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3/25/2011
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$1.50/MARCH 28 - APRIL 3, 2011
Material costs jump, vex weary contractors
(TWO) DOLLARS AND SENSE Again for a buck, former Nat City CEO Peter Raskind tries to rescue a Cleveland institution
As area construction stirs, spike in staple prices forces tough decisions
By MICHELLE PARK mpark@crain.com
I
t’s curious that, early in this interview, Peter Raskind says talented people are attracted to stable situations. When asked to address why, then, he’s doing what he’s doing — leading the Cleveland city schools — he grins. You caught me, he replies. “It’s not that I’m some sort of adrenaline junkie,” he remarks. EDITORIAL: “I’m far from it, actually.” Mr. Raskind Mr. Raskind, who was CEO of and Cleveland National City Corp. in the final school offimonths before it disappeared cials have no from Cleveland’s landscape, choice but to now has twice become interim make difficult head of organizations in difficuts. Page 10 cult straits. His salary in each case: $1. His goal with both bodies: to leave them more stable for the talent that follows. He worked first beginning in late 2009 for the then-beleaguered Cleveland-Cuyahoga County Port Authority. Now, he’s striving to close by June 30 a $47.5 million budget shortfall for the 2011-2012 school year at the Cleveland Metropolitan School District as its interim CEO. Mr. Raskind, 54, hadn’t set out to do any of this. For a time, he was just tired. See RASKIND Page 4
INSIDE On the right trak
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Calling 2010 a “stability year,” Datatrak International Inc. CEO Laurence Birch (pictured) sees 2011 as an opportunity to rebound even further from a disastrous 2009 when the software company lost $1.9 million. The company’s profit last year was its first since 2005. Read Chuck Soder’s story on Page 5.
By STAN BULLARD sbullard@crain.com
MARC GOLUB
Peter Raskind in January was named the interim CEO of the Cleveland Metropolitan School District and must close a $47.5 million gap in the district’s budget.
Last week, the price for a five-pound box of sinkers — coated nails used in wall-frame construction — shot up to $8.50 from $7.50 at Cleveland Lumber Co. Vince Valentino, who owns the West Side building goods supplier, said previous 2% or 3% hikes in the price his supplier charged Cleveland Lumber for the nails weren’t worth changing the signs at his place for his own customers. But he couldn’t swallow in its entirety a INSIDE: A sample recent 20%, across-the-board of prices for conspike in nail prices — hence, his struction materials own 13% price increase. products that are at “That’s the profit margin,” the whim of global Mr. Valentino said. demand. Page 9 Rapidly rising costs of building materials such as copper and steel pose a new problem for a construction industry already bedeviled by its worst slowdown in 50 years. Materials linked to the global commodity markets spiked astronomically over the last few years even as U.S. construction was at a virtual standstill. Now, with the real estate market starting to revive, even higher material costs are whacking the bottom lines of contractors who already were slashing their margins to win work — a situation that could drive more contractors out of business. See COSTS Page 9
Crowne Plaza sale talks awaken prior tunnel plans Bidders eye connection to convention center By STAN BULLARD sbullard@crain.com
A potential sale of the Crowne Plaza City Centre in downtown Cleveland has revived talk of building a tunnel beneath East Sixth Street that would connect the property at 777 St. Clair Ave. to the Cleveland Medical Mart and Convention Center under construction at the old convention center site.
Talk of such a weather-shielding connection is not new. The idea has been bandied about since the hotel was proposed in the early 1970s, discussed again in a joint venture with the city of Cleveland in the mid-1980s and yet again when Lane Hotels of St. Louis bought the property in 1989 from the original developer, the late John Carney. Dave Johnson, public relations director for the medical mart and
convention center, said he has received calls from as many as five prospective bidders for the property over the last six months about the possibility of connecting the hotel to the rebuilt convention center. He said he is not aware of specific talks between the mart, Cuyahoga County officials and a successful bidder for the property. The nearly 500-room hotel clearly is in play. A web site of Atlanta-based TriMont Real Estate Advisors, at www .TriMontrea.com, lists the property See SALE Page 21
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EVENT PLANNING The green movement is hitting the events industry, albeit slowly ■ Page 13 PLUS: VENDORS EYE MED MART ■ JUMP BACK BALL ■ & MORE
Entire contents © 2011 by Crain Communications Inc. Vol. 32, No. 13