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FEBRUARY 6 - 12, 2012
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
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THEINSIDER
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
MILESTONE
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.”