPONSORED BY www.CrainsCleveland.com/breakfast 8 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 RETAIL AND OFFICE SPACE AVAILABLE Export to Nigeria? Yep, it's safe North Olmsted group aims for better access to African country known for scammers By MICHELLE PARK firstname.lastname@example.org RESERVE SQUARE 1701 East 12th Street Downtown Cleveland www.reserve-square.com A North Olmsted group is bent on boosting exports between here and Nigeria. The Nigeria-USA Chamber of Commerce aims to help American businesses sift through trade issues and identify business opportunities in the African country, and vice versa. "Whenever people hear the word, `Nigeria,' all they ever think about are the negative things that come out of Nigeria -- scams, insurance," said Lee O. Kareem, chamber president and CEO and one of the group's five founding members. But those are the actions of a few, he said. "We want Nigeria to be known for the good things," said Mr. Kareem, a native of Nigeria and the owner of two North Olmsted companies, Biotronics Inc. and Tech-Consultants .org. Launched last March, the chamber has received calls from U.S. businesses as far south as Florida, according to Mr. Kareem, who said an Atlanta business owner attended the chamber's International Trade & Investment Summit at Quicken Loans Arena last month. This summer, the chamber will host a week-long program in Nigeria that will conclude with a reverse trade mission, through which a group of Nigerian business people will travel to the United States for matchmaking with companies here. Susan Whitney said she and her staff at the U.S. Commercial Service in Cleveland, an agency of the U.S. Department of Commerce, support the local effort. Her organization helps businesses determine their best overseas markets, and also provides legitimacy checks on buyers, which helps to guard against the scams that have contributed to Nigeria's notoriety. "We think it's a great thing," Ms. Whitney, office director at the Commercial Service, said of the Nigeria-USA chamber. "Nigeria is a great country to export to." As with any country, though, Nigeria is not right for all companies. It's particularly lucrative for companies in the oil and gas industry -- something Pipe Line Development Co. in Westlake knows firsthand. The company, which makes repair products for pipelines, has been exporting to Nigeria since 1984, with up to $4 million of product exported there annually, said Kim Smith, marketing manager. "It's a great place to do business, but first you must do your homework," Ms. Smith said. HR Academy Webinars Sponsored by the Ohio Chamber of Commerce Fix: Shop offers Clinic many advantages continued from PAGE 1 Interactive webinars from the Ohio Chamber provide an opportunity to learn and discuss important human resource issues with top experts from the comfort of your desk. This program has been submitted to the HR Certification Institute for review and also to the Ohio Supreme Court for CLE credits. Whether you are a human resources professional or business manager, these webinars will help you further develop your HR expertise and abilities. Upcoming topics include: January 11, 10 to 11:30 a.m. � Think Before You Click � Strategies for Managing Social Media in the Workplace. CLE approved. January 25, 10 to 11:30 a.m. � Wage and Hour 101. CLE approved. February 8, 10 to 11:30 a.m. � NLRB � Employer Free Speech and How the NLRB/NLRA Applies to Nonunion Employees. CLE pending. To register go to www.ohiochamber.com or contact Michelle Donovan email@example.com or 614-228-4201 doctors, but also to take doctors' ideas and turn them into new medical devices. "We are a design group that integrates and works with the physicians to develop their ideas -- and not just physicians, but anyone within the Clinic," said Karl West, director of the Clinic's Medical Device Solutions unit. For example, a Clinic surgeon recently came up with an idea for a new stent that could be used in heart surgery. Taking the technical equivalent of a cocktail-napkin design, Mr. West and his staff turned it into three-dimensional drawings and, eventually, a stent that the Clinic can use internally and possibly can market to other hospitals and surgeons, Mr. West said. Over in the machine shop, machinists such as Anthony Shawan work on prototypes for new devices, though they also do more mundane work that is just as critical to patient outcomes, if not more so. "Sometimes, things break during surgery," Mr. Shawan said. On more than one occasion, Mr. Shawan said, he has repaired or altered a surgeon's tool while an operation was under way -- a task that requires a faster turnaround than even the most efficient automakers demand of their suppliers. "We've done stuff in less than half an hour, including machining and sterilization. We're literally running," Mr. Shawan said. sclerosis but also to design better prosthetic devices. The modeling system even conducts analyses on the throwing motion of baseball pitchers and golfers' swings. In another lab, researchers and engineers work with a special metal called Nitinol, a relatively new alloy that has amazing abilities when it comes to elasticity and shape memory. The metal is non-reactive with body tissues and extremely flexible, but it's also "springy," Clinic researchers say, and that quality makes it perfect for devices such as cardiovascular stents, in which it's used to make a flexible frame to hold open blood vessels. Next door, a computer biomodeling lab would look familiar to anyone who has used a computeraided design (CAD) system, except the Clinic uses its system to work with more than just metal and plastic. For instance, technicians can work up a three-dimensional model of a human heart, complete with the plaque that's found in the blood vessels via medical imaging technology. Mr. West said they then can print out their model using a 3-D printer. The result is a life-size model of a patient's heart, with the plaque a surgeon needs to remove highlighted in a different color than the healthy tissue. "They know it, because they see it in 3-D before they even go in (for surgery)," Mr. West said. impart. While an auto supplier might have a robot compressing a shock absorber hundreds of thousands of times to test its performance, the Clinic's robot flexes an artificial joint over and over again for the same reason. And, of course, there's the machine shop, where Mr. Shawan and his crew of eight work on a little bit of everything, from producing tools and fixtures for the Clinic's use on its own patients to manufacturing the bits and parts that allow the other parts of the Medical Device Solutions unit to function. The payoff for the Clinic takes many forms. Immediate access to repair and fabrication work for medical tools and devices is a benefit that's tough to value in dollars; other efforts within the unit provide the Clinic with more direct financial and strategic benefits, such as new patents and research grants. For instance, some of the Clinic's work on Nitinol is financed by a $3 million grant from Ohio's Third Frontier program. Setting the pace The existence of a hospital-based operation with all the research, design, testing and fabrication capabilities that a medical device manufacturer might have is a smart strategy for the Clinic, said Mark Coticchia, founder of Red Wind Innovations, a Cleveland firm that advises universities, hospitals and others on economic development opportunities centered around medical technologies. As the former vice president of research for Case Western Reserve University, Mr. Coticchia administered federal grants from the National Institutes of Health, including some that went to the Clinic, and he's familiar with the scope of activities in which the Clinic engages. "The Clinic is really pushing the envelope as far as folding in prototype development and product development activities into their commercialization effort," Mr. Coticchia said. "I'm not aware of any other hospital entity that's taken it as far as the Clinic has." Parts put to work In another section of the unit, researchers test artificial joints, spinal implants and other mechanical devices that go into the human body. Those devices must be tested the same way auto parts are tested, which means they must be put through wear and tear as close as possible to what they would be subjected to in the real world. In the realm of prosthetics and implants, such work is messy. Technicians spend a good deal of their time preparing real human feet, shoulders and other cadaver parts so they can have the devices attached to them and then be driven by robots to mimic the stresses a live human body would A model of efficiency All told, 32 people work in Mr. West's unit. They're a mix of seasoned machine shop veterans and tech-savvy, fresh-faced college graduates, and they perform an equally diverse set of tasks. In one room, subjects with reflective markers at strategic points on their bodies provide data for a "gait lab," where computers take the information and technicians track and model a patient's movements. Using computer modeling, the lab works with patients suffering from neurological conditions or with amputees. It not only helps to research conditions such as multiple 10 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 PUBLISHER/EDITORIAL DIRECTOR: Brian D. Tucker (firstname.lastname@example.org) EDITOR: Mark Dodosh (email@example.com) MANAGING EDITOR: Scott Suttell (firstname.lastname@example.org) OPINION Real deal T he new year is a great time for investors to assess which assets to keep in their portfolios and which ones to dump. It's good to know that Cuyahoga County finally appears ready to go through the same process with the dozens of buildings that it owns and leases to house its personnel. For years, members of the old county Board of Commissioners talked about consolidating in fewer buildings the offices that various departments of county government occupy. However, that's about as far as the commissioners ever got -- oh, except for their questionable purchase in 2005 of the old Ameritrust headquarters in downtown Cleveland. You know, the complex with the empty, 28-story office tower, the floors of which are too small to house efficiently a multi-story tenant such as the county. A dubious and costly move, that one -- the kind that contributed to voters finally giving the boot to the old guard of county leadership by creating a new form of government based on a single executive and an 11-member council. Now, only a year after assuming office, county Executive Ed FitzGerald and council members have set the table for a serious reduction in the county's real estate costs thanks to a third-party evaluation of the government's space needs. Allegro Realty Advisors Ltd. late last month delivered to county officials a report that indicates the county could save $91 million by exiting 22 buildings, or one-third of the properties it now occupies. As part of its report, Allegro recommended the county sell both its 57-year-old administration building, which sits across from the under-construction Cleveland Medical Mart and Convention Center, and the aforementioned Ameritrust complex, which was deemed to be unfit to serve as the county's new HQ after $40 million was sunk into the property. Any consolidation of the county's operations likely will take years to execute. However, the return on investment for the $220,000 the county paid Allegro for its report could be tremendous -- and makes an outsider wonder why county leaders of the past never undertook such a comprehensive review. Thankfully, the old regime is gone and the new leadership that has replaced it is transfixed on bringing down the cost of government rather than lining landlords' pockets with county dollars. It continues to be a change for the better that's off to a promising start in 2012. FROM THE PUBLISHER About time to let Cordray do his job R know we will never again be led to the egular readers of this column brink of wholesale financial collapse by know I often criticize the antics a few greedy individuals and financial that foul the political systems in institutions. That's what inspired the our city, region, state and nation. law creating the Consumer Financial It's often based on my concern that we Protection Bureau -- the agency Mr. have too many people in office because Cordray was picked to lead -- in the first it's their job and not that public service place. is their calling. It doesn't take a financial That said, I found President engineer to understand that Obama's visit here last week BRIAN widespread mortgage fraud gave me a moment to reflect on TUCKER was perpetrated by cheats and politics in a more complicated then magnified by financial sense. institutions eager to turn massive Clearly, this was a campaign numbers of home mortgages -- trip, with the president appearing many of them held by folks who at a rally at Shaker Heights were never qualified to borrow High with Richard Cordray, his at such levels -- into tradeable choice for America's first securities. consumer-finance watchdog Now, cities such as Cleveland and a native son (and former and Detroit are wasting money they Ohio attorney general). Using the power can't spare in an effort to tear down foreof a "recess appointment," the president closed and abandoned houses in order installed Mr. Cordray, who's been kept to save deteriorating neighborhoods. from starting his work by Republicans in Congress passed this law creating the the Senate upset with the composition of consumer finance protection agency, the agency he'll be leading. but Republicans in the Senate don't like This is where it gets complicated. how it was structured, claiming it gives First, it's clear Americans need to too much unchecked power to an individual. Most have no problem with Mr. Cordray, understanding his reputation as a solid attorney general and public servant. But because they couldn't muster the votes to change what the law made possible, they've been conducting phony "sessions" of the Senate in which a handful of members appear in order to sound a gavel and then end the session minutes, if not seconds, later. The goal is to stop the president from making an appointment during the typical holiday recess. They have some valid concerns, but the place to have dealt with them was during the legislative sessions around the Dodd-Frank Act that created this agency, not now. Dodd-Frank was an attempt to avoid future crises, much like the Glass-Steagall Act of 1933, enacted after the Great Depression. So the courts now will decide the issue, and it won't likely be resolved soon. In the meantime, here's hoping that Mr. Cordray is able to do the work for which he is so sorely needed. PERSONAL VIEW Prioritize value, not volume, in health care By DR. TIM KOWALSKI Good for GAR B R ob Briggs will be a tough act to follow after 15 years as president of the GAR Foundation. However, the baton of leadership is passing into capable hands with the ascension of Christine Amer Mayer as head of the Akron-based foundation. We tip our hat to Mr. Briggs, who also has been a force behind the collaborative foundation initiative known as The Fund for Our Economic Future, and wish success to Ms. Amer Mayer. usinesses that produce paint or provide legal services never planned to be at the nexus of efforts to fix a health care system in need of a makeover. But as employers, that's where we find ourselves. As the biggest purchasers of private health insurance, we've got a big stake in making health care work like we all want it to. Economists will tell you that Americans' reliance on employer-sponsored health insurance was an accident of history. It began with wage controls imposed in 1942, as the country was consumed by war production. Because fringe benefits were exempted from government caps, employers started offering health insurance to compete for scarce labor. Other arcane developments, including subsidies Dr. Kowalski is chief medical officer of Progressive Insurance and president of the Health Action Council Quality Forum. for employers' health insurance purchases, fashioned employers' foundational role in our health system. For most members of Health Action Council Ohio, the region's business group on health for self-insured public and private employers, the business of providing efficient and effective health care is not a core competency. But as Harvard University's Dr. David Blumenthal so plainly put it in a 2006 paper published in the New England Journal of Medicine on the development of our employerbased system, "He who pays the piper calls the tune." As employers, we know we're paying ever-rising health care costs for services that too frequently don't deliver the value and outcomes we need. We want care that focuses on health, not sickness; that is safe and coordinated; that is laserfocused on the needs of our employees and their families; and that optimizes the vitality of our workers and their focus on their jobs. And we want this at a price that doesn't continue to blunt the economic vitality of our employees' families and Northeast Ohio. Employers have tried to tackle the cost issue for more than 20 years. We spurred health plans to create managed care in the early 1990s; to pay physicians for care that meets benchmarks for quality; and to contract with so-called `disease management' vendors with call centers that dial up enrollees who are pegged to be at risk of an avoidable hospitalization, See VIEW Page 11 JANUARY 9 - 15, 2012 WWW.CRAINSCLEVELAND.COM CRAIN'S CLEVELAND BUSINESS 11 THE BIG ISSUE Are you more or less excited about voting in this year's presidential election than you were in 2008, and why? 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 (email@example.com) Editor: Mark Dodosh (firstname.lastname@example.org) Managing editor: Scott Suttell (email@example.com) Sections editor: Amy Ann Stoessel (firstname.lastname@example.org) Assistant editors: Joel Hammond (email@example.com) Sports Kathy Carr (firstname.lastname@example.org) Marketing and food Senior reporter: Stan Bullard (email@example.com) Real estate and construction Reporters: Jay Miller (firstname.lastname@example.org) Government Chuck Soder (email@example.com) Technology Dan Shingler (firstname.lastname@example.org) Manufacturing Tim Magaw (email@example.com) Health care & education Michelle Park (firstname.lastname@example.org) Finance Research editor: Deborah W. 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Rafferty (firstname.lastname@example.org) Billing: Susan Jaranowski, 313-446-6024 (email@example.com) Credit: Todd Masura, 313-446-6097 (firstname.lastname@example.org) Audience development manager: Erin Miller (email@example.com) CAROL QUIGLEY Lyndhurst I'm less excited because I don't think my choices are ... so far, I'm not impressed, that's all. MARY BORUCKI Strongsville No, (less excited) because the candidates suck. Get somebody in there who's going to do something for the country and not give all the money away. SHELBY CREAGER Cleveland I guess I'm less excited -- because the last election was my first year voting in a presidential election. Also, last time everyone was very excited about change. There was obviously a huge marketing campaign making us more excited about change, but there was a lot more hope that there was going to be major change. NORENE VAN LEER Shaker Heights I'm more nervous about voting because I would hope that we have the same amount of drive to get people out to vote like we did in 2008. I don't want to see it go down; I want to see voter participation go up. Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com. Brunswick outfit hopes tiny parts lead to big things Precision Made Products' new metal injection molding method has potential in med device field By DAN SHINGLER firstname.lastname@example.org Majid Daneshvar's efforts to build a medical device company in Brunswick are bearing fruit, the inventor says, as he hires people and works his way into supply chains with his metal injection molding technology. "Our name is starting to get around," Mr. Daneshvar said. Mr. Daneshvar's company, Precision Made Products, is still small -- only 18 employees -- but he said it's growing and that its technology has the capability to make a big splash with tiny parts, especially in the field of medical devices. Mr. Daneshvar, a polymer chemist by training, said he has come up with advances in the field of metal injection molding that allow him to do things his competitors can't. Metal injection molding, known as MIM, involves mixing powdered metals with other agents, such as a polymer, and then molding the mixture into shapes the way other manufacturers mold plastic. Once parts are cast they are put into hightemperature ovens for a process called sintering, in which the metal particles fuse together to form a precise and durable part. It can be done with steel, titanium or a host of other metals. Metal injection molding isn't new, but Mr. Daneshvar said he has developed a formula and process that enable him to do it differently and better than his competitors. More specifically, he said, he can make parts that don't shrink as much as other MIM parts during the sintering process. And, he said, he can take two "green" parts straight from the molds, put them in the oven together, and sinter them into one, seamless part. The technology was impressive enough that Precision Made Products early this year won a National Science Foundation grant for $150,000 to further develop it. Jim McGuffin-Cawley, chairman of Case Western Reserve University's Materials Science and Engineering department, who has worked with Mr. Daneshvar, has lauded the new process for its engineering flexibility. A reduction in shrinkage allows Precision Made to produce parts to tighter tolerances than companies using other MIM methods, Mr. Daneshvar said. The ability to co-sinter parts, on the other hand, opens up the possibility of producing parts that were either too expensive to make with other methods, or which couldn't be made at all. For example, Precision Made can make a tiny metal part with channels, reservoirs or other engineered spaces inside, where it would be impossible to do traditional machining. It does so by casting two parts with half of the desired channels and cavities in each one, Mr. Daneshvar said. When they are sintered into a single piece, that part then has those features on the inside. Mr. Daneshvar greets visitors with a plethora of parts, some of them so tiny they easily fit on a fingernail, demonstrating how the process can make components for equipment ranging from firearms to dental instruments. Mr. Daneshvar is tight-lipped about both his processes and his customers, but one of the parts he recently displayed was for use in endoscopes, and he confirmed the customer for it was Mentor-based US Endoscopy. US Endoscopy has been in highgrowth mode in recent years, and always is looking for better ways to make its products, said its chief operating officer, Tony Siracusa. Mr. Siracusa said it's too soon to say how well Mr. Daneshvar's parts will work for his products -- the two companies still are working on development. But the technology's promise was enough to spark US Endoscopy's interest, especially because it was coming from a local company, Mr. Siracusa said. "We are working with Majid to leverage their technology into our small but precise components," Mr. Siracusa said. "We always strive to partner with our local suppliers first." Mr. Daneshvar not only would like to count US Endoscopy among his customers, but would like to emulate the company outright, he said, noting that he, too, would like to identify and make complete products that he can bring to market. "I don't want to just make parts for others, he said. Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain's Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-2912, or email to email@example.com, or call 877-812-1588 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Reprints: Call 1-800-290-5460 Ext. 125 Audit Bureau of Circulation View: Funding available for new health care model continued from PAGE 10 among other approaches, all with varying degrees of success. Still, we have continued to pay for volume rather than value -- something we typically avoid in other facets of our businesses. Rarely have we joined forces to use our purchasing weight to impact a single health care market. Now, 70 years after employers first took on health insurance, we have a unique opportunity to come together and call the tune in Northeast Ohio. By Jan. 17, 2012, Northeast Ohio will be nominated by virtually all the region's health plans to be selected as one of a handful of communities to participate in a federal program that could bring $40 million to $60 million annually to the region. These federal dollars, from the Center for Medicare and Medicaid Innovation, would help capitalize implementation of the Patient Centered Medical Home, a health care delivery model that in other communities has reduced cost and improved care for patients of primary care practices. As employers, we'll be able to leverage federal dollars to get the health care we want and the value that will benefit our companies, our employees and the regional economy. To respond to this opportunity, we have been working together and with an organization called Better Health Greater Cleveland, a regional alliance of purchasers, payers and providers that has led the effort to coordinate with health plans that do business in Northeast Ohio. Thanks to Better Health's established programs, we have the infrastructure we need to succeed. Better Health reaches more than 500 primary care providers in 50 practices of 10 health systems, which have demonstrated improvement in care and outcomes for more than 120,000 people with chronic conditions. Its leadership in health information technology -- an essential tool in providing coordinated and patient-focused care -- has drawn the attention of the U.S. Secretary of Health and Human Services, the federal agency that oversees federal health care programs. How can you help us harmonize our tune? Write your health plan to tell them that you expect their support for Northeast Ohio in its Comprehensive Primary Care Initiative proposal. Together, we can reward value over volume, quality outcomes over treatment of incidents and provide optimal vitality for our employees and our communities in Northeast Ohio. We can use our accidental influence in health care to purposefully chart a future of better health and lower costs. 12 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 Add Your Company Logo To Contact Keeper Products Kent aims for versatile tech specialists Digital sciences school combines disciplines By TIMOTHY MAGAW firstname.lastname@example.org contactkeeper.com 440-498-7200 Keep Business Cards and Notes Together Kent State University is looking to mold an army of digital super employees with the creation of a new academic unit that's a mashup of offerings from various disciplines. Dubbed the School of Digital Sciences, the academic unit that launched last fall combines courses from computer science, visual communication design, journalism and communications to give students a broad understanding of the digital sciences. Exactly what "digital sciences" means still is a bit amorphous, but Robert Walker, the school's director, said the idea is to teach students how a variety of cultures, ethnic groups and business organizations use technology differently and how they can solve problems in those settings. "(Students) need to be exposed to different types of people and be exposed to how they think," said Dr. Walker, also a professor of computer science. "Putting them in a bubble and not letting them talk to people who don't look or think like them isn't going to be very useful." Dr. Walker said a central piece of the program is its bachelor's and master's degrees in enterprise architecture -- a business concept that focuses on how to use information technology to enhance collaboration and efficiency throughout an organization. Dr. Walker maintains Kent State is the first school in the country to offer such degrees, noting the master's degree would be of particular value to computer science graduates looking to apply more appropriately their technical and critical thinking skills in the business world. Also, because the new digital sciences school is made up of the university's existing resources, Kent State hasn't had to invest in hiring faculty to get the program off the ground. "The thing that's amazing about this from an academic perspective is that we've torn down a lot of silos to make this happen," said Dr. Stanley Wearden, dean of Kent State's College of Communication and Information. "It's great to see how faculty can work together and students can draw on all these disciplines." GOING PLACES JOB CHANGES EDUCATION MUSIC SETTLEMENT: Theresa A. Schneider to manager of annual giving. NOTRE DAME-CATHEDRAL LATIN SCHOOL: Keven S. Krajnak to major gifts officer. UNIVERSITY OF AKRON: Judit Puskas to the Austin Chemical Co. Chair holder, College of Engineering. Jennifer Ashbee to senior billing managers; Jessica Roe to senior credentialing specialist; Jennifer Dimassa to coder II; Amanda Stillman, Joan Bible, Barbara Hutzell, Karen McArthur, Beverly Klimas, Kristine Woodcock, Bonnie Eshbaugh, Linda Anderson, Caroline Urgo-Licursi, Lynnette Szabat, Christina Gasser, Ranita Mitchell, Christina Mathis, Renee Genet, Denise McCartney, Samantha Laslo, Diane Clare, Shelli Kelling, Doreen Meredith, Sue Panek, Heather Hoza, Susie Gatian, Jeanette Danczak, Virginia Neff, Jennifer Matozel and Wendy Herchek to senior billing specialists. Krajnak Puskas Juris ENGINEERING URS CORP.: Brandon Davis to director, industrial manufacturing, Industrial Process Group. Godios Bautista Evans FINANCE CHASE: Chet Shedloski to vice president and banker for community development real estate lending, Ohio, Kentucky and West Virginia. GOVERNMENT CITY OF CLEVELAND: James DeRosa to commissioner of real estate. if you are paying more than $10 per foot, you are overpaying. FIRSTMERIT CORP.: Joseph J. Varckette and Brian E. Wells to vice presidents, business banking. HEALTH CARE UNIVERSITY HOSPITALS AHUJA MEDICAL CENTER: Susan V. Juris to president. Sponseller Sanek Kaminskas FINANCIAL SERVICE BRUNER-COX LLP: Laura A. King to tax director; Tamara A. Lukes to assurance services supervisor; Robert M. Ryan to tax manager; Erin M. Simone and Francis A. Turocy to assurance services senior associates; Jason A. Wahl to tax supervisor; Heather L. Ackermann and Kyle A. Bowers to assurance services associates; Jesse P. Kepple and Manbir Sidhu to tax associates. CORRIGAN KRAUSE: Michael D. Toncar to controller; Samantha VanArnhem to firm administrator; Patrick J. Lang to associate. PEASE & ASSOCIATES INC.: Jennifer Barnes to partner; Tina Moore to vice president, operations; Matt McGowan, Joe Rokas and Kathleen Moran to supervisors; Will Fugate, Dan McGoun, Jessica Sokol, Daniel Papadelis and Lauren Yurcak to senior accountants; Allison Parsons to office manager. RETIREMENT SOLUTIONS: Joyce Filipiak to associate financial consultant. SS&G HEALTHCARE SERVICES LLC: Erline C. Franks to associate director; Andrea Driscoll, Cheryl L. Chianello, Robert Hague and Sonda Kunzi to senior managers; Jan Lasker, Kimberly Ivery, Linda Falkenstein and Tamiya Williams to senior consultants; Larry Bitting and Mark Parmelee to IT senior associates; Arlene Kelly and LEGAL BELKIN GARFIELD LLC: William K. Smith to of counsel. GALLAGHER SHARP: Jeremy V. Farrell and Justin L. Monday to associates. MEYERS, ROMAN, FRIEDBERG & LEWIS: Steven P. Dlott to partner. SHIFRIN NEWMAN SMITH INC.: Christopher N. Godios to partner. TAFT STETTINIUS & HOLLISTER LLP: Philip R. Bautista to partner. THOMPSON HINE LLP: Deborah Z. Read to managing partner. of advocacy; Julie Robie to managing attorney, consumer practice; Anne Sweeney to managing attorney, community engagement. WESTERN RESERVE HISTORICAL SOCIETY: Clio to digital curator. UTILITY FIRSTENERGY NUCLEAR OPERATING CO.: Vito A. Kaminskas to site vice president, Perry Nuclear Power Plant. BOARDS ASSOCIATION OF FUNDRAISING PROFESSIONALS, CLEVELAND CHAPTER: Beth Brown (Kimball Consulting LLC) to president; Tim McCormick to president-elect; Sharon Martin to secretary/treasurer; Paul Pawlaczyk, Marge Zellmer, George Graham and Jerry Jindra to vice presidents; Carol Carbary to immediate past president. NATIONAL CENTER FOR CREATIVE AGING: Linda Noelker (Benjamin Rose Institute on Aging) to president. MARKETING ADCOM COMMUNICATIONS INC.: Caroline Evans to associate art director; David Sponseller to senior digital production artist; Daniel Sanek to assistant account executive. DONER: Gretchen Hentemann to vice president, brand leader. HITCHCOCK FLEMING & ASSOCIATES: Kelly Wanstrath to senior research manager; Lauren Reed to senior account planner; Jennifer Keenan to agency administrator. KAREN SKUNTA & CO.: Jennifer Teeter to client services and business manager. � downtown youngstown � walking distance to university and courts � central business district � on-site fiber-optics available � naming rights now available brokers protected AWARDS AMERICAN INSTITUTE FOR MEDICAL AND BIOLOGICAL ENGINEERING: Liming Dai (Case Western Reserve University) was named a Fellow. (330) 480-0804 downtown youngstown, ohio NONPROFIT LEGAL AID SOCIETY OF CLEVELAND: Tom Mlakar to deputy director Send information for Going Places to email@example.com. JANUARY 9 - 15, 2012 CRAIN'S CLEVELAND BUSINESS 13 INSIDE 14 TAX TIPS: STATES EYEING REVENUE FROM CLOUD. SMALL BUSINESS INBRIEF ARE YOU GETTING AHEAD?: On Page 14 this week, we're debuting a new feature called "Getting Ahead," which will run in each month's Small Business section. Targeted to early and mid-career professionals and others in career transition, the goal is to provide a regular source of information for those interested in taking the next step to advance their professional and personal standing within the community. (There may even be a little insight for those who are more established.) Each feature will include a story, such as this month's on how to form and cultivate a relationship with a mentor; a Q & A with a leader; and sources for building one's network both online and in person. If you have suggestions for future Getting Ahead stories, Q & A subjects or networking opportunities, please email sections editor Amy Ann Stoessel at firstname.lastname@example.org or call 216-771-5155. RUGGERO FATICA PHOTOS Kevin Busta (left) and Michael Carreras have teamed to run a business, Kevin Busta LLC, that sells Mr. Busta's industrial-style artwork. Mr. Carreras serves as the company's CEO. THE TROUBLE WITH TEAMS By CHUCK SODER email@example.com ttorney Frank Manning spent the morning of Dec. 2 in two meetings with two unrelated clients. Both of them were trying to get rid of their business partners. Over the past 20 years, meetings such as those have helped turn Mr. Manning into a big skeptic of business partnerships. It isn't that they can't work. Partners who complement one another and plan ahead can achieve a lot together -- and even remain friends, according to Mr. Manning and a few other local business people. However, loads of people dive into partnerships without much planning, said Mr. Manning, who focuses mainly on business law at Manning & Manning Co. LPA in Mentor. The partners usually like each other, though. At least in the beginning. "They fail to consider what happens when the honeymoon is over," said Mr. Manning, who himself has been part of both good and bad business partnerships. Mr. Manning said people tend to go into business together for one of three reasons: They like each other; one person wants to build a company and the other has money; or they A Business partnerships fraught with potential pitfalls, but can work with proper planning The duo opened a storefront in Tremont in September. have complementary skills that could benefit the business. The third reason is the only good one, in Mr. Manning's eyes. Even the second is questionable: If someone needs money to start a business, Mr. Manning said, the person first should try to borrow it, either from a bank or from someone they know. That method produces less conflict, he said, because the lender won't try to weigh in on day-to-day business decisions. Even if the company goes out of business, the lender will be happy as long as the borrower finds another way to make payments, he said. By contrast, partners with complementary skills may need each other, Mr. Manning said. However, if one partner has a low tolerance for working long hours or taking risks, the other should hire that person as an employee, he said. "Being an owner of a business is a lifestyle, and being an employee is a job," he said. Even assuming both potential partners have complementary skills and a similar commitment to the business, Mr. Manning said, they still need to take a few more steps: They should define their roles, decide how much time each person will put into the business and create a buysell agreement. Should one partner want to buy out the other, the agreement would spell out the terms of the deal. Creating such an agreement ahead of time is easier than hammering out a deal between two bickering partners, Mr. Manning said. "If you haven't done that -- and most people don't -- it is so costly to pry things apart," he said. ADVISER UPDATE: In an adviser column in the Dec. 12 Small Business section of Crain's Cleveland Business, James Kurek, a partner at Fisher & Phillips' Cleveland office, indicated that the National Labor Relations Board would require all employers to Kurek post a Notice of Employee Rights, effective Jan. 31. This poster states that employees have the right to act together to improve wages and working conditions, form, join and assist a union, bargain collectively and refrain from these activities. It also provides examples of unlawful conduct. Since the column's publication, the NLRB has moved the compliance date to April 30. The NLRB stated that the regulation was pushed back to April to allow for enhanced education and outreach to employers, particularly those who operate small and mediumsized businesses. This rule applies to all private-sector employers subject to the National Labor Relations Act, excluding agriculture, railroad and airline employers. Learning from his mistakes Andy Halko admits he made big mistakes when he decided to go into business with a college friend in 2002. The two men each threw in a little bit of money to start a web See TEAMS Page 15 A NEW FINAL RESTING PLACE: Marlene Medley of Bay Village has purchased a franchise of the Eternal Ascent Society, the first of its kind in the Cleveland area. The business, which is based in Crystal River, Fla., offers a patented process for the scattering of cremated remains by releasing them in a giant balloon with a 5-foot diameter. The biodegradable balloon is inflated with helium, which is released after a private family service. During the balloon's ascent it expands and, at a height of almost 6 miles, it freezes and fractures, scattering the ashes. 14 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 SMALL BUSINESS GETTINGAHEAD By AMY ANN STOESSEL firstname.lastname@example.org Your monthly guide to getting to the next level in your career. Building relationships: The mentor-mentee bond Cloud's tax implications could weaken benefits State authorities analyzing newer technology F inding a mentor is all about building connections -- now and for the future. "It's nice to have someone in your corner," said Sunny K. Lurie, the CEO of Beachwoodbased Fast Focus Careers, who has been in the career training and coaching arena for 20 years. She started her business in 2007, and today helps people at all levels, especially those looking to make a career change. "I think it will stretch your ability to work through a challenge," said Dr. Lurie of having a mentor. "People really do get stuck a lot ... they don't see what else is possible." Instead of zeroing in on finding one perfect mentor (although, she said if you can find one, great), Dr. Lurie suggests finding multiple "advisers" -- a "mini team" so to speak. The simple change in terminology suggests less responsibility, and having more than one counselor offers access to a broader range of skill sets and perspectives. Dr. Lurie recommends having advisers both from inside one's workplace and from outside sources, such as professional associations, college alumni groups, previous employers, business owners, online communities or even other industries. They should be accessible, knowledgeable, responsible and optimistic. She did offer one exception: Stay away from the boss. Once a potential adviser has been identified, Dr. Lurie suggests reaching out with a casual, brief introduction, asking questions about their field, eventually broaching the possibility of furthering the relationship. For example, such a proposition could be phrased this way: "I was interested to see if you can act as an adviser for me periodically." Finally, define clear-cut expectations for the relationship, and keep in mind the setup should be a two-way street, with the mentor receiving some sort of benefit as well, Dr. Lurie stressed. This fall, two Northeast Ohio professional organizations kicked off mentorship programs to make it easier to build such relationships -- the Women in Law section of the Cleveland Metropolitan Bar Association and the Cleveland chapter of the Young Nonprofit Professionals Network. "Our main role was simply to make the connections," said John Lynch, chairman of YNPN Cleveland's professional development committee. Mr. Lynch, who works as a volunteer engagement specialist at the Center for Families and Children in Cleveland, said the decision to begin a mentoring program was the result of a survey the group conducted in late 2010. "We wanted to connect pairs that otherwise might not have crossed paths," said Mr. Lynch, whose program currently links 13 experienced nonprofit professionals with 18 young professionals. The pairings are expected to meet once a month for at least 60 minutes. "We're hoping the relationships formed persist," he said. Meanwhile, Nicole M. Capretta, a second-year student at Cleveland State University's Cleveland-Marshall College of Law, already has discussed the ups and downs of the interviewing process with her mentor through the Women in Law section of the Cleveland Metropolitan Bar Association. Developed in response to input from the region's law schools, the Women in Law section's program connects law students with mentors in Northeast Ohio's legal community. The program, which started in October, pairs 22 students, such as Ms. Capretta, with mentors. "It's nice hearing from her what they're going through," said Ms. Capretta's mentor, Nicole J. Quathamer, who is co-chair of the Women in Law section and a partner in Porter Wright Morris & Arthur LLP's litigation department. "It's a reality check." S FOLLOW THE LEADER: A Q&A TAMI BROWN General manager Greater Cleveland Aquarium Who do you admire and why? My parents, Pat and Dave Lash. They have been married for nearly 50 years and they still hold hands and laugh together. They have been through some absolutely crazy stuff in their lives, but have never lost their focus on family and friends and bringing love and fun into the lives of the people around them. What skill do you wish you had? The ability to say "no" more often and more strategically. At a meeting a few years ago, I had the opportunity to hear the former CEO of Continental Airlines speak. Someone asked a question and he responded, "I know you want the answer to be `yes,' but it's not, and here's why." I loved it, and have tried to model my "no's" off of that response. I am getting better, but still not where I should be. And singing. I really wish I could make a beautiful sound when I sing. Career advice you wish someone would have given you? Never hesitate to ask questions. Rather than making it look like you don't have answers, it alerts others to the fact that you are thinking and gathering information to make better decisions and solve problems. Favorite nonwork activity? Visiting the other wonderful attractions in the region and eating at our independent restaurants. What most surprises you about the path your career has taken? My goal since high school was to work in the arts and cultural field. When I first graduated, despite more interviews than I like to think about, I could not land a job and ended up at an advertising agency. While there, I volunteered for the pro bono account for the Institute of Contemporary Art. If it hadn't been for that "off my career choice" job at the ad agency, I would not have been hired at the Cleveland Museum of Art as their first advertising staff member. Though my career path has not been straight, the cumulative experience I have gained from the "side step" career positions has been invaluable. mall business owners may be intrigued by the possible benefits of moving their computer-related activities into "the cloud," but they should be aware that tax authorities are intrigued by the possibilities around taxing in the cloud as well. Tax authorities at all levels are on a constant hunt for creative new ways to generate tax revenue to cover disturbing shortfalls in fiscal budgets. State tax authorities in particular are showing an increasing interest in how they might be able to stake a claim to tax revenue by looking at cloud-related activities as taxable transactions. The range and breadth of interpretations that are beginning to emerge suggest state tax authorities haven't yet sewn together a strong case for how to tax whatever is happening in the cloud. But they're working on it. The cloud is a cutting-edge, rapidly evolving method of managing business information. Essentially, cloud computing enables unrelated businesses to share computer resources by becoming networked in an Internet-like way. Small business in particular can benefit from cloud computing by gaining access to applications, servers, storage, networks and services that otherwise would be highly impractical or entirely unaffordable. PETERDEMARCO TAX TIPS user of the service, and to the business and occupancy tax imposed on the provider. SaaS enables a consumer to access the provider's software through various client devices, so SaaS providers located in Washington will be collecting and remitting taxes related to those services. Missouri and New York have taken different views on how to treat the sale of software hosted on out-ofstate servers. In Missouri, such a sale is not subject to sales tax when accessed from an in-state location. In New York, SaaS hosted on out-of-state servers are subject to tax in New York, if the software is accessed from inside the state. New York also contends that SaaS falls within its definition of "tangible personal property" because the customer gains possession and use of the software. In Massachusetts, on the other hand, officials have concluded in at Small business owners can be assured Ohio is paying close attention to what other states are doing. The cloud can give a small business owner easy access to expanded resources while reducing or eliminating the need to maintain expensive, hard-to-handle technology and equipment. As state tax authorities have studied the evolution, they are exploring how cloud activity can be taxed. They already have ventured down the path of how to assert their tax authority, or nexus, over transactions that cross state borders in new and creative ways as a result of technology. It was a long haul for states to wiggle in on Internet-based transactions and ensure their share of sales and use taxes on such activity. Today, it's routine for customers to pay sales tax on Internet transactions at the time of purchase. Now, tax authorities are wondering how sales and use taxes, or possibly even income tax, can be asserted over cloud-based activity. So far, Ohio hasn't made significant inroads on whether, when and how to tax cloud-based activity, but small business owners can be assured Ohio is paying close attention to what other states are doing. There are generally three service models with cloud computing: Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). Washington, for example, updated its tax rules to say that any SaaS would be subject to both sales and use tax, which is imposed on the least one case that the customer's ability to access software through SaaS is more akin to receiving a service than receiving a product. As another example, Texas recently amended its sales and use tax regulation to state that any retailer that owns or uses tangible personal property located in the state is considered to be doing business in the state and therefore is required to collect and remit sales and use taxes. Even though a July 2011 ruling issued by the Texas comptroller indicated such activities were not subject to sales tax, the state is starting to look at these activities. The amendment specifies that a computer service or software would be included in the view of what constitutes tangible personal property, therefore a business using SaaS that's hosted in Texas may be considered to be doing business in that state. With such varying interpretations materializing, it will be a long path through regulatory and judicial activity for the taxation of cloud activities to become clear. But small business owners venturing into the cloud should be aware that tax consequences are sure to follow eventually. Mr. DeMarco is vice president and director of tax services for the regional accounting and business consulting firm of Meaden & Moore, headquartered in Cleveland. O ne could say that Tami Brown is Northeast Ohio's newest big fish. As general manager of the Greater Cleveland Aquarium, which is slated to open to the public on Jan. 21, Ms. Brown has been leading the startup of Cleveland's newest attraction since September. Ms. Brown admits she's learned a lot when it comes to fish, but she's not swimming in completely uncharted territory in terms of promoting tourist spots. She most recently served as vice president of marketing for Positively Cleveland, and she has a background that includes time at the Western Reserve Historical Society and the Cleveland Museum of Art. Daily must-read? Crain's Morning Roundup and Daily Headlines. (Seriously.) Also, the daily sales report for the aquarium and a wonderful cartoon called Frazz in The Plain Dealer. BUILDING YOUR NETWORK Get involved and stay informed by building your network online and in person. Check out United Way of Greater Cleveland's Young Leaders. It's a group of professionals in their 20s and 30s who want to work to make our community better through philanthropy, volunteerism and advocacy through United Way of Greater Cleveland. Contact: Greg Renkas, 216-4362208, or email@example.com. Web: www.unitedwaycleveland.org /youngleaders While you're in the spirit of giving back, consider looking into Minds Matter. Minds Matter of Cleveland is part of the national Minds Matter organization that's in its fourth year locally. Young professional volunteers help high-achieving high school students from low-income families accomplish academic excellence. Volunteers go to Minds Matter on Saturdays during the school year to help students improve their academic skills, gain acceptance to leading college summer programs and eventually gain admission to a four-year university. Contact: firstname.lastname@example.org Web: http://mindsmattercleveland.org JANUARY 9 - 15, 2012 WWW.CRAINSCLEVELAND.COM CRAIN'S CLEVELAND BUSINESS 15 SMALL BUSINESS It may not be time to sell, but time to plan exit sk anyone how to make money in the stock market and you'll get the same clich� answer: "Buy low and sell high." Or for the past few months, "Sell high and buy low." The popularity of the statement is driven by its truth, yet it is rarely practiced by anyone other than the ultra-disciplined investor. Greed, more often than not, gets in the way of a profitable sale of a stock, as it does the profitable sale of a company by an entrepreneur. If you are a typical entrepreneur, you have spent years creating your company, pouring thousands of hours over many long days, nights and weekends into your efforts. When things are going well, you are happy to continue your efforts and take advantage of the fruits of your labor. When things turn down as they have recently, like many owners, maybe you are looking to sell with the hope of cashing in on A your past success. Unfortunately, you are looking to sell at a time when earnings and sales growth are reduced and when buyers are looking to conserve cash, reduce risks and pick up companies cheaply. The reasons that entrepreneurs become sellers can be numerous. They range from retirement and succession planning to fatigue to diversification of assets and risk reduction. No matter the reason, if an owner is looking to make a transition, the best thing to do is to plan two to three years in advance and be a proactive seller when your company is on the upward swing. The time may not be right to make a good deal and achieve a high multiple of earnings (if there are any earnings any longer), but it is the right time to start planning an exit. Now is the time to assemble a team (lawyer, accountant, financial MITCHELLFRANKEL ADVISER adviser and business broker or investment banker) and plan for the future disposition of the business. This means that many owners of middle-market companies who feel they are ready to hand the reins to someone else or who wish to diversify their holdings should be looking to sell their companies in the coming recovery. With the improving economy as wind at their backs, they will be able to show the growth and project future growth in order to achieve the maximum value for their company in a sale. Remember, as the economy recovers, you, like many owners, will have forgotten the gloomy days of the past and will be caught up in the euphoria of increased sales and growth once again. You forget the reason why you wanted to be a seller. Instead of seeing a recovering business as an opportunity to cash in on your efforts, you again focus on the here and now, forgetting what just was. As an entrepreneur, the only thing more difficult than figuring out when to sell is figuring out whether you are a seller. Determining whether one wants to sell their company requires significant self-analysis. Are you ready to cede control? Are you ready to retire? How will you replace your paycheck? Do you wish to continue under the ownership of another? Will you still be motivated? Some of the issues we ask potential sellers to think about are valuations of their company, required future income needs and what investment vehicles (stocks, bonds, etc.) they will use to provide the income replacement. With the information, a good financial adviser can help an owner project if the time is right to sell and whether their sale will provide them with the funds they need to accomplish their goals. Before becoming a seller, especially if you are looking for it to mean retirement, it is a good idea to review your plans and needs with a good financial adviser. Mr. Frankel, chartered retirement planning counselor (CRPC), is a financial adviser with Lakeside Wealth Management Group of Wells Fargo Advisors LLC in Pepper Pike. Prior to joining Wells Fargo Advisors, Mr. Frankel was a merger and acquisition adviser to small to midsize corporations. Wells Fargo Advisors LLC is not a legal or tax adviser. Teams: Defined roles, ownership key continued from PAGE 13 development firm called Insivia just after graduating from John Carroll University. Soon thereafter, they started "stepping on each others' toes" because they both did a little bit of everything instead of taking on separate roles within the company, Mr. Halko said. Plus, they started disagreeing over issues such as the services they should offer and the customers they should pursue, which "significantly slowed" the growth of the company, he said. After a few years, Mr. Halko bought out his partner's portion of the company, which today employs 14 people in Cleveland. He advises others thinking about taking on a business partner to define their roles clearly and to create a buysell agreement ahead of time. "You have to go into it with an understanding that it may end," he said. Mr. Halko also says that, if the business has just two owners, one should own at least a slight majority of the company's stock, which ensures that votes on big decisions don't get stuck in a 50-50 stalemate. Bob Chalfant agrees that one partner needs to own a majority stake: 50.1% is enough to do the trick. That setup sometimes can frustrate the partner with the minority stake, but he or she will get over it, said Mr. Chalfant, director of the Fitzgerald Institute for Entrepreneurial Studies at the University of Akron. "The person already agreed that, if we have a tie, you win," Mr. Chalfant said. On occasion, Mr. Chalfant has encouraged his students to go into business together. When he learned he had one student who wanted to start a dance studio and another who wanted to start a dance clothing store, he suggested they combine their ideas into one business. "It's just so synergetic," said Mr. Chalfant, who has held management positions at several companies, most recently serving as CEO of The MetalWood Bat Co. in Eleanor, W. Va. A work of art So far, the partnership between Kevin Busta and Michael Carreras is going well, according to Mr. Carreras, who is managing the business side of a company they started to sell Mr. Busta's industrialstyle artwork and furnishings to a broader audience. After reading about Mr. Busta's work in Crain's Cleveland Business two years ago, Mr. Carreras started buying his artwork and built a friendship with Mr. Busta. They soon began to discuss the idea of creating a formal company, with Mr. Carreras serving as CEO and opening a storefront where Mr. Busta could display his work. Kevin Busta LLC opened a store in Tremont in September. Mr. Carreras said the partnership should work because he and Mr. Busta have clearly defined roles, communicate well and spent a year discussing the plan before pulling the trigger. "You need to build up that trust in each other and make sure that each person is committed," said Mr. Carreras, who is an account executive at WJW-TV, Fox 8 Cleve- land, and an MBA student at Case Western Reserve University. Mr. Manning knows that business partnerships can work. For instance, he started his law firm with his wife, though she eventually went into banking because she didn't like the business of law. Plus, he and a client who previously had been in a rocky business partnership together started the Five Star Dive Bar & Grill in Willoughby. They sold the bar for a profit two years ago, after which it became an Irish pub called Croagh Patrick. Those good partnerships haven't helped Mr. Manning forget the bad one, though: In the 1990s, he and a few friends decided to buy a rental property, fix it up and sell it. They laid just one ground rule: Everyone had to show up on certain days to work. That agreement wasn't enough. Soon, they were fighting over who was pulling their weight. They did get their money back when they sold the property, but it wasn't worth the effort and the strain it put on their friendships, Mr. Manning said. "We all agreed we would never go into business with one another again," he said. Big to Us! The Middlefield Banking Company built our business on helping small business. We will treat you with dignity and fairness, and give you the consideration you deserve. Come over to a Community Bank that delivers: SMALL Business is Common threads fuel collaboration on popup I n many ways, Steven Tatar and Michael Ozan are cut from the same cloth, and sometimes that's just what it takes to start weaving together a partnership. Both are energetic business owners and entrepreneurs. Each shares an interest in history. Both are passionate about supporting the creative energy building around Ohio City. So it's not surprising to see the two join forces in support of a common business and development effort -- a collaboration that manifested itself this holiday season as the Ohio Knitting Mills popup shop on West 28th Street in Ohio City. "We were kind of each other's missing piece," said Mr. Ozan, president and chief creative officer of Twist Creative Inc., a brand strategy and design firm. Michael Ozan from Twist Creative and Steven Tatar from Ohio Knitting Mills. The popup, which was located in the storefront space of Twist's offices, was a temporary retail site for Mr. Tatar's archive of virgin vintage knitwear from Ohio Knitting Mills, a company that for 76 years produced clothing from its Cleveland factory for department stores and labels. But the setup was far more than a landlord-tenant relationship. For Mr. Ozan, it was a chance to further the work his agency already was doing for Ohio City Inc., which recently adopted the Twist-inspired branding of being an artisan neighborhood. It also offered his creative team the chance to be involved in a product offering and to try out a large and lofty promotion effort: a billboard that was dressed up in a 24-foot sweater made of vintage OKM knits (for which the money that would have been rent was reinvested). Messrs. Tatar and Ozan say the end of the popup will not be the end working together. Mr. Tatar even sees manufacturing in textiles as a potential next step: "There's a very wide but specific niche that Cleveland can step into." -- Amy Ann Stoessel The Middlefield Banking Company www.middlefieldbank.com 888-801-1666 Main Office 888-801-1666 | West 440-632-1666 | Chardon 440-286-1222 Garrettsville 330-527-2121 | Mantua 330-274-0881 | Orwell 440-437-7200 Newbury 440-564-7000 | Cortland 330-637-3208 16 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 NORTHEAST OHIO'S TOP SBA LENDERS RANKED BY DOLLAR VALUE OF 7 (A) LOANS IN FISCAL 2011 This Company name year Headquarters Dollar value of approved loans fiscal 2011 82,357,400 31,495,900 17,985,300 14,570,400 14,180,200 13,057,300 7,847,200 6,647,000 6,460,000 5,820,000 5,542,800 5,125,000 4,855,000 4,788,900 4,581,000 4,570,600 4,255,200 3,946,000 3,800,000 3,710,000 3,558,000 3,531,200 3,528,500 3,431,700 3,130,000 2,697,800 2,412,200 2,080,000 1,975,100 1,675,000 1,610,800 1,600,000 1,475,000 1,410,000 1,400,000 1,323,300 1,200,000 1,070,000 1,069,000 1,009,000 THE SAME GAME According to statistics from Grubb & Ellis, vacancy rates in Northeast Ohio's office market inched up while the industrial rate trended downward. Office Downtown Suburbs Total market 2011 22.19% 21.48 21.88 2010 21.74% 21.43 21.60 2009 21.05% 19.72 20.46 2008 19.84% 17.56 18.82 2007 20.11% 17.16 18.81 Dollar value of approved loans fiscal 2010 54,599,300 10,521,000 12,197,500 1,903,500 10,902,800 6,142,900 4,080,300 -------- 4,248,500 1,325,000 3,610,800 3,686,500 3,428,400 -------- -------- 2,147,100 -------- -------- 1,800,000 -------- 4,871,000 1,298,800 420,200 -------- 200,000 661,000 3,098,100 4,902,000 630,000 2,309,000 -------- -------- -------- -------- 1,965,000 470,000 958,500 -------- 345,000 5,449,000 % change 50.8% 199.4% 47.5% 665.5% 30.1% 112.6% 92.3% -------- 52.1% 339.2% 53.5% 39.0% 41.6% -------- -------- 112.9% -------- -------- 111.1% -------- -27.0% 171.9% 739.7% -------- 1,465.0% 308.1% -22.1% -57.6% 213.5% -27.5% -------- -------- -------- -------- -28.8% 181.6% 25.2% -------- 209.9% -81.5% Number of loans fiscal 2011 681 101 36 28 84 31 43 8 11 8 19 63 10 1 2 13 10 5 2 1 5 15 3 4 2 9 13 2 4 9 2 1 1 2 1 7 1 1 7 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Huntington National Bank Columbus KeyBank NA Cleveland Fifth Third Bank Cincinnati U.S. Bank NA Columbus JPMorgan Chase & Co. New York Lorain National Bank Lorain FirstMerit Bank NA Akron Live Oak Banking Co. Wilmington, N.C. Ohio Commerce Bank Beachwood First National Bank Orrville PNC Bank Pittsburgh Charter One Providence, R.I. Westfield Bank FSB Westfield Center mBank Manistique, Mich. Community South Bank Parsons, Tenn. Consumers National Bank Minerva Home Savings & Loan Co. Youngstown Park View Federal Savings Bank Solon First Colorado National Bank Paonia, Colo. North American Banking Co. Roseville, Minn. Grow America Fund Inc. New York, N.Y. Portage Community Bank Ravenna First Financial Bank NA Hamilton State Bank and Trust Co. Defiance Cortland Savings and Banking Co. Cortland Western Reserve Bank Medina Citizens Bank Flint, Mich. First Place Bank Warren Wells Fargo Bank NA Sioux Falls Genoa Banking Co. Genoa Newtek Small Business Finance Inc. New York Baytree National Bank & Trust Co. Lake Forest, Ill. Home Loan Investment Bank FSB Warwick, R.I. RidgeStone Bank Brookfield, Wis. First Western SBLC Inc. Dallas Lake National Bank Mentor Waterford Bank NA Toledo American Business Lending Inc. Dallas First National Bank of Pennsylvania Greenville, Pa. CFBank Fairlawn Vacancies: 2013 office market likely better continued from PAGE 3 market -- people can breathe and relax." It didn't hurt the industrial market that nearly 2 million square feet were demolished in Twinsburg alone as Scannell Properties and DiGeronimo Cos. tore down much of the Chrysler plant after finalizing its purchase. Plans call for rebuilding on that land as well as on empty land and parking lots at the plant site. Industrial Downtown Northeast Southeast South Central Southwest Northwest Total market 2011 9.73% 12.01 11.34 12.02 13.07 19.03 11.90 2010 10.45% 12.03 13.99 11.12 14.43 17.82 12.80 On the office front ... The vacancy numbers were not as favorable in the office market. In downtown Cleveland, vacancy edged up to 22.19% at year end from 21.74% at the end of 2010. The uptick was even smaller in the suburbs, to 21.48% from 21.43%. However, those numbers do not tell the whole story, notes Jeff Cristal, senior vice president at Grubb & Ellis and head of its office unit. He said absorption -- a little-reported real estate statistic that measures the change in occupied space in the market -- climbed 246,315 square feet in 2011 over 2010, the first time the regional office market posted a positive absorption figure since the end of 2008. Credit the weak economy for depriving the office market of greater absorption gains, although they beat the bad breaks of the past few years. "You can only sit on the sidelines for so long," Mr. Cristal said. "I'm hearing business owners and operators say they're busy now. I've not heard that for a few years. More have to hire and have to look at more space." This time next year, the office market will be in far better shape, Mr. Cristal predicts, because some of the big deals of 2011 will increase occupancy as more tenants move into their space. For example, plans by AmTrust Financial Corp. to move more than 300 jobs to the 800 Superior Ave. building in downtown Cleveland from Seven Hills and to add as many as 500 jobs in the future do not show up yet in the Grubb & Ellis occupancy figures. An AmTrust affiliate bought the largely vacant building last August but will not be in the space until later this year. Even so, Mr. Cristal feels a new tempo in the office market. "There is a buzz downtown like I have not heard in many years," he said. That beats the gnashing of teeth and hand-wringing punctuating so much bad news in the office market since 2008. Packaging specialist in Wadsworth buys Pa. firm Acquired company specializes in thermoforming By FRANK ESPOSITO Plastics News This list was compiled from information provided by the Cleveland District office of the SBA for fiscal years ended 9/30/2011 and 9/30/2010. The Cleveland District covers 28 northern Ohio counties. Crain's Cleveland Business does not independently verify the information. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Researched by Deborah W. Hillyer In a deal that it said will strengthen its position in the visual packaging market, Rohrer Corp. in Wadsworth has purchased Buckell Plastic Co. of Lewistown, Pa., for an undisclosed price. Buckell "is a well-run company with products and customers that complement our current book of business," Rohrer president and CEO Scot Adkins said in a news release. Buckell has annual sales of about $3.5 million. Its 50,000-square-foot Lewistown plant, which makes thermoformed plastic packaging for the medical, food and retail markets, will join Rohrer plants in Wadsworth; Buford, Ga.; and Huntley, Ill. This marks the first deal for Rohrer since private equity firm ShoreView Industries of Minneapolis bought controlling interest in the company in early 2010. Rohrer makes thermoformed blister packaging as well as paper cardstock for blister packs and folding paper cartons. ShoreView owns four other plastic-related businesses. Rohrer reported thermoforming sales of almost $21 million for the year ended last May 31, while Thermoforming accounted for about 28% of the company's total sales. Rohrer employs about 100 in its thermoforming operations. Buckell had been owned by the Schell family. Clarence Schell founded the firm in Lancaster, Pa., in 1964. Buckell moved to Lewistown in 1990. Brian Schell, Clarence's son, now serves as president of the firm. Frank Esposito is a senior reporter with Plastics News, a sister publication of Crain's Cleveland Business. JANUARY 9 - 15, 2012 WWW.CRAINSCLEVELAND.COM CRAIN'S CLEVELAND BUSINESS 17 Metro: Changes could impact hospital system's construction plans continued from PAGE 1 "I don't think it would be an exaggeration to say appointing the next CEO is the most important decision that this board is maybe ever going to make because the institution is at a turning point and health care in America is in transition," Mr. FitzGerald said. "We have to find a really talented candidate to take on that challenge." The impending leadership changes come at a time when MetroHealth faces mounting financial uncertainty given the 35% increase in uncompensated care the system has stomached since 2008, when Mr. Moran took the helm. To avoid $6.3 million in projected operating losses in 2011 and another $21.1 million in 2012, MetroHealth last Nov. 3 announced a number of cost-cutting moves, including 104 layoffs and the elimination of 151 vacant positions. It also is in the process of eliminating another 83 jobs during the first half of this year, in part through attrition. Out with the old ... While Mr. Moran has been the most visible figure at the institution for the last four years, the health system's board of trustees has been composed of many of the same faces for decades -- an arrangement Mr. FitzGerald said was "not ideal." Mr. FitzGerald made clear in his interview with Crain's he wants to inject new blood into the board, which oversees MetroHealth's operations and signs off on the health system's budget, consulting work and spending on major capital investments. The three board members whose terms expire over the next two years -- William Gaskill, Ronald Fountain and Donna Kelly Rego -- will have served an average of 26 years by the time their final six-year terms expire. Dr. Fountain, the board's chairman who will have served 16 years as a trustee when his term expires in 2013, echoed Mr. FitzGerald's sentiment. "There needs to be a crosssection of people on this board who don't serve long, long terms," Dr. Fountain said. "I said this to Ed FitzGerald. One term is probably not quite enough, but two terms is plenty." Mr. FitzGerald already has made an impact on the MetroHealth board with the appointments of J.B. Silvers and Vanessa Whiting, and potentially could change the entire board if he runs for and wins a second term as county executive. "If Ed can continue to provide people like that in terms of leadership on the board, it would be a different board," Dr. Fountain said. "With picks like that, it'll simply be amazing in the future." Mr. FitzGerald said Dr. Silvers, the former CEO of QualChoice -- a health plan and insurance company -- who now teaches at Case Western Reserve University, and Ms. Whiting, a tax and real estate attorney from Cleveland Heights, diversified the board's skill sets in order to address the lofty issues facing the system. Those include its aging main campus on West 25th Street and how to cope with the financial repercussions of federal health care reform. Mr. FitzGerald said other new appointees would elevate the board's scrutiny of how public dollars are spent by the system, which has "I don't think (the MetroHealth CEO decision) should be made without input from the county." � Ed FitzGerald, Cuyahoga County Executive been criticized in recent months for the amount of money it has pumped into consulting contracts. her language as Mr. FitzGerald about what the level of the county's involvement should be in MetroHealth's CEO search. She instead noted that the council vets and signs off on the county executive's MetroHealth board appointments and is confident the board will make a good decision in naming the next CEO. "I don't know we have much more to do with it than that," she said. County Councilman Dave Greenspan, who has been critical of MetroHealth's operations, likewise said council should have "zero involvement, in my opinion" in the selection of the next CEO, as dictated by state law. "To that extent, their independent board should independently select their CEO," Mr. Greenspan said. "To the extent council provides funding, I believe we have the right and obligation to ensure the funding is appropriated as we have conditioned it." The county in 2011 provided a $36 million subsidy to MetroHealth, which is considered to be ... and in with the new MetroHealth officials are putting together a search committee to vet potential candidates to take over for Mr. Moran, who earns an annual base salary of $550,000 with up to $150,000 in incentives. Mr. FitzGerald wouldn't specify how he or members of the 11member county council should be involved in the CEO selection process, other than to say it should be an exhaustive and public search with consistent communication among all parties. He did note, however, that Mr. Silvers and Ms. Whiting will be on the search committee. "I think we'll continue to monitor the way it's working," Mr. FitzGerald said. "We're a major stakeholder in the whole system. I don't think a decision that crucial should be made without input from the county." County Council President C. Ellen Connally wasn't as pointed in the county's safety-net hospital for those who can't afford medical care. A big unknown is how any changes in leadership will affect plans unveiled late last year by Mr. Moran to expand MetroHealth's presence by constructing at least three suburban health centers -- the first planned for Middleburg Heights -- and undertaking other measures to lure more insured patients to the system. Thomas Campanella, director of Baldwin-Wallace College's health care MBA program, indicated the impact of any changes remains to be seen. "If it's already a really solid organization with a solid profit margin, you can weather those leadership changes," Mr. Campanella said. "But as we all know, Metro's challenges are going to be even greater given the population it serves." Dr. Fountain said MetroHealth's leadership is bound to change and the model for how to guide the health system toward a sustainable future might change, too. But, he added, "the outcome doesn't change, which is continuing to serve the mission of the institution," that being to care for the county's indigent population. Where can I get a sample job description? What do I need to include in my employee handbook? Where should we post our new job opening? Back to the Future Business succession and estate planning for 2013 starts now What are best practices for employee onboarding? ROUNDTABLE EVENT Thursday, January 26, 2012 11:30 a.m. to Noon EST � Lunch & Networking Does this qualify under FMLA? Where can I get local co compensation data? Noon to 1:00 p.m. EST � Roundtable Program Location: McDonald Hopkins, Fifth Third Building 600 Superior Avenue East, Suite 2100 � Downtown Cleveland RSVP: Call 216.348.5400 or visit www.mcdonaldhopkins.com Yeah, we can answer that. www.ercnet.org/answers | 440/684-9700 McDonald Hopkins LLC 600 Superior Avenue East, Suite 2100, Cleveland, OH 44114 � 216.348.5400 Carl J. Grassi President Shawn M. Riley Cleveland Managing Member Chicago � Cleveland � Columbus � Detroit � Miami � West Palm Beach 18 CRAIN'S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM JANUARY 9 - 15, 2012 Positive jobs report has some analysts rethinking 2012 outlooks By JEFF BENJAMIN InvestmentNews Last Friday's U.S. jobs report, which showed that more than 200,000 jobs were created in December and pushed the nation's unemployment rate to its lowest level in nearly two years, has some financial market watchers rethinking their outlook for the year ahead. "I don't know what the heck's going on here," said Brian Gendreau, market strategist at Cetera Financial Group Inc. "This seems like nothing but good news about the economy." The report from the Bureau of Labor Statistics showed broadbased job growth, with the only job losses last month coming from the government sector. But even that figure -- showing 12,000 government jobs cut -- reflects a slowing trend. With the unemployment rate for December measured at 8.5%, down from a revised November figure of 8.7%, the unemployment rate is at its lowest point since February 2009. "This is a cap to a really good week," said Mark Lamkin, president and chief executive of Lamkin Wealth Management, a $225 million advisory firm. "If this continues, it could get Obama re-elected." It already has Mr. Lamkin rejiggering his investment strategy. Citing improved consumer sentiment, December retail sales increases that came in above expectations and data from the Institute for Supply Management showing increased business activity, Mr. Lamkin is ready to move money into stocks. "Until (last) Monday, we were 80% in cash, but we're now 50% invested and on Monday, we'll be adjusting that to 70%," he said. While the loss of government jobs does have a negative effect on the unemployment rate, it also represents a direction toward fiscal responsibility and a broader recovery, said Brien O'Brien, chairman and CEO of Advisory Research Inc.. "The deleveraging of municipalities, states and the federal government is being accomplished in part by the shrinking employment levels in those areas," he said. Jeff Benjamin is a senior editor with InvestmentNews, a sister publication of Crain's Cleveland Business. Contact: Phone: Fax: E-mail: Toni Coleman (216) 522-1383 (216) 694-4264 email@example.com REAL ESTATE AUCTION COMMERCIAL PROPERTY Real Estate Consulting Visit Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card REAL ESTATE SERVICES INVESTMENT PROPERTY FOR SALE REAL ESTATE AUCTION / FEB 9 Two Prime Industrial Buildings Shopping Plaza Fully rented with a strong anchor in a growing area. Priced at 10+ Cap Rate. AARDVARK-LLC.COM 440-605-0555 � Fax 440-605-0666 Bruce Klotzman 2811 Carquest Dr., Brunswick, OH 44212 2906 Nationwide Pkwy, Brunswick, OH 44212 440-899-7887 PRUDENTIAL LUCIEN & ASSOC. SHERIFF SALE! TO BE SOLD BY ORDER OF THE MEDINA COUNTY COURT OF COMMON PLEAS, CASE NO. 10CIV1994 PUBLISHED RESERVE PRICES (2/3 OF SHERIFF'S APRS. VALUE): Crain's Cleveland Business Online Property Search Carquest: $2,400,000 2811 Carquest Dr., Brunswick, OH Built in late 2006, the property consists of 125,400 S.F. (9,500 SF office) on 15+ acres. High-quality construction, 25'clear ceiling, 4-10'docks w/ levelers, 1-16' drive-in door, 2500 amp, 3-phase main supply, ample parking, LEED Certified Silver. Move-in ready. 2906 Nationwide Pkwy, Brunswick, OH Built in 1993 with additions in 1998 & 2002, the property consists of 87,000 SF (10,000 SF office) on 5.27 acres. High-quality construction, 4-10'docks, 2 drive-in doors, 18-20'clear ceilings, 600 amp, 3-phase main supply. Great opportunity for user or investor. Nationwide: $1,389,350 Both Properties to be sold free and clear of all liens. Both have immediate access to I-71 @ SR 303, minutes from I-80 (Ohio Turnpike), I-480, I-271 & I-77. 20-miles from downtown Cleveland and downtown Akron, and 10-miles from Cleveland Hopkins Intl Airport.Tax abatements and economic incentives available. Located in Brunswick's Premier Industrial Park. On-Site Inspections: Both properties will be open for inspections 1:00 - 3:00 pm on Wednesdays Jan 18, 25, Feb 1 and Tuesday Feb 7. Auction: 11:00 am, Thursday, Feb 9th, 2012 at 2811 Carquest Dr., Brunswick, OH 44212 REALTORS: Now is a great time to promote your Luxury Properties to high-end prospects AND receive reduced rates on your advertising. Call 216.522.1383 for more details Powered by LoopNet, No. 1 in Commercial Real Estate online Looking for property? Search thousands of local listings Selling or leasing a property? Get your property featured through Crain's www.CrainsCleveland.com/LoopNet For Brochure & Terms of Sale call Mark Abood 216-360-0009 Chartwell Group, LLC/Chartwell Auctions, LLC Michael Berland, Court Appointed Auctioneer www.chartwellauctions.com For advertising opportunities contact Toni Coleman firstname.lastname@example.org 216-522-1383 CLASSIFIED BUSINESS SERVICES EMPLOYERS: CPA on Call, LLC Individual & Business Taxes Bookkeeping - Payroll Free Consultations LAST CHANCE to cash in on First Energy Rebates and reduce your lighting energy costs by 50-70%! FLYNN ENVIRONMENTAL For Assessments Reach the most qualified workforce. Advertise your open positions here. Call 440-226-0660 (800) 690-9409 www.flynnenvironmental.com SPECIAL RATES AVAILABLE Call Toni Coleman at 216-522-1383 ATTENTION BUSINESS SERVICE OWNERS! Submit your business card to promote your service and receive a JOB SEEKERS: We now post POSITIONS WANTED in the Classified section of CrainsCleveland.com at FUNDS ALMOST GONE! Bob Taussig SUBSTANTIAL DISCOUNT off your ad price. To find out more, contact Toni Coleman at 216.522.1383 NO CHARGE. (Up to 150 words) 330-931-3905 Bob@ROI-Energy.com www.ROI-Energy.com E-Mail info to email@example.com JANUARY 9 - 15, 2012 WWW.CRAINSCLEVELAND.COM CRAIN'S CLEVELAND BUSINESS 19 THEINSIDER THEWEEK JANUARY 2 � 8 Macy's Inc. soon will be pulling out of Parmatown Mall, leaving the suburban shopping center with a massive hole to fill. The store at Parmatown is among five Macy's stores across the country that the Cincinnatibased retailer said it will be closing early this spring. It is the only store in Ohio that will close. The Macy's store at Parmatown opened in 1960, when it was part of May Department Stores Co., and consists of 288,000 square feet of retail space. The company said it will try to find the store's 94 employees opportunities at other stores it is keeping open. REPORTERS' NOTEBOOK BEHIND THE NEWS WITH CRAIN'S WRITERS Bankruptcies are down, but don't pop the bubbly A drop in bankruptcy filings in all of 2011 from levels of 2010 in Cleveland and Akron may inspire optimistic thoughts, but bankruptcy experts are echoing what they told Crain's last May: Bankruptcies aren't falling because the economy is improving. "There is no silver bullet to our economy," said John K. Lane, managing director and CEO of Inglewood Associates LLC, a local turnaround and workout firm. "We are not going to wake up to the dawn of a new day. This is going to be a tough, gradual climb back up the mountain." Total bankruptcy filings, including consumer and commercial cases, tumbled year over year by 14% in Cleveland, 21% in Akron and 19% across the entire Northern District of Ohio of the U.S. Bankruptcy Court, which also includes Canton, Youngstown and Toledo. Bankruptcy filings in the entire district totaled 30,828 -- their lowest point since 2008, when they numbered 31,180. Bankruptcy professionals say filings are dropping because many people and businesses cannot afford the costs of bankruptcy, and because others don't expect to see the light of day if they enter the bankruptcy tunnel. They also say most of the companies that could survive bankruptcy took the leap before 2011. As for why consumer bankruptcies in particular are down, attorneys cited slowed foreclosures and increased loan modifications. In addition, access to credit has been The big story: restricted, rendering many people unable to take on debts from which they later might need absolved, said Alan C. Hochheiser, managing partner in bankruptcy for Weltman, Weinberg & Reis Co. LPA in Cleveland. -- Michelle Park more promotions this season, according to a network spokeswoman. -- Joel Hammond A testy battle in TV land There is a war of words being fought in the ether over Northeast Ohio. Ohio Media Watch, an industry blog, is following a flurry of increasingly testy FCC filings by the owners of local television stations WJW-TV, Channel 8, and WBNX-TV, Channel 55. It's over a request by WJW's owner, a subsidiary of Oak Hill Capital Partners, to move the station's signal to a different frequency, one it occupied in the past. The change would eliminate some areas where its signal is hard to pick up over the air since broadcasting went digital in 2009. WJW's petition before the FCC included a log of more than 300 complaints since June 2009 from people who've had trouble picking up the station. But Winston Broadcasting, owner of WBNX, filed an objection, saying the switched signal would interfere with its signal and that the petition was only a cost-saving measure. Winston said WJW could solve the problem by raising its signal strength at its current frequency. That annoyed WJW, which in a Dec. 12 filing scoffed at its competitor. It said WBNX "offers viewers zero local news or public affairs programming. Put bluntly, it really matters if viewers throughout the Cleveland market can't reliably tune into WJW over-the-air; a few WBNX viewers' inability to watch reruns of `The People's Court' and `Frasier' is considerably less important." -- Jay Miller Missed this deal? Well, keep watching For the low, low price of tuning into Fox Sports Ohio for the Cleveland Cavaliers' game at Toronto last Wednesday night, Cavs fans could have gotten a free ticket to the team's Friday, Jan. 20, game against the Chicago Bulls at Quicken Loans Arena. And many did. The latest installment of the "Box Office Buyout" promotion of the team and regional sports network featured an in-game special offer giving every ticket buyer a second ticket for free, courtesy of FSO. Cavs spokesman Tad Carper said the promotion, which the parties ran a few times last season, typically generated "a couple hundred tickets," but this one produced more than 850 tickets sold, with another 850 distributed for the promotion. It's the latest in what likely will be a long line of promotions this season as the Cavs deal with a flagging fan base. Last week, the Cavaliers offered a beer tasting included with a ticket purchase to Tuesday night's win over Charlotte. The Cavs listed official attendance as 14,173 for that game, or just under 69% of capacity. The team and FSO would partner on two It's a gas: Chesapeake Energy Corp. completed a previously announced joint venture agreement with a subsidiary of Total S.A., under which Total acquired for $2.3 billion an undivided 25% interest in 619,000 acres in what Chesapeake described as "the liquids-rich area of the Utica Shale." Of the joint venture acreage, about 542,000 acres were contributed by Chesapeake and 77,000 acres were contributed by Houstonbased EnerVest Ltd. and its affiliates. The joint venture area covers all or a portion of 10 counties in eastern Ohio. Taking stock of the situation: Directors of American Greetings Corp., which saw its stock price battered recently by disappointing quarterly results, authorized the repurchase of up to $75 million of the company's Class A common shares. In late December, investors sent American Greetings' stock down 21% in a single day after posting weak operating margins. On Jan. 4, the stock ended the day at $12.50 a share, down nearly 50% from its 52-week high of $24.84. American Greetings said there is no set expiration date for the repurchase program. Ferro Corp.'s former headquarters in downtown Cleveland is in new hands long associated with Cleveland business after the building's sale to Parkwood Corp., an investment firm formed by the Mandel brothers, who built and sold the former Premier Industrial Corp. in the city's Midtown neighborhood. Parkwood paid $2.3 million for the 44,000square-foot office building at 1000 Lakeside Ave. Morton L. Mandel, Parkwood CEO, said the firm would move its 51 employees to the building in a few months after it modernizes the 1965vintage structure. OM Group Inc. said it bought Rahu Catalytics Ltd., the developer of what OM Group described as "a unique iron-ligand based chemistry" for use in environmentally friendly coatings, composites and inks. The seller was Unilever Ventures and Management, the European venture capital arm of consumer products giant Unilever. OM Group said the transaction includes all related intellectual property rights and master patents, as well as all manufacturing and supply agreements. The Cleveland-based producer of specialty chemicals did not disclose terms of the transaction. WHAT'S NEW BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com. New in the neighborhood: Abramoff's comeback sets off her gag reflex It's only Jan. 3, but we already have a candidate for Northeast Ohio quote of the year, courtesy of a Bloomberg story about the re-emergence of convicted felon Jack Abramoff in public life. Bloomberg reported that mandatory ethics training this year for the 138 members of the Kentucky legislature features a lecture by Abramoff, who in 2006 was convicted for his role in Washington's biggest lobbying corruption scandal. He will be paid $5,000 plus travel expenses for an hour of his thoughts. Some lobbyists "say they are livid about Abramoff's return to the spotlight, saying he only further impugns the reputation of a profession that rates lower in Gallup public opinion surveys than car sales and telemarketing," Bloomberg reports. Elizabeth Bartz, president of State and Federal Communications Inc. in Akron, said Abramoff's public appearances "make me want to gag." (State and Federal Communications helps companies and organizations comply with their political contributions, state lobbying and procurement activities.) "Certainly you want to give people a chance to rehabilitate themselves," she told Bloomberg. "But is Jack Abramoff rehabilitated? I don't think so." COMPANY: Molar Bond LLC, Auburn Township PRODUCT: OralEnlight Molar Bond, a startup formed by Ken Lawrence, DDS, and manufacturing industry veteran Mike Tur, promises its new product will help orthodontists see molars in a new light. The OralEnlight device is designed to make it easier for orthodontists to see teeth in the back of the mouth and to obtain proper isolation; think of it as a fitted mouth flashlight. The company says it offers total posterior illumination, shadow-free light and a rechargeable battery pack. It's made from FDA-approved plastic and components. Dr. Lawrence, an orthodontist and an assistant clinical professor at Case Western Reserve University, designed OralEnlight in response to complaints from residents that they had a hard time obtaining proper molar bracket position due to the difficulty of seeing far inside the mouth. To produce the product, he teamed with Mr. Tur, a longtime friend, who heads the Cleveland office of a family-owned manufacturing company called Roboworld. The device was designed with the assistance of The Technology House in Solon. It is injection molded at GSH Industries in Strongsville and assembled in Mentor, where Dr. Lawrence has an orthodontics practice. For information, visit www.OralEnlight.com. The Federal Reserve Bank of Cleveland is offering high school juniors and seniors a chance to win prizes by entering the bank's 2012 Creative Writing Contest called "Economics on TV." Students "can submit an essay, poem, play, or short story explaining how basic economic concepts impact the TV show's plot," the Cleveland Fed said. The deadline for submissions is Feb. 27, 2012. The top prize is a $500 cash gift card. Kids, start looking closely at the economic concepts on display in "Jersey Shore." (No joke. That would be a good one to write about.) If the gambling doesn't get you, the taxes will We avoid clich�s like the plague here at Crain's Cleveland Business, so you won't find us calling something a "good news/bad news" story. But a recent piece from Reuters might be described no other way for gamblers living in Ohio. "In the waning days of 2011, the federal government has handed gamblers two gifts," the news service noted. "The Justice Department cleared the way for states to start legalizing online poker and other online betting games. And the IRS agreed to a tax court decision that will allow professional gamblers to take big tax losses." But Russell Fox, a Las Vegas tax expert who prepares the returns of poker aficionados, horse bettors, slots players and more said Ohio is not kind to gamblers. "Some states disallow gambling losses, or subject them to their state's alternative minimum tax rules," Reuters reported. "If you've got gambling income and losses, you probably don't want to be from Hawaii, New York, Ohio, Wisconsin." Good chemistry: This and that: Sandusky-based amusement park operator Cedar Fair L.P. said attendance at its 17 locations totaled 23.4 million guests in 2011, up 2.6%, or approximately 590,000 visits, from the company's record attendance of 22.8 million in 2010. ... Mining company Cliffs Natural Resources Inc. reached an agreement to sell for an undisclosed price its previously discontinued renewaFUEL biomass production plant in Michigan. The buyer is RNFL Acquisition LLC, an acquisition entity created by an investor group that includes renewaFUEL's minority partners. Might as well put that TV viewing to good use Here's a fun assignment for your TVwatching high school student.