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Chorus boos broader sales tax Kasich’s proposal draws protests from service providers that are exempt now By MICHELLE PARK mpark@crain.com

While a recent poll shows Gov. John Kasich’s popularity with

Ohioans is at an all-time high, it’s become increasingly clear his plan to expand the state sales tax to most business services is quite unpopular. A number of trade groups in the

INSIDE: A look at the American Society of Travel Agents’ newsletter that protests the wider tax. Page 4 last two weeks have made it known that they oppose the governor’s plan to lower the sales tax to 5% from 5.5% but broaden the tax to apply to services ranging from legal representation to hair coloring. The

extra revenue would help underwrite a $1.4 billion reduction in income and small business taxes over three years. In an “urgent” message that blares “WE NEED YOUR HELP!!”, the American Society of Travel Agents Mid-America Chapter assured its members in a newsletter:

Union with Catholic Health Partners may improve bond rating, increase its presence

By CHUCK SODER csoder@crain.com

C

09

We kick off our new Cream of the Crop series with a profile of Derek Clayton, right, the corporate chef for Michael Symon Restaurants. PAGE 3

Summa’s pairing could be powerful

ViewRay’s president believes company’s MRI machines will revolutionize radiation therapy

See VIEW Page 5

At home in the kitchen

See GROUPS Page 4

A NEW VIEW OF CANCER TREATMENT

hris Raanes has reason to believe ViewRay Inc. could become even bigger than the last company he worked for — which posted sales last year of more than $400 million. Over the last five years, ViewRay has raised more than $80 million from investors, hired about 50 employees and designed a machine that Mr. Raanes says will reshape the process doctors use in cancer radiation treatment. Now the Oakwood Village company is ready to get that revolution started. ViewRay hired Mr. Raanes Feb. 4 to replace Dr. Greg Ayers as its president and CEO. His job is to take ViewRay’s system — which allows doctors to see live MRI images of cancerous tumors as they try to hit them with radiation — and turn it into the new standard for delivering radiation therapy. He already is a big proponent of the technology. “I think this will change the way radiation oncology is practiced,” Mr. Raanes said. “Because once you’ve got the ability to see what you are doing in real time, how could you ever go back?” Last year, ViewRay received regulatory approval to sell its system for use in radiation therapy. The company over the last 12 months has raised $37 million in venture capital, including $5 million announced Feb. 21, according to documents filed with the Securities and Exchange Commission.

INSIDE

By TIMOTHY MAGAW tmagaw@crain.com

JANET CENTURY

Chris Raanes was hired last month as president and CEO of ViewRay Inc.

The plan by Akron’s Summa Health System to sell a minority stake in its $1.4 billion enterprise to Cincinnati’s Catholic Health Partners paves the way for a commanding health system — one with 24 hospitals under its belt and a whole lot of money — to make a play in Northeast Ohio. Catholic Health Partners, a health system that employs more than 32,000 and boasts $5.6 billion in assets, has a peppered presence in Northern Ohio, with community hospitals in Lorain, Lima, Toledo, Warren and Youngstown. Combined, officials said Summa and Catholic Health Partners would boast the largest market share in the state. “It was almost a no-brainer,” Summa CEO Thomas Strauss said in an interview last Wednesday, Feb. 27, with Crain’s. “It will give us a minority partner that will buoy our balance sheet and give us a partner aligned with our mission, vision and See SUMMA Page 11

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NEWSPAPER

74470 83781

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SPECIAL SECTION

NORTECH AWARDS Crain’s again partners with the local technology advocacy group to highlight some of the area’s most promising innovations ■ Pages 13-16

Entire contents © 2013 by Crain Communications Inc. Vol. 34, No. 9


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COMING NEXT WEEK

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HELPING HANDS A little more than one-quarter of Americans take part in volunteer activities, according to new federal data. For the 12 months that ended Sept. 30, 2012, the volunteer rate was 26.5%, down slightly from 26.8% in the previous 12-month period. By age, the highest volunteer rate, at 31.6%, can be found among 35- to 44-year-olds. The lowest are among 20- to 24-year-olds at 18.9%. Here’s a look at volunteer rates by selected demographics:

Becoming a big deal What type of impact does a celebrity endorsement have on a Northeast Ohio company? The Small Business section will answer that. Plus, tax tips, a look at the growth of Newbury-based Mom’s Gourmet and more.

Characteristics

Percent volunteering

Total U.S. population

26.5

Employed part time

33.4

Employed full time

28.1

Unemployed

23.8

Bachelor’s degree or higher

42.2

REGULAR FEATURES

Some college or associate degree

28.7

Big Issue .....................10 Classified ....................18 Editorial ......................10

High school graduates, no college

17.3

Going Places ...............12 Reporters’ Notebook....19 Milestone ....................19

Less than a high school diploma SOURCE: U.S. BUREAU OF LABOR STATISTICS; WWW.BLS.GOV

8.8

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editor: Kevin Kleps (kkleps@crain.com) Sports Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Energy, steel and automotive Tim Magaw (tmagaw@crain.com) Health care and education Michelle Park (mpark@crain.com) Finance Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing director: Lori Yannucci Grim (lgrim@crain.com) Events Manager/Operations & Logistics: Christian Hendricks (chendricks@crain.com) Events Manager/Promotions & Sponsor Relations: Jessica Snyder (jdsnyder@crain.com) Advertising director: Nicole Mastrangelo (nmastrangelo@crain.com) Senior account executive: Adam Mandell (amandell@crain.com) Account executives: Dawn Donegan (ddonegan@crain.com) Andy Hollander (ahollander@crain.com) Lindsie Bowman (lbowman@crain.com) John Banks (jbanks@crain.com) Sales and marketing assistant: Michelle Sustar (msustar@crain.com) Office coordinator: Denise Donaldson (ddonaldson@crain.com) Digital strategy and development manager: Stephen Herron (sherron@crain.com) Web/Print production director: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Graphic designer: Lauren M. Rafferty (lrafferty@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.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 Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Mary Kramer: Group publisher 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 customerservice@crainscleveland.com, or call 877-812-1588 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777. Reprints: Call 1-800-290-5460 Ext. 125 Audit Bureau of Circulation


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CRAIN’S CLEVELAND BUSINESS

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Geauga Lake land will be sold — in pieces Cedar Fair’s new strategy for 500 acres of closed amusement park property is taking offers for parcels as small as 3.5 acres By STAN BULLARD sbullard@crain.com

About 500 acres at the closed Geauga Lake amusement park in

Aurora and Bainbridge is back up for sale as the real estate market makes its slow ascent from the depths of the recession, though at a far shallower rate than the roller

coaster that made the park famous until it closed in 2007. Marcus & Millichap associate Cliff West has started marketing the property, but with a new strategy

INSIDE: Duke Realty Corp.’s talks with Och-Ziff Capital Management about 11 office buildings are off. Page 6 he believes suits today’s slow-go real estate market better than past efforts to locate a single buyer for all the land. This time, Mr. West said, landowner Cedar Fair Entertain-

EVEN IRON CHEFS NEED SUPPORT

Less is usually more for offices New IRS home in Independence will be much smaller, and it’s not alone

By KATHY AMES CARR clbfreelancer@crain.com

By STAN BULLARD sbullard@crain.com

MARC GOLUB

Derek Clayton has been the corporate chef for Michael Symon Restaurants since 2011.

ON THE WEB: For a video interview with Derek Clayton,

See SUPPORT Page 7

log on to www.crainscleveland.com

THE WEEK IN QUOTES “Summa’s hospitals have a more robust scope of specialties than their (Catholic Health Partners’) community hospitals do, so they can retain those kinds of services within the family, so to speak, that they wouldn’t have otherwise.” — Bill Ryan, president, Center for Health Affairs. Page One

See GEAUGA Page 18

INSIGHT

Derek Clayton plays key role in fast rise of Michael Symon’s 10 restaurants There’s no place like the kitchen for Derek Clayton. He first understood the sanctity of the space upon learning how to make scrambled eggs and French toast when he was barely tall enough to see above the counter. Now he oversees as corporate chef all 10 kitchens of Michael Symon A periodic series of Restaurants, a profiles of behind-the-scenes roughly 500-em- people who are key to the ployee operation success of food-related with one of businesses in Northeast nation’s most pop- Ohio. ular celebrity chefs at the helm. Mr. Clayton in 2006 first teamed up with Mr. Symon as sous chef of Lola when that catalyst at East Fourth Street opened in downtown Cleveland. He took the corporate chef position in 2011 and is responsible for menu creation and technique instruction. “It’s a large operation that has grown so fast, it’s hard for one person to keep tabs on everything,” said Mr. Clayton, whose position was created to manage the growth. “But Mike drives it. He is so intimately involved in the operations.”

ment Co. will consider offers for smaller parcels, including those as small as 3.5 acres. “There’s much more interest in three to 30 acres you can immediately develop than 500 acres you have to master-plan to develop,” Mr. West said in an interview.

“I wasn’t expecting it, I wasn’t looking for it, but I was very interested in it after I spoke to them. It’s a top-notch organization and it’s a position that doesn’t come up very often.” — Chris Zeigler, incoming executive director, Ohio Petroleum Council. Page 7

“I think working from home can be more productive because you’re not getting 100 calls and people walking by your desk, stopping to chit-chat. … It also can go the other way if people take advantage.”

“I’m not a sports guy, but baseball is a very social sport. It’s a nice way for clients to meet people, and the environment the Indians are setting up is very nice.”

— From a comment in The Big Issue. Page 10

— Bernie Moreno, president, Collection Auto Group. Page 19

For years, owners of office buildings in the Rockside Road area tried to position themselves for the day when the Internal Revenue Service would outgrow its field office on West Creek Road in Independence. Rico Pietro, a principal at the Cresco real estate brokerage, said some owners held off inking sure-thing lease deals to keep space available for the IRS. Rumors say others bought buildings in hopes of eventually landing the prized tenant. Well, the IRS finally is ready to move. But the occasion wouldn’t be the grand event so many landlords anticipated. The General Services Administration recently awarded the lease for the IRS’s office to Duke Realty Corp.’s Corporate Plaza I office building in Independence. But rather than gobble up more space, the IRS will take about 35,000 square feet at Corporate Plaza, down a startling 44% from the nearly 62,000 square feet it occupies now. The IRS expects the field office still will be home base for 200 employees, from criminal investigators to clerical personnel. However, it has figured out ways to fit those workers into the available space more efficiently. Welcome to the incredible shrinking office of the New Millennium. Even as building owners and brokers hope job growth forces businesses to expand offices again — and some are — the sluggish rebound in demand for office space reflects that the IRS is far from alone in doing See OFFICES Page 8


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Groups: Costs could be passed to consumers continued from PAGE 1

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“(We are) in the process of preparing a strategy to fight this tax!! For those of us in Ohio — please identify your state legislators and be prepared to email, call, visit … whatever you can do to make your opposition known!” The travel agents society maintains the tax would increase the cost of doing business for travel agents and increase the cost of travel to Ohio, sending “a profoundly anti-tourism message at a time when the state is competing fiercely with neighboring states for out-ofstate tourist dollars,” according to a call to “immediate grassroots action” by the group. Both the Ohio State Bar and the Cleveland Metropolitan Bar associations announced last week their formal opposition to the governor’s plan to tax legal services, and the Akron Bar Association’s board voted last Wednesday, Feb. 27, to oppose it, too, in letters to the governor and local state legislators, said Jack Weisensell, Akron Bar president. The Cleveland bar also has convened a committee that will hold a town hall meeting on the issue, president Carter Strang said. Most opponents predict levying the sales tax on their services would create an uneven playing field because Ohio companies will pass the tax through to consumers, resulting in higher prices than out-of-state service providers charge. The lawyer groups take it further, arguing that higher costs for consumers would result in decreased access to justice — even a potentially unconstitutional burden on the right to counsel for those accused of crimes. “It’s not cutting into the lawyers’ dollars, it’s more (the) people I represent,” said Mr. Weisensell, a partner with Akron-based law firm, Bernlohr, Niekamp & Weisensell. “You may have people who … say, ‘Well, it’s going to cost me extra dollars. I’ll see if I can do it on my own.’” Mike Caputo, whose law firm lobbies on behalf of clients, predicts opposition among service providers will mount. “I think a lot of these folks (were) waiting to see who’s going to go first, what group is going to come out first and oppose the tax plan,” said Mr. Caputo, chairman of the government affairs practice at Cleveland-based McDonald Hopkins LLC. “Now that the bar association has formally opposed it, I think others are going to be following suit,” he said.

To war, or not to war Actually, the American Institute of Architects of Ohio and the American Council of Engineering Companies of Ohio beat the bar associations to the punch. In a letter to the governor dated Feb. 22, the organizations wrote, “Our associations are taking the unusual step of writing you jointly because members of our professions … would be similarly harmed by the current proposal in House Bill 59 to require collection of the state sales tax on the services they provide.”

A look at the top portion of the newsletter published by the American Society of Travel Agents, which opposes Gov. John Kasich’s tax plan. It is not unusual, their letter stated, for architects and engineers to hire sub-consultants to assist in building projects. According to their letter, the Department of Taxation takes a position that would require the architect or engineer to pay sales tax on the services provided by each sub-consultant. The end result, they write, is the architect or engineer would add sales tax to his or her invoices, creating a “huge” price advantage for out-of-state firms. “We will be using every opportunity we can to talk to legislators about why we think this is a bad idea,” said Donald L. Mader, executive director of the engineering group, which counts 110 member companies in the state. Not all services providers are prepared to rise up just yet in opposition to a broader sales tax. The Professional Independent Agents Association in Columbus, which represents 25,000 insurance industry members, encouraged them to sit tight in an e-newsletter sent Feb. 22, said George W. Haenszel, CEO. “If you’re going to go to war over an issue, you’ve got to ensure there’s a need for a war,” Mr. Haenszel said. “From our perspective, it’s premature.” The organization first needs clarification as to whether insurance commissions will be taxed, Mr. Haenszel said. Insurance premiums explicitly are exempt from the sales tax, but if it’s the Kasich administration’s intent to tax commissions, the independent agents’ group would oppose that step, he said. In the end, the increased costs of the tax would be passed to customers, who already have been paying higher premiums, Mr. Haenszel said. “We’ve had a disastrous 10 years in terms of storms and losses,” he said. “To add another layer to that and say you’ve got to pay tax on top of having a premium increase, it’s just too much.”

Moving parts aplenty When asked for the Kasich administration’s reaction to the opposition, the governor’s spokesman, Rob Nichols, stressed that the goal of the tax plan —

which is proposed as part of the next two-year state budget — is to make Ohio more jobs friendly. “Transforming Ohio’s tax code to lean less on income and instead apply a lower rate to a broader base can help unleash economic growth that lifts everyone and every sector,” Mr. Nichols wrote in an email. “It’s predictable that some are missing that and letting narrow, short-term analyses dominate their thinking, but Ohio’s long-term prosperity is the greater goal and what’s driving the governor’s thinking.” While there are numerous services that would incur sales tax for the first time under the proposed plan, other services — among them, landscaping and drycleaning — would see a decrease in the sales tax they pay. Plus, as Mr. Nichols referenced, personal income taxes would be lowered by 20% over three years. McDonald Hopkins’ Mr. Caputo acknowledged that “there’s a lot of moving parts to this tax plan.” He said he has met in recent weeks with two financial services associations and a marketing company that sought advice about it. “What they’re trying to understand now is, are they a net winner or a net loser?” Mr. Caputo said. To that end, the Ohio Association of Realtors has retained “one of Ohio’s leading tax experts” to conduct a thorough analysis of the proposal, according to Mike Valerino, CEO of the Cleveland Area Board of Realtors, which had not taken an official position as of Crain’s deadline last week. State Rep. Nickie J. Antonio, who represents Lakewood, wards of Cleveland and Linndale and serves on the Ohio House finance committee, said she’s received one letter from a Lakewood travel agency that “really believes this will devastate their business.” When asked if she has heard from people who support the expansion of the sales tax, Rep. Antonio said no. “The devil’s in the details,” Rep. Antonio said. “We’re just getting started. (As committee hearings begin), I think that’s when folks will start coming to us.” A state budget must be passed by June 30. ■

Volume 34, Number 9 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth

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View: Machine is able to detect when patient moves during MRI continued from PAGE 1

The money has helped ViewRay hire a small sales team and take other steps to prepare to commercialize the system.Mr. Raanes said he was in a similar situation in 2002, when he joined Accuray Inc. as senior vice president and chief operating officer. At the time, the Sunnyvale, Calif., company had just received regulatory approval to sell the CyberKnife as a tool for surgically removing tumors with radiation. Accuray raised $288 million when it went public in 2008 and now has sales exceeding $400 million. Mr. Raanes said Accuray changed the way radiosurgery is practiced, and ViewRay could do the same for radiation therapy — which is a much broader market. “I feel like ViewRay has that potential on the radiation therapy side. In the oncology market, this could be a game changer,” he said.

“Over time, this will become the new way (radiation therapy is) done.” – Chris Raanes, president and CEO, ViewRay Inc. MRI machines typically cost between $1 million and $4 million, according to estimates on several websites. It’s unclear if that range would apply to ViewRay’s customized system. ViewRay is working to compile data illustrating the system’s effectiveness. The first customer to install the machine — the Siteman Cancer Center at Washington University in St.

Louis — a year ago used the system to produce MRI images of nearly 30 people. Now it is working to publish data about how the images compare to those produced with standard MRI machines, said Dr. Parag Parikh, assistant professor of radiation oncology and biomedical engineering at Washington University. The university plans to conduct more studies describing how well the system works and how small bodily movements affect the position of tumors, Dr. Parikh said. The other universities that bought the ViewRay system will be conducting studies, too, Mr. Raanes said. Dr. Parikh said Washington University decided to buy the machine because it wanted to help develop

a new way of imaging patients, and because it believed in the idea behind the technology, which was invented by James Dempsey, who earned a Ph.D in nuclear chemistry from the university. “We really shared his vision,” Dr. Parikh said.

The lure of Ohio Dr. Dempsey founded ViewRay in Gainesville, Fla., in 2004. The company moved to Oakwood Village in 2008. ViewRay — which had only five employees and five contractors in February of that year — was encouraged to move by more than one of its investors, former CEO William Wells said at the time. The company moved to take

advantage of government incentives and to be closer to the region’s major health care institutions, Mr. Wells said. ViewRay was recruited by local economic development groups and was offered $537,000 in state tax credits and an $800,000 loan from Cuyahoga County. In addition to those incentives, the company moved with the intention of applying for money from the Ohio Third Frontier economic development program. ViewRay later was awarded more than $5 million that helped the company develop its technology, which Mr. Raanes expects will become a fixture in radiology offices. “Over time, this will become the new way it’s done,” he said. ■

Accuracy first Today, doctors take MRIs before they start treating a patient with radiation, but a lot can change after they take the image. For instance, a patient might lose weight, or the tumor might shrink after the first few treatments. Plus, no matter how hard a patient tries to sit still while they’re treated with radiation, they always make small movements that slightly could alter the location of the tumor. The ViewRay system is designed to make the process more accurate. From the outside, it looks like a standard MRI machine, but inside the giant tube, next to the magnets that help generate the images, are three pieces of equipment that revolve around the patient, shooting the tumor with radiation. Obtaining MRI images while delivering the radiation allows the system to pinpoint the location of the tumor. If the patient moves, the machine’s software takes notice and stops the radiation. Accuracy is important: Radiation causes various side effects that can last for weeks, according to RTAnswers.org, which is run by the American Society for Radiation Oncology. For instance, a breast cancer patient might have irritated skin near the tumor, patients treated near the stomach sometimes get diarrhea, and those with cancer in the mouth might have a hard time swallowing, the website states. Some areas of the body are particularly sensitive, said James Victoria, radiation therapy scientist at ViewRay. “We can’t overradiate the lungs, we can’t overradiate the spine. The esophagus, we can’t overradiate those,” he said. And because more of the radiation will hit the tumor, doctors using the ViewRay system should be able to treat patients faster, reducing the cost of care, Mr. Raanes said.

Sharper image Now ViewRay must convince hospitals and private radiology practices that the system works and that it’s worth the money. Although ViewRay already has sold systems to three universities that conduct medical research, the company hasn’t yet finalized how much it will charge for the machine once it starts selling them in greater numbers, Mr. Raanes said. He declined to provide a range of possible prices, though he said it would pay for itself in two years.

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Duke Realty’s talks with Och-Ziff over office buildings come to end Investment trust had hoped to sell its 11 Rockside Road properties by close of 2012 By STAN BULLARD sbullard@crain.com

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Duke Realty Corp.’s long exit from the Northeast Ohio office market will linger on as talks are off toward the sale of its last 11 office buildings here to Och-Ziff Real Estate, the property investment affiliate of alternative asset manager Och-Ziff Capital Management of New York. Two sources familiar with the talks say they understand the deal is dead. A third source said the parties are no longer in active discussions. When the deal surfaced last December, industry insiders said the parties hoped to close the deal

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by the end of 2012, although they stayed at the table after the New Year began, the sources said. All the sources declined to be identified because they are not authorized to speak about the transaction. As is typical for deals that are not consummated, none of the principals would discuss it. Helen McCarthy, a spokeswoman for Duke, an Indianapolisbased real estate investment trust, declined comment. Jonathan Gasthalter, an Och-Ziff spokesman, said it does not discuss its transactions. Duke has had the properties for sale since 2005, when it announced it would exit Northeast Ohio to

Pavilion in Beachwood is sold for $3.3 million By STAN BULLARD sbullard@crain.com

Pavilion, a four-story office building in Beachwood, has changed hands for nearly $3.3 million. Cuyahoga County land records show the new owner of the property at24100 Chagrin Blvd is an Akronbased investor group called Briarwood Management LLC. The seller was an affiliate of Goldberg Cos., a Beachwood-based apartment and office building owner that listed Pavilion as an asset on its website. Goldberg Cos. held the property through three limited liability concerns with the same address as its offices. Eric Bell, Goldberg senior vice president, declined comment. Goldberg once was headquartered in the building but now is in one of its Signature Square office complex buildings farther east on Chagrin.

McDonald Hopkins

“This (sale) price shows office values on the Chagrin Boulevard office corridor are rebounding.” – Steve Egar, broker, Egar Associates office brokerage firm Pavilion consists of nearly 43,000 square feet of office space. The building dates from 1972 and had little vacancy a year ago, according to the most recent data from online real estate data provider LoopNet. Steve Egar, the broker at the Egar Associates office brokerage firm, has his office in Pavilion. He said he tried to secure a listing to lease the property and was told his new landlord handles its own brokerage. “This (sale) price shows office values on the Chagrin Boulevard office corridor are rebounding,” Mr. Egar said. ■

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reinvest its capital in areas with more office and industrial rent growth and appreciation. The REIT peddled its industrial portfolio and its portfolio of 13 office buildings in the eastern suburbs before the recession hit in 2008. Duke sold its three North Olmsted office buildings in 2011 to a Pittsburgh-based investor group. The REIT’s last stand consists of blue-chip properties Park Center Plaza I, II and III, which it built, as well as the older Corporate Plaza I and II and Freedom Square I, II and III office buildings and two Rock Run buildings it acquired here. Together, they house 1 million square feet of office space. The properties, all in the Rockside Road office market, are in either Independence or Seven Hills. ■

ON THE WEB

Story from www.crainscleveland.com

Clinic’s new center targets rare disorder The Cleveland Clinic recently launched a center that is expected to bring a heap of out-of-town patients suffering from a rare genetic disorder to Northeast Ohio for treatment. The new center is aimed at treating hereditary hemorrhagic telangiectasia, or HHT — a rare disease affecting roughly one in 5,000 people that causes abnormalities in blood vessels and often results in severe bleeding. Given the complexity of each case, the Clinic explored the opportunity of creating a specialized center that would be centrally located in the region for affected patients. “We’ve been seeing patients with HHT over here for a little while, but it’s such a rare disease that a lot of times physicians tend to under diagnose or misdiagnose it,” said Dr. Joseph Parambil, a Clinic pulmonologist and the new center’s director. The Clinic’s HHT center has been recognized as the 15th HHT Center of Excellence in the country by HHT Foundation International, a Maryland-based advocacy group that refers HHT patients to health care providers. “They strongly advocate to patients that they need to be seen at a center of excellence,” Dr. Parambil said. The Clinic’s center will be the Midwest’s primary HHT hub, according to Dr. Parambil. The closest centers to the Clinic’s are in Pennsylvania, Wisconsin and Toronto. Dr. Parambil said the Clinic’s compounding pharmacy is working on a crafting a drug in-house to treat nosebleeds in HHT patients, which in the past had only been available through a pharmacy in Kansas. — Timothy Magaw


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Ohio Petroleum Council will be guided by aide of Rep. Tiberi Chris Zeigler starts March 11 as exec director; post was vacated in December By DAN SHINGLER dshingler@crain.com

The Ohio Petroleum Council has a new executive director — or at least it will on March 11, when Chris Zeigler steps into the open position. Mr. Zeigler, currently chief of staff for U.S. Rep. Pat Tiberi, a Republican from suburban Columbus, said he will take over the Ohio Petroleum Council as its new chief next month. March 8 will be Mr. Zeigler’s last day working for the congressman, ending a stint of 19 years working in Congress that predates Mr. Tiberi’s arrival in 2001. He will succeed former Ohio Petroleum Council executive director Terry Fleming, who abruptly resigned in December after heading

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the council for more than 25 years. No reason was given for Mr. Fleming’s departure. The council is the state arm of the national American Petroleum Institute; that group’s regional manager, John Kerekes, said in December that finding a replacement for Mr. Fleming was an urgent matter. Mr. Zeigler said he was not seeking the job, but was contacted last month by a search firm for the Ohio Petroleum Council. “I wasn’t expecting it, I wasn’t looking for it, but I was very interested in it after I spoke to them,� Mr. Zeigler said. “It’s a top-notch organization and it’s a position that doesn’t come up very often. Since 2005, I’ve been commuting back and forth from D.C. My family is here in Ohio, and I’ll get to be closer to them.�

Mr. Zeigler admittedly does not have experience in the oil and gas industry, but he has a lot of political experience that could come in handy in his new job. “Yeah, that’s what I understand,� Mr. Zeigler said. For one, he’ll likely be addressing Gov. John Kasich’s proposed hike in severance taxes for oil and gas produced by Ohio’s shale wells — though only after a well has been in production for a year and its volumes have dropped dramatically from the well’s initial production. His soon-to-be-former boss, Rep. Tiberi, has been a friend of Gov. Kasich and of the oil and gas industry. Among his pro-industry actions, Rep. Tiberi has voted in favor of increased offshore drilling, in favor of barring the U.S. Environmental Protection Agency from regulating greenhouse gases, and against both limits on greenhouse gases and tax incentives for cleaner renewable energy. ■

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Support: Symon gives ‘tons of leeway’ continued from PAGE 3

Is it intimidating to be one of the legs of an operation run by an iron chef? Not so much, Mr. Clayton said. But working for a star can be challenging because Mr. Symon’s reputation means heightened scrutiny within the individual eateries and as an organization. “People come to our restaurants with very high expectations and we have very high expectations of ourselves,� Mr. Clayton said. “Trying to meet or exceed these expectations is very demanding yet crucial to our success.� Those pressures notwithstanding, Mr. Clayton enjoys a good personal relationship with his boss. “Mike’s just a regular guy to me,� Mr. Clayton said. “He’s a good cook and a guy I work with.� The chefs also have competed regularly on many of Food Network’s “Iron Chef America� episodes. Just how many? “Twenty or 30? I really have no idea,� Mr. Clayton said. “The first time was tense. It was a 14-hour day for a one-hour show. “It was a foreign environment, with camera guys and cords around while you’re trying to cook,� he said. “It seemed like a recipe for disaster. Now it’s just like a second kitchen.�

It started with spuds Mr. Clayton’s professional experience began in the kitchen at a steakhouse chain as “the baked potato guy,â€? then on to a progression of higher-end restaurants, all while attending the University of Michigan, where he graduated with a degree in interdisciplinary studies. He debated law school, but realized a career in restaurants is what did justice to his interests. Mr. Clayton acquired skills on technique as sous chef of the defunct French-inspired CafĂŠ Bon Homme in Plymouth, Mich., then absorbed the art of dish execution at what once was one of Michigan’s most celebrated restaurants, Tribute. “That was a life-changing experi-

MARC GOLUB

Michael Symon, above, calls Derek Clayton “an absolute perfectionist.� ence. It was an intense kitchen — very focused,� he said. When pastry chef and friend Cory Barrett left Tribute to open Mr. Symon’s Lola in 2006, Mr. Clayton inquired whether the venerable Cleveland chef had work. The offer portended a partnership.

Symon says welcome The sous chef position included butchering fish, sauce work and working side by side with Mr. Symon, whom in the early days of Lola had full control over the menu. “It started as 100% Michael’s menu, then 95% him, 5% me,� Mr. Clayton said. “Michael had veto power, though. He didn’t use it a ton.�Mr. Clayton gradually assumed more influence in his responsibilities and menu contributions at Lola as his boss, the Iron Chef, opened new restaurants and accelerated his celebrity status through Food Network and other prominent media affiliations. “Michael gave me tons of leeway� within the parameters of his style and philosophy, said Mr. Clayton, who in 2007 became Lola’s executive chef. “We’d use ingredients Michael

hadn’t used before. Michael loves lemons. I used yuzu (a Japanese citrus fruit) and still do now.� Mr. Clayton sifted self-described “fussy� and “cutsie� dishes from his culinary approach and presented polished cuisine that reflects Lola’s eclectic Midwest fare laced with Mediterranean influence. “I’m more comfortable in my skin,� said Mr. Clayton, who lives with his wife, Jennifer, and 2-yearold son, Sullivan, in a Shaker Heights farmhouse built in 1836. “I’ve done away with ‘Look how clever I am,’ � he said. Refining one’s technique doesn’t mean a dish reaches its full potential on the first iteration, however. “It depends,� he said. “Around 2009, I was working on a tomato salad when tomatoes were in season, and I was going back and forth, back and forth. I like it, I don’t like it. I finally said, ‘It’s done.’ It was Sept. 30.�

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Pleasing a tough crowd Mr. Symon underscores the aforementioned approach when describing why Mr. Clayton is an asset. “He is incredibly disciplined and an absolute perfectionist,� Mr. Symon said in response to a tweet inquiring about Mr. Clayton’s qualities. “He treats the restaurants like they are his own.� Lola general manager Jude Feyedelem offered similar sentiments. “His dedication to quality and consistency is higher than any chef I’ve ever know,� Mr. Feyedelem said. “He’s great under pressure and really has a true understanding of Michael Symon’s vision.� Mr. Clayton references a moment that vindicated his career, when a group of high-profile chefs from New York City dined at the award-winning Lola. “A chef thanked me for dinner, and said, ‘This lamb heart dish was really special,’ � he recalled, declining to identify the chef. “It was positive affirmation. At the time, I was working 14 to 15 hours a day. It almost brought a tear to my eye.� ■

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Colliers International in Cleveland Welcomes Thomas K. Gustafson The Cleveland office of Colliers International is pleased to announce that Thomas K. Gustafson has joined their organization as Senior Vice President Ň Principal.

Tom Gustafson Senior Vice PresidentŇPrincipal Main +1 216 239 5060 Dir +1 216 239 5071 thomas.gustafson@colliers.com

Tom is a leading broker and top producer in the northeastern Ohio marketplace. He has represented tenants, landlords, investors, sellers, and developers throughout his 18 year real estate career. Tom has completed more than $450 million in transactions and brings a wealth of experience and knowledge to the Colliers team.

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MARCH 4 - 10, 2013

Offices: Technology playing role in trend continued from PAGE 3

with less office space, local experts in the brokerage, design and ownership ranks agree. In the case of IRS, public information officer Jennifer Jenkins said the agency cut what federal contracts say is a $5.5 million lease deal for 10 years under a national space and real estate cost reduction initiative IRS launched last May. Plans call for the new IRS Independence office to use measures such as desk sharing and telecommuting to slice space needs, she said.

Free at last, free at last Real estate experts including David Browning, managing director of the Cleveland office of CBRE Group Inc., agree that the IRS’s space-shrinking drive is not the tip of the spear but somewhere along the shaft in changing office patterns. Even real estate brokers are part of the trend.

With working smart and using space efficiently as guiding principles, CBRE concluded that one-third of its staff is in its downtown Cleveland offices at any given time. That means lots of desks sitting empty throughout the day. When CBRE consolidates its office this May at Ernst & Young Tower along Cleveland’s lakefront, it will occupy less than 15,000 square feet. That’s a reduction of about one-third from the more than 22,000 square feet CBRE now occupies at 200 Public Square and the Hanna Building. While some CBRE jobs, such as appraisers and support personnel, require a permanent location, about 20% of the Cleveland staff will be termed “free address” after the move. Those staffers will have a place to touch down at the office and make calls, charge their laptops, iPads or smart phones and chat. However, they won’t have an office or even a cubicle. The new office will emphasize conference areas because it primarily will be a place staffers gather for meetings. “This is totally different from when I started in the business,” Mr. Browning said. “You had to be in the office. You couldn’t connect to the computers remotely. That’s where your phone was. That’s no longer the case. “We are seeing this across the board with our clients,” Mr. Browning said. “A whole different technology is fueling this.”

Goin’ mobile Most big recent office moves in the Cleveland market have resulted in tenants taking less space. They include: Huntington Bank’s move to 200 Public Square from the longtime home that bore its name at East Ninth Street and Euclid Avenue; KeyCorp’s relocation of its data services operations to the Higbee Building from the May Co. building; and the pending move of the Ernst & Young accounting firm to a new namesake office tower in Cleveland’s Flats from the former Huntington Building. The factors that account for the shrinking use of office space go beyond cost and technology. For instance, many tenants are

embracing an open office design with fewer or no private offices, which makes it easier to keep the office footprint shrinking. Bob Porter, director of a design studio at Vocon, a Cleveland-based architecture firm, said the push for more mobility also feeds the trend. Mr. Porter said surveys show 87% of employers believe they need to address mobility issues, partly because employees want to work remotely at home or are spending time with clients. The IRS space-slash is “very consistent with what we are seeing in the marketplace,” said Mr. Porter, who worked on the new Goodyear headquarters in Akron and other recent office designs.

Changing times John Ferchill, CEO of Clevelandbased Ferchill Group and the developer of the North Point office complex in downtown Cleveland in the 1980s, has watched the changes firsthand. Office growth trumped other commercial real estate types in the 1980s until the rise of the personal computer prompted companies to start slashing layers of middle management. “Today I would not build a general office building if my life depended on it,” Mr. Ferchill said. “I’m doing office buildings (in locations outside Northeast Ohio) that are more office-research space or to house data centers. They’re office space. But they really aren’t.” Mr. Ferchill said he sees the drive to use less office space as a reflection of another factor: the downsizing of the work force to trim labor costs. He maintains the trend will accelerate under the new federal health care law. He expects companies to use more part-time workers under the law, so twice the employees may use the same offices in different shifts. “People have no idea what the health care law is going to mean for employment,” and by extension, the size of offices, Mr. Ferchill said. That is why older cities with lots of downtown office space are wise to convert older buildings to apartments, Mr. Ferchill said. “Those are the new projects that need to be done,” Mr. Ferchill said. ■


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MARCH 4 - 10, 2013

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Kill cafés

S

o-called Internet cafés are a joke. How these operations that are excuses for gambling have been allowed to proliferate, much less exist, is a mystery to us. If they can’t be shut down under current Ohio law, the Legislature should pass a strong measure that would put them to death. The café operators are a crafty bunch. They manage to circumvent constitutional restrictions on gaming in Ohio by selling customers Internet time or pre-paid phone cards; those purchases entitle the buyers to “sweepstakes” points that patrons can use to play slot machine-like games inside the cafés. It is not too hard to figure out that the purpose of the cafés isn’t to provide customers with a means to call their relatives long distance or to gain access to the web. Consider the names of the cafés — places such as Players Club, Winners Circle and Lots-ALoot. There also are cafés with neon lights in their front windows that display the numbers “7-7-7” in the shape of a winning row on a slot machine. Subtle stuff. The patrons aren’t there for the phone cards, either. They are there to play the games of chance. And there must be plenty of them playing, because these Internet cafés have spread like mold in a Petri dish. The state estimates at least 800 Internet cafés are operating in Ohio, up from just a couple hundred a few years ago. Supporters of the cafés say they provide jobs and bring life to retail space that otherwise would be vacant. But if that’s the criteria for why these businesses should be allowed to exist, then Ohio should let brothels set up shop statewide — they’d provide the same economic benefits, even if what’s going on inside them isn’t on the up and up. No authoritative numbers exist as to how much business these Internet cafés do in the aggregate. But if each of the cafés sold on average just $20 in phone cards to 50 customers a day, the cafés would pull in nearly $300 million a year. And news stories about the cafés have indicated that their annual volume of business could be more than three times higher than the aforementioned figure. That’s a huge amount of money, and we bet at least some of it would be going to the Ohio Lottery and the state’s four casinos — all of which are authorized under the Ohio Constitution. Though we’ve never been fans of gambling, we also believe the law is the law, and that the legitimate interests of the state and the casino owners should be protected in the face of competition from operators of businesses that skirt constitutional standards. Tom Niehaus, former president of the Ohio Senate, wimped out last year on moving a bill forward that would have put the clamps on the cafés. Now a nearly identical measure, House Bill 7, is under consideration that would impose strict regulations on the prizes these sweepstakes parlors dole out — restrictions we hope would drive them out of business. This bill can’t move through the Legislature fast enough. Lawmakers should nail the coffin on the cafés as soon as possible.

FROM THE PUBLISHER

When too many eggs are in one basket ust when you think that after 28 you’re an OEM (original equipment manufacturer) for the auto industry, for years of business journalism, example,” he said. you’ve read or heard pretThe questioner never specity much every term and BRIAN fied whether he meant concencatch phrase, you learn yet anTUCKER tration of business with one other. customer or a small group of I hadn’t heard the term “cuscustomers — or a specific tomer concentration” before an industry — but it was apparent audience member rose from his from our panelists that either seat to ask a question of our represents a challenge. And panelists at last week’s seminar that was made painfully clear on business succession. later in the week when news We had 300 people at a broke of the sudden closure of breakfast event in IndepenPainesville’s largest private employer, dence, and clearly it was an engaged Core Systems LLC. crowd. They were there to learn from A Lake County economic developexperts about two things — planning for ment official was quoted as saying the the next level of leadership at their busicompany late in 2012 had lost a contract ness and (or) preparing to sell the busito supply parts to Whirlpool — a conness for the highest possible profit. tract that represented about 40% of its The gentleman who asked the quesbusiness. According to news reports, tion wanted to know what our panelists Whirlpool filed suit in federal court late thought would be a troublesome level of last month, demanding the return of customer concentration. Ralph Della some tooling equipment. It appears that Ratta of Western Reserve Partners deftly handled the question, saying that anystarted the cascade of events that led thing above 30% to 35% might present a Core Systems to shut down on Feb. 22, problem. putting some 300 folks out of work. “Of course, that might be different if It’s a sad development, and a harsh

J

underscoring of the answer given to our breakfast attendee. ***** OHIO’S SHALE industry is at its early stages, and we remain impressed — and sometimes startled — at the pace of development and level of investment in our state’s portion of the Utica Shale. So, no one should be surprised that state Rep. Robert Hagan moved quickly to push for tougher regulations after a Youngstown businessman admitted to ordering his employees to dump fracking wastewater into a storm sewer that emptied into the Mahoning River. Rep. Hagan, also of Youngstown, has resumed efforts to pass a bill that would require well owners to disclose what chemicals are used to drill and then stimulate a gas or oil well. The industry will push back, claiming a need to protect proprietary, competitive information. We can only wait and watch what Ohio’s lawmakers will do. In the meantime, state and federal environmental protection agencies are overseeing the river cleanup, and we can only hope this is the first and last example of such blatantly illegal activity. ■

THE BIG ISSUE Yahoo no longer is allowing employees to work from home. Do you think companies should continue to expand that option for workers, or are people more productive in a shared work environment?

MARLENE PIATAK

JASON TARTICK

CHRISTOPHE JAMBON

NICOLE AVENI

Brunswick

Cleveland

Cleveland

Mayfield Heights

Personally, I think working from home can be more productive because you’re not getting 100 calls and people walking by your desk, stopping to chit-chat … it also can go the other way if people take advantage.

There’s value to a shared work environment. … However, I think it makes sense to allow employees to work from home assuming they can get their responsibilities done and they can contribute to the whole organization effectively.

Continue to expand … We have some employees who work from home and they’re productive.

As long as production is up, then I think they should continue to have that option.


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CRAIN’S CLEVELAND BUSINESS

Summa: New ally has strong operating margin continued from PAGE 1

values. I think it’s going to be transformational not only for ourselves but both organizations and the state.” When Summa announced last July that it was looking to sell a stake in itself to a “like-minded” nonprofit health system, industry insiders told Crain’s the suitor likely would have roots beyond Northeast Ohio. The announcement that Summa had tapped Catholic Health Partners, insiders now say, appears to be the ideal union that could strengthen both organizations. The deal, which is expected to be finalized by mid-year, would provide the Akron health system with easier access to capital and the ability to broaden its patient base. “There definitely seems to be some efficiencies for both organizations from a cost standpoint,” said Thomas Campanella, executive director of the health care MBA program at Baldwin Wallace University. “They’ll look for ways to collaborate. It seems to be a pretty good marriage.”

Strong big brother While Summa’s financials are hardly souring as the system continues to post positive operating margins, Catholic Health Partners’ particularly strong books made the downstate health care behemoth an attractive suitor. Catholic Health Partners posted a healthy 4.3% operating margin in 2012, while Summa reported an operating margin of 1.5% — short of the 3.2% Summa officials had hoped to achieve. In the wake of revenue shortfalls and the looming pressures of health care reform, Summa laid off 54 employees last month. With the backing of a larger, financially robust partner in Catholic Health Partners, health care observers say, credit rating agencies would view Summa more favorably should it take on new debt for facility upgrades or expansion. When Southwest General in Middleburg Heights took on debt to finance $128 million in expansion projects, for instance, the rating agencies liked that the hospital was linked to University Hospitals, according to Southwest General president and CEO Thomas Selden. “They gave us the benefit of the doubt with our bond rating,” Mr. Selden said. “The fact that Summa hooked up with a highly rated system opens up the opportunity for increased access to capital. They made a really good move.” Catholic Health Partners boasts

an A1 bond rating with a positive outlook, with Moody’s Investors Service last year lauding the health system’s record of “effectively managing expenses to overcome revenue challenges.” Summa, meanwhile, carries a lower Baa1 rating with a negative outlook — a reflection, according to Moody’s, of the system’s “unexpected decline in performance in 2012.”

Summa’s appeal Catholic Health Partners’ Northern Ohio presence is fairly robust, as it operates Mercy hospitals in Lorain and Oberlin and Humility of Mary Health Partners, which is comprised of St. Elizabeth Health Center in Youngstown and St. Joseph Health Center in Warren. A partnership with Summa could help those hospitals stave off leakage of complex cases to health care juggernauts such the Cleveland Clinic or UPMC in Pittsburgh. “Summa’s hospitals have a more robust scope of specialties than their (Catholic Health Partners’) community hospitals do, so they can retain those kinds of services within the family, so to speak, that they wouldn’t have otherwise,” said Bill Ryan, president of the Center for Health Affairs, an advocacy group for area hospitals. Summa’s Mr. Strauss agreed there’s “absolute potential” for an influx of new patients from Catholic Health Partners’ other health centers once the deal takes hold. More importantly, he said, there’s the potential for a “statewide collaborative” in population health management. Both systems, he said, have a vision of improving the health of the population, rather than treating people after they get sick. Catholic Health Partners have focused squarely on its in-state efforts in recent years, though it still operates facilities in Kentucky. In 2011, Catholic Health Partners shed its assets in Pennsylvania and Tennessee by selling off nearly one-third of the system’s hospitals to for-profit operators, according to Modern Healthcare, a sister publication of Crain’s Cleveland Business. The Summa deal is a relatively low-risk move on part of Catholic Health Partners, as it allows the bigger organization to penetrate a market further in conjunction with an established provider as a partner. “This gives them that opportunity to sort of create a relationship without investing a whole lot of capital in bricks and mortar,” Mr. Ryan said. “That gives them an ex-

panded platform to keep their patients in the network.”

The way of the world How the Summa and Catholic Heart Partners union would affect the Northeast Ohio health care market at large remains to be seen. Summa’s crosstown rival — Akron General Health System — shook off Summa’s announcement, with a prepared statement from its CEO, Dr. Thomas L. “Tim” Stover, saying the move “does not steer us off our own course of providing exceptional health care.” Dr. Stover told Crain’s last fall, however, that Akron General likely would become an arm of a larger medical system given the trends in health care. As for whether the entrance of a large, multibillion-dollar health system in Northeast Ohio was a cause for concern for the Cleveland Clinic or University Hospitals, Mr. Ryan said he doesn’t think it crosses their minds in that way. “I think it would be a completely different situation if someone plants a flag in a piece of ground and starts to dig a hole and build a building,” he said. “At this stage in the game, the deal creates economies of scale for both entities. It doesn’t change the game for either of them.” When asked last week about Summa’s deal, Cleveland Clinic CEO Dr. Toby Cosgrove declined comment but confirmed the Clinic was one of the 10 health systems with which Summa had conversations. Dr. Cosgrove said the Clinic had an idea about a “different sort of relationship” with Summa, but wouldn’t offer other details. Historically, the Clinic has preferred fullon acquisitions, as seen in its acquisition of eight community hospitals in Northeast Ohio in the 1990s and 2000s. Still, partnerships such as Summa’s are becoming the norm in health care as smaller organizations eye the potential for outside investors to prop up their finances, which have been ravaged over the years by declining reimbursements from commercial and government payers. Parma Community General Hospital has maintained its preference of remaining wholly independent, but its president and CEO, Terry Deis, said that prospect gets more challenging every year. “The fact an organization the size of Summa went out and had to bring in an external third party, and Akron General is looking shows that’s clearly the direction health care is going,” Mr. Deis said. ■

What do You Value?

COMING UP Ideas at Dawn will discuss workers’ compensation Workers’ compensation is the focus of the March 7 Crain’s Ideas at Dawn Business Breakfast, set for the Embassy Suites at 5800 Rockside Woods Blvd. in Independence. The business breakfast is titled, “Workers’ COMPrehension: Dynamic Insights to 2013 Workers’ Comp and Healthcare Savings.” Panelists are Bud Andrako, president of

Andrako Associates, and Steven Oddo, president of Diversified Employee Solutions. They will identify tools to lower workers’ comp premiums while protecting employers in the face of injury. Tim Magaw, Crain’s Cleveland Business health care reporter, will serve as moderator for the panel. Registration and breakfast is

CPA’s and Business Advisors

from 7 a.m. to 8 a.m., with the program running from 8 a.m. to 9:30 a.m. Single tickets are $40, and tables of eight are $275. All tickets must be purchased in advance of the event. Walk-ins will not be accepted. To register, go to www.crainscleveland.com/breakfast.

Maybe it’s advice from accounting and tax professionals to help your business grow and thrive.

We Value that too.

■ Crain’s on Twitter: @CrainsCleveland ■ Crain’s on Facebook: Facebook.com/CrainsCleveland ■ Crain’s daily e-newsletters: CrainsCleveland.com/register

216.241.3272 or www.meadenmoore.com

11


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MARCH 4 - 10, 2013

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UNIVERSITY HOSPITALS CASE MEDICAL CENTER: Ronald E. Dziedzicki to chief operating officer.

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LEGAL SEELEY, SAVIDGE, EBERT & GOURASH CO. LPA: Thomas G. Haren to associate.

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AKRO-MILS: Doug Trasatt to director of sales and marketing. ECO APPLICATORS LLC: Thomas J. Murphy to president. TIMKEN CO.: Thomas G. Webb to chief engineer, oil and gas, steel segment; Christopher W. Henson to director, United States sales for distribution management; Mario Cancelliere to general manager, manufacturing and supply chain systems, IT corporate group; Neil W. Carlson to general manager, manufacturing advancement, mobile industries.

NONPROFIT HOSPICE OF THE WESTERN RESERVE: Ericha Fryfogle-Joy to chief marketing officer; Michele A. Seyranian to business development officer. VOLUNTEERS OF AMERICA OF GREATER OHIO: Kathy Atkins to director of program operations, veterans programs; Janet Ferguson to director of program operations, housing programs.

REAL ESTATE ASSOCIATED ESTATES REALTY CORP.: Scott Irwin to vice president,

BOARDS LAKEWOOD ALUMNI FOUNDATION: Kyle Baker (Thompson Hine) to president; Vicki Morford Smigelski to vice president, president-elect; Frederick W. Leick to treasurer; Margaret Brinich to secretary; Chuck Greanoff to past president. LEGAL MARKETING ASSOCIATION, OHIO CHAPTER: Liz Boehm (Benesch) to president; Jeff Dennis to immediate past president, treasurer; Erin Hawk to president-elect; Dorenda Swanson to secretary; James Barone, Mark Elliott, Lance Godard, Courtney Kall, Shannon McDonough, Brittaney Schmidt and Jennifer Shankleton to members-at-large. YOUTH OPPORTUNITIES UNLIMITED: Brian Broadbent (BVU Center for Nonprofit Excellence) to chairman; Patrick Hofford to treasurer; Beth Rosenberg to vice chair and secretary; Gloria Ware to vice chair.

AWARDS APPLIED COMPUTATIONAL ELECTROMAGNETICS SOCIETY: Nathan Ida (University of Akron) to fellow. AMERICAN SOCIETY OF MECHANICAL ENGINEERS: Michelle Hoo Fatt (University of Akron) and Dane Quinn (University of Akron) to fellows. MANUFACTURING INSTITUTE STEP AHEAD INITIATIVE: Tracy Albers (GrafTech International), Norma Byron (Ashlawn Energy LLC), Julia DiCorleto (Saint-Gobain Performance Plastics) and Dale Foerster (Starr Manufacturing) received the inaugural Women in Manufacturing STEP Awards.

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


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ach year, the NorTech Innovation Awards honor some of the most promising technologies coming out of Northeast Ohio. “It’s just really exciting to see it becoming more diverse, which means our economy is becoming more and more diverse,” said Rebecca O. Bagley, president and CEO of NorTech. Nominees competed for awards in six areas: advanced energy; advanced materials; biosciences; flexible electronics; instrumentation, controls and electronics; and water technologies. They are judged on creativity, feasibility, collaboration and triple bottom line impact. (Award finalists are profiled on the following pages based on information included in their nominations.) Jodi Berg, president and CEO of Vitamix Corp., will deliver the keynote address during Berg the 2013 NorTech Innovation Awards, set for 5:30 to 8:30 p.m. Thursday, March 14, at Embassy Suites, Rockside, in Independence. Ms. Berg will discuss how to think outside the box, leverage creative strategies and be ready to compete. “She’s been able to innovate and grow the company,” Ms. Bagley said of the choice in keynote speaker. “That’s such a great example for our community.” The company Ms. Berg leads, Vitamix, is a fourth-generation, family-owned business that produces high-performance food-blending equipment for the global marketplace and is based in Olmsted Township. Single tickets to the NorTech event are $65, and a group table of eight is $500. All ticket reservations must be made in advance; the deadline to purchase tickets is 5 p.m., this Friday, March 8. The price includes a networking reception with cocktails, heavy hors d’oeuvres and awards program with dessert. It also includes admission to a pre-event panel discussion from 4 p.m. to 5:30 p.m. titled “Innovate, Grow, Succeed: Strategies for Staying Competitive in Today’s Economy.” (More information on the panel discussion is at right.) Register online at www.CrainsCleveland.com/NIATix, or contact Denise Donaldson at 216-522-1383. The NorTech Innovation Awards are presented by NorTech, Crain’s Cleveland Business and Kent State University and sponsored by Keystone Compliance, Cleveland Public Power and Fay Sharpe LLP.

PRE-EVENT PANEL This year, for the first time, prior to the awards portion of the NorTech event, a complimentary panel discussion will be open to all ticket holders from 4 to 5:30 p.m. “It’s a great opportunity to not only highlight innovation, but to dive into the substance a little bit,” said Rebecca O. Bagley, president and CEO of NorTech. Ms. Bagley will moderate the discussion, titled “Innovate, Grow, Succeed: Strategies for Staying Competitive in Today’s Bagley Economy.” Panelists are: ■ Andrew J. Poslinski, technical director, Films Center for Excellence, Avery Dennison

ABOUT THE JUDGES Judges for this year’s NorTech Innovation Awards were: ■ Shauna Brummet, president and CEO, BioHio Research Park ■ Peter Buca, vice president, technology and Innovation, Parker Hannifin Corp. ■ Dennis Cocco, co-director, GLIDE (Great Lakes Innovation and Development Enterprise) ■ Andy Conti, director of external innovation, Avery Dennison

■ Daryll Fogal, senior vice president of technology for the electrical sector, Eaton Corp.

■ Ajay Mahajan, associate dean for research, professor, mechanical engineering, University of Akron

■ Kenwood H. Hall, vice president, architecture and systems, advanced technology and distinguished engineering fellow, Rockwell Automation

■ Grant McGimpsey, vice president for research and sponsored programs, Kent State University

The panel discussion is open, free of charge, for all with tickets to the main NorTech awards events.

■ Jay Schabel, CEO, RES Polyflow


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CRAIN’S CLEVELAND BUSINESS

AKRON SURFACE TECHNOLOGIES INC. Akron

ASTI Series 2000-7000, thin film nanocomposite coatings

T

hree years ago, the Timken Co. developed a technology that made its strongest roller bearings last four times longer. But the Canton-based maker of steel and bearings wanted to market the technology to other industries, too. So Timken worked with the University of Akron Research Foundation to form Akron Surface Technologies Inc. in 2012. Both Timken and the foundation hold shares in ASTI.

The Akron startup aims to sell the nanocomposite coatings into other industries, including automotive, aerospace, oil and gas, and wind energy. Timken developed the coatings in 2010, and now the company sells coated versions of all of its bearings for a premium, said Gary Doll, who led the team at Timken that developed the technology. The coatings — which consist of nanometer-sized ceramic particles

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CLEVELAND HEARTLAB Cleveland

CardioMPO cardiovascular inflammation testing

C in a matrix of polymers — work so well on roller bearings that Dr. Doll, who now is ASTI’s chief technology officer, said he has heard the technology described as “the single biggest improvement since when they started making bearings out of steel.” Though nanocomposite coatings have been around since the 1980s, they didn’t do much to improve bearing life until Dr. Doll’s team eliminated a defect: The coatings his team previously used would fracture when exposed to high levels of pressure, so they developed a deposition process that made the coatings stronger. Timken’s expertise is in making steel and bearings, which is why it turned to the university to help create a startup that could sell the coatings to other industries. In the process, Timken funded the creation of a professor of surface engineering position at the University of Akron — which is held by Dr. Doll — and worked with the college of engineering to create the Timken Engineered Surfaces Laboratories at the university. Dr. Doll said ASTI likely will be tapped to commercialize many of the technologies created within the lab, which is intended to serve as a vehicle for students, faculty members and industry researchers to solve surface engineering problems.

ardiovascular testing is a $7.8 billion market, yet for about 30% of patients, their first indication of cardiovascular disease is death, according to the nomination. Myeloperoxidase (MPO), a white blood cell molecule that plays an important, protective role during the body’s acute response to infection, was discovered to be a risk predicator of cardiovascular disease by Dr. Stan Hazen of the Cleveland Clinic and Dr. Marc Penn, now with Summa Health System. The Cleveland HeartLab, a Cleveland Clinic spinoff, in 2012 moved into a state-of-the-art facility in MidTown as part of the city’s Health-Tech Corridor. The lab “offers breakthrough testing,” the nomination said, that “identifies patients at increased risk for a heart attack not previously identified using traditional or advanced cholesterol testing alone.” MPO testing provides a unique view of a patient’s risk for cardiovascular disease based on his or her inflammation status. Patients with increased MPO levels are at an increased risk of rupture of a vulnerable plaque (the build-

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Codonics Safe Label System SLS 500i

A

mong places you’d like to be able to label as completely “error-free,” operating rooms would need to be high on the list. They’re not, of course. But Codonics Inc. is using technology, in the form of the Codonics Safe Label System SLS 500i, to reduce the incidences of drug errors in the operating room. Even with safety measures already in place, “(drug) errors occur once in every 135 operative cases,” the nomination stated. The SLS 500i system “addresses the three most common medication errors made in the selection, preparation and administration of injectable and intravenous medications,” according to the nomination. “SLS brings pharmacy best practices and clinician expertise together to provide safe, compliant labeling to the fingertips of anyone preparing medications.” The system includes a twodimensional bar code on labels enabling electronic documentation of the medication in the patient’s electronic health or anesthesia record, Codonics says on its website. It prints labels for intravenous lines, invasive monitor lines and other operating room needs on demand. Codonics’ SLS 500i system stems from technology developed by anesthesiologists at Massachusetts

up of cholesterol in the artery wall), which can lead to a heart attack or stroke. By using MPO and other inflammation tests as an additive marker to traditional testing, the HeartLab says it has identified “an additional 10% to 12% of the population it has studied who are at risk for a heart attack that would have otherwise thought they were healthy.” The Cleveland HeartLab generated $6 million in Series A financing and $27 million in Series B funds. The HeartLab, which was created in November 2009, supports more than 500 physicians and provides more than 1 million tests annually. The Cleveland HeartLab said its revenue grew by at least 100% each year from 2010 to 2012. Additionally, more than 100 jobs have been added since CHL’s inception, and according to the nomination, the company anticipates that job creation will continue at a similar rate over the next three to five years. “We’re a clinical lab,” Cleveland HeartLab CEO Jake Orville said. “Physicians hire us and send us the blood work to perform many cardiovascular tests, including MPO. Most of our tests are done and performed here.”

General Hospital. The nomination noted that, in October 2006, existing Joint Commission and American Association of Anesthesiology standards for labeling intravenous medication administered in the hospital still led to information that was “traditionally hand-written on a colorcoded label by caregivers in one of the fastest-paced settings in the entire hospital, is often completely overlooked and is prone to error.” Massachusetts General in 2009 produced a prototype for a system that would reduce errors, and soon after that, “the invention was licensed to Codonics to innovate and bring to market,” according to the nomination. As Codonics has developed the SLS 500i, a clinician “scans the barcode on a drug container (which is instantaneously verified on the administration tool presiding in pharmacy) and is presented with an audible and visual confirmation of the drug name and concentration.” This “electronic ‘double-check’ ensures that the medication the clinician selected is the medication he/she intended to select,” the nomination stated. Use of the system means that “on-demand patient and medication-specific, real-time feedback, validated preparation and identification with safety checks is available anywhere medications are prepared.” To date, more than 20 U.S. hospitals use the SLS 500i system. Outside the United States, it is used in hospitals in Bahrain, Japan, Korea and Saudi Arabia.


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ENERGY FOCUS INC. Solon

M1 IntelliTube, an LED-based replacement for legacy linear fluorescent tubes

A

n innovation from Energy Focus Inc. in Solon has turned out to be quite the bright idea for the U.S.

military. “Some areas within the military are notoriously slow at adopting new technologies … updating lighting fixtures for 1950s technology to current technology on Naval ships represents such a case,” said the nomination. Enter Solon-based Energy Focus, which in 2011 received a $23 million contract to design, qualify and then supply the U.S. Navy with LED-based lights. The Energy Focus M1 IntelliTube is an LED-based fluorescent tube replacement that uses half the power of the legacy system and extends the lifetime, particularly in harsh environments. It helps to eliminate the need for inconvenient and costly sea transportation of replacement and spent systems. “The innovative approach was taken to package the new technology in a form that closely matches the existing form, significantly enhancing acceptance based on appearance and handling,” the nomination said. The IntelliTube uses existing wiring and hardware, meaning the

old fluorescent tubes can be removed and the new Energy Focus product snapped into place without changing anything. “It is truly a one-to-one replacement,” the nomination said. The M1 IntelliTube also contains intelligence to discriminate the electrical environment in which it is situated and adjusts operating parameters to match. Energy Focus is under contract to supply 7% of the U.S. Navy fleet with the M1 IntelliTube, which is fully military qualified and meets Navy standards for lighting. More than 5,000 M1 IntelliTubes have been shipped to the USS Preble as the first step in the procurement part of the contract. The awarded contract is the single largest known procurement of LED lights for the federal government. To meet M1 IntelliTube demand, an additional 10 people have been employed at the company’s Solon location. The company also sources as many local components and services as possible. Energy Focus, which has filed a patent application for the innovated circuitry, also is proceeding with a commercial offering for this product aimed at displacing existing fluorescent tubes with an updated, lower maintenance, significantly longer lifetime, snap-in replacement. “This innovative approach makes replacement of existing fluorescent tubes with LED tubes as simple as replacing the tube,” the nomination said.

Cuyahoga Falls

B

onneted workers poring over microscopes in locations as varied as factories and pathology laboratories to find flaws in semiconductors and diseased cells may employ products of Cuyahoga Falls-based Nanotronics Imaging LLC. The company uses proprietary computer software combined with microscopes to automate elements of the analysis of widely different materials to save time and labor, according to the nomination. While elements of the systems may be familiar high-resolution microscopes, Nanotronics products combine them with automated turrets, other motion-control devices and a custom-built computer to speed up the review of the highly varied materials. Its proprietary software allows the process of reviewing semiconductors and medical samples to achieve elements of automation and increased details. Two of Nanotronics’ software programs are patented. One is dubbed “nPROCESS” which uses software to examine images and report data to the users. It is a one-stop shop for imaging, the nomination said, so it can capture, display and classify the images. The other is called “nCONTROL,”

NASA GLENN RESEARCH CENTER/OHIO AEROSPACE INSTITUTE Cleveland

Polyimide aerogels

S

cientists at NASA Glenn Research Center in conjunction with the Ohio Aerospace Institute have developed what they say is a highly flexible and lightweight technology that could transform the market for insulation materials. The polyimide aerogels developed by NASA could out-compete commercially available aerogel-based thermal insulation because it is 500 times stronger, according to the nomination form. Because the NASA-developed aerogels can be formed into flexible thin films, they will be ideal for pipe insulation, automobile heat shields, insulation for temporary shelters and protective clothing. “Unsupported, flexible thin films that do not crush easily are unprecedented in the aerogel community,” the nomination said. “These NASA-developed polyimide aerogels are significantly lighter and take up less space than fiberglass, wool or polyurethane

foam building material insulation.” At present, lab-scale batches are available for evaluation and testing, and NASA Glenn is planning to launch a thermal-based insulation and it is expected to be competitively priced. Unlike NASA’s technology, typical aerogels must be modified or chemically altered to be used as form-fitting insulation. “No other aerogel possesses the compressive and tensile strength of the NASA innovation while still retaining its ability to be flexibly folded to contour to whatever shape is needed,” the nomination said. Developers are negotiating with a materials company about manufacturing the aerogel, with a target market in pipeline insulation. In addition, another materials company is in discussions with

which refers to the combination of software and hardware used to operate and organize the system. The co-founder and CEO of Nanotronics is Matthew Putman, who developed the concept to aid his physics and polymer research at Columbia University in New York City. He worked with Northeast Ohio engineering talent, close friends and others to launch the company. Collaborators with the company include Kent State University, the University of Akron, Columbia and the lens powerhouse Nikon. Since Nanotronics began operations in 2010, the company has secured about $3 million in funding and in its first year of business generated revenues of more than $1 million. It already has global reach, with customers from Europe to Asia. While the contributions Nanotronics can make in high-tech manufacturing and in medicine benefit both business and people, it takes other steps to benefit the community. For one, Nanotronics set up its headquarters in an office on Front Street in Cuyahoga Falls. The company also uses several pieces of equipment locally produced at Jos-Tech Inc., of Kent, and even uses work of Ohio-based artists to decorate its headquarters.

– NorTech Innovation Awards nomination NASA Glenn and is interested in manufacturing and marketing the technology for a variety of insulation uses, including highend building products. According to the nomination, short to mid-term market potential could exceed $25 million in sales per year while long-term sales could bring in several hundred million dollars each year. The technology, for which there are two patents pending, also is expected to benefit NASA’s own projects. For instance, it’s expected the technology could be used as thermal protection for entry, descent and landing. It could also be used for space suit insulation.

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“Unsupported, flexible thin films that do not crush easily are unprecedented in the aerogel community ... These NASA-developed polyimide aerogels are significantly lighter and take up less space than fiberglass, wool or polyurethane foam building material insulation.”

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NANOTRONICS IMAGING LLC nSPEC, a high-speed automated inspection system

CRAIN’S CLEVELAND BUSINESS

NORTECH INNOVATION AWARDS

MARCH 4 - 10, 2013


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CRAIN’S CLEVELAND BUSINESS

NOTTINGHAM SPIRK/ CARDIOINSIGHT TECHNOLOGIES INC. Cleveland

CardioInsight Electrocardiographic Mapping Sensor Vest

U

nlike the original prototype, which took more than 45 minutes to apply on a patient reliably, this “breakthrough technology” is a lightweight vest that can be put on in less than five minutes and aids in the diagnosis and treatment of electrical disorders of the heart, such as arrhythmias. Developed through a partnership between CardioInsight Technologies Inc., a Cleveland medical device company, and Nottingham Spirk, a Cleveland company that’s developed hundreds of patented products in the medical and consumer fields, the disposable vest captures electrical information from the body surface. A third company called Meritec, a leading connector company, also partnered in its development. According to the nomination, it’s the first system able to provide such a noninvasive, real-time, 3-D

QUASAR ENERGY GROUP Cleveland

Collinwood BioEnergy electrical map of the entire heart in a single heart beat, and it presents the opportunity to extend cardiac mapping outside the electrophysiology lab. Conventional cardiac mapping requires invasive, catheter-based approaches that are time consuming and unable to map the most complex arrhythmias, such as

atrial fibrillation. The CardioInsight Electrocardiographic Mapping Sensor Vest should reduce X-ray exposure and the need for invasive procedures, ultimately leading to safer, faster and more cost-effective procedures for patients, physicians and hospitals, the nomination said. CardioInsight’s earlier prototype sensor array had 250 electrodes arranged in 25 to 30 individual strips that needed to be applied manually, one by one. The company approached Nottingham Spirk, and together, the two created this lightweight vest that allows the patients the mobility necessary to

navigate through the procedure, which can last for more than eight hours. Validated in more than 500 patient studies conducted at leading U.S. and European clinical centers, the vest also was designed to fit a wide range of body types. It was first commercially available in Europe in early 2012. To date, CardioInsight has secured more than $20 million of private equity investment and competitive grant funding, and it expects to be able to attract additional equity or strategic financing as it continues to validate the economic and clinical value of the product’s key applications. Primary users include hospitals and centers in England, Germany and France. The technology is covered by five licensed patents from Case Western Reserve and Washington universities. In addition, more than 20 new patent applications are in various stages of prosecution with the U.S. Patent and Trademark Office and internationally; they cover the noninvasive mapping algorithms and the electrode sensor vest, among other inventions.

PAST NORTECH INNOVATION AWARD RECIPIENTS 2012 ■ Regional Impact Award: Stephen Spoonamore, ABS Materials ■ BrainMaster Technologies Inc. ■ eQED LLC ■ GrafTech International Holdings Inc. ■ LineStream Technologies ■ MesoCoat Inc.

MARCH 4 - 10, 2013

■ NASA Glenn Research Center/ Ohio Aerospace Institute/Sest Inc. ■ Tesla NanoCoatings Ltd. ■ Powdermet Inc. ■ Polyflow

2011 ■ Regional Impact Award: Hiroyuki Fujita, QED LLC

■ AllTech Medical Systems America Inc. ■ VasoStar Inc. ■ AeroClay, Inc. ■ MAR Systems Inc. ■ RTI International Metals Inc. ■ The University of Akron ■ Kent Displays ■ Echogen ■ Ashlawn Energy LLC

I

magine bugs that turn trash into energy. Scratch that — don’t imagine it, read about it here, because Clevelandbased quasar energy group has developed just such a system. On a former brownfield site in Collinwood, quasar and partner Forest City Enterprises have developed a facility that gets its fuel from the “anaerobic digestion” of trash. Microbial organisms eat trash and garbage that would otherwise go into landfills and produce methane gas that can be used to generate electricity. The electricity is then bought by Cleveland Public Power and distributed to its customers. In other words, the banana peel that you throw away today could be powering your lights tomorrow. The microbes aren’t picky eaters either — they’ll gobble up almost anything organic, from food waste like fats, oils and uneaten meals, to bio-based lubricants, personal care products and even sludge from wastewater treatment plants. The project, known as Collinwood BioEnergy, has been producing electricity since July 2012. The plant can generate 1.3 megawatts of electricity per day and will be able to divert 42,000 wet tons of biomass from landfills each year. Participants who provide waste

for the facility benefit by using it to meet their own sustainability goals. The local economy, on the other hand, gets jobs. Not only does quasar employ 60 people, but the company also employs local contractors, manufacturers, suppliers and fabricators. More are participating in the supply chain than ever, too. When quasar built its first project, all the components were sourced from Europe, where there are more than 8,000 anaerobic digestion facilities in operation today. Over the past six years, quasar has worked with Ohio manufacturers to redesign and fabricate these components in Ohio. Collinwood BioEnergy, along with all of quasar’s current systems, was built using 98% U.S. components, with more than 75% of those from Ohio. “The impact of an anaerobic digestion facility to the community is positive, as it creates jobs during the construction and long-term maintenance and operation of the facility. The efficiency of components and low impact to land use minimizes the negative effects of energy production to the surrounding community,” the nomination said. “As Northeast Ohio moves to a greener economy that generates clean-energy jobs, while reducing waste and generating renewable energy, Collinwood BioEnergy stands out as a project that attains each of these goals and closes the loop through a highly effective waste-to-energy model.”

SNS NANO FIBER TECHNOLOGY LLC Hudson

Functionalized nanofiber composite products

S Tomorrow’s high-tech professionals are earning degrees today at Northeast Ohio’s source for skilled technology graduates –

Kent State. Kent State University, Kent State and KSU are registered trademarks and may not be used without permission. Kent State University, an equal opportunity, affirmative action employer, is committed to attaining excellence through the recruitment and retention of a diverse workforce. 13-0535

www.kent.edu/caest

NS Nano Fiber Technology LLC takes nanofibers — polymer strands smaller than a human hair — and spins them into fabrics for a variety of commercial applications, including filters and absorbent fabrics. Its proprietary technology can create fabric mats 2 millimeters thick that can trap fibers as small as 150 microns, or 0.006 inches. The nomination described SNS Nano Fiber as the first company to successfully integrate very large particles into a nanofiber structure and produce them in high volumes and at a low cost. Depending on the kind of polymer used to create the fibers and the kind of particles encapsulated or trapped within the fabric, SNS can create products with a range of characteristics and applications. The company, founded in 2007, currently has three primary product lines — a high-strength material, a highly absorbent material and a highly flexible and elastic material. Nanofibers are being used in medicine, as components for artificial organs and tissue and wound dressings. They also are used in sound-absorbing materials, protective clothing and in air and liquid filters in many industries. Currently marketed under the name, Nanosan, SNS products are used in filters, medical and military products and personal care products, such as cosmetics. With

super-absorbent particles trapped within it, a polymer nanofabric can, for example, create better bandages or sop up oil and chemical spills. The company also is developing products that can be used to clean up oil spills. The nomination said SNS’s technology has the potential to revolutionize a number of market segments. By controlling the structure of molecules, according to the nomination, the products can improve performance or offer lighter weight and wafer-thin alternatives to existing market offerings. Drs. Darrell Reneker and Daniel Smith developed the nanofiber technologies, eventually leading to six families of patents. The two scientists are among the University of Akron’s most prolific inventors and are members of the National Academy of Inventors. SNS recently moved into a new, larger manufacturing facility in Hudson to meet growing customer demand. The company is a partnership with Struktol Company of America and the University of Akron Institute of Polymer Science. Struktol is a Stow-based chemical additives firm. Its German parent, the German chemical company Schill + Seilacher GmBH, also is a collaborator in the company’s innovations. The nomination noted that without any of the members of this collaboration, “it is likely the innovation would have failed.”


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WWW.CRAINSCLEVELAND.COM

17

PROFESSIONAL ASSOCIATIONS BASED IN NE OHIO RANKED BY NUMBER OF MEMBERS(1)

Name of firm Address Rank Phone/Website

Members NE Number of Ohio members Year founded

Publications

Meetings

Description or mission

Top executive

1

ASM International 9639 Kinsman Road, Materials Park 44073 (440) 338-5151/www.asminternational.org

33,000

2,746 1913

Advanced Materials & Processes, International Thermal Spray

AeroMat Conference/ Exposition, International Thermal Spray Conference/ Exposition

Serves materials professionals, nontechnical personnel and managers worldwide by Thomas S. Passek providing high-quality materials information, managing director education and training

2

International Association of Information Technology Asset Managers 4848 Munson St. NW, Canton 44718 (330) 628-3012/www.iaitam.org

21,000

840 1998

ITAK News

IAITAM Annual Conference & Exhibition (Spring and Fall)

Professional association for individuals and organizations involved in any aspect of IT Asset Management (ITAM), Software Asset Management (SAM)

3

National Association of Collegiate Directors of Athletics 24651 Detroit Road, Westlake 44145 (440) 892-4000/www.nacda.com

6,100

550 1966

Athletics Administration NACDA Convention

Professional association for intercollegiate Vecchione athletics administration. Provides educational Robert executive director and networking opportunities

4

College of Optometrists in Vision Development 215 W. Garfield Road, Suite 200, Aurora 44202 (330) 995-0718/www.covd.org

4,165

64 1971

Optometry & Visual Performance, VP Today, Optometry & Vision Development

COVD annual meeting

Improving lives by advancing excellence in optometric vision therapy through education and board certification

5

Institute of Mathematical Statistics P.O. Box 22718, Beachwood 44122 (216) 295-2340/http://imstat.org

4,000

10 1935

Annals of Applied Probability, Annals of Applied Statistics

IMS annual meeting, joint statistical meetings

To foster the development and dissemination Elyse Gustafson of the theory and applications of statistics executive director and probability

5

International Society of Explosives Engineers 30325 Bainbridge Road, Cleveland 44139 (440) 349-4400/www.isee.org

4,000

100 1974

The Journal of Explosives Engineering; Blasting and Fragmentation Journal

Annual Conference on Explosives and Blasting Technique; Ohio Drilling & Blasting Conference

Provides technology, education and J. Winston Forde information to promote the safe, secure and executive director, controlled use of commercial explosives CEO

7

National Association of College Stores 500 E. Lorain St. , Oberlin 44074 (800) 622-7498/www.nacs.org

3,895

155 1923

The College Store Magazine; Campus Marketplace

To be the leading advocate and resource for Brian E. Cartier CAMEX (CAmpus Market EXpo) college stores — helping them connect, CEO grow, and succeed

8

American Orff-Schulwerk Association P.O. Box 391089, Cleveland 44139 (440) 543-5366/www.aosa.org

3,553

212 1968

The Orff Echo, Reverberations

AOSA Professional Development Conference

Educators dedicated to the creative music and movement approach developed by Carl Orff and Gunild Keetman

Carrie L. Barnette executive director

9

Society for Photographic Education 2530 Superior Ave., Suite 403, Cleveland 44114 (216) 622-2733/www.spenational.org

2,300

NA 1963

Exposure Journal, members' newsletter, membership directory

a forum for the discussion of SPE National Conference, SPE Provides photography and related media as a means Regional Conferences of creative expression and cultural insight

Virginia Morrison executive director

10

Society for Investigative Dermatology 526 Superior Ave. East, Suite 540, Cleveland 44114 (216) 579-9300/www.sidnet.org

2,200

100 1937

Journal of Investigative Annual meeting Dermatology

To advance and promote the sciences relevant to skin health and disease through education, advocacy and exchange of scientific information

11

The North American Menopause Society 5900 Landerbrook Drive, Suite 390, Mayfield Heights 44124 (440) 442-7550/www.menopause.org

2,092

42 1989

Menopause (journal), Menopause Practice: A NAMS annual meeting Clinician's Guide (4th ed.)

To promote the health and quality of life of all women during midlife and beyond through Margery L.S. Gass an understanding of menopause and healthy executive director aging

12

Rubber Division, American Chemical Society 411 Wolf Ledges Pkwy., Ste. 201, Akron 44311 (330) 972-7814/www.rubber.org

2,000

344 1909

Rubber Chemistry and Technology Journal

International Rubber Expo, International Rubber & Advanced Materials In Healthcare Expo

To expand the elastomeric profession and individual development through educational, technical, and interactive activities

Edward L. Miller executive director

13

Association of Nurses in AIDS Care 3538 Ridgewood Road, Akron 44333 (330) 670-0101/www.nursesinaidscare.org

1,700

50 1987

Journal of the Association of Nurses in AIDS Care

Annual convention

Education and support of HIV nurses

Kimberly Carbaugh executive director

14

ASSE International 901 Canterbury Road, Suite A, Westlake 44145 (440) 835-3040/www.asse-plumbing.org

1,227

53 1906

Plumbing Standards Magazine

ASSE International is an ANSI accredited Annual Meeting, E.J. Zimmer developer and product Technical Seminar & Exhibition standards certification body

15

Marble Institute of America 28901 Clemens Road, Suite 100, Cleveland 44145 (440) 250-9222/www.marble-institute.com

1,200

24 1944

Newsletter, technical manual, consumer materials

StonExpo/Marmomacc of the Americas

World's leading stone industry trade association; educates users and designers, promotes craftsmanship, advocates

Jim Hieb executive vice president, CEO

16

Precision Metalforming Association 6363 Oak Tree Blvd., Independence 44131 (216) 901-8800/www.pma.org

890

90 1913

MetalForming magazine, Fabricating Product News

Manufacturing for Growth (MFG) Meeting, FABTECH tradeshow

PMA represents the $113 billion metalforming industry of North America, which creates precision metal products

William E. Gaskin president

17

American Association of Neuropathologists 25373 Tyndall Falls Drive, Olmsted Falls 44138 (440) 793-6565/www.neuropath.org

885

1 1959

Journal of Neuropathology & Experimental Neurology

Annual meeting

The association addresses the needs of physicians and scientists in the field of neuropathology

Charles White III president

18

American Holistic Medical Association 27629 Chagrin Blvd., Suite 206, Woodmere 44122 (216) 292-6644/www.holisticmedicine.org

856

78 1978

NA

iMosaic (Integrative Medicine Offering Science-based Alternatives In Collaboration)

To help create a healthy world by promoting holistic/integrative principles and practice in health care

Steve L. Cadwell executive director, CEO

19

Association for Living History, Farm and Agricultural Museums 8774 state Route 45, North Bloomfield 44450 (440) 685-4410/www.alhfam.org

800

25 1970

Quarterly magazine, proceedings of annual conference

2013 in Bath, Ohio, 2014 in Calgary, Alberta

Institutions and individuals dealing with interpretation of agricultural and economic history and why we need to understand it

Peter Watson president

20

Russian American Medical Association 36100 Euclid Ave., Suite 330-B, Willoughby 44094 (440) 321-2311/www.russiandoctors.org

695

147 2002

RAMA Journal

RAMA annual national conference

Improving health care worldwide

Boris Vinogradsky, M.D. founder, chairman

21

American Institute of Organbuilders P.O. Box 35306, Canton 44735 (330) 806-9011/www.pipeorgan.org

600

30 1974

Journal of American Organbuilding

Annual Convention (September Pipe organ building education or October)

Robert Sullivan executive secretary

21

Association of Specialty Cut Flower Growers M.P.O. Box 268, Oberlin 44070 (440) 774-2887/www.ascfg.org

600

12 1988

The Cut Flower Quarterly

ASCFG provides production and National Conference and Trade The marketing information to field and Show greenhouse cut flower growers

Judy Marriott Laushman executive director

23

United States Trager Association 13801 W. Center St., Suite C, P.O. Box 1009, Burton 44021 (440) 834-0308/www.tragerus.org

555

5 2001

Quarterly membership newsletter

membership organization Annual membership conference Nonprofit supporting Trager practitioners in the USA

Anna Marie Bowers administrative director

24

Precision Machined Products Association 6700 W. Snowville Road, Brecksville 44141 (440) 526-0300/www.pmpa.org

450

50 1933

Production Machining Magazine

Precision Machining Technology Show

Provide programs and services to the precision machining industry in North America.

Michael B. Duffin executive director

25

American Aging Association 25373 Tyndall Falls Drive, Olmsted Falls 44138 (440) 793-6565/www.americanaging.org

337

2 1970

Age

Annual meeting

To promote biomedical aging studies directed towards increasing the functional life span of humans

LaDora Thompson 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. Business lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Source: Association websites, Associations Unlimited, individual associations. Fraternities, sororities, unions, honor societies and religious organizations are not listed.

Barbara Rembiesa CEO, founder

Pamela R. Happ executive director

Rebecca Minnillo Jim Rumsey executive directors

Steve Silber international president

RESEARCHED BY Deborah W. Hillyer


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Geauga: Developers’ interest increases he said. An expert in land sales, Mr. West said interest in land purchases among home builders and developers of lots for homes has increased in Northeast Ohio in the last six months compared to none a year ago. Bill Sanderson, a principal at Chardon-based Eclipse Homes and an executive at the land group of Forest City Enterprises Inc. until last Dec. 31, said he expects national and a few regional home builders will be interested in portions of the site. He said he expects that interest to rise slowly as builders exhaust existing supplies of land in attractive areas with municipal and township approvals in place. “Only a few builders have the resources and energy to go through the entitlement process for large

continued from PAGE 3

With less than two weeks of marketing efforts under way, Mr. West said he already has a contract to sell 3.5 acres on state Route 43 in Aurora to a national retailer. Mr. West said he believes land on Route 43 will be most attractive to buyers because of other commercial development on the highly trafficked artery. Mr. West said he also is in serious talks with a homebuilder who wants to buy 30 acres near Depot Road on the west end of the former park. He said he won’t identify prospective buyers until individual transactions close. Mr. West said which parcels move first likely will be dictated by their proximity to existing utilities. However, there are roads on all sides of the park to assist in its sale,

parcels of land today,� Mr. Sanderson said. He said he believes portions of the land that have value for residential use will sell faster than commercial uses. Mr. Sanderson agrees that breaking up the site suits the current market’s appetite for the risks and rewards of land development, particularly with underwriting standards for real estate lending remaining strict. In times past, Forest City itself would have been a natural prospective bidder for such a massive land opportunity. However, the Cleveland-based real estate giant has exited that market and is trying to sell most of its land portfolio. Mr. West said the sale price for Geauga Lake sites will vary according to location and how much land

Cedar Fair property Area reserved for water park Geauga Lake Geauga Lake Road

Parcels available for sale are in red.

Au ror aR oa d

a buyer wants. However, he said the land carries an asking price of $15 million for the entire property, or $30,000 an acre. About 300 acres is in Aurora in Portage County. Another 200 acres is in Bainbridge Township in Geauga

d oa R t en Tr LAUREN RAFFERTY

County. Mr. West said the offering excludes about 200 acres that are part of Cedar Fair’s Wildwater Kingdom water park, 1100 Squires Road in Aurora, which remains in operation. ■

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THEINSIDER

THEWEEK FEBRUARY 25 - MARCH 3 The big story: Cleveland Mayor Frank Jackson announced a pact designed to ensure that big development projects in the city of Cleveland directly will benefit as many sectors as possible of the Cleveland community. The accord, called a community benefits agreement, sets goals for the hiring of local, minority and female contractors and trades people on large construction projects. It also is expected to connect local residents with job opportunities and to expand apprenticeship and pre-apprenticeship programs for city youth. Signers to the pact included the Black Contractors Group, the Hispanic Roundtable and the Greater Cleveland Partnership. The direct approach: Barnes Group Inc. of Bristol, Conn., an aerospace and industrial manufacturer, agreed to sell its Cleveland-based Barnes Distribution North America business unit to MSC Industrial Direct Co. for $550 million. Barnes Distribution has 1,400 employees and posted 2012 revenues of about $300 million. It’s a distributor of fasteners and other high-margin, low-cost consumables in the United States and Canada. MSC Industrial Direct of Melville, N.Y., is a distributor of metalworking and maintenance equipment and supplies to industrial customers in the United States.

Growth prescription:

Cleveland Clinic CEO Toby Cosgrove used his annual State of the Clinic address to lay out his vision to continue to grow the health system in terms of its footprint locally and abroad as well as its clinical might. “We’ve had tremendous growth over the last 20 years, and there’s an opportunity for us to grow further as we go forward,” he said. While offering few details, Dr. Cosgrove noted the health system, which owns eight community hospitals, is in negotiations to extend its regional footprint east, west and south. In a follow-up interview, Dr. Cosgrove said the Clinic was in talks with existing health care organizations in all those locations about potential mergers or acquisitions.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Collection Auto Group adds to naming-rights collection ■ The Premium Club — the Cleveland Indians’ 5,000-square-foot lounge that will be unveiled for the home opener April 8 — has a corporate partner and a new name. The Indians and The Collection Auto Group, which owns luxury-brand dealerships in Beachwood, Hudson Middleburg Heights and North Olmsted, were set to announce a naming-rights deal today, March 4, for the former home of 10 suites at Progressive Field. The Collection Auto Club has 100 seats available on a season-ticket basis. It features 20 high-definition televisions, plush seating, deluxe drink and dining rails, and a full bar. Current availability for the club is extremely limited, the Indians said. The Tribe also announced that the Frantz Ward LLP law firm and Cohen & Co. CPAs, both based in Cleveland, and Thogus Products of Avon Lake, a provider of plastic injection molding services, have joined The Collection Auto Group in committing to the space. “We’ve been great partners with the Indians since we started the group eight years ago,” Collection Auto Group president Bernie Moreno told Crain’s. “When the Indians approached us, they said they had some clients who were looking for some higher-end experiences at a baseball game. “I’m not a sports guy, but baseball is a very social sport,” Mr. Moreno said. “It’s a nice way for clients to meet people, and the environment the Indians are setting up is very nice.” Mr. Moreno said the agreement is for three years. The Indians deal is the second high-profile partnership for Collection Auto

Relax: Airspace Lounge, which describe itself as a new-generation airport lounge open to all airline passengers, plans to open a lounge this month at Cleveland Hopkins International Airport. Airspace Lounge said the lounge at Hopkins will be located beyond the security checkpoints near the gates for Concourses A and B. The company said for an all-inclusive fee as low as $20 a day, passengers on any airline will be able to access the lounge, where they’ll find food and beverage and access to business technology.

This and that: Hyland Software, a Westlakebased provider of enterprise content management software, acquired AnyDoc Software, a producer of document and data capture software based in Tampa, Fla. Hyland did not say what it paid for AnyDoc, which has about 40 employees. … Marcus Thomas LLC was named digital agency of record for Sherwin-Williams Paint and Sundries Brands. The Cleveland agency will have responsibility for the digital aspects of Sherwin-Williams’ Dutch Boy, Krylon, Purdy and Pratt & Lambert brands. Billings of the account were not disclosed.

Group in the last 12 months. Last year, it partnered with Horseshoe Casino Cleveland to name the casino’s welcome center and parking garage the Collection Auto Group Centre. — Kevin Kleps

Oswald’s first deal of ’13, but likely not its last ■ In a deal its CEO says is probably the first of more to come in 2013, Cleveland-based Oswald Cos. has acquired for an undisclosed price Knezevich & Foerster LLC, a small employee benefits brokerage in Independence. The cash transaction adds three people to Oswald, including Sue Foerster, a nearly 30year veteran of the insurance business and president and owner of Knezevich & Foerster. She and two other employees will continue to work in Independence until they move into Oswald’s new headquarters, the Oswald Centre, which opens in August at 1100 Superior Ave. in Cleveland. Ms. Foerster has been “a great peer of mine and competitor over the years,” said Robert J. Klonk, CEO of Oswald. She and her people bring roughly 100 clients to Oswald, he said.

Same group, new location ■ Cleveland’s Manufacturing Mart might have lost its space when rents went up at the Galleria in downtown Cleveland last year, but it’s not only still kicking, it’s kicking off 2013 by announcing its first trade show. The Manufacturing Mart will hold what it bills as “THE Supply Chain Trade Show” at the John S. Knight Center in Akron on May 14 and 15. Mary Kaye Denning, founder and president of the organization, said she’s expecting about 150 exhibitors at the event, which will focus on networking, sales generation and productivity strategies. — Dan Shingler

BEST OF THE BLOGS

MILESTONE

Excerpts from recent blog entries on CrainsCleveland.com.

Things are looking up

It’s a start: Draper Triangle Ventures raised another $40 million to invest in startup companies. The Pittsburgh-based venture capital firm, which has invested more than $30 million in seven Ohio-based startups, isn’t done raising money: Draper Triangle’s third fund should top out between $75 million and $100 million. Northeast Ohio companies are bound to get some of that money. Of the $75 million in Draper Triangle’s second fund, four companies in the region received investments.

KYLE EMERY

The Collection Auto Club will be ready for the Indians’ home opener April 8.

“Now she’ll be able to take care of her customers better from the standpoint of compliance,” he said, noting that Oswald, unlike small firms such as Ms. Foerster’s, has a compliance division and in-house attorneys. The need for more resources in light of health care reform was the greatest driver behind her firm’s acquisition, said Ms. Foerster, now an Oswald vice president. “Their (Oswald’s) vision for what’s coming in health reform … and their reaction to it really was, to me, something that was very attractive,” she said. “At this point in my career, I had to acquire additional resources (to keep up) and that just didn’t appeal to me.” Mr. Klonk expects more small brokerages to decide the same, which he said should open the door for Oswald to acquire more firms this year. Oswald acquired Union Insurance Group last May and already is in talks to acquire a couple firms in its existing footprint in Ohio, Michigan and Florida, he said. — Michelle Park

GEORGE SHUBA

From left to right, Norm Heinle, Carol Heinle, Al Heinle and Renee Heinle Close of The Sausage Shoppe. COMPANY: The Sausage Shoppe, Cleveland OCCASION: Its 75th anniversary

Talk about finely aged meat. The Sausage Shoppe, at 4501 Memphis Ave. in Old Brooklyn, just celebrated 75 years in business. Hans Kirchberger and Theo Johanni started The Sausage Shoppe March 3rd, 1938. The recipes they brought to Cleveland from Schweinfurt, Germany, are still used today in the production of The Sausage Shoppe’s lunchmeats and sausages. The store currently is owned and operated by Norm Heinle, who has been at the company for more than 50 years. Mr. Heinle’s origins at the company are humble. His first jobs including cutting the grass and washing pots and pans, before moving on to learning the art of sausage making. In addition to keeping true to the original recipes, which are allergen, preservative and nitrate-free, Mr. Heinle “has created many new award-winning products with those same qualities,” the company says. More information on The Sausage Shoppe is available at www.sausageshoppe.com. Be sure to check out the charming pig logo at the top left of the website.

Send information about significant corporate anniversaries to managing editor Scott Suttell at ssuttell@crain.com.

■ Clevelanders are quite a bit less miserable than they used to be, according to the latest ranking from Forbes.com. Remember the days when we were No. 1, or close to it, on this list? Not anymore. Cleveland is only No. 17 now. We’re not even the most miserable city in Ohio; Toledo has that distinction, at No. 11. Forbes.com uses nine categories to come up with a “misery index.” They include serious metrics, such as violent crime, unemployment, foreclosures, taxes (income and property) and home prices, along with less-weighty quality-of-life issues such as commute times and weather. The most miserable city in the country, as Forbes.com ranks it: Detroit. No. 2 is Flint, so things must be really rough in Michigan.

Cash for (not quite) clunkers ■ Used cars have become so scarce, The Wall Street Journal reported, that auto dealers such as Doug Waikem, president of Waikem Auto Group in Massillon, “are scrambling to find suitable vehicles — and paying top dollar when they do.” A few weeks ago, The Journal noted, “Justin Severson put an ad on Craigslist to sell his 13-year-old Honda, and within a few minutes an eager and unexpected buyer was on the phone” — Mr. Waikem, who has seven new-car franchises in Northeast Ohio. Mr. Severson “drove his Accord to the dealer’s showroom two days later and picked up $5,200 in cash,” according to the newspaper. The dealer “gave me a fair price and it was handled within a few days,” the 31-year-old Uniontown resident said. “I am spending more time now trying to buy cars than sell them,” Mr. Waikem told

The Journal. He now parks delivery vans that advertise his purchases at high school sports events and uses a computer program that alerts him whenever local used-car postings appear on Craigslist. The shortage of used cars “stems from the deep plunge in new-car sales between 2008 and 2010, and the virtual disappearance of new-car leases during the financial crisis,” The Journal said. “As a result, three-year-old cars are now hard to find and even older models are holding their value.”

Cooking up a storm ■ Timothy Rios, executive chef at Canterbury Golf and Country Club in Shaker Heights, is competing at the March 18 American Culinary Federation Northeast Regional Conference in Verona, N.Y., for a prestigious designation: Regional Chef of the Year. At the competition, chefs “will have 15 minutes to set up, 60 minutes to fabricate and cook four portions of their dish, 10 minutes to plate the dish and 15 minutes to clean up,” according to the federation. A panel of judges will select the winner based on cooking skills, taste and professionalism. The winner of the regional competition will compete for the national title in July in Las Vegas. Chefs are nominated by their peers and compete against other regional chefs for the award. To be nominated, Mr. Rios needed to have demonstrated “a high standard of culinary skills, advanced the cuisine of America and given back to the profession through development of students and apprentices.”


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