20111212-NEWS--23-NAT-CCI-CL_--
12/9/2011
2:25 PM
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DECEMBER 12 - 18, 2011
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
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THEINSIDER
THEWEEK DECEMBER 5 - 11 The big story:
AmTrust Financial Services Inc., a property and casualty insurer based in New York that already has an operation in Seven Hills with 245 employees, is planning to establish a big office in downtown Cleveland that eventually could house as many as 1,000 workers. Subject to various approvals, AmTrust intends to set up offices inside the building at 800 Superior Ave. (left) that once housed the former McDonald Investments brokerage firm. An affiliate of AmTrust bought the largely vacant 23-story building earlier this year for $7.5 million at an online auction and has committed to spending at least $20 million to upgrade the property, which includes a parking garage.
Raising the stakes: As expected, the RitzCarlton hotel in Cleveland is changing hands. Forest City Enterprises Inc. agreed to sell the 206-room Ritz-Carlton at Tower City Center to a subsidiary of Rock Ohio Caesars LLC for a total of $36.5 million, which includes a $2.5 million payment by Rock Ohio under a previous option agreement between the two companies. Rock Ohio Caesars is the joint venture of Caesars Entertainment Corp. and Rock Gaming LLC, which is owned by Cleveland Cavaliers majority owner Dan Gilbert, that is creating the Horseshoe Casino Cleveland in the former Higbee Building that’s part of the Tower City complex.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Price gets right to the point
And now, a bit of sports talk talk
■ K&D Group CEO Doug Price gave a plea — or perhaps a hard sell — as he spoke to the Greater Cleveland Mortgage Bankers Association last Tuesday, Dec. 6, at The Union Club of Cleveland. Most of Mr. Price’s remarks recounted the Willoughby apartment company’s growth from eight units to more than 9,000. He noted that K&D’s growth came first from Price loans with savings and loans, then via federal-backed financing. The latter is now iffy because of concerns over the future of government-sponsored entities such as the Federal National Mortgage Association and Government National Mortgage Association, better known as Freddie Mac and Ginnie Mae, respectively. Now, Mr. Price said, local banks need to step forward to fund additional downtown apartments like those that K&D wants to do — and that the market apparently needs — due to record-high occupancy levels. “You can’t go to New York City to get financing for these projects,” he said. “It’s up to the people in this room to do it.” He closed simply: “Lend money.” As he thanked Mr. Price for speaking at the session’s end, Jack Branden, a Guardian Title agent and association’s president, said, “Message delivered. Whether it’s heard, only time will tell.” — Stan Bullard
■ A month after a 19% jump in market share, ratings at established all-sports radio station WKNR-AM, 850, fell in October, to 4.0 from 4.4. That figure represents a 9% drop in the listening audience tuned in to the station, according to data provided by Baltimorebased Arbitron Inc. And it appears WKNR, better known as ESPN Cleveland, is getting a stiffer challenge from its new competitor, CBS Radio’s new sports talk station, WKRK-FM, though WKNR still owns the genre as CBS attempts to establish itself in Cleveland. CBS’s station, better known as Sports Radio 92.3 The Fan, saw its share climb to 1.2 in October from 0.8 in September. That rise seems to reflect what Tom Herschel, CBS Radio’s senior vice president and market manager in Cleveland, told Crain’s last month, when WKNR experienced a bump in WKRK’s first full month measured by Arbitron. “(September was) the first full rating month we’ve had, and people still are discovering the station,” Mr. Herschel said then. “The feedback we’re getting from listeners and advertisers is all positive.” — Joel Hammond
WHAT’S NEW
BEST OF THE BLOGS
Shape your message around this app ■ A local startup is encouraging companies to shy away from giving their employees or customers the
traditional box of chocolates or company calendar over the holidays and instead give the gift of wellness with a yoga app. The Mobile Yogi, a Cleveland company that has developed a line of smart phone applications offering yoga tips, is opening a line of business aimed at allowing companies and other organizations to put their marks on its mobile yoga apps. With Mobile Yogi’s how-to yoga videos at the heart of the apps, companies and groups easily can add their own logos, links or whatever other content they wish before shipping them off as holiday gifts. “It allows the company to deliver the applications with their brand and their messaging,” said Sebastian Holst, who developed the apps along with wife, Dawn. “There seems to be a lot of interest.” Mobile Yogi also is pitching its services to local yoga studios that don’t have the resources to develop their own apps but would like to offer such services to their customers. The company launched consumer versions of the apps last May. Though the apps have reached more than 20,000 users around the globe, the idea was to refine and validate the content for users. The core business model, Mr. Holst said, is the business-to-business services the company started pitching this month. “This is a business we’ll scale,” Mr. Holst said. “There are literally thousands of yoga studios and companies around the world who might be interested.” — Timothy Magaw
Bargain buy: An investor and hotel operator based in Canada acquired the Old Arcade and downtown Cleveland Hyatt Hotel for the minimum bid of $7.7 million at a Cuyahoga County Sheriff’s foreclosure auction. Skyline Cleveland Acquisition LLC, formed by Skyline Acquisition International Inc. of Toronto, was the winning bidder for the 1890-vintage Cleveland landmark. The Arcade property was redeveloped a decade ago at a cost of $60 million to accommodate the hotel, but a recent appraisal for the sheriff’s office valued it at $11 million, which triggered the minimum selling price at $7.7 million under state law.
Afoul of the feds: Invacare Corp. said the U.S. Food and Drug Administration requested the company negotiate and agree to a consent decree related to what Invacare described as “previously disclosed inspectional observations” at the company’s corporate facility and its wheelchair manufacturing plant in Elyria. Invacare said the FDA proposed a consent decree that would require suspension of certain operations at the facilities until they are determined by the FDA to be in compliance. Group effort: In its new role as the regional office in Northeast Ohio for the state’s JobsOhio business development program, Team NEO announced that six proposals to stimulate job growth and economic development in the region have received preliminary approval for financing from its board of trustees. Pending final documentation and approval, grants totaling nearly $3 million will be issued by Team NEO. The largest grant, for $2 million, would go to a joint regional retention and expansion program involving five groups.
Young, man in charge: William A. Young Jr., a former Cleveland Clinic administrator, was named president and CEO of St. John Medical Center in Westlake. Mr. Young, who most recently served for more than five years as chief operating officer at the Clinic’s South Pointe and Marymount Hospitals, will replace Cliff Coker, who announced in April he would retire at the end of the year.
Excerpts from recent blog entries on CrainsCleveland.com.
kid-friendly, wristwatch-style pedometer called the MOVband. “The MOVband uses the same technology that most more-expensive pedometers do: a 3D accelerometer in a solid state chipset,” Forbes.com reported. “But its slimmeddown features (the only data you can input ■ Northeast Ohio is home to two of the 100 are age and the time) mean that the businesses on Forbes.com’s list of America’s MOVband, priced at $20, sells for about a most promising companies. third of what it costs for the competing The privately held up-and-comers “have Nike+ Sportband.” compelling business models, strong manageMr. Squires said, “Pedometers are expenment teams, marquee customers, strategic sive and complicated. We said there’s an partners and precious investment capital,” opportunity to create a better, simpler peForbes.com said. dometer at an inexpensive price point.” At No. 50 on the list is Mesocoat Inc. of Nearly 2,000 students and faculty in ChaEuclid, which provides metal coating and grin Falls walked a combined cladding to protect pipes, plates 187,000 miles in three weeks in Ocand bars from corrosion and wear in tober as part of a program extreme environments. begun by the school district two Forbes.com said Mesocoat, years ago to improve children’s founded in 2008, has raised $13.5 fitness. The MOVband “helped get million in private equity and students excited about taking grants. CEO Andrew Sherman, 47, 10,000 steps a day.” was appointed to the U.S. DepartMr. Squires said he has been ment of Energy’s Hydrogen Safety approached by a financial services Panel. Mr. Sherman also has been company that wanted MOVbands involved in 11 startups, founding ABSMaterials’ for its 100 employees. He’s also in three of them. Steve talks with a Coca-Cola distributor. Coming in at No. 67 is ABSMate- Spoonamore rials of Wooster, a maker of “reactive glass” that separates pollutants and other molecules from water and air. ABSMaterials has raised $11 million in venture ■ A Wall Street Journal roundup of new capital. CEO Steve Spoonamore, 46, has fiction included kind words for a story founded or co-founded 14 companies. collection from a former Clevelander — and the best story, apparently, turns Cleveland into a zombie wasteland. The book is “After the Apocalypse,” by Maureen F. McHugh. The Journal called it ■ Chagrin Falls serial entrepreneur Blake “superb” and said the collection’s finest Squires has joined the fight against obesity story is “The Naturalist.” in a big way. The story features Gerrold Cahill, a conForbes.com profiled Mr. Squires, who vict who, like other prisoners, “has been left previously co-founded Findaway, a company to die in the sealed-off Cleveland Zombie that makes a digital audio book player Preserve.” called the Playaway. His new product is a
Let’s hear it for the 2%
COMPANY: Akhia, Hudson THE OCCASION: Its 15th anniversary The public relations and marketing communications agency was founded in November 1996 by its president, Jan Gusich (above), at her dining room table. She says her goal from the start was to serve clients’ needs “beyond their expectations,” and that remains the agency’s operating philosophy. Akhia started with two employees and three clients. It now has 29 employees and more than 30 clients. For information, visit www.Akhia.com.
COMPANY: National Mortuary Shipping, Cleveland THE OCCASION: Its 30th anniversary The company, founded in 1981 by Robert P. Smith, works with hometown funeral directors to aid families dealing with a difficult situation — death away from home. National Mortuary offers removal services, domestic shipping, international shipping, removal and embalming, livery, direct cremation, disinterment and graveside services, among other services a funeral director might need. For information about the company, visit www.NatlMortuaryShipping.com.
Be glad these aren’t your (flesh-eating) neighbors
MOVband pedometer is a step in the right direction