$2.00/FEBRUARY 6 - 12, 2012
WIND WINDS DOWN FitzGerald has Local suppliers fear effects of impending lapse of production tax credit high hopes for central services ABOUT THE CREDIT
By DAN SHINGLER email@example.com
t’s going to be a busy, blustery start of the year for the wind energy business, say its local proponents and participants — followed by a dead calm that could leave the sector in the doldrums even before the end of summer. A federal production tax credit on wind energy investments that has helped boost the return that developers receive from wind energy projects expires on Dec. 31 of this year. With little talk in Washington, D.C., about extending the credit, wind power developers are trying to get See WIND Page 20
First enacted in 1992, the production tax credit provides wind farms and other renewable energy facilities with a subsidy of 2.2 cents per kilowatt hour of electricity that they generate in the first 10 years of their operation, according to the American Wind Energy Association. Since 2009, wind farm developers also have had the option of claiming a one-time 30% tax credit on their investments, in lieu of the 10-year subsidy. The credit has been allowed to lapse before, including in 2004 when it resulted in a 76% decline in wind turbine installations that year, according to AWEA’s data. AWEA since has asked for the credit to be put in place for a longer term and says the industry needs long-term predictability in tax policies in order to develop projects that can take years to — Dan Shingler plan and build.
County leader’s goal is take to consolidation of municipal services from idle talk to reality By JAY MILLER firstname.lastname@example.org
Cuyahoga County Executive Ed FitzGerald thinks he has found a way to overcome nearly a century of resistance to leaner, less fragmented government in the county. It was the first point in his 12-point Western Reserve Plan for unifying the county, which Mr. FitzGerald laid out in his State of the County address last Wednesday, Feb. 1: “Implementing a practical strategy for creating a functioning, countywide metropolitan government.” That goal doesn’t mean he wants to start erasing municipal boundaries and create a single city, or even a handful of mega-suburbs. However, he does want to take talk of consolidating services among city governments beyond what he termed “a water cooler conversation” by turning the county into a central provider of
“Ed’s vision is outstanding. I’m leaving here with ideas dancing in my head.” – Brad Sellers, mayor, Warrensville Heights
EDITORIAL: Ed FitzGerald’s central services initiative won’t bear fruit overnight, but it’s worth the effort. Page 10 services that communities could tap into under contract agreements. “For the first time, it’s going to stop being a theoretical issue,” Mr. FitzGerald said during a Jan. 30 preview of the plan with Crain’s editorial board. “Now there’s going to be an option where there wasn’t an option before.” He later would add: “We’re not on See FITZGERALD Page 20
Danish turbine maker Vestas shocked the industry last month when it announced 2,335 job cuts worldwide, including 182 in the United States.
Quicker turnover for distressed property To avoid taking over commercial buildings that serve as collateral for bad loans, bankers now are more apt to sell them via receivership sales. PAGE 3 PLUS: Crain’s names account executive Nicole Mastrangelo its new advertising sales manager. PAGE 5
State committee digs through public colleges’ capital wish lists Requests outpace cash, so group must prioritize improvement projects By TIMOTHY MAGAW email@example.com
Northeast Ohio’s public colleges and universities shipped their renovation wish lists off to Columbus, and now hope their peers can come to a consensus about what most
needs a-fixin’. Time is of the essence in this process. Gov. John Kasich has asked a committee chaired by Ohio State University president Gordon Gee and made up of college presidents and the heads of associations representing Ohio’s public colleges
and universities to submit by Feb. 15 a list of renovation projects to be considered for inclusion in the state’s next capital bill. That bill covers a two-year budget cycle beginning July 1. The state’s budget woes nixed a capital bill for the 2011-2012 bien-
nium, but Gov. Kasich, according to his spokesman, plans to roll out an “austere” capital measure to lawmakers this spring. The prospect of a cash infusion for capital upgrades at higher education institutions, though likely small, is a welcome relief for college presidents who’ve received nothing for renovations since mid-2010. Dr. Gee’s six-member committee
is charged with figuring out how to best divvy up what’s expected to be a small pot of roughly $350 million among 37 institutions statewide for what they’ve deemed their highest renovation priorities. The pot is about $80 million less than what was doled out for higher education in the last capital bill, which covered fiscal 2009 and 2010. See CAPITAL Page 7
HEALTH CARE Publicly funded hospitals wonder what’s next as economic problems add up ■ Page 15 PLUS: HIRING SHIFTS ■ HEALTH CARE COACHES ■ & MORE
Entire contents © 2012 by Crain Communications Inc. Vol. 33, No. 6
©2012 Porsche Cars North America, Inc. Porsche recommends seat belt usage and observance of all traffic laws at all times. Vehicle shown includes optional equipment available at additional cost.
See how far it’s come. See how fast it goes. This isn’t just a new 911. It is the ushering in of a new era of the sports car. The history-making begins with 90% new or fundamentally revised materials. 400 horsepower from a powerfully efficient 3.8 liter engine in the Carrera S. And even the interior breaks new ground, with an elevated center console, inspired by the Carrera GT, connecting car and driver like never before. These are the things legends are made of. Even if it’s becoming a legend all over again. The new era starts with a test drive.
The next Porsche 911. Forever the sports car. Starting at $82,100.
Porsche of North Olmsted
A Division of Collection Auto Group 28400 Lorain Road, North Olmsted, Ohio 44070
Open 24/7 at: www.clevelandporsche.com #1 PORSCHE DEALER IN OHIO
Follow us on
for additional specials and offers
Now Partnering With:
Proudly point out your Porsche of North Olmsted dealership plate and get 20% off valet parking at Cleveland Hopkins Airport.
CURRENT PORSCHE OWNERS TEXT THE WORD
“CARRERA” TO 69940 FOR A SPECIAL OFFER
FEBRUARY 6 - 12, 2012
CRAIN’S CLEVELAND BUSINESS
Business adds up for payment processor
Lenders quicker to deal pained properties
New merchants, eye for acquisitions spur Highland Hills firm
Receivership sales find more favor among bankers, others that seek to avoid ownership
By CHUCK SODER firstname.lastname@example.org
It took the Shanahan brothers less than six years to build a business with $155 million in annual revenue. And $200 million in annual revenue probably isn’t far off: Financial Transaction Services LLC, which resells payment card processing services, is bringing on roughly 1,000 new merchants per month, a rate that one industry insider described as “aggressive.” The Highland Hills company also plans to acquire three other companies in the payment card processing business over the next few months, said FTS president Jeff Shanahan, whose brother, Brian, is CEO.
RUGGERO FATICA PHOTOS
ABOVE: Keith Kelly of Mentor participates in a program forged by Solon manufacturer Kennametal and Auburn Career Center that offers training at the Concord Township school and at Kennametal. BELOW: Chris Festini of Mentor takes part in the program.
AN AGE-OLD SOLUTION Solon’s Kennametal, Concord career center team up to prepare the next group of technically advanced workers By DAN SHINGLER email@example.com
The company brought in $155 million in revenue last year on $5.5 billion in payment transactions, up from revenue of $113 million on $4.3 billion in transactions in 2010. By comparison, the company’s revenue totaled $49 million on $1.6 billion in transactions in 2007, its first full year of business. Mr. Shanahan noted that it might be hard for FTS to top the 37% revenue increase it posted in 2011, given that it is starting from a bigger base this year. Then again, the company, which has grown partly through acquisitions, plans to do even bigger deals in the future, he said. “We’re trying to increase the size of our acquisitions over time,” he said. FTS, which employs 35 people, including 19 at its headquarters, has a few of its own sales people who market payment card processing
hen managers and workers at Kennametal in Solon look out at the plant floor, they see a lot of gray that isn’t steel. The master welders and machinists at the company’s advanced manufacturing plant tend to be in their 50s or 60s, as is the case with many manufacturers. Unlike many other companies, though, Kennametal is taking steps to address the problem. It has begun working with Auburn Career Center in Concord Township and offering what looks a lot like good old-fashioned apprenticeships to Auburn students. “We’re all getting to the age where we’re making retirement plans and there are not enough young people
See ADDING Page 9
By STAN BULLARD firstname.lastname@example.org
Two words — “Receivership Sale” — on a sign at the Lakeside Place office building, 323 W. Third St. in downtown Cleveland, say much about the Northeast Ohio commercial real estate market. The sign reflects how lenders are moving faster now to unload properties that serve as collateral for loans that have gone bad than they did earlier in the prolonged real estate depression that accompanied the Great Recession. To meet the newfound need for speed, lenders increasingly are turning to receivership sales as they try to get a grip on distressed property losses and move on. A receivership sale is a quicker, less cumbersome alternative to a sheriff’s sale for troubled commercial properties. The court-appointed receiver can put a property up for sale and a judge can approve a sale by the receiver without the lender taking title to the property, as it would under a sheriff’s sale. However, the lender still receives the proceeds from the sale to satisfy its distressed mortgage. Lakeside Place, a pioneering conversion in the late 1980s of a garment factory and printing plant to offices in Cleveland’s Warehouse District, went into foreclosure last August in Cuyahoga County Common Pleas Court. Now, a sale of the property by real estate broker Ostendorf-Morris Co. under a court-appointed receiver is under way. The case is pending before Judge Richard J. McMonagle. Greg West, an O-M vice president, said there are two offers on the building from bidders he declined to identify. Dumping distressed properties quicker constitutes a “new paradigm” in how lenders are handling sour loans in this downturn, said David Browning, managing director of the Cleveland office of CB Richard Ellis. Lenders increasingly are trying to peddle sour mortgages without taking title to the properties that are collateral for those loans, Mr. Browning said. It’s a vastly different approach than what was seen in prior downturns, when
See SOLUTION Page 9
See PROPERTIES Page 7
THE WEEK IN QUOTES “This is the year to define a long-term plan for the county. If I had proposed this a year ago, it would have been premature because the county hadn’t proven itself as a trusted provider of services.” — Cuyahoga County Executive Ed FitzGerald. Page One
“I would describe my mood as sober. I’m not depressed and I’m not angry. This train has been coming and it’s getting closer, but you have to deal with what it is.” — Ed Weston, director, Great Lakes Wind Network. Page One
FEATURES “Local governments are not flush with cash right now, and they’re struggling with their own issues. … I’ve said it before: Public hospitals are an endangered species.” — MetroHealth CEO Mark Moran. Page 15
“It’s no secret this is dual-purposed. … All of these things are a proactive effort to keep our associates healthy and to manage health care costs.” — Amy French, director of marketing and human resources, OEConnection in Richfield. Page 17
Classified..................22 Editorial....................10 Going Places ............14 Letter ......................11 List: Software developers............19 Personal View ..........10
CORRECTION A Jan. 30, Page 11 story on Magnet and NASA Glenn Research Center working together incorrectly identified the employer of strategic program officer Gregory Zucca. He is employed by the Cuyahoga County Department of Development.
CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
Two NE Ohio money managers merge Shaker, Beachwood advisers see value in combining resources, eliminating redundancy By MICHELLE PARK email@example.com
Frank Novak & Sons Since 1912
Still “painting the town” after all these years
Congratulations from your friends at
Already a collaborating duo that met weekly to share strategies, two investment management firms in Northeast Ohio have taken their teamwork to an entirely new level: They’ve merged. The employees and clients of Tower Wealth Management in Shaker Heights joined Carnegie Investment Counsel in Beachwood, effective Jan. 1. The move creates one of the larger money managers in the region with 19 employees and more than $450 million in assets under management. “It’s getting harder and harder to be a small firm,” said Richard Alt, principal and chief investment officer of Carnegie. Regulatory compliance costs are skyrocketing, he said, and clients also want to see operations of more depth. The merger affords the combined firm’s people better resources and better access to research, said Ensign Cowell, a principal of Tower Wealth who now is director and senior wealth manager for Carnegie. “It’s a much more complex investment world in terms of choices and things to deal with, investment issues,” Mr. Cowell said. “The larger firm that’s got more depth … has more resources to deal with those things.” Mr. Cowell and S. Sterling “Ted” McMillan, who formed Tower Wealth in 2008, had worked with Mr. Alt,
We’re Branching Out Western Reserve Partners LLC is pleased to announce the launch of a complementary new business
V A L U A T I O N S E R V I C E S L L C
majority owner of Carnegie, years back at another investment firm. When Messrs. Cowell and McMillan formed Tower Wealth, they did it expecting they would join another firm at some point, Mr. Cowell said. Now was the opportune time for a combination, he said, because new leadership at Carnegie had transitioned comfortably following Mr. Alt’s joint purchase with Gary Wagner of 38-year-old Carnegie in 2009.
Getting to know you Members of the two firms actually have gotten together in weekly investment meetings for the past nine months, sharing research, discussing strategy and doing general planning. “We had worked with (Mr. Alt) … so we knew his capability,” Mr. Cowell said. “We knew his philosophy.” The feeling is mutual, Mr. Alt noted. “We certainly realized we benefited having those guys in the room,” he said. So instead of both firms paying rent and other business costs, they became one. Carnegie needed more people to handle its business, as its assets under management grew roughly 30% in each of the past two years, Mr. Alt said. The most recent documents filed with the Securities and Exchange Commission show Tower Wealth had more than $158 million in assets under management and Carnegie had more than $313 million as of Dec. 31, 2010. According to the list of largest Northeast Ohio money managers that Crain’s published last April, Carnegie was the 11th largest firm in the area and Tower was ranked No. 18; their combined assets under management would put the merged firm among the seven largest money managers in the area. Mr. Alt anticipates another combination for Carnegie before the year is up, this time with Hurley Investment
Register for free e-mail alerts and receive:
Corporate Finance Transactions Corporate Tax Planning and Compliance Succession Planning and Wealth Preservation Employee Stock Ownership Plans Financial Reporting Portfolio and Fund Valuation
■ The Morning Roundup: A collection of the day’s business news from Ohio’s daily papers
Western Reserve Valuation Services LLC is an affiliate of Western Reserve Partners LLC, a FINRA-member investment banking firm based in Cleveland, Ohio. For more information regarding Western Reserve Partners’ M&A and capital raising services, visit www.wesrespartners.com.
Size does matter “We’re not pushing acquisition as a growth strategy at all,” Mr. Alt said. “It’s kind of coming to us. “I do believe we need to be at a certain size to properly serve our clients in the coming future,” he added, citing the $750 million threshold a trade magazine suggested. “Research is getting more expensive. “To have the depth and talent of employees that clients demand, you can’t do that on a small budget,” he said. “It won’t be this year, (but) we’ll be there in a few years.” Messrs. Cowell and Mr. McMillan have signed a 10-year contract with Carnegie, Mr. Cowell said. Tower Wealth still exists, but only in that Mr. Cowell and Mr. McMillan are continuing their venture consulting business. They, like their other employees, work out of Carnegie’s office. “This frankly permits all of our guys to be less involved in the operations of a business and more involved in clients and investment work,” Mr. Cowell said. “We’re more accessible to them.” The number of SEC-registered investment advisers declined by 104 — less than 1% — to 11,539 in 2011, according to an annual report by the Investment Adviser Association and National Regulatory Services. Though small, it was the first yearover-year decline in the total number of advisers since the organizations began compiling the reports in 2001. “The reason for the decline is not readily apparent, although we note that it is attributable to a significant decline in the number of advisers with $25 (million) to $100 million in assets under management,” the report said. “Some anecdotal evidence points to two possible contributing factors to the reported decline. “First, some investment advisers managing less than $30 million in assets may already have transitioned to state registration in anticipation of Dodd-Frank rules. Second, there have been reports of increased consolidation among small investment advisers.” While the report stopped short of predicting any future trend, it did note that the previous year’s 11,643 SEC-registered advisers may serve as the high-water mark for years to come, considering, for one, that the Dodd–Frank Wall Street Reform and Consumer Protection Act increases the threshold for SEC registration as an investment adviser to $100 million from $25 million. ■
GET DAILY NEWS ALERTS FROM CRAIN’S !
offering valuation services and financial opinions relating to:
274 Marconi Boulevard . Suite 140 . Columbus, OH 43215 Phone: (614) 448-3700 . Fax (614) 448-3709 www.wesresvaluation.com
Counsel in Lancaster, a city southeast of Columbus. He said he has been co-managing accounts with the head of that firm for the past four or five years.
■ Breaking news alerts: When
major news happens, you’ll know ■ Daily headlines: A collection of Crain’s-produced news and blog items from the day ■ Small Business Report: A weekly guide to small business news
SIGN UP NOW AT: www.CrainsCleveland.com/register
Volume 33, Number 6 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. 1-877824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
FEBRUARY 6 - 12, 2012
CRAIN’S CLEVELAND BUSINESS
Demand for data center services fuels BlueBridge expansion By CHUCK SODER firstname.lastname@example.org
BlueBridge Networks LLC is betting big on future demand for its expanded list of data center services. The Cleveland company plans to triple the amount of data center space it currently leases. It’s in the process of finalizing leases on space for two new data centers: a 10,000square-foot center in downtown Cleveland and a 22,000-square-foot center located elsewhere in Northeast Ohio, said CEO Jeff Levine, who declined to say where the larger center will be. Plus, BlueBridge last year signed a lease on 14,000 square feet on the fifth floor of the Sterling Building in downtown Cleveland. Once renovated, the space will allow the company to expand its existing, 20,000-squarefoot data center across the hall. So that’s 46,000 square feet of new data center space for a company that has about 23,000 square feet today, including a small backup data center in Mayfield Heights. BlueBridge expects to fill that space partly because demand for data center
services is growing among small and midsize companies, which often would rather have outside specialists house and sometimes manage their computer servers, Mr. Levine said. Last summer, BlueBridge launched an overhauled lineup of services, which has helped the company fill almost all the remaining space in its downtown data center, according to Mr. Levine and Kevin Goodman, BlueBridge managing director of business development. The company last year became a reseller of enterprise-level computer hardware and software. Now, though, BlueBridge customers no longer must buy servers at all: The company lets customers pay a fee to use
servers that BlueBridge owns. The new services played a big role in helping BlueBridge grow sales by 60% and hit a new revenue record in 2011, Mr. Goodman said, though he declined to specify a dollar figure. They also helped BlueBridge win about 12 new customers who otherwise probably would not have done business with the company, he said. “We grew more in one year than the previous five years combined,” Mr. Goodman said.
Serving as ‘trusted adviser’ BlueBridge decided to expand its lineup of services partly because a group of CEOs and business owners with whom Mr. Levine was
meeting regularly said they’d rather work with a company that could provide guidance on all sorts of information technology issues. “They were really looking for someone who would be their trusted adviser,” Mr. Levine said. The broader list of services was a big plus for Cleveland HeartLab Inc., said Arkadiy Kheyfets, director of IT for the company, which tests biological samples to determine whether a patient is at risk of heart problems. When Mr. Kheyfets asked about using BlueBridge’s data center, he was glad to learn that the company now sold hardware, he said. “We were building our environment, and back then we needed
servers, switches, routers and firewalls,” said Mr. Kheyfets, who had worked with BlueBridge when he was employed by clinical trial software provider Datatrak International Inc. of Mayfield Heights. BlueBridge plans to spend $6 million from its profits to renovate the two new data centers and the new space in the Sterling Building, Mr. Goodman said. The company wants the location outside the city of Cleveland to better serve customers in that geography, Mr. Levine said. The company employs 10 people and the equivalent of another 20 full-time contractors, and likely will hire another 15 people this year, Mr. Goodman said. ■
Crain ad exec promoted to sales manager Nicole Mastrangelo has been named advertising sales manager of Crain’s Cleveland Business, taking the role vacated by Mike Malley, who has left to become chairman of his family’s well-known Cleveland business, Malley’s Chocolates. In addition, Adam Mandell has assumed the title of senior account executive at Crain’s, and Andy Hollander has joined the sales team as an account executive.
Ms. Mastrangelo has been an account executive at Crain’s since March 2007. Prior to that, she worked at the National Association of College Stores in Oberlin. Mr. Mandell joined Crain’s as an account executive in 1996 from the Atlanta Journal Constitution. Mr. Hollander is a graduate of Aquinas College in his hometown of Grand Rapids, Mich. He spent five years in sales in the food industry before a six-year career in sales at The Roanoke Times in Virginia. Mr. Malley has led Crain’s sales team since December 2006. Brian Tucker, Crain’s publisher and editorial director, said that under Mr. Malley’s leadership, “Crain’s experienced steady, significant growth in both digital and event sales.” He said Mr. Malley “helped broaden our array of print-oriented sales programs in order to help our advertisers better achieve their marketing objectives. We wish him and Malley’s Chocolates the very brightest, and prosperous, future.” ■
Improving lives here…
…and around the world.
www.uakron.edu/innovation UA researchers have created a glucose sensing contact lens that changes color as blood sugar levels rise and fall, so diabetics can easily monitor their health status.
CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
Cleveland company discovers Puzzitiellos plan active the power of recycled plastic 2012, mum on givebacks New Wave started in ’07 with gift cards, has branched out since By DAN SHINGLER email@example.com
Some folks start a business on a credit card, but T.R. Mitchell says he started his with gift cards — millions of them. The co-founder of New Wave Plastics in Cleveland established his company in 2007 by recycling the cards after they’d been used by customers of Starbucks and other retailers and service companies. He said he liked the business model because the initial challenge was not to make sales, but to find raw materials. Gift cards, hotel room keys, credit cards and other cards must be made of a particular kind of printable plastic, and more companies have sought to use recycled plastic in recent years. As a result, every bit of old plastic card stock that Mr. Mitchell finds can be sold to the plastic companies that resell it to the printers and their end users. “Our orders are set for the year,” Mr. Mitchell said, noting that his challenge now is to find as much of the plastic as possible to fill them. “In the recycled plastics world, you have limited supply.” That business has been a springboard for Mr. Mitchell’s company, which he started in Medina. Last year, it outgrew its initial 20,000square-foot Medina plant and, in early 2011, it moved to new, larger digs in Cleveland, where it took over about 120,000 square feet of manufacturing space on Walworth Avenue. Today, however, recycling cards has become only a fraction of New Wave’s business, even though it recycled more than 4 million of the cards last year. It also has branched out into recycling all sorts of other plastics, Mr. Mitchell said. “At one point, (card recycling) was about 98% of our business. Now, it’s about 5%,” Mr. Mitchell said.
Among the other types of plastic New Wave recycles are those used by injection molders such as Thogus Products in Avon Lake. The presence of a reliable vendor such as New Wave that will pick up all its scrap enables Thogus to get at least some cash from what otherwise would be trash, said Thogus spokeswoman Dana Foster. “They’re a great resource to us as a manufacturer,” Ms. Foster said. “They take all our scrap and pick it up on time.” Now, New Wave’s challenge is to expand and use its new space efficiently. To do so, Mr. Mitchell said, he’ll likely spend about $1 million this year on new equipment to grind up, process and pelletize the plastic he recycles. He’d have done it in 2010 or 2011, he said, but credit was harder to come by. The company has room to grow, both physically and financially, Mr. Mitchell said. It’s only using about 65,000 square feet of its current building and has another 55,000 square feet it can occupy as soon as it has the equipment and raw materials to fill it. It’s also expanding elsewhere. Last October, it opened a recycling center in Florida. But the company still is committed to growing in the city of Cleveland, Mr. Mitchell said, and it’s involved in local endeavors such as the Manufacturing Mart that opened in the Galleria downtown in 2010. Manufacturing Mart president Mary Kay Denning has been working with Mr. Mitchell to help him get more raw materials by working with other manufacturers on sustainability issues that include managing their waste stream. Mr. Mitchell said those connections already have brought in about $500,000 of plastics he otherwise would not have secured. Ms. Denning said New Wave not only is helping other manufacturers to be more green, but also is profiting in the process. ■
By STAN BULLARD firstname.lastname@example.org
Members of the Puzzitiello family that operates Strongsville-based Parkview Homes are investors in two partnerships that recently relinquished ownership of two Strongsville properties, one of which is the building that houses Parkview’s office and design center. Rick Puzzitiello, Parkview’s CEO, said the two instances of deeding properties to the lender have no bearing on Parkview, which actually plans to build and sell more homes this year than last. However, he declined to discuss why the investor groups — Edrich Supply LLC for the office building and Kingswood Group for a 60acre parcel nearby — gave up the properties, or which family members and investors participated in the partnerships. Cuyahoga County land records show the 4,400-square-foot multitenant building at 13370 Prospect Road that remains Parkview’s offices transferred Jan. 3 for no money to Lake Properties Ltd., a realty holding company formed by First Federal of Lakewood. The same day, the parcel at 18270 Prospect was transferred to Lake Properties in what county records list as a “deed in lieu of foreclosure,” or a property transfer to satisfy a distressed loan and avoid foreclosure. Cuyahoga County values the office building at $1 million and the farmland at more than $175,000. Mr. Puzzitiello described the situation as amicable, as the Puzzitiellos will manage and lease the office building for the bank-related company and plan to co-develop — someday — the agricultural land with Lake Properties. The builder remains a client of the Lakewoodbased lender, he said. A source familiar with the situation confirmed the co-development agreement as well as the leasing and management arrangement for the office building. Online realty marketing sites
LoopNet and Realtor.com confirm Parkview Realty, a Parkview Homes affiliate, continues to offer the office building for lease. Paul Capka, First Federal senior credit officer, declined comment on the properties or loans.
‘Building in our blood’ Although Mr. Puzzitiello declined to comment on the distressed properties in more detail, he noted, “This is my second recession and my father’s (Richard Puzzitiello Sr.) fourth. We know the business.” Parkview now will pay Lake Properties its rent, the same way “as it always did with Edrich Supply,” Mr. Puzzitiello said. Parkview plans to sell more homes, 50, in 2012 than the 35 it sold last year, Mr. Puzzitiello said. That level, though notable now, is much reduced from the housing-boom era. Parkview’s best year was 2006, when it sold 112 homes. Mr. Puzzitiello said the company this year plans to enter the Brecksville market with a new-home development. Although closely associated with building in Strongsville, it also builds and sells in Brunswick Hills Township, Montville Township and Stow. The company sells 1,800-square-foot to 4,500 square-foot homes for prices ranging from $230,000 to $700,000. Enzo Perfetto, president of the Home Builders Association of Greater Cleveland, puts the relinquishing of property in which the Puzzitiellos were investors in perspective. “I feel that any builder that has held on this long should be able to weather the storm,” Mr. Perfetto said. Mr. Puzzitiello, who noted he and his brother, Roger, Parkview’s president, have five Puzzitiello children working with them in the family business, agreed. “We have the energy. We have building in our blood,” Mr. Puzzitiello said. “We will continue to build houses as long as God lets us.” ■
if you are paying more than $10 per foot, you are overpaying.
Thank you With deepest gratitude we thank the following corporations and corporate foundations who supported Y.O.U.’s mission with financial contributions of $2,500 or more in 2011. Anonymous ArcelorMittal Best Buy Cavaliers Youth Fund, a Fund of The McCormick Tribune Foundation Charter One Foundation Cleveland Clinic Dealer Tire Deloitte LLP Dominion East Ohio Eaton Corporation Findley Davies, Inc. Forest City Enterprises, Inc. Huntington National Bank Jones Day
JPMorgan Chase Foundation KeyBank Lincoln Electric Foundation Matco Tools Medical Mutual of Ohio Pat Catan’s Quicken Loans RPM International, Inc. Swagelok Company Third Federal Foundation Thompson Hine The TJX Foundation Inc. Turner Construction Company Walmart Zashin & Rich Co., LPA
Youth Opportunities Unlimited, a non-profit youth workforce development organization founded in 1982, empowers youth to succeed in school, in the workplace, and in life by graduating high school and preparing for a career.
• downtown youngstown • walking distance to university and courts • central business district • on-site fiber-optics available • naming rights now available brokers protected
(330) 480-0804 downtown youngstown, ohio
FEBRUARY 6 - 12, 2012
CRAIN’S CLEVELAND BUSINESS
Capital: Schools bemoan state’s inability to help continued from PAGE 1
“They will come to some sort of consensus on what they deem to be the most critical projects,” Kasich spokesman Rob Nichols said. “That strips an element of politics out of this process that should serve taxpayers very well amid an environment of very few resources.” Bruce Johnson, a member of Dr. Gee’s committee and president of the Inter-University Council, an advocacy group representing the state’s 14 public universities, said the process of determining which projects to include in the list the committee will forward to Gov. Kasich “is going pretty well, but we haven’t made the tough decisions yet.” Representatives on the committee said they didn’t have an aggregate figure for all the requested projects, but noted that the requests total more than what will be available
from the state. “Once our recommendations are finished, will all the college and university presidents like our recommendations? Well, that may be different story,” said Ron Abrams, a member of the committee and president of the Ohio Association of Community Colleges. “We think so because we’re trying to be true to the principles and priorities established.”
Nothing too sexy The types of projects Northeast Ohio colleges and universities are jockeying for are not expansive new construction initiatives, such as residence halls, student centers or recreation centers. Rather, they make up a relatively short list of muchneeded fixes and renovations. Cleveland State University spokesman Joe Mosbrook said the university submitted to the committee a $12
million request to repair aging roofs, sidewalks and other crumbling infrastructure. However, Mr. Mosbrook noted, it would cost as much as $200 million to cover all the university’s deferred maintenance needs. Likewise, Cuyahoga Community College officials say it would cost as much at $75 million to address the bevy of maintenance needs across its system, according to an email from Peter Mac Ewan, Tri-C’s vice president for facilities development and operations. Tri-C hopes to receive about $15 million for three renovation projects on two of its campuses. Lakeland Community College president Morris Beverage, the only administrator from Northeast Ohio on Dr. Gee’s committee, said the school in Kirtland asked for $2.2 million to refurbish half its aging science labs and an additional $1 million for other maintenance needs.
Properties: Receiverships popping up nationwide continued from PAGE 3
lenders commonly foreclosed and took title at a sheriff’s sale. The problem with the latter process is that it can take a minimum of two years. Such was the case at the Old Arcade, which houses the Hyatt Regency Cleveland at 101 Euclid Ave. A sale of that property took two years despite Judge Nancy Margaret Russo’s efforts to push the foreclosure case to conclusion last December
with a sheriff’s sale. By selling a mortgage, even at a discounted rate, the lender does not need to assume ownership of the property. Bankers generally do not want these properties, anyway. The most high-profile local example of dumping a mortgage was seen last December. That’s when the lender on Forest City Enterprises Inc.’s former Chase office tower in downtown Cleveland sold the note
to Rock Ohio Caesars, a partnership of Dan Gilbert’s Rock Gaming and Caesars Entertainment Corp. that is creating the Horseshoe Casino Cleveland at the nearby Higbee Building. Gordon Greene, a nationally active auctioneer at Cleveland-based Chartwell Group, said some states provide receivership sales as an option by statute as an alternative to sheriff’s sales. Receivership sales are common in federal bankruptcy
“All of us have capacity issues or maintenance issues that have been building up,” Dr. Beverage said. “I’m sure that all institutions could use even more capital funding than we’re getting, but we appreciate what we have coming.”
Anything helps University administrators haven’t been shy in recent years about their desire to bring in more money to mend their aging facilities. Cleveland State’s Mr. Mosbrook said the lack of a capital budget for the 2011-2012 cycle was “a big loss” for the university considering it came on top of other cuts in state support for higher education. The university received about $12 million in the last round of state capital outlays — the same amount it hopes for this year. Last spring, Kent State University president Lester Lefton also ex-
courts. Since late 2010, receiverships have started popping up, because lenders are starting to dispose of more distressed loans and distressed properties than earlier in the downturn, Mr. Greene said. “It’s not exclusive to Ohio,” Mr. Greene said of the growing popularity of receivership sales. “They are on the rise around the country.” Kevin Margolis, chairman of the real estate practice group at the Benesch, Friedlander, Coplan & Aronoff law firm, said when the downturn started, lenders were wary
pressed his frustration with the lack of state money and told Crain’s, “The reality is the state of Ohio has been unable to step up and ensure we have the kind of facilities that Ohio needs for its students” As such, Kent State proposed in 2010 a $210 million bond sale to support a $250 million construction and renovation program on its main campus in Kent. The university looked to phase in a new student fee to pay for the borrowing, but the plan has sat dormant as lawmakers on the State Controlling Board, which must give the final OK on the proposal, expressed objections over the fee as higher education costs rise. Dr. Lefton wouldn’t indicate how the availability of capital funds would alter the university’s previous proposal, but he said in a statement the university was “grateful to Gov. Kasich to have a capital budget, and I’m looking forward to working with the other presidents to come up with a solution that helps us address our deferred capital needs.” ■
about selling properties because the feeling was that too many properties had been unloaded for too little after the 1990s savings and loan crisis. “When everything crashed (in October 2008), everything was frozen,” he said. “Now there is more of a sense of normalcy to the market.” However, one problem remains for all the parties regardless of whether they go the receivership route or stick with a sheriff’s sale. “They are all trapped by the same thing,” Mr. Margolis said — a weak real estate market. ■
CRAIN’S CLEVELAND BUSINESS
Ohio court rejects claim by widower of obese smoker By ROBERTO CENICEROS Business Insurance
A widower failed to prove that a fatal heart attack suffered by his wife, a 317-pound clerk who smoked two packs of cigarettes a day, was work-related, Ohio’s 10th Appellate District Court ruled last week. The ruling in the case of Deborah Davis vs. Marsha Ryan upholds a denial of workers’ compensation benefits sought by Thomas E. Davis. Ms. Davis, a 5-foot-4-inch clerk for the Ohio Education Association, died in 2005 after she found her usual handicapped parking spot blocked, so she parked in a lot a block from her work, court records show. She later was found unresponsive in her vehicle. A death certificate stated she died of a heart attack. The Ohio Bureau of Workers’ Compensation denied benefits for her estate, administered by her husband. He appealed to the Franklin County Court of Common Pleas. The bureau then moved for summary judgment, arguing that there was no causal connection between Ms. Davis’ employment and her
demise. The state agency cited testimony given by Ms. Davis’ cardiologist in a separate personal injury case. In that case, the doctor testified that Ms. Davis had a pre-existing heart condition and underwent coronary bypass surgery in 2004. The doctor said she “was at risk for having a heart attack at any point” and he could not determine the heart attack’s probable cause. The doctor said Ms. Davis suffered from multiple health problems, including hypertension, reactive airway disease and diabetes. The trial court granted summary judgment in favor of the bureau, finding that there was no evidence that Ms. Davis’ death was “caused by anything other than natural deterioration from pre-existing physical conditions.” On appeal, Mr. Davis argued that his wife’s death could have been caused by overexertion as she attempted to walk from the parking lot and that her death arose from her employment. The appellant court, however, found that Mr. Davis failed to present sufficient evidence that the heart attack was caused by work-related activity. ■
Lonely? Not at Ohio Commerce Single-branch firm in Beachwood grows assets two years after decision to fly solo By MICHELLE PARK email@example.com
So far, Ohio Commerce Bank has worn its independence well. In the nearly two years since the single-branch Beachwood bank raised enough capital to buy itself out from an ailing parent company, the institution has grown its deposits, its lending and its staff. If its growth keeps pace, the bank probably will outgrow its existing capital level, said president and CEO Dell R. Duncan. That situation would require some type of capital infusion, be it a sale of stock, a merger or acquisition or other action. In the most recently concluded year, Ohio Commerce grew its assets 37% to $110.2 million. The year before, it grew its assets 21.4%, Mr. Duncan said. While its loan originations last year fell 17% short of the bank’s goal, loans still grew 18% during 2011 over
TWO HEALTH CARE SYSTEMS WERE BATTLING IT OUT IN THE SAME MARKET. IT WAS HEATED. THERE WAS TENSION. IT WASN’T HEALTHY. THERE WERE THE DOCTORS AND THE NURSES AND THE EXECUTIVES. THERE WERE THE ACADEMICS AND THE CLINICIANS AND THE FINANCE PEOPLE. AND, OF COURSE, THERE WERE THE PATIENTS. SO HOW DID WE BRING THEM ALL TOGETHER AND CREATE ONE OF THE LARGEST HEALTH CARE PARTNERSHIPS OF ITS KIND?
WE FIGURED IT OUT.
Higher standards make better lawyers.® For more information on our work in health care, visit vorys.com/health.
Vorys, Sater, Seymour and Pease LLP 1375 East Ninth Street
FEBRUARY 6 - 12, 2012
2100 One Cleveland Center Cleveland,Ohio 44114
2010, he noted. Midway through 2011, Mr. Duncan said, he took a “hard look” at the management team and in August replaced the bank’s chief lending officer. Thereafter, the bank generated nearly as much loan volume in the fourth quarter as it did the first three quarters of the year, Mr. Duncan noted. “That’s why I’m excited about our prospects” in 2012, he said. “Word is getting out. We’re not a household name, but accountants and attorneys do know about us.”
Growing up fast Ohio Commerce remains Cuyahoga County’s youngest bank. When it opened in 2006, it was the first de novo institution chartered in the county in 16 years. When its parent company, Capitol Bancorp, which has offices in Michigan and Arizona, encountered problems, in large part because of its business in places such as Las Vegas that were hard hit by the economic downturn, local investors bought out Capitol’s 50.5% stake, effective June 30, 2010. “They were going downhill, and we were going uphill,” Mr. Duncan said, citing how the young bank first became profitable in the first half of 2009. In an internal newsletter sent immediately after the transaction, Mr. Duncan wrote, “Excess funds will be added to the bank’s already strong capital base, positioning our institution for the growth we have projected over the next several years.” Grow, it has. In addition to its loan and asset growth, Ohio Commerce added four net people last year, bringing its staff to 24. The bank also is seeking to lease another 3,000 square feet to increase its Beachwood office space by more than one-third to 11,000 square feet. And it’s working with the property owner to have significant signage placed on the building it calls its headquarters. The bank is a preferred Small Business Administration lender and was ranked in fiscal 2010 in the top 10 SBA lenders in Northeast Ohio by dollar value of loans. “For us at this point, everything is going in the right direction,” Mr. Duncan said.
Mr. Duncan said the bank does not try to be everything to everyone. It has a minimal amount of consumer loans on the books — a mere $136,000 at the end of 2011 — because it’s focused on the small business lending it was founded to do. (The bank’s core customer is a small business with revenue of $10 million or less.) This year, it aims to grow its loan portfolio another 25% to 30%, Mr. Duncan said.
‘Timing is everything’ Younger institutions often post above-normal growth rates because “they’re the new kid on the block,” plus community banks in general are posting higher growth rates than they did prior to 2008, said Robert L. Palmer, president and CEO of the Community Bankers Association of Ohio, which represents 222 community banks statewide. He said disenchantment with larger institutions is a key reason for smaller banks’ growth. Mr. Palmer isn’t minimizing what Ohio Commerce has done, though. “They have been extremely successful,” Mr. Palmer said. It’s a “very, very strong accolade to their management team and their board” that Ohio Commerce continues to grow during these challenging times, he noted. When Ohio Commerce restructured, it was clear of the expense burden so many startup banks have, and it didn’t have the legacy debts that turned sour for so many institutions, said Paul L. Simoff, principal with Austin Associates LLC, a Toledo community bank consulting firm that has worked with Ohio Commerce. So Ohio Commerce, for all intents and purposes, was a new, healthy player in the market, he said. “Timing is everything in a lot of disciplines,” Mr. Simoff said. About 25% of the bank’s deposits, Mr. Simoff noted, are non-interestbearing accounts, which signals that Ohio Commerce is a relationship bank. “That tells me they aren’t going to get whipsawed when this interest rate environment starts to turn and banks that are funded with more interest-sensitive deposits all of a sudden (have) those costs start to go up dramatically,” Mr. Simoff said. ■
FEBRUARY 6 - 12, 2012
Adding: Investment offers credibility continued from PAGE 3
services to retailers and other businesses. For the most part, it sells services through 500 independent companies and individuals.
An urge to merge FTS makes a small amount of money whenever someone uses a payment card to buy a product through a merchant in the company’s portfolio. After passing along payments to other businesses involved in the payment process and taking care of its own expenses, FTS earned about $10 million before interest, taxes, depreciation and amortization in 2010, Mr. Shanahan said. He estimates that earnings grew by nearly 40% in 2011, noting that he did not yet have a dollar figure for last year. The company keeps expenses down by keeping its staff small, though Mr. Shanahan said the Cleveland office should grow as the company makes acquisitions. FTS also has offices in Detroit, Chicago and Pittsburgh, where Brian Shanahan works. Over the next few months, FTS plans to acquire two “good size” resellers of payment processing services in Texas and Florida. It also aims to buy a company in New
Jersey with a system that would allow FTS merchants to take payments without a credit card terminal, which would allow them to take online payments. He would not identify those three companies.
The means to an end The company’s appetite for acquisitions increased in September 2010, when FTS received a $50 million equity investment from FTV Capital, which has offices in San Francisco and New York. The private equity firm owns a majority stake in the company. Since then, FTS has acquired another reseller, Efficient Payment Processing LLC of Chicago, which brought about 200 merchants into the FTS portfolio last August. It also has bought the merchant portfolios of five other independent sales organizations, which remain separate companies but now funnel their transactions through FTS, Mr. Shanahan said. The Highland Hills company spent about $20 million on those six transactions, he said, declining to be more specific. The investment from FTV Capital, which invests in companies in the payment industry, has made it easier for FTS to do acquisitions,
Solution: Parents targeted in partnership’s marketing continued from PAGE 3
with these skills to take our place,” said Andrew Tanner, Kennametal’s director of advanced engineering for the Americas. Auburn and Kennametal have come up with a program that combines 350 hours of training at the career center with 320 hours of training at Kennametal’s Solon plant. Students can finish the program in less than a year and, at the end of it, will have the skills they need to work at Kennametal or nearly any other advanced manufacturing plant, Mr. Tanner said. The program costs $4,700 for adults, but high school students are eligible to take it for free if they attend one of the 11 area school districts affiliated with the career center, said Auburn superintendent Margaret Lynch. Ms. Lynch said her school could not have offered the program alone. For one thing, it could not afford to buy the expensive machines required to train students fully, but which Kennametal already uses in the production of the metalworking tools and accessories that the company makes. Her challenge now is to find students. The career center in 2009 shut down a program teaching similar skills, Ms. Lynch said, because it could not attract students. Ms. Lynch has not changed that reality quite yet — only four students are enrolled in the Kennametal program, which began Jan. 23 — but she has big plans.
Meet the parents In addition to equipment and the time its people will spend training students, Kennametal is donating $10,000 to Auburn to put toward scholarships for the new program. Meanwhile, Ms. Lynch said she’s marketing it heavily, beginning with
a mailer going out to 200,000 households. She’s also taking a page from the recruitment playbook of many successful college football coaches. Instead of going after just students, Ms. Lynch often is recruiting them via their parents. That’s because, as a survey financed by Kennametal found, parents are the ones often steering their children away from manufacturing careers. “We have to change our recruiting strategies,” Ms. Lynch said. “Recruitment is now a family affair. You have to get the parents’ support.” The program does not guarantee students a job at Kennametal, though Mr. Tanner said he’s always looking for new qualified employees and is sponsoring the program in order to get new hires. However, it does promise students they’ll be well prepared to work in advanced machining, or even be prepared for an engineering program.
‘It has to work’ Kennametal’s shop is wall-to-wall with advanced machining cells, some costing more than $500,000. Students will be trained on some of the most advanced equipment available, Mr. Tanner said. Will it work? It’s too soon to say how many students the program ultimately will attract, but Mr. Tanner said it had better work, for the sake of Kennametal and other area manufacturers. Demand for employees only is rising, as more companies bring foreign work back home and the boom in natural gas drilling in the United States keeps plants such as Kennametal’s busier than ever. Mr. Tanner already is working his 300 employees on three shifts — and he needs more of them. “It has to work,” he said. “There’s no other option.” ■
and not just because of the $50 million, Mr. Shanahan said. The deal also gave FTS credibility, which has helped the company build trust with potential partners, he said. “All the outsiders know, to get that deal done, you’ve gone through major due diligence,” he said. Brian Shanahan, who has founded four other financial services companies, started FTS with a few other payment card industry executives in 2006. The company grew in Northeast Ohio because its original president lived here. Today, FTS has about 25,000 merchants in its portfolio, Jeff Shanahan said. That number would put the company on the border between the smaller and midsize independent sales organizations that are registered to do business directly with banks, said Tom Goldsmith, director of communications and public relations for the Electronic Transactions Association of Washington, D.C. FTS will rise through the ranks fairly quickly if it continues adding 1,000 merchants a month, Mr. Goldsmith said. “A thousand accounts a month from a base of 25,000 is a pretty good growth rate, even for our industry,” he said. ■
CRAIN’S CLEVELAND BUSINESS
BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s Cleveland Business highlighting positive business developments. Send information for inclusion to managing editor Scott Suttell at ssuttell@ crain.com. ■ South University, a for-profit college with campuses primarily in the southern part of the country, plans to open a 40,000-square-foot campus in Warrensville Heights. Classes at the college, which will be located on Richmond Road near U.S. Route 422, are expected to begin April 7. The for-profit college will offer degrees in criminal justice, paralegal studies, legal studies, business administration and other fields. South University has several campuses across the country, including sites in Austin, Texas; Richmond, Va.; Montgomery, Ala.; and Novi, Mich. Education Management Corp. in Pittsburgh, the college’s parent company, also runs Brown Mackie College, which has campuses in Akron and North Canton. ■ The Chesler Group in Cleveland
recently won an international award from Wallpaper* magazine in London for the much-lauded renovation of the headquarters in Novelty of ASM International, a nonprofit involved in materials science. Chesler Group, a firm that specializes in historic renovations, received the Best Architectural Renovation award in the magazine’s 2012 Design Awards. The renovation encompassed interior and exterior improvements that included new mechanical, electrical and plumbing systems, ADAcompliant restrooms and egress, window restoration and refurbishment of the headquarters’ exterior stainless steel solar shades, repair of steel columns and concrete structural elements, and a vegetative green roof. The work was done in compliance with the U.S. Department of the Interior’s Standards for Rehabilitation of historic buildings. The headquarters, known best for its geodesic dome, was listed on the National Register of Historic Places in October 2009. Renovation construction by Chesler Construction began in April 2010 and was completed in June 2011.
CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
Brian D. Tucker (firstname.lastname@example.org) EDITOR:
Mark Dodosh (email@example.com) MANAGING EDITOR:
Scott Suttell (firstname.lastname@example.org)
aily television footage of former Cuyahoga County Commissioner Jimmy Dimora trudging to U.S. District Court in Akron to face federal corruption charges is a reminder that the county not that long ago was a playground for politicians who put satisifying their personal desires ahead of serving the public. But, oh, what a difference a year has made in the operation of county government — and what a difference the team of public officials led by County Executive Ed FitzGerald could make in the years ahead. Thanks to Mr. FitzGerald and crew, the negative image of the way government worked in Cuyahoga County quickly is fading in the rear view mirror. In just 13 months on the job, they have stabilized a ship that had run aground and badly was in need of repair. Now, with the fix-up largely behind him, Mr. FitzGerald in Year Two of his administration is casting a broad vision of the role the county could play in improving the efficiency of municipal governments within its borders. Mr. FitzGerald used his “State of the County” speech last Wednesday to articulate that vision. It is a speech he couldn’t have made a year earlier, because he first needed to convince residents that the county’s new leadership was worthy of their trust. There was, after all, no guarantee the new form of government county voters had approved — with its single executive and 11-member council — would be any better than the old three-member Board of Commissioners and the elected heads of several county offices. But the reform effort has succeeded, both because of the new setup and because of the caliber of the people who are in charge. “We’ve proven over the last year that county government can be operated efficiently, openly and transparently,” Mr. FitzGerald told Crain’s editorial board last Monday. Now, he said, “This is the year to define a long-term plan for the county.” The object of Mr. FitzGerald’s Western Reserve Plan is to take talk of promoting collaboration among cities “beyond a water cooler conversation,” as he put it, by offering up the county as the place where they can consolidate various services. “We’re not on a trajectory” for real consolidation at present, Mr. FitzGerald told Crain’s. “The idea that it somehow will just happen is wrong.” Mr. FitzGerald said his team is working on defining the services — such as information technology services — that typically are done at the municipal level, then figuring out which ones the county can provide across cities. Cities then can decide for themselves whether they’ll contract those services out to the county. “For the first time, it’s going to stop being a theoretical issue,” Mr. FitzGerald said. “Now there’s going to be an option (for consolidation) where there wasn’t an option before.” Mr. FitzGerald admits it could take 10 years before the idea of consolidating services at the county level truly takes hold. But he believes it is worth the effort. “We just don’t want to have a reform administration and then go back to business as usual,” he said last week. We doubt anyone else does, either.
FROM THE PUBLISHER
In this contest, even the loser wins
Remember when the entire nation don’t know about your driving habits referred to him as “the Donald”? This to work, but mine have a certain man would make P.T. Barnum blush. pattern: news, either from my pal He’s a walking, talking, fire-breathing Bill Wills at WTAM, or National Pubbrand unto himself. lic Radio, or one of the satellite stations. Now, I’m thankful it was dark because On the way home, after a particularly I laughed and then said — aloud, to no long day, it might be calming music or one in particular because the car was even comedy. empty — “Are you kidding me? But the morning? Well that’s Who the hell cares?” for news and information. I am, BRIAN But of course, Donald Trump, after all, still a journalist at heart TUCKER along with his media-fueled after all these years (gulp — entourage, cares, as does the decades!) in the business. GOP candidate who finally gets So last Thursday, as I started his blessing — and presumably my journey downtown, I couldn’t a healthy campaign donation. help but laugh out loud when I So, later in that same day, I did came across the breathless a Google search and saw entry speculation by a commentator after entry of stories speculating on POTUS, the satellite station about whether it would be for politics junkies. There I Newt Gingrich or Mitt Romney getting was, minding my own business, some the nod from the Donald. six hours before the much-awaited The Trump publicity machine had to “announcement” from Donald Trump be in seventh heaven. They got this regarding whom he might endorse for fabulous blast of hype earlier in the the Republican presidential nomination. process while he contemplated running Yes, ladies and gentlemen, that Donald for president, and then they get a second Trump. The one with the crazy-bad hair wave as he pondered who would kiss his style, trophy wives, helicopters, signature ring. golf courses, a TV show, etc., etc.
Several entries down on the first search page, I caught a Los Angeles Times digital story that quoted Mr. Gingrich, the often-acerbic, former House speaker telling a crowd that, “I like hiring people,” so I understood the inference. Former Gov. Romney, who stubbed his toe a couple weeks ago when he said, “I like firing people,” was aligning himself with the guy who does it every week on his TV show, “The Apprentice.” When asked that day whether he expected the Trump endorsement, Mr. Gingrich gave a clipped, one-word answer: “No,” was all he said, and when asked if he expected Trump to back former Gov. Romney, Mr. Gingrich said, “Who knows?” Now, I doubt whether Newt Gingrich has answered two questions with a total of three words since — oh, I don’t know — maybe elementary school. So Mr. Romney later that day did indeed get the Trump nod and now appears closer to his face-off with Barack Obama. And Newt? He’ll go back to thrilling audiences with his brilliant opinions at a gazillion bucks a gig. Is this a great country or what? ■
Economic blueprint requires bold action By HERB KLEIMAN
nother economic plan is being offered to us. Cuyahoga County Executive Ed Fitzgerald proposes to spend $100 million to assist startups and emerging companies. The program is not new and comes from an agency with no track record in such endeavors. So we wish him well and wait in anticipation for the next moves. But skepticism abounds. The plan is bold enough but overlooks one crucial factor: someone to spearhead the effort who has the wisdom, experience, and — dare I say it — a bit of charisma. It needs a Richard Shatten. He had the good fortune to be on the scene at the right time. His success was almost immediate, and it grew with the years.
The late Mr. Shatten served for 10 years with Cleveland Tomorrow, a consortium of CEOs from the largest firms in Greater Cleveland. Eventually he became the executive director and his voice spoke for the organization and, indirectly, for the CEOs themselves. Richard became the public face articulating an array of very excellent ideas. In hindsight, one could say that he was primed for Cleveland Tomorrow. An MBA from Harvard University and a brief stint at McKinsey & Co. prepared him for the arduous task. After Cleveland Tomorrow, he founded and was the first executive director of Regional Economic Issues (REI) and a professor at Case Western Reserve University’s Weatherhead School of Management. These jobs allowed him to
hone his talents to a wider audience. And none of these positions were governmental in nature. They were not achieved by appointment or election at the local, county, regional or state levels. He was not susceptible to the fickle political winds that may favor a cause one day, but may change the next. He was also not liable to the electoral process. He sought the advice and counsel of government sources, yet he was his own man. Given this relatively “safe” position and the resources at his disposal, criticism had to be carefully considered. I disagreed with his emphasis on our manufacturing strength and excellence. These skills were built upon industries that peaked already, such as automaking or steel. I suggested we instead stress outstanding strengths See VIEW Page 11
FEBRUARY 6 - 12, 2012
CRAIN’S CLEVELAND BUSINESS
THE BIG ISSUE
Now that we have an aquarium and a casino on the way, what else does Cleveland need to draw more visitors?
State hurt by disparate tax collection methods
(director of visitor services, Positively Cleveland) Garfield Heights
I’d like to see the lakefront and the riverfront more completely developed. We obviously need still more housing downtown to create a 24-hour community like so many European communities.
What we need is sunrise (emerging) industries. Sunrise industries would spur growth, which would create energy, which would bring visitors.
A lot of people I’ve talked to think that people in Cleveland are less friendly and more rude. Down south and in other areas, people are much more personable and less guarded.
I think Cleveland needs to believe in itself first. Civic pride.
➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.
Software specialist lands new financing OnShift Inc., a company in Cleveland that is a provider of staff scheduling and shift management software for the health care field, said it has closed $3 million in financing that it will use to bolster sales and marketing efforts and to increase its staff. The company said the Series B financing round was led by West Capital Advisors LLC of Cincinnati and included participation from OnShift’s institutional investors Draper Triangle Ventures, Early Stage Partners and Glengary LLC. In announcing the investment, OnShift said it’s “experiencing fast, significant growth, having achieved a 400% increase in annual revenue in 2011.” Mark Woodka, CEO of
ON THE WEB
Story from www.CrainsCleveland.com.
OnShift, said the company doesn’t disclose revenue figures, but he noted it now has about 500 customers, up from 170 in December 2010. OnShift has 36 employees at present and, with fresh financing in hand, expects to increase that number to 55 or 60 by the end of the year, Mr. Woodka said. The new employees will work in marketing, sales and customer service, he said, to meet the company’s needs as its profile rises in the health care business. The company, founded in late 2007, currently occupies about two-
View: Yesterday’s leaders provide model for today continued from PAGE 10
where we have natural advantages: our excellent university system, our much-admired hospital and medical care, and our coastline and waterways. Although Richard Shatten was a powerful influence upon the Cleveland area, it is useful to note two others who played a key role upon their communities’ welfare. They each used different leverage strategies to persuade and encourage local risk takers. But each had a common theme: the role of the university, in various ways, to help them. In the Boston area, Georges Doriot was a professor at Harvard’s business school, teaching the principles of entrepreneurship. He opened the first venture capital firm in the country, American Research & Development Corp. (ARDC), in 1946. In the 1950s and 1960s, he offered young risk-takers to pay a portion of their startup funding if they adhered to his strict regimen. In 1957, the founder of Digital Equipment Corp., Ken Olsen, went through this demanding process and eventually introduced real-time minicomputers. In the early 1980s, the company became the major
competitor to IBM. It employed 130,000 people. (As prescient as Digital Equipment was on the possibilities of minicomputers, it ignored the microcomputer, the personal computer. It was acquired by Compaq in 1992.) Of course, we must acknowledge Silicon Valley, the stretch from San Francisco to San Jose. Dean Frederick Terman of Stanford University is considered by many to be the “father” of Silicon Valley. He created Stanford Industrial Park, the first complex associated with a university. In the late 1930s, Mr. Terman helped the founders of Hewlett-Packard by providing space to them for their new venture. After the war, he attracted young entrepreneurs with the considerable resources at his disposal. The last 50 years have not diminished the impact of Messrs. Doriot and Terman. They created a climate that still persists today. For instance, read of the beginnings of Google. The technologies are different, venture capital is now commonplace, and the successes of many startups are well-documented. Perhaps, just perhaps, we might take away some lessons. ■
thirds of the 15th floor of the Keith Building, 1621 Euclid Ave. downtown. Mr. Woodka said OnShift has begun negotiating to take the rest of the 15th floor to accommodate an expanded staff. Mr. Woodka said OnShift officials were introduced to West Capital Advisors via contacts at Draper. Madeleine Ludlow, managing director of West Capital Advisors, said in a statement that OnShift “is well positioned for tremendous growth, with a strong team, compelling technology, expanding customer base and the right timing.” ■
■ I support recent efforts to consolidate local income taxation into the state, as described in your Jan. 30, Page One story, “Kasich team renews push to collect muni taxes.” The patchwork of local tax rates, forms, reciprocity agreements and enforcement regimes causes real headaches for individual and business taxpayers. In some states, the state collects the income and geographic information of taxpayers, then distributes the local tax share to the municipalities. This is far simpler for preparation,
and it relieves taxpayers of local lapses of privacy and imbalanced enforcement. Businesses should support this effort strongly. It is good for all of us. William C. Ferry, Esq. Rocky River
WRITE TO US Send your letters to: Mark Dodosh, editor, Crain’s Cleveland Business, 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 e-mail: email@example.com
TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.
LIENS FILED ESP Electrical Contractors Inc. 5055 W. Fifth St., Brooklyn Heights ID: 20-2738058 Date filed: Nov. 10, 2011 Type: Employer’s withholding Amount: $19,001 School of Tomorrow Inc. 11228 Detroit Ave., Cleveland ID: 27-1193825 Date filed: Nov. 29, 2011
Type: Employer’s withholding Amount: $18,779 JDRC Inc. 5368 Saint Clair Ave., Cleveland ID: 32-0027053 Date filed: Nov. 29, 2011 Type: Employer’s withholding, corporate income Amount: $18,298 Studio Techne Inc. 12210 Euclid Ave., Cleveland ID: 34-1790162 Date filed: Nov. 22, 2011 Type: Employer’s withholding Amount: $15,979 Berry Insulation Co. 1600 E. 25th St., Cleveland ID: 36-4628732 Date filed: Nov. 30, 2011 Type: Employer’s withholding, unemployment Amount: $15,579
A DIVISION OF CUYAHOGA COMMUNITY COLLEGE
Corporate College Presents
Tuesday, March 27 e 7:30 a.m. - 4:30 p.m. Cost: $395 (includes lunch) e CRN: #18446 Bring your business challenges and we will show you a clear, simplified way of looking at the problems and seeing what’s probably already right in front of you – easy, effective solutions. With Disney Institute, you can learn to think differently. Are you ready? Communicate a compelling vision e Select and hire right-fit employees Develop a service philosophy e Retain customers for life Create a collaborative culture Limited seating. Register today. © Disney
Corporate College, 4400 Richmond Rd., Warrensville Hts., OH 44128 O Oììeììwww.corporatecollege.com/disney
Partnerships for a better Northeast Ohio Raven Lining Systems, Inc.
Panzica Construction Company Euclid Medical Ltd.
Manufacturer of calcium carbide and acetylene
Manufacture & sales of high performance coatings for wastewater treatment and water infrastructure
Building contractor and construction manager for the commercial, industrial & institutional markets / Commercial Real Estate Developer
Participation in a Multi-Bank Credit Facility
Term Loan Financing
Working Capital & Oﬃce Park Financing
Working Capital, Equipment & Real Estate Financing
January & December 2011
Branam Fastening Systems, Inc.
CONSTRUCTION C O
Carbide Industries LLC Central Carbide LLC
Duke Graphics, Inc. Full service print, direct mail & fulﬁllment provider
National Threaded Fasteners LTD
Stoddard NLA, LLC
Lake Erie Construction OEM distributor of fasteners, hardware & stud welding products
Flange bolt importer and distributor
Manufacturer and distributor of collector Porsche car parts
Working Capital Financing
Working Capital and Term Financing
Line of Credit and Equipment Financing
MPDS Memphis Ltd. Emerald Overlook
MPDS West Park Ltd
Canterbury Court Multi-Unit Apartment Community Managers
High-tech metal forging for a variety of industrial applications
Real Estate Financing
Participation in a Multi-Bank Credit Facility
Ohio’s premier specialty contractor specializing in guardrail signing & fencing
L&M Auto Specialty LLC
Real estate developers and property managers
Real Estate Financing
Real Estate Financing
Line of Credit
Ciro’s Property Management, Inc.
Sheoga Hardwood Flooring & Paneling, Inc.
Choice Child Care and Preschool, Inc.
Playhouse Square Foundation
Manufacturer of solid, high quality hardwood ﬂooring and paneling
Provider of quality childcare and educational programs
Working Capital Financing
Participation in Multi-Bank Revolving Credit and Allen Theatre Renovation Loan
D&S Custom Van, Inc. M.C. Mobility Systems, Inc.
Pearne & Gordon LLP
Full service collision & restyling center and mobility products dealer
Intellectual property law ﬁrm providing patent & trademark services
Working Capital Financing
Working Capital Financing
Real Estate, Equipment & Working Capital Financing
State Road Associates
Hodell-Natco Industries, Inc.
Real estate owner and management
Consolidated Investment Corporation
SpringCo Metal Coatings, Inc
GPD Development LLC
Real Estate Financing
Working Capital, Equipment and Commercial Real Estate Financing
Davco Fastener Co.
WXZ Residential Group / Hazel LLC
Commercial Real Estate Developer Real Estate Financing
Continental Enterprises Ltd Monclova One LLC Woodmont One LLC Redwood Management specializes in the development & management of luxury apartment communities
Luxury Apartment Community Real Estate Reﬁnancing
Multi-Family Construction Financing
June & September 2011
Industrial Fastener Distribution Commercial Real Estate Developer
Equipment rental, inspection & engineering services related to storm water and erosion and sediment control
Complete Auto Care Provider
Commercial Owner-Occupied and Investment Real Estate Financing
Versatile metal coating job shop with multiple coating & plating capabilities
Harbor Communications LLC Business media company with magazines, websites & events for industries served
Working Capital Financing
Real estate investment, management & development company
Vintage Development Group LLC Chagrin River Walk LLC
Shale Construction Services LLC
Commercial Real Estate Developer
Hemingway at Boston Heights LLC
Working Capital & Real Estate Financing
Multi-Family Construction Financing
Construction and Mini-Perm Oﬃce Building Financing
Real Estate Financing
Performing arts center
Moving Solutions, Inc. Customized moving services for local & long distance
Sea-Land Chemical Co. Nationwide, solution-focused wholesale distributor of fasteners and chain
100% employee owned specialty chemical distribution company
College Town Kent LLC
Wheeler Landscaping, Inc.
Hilltop Investment LLC
Provider of quality design-build, maintenance and irrigation services to residential and commercial clients
Millennia’s mission is to acquire, preserve and rehabilitate multi-family residential properties receiving rental or other subsidies
Working Capital and Equipment Financing
Multi-Family Acquisition Financing
Rockwell Property LLC Rockwell Land Management Co. LLC Lucas Plumbing & Heating, Inc. Mechanical Contractor
Z & Z Manufacturing, Inc. Halo Mechanical LLC Mechanical Contractor
Commercial Real Estate Developers Construction Perm Financing for Historic Renovation of Downtown Corporate Headquarters Building
Working Capital and Commercial Real Estate Financing
Working Capital and Commercial Real Estate Financing
Tradex International, Inc.
Architectural & Industrial Metal Finishing Company LLC
Hillbrook Apartments Associates LLC Multi-Unit Apartment Community Managers Multi-Family Real Estate Financing
Leading supplier of general purpose disposable gloves
ISO 9001 Certiﬁed powder coating facility
Working Capital and ABL Financing
Working Capital, Real Estate and Equipment Financing
Michael Symon Restaurants General machine shop specializing in hydraulic ﬁttings
Developer of mixed-use “College-Town” districts
Real Estate, Equipment and Working Capital Financing
Working Capital, Build-Out and Equipment Financing
Participation in a Multi-Bank Credit Facility
The Masters Group, Inc. Raw Materials, by-products and recycling solutions
Diverse rental products company
Working Capital Financing
Working Capital, Real Estate and Term Loan Financing
R. W. Beckett Corporation
Neway Stamping & Manufacturing, Inc.
Integrated communications consultancy that partners with clients to drive results
Brokaw is a lean, nimble strategic-creative agency famous for helping brands rise above the blah blah
Premier manufacturer of components for heating appliances
Production tooling for manufacturers in every ﬁeld of industry
Working Capital Financing
Working Capital Financing
Working Capital and Real Estate Financing
Dix & Eaton Incorporated
Mike & Terrie Enterprises, Inc.
Lawn Village, Inc. Owner-Operator of Aberdeen Commons, a garden style multi-family apartment community
Olympus Holding Company, Inc. Real Estate Investment and Management Working Capital and Real Estate Financing
Multi-Family Real Estate Financing
Parts Associates, Inc. A System Focused National Supplier of MRO Consumables Working Capital and Term Loan Financing
For more information call Sean Richardson, President and CEO, NorthCoast Region at 216-802-6565 FirstMerit.com Member FDIC
CRAINâ€™S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
GOING PLACES JOB CHANGES
environmental services; Randall S. White to director of protective services.
EDUCATION NATIONAL COLLEGE: Jill Morrow to campus director, Canton; Mark A. Rice to campus director, Cleveland.
VISITING NURSE ASSOCIATION OF OHIO: Emily Smayda Kelly to general counsel and chief human resources officer.
FIRST NATIONAL BANK OF PENNSYLVANIA: Jeffrey B. Kraig to manager, Chardon.
EXPLORER INSURANCE AGENCY: Bill Tuttle to agency manager.
VALLEY SAVINGS BANK: Robyn L. Cottrell to operations manager.
MEADEN & MOORE: Scott Holter to practice leader, Business Solutions.
NICOLA, GUDBRANSON & COOPER LLC: Brenda L. Wolff to member.
WESTERN RESERVE PARTNERS: Matthew D. Francati to analyst.
LEX PRODUCTS CORP.: Tom Siko to national sales manager, Military Power Systems. MOEN INC.: Tim Bitterman to director of marketing and new product development, Creative Specialties International. RPM INTERNATIONAL INC.: Scott Copeland to director, corporate development.
MARKETING LESIC & CAMPER COMMUNICATIONS: Katie Boland to account executive.
EVERY UPLOAD. EVERY DOWNLOAD.
CLEVELAND BOTANICAL GARDEN: Marie Monago to chief development officer; Julie Anderson to chief operating officer. TEAM NEO: Stephanie Mercado to business development director, JobsOhio regional office.
Doll to treasurer; Jill Rako to secretary; Mark Elliott and Lance Godard to members-at-large. PUBLIC RELATIONS SOCIETY OF AMERICA, AKRON AREA CHAPTER: Ralph Davila (Conservancy for Cuyahoga Valley National Park) to president; Ron Kirksey to president-elect; Tracy Teuscher to vice president; Amy Krebs to secretary; Abbey Linville to treasurer; Gretchen Fri to past president. SHOES AND CLOTHES FOR KIDS: Scott Simon (North Pointe Realty Inc.) to chair; Allan C. Krulak to chair emeritus; vic gelb, Rockette L. Richardson and Terence J. Uhl to life directors; William R. Joseph to vice chair; A. Lamont Mackley to treasurer. YOUTH OPPORTUNITIES UNLIMITED: Brian Broadbent (BVU Center for Nonprofit Excellence) to chairman; Patrick Hofford to treasurer; Beth Rosenberg to vice chair, secretary; Gloria Ware to vice chair.
BRAVO WELLNESS: Kevin Bodi, Joe Clark and David McGlennen to vice presidents, business development.
ENGINEERSâ€™ COUNCIL: Mrityunjay Singh (Ohio Aerospace Institute) reeived the Distinguished Engineering Achievement Award.
IGAF POLARIS: Laura Culp (Brockman, Coats, Gedelian & Co.) received the Tax Planner of the Year Award.
Send information for Going Places to firstname.lastname@example.org.
Â‡ Â‡ Â‡ Â‡ Â‡ Â‡ Â‡ Â‡ Â‡ Â‡
WEâ€™RE THERE, BECAUSE EVERY CONNECTION MATTERS. SM
Weâ€™re there with reliable Cox Business Internet, VoiceManager and TV. Because every connection matters, and so does your bottom line.
Call 1-866-791-2688 or visit us at coxbusiness.com and connect with Cox today. *Offer valid until 4/1/12 to new commercial subscribers of Cox Business InternetSM and/or Cox Business VoiceManagerSM serviceable locations. Minimum 2-year service contract required. Offer includes monthly service fees for the ďŹ rst 24 months of Cox Business Internet with download/upload speeds of 6 Mbps/2 Mbps, 1 Cox Business Basic VoiceManager with Cox Service Assurance Plan and Unlimited Long Distance). Discounted Phone line, Cox Service Assurance and Unlimited calling plan may be extended up to 8 lines (excludes usage, long distance, Voice Mail and features). Offer does not include installation, construction, inside wiring, usage, equipment, applicable taxes, surcharges or fees. Telephone modem equipment is required. Modem uses electrical power to operate and has backup battery power provided by Cox if electricity is interrupted. Telephone service, including access to e911 service, will not be available during an extended power outage or if modem is moved or inoperable. Telephone services are provided by Cox Connecticut Telcom, LLC. Cox cannot guarantee uninterrupted or error-free Internet service or the speed of your service. Actual speeds vary. Rates and bandwidth options vary and are subject to change. Discounts are not valid in combination with or in addition to other promotions and cannot be applied to any other Cox account. Services not available in all areas. Other restrictions apply. ÂŠ2012 CoxCom, Inc., d/b/a Cox Communications New England. All rights reserved.
LEGAL MARKETING ASSOCIATION: Jeff Dennis to president; Ryan Daniels to immediate past president; Liz Boehm to president-elect; Bill
Get Business Voice & Internet for only
FRIEDMAN & FREY LLC: Ronald L. Frey to partner. HURTUK & DAROFF CO. LLP: Mark B. Radefeld to partner; Haley A. Debevec to associate.
In business, every connection matters.
COHEN & CO.: Pamela Dunlap to partner.
METROHEALTH: Dr. Matthew Tien, pediatrician; Dr. Lori Hollins, obstetrics/gynecology; Jeffrey Prewitt to director, environmental services and patient transportation; Kimberlee Trumbo to operations manager,
THE HOFFMAN GROUP: Tim Bialowas to producer, account executive; Stephanie Bahner to agency support technician.
FINANCIAL SERVICE CLEVELAND INTERNATIONAL FUND: Stephen Strnisha to chief financial officer; Kristen Laughlin to vice president, global markets.
Global commercial real estate expertise
-DFN:'UHVFKHU .HQQHWK5<DQWHN *UHJRU\%:HVW 'LDQD&*RORE 0LFKDHO-2FFKLRQHUR .HYLQ-.XF]\QVNL 5XVVHOO35RJHUV &KULVWRSKHU-+RQGOLN /DZUHQFH).HOO -RVHSK-0DUWDQRYLF
CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
17 HEALTH COACHES NOW PLAYING BIGGER ROLES.
A MODEL FOR THE CITIZENS? With odds stacked against them, publicly owned hospitals wonder what future might hold
In hiring, not all jobs are equal anymore Midlevel practitioners squeezed by hospitals targeting experience By JENNIFER KEIRN email@example.com
By TIMOTHY MAGAW firstname.lastname@example.org
controlled health care institutions throughout the country even are questioning whether the business models that have governed their operations for decades and, in some cases, centuries are becoming obsolete, at least in their current forms. “Local governments are not flush with cash right now, and they’re struggling with their own issues,” said MetroHealth CEO Mark Moran, who announced plans in December to step down from his post once a successor is named. “I’ve said it before: Public hospitals are an endangered species.”
he MetroHealth System and its public hospital counterparts around the country are caught between a rock and a hard place. With many facilities nearing the end of their useful lives, exploding charity care rolls and dwindling taxpayer support, these providers are finding it difficult to compete with their for-profit and nonprofit peers while continuing to care for the poor and compete for paying patients. Some administrators at publicly
See MODEL Page 18
METROHEALTH: A YEAR IN THE HEADLINES JAN. 27, 2011
MetroHealth finishes 2010 with third consecutive surplus
Eyeing wide-ranging upgrade, hospital hires architect to put together master plan
MetroHealth plans $23 million health center in Middleburg Heights
MetroHealth CEO Mark Moran to exit health system’s top post
JAN. 9, 2012
CFO Sharon Kelley leaving post
Metro to freeze hiring, cut back on consultants to head off operating loss
Metro to lay off 104 employees, eliminate 151 vacant jobs
MetroHealth long-term debt rating downgraded by Moody’s Investors Service
County exec Ed FitzGerald to put his stamp on MetroHealth
MetroHealth posts $2.7 million loss in 2011, but sees better times ahead
ealth care is widely regarded as a safe harbor in an otherwise stormy job market. But evolving standards of care and new regulations from government and accrediting bodies are shifting the winds, carrying health care into new hiring waters. Case in point: that nursing shortage we all hear about? “Right at this moment, this year, there is not a nursing shortage,” said Kim Shelnick, vice president of recruitment and staffing at University Hospitals. “In the war for talent, (the hospital systems) are all fighting for experienced RNs.” “Experienced” appears to be the key word. Ms. Shelnick and other health care experts and employers agree that lower-skilled patientcare positions — such as licensed practical nurses (LPNs) — are the jobs most at risk. “Our strategy is to bring in bachelor’s-prepared nurses (BSNs) as much as possible because of the education and training that they have,” said Kyle Klawitter, vice president of human resources for Summa Health System, which laid off 10 LPNs in October in favor of hiring RNs. Just weeks before Summa’s announcement, Akron General Medical Center laid off 70 LPNs. The plight of the LPN points to a larger trend in health care hiring: a squeeze on midlevel practitioners. According to Ms. Shelnick, shortages of physicians in lessspecialized fields such as family medicine have created a downward push of responsibilities to nurse practitioners and physician assistants, who are credentialed to deliver higher levels of care — such as prescribing some medications — than RNs. Meanwhile, higher standards of care create greater demand for experienced RNs with bachelor’s degrees, starving LPNs and RNs with associate degrees (ADNs) out of the acute-care setting. “It’s a big swing,” she said. “Last year we filled over 1,000 RNs, and only a couple LPNs. We’ll eventually go toward having none.” See HIRING Page 16
16 CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
Hiring: Demand to grow in many fields Hospitals’ incentive to continued from PAGE 15
That’s not to say that the demand for nurses who haven’t earned a bachelor’s degree, like LPNs and ADNs, has vanished. Labor projections from the Ohio Department of Job and Family Services estimate a 17.4% increase in demand for LPNs by 2018, “but they’re being pushed out of the acute setting into occupational health, physicians’ offices and long-term care,” says Jillian Bushner, director of health care at Allied Staffing Solutions in Independence. When she sees LPNs and ADNs come through her office for outplacement services, she encourages them to cast a wider net toward health care jobs in other settings or with similar education requirements. In her most recent reports,
Ms. Bushner said she had 600 postings for medical assistants and 350 for physical and speech therapy assistants. “The numbers are astronomical,” she said. Demand for home health aides will nearly double by 2018, according to Ohio’s labor projections, while aides and assistants to physical and occupational therapists are expected to grow about 30%. Other top growth areas include dental hygienists, pharmacy technicians and surgical technologists. “We have to educate them,” says Cuyahoga Community College’s Barbara Mikuszewski of students who enroll in Tri-C’s health careers program. Many enter thinking primarily of a career in nursing — particularly students in their teens
BUSINESS● We bring the bank to you.
term loans* for
*Great rates & most current terms are available, subject to credit approval & other program terms
and early 20s — “but we direct them to where the jobs are,” said Ms. Mikuszewski, associate dean of the program. They’re listening. There’s so much interest in physical therapy and occupational therapy assistant majors that Tri-C has a waiting list into 2013’s fall semester. Ms. Mikuszewski also said the school is struggling to keep up with demand for medical assistant graduates.
Off the floor In health care, perhaps more than in other sectors, the key to job security is a willingness to pursue advanced education, agree Ms. Shelnick and Ms. Klawitter. New licensing requirements for physical and occupational therapists now require a doctorate, which leaves Ms. Shelnick worried about a possible shortage in those professions. New expansion into electronic medical records will require BSNs with technical aptitude who can enter the health informatics field, which bridges the gap between clinical and IT environments. And new medical coding requirements will drive an enormous need for talented coders in the coming months. Back at Summa, Ms. Klawitter and her team are working closely with local educational institutions to generate the kind of work force they need, and creating programs like tuition credit that will help employees advance their education. “We don’t want people to get into health care because there’s a demand and it pays well,” Ms. Klawitter said. “I would rather people find out in advance whether or not it’s for them.” ■
aloney + Novotny LLC has extensive experience in the healthcare sector, serving long term care facilities (including for-profit and nonprofit organizations) such as skilled nursing centers, retirement communities and assisted living facilities, as well as dialysis centers, home health agencies and other healthcare providers. Mike Mullee We provide a variety of accounting, tax and consulting Shareholder services to include: • Cash flow forecasting, budgeting and long-range planning • Feasibility study and financial projections related to expansion and acquisition projects • Revenue enhancement and accounts receivable management • Preparation and review of Medicaid and Medicare cost reports • Assistance in financing alternatives • Preparation of federal and state forms and consultation on various tax matters
please patients grows By DAN SHINGLER email@example.com
ospitals today don’t just want their patients to get better, they want them to feel better while they’re hospitalized — and soon they’ll have millions of dollars riding on whether they do. Beginning next year, Medicare is instituting what’s known as “valuebased purchasing.” That means hospitals will have a portion of their Medicare reimbursements based on the quality of their care and on how well patients rate their hospital experiences. Only 1% of Medicare revenues will be at risk initially, with the amount increasing to 2% by 2013, but that small percentage quickly adds up to millions of dollars per hospital, say health care professionals. “It absolutely does,” said Dr. James Merlino, chief experience officer for the Cleveland Clinic and that organization’s point man on improving patient satisfaction. “There were very few hospitals that paid attention to this before valuebased purchasing came on the scene. Now, I think that’s the primary driver.” But, while many other hospitals around the nation might be playing catch-up, some of the larger institutions in competitive markets and industry leaders, including at least two in Northeast Ohio, have been working on the issue for some time. In 2009, the Clinic was the first major hospital in the U.S. to create the position of chief experience officer or CXO, said Dr. Merlino, who is the second doctor to hold that post at the clinic. That was only part of the Clinic’s organizationwide effort to put patients first and increase their satisfaction, he said. “We’ve made tremendous progress,” Dr. Merlino said. “When you look at our trends for the past few years, the rate of satisfaction and recommendation is way up and complaints are way down.”
Customer service The changes at the Cleveland Clinic include steps such as ensuring that patients who call in the morning can see a doctor that same day or requiring that no one on the hospital
staff ever walks by a room with the attention light on without checking to see what the patient needs. Behind the scenes, all 42,000 of the Clinic’s employees received at least a half day of training and were engaged in the process of changing the organization’s culture. It’s no longer enough to just provide the best care — it has to be provided in the best way, Dr. Merlino said. “The Clinic was always known for high-volume, high-quality care,” Dr. Merlino said. “But our patients sometimes didn’t like us much.” The concept also has been adopted by University Hospitals, where chief nursing officer Cathy Koppelman leads the initiative to improve patient satisfaction. Like the Clinic and other progressive hospitals, UH also began working on the issue long before its Medicare payments came into question. About three years ago, each of UH’s hospitals formed interdisciplinary committees to institute ways to increase patient satisfaction. Among other changes, rules were set up to ensure that patients were fully informed with regards to what to expect from their hospital experience, from entrance to discharge, and procedures were incorporated for patient followups and home caregiver collaboration. “It’s really remembering that, when someone comes to us, they’re coming because they have an injury or illness or something that they don’t know what it is — and they’re vulnerable,” Ms. Koppelman said. “You see (the workings of a hospital) every day if you’re a nurse or a doctor. Patients don’t.”
Ahead of the curve Hospitals such as the Clinic and UH are ahead of the curve, said Dr. Bridget Duffy, CEO of ExperiaHealth in San Francisco. A national expert on patient satisfaction, Dr. Duffy was the Clinic’s first CXO and held that post from 2006 to 2009, but has been working with various hospitals on improving patient satisfaction for 20 years. Most of that time, she was alone in the wilderness, but these days Dr. Duffy is very much in demand, she said. “There’s a huge interest in this now, because there’s money tied to it,” Dr. Duffy said. ■
Action Management Services Earning the trust of Northeast Ohio professionals for over 30 years.
Professional -- Honest To The Point • Executive Search • Professional Placement • Consulting
+ Business Advisors and Certified Public Accountants
+ Cleveland 216.363.0100 Canton 330.966.9400 Elyria 440.323.3200 maloneynovotny.com
Management Services 6055 Rockside Woods Blvd. Cleveland, OH 44131
TAKE ACTION TODAY!
FEBRUARY 6 - 12, 2012
CRAIN’S CLEVELAND BUSINESS 17
Increasingly popular, coaches help design wellness game plans By AMY ANN STOESSEL firstname.lastname@example.org
nce a more niche specialty, health coaches are starting to pop up everywhere from institutional settings to workplaces and community programs as rising health care costs are putting an increased focus on proactive and preventive medicine. In a nutshell, coaches collaborate with patients to create personalized health plans and work with them to reach their goals. They are used for any number of purposes, from the management of a chronic condition to a desire for improved overall health or as a way to quit smoking. “It really is making sure the individual is the center point of their own health care team,” said Dr. Karen Lawson, director of the University of Minnesota’s health coaching track, a two-year, 360-hour graduate-level program. “It’s really putting the person back in the driver’s seat. … The health coach is really designed to be a partner.” In Northeast Ohio, employers, health care providers and insurers increasingly seem to be getting on board with the concept, with many saying it’s a field growing in both popularity and potential. The Cleveland Clinic’s Wellness Institute, for one, within the past year added coaching to its general lifestyle management programs, said Emily Fox, administrator for the Center for Lifestyle Medicine. Three coaches now are available as part of the general menu of services. “The No. 1 key is really being able to build relationships with the patient,” she said. “It really is based on helping the patient come to the conclusion of what they have to do.”
Medicare billions. The pilot project is aimed at those hospitalized for several select diagnoses, including pneumonia and heart failure. Melissa Pessefall, a registered nurse with the agency, said the coaching process is really centered on the patient’s focus. Coaches visit with patients in the hospital, track their discharge and follow up at home. This isn’t the senior services agency’s first foray into transition coaching. It also collaborates with SummaCare insurance, and it conducted a small independent demonstration project that netted a
reduction in hospital readmission rates from the high teens/low 20s to about 2%. Both Mr. Cook and Ms. Pessefall stressed that coaching — while potentially having a positive effect on the numbers side of health care — is about empowering the patient. “We try to come together with a mutual health goal,” Ms. Pessefall said. “If I don’t get their buy-in, it doesn’t matter.”
The right direction Janine E. Janosky, who leads the Austen BioInnovation Institute in Akron’s Center for Clinical and
Community Health Improvement, said the projection is that there is going to be a strong need for health coaches in the future. Dr. Janosky — who is heading the ABIA’s Accountable Care Community initiative, a new effort to promote a healthier community and identify system gaps — has seen the effectiveness of coaching over the past year through a diabetes management program. There have been positive results seen among the participants including psychological, behavioral and body changes. “We’ve found them very successful,” she said.
Gloria Treister, meanwhile, is not surprised to see the shift in focus toward the use of health coaches. Her business, Wellness Evolution in Beachwood, has been operating in the customized care sphere since 2004, utilizing a range of practitioners, including a coach, naturopathic doctors and acupuncturists. “I think people in the general public are getting fed up with having drugs shoved down their throats,” said. “I think the nicest thing about having a health coach is that they can put people in the right direction.” ■
Thanks to those who proudly support MetroHealth comebacks like ours.
Bottom-line results Personal attention aside, coaching programs often are instituted with money matters in mind. Amy French, director of marketing and human resources at OEConnection in Richfield, said coaching was a natural fit with the firm’s wellness culture, but there were potential benefits to the company’s bottom line as well. Coaches, provided through ERC Health, visit OEConnection twice a month, and in 2011 roughly 94% of OEConnection’s 200 employees participated in some sort of coaching interaction. And for those who sought help on specific issues, the results speak loud and clear: 20% increased weekly exercise habits; 72% lost weight; 63% reduced body mass index; and 67% lowered blood pressure. “It’s no secret this is dual-purposed,” Ms. French said. “All of these things are a proactive effort to keep our associates healthy and to manage health care costs.” The Uniontown-based Area Agency on Aging, which serves Portage, Stark, Summit and Wayne counties, also is aiming for measurable results from coaching. Specifically, its target is a 20% reduction in hospital readmissions. The organization recently was among those awarded a contract by the Centers for Medicare and Medicaid Services to provide coaches to patients leaving the hospital. Gary Cook, chief operating officer for the agency, said avoidable hospital readmissions cost
Thousands of donors made 2011 MetroHealth’s best fundraising year ever. To support comebacks, visit donate.metrohealth.org or call Kate Brown at 216-778-7509.
PROUD SPONSOR OF THE COMEBACK™ FOR 175 YEARS
18 CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
Model: Some systems may consider nonprofit status continued from PAGE 15
“I TRUST NATIONWIDE® WITH MY EMPLOYEES’ BENEFITS.” — Dale Earnhardt Jr. You can rely on Nationwide Employee BeneﬁtsSM, too. đŏLife/AD&D
đŏAccident and Hospital Ca$hBackSM
Call 888-674-0385 or go to nationwide.com/neb to learn more
Paid endorsement. © 2011 JR Motorsports, LLC. The name and likeness of Dale Earnhardt Jr. and other related trademarks and copyrights are used with permission of Hendrick Motorsports, LLC and JR Motorsports, LLC. The NASCAR Nationwide Series logo and word mark are owned and used under license by the National Association for Stock Car Auto Racing, Inc., and Nationwide Mutual Insurance Company. NASCAR® and the NASCAR logo are registered trademarks of the National Association for Stock Car Auto Racing, Inc. 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
However, a public hospital’s business model isn’t driven solely by how much money it receives from taxpayers or the regulatory requirements attached to being a public body, such as open records laws or the responsibility to contribute to public employees’ lucrative retirement plans. In a large part, it’s dependent upon the patients it serves. For one, MetroHealth last year received a $36.1 million subsidy from the county but absorbed $131 million in uncompensated care, an increase of 14.8% from the previous year. “That really drives the whole business model — it drives the resources we have to be available to invest in facilities, drives the resources we have to invest in service lines, and it determines what we’re able to pay people,” Mr. Moran said. It’s an equation that can lead to casualties: In November, for example, MetroHealth laid off 104 employees and eliminated 151 vacant positions as it sought to head off heavy operating losses. MetroHealth’s financial troubles and uncertain future aren’t unique among similar institutions. In fact, nationwide, the number of publicly controlled hospitals around the country declined about 4.6% between 2006 and 2010, according to the most recent data from the American Hospital Association. On the contrary, the number of nonprofit institutions fell by less than 1% and the number of investor-owned hospitals increased by almost 14%.
Still gotta compete
This house is absolutely indescribable and truly one of a kind! Private 8+ acre enclave offering extraordinary landscaping and views. Long winding drive through woods opens into the front of this magnificent all brick transitional manor home. A walk-out lower level second to none! Full bath, wine cellar and an indoor pool complex with retractable glass ceiling! Absolutely breathtaking!
Absolutely magnificent home offering the finest quality and attention to detail! A true in-town estate sited on over 1.25 acres with pool, extraordinary cabana/pool house and magnificently landscaped grounds. Every luxury and amenity are offered including a fabulous floor plan designed for entertaining. A grand 2 story foyer with circular stairs, exquisite paneled library imported from England and true gourmet dream kitchen.
Absolutely beautiful home located on a quiet cul de sac street offering privacy and serenity! Impressive entry set back off the street with major front landscaping and grounds.The first floor highlights include a magnificent vaulted and beamed great room with spectacular stone fireplace and gracious library with fireplace.
Gorgeous custom built home with outstanding quality and a fabulous open and flowing floor plan highlighted by magnificent wood floors,wall of windows and 8' doorways! Dramatic covered front entry,gorgeous entry foyer opening into the spectacular great room with slate fireplace,free standing bar and built-in entertainment center.
When buying or selling your home.
Just ASK Adam S. Kaufman 216.831.7370
Check out all of Adam’s listings at www.justaskadam.com
#1 State of Ohio Company Top Producer Pepper Pike Office: 28879 Chagrin Blvd., Woodmere, OH 44122
Because of the financial losses public health care systems stomach by caring for the uninsured, which they’re often required to do by law, many have found it difficult to reinvest in their facilities. MetroHealth officials, for example, note it would cost $435 million over the next five years just to maintain the hospital’s current facilities on West 25th Street in Cleveland, much less provide for expansion. And with 32 million of the uninsured slated to be added to the insurance rolls across the country by 2014 under the federal health care overhaul, public hospitals are bracing for an even more competitive market. How it might pan out is anyone’s guess, but some observers predict that the newly insured might migrate from the public hospitals they traditionally used and instead patron other health systems with newer facilities. “If individual mandate is implemented, now (the newly insured) will not only have coverage but choice,” said Jonathan VanGeest, associate professor of health policy and management at Kent State University. “These very same hospitals that have been struggling for years now have to become competitive in that type of market. It’s going to be a real challenge.” Mr. Moran said the expansion of insurance coverage under health care reform could be viewed as a lifeline for public hospitals if those
patients stick with the system. However, he added that it would be “unrealistic to expect that expansion of coverage is going to come without a reduction in reimbursements rates.” Every health care system regardless of its ownership is interested in exploring new ventures that might generate more revenue in the challenging health care environment. However, being a publicly owned hospital presents its own set of constraints, according to Stephen Colecchi, president and CEO of Robinson Memorial Hospital in Portage County. Robinson Memorial, which unlike some of its peers doesn’t receive taxpayer support, is looking to drop its county-owned status and convert to a nonprofit. Simply put, dropping the county-owned status would offer the hospital more autonomy over its operations, allowing it to operate more in lockstep with hospitals owned by the Cleveland Clinic or Summa Health System. Mr. Colecchi said the current arrangement prevents the hospital from entering into new business ventures with for-profit providers as other systems have done in the region. Likewise, being a public entity limits the types of investments the hospital can make. “Over the years, we’ve left millions of dollars on the table in terms of investment,” Mr. Colecchi said.
Changing the perception Meanwhile, many observers suggest that muscling up the payer mix with more commercial insured patients could be the saving grace for some public hospitals. Still, luring more patients with commercial insurance to a public hospital is challenging, particularly from a marketing standpoint. MetroHealth already announced plans to invest heavily in a slate of new community health centers in the coming years, the first being a $23 million facility in Middleburg Heights. MetroHealth, whose payer mix in 2011 was comprised of about 25% of the commercially insured, has been attempting to position itself as a provider offering the quality of a top-tier academic medical center at an affordable cost in order to lure in more paying patients who have a choice in the crowded market, Mr. Moran noted. “That’s a very different brand positioning than ‘taxpayer-assisted hospital for the poor,’” Mr. Moran noted. Broward Health, the taxpayerfunded health system in Broward County, Fla., struggled with a similar problem and went so far as changing its name about five years ago. The system had been known as the North Broward Hospital District. “Our research showed it was telling people if they had insurance, they wouldn’t go there. It was in their mind,” said Sara Howley, Broward Health’s chief communications and marketing officer. “We needed to do something to let everyone know we take care of everyone regardless of ability to pay.” ■
FEBRUARY 6 - 12, 2012
CRAINâ€™S CLEVELAND BUSINESS
NE OHIO SOFTWARE DEVELOPERS RANKED BY LOCAL FULL-TIME EMPLOYEES Number of full-time employees Name Address Rank Phone/Web site
Hyland Software Inc. 28500 Clemens Road, Westlake 44145 (440) 788-5000/www.hyland.com
Full-time 1-1-2012 1-1-2011 programmers Industry specialization
Year Top local executive founded Title
Health care, higher education, government, financial services, insurance, manufacturing
OnBase, enterprise content management software suite
A.J. Hyland president, CEO
Micros-Retail 30500 Bruce Industrial Pkwy., Cleveland 44139 (440) 498-4414/www.micros-retail.com
Retail, including stores and direct commerce
Xstore Java POS, Open Commerce Platform, XBR Loss Prevention, Relate CRM, Store21 Specialty Retail POS
Jeremy Grunzweig COO
Snap-on Business Solutions Inc. 4025 Kinross Lakes Parkway, Richfield 44286 (330) 659-1600/www.sbs.snapon.com
Global electronic parts catalogs
Timothy L. Chambers president
MRI Software LLC 20800 Harvard Road, Cleveland 44122 (800) 321-8770/www.mrisoftware.com
Business solutions for commercial and residential property management and real estate portfolio management
MRI Commercial, MRI Residential, Workspeed, Bostonpost, VaultWare
David M. Post CEO
TMW Systems Inc. 21111 Chagrin Blvd., Beachwood 44122 (216) 831-6606/www.tmwsystems.com
Trucking and logistics software
TMWSuite, TL2000, TruckMate, Innovative, IDSC Netwise, IDSC ExpertFuel, TMT Fleet Maintenance, Appian DirectRoute
David W. Wangler president, CEO
OEConnection 4205 Highlander Parkway, Richfield 44286 (330) 523-1800/www.oeconnection.com
Online parts and service exchange in the automotive original equipment parts business
D2DLink, D2DLink Plus, D2D Express, CollisionLink, CollisionLink Plus, LinkIQ, ServiceAdvantage, RepairLink with MORE
Charles Rotuno president, CEO
Turning Technologies 255 W. Federal St. , Youngstown 44503 (330) 746-3015/www.turningtechnologies.com
Student and audience response solutions
TurningPoint, TurningPoint AnyWhere, RemotePoll, TurningKey, ResponseWare, PresenterWare, ResultsManager
Mike Broderick CEO, co-founder
BrandMuscle Inc. 3750 Park East Drive, Beachwood 44122 (216) 464-4342/www.brandmuscle.com
BrandBuilder, BrandPlanner, BrandWorkshop, BrandLibrary, Digital Asset Manager
Philip Alexander CEO
SageQuest 31500 Bainbridge Road, Suite 1, Solon 44139 (888) 837-7243/www.sage-quest.com
HVAC, telecom, cable, construction, plumbing and security industries
Dennis Abrahams COO
Virtual Hold Technology LLC 3875 Embassy Parkway, Suite 350, Akron 44333 (800) 854-1815/www.virtualhold.com
Technology, software, telephony, virtual queuing
Virtual Hold, Multi-Channel Virtual Hold, Rapport
Kevin Sjodin CEO
Knotice 526 S. Main St., Suite 705, Akron 44311 (800) 801-4194/www.knotice.com
Direct digital marketing
Brian Deagan CEO
Foundation Software 150 Pearl Road, Brunswick 44212 (330) 220-8383/www.foundationsoft.com
Accounting software for construction
Foundation for Windows
Fred Ode chairman, CEO
MIM Software Inc. 25200 Chagrin Blvd., Suite 200, Cleveland 44122 (216) 455-0600/www.mimsoftware.com
MIM, Mobile MIM, MIMcloud
Dennis Nelson president, CEO
Software Answers Inc. 6770 W. Snowville Road, Suite 200, Brecksville 44141 (440) 526-0095/www.progressbook.com
Web-based K-12 student, classroom and school management - online grade book, lesson planning, report cards
ProgressBook, GradeBook, ParentAccess, StudentInformation (SIS), VirtualClassroom, DataMap, SpecialServices, Snapshot
Paul Chaffee CEO, CFO
TOA Technologies 3333 Richmond Road, Suite 420, Beachwood 44122 (216) 360-8106/www.toatech.com
Mobile work force and customer appointment management software as a service (SaaS)
ETAdirect SR, ETAdirect Manage, ICC (ETAdirect Notify and ETAdirect PAS)
Yuval Brisker president, CEO
Main Sequence Technologies Inc. 4420 Sherwin Road, Hamilton Hall, Willoughby 44094 (440) 946-5214/www.pcrecruiter.com
HR applicant tracking, recruiting CRM, staffing software
PCRecruiter, PCRecruiter Resume Inhaler, PCRecruiter Outlook Portal, MacRecruiter
Martin H. Snyder, president; William F. Kubicek IV, vp, marketing
Easy2 Technologies 1220 Huron Road E., 7th floor, Cleveland 44115 (216) 812-3200/www.easy2.com
Consumer product manufacturers and retailers
MYO (Make Your Own) Demo
Ethan Cohen CEO
ID Networks Inc. 7720 Jefferson Road, Ashtabula 44004 (440) 992-0062/www.idnetworks.com
Software solutions for law enforcement agencies
Jail Management, Records Management, ImageNet, FingerRoll Livescans, CAD and Mobile Systems
Douglas Blenman Sr. president
New Innovations Inc. 3743 Boettler Oaks Drive, Uniontown 44685 (330) 899-9954/www.new-innov.com
Residency Management Suite
Steve Reed CEO
Tribute Inc. 1696-F Georgetown Road, Hudson 44236 (330) 656-3006/www.tribute.com
Industrial distribution, fluid power, hose, seals, power transmission, automation, industrial controls and related industries
Tribute Software, TrulinX Software
Timothy Reynolds president
Data-Basics Inc. 9450 Midwest Ave., Cleveland 44125 (216) 663-5600/www.databasics.com
Service management and accounting
SAM Pro Enterprise, TechAnywhere 3.0, Escalation Manager
Arthur K. Divell CEO
Imaging Science and Service Inc. 95 Executive Parkway, Suite 500, Hudson 44236 (330) 342-7760/www.issimage.com
Regulatory document compliance - sales and use tax exemptions, freight forwarding, product liability risk management
TEAMS Express, LineLink
Philip C. Hodge CEO
FeneTech Inc. 1455 Danner Drive, Aurora 44202 (330) 995-2830/www.fenetech.com
Ronald W. Crowl president
PreEmptive Solutions LLC 767 Beta Drive, Mayfield Village 44143 (440) 443-7200/www.preemptive.com
Software security, application analytics
Dotfuscator, DashO, Runtime Intelligence
Gabriel Torok CEO
Urbancode Inc. 2044 Euclid Ave., Suite 600, Cleveland 44115 (216) 858-9000/www.urbancode.com
Maciej Zawadzki CEO
Pointe Blank Solutions Ltd. 7055 Engle Road, Suite 304, Middleburg Heights 44130 (440) 243-5100/www.pointeblank.net
Health care, government
CasePointe, PropertyPointe, LivingPointe, ProjectPointe, DocuPointe
Thomas J. Coury chairman, chief software architect
Associated Software Consultants Inc. 7251 Engle Road, Suite 400, Middleburg Heights 44130 (440) 826-1010/www.asconline.com
Mortgage and consumer lending software solutions for mortgage banks, community banks, credit unions and midsize lenders
PowerLender Loan Origination & Processing System, PowerSeller Secondary Marketing System
Timothy W. Liston president
Monarch Teaching Technologies Inc. 20600 Chagrin Blvd., Suite 703, Shaker Heights 44122 (800) 593-1934/www.monarchtt.com
Terry Murphy CEO
Specialized Business Software 6325 Cochran Road, Unit 1, Solon 44139 (440) 542-9145/www.specializedbusinesssoftware.com
Financial services, government, technology Docunym Document Imaging and Workflow
Steve Wiser president
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.
RESEARCHED BY Deborah W. Hillyer
CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
FitzGerald: Plan could be statewide example 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. Hillyer (email@example.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (firstname.lastname@example.org) Marketing/Events coordinator: Jessica Snyder (email@example.com) Advertising sales manager: Nicole Mastrangelo (firstname.lastname@example.org) Senior account executive: Adam Mandell (email@example.com) Account executives: Dawn Donegan (firstname.lastname@example.org) Andy Hollander (email@example.com) Office coordinator: Toni Coleman (firstname.lastname@example.org) Digital strategy and development manager: Stephen Herron (email@example.com) Web/Print production director: Craig L. Mackey (firstname.lastname@example.org) Production assistant/video editor: Steven Bennett (email@example.com)
continued from PAGE 1
a trajectory” for real consolidation of services now. “The idea that it somehow just will happen is wrong.” Mr. FitzGerald said county officials have set their sights on 30 services that they believe the county can offer at a lower cost than communities can provide themselves. Mr. FitzGerald has emphasized that he has no interest in forcing county services on communities. “Cities don’t have to agree to any of these things,” he said “But if we can show we can provide these services for less money and more professionally, it will create an economic incentive. Local officials will have to justify (to voters) why they’re not using the county service.”
Timing is everything Mr. FitzGerald’s proposal comes after Cuyahoga County’s first year of government under a single county executive. Only Summit County also has replaced its three-person board of commissioners and the handful of other elected county officials, a form of government still practiced in 86 of Ohio’s 88 counties. Mr. FitzGerald said while he had some vision of what he wanted to do a year ago, he believed he needed to restore public faith in a county government shaken by a widespread corruption scandal before he could speak credibly about the change he envisioned. “This is the year to define a longterm plan for the county,” he said. “If I had proposed this a year ago, it would have been premature because the county hadn’t proven itself as a trusted provider of services.” Several local mayors and city council members who listened to his presentation of the Western Reserve Plan appeared willing to hear Mr. FitzGerald out. “Ed’s vision is outstanding,” said
Warrensville Heights Mayor Brad Sellers. “I’m leaving here with ideas dancing in my head. “It’s great to hear somebody get outside their normal boundaries.” Cleveland Mayor Frank Jackson, who has made his own proposals for sharing services, also is willing to hear about what Mr. FitzGerald will be offering. “He hit the right points — get rid of redundancy, lower the cost of service delivery,” the mayor said. “I’ve always been supportive of collaboration.”
Giving it a go in Parma Mr. FitzGerald’s concept would be new to Ohio, though it has been used elsewhere, notably in California and Georgia, where the communities are called “contract cities,” and city councils and small staffs bid out all local services to the county or nearby cities. Places such as Lakewood, Calif., and Sandy Springs, Ga., were created when rapidly growing unincorporated areas decided to become cities and were faced with the big, upfront expense of buying police cars and fire and garbage trucks and hiring and training new staffs. Instead, they contracted with existing communities, or private service firms, for police and fire protection, garbage collection and road repair work. Cuyahoga County already has begun a pilot project with the city of Parma. As the county is installing some new information technology programs, it is extending those programs to the suburb. Likewise, if the county is seeking bids for 500 personal computers, in a theoretical example offered by Jeff Mowry, the county’s chief information officer, it would be easy to expand that bid to 520 computers for a suburb such as Parma. Under Mr. FitzGerald’s vision, the
county even could negotiate a single health insurance program covering county and municipal employees that, because of the increased clout of a larger group, could cost cities less. Mr. FitzGerald concedes it easily could take a decade before all the services the county could provide are rolled out. But he maintains that cost pressures on communities eventually will force further consolidation of services.
Potential role model? Kevin O’Brien, director of the Center for Public Management at Cleveland State University, shares that view. “You’ve got to applaud the guy for doing more than his predecessors in being willing to look into relieving the burden on local government,” said Mr. O’Brien, who has studied many efforts across the country to create collaborative government services. “And he can begin to define the role of county government not just for Cuyahoga County, but for the rest of the state.” Mr. O’Brien and his center have helped communities as they’ve begun to share services such as police and fire dispatch, SWAT teams, bomb squads and water rescue units. But he also believes basic safety services can be improved through consolidation. His confidence is based on seeing how sprawling communities such as Austin, Texas, are able to provide quality police service. When faced with large capital expenses to replace aging computer systems, fire vehicles and other equipment, Mr. O’Brien said, communities will be willing to turn to the county. “Only the county has the debt capacity to buy the best equipment,” he said. But Mr. O’Brien expects that cities will prefer to retain some ser-
INSIDE THE PLAN The Western Reserve Plan will focus on these 12 key areas: ■ Implementing a practical strategy for creating a functioning, countywide metropolitan government. ■ Establishing Greater Cleveland as a center of entrepreneurship and job growth. ■ Designing a place-based development strategy that recognizes the centrality of downtown Cleveland to the region as a whole. ■ Aligning and coordinating both public and private resources around our most pressing human service needs. ■ Identifying education, from early childhood forward, as the central factor in individual and community success. ■ Embracing a health and wellness culture that mirrors the excellence of our major medical institutions. ■ Incorporating economic inclusion as a guiding principle in our economic development strategy. ■ Branding our metropolitan area as an international city that harnesses the energy of our younger generations. ■ Adopting a collaborative approach to the foreclosure crisis — from prevention to restoration. ■ Honoring the service of our veterans by giving them priority in hiring, training and education. ■ Protecting our county by leading a county-wide public safety initiative. ■ Creating a culture within county government that implements nationally recognized good government practices and innovations. SOURCE: CUYAHOGA COUNTY/ WWW.WESTERNRESERVEPLAN.ORG
vices, such as senior centers and perhaps data collection that requires maintaining confidentiality. ■
Graphic designer: Lauren M. 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)
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 firstname.lastname@example.org, 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
Wind: Observers fear industry growth in foreign markets continued from PAGE 1
their projects completed this year, but few have any plans for U.S. installations in 2013, observers say. “The production tax credit expires in 2012 and, with uncertainty going into 2013, it’s caused many developers to accelerate their turbine installations this year. So we’ll have a bumper year this year,” said John Grabner, president of Cardinal Fastener in Bedford Heights, which supplies large bolts used in wind turbines. “But if the (credit) does not get passed for an extension, it could be a cliff in 2013.” Not could be — will be, says Ed Weston, director of the Clevelandbased Great Lakes Wind Network. “The pipeline is already emptying fast,” Mr. Weston said. Because it takes so long to site, permit and develop a wind farm, Mr. Weston, said developers plan their projects years in advance. That means they’re either pushing to finish installations this year before the tax credit expires, or are not pushing them at all in the United States, Mr. Weston said. Recent announcements support Mr. Weston’s assertion. The Danish turbine maker Vestas announced last month it was cutting 2,335 jobs worldwide, including 182 in the United States. Worse yet,
Vestas said it could end up cutting another 1,600 of its U.S. workers if the United States does not extend or renew its production tax credit. Likewise, Spanish wind energy developer Iberdrola Renewables said it was cutting 50 jobs in the United States and was suspending its U.S. developments planned beyond the end of this year. It also cited the lapsing tax credit as its rationale.
Rushing toward a cliff The anticipated slowdown won’t hit all the wind industry at once, with many in the sector feeling the drop in activity long before the end of this year, say industry experts such as Mr. Weston. Those at the start of the supply chain, such as companies that sell steel or components to blade and turbine manufacturers, will be hit first, Mr. Weston said, because the turbines installed in the fall will be made in the spring and summer. Companies that make bolts and other parts for final turbine installations will be affected later, Mr. Weston said. Mr. Grabner agreed, predicting his company will be busiest in August and September this year as it makes bolts for final installations, but probably will see a slowdown in its wind business thereafter.
Another manufacturing executive, who asked not to be identified, also said his company was concerned about its wind energy business, after it spent tens of millions of dollars tooling up to serve the industry. “We are all nervous about this tax credit issue,” the executive said. “All the big wind companies are rushing toward the cliff right now — and that cliff is coming up about June 30.” The situation is frustrating to Mr. Weston, who has worked not only to get the wind industry to grow in the United States, but also toward convincing developers to use U.S. suppliers for more parts and equipment. The Great Lakes Wind Network grew as a result of those efforts, and today has about 1,600 members from across North America, Mr. Weston said.
Natural gas steals the show Ironically, the cost of electricity generated by wind has been declining the past few years — a trend that, if it continued, would have made wind power more competitive against other energy sources, regardless of subsidies. But something else has been dropping even faster — the cost of natural gas, due in part to the unlocking of natural gas supplies in the shale fields of Ohio, Pennsylvania and West Virginia. Natural
gas coming from other places and warm winter temperatures also are contributing to the price drop. The surge in natural gas production has stolen attention from wind and has made it tougher for renewable energies to compete on a cost basis, say those in the wind sector. “Who would have guessed that natural gas would go from $11 to $2” per thousand cubic feet, Mr. Weston said. The wind industry still holds out hope that Congress will act to renew its tax credit. Industry representatives, including Messrs. Grabner and Weston, are going to the nation’s capital this month to lobby for just that, they said. But much of the damage already has been done, and some fear dropping natural gas prices and failed federal investments into renewable companies such as California’s Solyndra solar company are stacking the odds against them. They also note that federal legislators appear unwilling or unable to pass anything requiring bipartisan support these days. “I would describe my mood as sober. I’m not depressed and I’m not angry,” Mr. Weston said. “This train has been coming and it’s getting closer, but you have to deal with what it is.” ■
BEFORE YOUR TEST DRIVE, TAKE OUR SITE FOR A SPIN.
Take the experts from Autoweek with you when you shop for your next car. Head to shopautoweek.com and get honest reviews, insider tips and innovative tools to help you in your search. Check out shopautoweek.com today!
1/30/2012 4:06:13 PM
CRAIN’S CLEVELAND BUSINESS
FEBRUARY 6 - 12, 2012
HAVE A BALL
Crain’s Meeting and Event Planner Trends • Planning • Resources ~ SHOWCASE YOUR SHOWPLACE ~
Last Chance! Ad space closes February 9 Publish Date: February 20 • 216-771-5182 • email@example.com Contact: Phone: Fax: E-mail:
Toni Coleman (216) 522-1383 (216) 694-4264 firstname.lastname@example.org
Prime Medical & Retail Space Rocky River
Shopping Plaza Fully rented with a strong anchor in a growing area. Priced at 10+ Cap Rate.
440-899-7887 PRUDENTIAL LUCIEN & ASSOC.
REAL ESTATE SERVICES Real Estate Consulting
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
REALTORS: Now is a great time to promote your Luxury Properties to high-end prospects AND receive reduced rates on your advertising.
AARDVARK-LLC.COM 440-605-0555 • Fax 440-605-0666
Call 216.522.1383 for more details.
List your Industrial, commercial or Retail Space Here! Crain’s Cleveland Business’ classifieds will help you fill that space.
Contact Toni Coleman at 216.522-1383
CLASSIFIED INVESTMENT OPPORTUNITY
The Mars Racing Team/Mars Trucking Inc. based out of Brooklyn,Ohio is currently looking for Corporate sponsor or sponsors for the 2012 racing season,Mars Racing is a professional asphalt stock car team with a winning driver and history competing in the Arca,Main Event Late Model, and CRA Super Series,Many marketing and partnership options are available. Be part of the team and get noticed in the racing world ,call Frank at 216-509-2519 or email: email@example.com
BUSINESS SERVICES CPA on Call, LLC Individual & Business Taxes Bookkeeping - Payroll Free Consultations
$25 off for new clients.
FLYNN ENVIRONMENTAL For Assessments
BUSINESS SERVICE OWNERS!
“I don’t have a plan. If you look to far out in the future you waste your time” It’s Stys, Since 1962 Used - New Metal Machinery Forklifts - Scissor Lifts - Warehouse Rack, etc.
Submit your business card to promote your service and receive a SUBSTANTIAL DISCOUNT off your ad price.
To find out more, contact Toni Coleman at 216.522.1383
Crain’s Executive Recruiter College of Law Clinical Professor Positions at Cleveland State University
Director, Alumni & Annual Fund The University of Akron
Full time; non-tenure track
The School of Law seeks qualified and enthusiastic candidates for its Director of Alumni and Annual Fund. The successful candidate will be responsible for cultivating alumni and soliciting private financial support from alumni and other individuals through special programs.
Cleveland-Marshall College of Law (C|M|LAW) invites applications for two clinical professor positions to begin in the 2012-2013 academic year. The clinical professors will be non-tenure-track full-time members of the law faculty on eleven-month contracts with full benefits and will be eligible a long term contract after five years. C|M|LAW strives to be a model of experiential education by offering a broad array of experiential learning opportunities in a variety of practice areas for our students. In furtherance of this goal, we seek clinical professors with an entrepreneurial spirit who will actively grow our experiential learning curriculum. The clinical professors will be responsible for providing experiential learning opportunities, or “engagement experiences,” designed to prepare our students to enter the legal marketplace with the skills and knowledge needed to make them successful lawyers committed to excellence and ethical practice. In this role, the clinical professors will (1) develop and oversee a variety of external engagement experiences supervised by adjunct faculty or on-site attorneys, (2) develop and teach a skills course to prepare students for their engagement experiences, and (3) directly supervise students in the representation of clients. We seek to fill one position with a transactional lawyer and the other with an experienced litigator. Minimum qualifications: Candidates must be admitted or be eligible for admission to the Ohio bar. Preferred qualifications: Candidates should have a strong academic record and significant transactional or litigation experience (5 years or more); ability to manage and supervise other attorneys; teaching experience and knowledge of pedagogical methods; familiarity with the Cleveland bar; strong interpersonal skills; and strong communication and writing skills. To apply, candidates should submit the following items in .pdf format by email to Rosa DelVecchio at rosa.delvecchio@ law.csuohio.edu: a resume, a list of three references, and a cover letter addressed to Mark J. Sundahl, Chair of Hiring Committee. Candidates should indicate in their cover letter whether they are applying for the transactional or litigation position. The search committee will begin to review applications on February 21, 2012 and the positions will remain open until filled. Hiring is contingent on maintaining existing levels of funding from the State. Cleveland State University is an Equal Opportunity/Affirmative Action employer. Women and minorities are especially encouraged to apply. All applicants will receive equal consideration for employment without regard to race, color, national origin, religion, sex, pregnancy, marital status, sexual orientation, gender identity, age, physical or mental disability, or covered veteran status.
Requirements include a law degree, Akron Law JD preferred (candidates who are in their final semester of law school and anticipate spring 2012 graduation are eligible to apply). Also required are: Two years of experience of successfully managing, directing, and initiating fund raising, and/or related activities; superior interpersonal skills; and demonstrated ability to successfully organize, manage and prioritize completing tasks simultaneously.
For complete details & to apply for this position, visit: http://www.uakron.edu/jobs/. Requisition number: 006479. EEO/AA
EMPLOYERS: Reach the most qualified workforce. Advertise your open positions here.
SPECIAL RATES AVAILABLE Call Toni Coleman at 216-522-1383
JOB SEEKERS: We now post POSITIONS WANTED in the Classified section of CrainsCleveland.com at NO CHARGE. (Up to 150 words)
E-Mail info to firstname.lastname@example.org
FEBRUARY 6 - 12, 2012
CRAIN’S CLEVELAND BUSINESS
THEWEEK JANUARY 30 – FEBRUARY 5 The big story: Cuyahoga County Executive Ed FitzGerald unveiled a plan he believes will revolutionize the way government services are provided in the county. His plan would expand the role of county government and, he believes, will lead to more efficient government within Cuyahoga County, including the county’s 59 municipal governments. See related story, Page One. Welcome back: The University of Akron hired former Ohio State football coach Jim Tressel as an administrator at the university — a job that comes with a base salary of $200,000. He officially was named the university’s vice president for strategic engagement, but exactly what his duties will include will be determined in the coming months. University officials say Mr. Tressel’s duties largely will focus around building student success programs, but also will include fundraising and fostering relationships with the community.
Land, ho: Forest City Enterprises Inc. said it plans to sell off large portions of its land business, which is the foundation upon which the Cleveland-based mega developer was built. The company expects to take a pre-tax impairment charge of as much as $160 million in the quarter that ended Jan. 31 in disposing of its land business, which largely buys and subdivides vast parcels, develops land and sells off home sites to builders. “The land business is Larue where the company started in real estate, and it has traditionally been a profitable contributor to our results,” Forest City CEO David LaRue said. “However, it tends to be highly cyclical and is fundamentally different from our core rental properties business, which will be our primary focus going forward.”
On the mend: Venture capital investments in health care companies in the Midwest were up in 2011 from 2010, but still lagged a pre-recession peak set in 2007. BioEnterprise Corp. in its latest Midwest Health Care Venture Investment Report said there was $810 million in new investments across 178 Midwestern health care companies last year. The total dollars attracted were up 10% from 2010; however, they remained 34% below the 2007 high watermark of $1.22 billion.
Newell embraces the new: Newell Rubbermaid said it plans to add nearly 140 full-time jobs and invest more than $25 million in its Rubbermaid manufacturing plant on Gilchrist Road in the village of Mogadore. The company said the investment will include the purchase of new machinery and equipment, as well as infrastructure improvements. Newell Rubbermaid employs more than 700 workers at the plant.
Condolences are in order:
American Greetings Corp., which saw its stock price plummet recently due to mediocre quarterly earnings, laid off “less than 30 employees” last week. Spokeswoman Patrice Sadd said the layoffs were scattered in different departments and were based on “specific opportunities to reallocate work.” The greeting card giant has about 2,000 employees in Northeast Ohio.
Executive shuffle: The Cleveland Clinic plucked Joanne Zeroske from her role as president of the system’s Euclid Hospital and installed her as president of its Marymount Hospital in Garfield Heights. Ms. Zeroske replaces William Zeroske Keckan, who has served as the hospital’s interim president since last October. He will return to his role as the Clinic’s executive director of system integration.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Shared custody of the Bingham
verted to 340 apartments early last decade. — Stan Bullard
Going back to the way they were
UFC for the robot crowd
■ The Columbus-based Floyd Browne Group name and ownership are out and the original Environmental Design Group name and local ownership are back at the design, planning and engineering firm in Akron. Dwayne Groll, Environmental Design president, said he and his partners decided they are better off plying their own course in Northeast Ohio than remaining part of the larger firm, which also has a Dayton office. “When we merged, we felt there was a wave of merger activity in the industry and we had to align with a larger firm,” Mr. Groll said of his outlook and that of his Akron colleagues in 2004. “Now we think we are better off zigging as the market zags,” he said. “We don’t want to be part of a larger firm. You become a number. We want to emphasize local relationships. We think there is more work here rather than traveling outside the area.” To counter the big-firm edge, Mr. Groll said the new firm will partner with big firms on big projects, such as providing landscape design and ramp planning for the new Cleveland Inner Belt bridge in a partnership with HNTB. He said Environmental Design, which dates from 1984, has an “ecosystem” of contacts to help it. Jay Shutt, Floyd Browne CEO, said his firm looks forward to continuing to partner with his former associates. Financial terms of the breakup were not disclosed. Environmental Design has six principals, 35 employees and annual fees of about $4 million, Mr. Groll said. — Stan Bullard
■ Morgan Communities, a Rochester, N.Y., developer and property owner, is the new manager and part-owner at the Bingham Apartments, 1278 W. Ninth St. in Cleve■ Things are going smashingly for the land’s Warehouse District. Alliance for Working Together, a group of Resource Real Estate of America, a more than 60 area manufacturers trying to publicly traded acquirer, operator and get students interested in working in their seller of distressed properties, reported in industries. an earnings statement last Friday, Feb. 3, The group was formed by Fredon Corp. that it had sold the building last Nov. 30 for owner Roger Sustar and other Lake County $40 million to a joint venture in which it manufacturers. One of the group’s signature remains a partner. events is a battling robot competition Morgan, which owns that pairs participating a variety of commerschools with a company cial properties as well sponsor. as apartments in 20 Last March, more cities, now lists the than 1,000 people Bingham as one of its came to watch robots holdings on its website. from 10 area schools Founder Robert Morthrow around and gan was on another destroy each other in call and did not return a bulletproof, plexia message Friday mornglass cage. This year’s ing from Crain’s Cleveevent, set for April STAN BULLARD land Business. 28, will be bigger; it The Bingham Apartments One of Resource Real already has drawn 24 Estate’s affiliates, RRE VIP Borrower LLC, schools and partner companies, said Alyson had acquired the Bingham Building after a Scott, the competition’s organizer and foreclosure proceeding in the U.S. District Fredon’s treasurer. Court of Northern Ohio. “The only reason we cut it off at 24 teams The Philadelphia firm bought a defaulted, was that was the maximum battles we could $45 million U.S. Department of Housing do in one day,” Ms. Scott said. and Urban Development loan at a HUD She said her biggest challenge now is auction in March 2010 to position itself to finding enough volunteers to run this year’s obtain ownership of the property, which event, which she expects to draw larger Burnside Construction Co. of Chicago concrowds than in 2011. — Dan Shingler
BEST OF THE BLOGS
THE COMPANY: Wright Tool Inc., Barberton THE OCCASION: Its 85th anniversary
Excerpts from recent blog entries on CrainsCleveland.com.
Wright Tool, which has Terry Taylor 150 employees and 140,000 square feet of manufacturing space in Barberton, traces its roots to a man who traveled unpaved roads in Indiana in the early 1920s as a salesman for Cornwell Tool Co. C. Nelson Wright even- Tom Futey tually became dissatisfied with how Cornwell Tool was run and tried to take control of the company himself. When that bid fell short, he was fired from Cornwell but used his knowledge about the tool business (and his money, and a $50,000 Pat Taylor matching investment from his brother) to start Wright Tool & Forge Co. on State Street in Barberton. The company grew rapidly during and after World War II, as the booming U.S. economy raised companies’ demand for tools. C. Nelson Wright’s son, Richard B. Wright, a graduate of Cal Tech and the Wharton School, joined the company as an engineer in the 1950s and became president in 1967. The elder Mr. Wright died in 1972. In January 2007, the company successfully transitioned from Richard B. Wright to three new owners: Terry Taylor, president and CEO; Tom Futey, vice president and chief financial officer; and Pat Taylor, vice president of human resources.
If you need a job, the Midwest is the place to be ■ Midwesterners are going to start blushing if the national media write too many more stories such as a Jan. 30 piece from Bloomberg. “From northern Michigan’s iron mines to Pennsylvania’s natural gas fields, the industrial heartland of America is humming with jobs again as a region once left for dead recovers faster than the rest of the U.S.,” the news service reported. Indeed, “the economies of Michigan, Indiana, Ohio and Pennsylvania … have improved faster than that of the U.S. since the recession’s depth in April 2009, according to the Philadelphia Federal Reserve,” Bloomberg said. Michigan, Ohio and Indiana “all ranked among the top eight performers for improvement of economic health in the Bloomberg Economic Evaluation of States from the third quarter of 2009 through the third quarter of last year, the most recent period available,” according to the story. Ohio, Bloomberg reported, added 72,400 jobs last year. That included 18,300 manufacturing positions after losing 419,400 such jobs from 1999 to 2009, federal data show.
Gilbert revamps the org chart in ‘brain economy’ ■ Dan Gilbert’s “vast, seeming random (business) empire is a management consultant’s nightmare,” but he makes it work, according to a short profile from Forbes.com. “Building anything great is messy,” Mr. Gilbert told the website, which noted that ideas, expertise and even employees “freely flow between companies on the theory that they’re all one tight-knit family.” Mr.
Gilbert’s phrase for the strategy is colorful: “eating our own dog food.” Forbes.com estimated Mr. Gilbert is worth $1.5 billion and founded, owns or controls “about 40 loosely connected companies,” the largest of which is Quicken Loans and the most visible of which is the Cleveland Cavaliers. The website took a stab at an organizational chart for the Gilbert empire, and it’s an intimidating web of overlapping businesses. Mr. Gilbert seems to like it that way. “There’s nothing better than people talking to each other, sharing best practices and opening up communications,” he said. “This is a brain economy.”
Given a choice, many Clevelanders go it alone ■ We’re a bunch of loners here in Cleveland. A piece on Fortune’s website, an excerpt of a coming book by New York University sociology professor Eric Klinenberg, looks at the rise of the percentage of Americans who live by themselves. He writes that 28% of all households “now consist of just one person — the highest level in U.S. history. That second statistic may appear less dramatic than the first, but it’s actually changing much faster: The percentage of Americans living by themselves has doubled since 1960.” In many big cities, the percentage of lone wolves approaches or exceeds 40%. Cleveland, along with Denver and San Francisco, is right at the 40% mark. Washington, D.C., at 48%, is tops. Conventional wisdom, Prof. Klinenberg wrote, is that “singletons” tend to be “lonely and isolated, perhaps even social failures.” But he found that “most people who live alone do it by choice.”