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POSITIVELY CLEVELAND TO ANNOUNCE EXPANDED FOCUS
ON THE WEB
Group aims to shape region’s image
Bioscience directory live
CEO sees possibility to have impact greater than just luring visitors By JAY MILLER jmiller@crain.com
Next Monday, May 14, roulette wheels will start spinning at the Horseshoe Casino Cleveland. In the fall of 2013, the new Cleveland Medical Mart & Convention Center will open its doors. In response, Positively Cleveland,
the local convention and visitors bureau, is transforming itself by focusing not only on bringing conventioneers and tourists to Northeast Ohio, but also on bolstering the economic impact of the region’s hospitality business. At Positively Cleveland’s annual meeting, set for this Wednesday, May 9, president and CEO David
Gilbert, who has led for the group for 16 months, will unveil a five-year strategic plan for the organization. Instead of just promoting the city to meeting planners and advertising tourist attractions such as the Rock and Roll Hall of Fame and Museum in television markets outside the region, Mr. Gilbert said Positively Cleveland intends to play a greater
role in shaping “how Cleveland looks, acts and feels as a travel destination.” “We’re finally there, in terms of running with a new vision of the organization,” Mr. Gilbert said in an interview with Crain’s editorial board. “I honestly believe it is vastly different than how the organization was run prior.” He also will discuss plans for the See FOCUS Page 7
Bureau may host events a la sports commission
See SPORTS Page 7
BrandMuscle will move 150 to downtown 1100 Superior digs will offer room to add staff By CHUCK SODER csoder@crain.com
By JOEL HAMMOND jmhammond@crain.com
As Positively Cleveland, the region’s convention and visitors bureau, lays out this Wednesday a detailed map for its future, it will look to the recent past of its downtown neighbor — the Greater Cleveland Sports Commission — as a potential guide. Positively Cleveland president and CEO David Gilbert — who in January 2011 assumed that role in addition to the same duties at the sports commission — said in a recent meeting with Crain’s editorial board that Positively Cleveland would explore owning and operating some of its own meetings and conferences. In creating its own events, Positively Cleveland would follow the lead of the sports commission, which in 2006 staged the first Continental Cup, an annual international youth
Crain’s first Bioscience Directory of Northeast Ohio companies, produced with the help of BioOhio, provides information about companies that are helping lead the state in a profound economic transformation. You can find the directory at www.CrainsCleveland.com/section/bioscience.
MARK STAHL PHOTOGRAPHY
Under-18 boys from the Internationals Soccer Club (blue), a team from Ohio, and Liberia FC (red) compete in the 2011 Continental Cup.
One of Northeast Ohio’s fastestgrowing software companies is moving to downtown Cleveland. BrandMuscle Inc. of Beachwood is in the process of finalizing a lease to take 40,000 square feet at 1100 Superior Ave., which is on the southwest corner of Superior and East 12th Street. The company Alexander today employs more than 150 people at its headquarters on Park East Drive in Beachwood. It plans to move all of them downtown before the end of 2012, said BrandMuscle CEO Phil Alexander. They’ll have a lot more leg room at 1100 Superior, formerly known as the Diamond Building. The new space on the building’s fourth and fifth floors is 5,000 square feet bigger See MOVE Page 6
Early signs of economic inclusion group’s ‘action steps’ show promise By JAY MILLER jmiller@crain.com
19
The Northeast Ohio construction industry soon may take a big step forward in the long-running effort to increase the presence of minorities and women at building sites.
After more than a year of work, the Commission on Economic Inclusion is preparing to release a study that will recommend as many as 10 “action steps” to bring more women and minorities onto area construction sites as both workers and as subcontractors. The study
includes a plan for what are called community benefits agreements, or CBAs, that set hiring requirements and offer developers incentives if goals are met. The inclusion commission’s April e-newsletter said the study’s findings “have been presented to, and
affirmed by, leaders of all segments involved in the construction arena: public and private sectors, project owners, construction companies, unions, economic inclusion organizations, training programs and others.” Joe Roman, president and CEO
of the Greater Cleveland Partnership, parent organization of the inclusion commission, was reluctant to disclose details of the study until it had been discussed with his group’s leadership. He said last Thursday, May 3, he hoped to be See INCLUSION Page 18
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NEWSPAPER
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SPECIAL SECTION
HIGHER EDUCATION Colleges’ add-on fees under more scrutiny as costs to attend continue to rise ■ Page 13 PLUS: GROWING VETERAN ENROLLMENT ■ & MORE
Entire contents © 2012 by Crain Communications Inc. Vol. 33, No. 19
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GOING THE RIGHT WAY
COMING NEXT WEEK
Ohio was one of 18 states that in March registered what the U.S. Bureau of Labor Statistics characterized as a “statistically significant decline” in unemployment from a year ago. Ohio’s jobless rate in the past year has dropped by 1.3 percentage points, to 7.5% in March 2012 from 8.8% in March 2011. Here’s a list of states in which unemployment has fallen by at least 1 percentage point:
Health Care Heroes Crain’s once again will recognize and profile some of Northeast Ohio’s top health care professionals in this annual section.
State
Unemployment March 2012
Unemployment Percentage March 2011 change
Alabama
7.3%
9.3%
-2.0%
REGULAR FEATURES
CORRECTION
Michigan
8.5
10.5
-2.0
Best of the Blogs ..19 Big Issue ................8 Classified ..............18 Editorial ..................8 Going Places ........12 Reporters’ Notebook ..........19 What’s New ..........19
An April 30, Page One story that described the availability of jobs in technical professions misrepresented a statement made by Ken Alfred, executive director of the Cleveland Engineering Society. Mr. Alfred said his daughter, who has an advanced engineering degree, is not having trouble finding a job in her field. He said one of the major traditional employers of engineers in her niche is not hiring.
Florida
9.0
10.7
-1.7
Nevada
12.0
13.6
-1.6
South Carolina
8.9
10.4
-1.5
Tennessee
7.9
9.4
-1.5
Connecticut
7.7
9.1
-1.4
Ohio
7.5
8.8
-1.3
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: Joel Hammond (jmhammond@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 Ginger Christ (gchrist@crain.com) Manufacturing, marketing and retailing Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing director: Lori Grim (lgrim@crain.com) Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Marketing/Events coordinator: Jessica Snyder (jdsnyder@crain.com) Advertising sales manager: 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) Lindsey Nordloh (lnordloh@crain.com) Office coordinator: Toni Coleman (tcoleman@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)
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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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INSIGHT
Stakeholders fearing natural gas price’s floor Oversupply situation could have unwelcome effects on drillers, landowners and the state By DAN SHINGLER dshingler@crain.com
MARC GOLUB
Cleveland CycleWerks’ Scott Colosimo at his Cleveland Heights home
CYCLES’ FULL-CIRCLE RIDE Cleveland entrepreneur, originally shunned stateside, started in China — but now plans to produce bikes back home By DAN SHINGLER dshingler@crain.com
S
cott Colosimo says people who hate him for making motorcycles in China can stop sending him nasty emails like the one that read, “I hope your bike blows up and kills you,” because later this year he’s going to start making motorcycles in Cleveland at his company, Cleveland CycleWerks. But to build inexpensive bikes the way he wanted — most of his models cost about $3,200 — he needed to start in China, he said. “I’ve always wanted to make bikes here,” Mr. Colosimo insists.
Since it began shipping bikes in 2009, CycleWerks has sold 9,000 of them, all designed by Mr. Colosimo and his company but built by contract manufacturers in China. He tried to build bikes in Cleveland, he said, but he was not able to do it. Now he’s going to try again. He has bought a closed, 60,000-square-foot factory on West 65th Street in Cleveland to serve as the company’s U.S. headquarters and plant. It’s an uncharacteristic investment for Mr. Colosimo. See CYCLES Page 17
“People like to rag on China and say China sucks — China has made my company possible.”
Wouldn’t you just know it — Ohio strikes gas and within months the price of the stuff plummets. A year ago, this newspaper was running its first stories about Ohio’s potential shale gas industry. At the time, natural gas was selling for more than $4 per thousand cubic feet (MCF). Since then, billions of dollars have been spent by drillers to secure mineral rights in Ohio’s Utica shale region. But though the state has been abuzz with activity as drilling rigs move in, natural gas recently has been selling for around $2 per MCF
and many worry the price will fall further. Just how the price drop will affect the industry’s development in Ohio remains to be seen. However, what’s certain is that the falling prices are not welcome by drillers, by landowners waiting for royalties from the sale of gas extracted from their properties or by the state, which is anticipating an influx of badly needed tax revenue in its coffers. Low gas prices are the talk of the industry not just here, but across the country, and it’s a situation that’s likely to get worse before it gets better, say some experts. “That’s all anyone in the industry See PRICES Page 9
THE WEEK IN QUOTES “We’re finally there, in terms of running with a new vision of the organization. I honestly believe it is vastly different than how the organization was run prior.”
“A fresh set of eyes on leasing, property management and construction can be helpful.” — Jim Clark, senior vice president, Duke Realty Corp. Page 10
— David Gilbert, president and CEO, Positively Cleveland. Page One
“We set out to build a program that would honestly give something back from the university perspective ... in recognition of their service to our country.”
“We try to be fair. … In order to maintain that low tuition, we sometimes need to add on an applicable fee. It seems to be the right thing to do.”
— Eric Patterson, director of Veteran Affairs, John Carroll University. Page 13
— Karen Miller, vice president of enrollment management and student affairs, Cuyahoga Community College. Page 13
– Scott Colosimo, founder, Cleveland CycleWerks
At long last, LCCC invests to accommodate its decade of growth $65 million in projects will help relieve overpopulated campus By TIMOTHY MAGAW tmagaw@crain.com
Lorain County Community College has stomached more than a decade of enrollment growth but until recently has invested little in expanding its facilities to accommodate hordes of new students. That’s changing. The community college based in Elyria is in the midst of a roughly
$65 million construction and renovation program to expand its reach in Lorain County and to modernize an aging campus that was built for 6,600 students but now serves more than 13,000. The college’s latest — and most expensive — project is a $21.5 million, 50,843-square-foot science building expected to break ground this month. The new building will house classroom and lab space and will be the
last major project for the foreseeable future, according to Roy Church, who has served as the college’s president since 1987. About $40 million of Church other projects already are under way. Last year, the university invested $17.5 million to renovate its old library, $12.5 million in a new culinary arts and convergent digital arts building, and $12.5 million for
a new satellite campus in North Ridgeville. “There are some facilities that are just unique to having a reputable, highquality collegiate environment,” Dr. Church said. Enrollment at the college had been on an upward trajectory from 1999 until 2010 as the number of students doubled to 13,685 from 6,773. Enrollment, however, fell in 2011 to 13,146. Dr. Church said he expects enrollment numbers to “soften a bit” over
the next five to eight years because the number of students graduating high school in the region continues to decline in the wake of demographic shifts. Still, Dr. Church said the region’s steady transition from a traditional manufacturing economy could continue to nudge enrollment numbers upward as workers look to enhance their skill sets — something that has been a main driver for the college’s growth over the last few years. See LCCC Page 17
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Staffing firm starts staffing up Alexander Mann could employ 300 here, state estimates By STAN BULLARD sbullard@crain.com
Alexander Mann Solutions Corp., a global provider of personnel services, is recruiting for two jobs at what could grow to a 300-person Cleveland office that it is working to establish with the help of state and local officials. The company, the New Yorkbased U.S. unit of Alexander Mann
Solutions Ltd. of London, had postings last Friday morning, May 4, on the LinkedIn social networking site for a job for a recruiter and another for an administrative assistant to schedule and coordinate interviews, both at an office in Cleveland. Mark Milner, interim marketing head at Alexander Mann, said in an email Friday afternoon that he could confirm the company “will be extending our global footprint to Cleveland.” However, he said he would not discuss a potential Cleveland office in detail or the company’s reasons for choosing Cleveland until June “for commercial reasons.” Local business attraction experts interviewed earlier in the week were
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confident about the city’s chances to land the office, but would not pop open the champagne to celebrate a win until they get word formally — and directly — from Alexander Mann. Michael Deemer, a Downtown Cleveland Alliance vice president who focuses on luring businesses to the city center, said he considered the online job postings “a positive indicator for Cleveland” and he would continue advocating for a downtown location over other city alternatives. Mr. Deemer confirmed that the alliance has worked jointly with the city, business attraction group Team NEO and others to bring Alexander Mann to the city. Chris Warren, chief of regional development for the city of Cleveland, said the company is considering “multiple opportunities” within employment hubs inside the city limits. He declined to elaborate on them or the company’s quest, but noted he believes the company would use Cleveland as a base for Midwest operations. Competition is stiff for the jobs Alexander Mann could bring. The Ohio Tax Credit Authority on Monday, April 30, approved a 65%, eight-year job creation tax credit for Alexander Mann. Cleveland is competing with North Carolina and Michigan for the project, according to a memo provided by the Ohio Department of Development after the tax credit was approved. The state said the company also could locate the added jobs at existing operations in Poland and the Philippines.
Big promises The state estimates the project could net as many as 300 jobs and a payroll of almost $13 million annually within three years of the opening of the office. AMS, as the company refers to itself, provides outsourced recruitment and human resources services, such as identifying, interviewing and placing candidates. It also places contract workers. Alexander Mann was launched in 1996 and has a staff of more than 1,500 employees in more than 60 countries. The state noted the jobs at the proposed office would include administrative and human resources staff for Alexander Mann itself. The company could add a significant tenant to the city’s core or an outlying neighborhood business district. If the company reaches the state’s 300 full-time job estimate, it would require more than 50,000 square feet of office space. A February 2011 article in Workforce Management, a Crain’s sister publication, noted that companies such as Alexander Mann are in demand as the economy rebounds because corporations slashed staff with recruiting skills in the last downturn. ■
Volume 33, Number 19 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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Crain’s publisher to receive SPJ distinguished service award Crain’s Cleveland Business publisher and editorial director Brian Tucker and longtime public relations executive Tony Kozlowski will receive the Society of Professional Journalists Distinguished Service Award. They will be honored for their contributions to excellence in journalism and for their service to the Cleveland chapter of SPJ. Both men are past presidents of the journalism society. The awards will be presented at a
June 13 luncheon at the City Club of Cleveland along with a yet-to-beannounced student winner of the four-year Phillip W. Porter Scholarship. A graduate of Kent State University, Mr. Tucker joined Crain’s as editor in Tucker 1985 from The Associated Press, where he had been assistant bureau chief of the news service’s 60-person Los Angeles bureau. He began his career in journalism
as a part-time sportswriter at the Ashtabula Star Beacon and the Conneaut News Herald, in his hometown. Mr. Tucker earned some notoriety — and respect — in the news business when he and several colleagues resigned their reporting jobs at the daily Mining Journal in Marquette, Mich., in 1977. The reporters quit after their publisher, John McGoff of Panax Corp., fired
the editors of two of his newspapers, including the editor of the Mining Journal, when they refused to publish a biased and untrue article about President Jimmy Carter and his wife. Keith Crain, chairman of Crain Communications Inc., applauded the award to Mr. Tucker. “Brian Tucker is the consummate journalist,” Mr. Crain said. “Although he may now carry the title of publisher, he is and always will be a reporter at heart.”
Mr. Kozlowski for many years was a public relations executive with Standard Oil Co. (Ohio) and its successor, BP America Inc. He has played a leading role in managing the annual “Best of Ohio” journalism awards sponsored by the Cleveland, Cincinnati and Columbus chapters of SPJ. The luncheon will be at the City Club at 850 Euclid Ave. at noon. Admission is $25. For more information or reservations, go online at http:// spjdsa2012.eventbrite.com. ■
Move: Young workers should boost city
planned move downtown happen as well, Mr. Deemer said. The move is just the latest in a series of big developments in downtown Cleveland, which soon will have a casino, a new convention center and a redeveloped East Bank of the Flats, said Rob Roe, managing director with Jones Lang LaSalle. The addition of a fast-growing software company to the mix should give the city a big boost, he said. “That’s certainly where our economy is headed,” Mr. Roe said.
expand the building, but in the end the plan didn’t work out, according to Mr. Doutt, who wouldn’t say whether Beachwood offered financial assistance to help the owner expand the building. “We’re very sorry to lose this company,” Mr. Doutt said. BrandMuscle, which this year was acquired by Cleveland private equity firm The Riverside Co., will become the second high-tech company to move from Park East Drive to downtown Cleveland over the past few years. Rosetta Marketing Group LLC of Hamilton, N.J., in 2010 started moving about 400 employees from multiple Northeast Ohio offices into a single office at 629 Euclid Ave., formerly known as the National City Bank Building. The interactive marketing firm’s largest local office was at 3700 Park East Drive, which is next door to BrandMuscle’s current headquarters. ■
continued from PAGE 1
than the company’s current headquarters, and BrandMuscle will have the option to take another 10,000 square feet on the fourth floor. Should it need even more space, BrandMuscle would work with building owner American Landmark Properties Ltd. of Skokie, Ill., to expand within the building, Mr. Alexander said. The ability to expand continuously without moving was one reason BrandMuscle decided to move downtown, Mr. Alexander said. The company, which sells software that helps businesses customize marketing materials for local audiences, has more than doubled the size of its staff over the past four years. Another reason is that Brand-
Muscle employs a lot of young people who like the idea of working in the heart of Cleveland, he said. “We had a lot of people lobbying for downtown,” he said. The company also considered locations in Beachwood, Independence, Mayfield Heights and Solon. The city of Cleveland offered BrandMuscle financial incentives to encourage the company to move downtown, Mr. Alexander said. Neither he nor a spokeswoman for the city of Cleveland would provide details about the offer.
Mayor makes his pitch The move is a big win for the city of Cleveland, given the company’s size, growth trajectory and young employee base, which might be
inclined to live downtown, said Michael Deemer, vice president of business development for the Downtown Cleveland Alliance. “It’s a creative, technologyoriented firm with a younger work force,” he said. The alliance, which works to promote and improve downtown Cleveland, helped recruit BrandMuscle to the city, as did the city itself, Mr. Deemer said. He noted that Mayor Frank Jackson spoke with Mr. Alexander near the end of BrandMuscle’s site search to encourage the company to make the move. American Landmark Properties and real estate services firm Jones Lang LaSalle, which represented BrandMuscle, helped make the
Following Rosetta’s footsteps Cleveland’s gain is Beachwood’s loss. The eastern suburb did not have available space that met BrandMuscle’s needs, said Beachwood economic development director Jim Doutt. The city of Beachwood tried to work with the owner of BrandMuscle’s current headquarters at 3750 Park East Drive to help
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Focus: Bustle of new activity provides right climate for shift continued from PAGE 1
organization to generate its own revenue by creating and staging its own events here. (See related story, Page One.) Wary of a letdown after, as Mr. Gilbert put it, “the luster wears off the shiny new toys” — the casino, the convention center and a raft of new or refurbished hotels — the organization will work on multiple fronts to advance the region’s travel and tourism prospects. Mr. Gilbert said he expects to retain the controversial and sometimes confusing Positively Cleveland name for the organization. But he intends to attach a brand name to the area as a tourist destination, a la “I Love New York.” “Right now, we don’t have a brand that’s been tested that speaks to visitors,” he said. “Whatever brand
comes out of this, we have to live it as a community.” Positively Cleveland also is taking on the role of making it easier for visitors to find their way around. The organization is working to create a unified system of signage to help people easily travel from the airport to downtown Cleveland to Lakewood and Coventry and beyond. He expects what is called wayfinding signage to answer such questions as, “How do you get to (and through) University Circle?” To help incoming tourists, and to boost traffic at local hotspots, the organization has installed software on its website that will give visitors a one-stop place to buy their airline tickets, reserve a rental car, make their hotel reservations and buy tickets to the various museums in the market.
Sports: Niche markets could be ripe for events continued from PAGE 1
sports festival that until 2010 featured only soccer. The sports commission early on lured legendary Italian soccer team AC Milan to be its partner, and in 2011 the soccer event drew nearly 160 teams from eight states and Brazil, Bermuda, Canada and Colombia. Now, Mr. Gilbert, as part of Positively Cleveland’s latest strategic plan, wants to identify similar opportunities on the meetings and events side. He said the organization has the know-how to operate events, though he was quick to add, “We’re not trying to replicate what someone else is doing. “We want to identify potential niches in the market,” Mr. Gilbert said. “If Cleveland has a critical mass in an area,” Positively Cleveland will consider that area for its event potential, he said. He mentioned urban farming specifically as an area that Positively Cleveland could target for a conference or meeting it could stage.
Honing their craft Mr. Gilbert said in a 2010 Crain’s story that the sports commission “lost its shirt” on the Continental Cup in its first year, but it slowly has built the soccer portion of the sports festival and has expanded it to other sports. Youth basketball and baseball components, sponsored by the Cleveland Cavaliers and Cleveland Indians, are part of it today. Another proprietary event created by the sports commission is the Cleveland Classic, a football game at Cleveland Browns Stadium each fall featuring historically black colleges and universities. Mr. Gilbert has touted the sports commission’s ability to make improvements year after year to the events it stages, something it’s unable to do with so-called “oneoff” events such as the 2007 NCAA Women’s Final Four and next summer’s Senior Games, which it does not control. Those one-off events also require substantial bidding fees that take a chunk out of the group’s operating budget, which ranges from $2 million to $2.5 million annually. The Continental Cup, on the other hand, requires no bidding
MARK STAHL PHOTOGRAPHY
Action at last year’s Continental Cup baseball tournament fees, and now is a profit generator for the sports commission.
Grow your own funds If Positively Cleveland was to develop similar revenue-generating events, it would have even more money to market the region. The group’s $8.5 million budget comes almost exclusively from the county’s 4.5% tax on hotel rooms; a chunk of that $8.5 million goes to MMPI Inc., the Chicago-based developer of the Cleveland Medical Mart & Convention Center. Sports commissions nationwide are going the create-your-own-events route, said Don Schumacher, president of the Cincinnati-based National Association of Sports Commissions, which named the Continental Cup the Outstanding Locally Created Event in 2010 and 2011. This year, the sports commission expects 4,000 athletes to descend on the region for the four-day event, which should have an economic impact of $3 million. Mr. Schumacher specifically cited a group called the Richmond (Va.) Sports Backers, the budget of which now exceeds that of the Richmond Metropolitan Convention and Visitors Bureau, thanks to revenues generated from the Backers’ own events. “It’s a trend that’s going to continue,” Mr. Schumacher said. “Cleveland is among the cities that learned a long time ago that if you create these events, you create revenues.” ■
‘Boom’ times On a more operational level, the organization has been greatly restructured. Mr. Gilbert said of the nine top executives in the organization, six have joined in the last 16 months. He said his new team now will be figuring out how best to adapt to what Mr. Gilbert believes is a more attractive convention and tourist city. He bases that forecast on more than the casino and new convention center, which is under construction. “We’ve got a boom going on that I think is unlike anything going on in the country,” he said, ticking off the new Greater Cleveland Aquarium and Museum of Contemporary Art, the renovated Cleveland Museum of Art and what he estimates is $200 million in new hotel development. Those developments, he said, have caught the eye of meeting planners who come to scout the town as a future convention site. But that boom could raise hotel rates to a point where Cleveland is priced out of the range of some of the social, fraternal and military organizations that have been the city’s bread-and-butter conventions in recent years. Avoiding that situa-
tion will require a more strategic marketing effort. “If you asked what conventions we have been going after (in the past), it would be everything and anything,” Mr. Gilbert said. “You can’t do that in this business.” So, Mr. Gilbert intends for Positively Cleveland to develop a focused strategy once the casino and convention center up and running. MMPI Inc., the Chicago developer that will run the convention center and medical mart, will book medical and health care conventions. Positively Cleveland will handle the rest. “We have to find the important markets,” Mr. Gilbert said.
Cleveland: tourism central One longtime destination marketer thinks Positively Cleveland is making the right move at an opportune time. “Being out there with any kind of new campaign right now can only benefit Cleveland,” said Cristyne Nicholas, who was happy to have the “I Love New York” tagline working for her when she was CEO of NYC & Co., New York City’s tourism marketing organization. “CVBs that are flexible and understand the changing dynamics will
be the ones that succeed,” Ms. Nicholas said of convention and visitors bureaus nationwide. Ms. Nicholas, who now is CEO of Nicholas & Lence Communications, a communications firm, said cities such as Cleveland within driving range of large populations can benefit as high gasoline prices have travelers looking closer to home. Mr. Gilbert’s plan also has been well-received by members of his board of directors, who have lived through the hard times without a viable convention center. “David Gilbert is doing an outstanding job,” said Rachel Talton, CEO of Synergy Marketing Strategy & Research Inc. of Fairlawn. “The organization has transformed itself to capitalize on Cleveland as a tourist destination.” Jon Pinney, a partner with Cleveland’s Kohrman, Jackson & Krantz law firm who has been on the Positively Cleveland board for seven years, said he believes the branding effort rightly will be a big focus in the months ahead. “I’m extraordinarily excited about the new direction,” Mr. Pinney said. “I believe the restaffing and other changes (Mr. Gilbert) has made are working.” ■
?
WHO’sWHO
IN NORTHEAST OHIO 150 Names You Should Know
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PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Too bad
S
ome charter school operators aren’t happy that the Cleveland Metropolitan School District’s transformation plan would give a public-private watchdog panel a say over which charter schools in Cleveland would receive money from the district’s operating levy and which ones would not. Our response to their lament? That’s too bad. The existence of the Transformation Alliance, as the panel is known, is essential to the success of the School Transformation Plan pushed by Cleveland Mayor Frank Jackson, who oversees the district, and schools CEO Eric Gordon. Without the alliance, the transformation plan would be ineffective because of its reliance on quality charter schools to share the load with the district’s own schools in providing a sound education to young people in Cleveland. The alliance would be composed of parents, educators, business people and other civic leaders who would evaluate district and charter schools using common performance standards. It would recommend which schools should be supported and which should be closed or cut off from public money. The district’s central office then could direct resources to the best schools and could close failing ones. The quality assurance role the alliance would play is important in light of Mayor Jackson’s plan to ask Cleveland residents this fall to raise the school district’s operating levy. Under the transformation plan, charter schools would be eligible for money generated by the tax. For voters to say “yes” to a levy increase, they’d need to know that the added dollars wouldn’t be wasted on charter schools with poor to mediocre performance track records. And there are good charter schools worthy of voters’ support. Among them are three of the schools — Entrepreneurship Preparatory School (better known as E Prep), Citizens Academy and Intergenerational School — that come under the umbrella of Breakthrough Schools. All three are rated excellent or better on the state’s report card. They are model schools that could serve as prototypes for replication in the district. Breakthrough Schools will have a role in the Transformation Alliance, leading some charter school operators to worry that it will use its influence to block them from opening new schools. We believe their concerns are misplaced. The people behind Breakthrough are all about delivering a quality education to as many Cleveland students as possible. If charter operators that aren’t in the Breakthrough realm have proven they can do the job, then we’ve little doubt they’ll be welcome to join in the cause of teaching the city’s young people to the extent that the operators’ finances and resources merit. State Rep. Sandra Williams, a Democrat from Cleveland who is co-sponsoring the House version of the bill that would clear the way for implementation of the transformation plan, is right when she says, “The Transformation Alliance is definitely necessary in order for the bad charter schools to stop opening up in our district.” It’s also needed to stop lousy existing schools from ruining children’s lives. We wholly support the concept.
FROM THE PUBLISHER
Occupy Cleveland occupies thoughts
L
Ohio’s first legalized casino, just a couple ast week, as I watched a local hundred yards, or less, from the protest early-morning television news site. The downtown area has been waiting show, I almost laughed out loud a long time for something new to celeat the coverage of the “news” that brate, other than last summer’s arrival of the city was pulling down the Public the cast, filmmakers and crew of “The Square tents of the Occupy Cleveland Avengers,” and it’s important to have protesters. Public Square dressed up and ready to Breathlessly, the reporter spoke at length go. about how gentle the police Now, dear reader, don’t get were and that they’d let the pro- BRIAN me confused with the folks who testers have their moment to take TUCKER derided the Occupy movement pictures, or whatever, before as little more than the usual the aluminum pole and plastic cast of anarchists and full-time sheet contraption was dismantled. protesters who show up for I am full of conflicted emotions every cause. As I have written about this story. On one hand, before, these people represented I’m glad the police weren’t heavy a cross-section of America, and handed — and some might they were more than entitled to have been — in their handling express their disdain for the of this because nobody needed greed that nearly killed our economy. any reason to be hot-headed. Score one And I agree that people should be for Cleveland’s finest. allowed to protest and criticize as much And I assume that the Jackson adminas they want, but they need to do it in a istration had some hand in planning this fashion that doesn’t turn our streets into clean-up of the city’s treasured center in a campground. a peaceful, orderly manner. Good work, **** if my assumption is accurate. CONSTRUCTION PROGRESSES APACE We are approaching the opening of
on our new convention center and its adjacent medical mart, and I, for one, am excited. When it opens, will it be exactly as it was proposed when the county commissioners agreed to impose the tax that financed its construction? No, but the entire world is different than it was back then. For example, we no longer have county commissioners, but that had less to do with this project than the greed and abuse of power of one of them. With a new advisory task force in place, and the hiring of former McKinsey exec Jim Bennett, the project is in better hands than ever. More importantly, we will finally have a convention center to help drive business to our hotels and restaurants. There is no way that ever happens without a med mart-convention center plan that appealed strongly enough to the commissioners that they summoned the political will to impose a tax to get it built. They eventually were driven from office by a reform of the entire governmental system, but on that project they deserve the thanks of all of Greater Cleveland. ■
THE BIG ISSUE If your son or daughter was graduating from college and ready to look for a job do you think Northeast Ohio would be a good place to start his or her career?
CAMERON ORR
KRIS HOCEVAR
STEVEN CRAIG
STEVE CORCORAN
Painesville
Euclid
Peninsula
Bay Village
I have a daughter who just graduated and she is looking for a job in Northeast Ohio, so it’s close to my heart.
My wife and I were talking about that last night. The city is definitely growing, and hopefully in 21 years there will be good things happening and my son (now 18 months old) can take advantage of them.
What’s not here? Northeast Ohio’s got enough of everything that any city has.
This is a great city to meet people and build relationships. We have emerging businesses.
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
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Prices: Drillers still after wet gas “It’s ugly.�
continued from PAGE 3
ever thinks about, is the price of gas,� said G. Allen Brooks, a Houstonbased energy consultant, former securities analysts and author of the industry blog, “Musings from the Oil Patch.� “Obviously, prices are a lot worse today than people thought they would be six, nine or 12 months ago,� Mr. Brooks said. “No one really anticipated we’d get to sub-$2. Now, we’re getting projections of a buck and a half, and people are asking, ‘Is $1 (per MCF) even the bottom?’� If you’re curious, it’s probably not, according to Mr. Brooks: He believes gas could be all but given away later this year, especially if the nation’s natural gas storage facilities reach capacity as expected this summer. “I wouldn’t be surprised to see trades this summer, out of storage, where gas goes for pennies,� he said.
– Jerry James, president, Ohio Oil and Gas Association; president, Artex Oil Co. to drop, there’s a temptation to shut down those wells and wait for higher prices. “We have not crossed that point yet, but it has occurred to us,� Mr. James said. But just because Artex and some other drillers might be slowing down doesn’t mean the state isn’t going to see a ramping up of activity this year.
Sticking with the plan Experts say Ohio actually might see more activity in light of low gas prices. That’s because, unlike much of the shale beneath Pennsylvania and some other states, Ohio’s shale contains “wet gas,� meaning it holds feedstock materials such as butane, ethane and other liquids used by makers of chemicals and plastics that now are more valuable than the natural gas itself. Those liquids are the only things that make drilling profitable in the current market, experts say, because it costs more to drill a gas well than the gas proceeds now can return in a reasonable period of time. The state’s largest driller, Oklahoma-based Chesapeake Energy, said it intends to continue moving more drilling rigs into Ohio, even while it slows down drilling in other dry gas areas and even slows down production generally. In January, Chesapeake said it was cutting its production by 8% in an effort to help buoy natural gas prices, but also would begin moving rigs from “dry� gas areas such as Pennsylvania into Ohio. That’s still the plan, according to Chesapeake spokesman Pete Kenworthy. “We stated in the (January news) release that the plan for the rig reduction would happen in the second quarter of 2012, which just started two weeks ago,� Mr. Kenworthy said in an April 17 interview. “We are in the process of following the plan that was laid out in the release.�
‘It’s ugly’ The culprit is the industry itself, not to mention the shale beds beneath Oklahoma, Pennsylvania, Texas and other states that recently have been helping drillers produce more natural gas than the nation can burn. “It’s ugly,� succinctly states Jerry James, president of the Ohio Oil and Gas Association and also president of Artex Oil Co., a drilling and production company based in Marietta. Mr. James’ company does not drill the horizontal fracking wells that have become synonymous with shale gas and oil; those wells, costing $3 million to $10 million each, are the purview of bigger, national companies. Instead, Artex drills deep vertical wells — deeper than the conventional wells seen in Ohio, but not as complicated as a horizontally fracked well. But it’s all the same at the wellhead — and low prices, combined with the fear of higher taxes in Ohio, have caused Artex to halt its drilling. For nine years, Artex had leased a drilling rig and crew and kept it operating almost continually, Mr. James said, drilling more than 200 Ohio wells in the process. In January, however, it stopped drilling and sent the rig back. Unlike some of the newcomers to Ohio’s oil and gas industry, Artex largely has mature mineral rights leases, including many where it already is producing gas and oil. It has paid some leaseholders to extend their leases, but it isn’t under the pressure to keep drilling the way some other companies are because it has production already taking place that will hold its sites, Mr. James said. Artex still is producing gas from the approximately 600 wells it owns in Ohio, but as prices have continued
those, too, will take a long time to bring on line. In the meantime, the energy industry is bracing for further price drops this summer, hoping for at least a normally cold winter in the United States, and watching the production numbers for any sign that the glut of supply will abate. Few if any observers think prices will go up significantly soon, and many predict they’ll fall further this summer. There are some contrarians predicting a faster turnaround than most, though; they include New York investment house J.P. Morgan, which on April 24 published a report entitled, “Argument for $4/MCF Gas in November.â€? For that to happen, J.P. Morgan says the nation must use some of its surplus by slowing its production of natural gas generally. Its report notes that many drillers already have begun to reducing their drilling and production, including in places such as Louisiana and Pennsylvania. Those slowdowns in production were credited with helping to get gas above $2 per MCF again last week, but producers will have to keep their foot on the brakes if they’re to get the prices they want. Mr. James of the Ohio Oil and Gas Association said his company, Artex, probably won’t resume drilling until gas gets back to $5 per MCF. It will take higher prices to support drilling, especially among drillers hungry for capital to invest in new rigs, he predicts. “With a lot of these drilling operations, even though this is a liquids play (in Ohio), the money to fund the operation is coming from dry gas playsâ€? in other states, Mr. James said. “All of a sudden the price drops and you lost your funding source.â€? â–
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Prices must firm, or else ‌ Over the long haul, though, Chesapeake and other drillers want to see natural gas prices rise — though when that will happen is anyone’s guess. Efforts to get significantly more U.S. vehicles running on natural gas or to export it to other nations in liquid form are probably years away, say experts and companies involved in those efforts. New electric generation plants that will run on natural gas are planned, but
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Duke aims to fortify local portfolio Shift to new property manager done to get ‘fresh set of eyes’ on 11 remaining sites
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In a sign that it expects to be in the Cleveland market awhile longer, Duke Realty Corp. has shifted the contract for property management, leasing and construction of its 11building portfolio in the Rockside Road office market to the Cleveland office of Jones Lang LaSalle from CBRE Group Inc. Jim Clark, a Duke senior vice president in Columbus, said the vendor change by the Indianapolis-based real estate investment trust is “not a direct result of what previous people have done or not done.” “A fresh set of eyes on leasing, property management and construction can be helpful,” Mr. Clark said. Duke steadily had been withdrawing from the Cleveland market prior to the recession as it looked to concentrate on cities with stronger
economies and higher rents. Duke sold its industrial properties in Northeast Ohio in 2006 and its office portfolio in Cleveland’s eastern suburbs in 2007. It also sold the Great Northern Corporate Center I, II and III buildings in North Olmsted last fall. Mr. Clark indicated that Duke is emphasizing improving the fundamentals of its remaining properties in Northeast Ohio over selling them. In an email follow-up to a telephone interview, Mr. Clark said, “At this point we are focused on leasing and increasing the overall occupancy rates for our Rockside Road office assets. The majority of our Cleveland assets are not being actively marketed for sale.” The work Jones Lang LaSalle secured is a plum that likely is worth hundreds of thousands in fees and commissions. Tom Fox, a Jones Lang senior vice president who heads its agency business here, estimates the vacancy of the Duke portfolio at 33%. Vacancy rates vary in each building or complex in the portfolio; they range from less than 13% at trophy properties such as Park Center Plaza to 72% at the older, more vanilla Rock Run Center and Rock Run Center
North office buildings. Composed of buildings in Independence and Seven Hills on both sides of the Rockside Road interchange of Interstate 77, the Rockside Road office market is part of the south suburban market, which has a vacancy rate of 24%, according to year-end 2011 statistics of Newmark Grubb Knight Frank. In commenting about the loss of Duke’s business, David Browning, Cleveland managing director of CBRE, said, “They’ve chosen to go another direction. We respect that. We value the relationship with Duke.” Mr. Browning noted that CBRE has leased more than 300,000 square feet of office space for Duke “in a soft market” on Rockside the last three years alone. The portfolio has faced challenges in the recession, according to Mr. Browning. He said more than 100,000 square feet was emptied in Duke buildings as tenants shut down or national firms closed offices. The move does not mean lost jobs for CBRE brokers and property managers; they will be reassigned, according to Mr. Browning, who said his company still manages and leases nearly 13 million square feet of office space in the region. ■
Mini electronics maker doubles its space Valtronic gets incentives from state, city of Solon
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Valtronic Inc., a maker of miniature electronic devices, said it plans to move by early fall to a building it bought at 29200 Fountain Parkway in Solon that is more than twice as large as its current home in the suburb. Patricia Klavora, Valtronic global communications manager, said the company needs more space to accommodate additional production. As a private company, Valtronic does not disclose sales figures, but Ms. Klavora said its sales rose 30% last year from 2010. The Fountain Parkway building is
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Dorfman said. The city of Solon estimated Valtronic would add 85 jobs in the period, she said. Valtronic on April 20 paid $2.6 million to Chagrin Valley Partners LLC for the Fountain Parkway building, according to Cuyahoga County land records. Ms. Dorfman said she is glad the company found an empty building that allows it to expand in Solon because it has been part of the city since the late 1980s. “They have looked for a new location for sometime,” she said. Valtronic plans to sell its current building, Ms. Klavora said, but has not yet started marketing it. The strong industrial real estate market may be on Valtronic’s side. Ms. Dorfman estimates Solon’s industrial district has less than 7% vacancy and, among single-user industrial buildings such as Valtronic’s current one, the vacancy rate is 3%. The company is a provider of engineering, design/development and manufacturing services, from microelectronics and mechanical parts to systems serving the medical device and industrial markets. Its parent company is based in Switzerland. ■
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close to Valtronic’s current location at 6168 Cochran Road. The proximity of the new site will enable Valtronic to retain its 89-person staff. Mr. Klavora said the company chose the Solon building from among six in the region, in part because of the city of Solon’s help. The new building is 60,000 square feet compared to Valtronic’s current building of just over 25,000 square feet, she said. Ms. Klavora would not say how many jobs the company will create as its production grows. However, Valtronic’s application for a state incentive is based on the addition of 50 full-time jobs over the next five years, according to a state news release issued Monday after the Ohio Tax Credit Authority approved a 45% credit on additional state income taxes for five years. The state grant is based on $2.3 million in additional annual payroll. The city of Solon also has approved a job-creation grant that exempts Valtronic from paying 40% of its city income taxes on additional payroll over the next eight years, according to Peggy Dorfman, Solon economic development manager. The incentive should net Valtronic about $250,000 over the eight years, Ms.
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Crain’s Cleveland Business on May 23 will honor some of the area’s best health care practitioners at its annual Health Care Hero Awards. The event will be held at Executive Caterers at Landerhaven. The event is presented by Anthem Blue Cross Blue Shield and sponsored by Huntington Bank, Kent State University and Benefits Resource Group. For more information, visit http://tinyurl.com/7u69urp.
Crain’s on May 16 will continue its 2012 Ideas at Dawn business breakfast series with a panel discussion centered on the hiring of interns. The event is sponsored by the Northeast Ohio Council on Higher Education and Baldwin-Wallace College and underwritten by Kaiser Permanente. For more information and to register, visit www.CrainsCleveland .com/breakfast.
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for those who make, sell, build, support, create, service, supply, repair, give, design, deliver, produce and contribute to our economy, we say thank you. Giving small businesses the credit they deserve. Local businesses help support the vitality of our communities. That’s why we’re here for you today, tomorrow and especially during our May Small Business Month. To learn more, stop by a branch, call 855-PNC-CFO5 or visit pnc.com/cfo
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Small banks turn to wealth management Community institutions embrace new area as customers look for bigger returns on investment By MICHELLE PARK mpark@crain.com
“You’re going to have to get in the game one way or the other.” That’s how Bill Valerian, chairman, president and CEO of Liberty Bank, regards community banks adding wealth management to their repertoires of services — and there’s evidence he isn’t the only one who sees the need. With so many people chasing higher investment yields because they’re earning so little off their bank accounts, this is a time when wealth managers have opportunity, said Mr. Valerian, whose Beachwood bank has narrowed to seven the number of wealth management partners it’s considering as a thirdparty provider. A growing number of community banks statewide and nationwide are weighing the addition of wealth management services, said Robert L. Palmer, president and CEO of the Community Bankers Association of Ohio. Of Ohio’s 223 community
banks, probably 40 to 50 of them have some insurance and/or securities capabilities, Mr. Palmer said, and the association knows of many now evaluating their addition. “More and more of their customers are asking for the services at the community bank level, (so) community banks are now starting to expand into these areas,” Mr. Palmer said. Most community banks tend to partner with an existing wealth management provider rather than start their own trust departments. There are pitfalls to a smaller bank going it alone, including the work and liability involved, said Allen S. Lencioni Sr., president and CEO of Geauga Savings Bank in Newbury. Mr. Lencioni said Geauga Savings is “very interested” in moving into investment services and is considering potential partners, though it likely won’t choose a partner until it decides whether it will add on to its existing location or move to a larger site. That decision should come within the next year.
“Every community bank is looking to augment its income right now,” Mr. Lencioni said. “(Interest) margins are tight, but more importantly, a lot of banks used to make a lot of money on all kinds of fees that the public has not responded to well. Because of that, avenues that we used to have for non-interest income are drying up to some degree.” Also considering the addition of wealth management is Lake National Bank in Mentor, but president Andrew L. Meinhold doesn’t anticipate offering such services for another few years. Wealth management isn’t a massive moneymaker, local bankers said. “If you do it just for the fee revenue, you’re probably going to be disappointed,” Mr. Lencioni said, noting that there are investment costs and risks to being in the business. What banks may accomplish, though, is eliminating the threat of unaffiliated financial planners referring their customers to other banks, Mr. Lencioni said. “So if you can provide all those services under one roof and do it well, you don’t expose yourself to losing your existing customers,” he said. ■
MAY 7 - 13, 2012
GOING PLACES JOB CHANGES CONSULTING ALDRIDGE GROUP: Casey Burns to vice president, consultant; Sheryl Radcliffe to senior consultant; Melinda White to consultant. CENTRIC CONSULTING: Jessica Fox to business analyst.
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ROOP & CO.: Kelly McGlumphy to director of client services.
NONPROFIT ST. CLAIR SUPERIOR DEVELOPMENT CORP.: W. Michael Fleming to executive director; Jamar Doyle to assistant director. TEAM NORTHEAST OHIO: Jessica Chapman to marketing communications manager.
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LEGAL MAZANEC, RASKIN & RYDER CO. LPA: Joseph F. Nicholas Jr. to managing partner. MCDONALD HOPKINS: Ketan K. Patel to member, real estate practice. WALTER & HAVERFIELD LLP: Bonnie S. Finley, Geoffrey S. Goss and J. Ryan Williams to partners.
MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES: Scott J. Wiles to director, National Retail Group, Cleveland.
SERVICE CLEVELAND MEDICAL MART & CONVENTION CENTER: Jim Bennett to senior vice president; Brian Milner to director of operations.
BOARDS CUYAHOGA COUNTY COMMUNITY IMPROVEMENT CORP.: Richik Sarkar to vice president.
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MANUFACTURING BRENNAN INDUSTRIES: Patrick DeCapua Jr. to director of quality and engineering.
BOYS & GIRLS CLUBS OF CLEVELAND: Barry Mintzer (Wells Fargo Insurance Services) received the Outstanding Board Volunteer Award.
SPECTRUM SURGICAL INSTRUMENTS CORP.: Jim Rygiel to director of endoscopy division.
Send information for Going Places to dhillyer@crain.com.
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16 STUDENTS FROM CWRU RUN HEALTH CLINIC.
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HIGHER EDUCATION Colleges coveting veteran enrollment Schools become more friendly to military By CHRISSY KADLECK clbfreelancer@crain.com
U NANCY YURCHAK PHOTOS
Wesley Simmons, a freshman musical theater major at Kent State University, was among a group that on April 12 protested a new proposed fee the school would impose on students enrolled in over 17 credit hours. “I couldn’t graduate in four years with the way these fees are going,” Mr. Simmons said.
PAYING THE PRICE Colleges more often charging fees for certain offerings, though scrutiny grows among students, lawmakers By TIMOTHY MAGAW tmagaw@crain.com
T
he cost of higher education can go well beyond the sticker price at Northeast Ohio’s public colleges and universities. Given dwindling state support and the rising costs associated with certain academic programs, local institutions are relying heavily on extra fees to fund their operations. The fees, or any additional charge beyond the base tuition price, are by no means a new concept in higher education, just as “service fees” or “convenience charges” have become ubiquitous in the ticketing industry. However, in recent years they’ve come under heightened scrutiny by lawmakers and students alike as the cost of higher education continues to escalate. Kent State University, for instance, ran into some road blocks when it looked to enact a wide-ranging student fee to support a $210 million bond offering to fund an expansive campus overhaul, but a group of lawmakers who had to sign off on the proposal objected to the fee hike. University officials this spring instead tweaked their plans and will issue about $170 million in new debt for a scaled-
back construction program. But this time, the bond would be funded by a new course overload fee — a $440 per-credit-hour charge for each credit a student is enrolled over 17 credit hours. While Kent State isn’t the only public university in Ohio with such a fee, this plan also was met with resistance, but this time by students. See FEES Page 14
nofficially, they refer to it as a Purple Operation. An appropriate use of military vernacular to describe a joint effort among several universities and colleges in Northeast Ohio — including fouryear, two-year, public and private institutions — to attract veterans to their campuses. The mission is institutionally altruistic and regionally self-interested. “Our view is we all win and Northeast Ohio wins having these young men and women coming home to continue their education in Ohio and hopefully staying in Ohio and finding jobs or opening businesses,” said Rick DeChant,
“Word of mouth is one of the most effective ways that we find to get veterans to come to your campus. Veterans talk to veterans.” – Joshua Rider assistant director, Center for Adult and Veteran Services, Kent State University executive director of veteran services and programs for Cuyahoga Community College, which has increased its veteran enrollment from 540 in the fall 2007 to 1,000 in the spring semester of 2012. “It’s going to be extremely beneficial to the region and to the state,” he said. Veterans — especially those discharged with the Post-9/11 GI Bill, hands down the most generous educational benefit package since World War I — are a highly coveted group among colleges and universities across the country. As such, institutions over the past five years have ramped up recruiting, shined up their campuses to make them more military friendly, streamlined processes and effectively pulled up their bootstraps to compete for this growing population of nontraditional, financially subsidized students.
Customizing services Take the University of Akron, for example: The school is a standout See VETERANS Page 14
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Fees: Fixed prices could disappear Veterans: Schools try to continued from PAGE 13
A few thousand people signed an online petition in hopes administrators would reconsider the fee, and another 75 took to the student center in protest.
the University of Akron’s provost and chief operating officer. “So programs have the opportunities to identify where the costs exceed available resources and propose fees that, to some extent, make up the differential cost across different academic programs.” Such fees are by no means unique to four-year universities, and they are just as prevalent on the community college level as well, according to Karen Miller, vice president of enrollment management and student affairs at Cuyahoga Community College. “We try to be fair to students,” Ms. Miller said. “It’s not the same across the board. In order to maintain that low tuition, we sometimes need to add on an applicable fee. It seems to be the right thing to do.”
graduate levels, but the concept appears to be rearing its head in undergraduate education as well. A recent study from the Cornell Higher Education Research Institute found that 143 public colleges or universities across the university had differential tuition policies. Cleveland State University president Ronald Berkman has said he publicly he supports the idea of differential tuition rates, and David Cummins of the University of Akron said the concept was something “on our radar.” “We’re not doing anything with it right now. It’s a little bit more of a global discussion,” said Mr. Cummins, the university’s vice president for finance and administration and chief financial officer. “Tuition is generally the same even though some programs are more expensive than others, but it’s something we probably we need to look at more closely.” Still, dynamic tuition pricing hasn’t been widely accepted, particularly by students. In 2003, Miami University of Ohio instituted a “progressive tuition” program that would have been phased in over several years to equalize pricing among out-of-state and in-state students. The program caused confusion and was ultimately scrapped. Students at California’s Santa Monica College staged a massive protest earlier this year in the wake of the college proposing to charge higher tuition for popular courses such as English, math and history. That proposal, too, eventually was tabled. ■
streamline enrollment continued from PAGE 13
Get ahead with a Saturday MBA.
in attracting student veterans with offerings that include a high-tech, veterans-only lounge at InfoCision Stadium, a fast-track, two-year degree in corrosive engineering technology and a groundbreaking partnership to deliver virtual therapy. Stephen Motika, assistant dean for student success for Summit and University colleges at the University of Akron, said the university has developed a “very veteran-friendly culture” and currently has 1,300 veterans on its campus. In addition, 135 faculty and staff are military vets, including Mr. Motika, who served 20 years in the armed forces. “Our veterans come all the way from being crewmen on atomicpowered submarines, which is very technical, to being infantry soldiers. They come with a variety of combat experience; a good number of our folks have been deployed three or four times in combat zones, others have never left the state,” Mr. Motika said. “Each of our veterans is a little different and because of that we try to customize our services to them as much as we can.” Once on campus, student veterans can relax and connect in the Musson Military Veterans Lounge, and they soon will be able to receive specialized therapies and clinical health services in the lounge’s soundproof conference room thanks to a new partnership with Louis Stokes Cleveland VA Medical Center, Mr. Motika said. “Telehealth is an innovation from the VA to touch veterans virtually and to do many of their medical services virtually,” he said. “As I understand it, we will be the first university in the United States to come online.” The program launched in April, and it is expected to begin with a pilot group of 12 veterans and focus on speech therapy. It also will bring clinical opportunities to the campus. “We have a very active speech pathology department here at Akron,” he said. “So the idea is that the student veteran will be working with a speech pathologist at Wade Park in Cleveland virtually, but there will be a graduate student from the University of Akron sitting with them at their side in the conference room.”
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Recruiting to the student ranks
An equitable solution? Denise Zelko, director of Kent State’s budget office, said the new overload fee was the “most equitable way” to distribute the costs of the university’s capital needs. She pegged the campus’ deferred maintenance costs at about $350 million. “When you look at alternatives, students who are enrolling in more hours are using more resources,” she said. “We thought that was an equitable way of finding a solution to helping us renovate our facilities.” “Equality” is a common thread in the fee discussion among higher education administrators, particularly as it relates to course fees. Oftentimes, colleges and universities tack fees — ranging from as little as $5 to a few hundred bucks — onto courses that cost more to teach or require additional supplies. For example, a basic statistics course at the University of Akron for the current academic year carried a $15 course fee on top of tuition while an introduction to printmaking course carried a $150 fee. Meanwhile, Kent State charges an additional $280 for one of its fashion design courses and as little as a $5 fee for a course on the morphology of lower plants. “The bottom line is that different programs have different cost structures,” said Mike Sherman,
A new structure College officials insist such fees haven’t deterred students from enrolling in certain academic programs or courses. As such, higher education leaders across the country are exploring how to take the concept even further given the rising costs associated with some academic programs. For example, Ohio State University president Gordon Gee, who often is regarded as a national expert on issues in higher education, told The Washington Post recently that he supports the idea of “differential tuition,” or abandoning a fixed undergraduate tuition price for all majors and assigning different price tags for different programs. Differential tuition pricing has been the norm on the doctoral and
The University of Akron MBA Program Ranked #1 in NE Ohio.*
Jim Drnek, dean of students and
vice provost for student affairs at Cleveland State University, said innovative recruiting techniques have helped increase studentveteran enrollment by 74% since 2009. “We are hoping to gain another 50% the next two years, that’s our goal,” said Dr. Drnek, who has worked closely with the National Guard in Columbus. Information on CSU’s vet program and an application for admission is included as part of an informational packet given to servicemen and women during re-entry ceremonies. Additionally, the university’s marketing team has found through research that veterans watch such television channels as Comedy Central, ESPN2, FX, the History Channel and Spike, Dr. Drnek said. CSU has purchased air time to broadcast commercials of current students — a male and female veteran — describing their positive experiences attending the urban university. “Word of mouth is one of the most effective ways that we find to get veterans to come to your campus. Veterans talk to veterans,” said Joshua Rider, assistant director for the Center for Adult and Veteran Services at Kent State University. “We really try to attract veterans by … treating the ones we have in the best possible manner.” That means providing GI bill certification services that are accurate and on time so student veterans receive benefits in a timely fashion. “We offer an office here that is a one-stop shop: A veteran can come in, they can apply for admission, GI Bill benefits, apply for financial aid and receive tutoring for free,” said Mr. Rider, who noted that Kent’s student veteran population has doubled from about 300 in January 2006 to 600 currently. This fall, Kent also will launch a Living Learning Community specifically for student veterans who are incoming freshmen. In the pilot program, which is designed for a group of 16 — 12 males and four females — veterans will live together in residence halls for two semesters and take a couple classes together to generate a shared experience, Mr. Rider said. “There are going to be some additional surround services … helping them with that transition from soldier to civilian,” he said. “They are used to camaraderie in the services. They are used to continued on NEXT PAGE
Classes meet every other Saturday using a hybrid in-class and distancelearning format. Attend one of our MBA information sessions to learn more. Attend an information session to learn more: The University of Akron Lakewood Thursday, May 24, 6-7:30 p.m. 216-221-1141, lakewood.uakron.edu
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The Medina County University Center (MCUC) Thursday, May 31, 6-7:30 p.m. 330-721-2210, www.uakron.edu/mcuc *The 2012 Bloomberg BusinessWeek rankings of part-time MBA programs.
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HIGHER EDUCATION working as a unit and when you go out into the college environment there really isn’t a lot of that at first.”
Private efforts Recruiting veterans is a budding focus area for private institutions such as John Carroll University and Baldwin-Wallace College. Both are designated as Yellow Ribbon institutions by the U.S. Department of Veterans Affairs, which means qualifying Post-9/11 veterans are able to attend the campuses tuition-free even though fees far exceed the $17,500 maximum annual educational benefit. “This Yellow Ribbon program is actually what spurred us to actually go after this population because it is the first time private colleges could level the playing field,” said Nancy Jirousek, director of Adult & Continuing Education/Veteran Services for B-W. How it works is the participating school and the VA have an agreement to split the difference of tuition fees that exceed the maximum benefit for qualifying veterans. In the case of B-W, that amount is close to $10,000, and B-W pays $5,000 and the VA pays the other $5,000. For John Carroll, annual tuition for 2012-2013 will be almost $32,000, leaving nearly $15,000 to be split between the university and the VA. Ms. Jirousek said 35 of B-W’s 95 students who are using veteran benefits are in the Yellow Ribbon program.
It’s not hard to do the math here. Without the Yellow Ribbon agreement, private tuition would be a tough sell for veterans, said Eric Patterson, director of Veteran Affairs for John Carroll, who founded the veteran program there in February 2011 after retiring from 20 years of service in Army. “We set out to build a program that would honestly give something back from the university perspective to those incoming students in recognition to their service to our country,” Mr. Patterson said. John Carroll does its best to award academic credit for military training and every incoming vet receives at least six credits, many times more. The record so far is 18 credit hours, he said. The university also gives a free meal plan to its student veterans, almost all of whom are commuters, and offers them attractively priced apartments that are a three-minute walk to campus. These efforts are paying off. Enrollment numbers have tripled in a little over a year, from 10 student veterans to 30 currently on campus. “We’ll be at 45 in the fall,” he said. “We’re building at the pace that is right for our university. One thing that we never like to do is to build so quickly so we don’t have the support services in place. My goal is to have 100 student veterans within the next two to three years. I think that’s the right number for us.” ■
HIGHER EDUCATION Pam Lebold, Director
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Hands-on clinics offer healthy dose of experience, training Case Western-Free Clinic setup gives students a chance to run operation By JENNIFER KEIRN clbfreelancer@crain.com
I
n 2010, four medical and nursing students from Case Western Reserve University came to Dr. Marlene Weinstein with a proposition. They wanted to create a free medical clinic that would be operated and staffed by CWRU students, and they asked Dr. Weinstein, medical director of The Free Medical Clinic of Greater Cleveland, if she would provide the space and supervision. After more than a year of planning, recruiting and piloting, the CWRU Student-Run Free Clinic held its first free clinic in fall 2011, providing acute care to 20 uninsured patients within The Free Clinic’s walls. Since then, they’ve staged about 20 such clinics, handling nearly 400 appointments. “It extends our services to people who don’t have insurance,� said Dr. Weinstein, who leads a team of licensed clinicians who supervise every student clinic. “They have such positive, good energy. This is the reason they went into medicine.� The number of student-run health care clinics is on the rise as more medical and nursing students seek valuable clinical experience,
while health care needs increase among the uninsured or underinsured. CWRU’s program is one of 96 such clinics nationwide to participate in the newly launched Society of Student-Run Free Clinics, which provides a platform to share best practices. “There’s an overwhelming amount of need in Cleveland,� said Alyssa Wagner, a CWRU student pursuing her master’s degree in nursing and a member of the clinic’s founding group. “I went into nursing to help that population that needs it.� A student-run medical clinic — supervised by licensed clinicians — can deliver benefits for patient and student. The Free ClinicCWRU collaboration not only provides students with clinical leadership, but training and mentorship in all aspects of managing a medical practice. The CWRU clinic is held every other Saturday morning. The clinic is designed for acute care only, such as routine sick visits, wound care, blood pressure checks and work physicals. Through donor and grant support, the CWRU clinic also provides some medications free to patients, and pays for a courier service to deliver them. Plus, patients say they love the attentiveness of the students.
“If you want to get some extra attention, go see some students,� Ms. Wagner said with a laugh.
Dr. Marlene Weinstein, medical director of The Free Medical Clinic of Greater Cleveland, center, assists with the CWRU Student-Run Free Clinic.
Reality checks Student-run clinics and similar opportunities are a chance to work hands-on with patients in a less intimidating environment. “When you’re in school and you go to your clinicals, it’s really scary,� said Heather Foos, director of the Preventative Care Centers at the East and Metro campuses of Cuyahoga Community College. “You have real clients with real issues, but it takes that anxiety away that your professors are there.� Student participation in Tri-C’s Preventative Care Centers is a mandatory part of classwork. Ms. Foos said that the model for Tri-C’s centers is unique, in that it draws students from allied health professions, such as physical therapy and medical assisting. The centers accommodate about 200 appointments in each school semester. Getting hands-on clinical experience is important, said Annette Mitzel, director of the Nursing Center for Community Health at the University of Akron. But it’s also critical that students understand the infrastructure of the health care system they soon will join.
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“It’s another level of preparation. ‌ The delivery of health care is something we’ll need to be creative with,â€? she said. “Students who have vision, who are our future ‌ give potential for improved systems.â€? The six centers in Summit County that Ms. Mitzel oversees are nursemanaged, not student-run, and have been in existence since the 1980s. Students assist with primary care for uninsured adults, help in the pharmacy and work alongside licensed dieticians, social workers and other health care professionals. However, it’s Ms. Mitzel’s personal ambition to see a studentrun clinic start at the University of Akron sometime in 2013.
Expanding access Back at the CWRU Student-Run Free Clinic, student interest continues to exceed available positions. In their first call for applicants last year, they received 150 responses for only 35 spots. To allow greater participation, Ms. Wagner and her team are considering expanding their bimonthly clinics to every Saturday, operating more mobile clinics or possibly establishing a permanent clinic at the 2100 Lakeside homeless shelter. “(The students) want to be part of the community,â€? Dr. Weinstein said. “They want to take care of their neighbors. Everyone benefits.â€? â–
GLOBALLY recognized NATIONALLY ranked LOCALLY vital Kent State University is the region’s leading public university s 2ANKED AS ONE OF THE TOP UNIVERSITIES IN the world, by Times Higher Education, London s .AMED TO THE TOP TIER OF THE "EST #OLLEGES IN the nation by U.S. News & World Report s 'ENERATED BILLION IN ADDED INCOME TO THE .ORTHEAST /HIO ECONOMY s -ORE THAN GRADUATES WORLDWIDE s #ELEBRATING MORE THAN YEARS OF excellence in action
Kent State University, Kent State and KSU are registered trademarks and may not be used without permission. Kent State University, an equal opportunity, afďŹ rmative action employer, is committed to attaining excellence through the recruitment and retention of a diverse workforce. 12-0076
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LCCC: Officials say school can handle debt continued from PAGE 3
“That could create a significant amount of growth pressure for us,” Dr. Church said. “Whether that will exceed the diminished population out of high school is still anybody’s guess. We’re watching and monitoring it each semester.”
Balancing act Since Lorain County Community
College invested so little in its campus over the last decade, the college recently took on a significant amount of debt in a relatively short period of time as it looked to break ground on several construction initiatives. In the last year alone, Lorain County Community College issued a total of $64.9 million in debt through two bond issuances, bringing the college’s total debt load to about
$70 million, according to Quentin Potter, the college’s vice president for administrative services and treasurer. Nonetheless, officials said the college is well positioned to handle its mounting obligations, particularly because administrators in recent years have designed their budgets around zero enrollment growth. “We’re in very good financial
Cycles: China production will continue continued from PAGE 3
Cleveland CycleWerks does not make a lot of motorcycles compared to, say, Harley-Davidson, which sold 40,000 motorcycles in the fourth quarter of 2011 alone. But then, Mr. Colosimo’s company doesn’t have many of the things Harley has, like a large dealer network, an engineering department, a legal staff, a marketing department and so on. Indeed, Cleveland CycleWerks didn’t hire its first full-time employee until this year. So, 9,000 bikes is significant. “That’s fantastic,” said Dan Moore, a Cleveland entrepreneur who owns several companies serving the automotive industry and who himself is an avid motorcyclist. “I had no idea he was that big. … Ducati is being purchased for $1 billion, and they only make 40,000 bikes a year.” Mr. Moore said he has seen
Cleveland CycleWerks’ bikes and likes the look enough that he’s considering buying a couple to teach kids to ride. The bikes are small, simple machines that seem perfect for new riders, Mr. Moore said.
Take my business, please The company’s growth to date has been the result of Mr. Colosimo and partner Jarrod Streng doing the design and administrative work themselves, using only $30,000 they scrimped together with a silent investor. The company has grown by using only the money it has made from selling its bikes, Mr. Colosimo said — no loans, no private equity. So why hasn’t he made bikes in Cleveland? No one wanted to work with a motorcycle startup, he said. Mr. Colosimo looked long and hard for a local company to make
his handlebars — a simple task for many manufacturers. He finally found one in HMF Engineering of Cleveland, an aftermarket parts company, but only after many others turned him down. “They’d say, ‘How many are you going to order?’ I’d say, ‘Probably 150 of them at a time.’ and then they’d say, ‘Ehh … we don’t want to do it,’” Mr. Colosimo said. He said it was that way for handlebars, brake calipers, frames — basically all the components that make up a motorcycle. No one wanted to deal with small volumes, even in the hope that Cleveland CycleWerks would become a big customer. The reception was better in China. “In China, it was, ‘How many do you need, how fast do you need them and what do you want to pay?’” Mr. Colosimo said. “My first
condition,” Dr. Church said. “We’re very conservative in the use of the resources we have, so we keep everything in balance.” Credit rating agency Moody’s Investors Services earlier this year gave Lorain County Community College high marks for its financial performance and noted in a recent report that it expects the college will “maintain its established market
trip to China, I visited 75 factories that wanted to work with me.” It’s little wonder Mr. Colosimo is not going to end China production. “People like to rag on China and say China sucks — China has made my company possible,” Mr. Colosimo said. “The Chinese manufacturing has allowed me to buy a factory in Cleveland that was vacant.”
Preparing for his run Now he’s got to find a way to make that Cleveland factory profitable. Mr. Colosimo said he’ll use it as a parts distribution center and then do limited production later this year. He’ll probably put together bikes using parts made in China, he said, but then, so does Harley-Davidson. He has hired a full-time engineer and designer and probably will hire a handful of mechanics and assemblers to put the bikes together. The first bikes made in Cleveland probably will be larger than the 250cc models he makes now, but how
position with strong operating performance that provides adequate debt service coverage.” Moody’s calculated the college’s three-year average operating margin between fiscal years 2009 and 2011 at 10.2%. Moreover, it assigned the college a high-quality Aa2 rating and an underlying A1 rating on its recent $24.9 million bond issuance, the bulk of which is financing the construction of the new science building. “I’m extremely confident we’ll be able to fulfill (our obligations) going forward and maintain sound fiscal basis,” Dr. Church said. ■
much larger is a secret. Chris Warren, economic development director for the city of Cleveland, said the city is looking for a way to help Cleveland CycleWerks rehab its building. He called it an “exciting development, one that would build upon the tremendous positive momentum now being experienced in the Detroit Shoreway neighborhood.” Mr. Moore is rooting for Cleveland CycleWerks to succeed, but he knows the challenges it will face. His MBA thesis at Harvard University was about why it would be difficult or impossible to start a U.S. motorcycle company. “He’s better off engineering it here and sending it to China for production,” Mr. Moore said. Perhaps, Mr. Colosimo said — and if things don’t work out, he’ll still have his Chinese-made bikes to fall back on. “I have American pride. I want to make it in the U.S.,” he said. ■
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‘On the right path’
ready to release the report publicly within the next month. However, Mr. Roman did respond to a question about the CBAs, a key element of the action plan. CBAs have been evolving since the late 1990s. They usually are the product of community and neighborhood activism and public sector participation and result in agreements that can be monitored and enforced, and that set clear goals for minority participation. They may include incentives for developers — often in the form of more public financial support — if the goals are achieved. “Clearly, it’s a place we want to really double down and see if there is an opportunity for us,” Mr. Roman said. The plan will include as many as nine other key points, though Mr. Roman said some of those may be folded together by the time the report is made public.
The economic inclusion study has been in the works since March 2011, when a series of economic inclusion forums began. There were at least three meetings attended by several hundred business leaders, union leaders and construction industry workers and executives. The soon-to-be released study grew out of those meetings. Rachel Talton, CEO of Synergy Marketing Strategy & Research Inc. of Fairlawn, has been involved in the discussions and was impressed with the response from executives. “It’s amazing, absolutely remarkable,” Ms. Talton said of the support expressed by the business leaders for an effort to work harder to expand the participation of women and minorities in the construction industry and in other industries as well. “People were raising their hands saying they’d like to do more,” she said.
Contact: Phone: Fax: E-mail:
– Norman Edwards, president, American Center for Economic Equality and former president, Black Contractors Group Norman Edwards, president of the American Center for Economic Equality, and former president of the Black Contractors Group, has been a vocal advocate for AfricanAmerican construction subcontractors and construction workers for a decade. He consistently has complained that voluntary goals on big construction projects have not been met. Mr. Edwards has been involved in the discussions leading to the study, and this is the first time he has sounded enthusiastic that progress is being made. “It’s the best program that I’ve seen put together so far,” Mr. Edwards said. “Everybody’s on the right path.”
Long-simmering issue U.S. Supreme Court rulings have constrained government from setting minority hiring requirements and, when targets can be set, they’re usually described as “goals” rather than hard-and-fast, enforceable requirements. African-American, Hispanic and women’s advocacy groups for years have complained that developers of public and private construction projects had failed to live up to agreed-upon goals to hire minorities because of union hiring hall practices and the use of so-called “front companies” that appear to be
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owned by minority group members but are financed and even operated by non-minority contractors. Construction projects at Cleveland Clinic, University Hospitals of Cleveland, Cleveland State University and the under-construction Cleveland Medical Mart & Convention Center all have been targets of the Black Contractors Group and similar organizations. A community benefits agreement is a voluntary, but legally enforceable, agreement. Its most notable early use was in 2001, when the developer of a hotel and entertainment complex adjacent to the Staples Center sports arena in Los Angeles agreed to wage and hiring goals and to include affordable housing and parks in the development in exchange for support by community and activist groups for a public financial package and for approval of its building and other permits. ■
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THEWEEK APRIL 30 - MAY 6 The big story: Ford Motor Co. will launch a third shift at its Cleveland Engine Plant No. 1 to handle higher demand for light vehicles using its fuel-efficient 3.5-liter EcoBoost and 3.7-liter V-6 engines. EcoBoost technology — first used in 2009 on the Ford Taurus and Lincoln MKS — combines direct injection and turbocharging. About 180,000 Cleveland-built 3.5-liter EcoBoost V-6s have been purchased since 2009. Fueled up: Fuel cells could fuel significant job creation in Ohio over the next seven years, according a report released by regional technology advocacy group NorTech and the Ohio Fuel Cell Coalition. The two groups said the state could create more than 1,650 jobs by 2019, if the right steps are taken to strengthen Ohio’s fuel cell industry. For instance, they suggested Ohio pass legislation that would give companies an incentive to adopt fuel cells, which create chemical reactions that generate electricity, fueled by hydrogen and sometimes other molecules.
Exploring space: The Manufacturing Mart is in the market for a new location, but whether it can find the affordable space it needs to remain in business is unclear. Mary Kaye Denning, founder and president of the evergreen trade show where manufacturers can rent exhibit space, said she’s shopping for a new location after the company’s Denning 3,500-square-foot space in The Galleria at Erieview was rented to a new tenant. The Manufacturing Mart, launched in late 2010, had been leasing the space for a reduced rate and couldn’t afford to pay marketrate prices for the prime real estate. It will vacate its space within the next week or two.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
A warning of unknown origin ■ A new group of computer hackers claims to have broken into a restricted database at NASA Glenn Research Center in Brook Park. And you’re next! Or so the group says. The hacker group, which calls itself “The Unknowns,” on May 1 announced that it had broken into computer systems belonging to NASA Glenn, the U.S. Air Force, Harvard University and other important institutions. To prove it, they posted all sorts of documents and passwords on Pastebin.com, a website that programmers and other people use to share text. The portion about NASA Glenn included a link to a picture of a computer screenshot that suggests they managed to gain some level of access to a restricted database shared by several government agencies. NASA security officials took the site down after noticing it had been broken into on April 20, according to a written statement from NASA Glenn. No sensitive information was compromised and NASA “is in the process of mitigating any remaining vulnerabilities,” the statement said. Maybe they could get help from The Unknowns? The group says it means no harm. It just wants to help these organizations find their weak points and fix them. That’s all. The hackers even list an email address so their victims can ask for help. That goes for current and future victims. Here’s their cryptic message to those they’ve yet to hack: “We’re coming, please, get ready, protect your website and stop us
WHAT’S NEW
from hacking it, whoever you are. Contact us before we take action and we will help you, and will not release anything. ... It’s your choice now.” Spooky! — Chuck Soder
Sports training for the legal set ■ The dean of one local law school says there are only a handful of programs like this in the country. Cleveland-Marshall College of Law and Case Western Reserve University School of Law next Monday, May 14, are launching the Great Lakes Sports & Entertainment Law Academy. The program is proving popular: Coordinators expected they would attract 10 to 15 students in the first year; instead, they have nearly 60, said Craig M. Boise, Cleveland-Marshall’s law dean. About a dozen of the students, or 20%, hail from outside Ohio. People in law school tend to be interested in sports and entertainment law but don’t have a defined notion of what that entails, Mr. Boise said. The academy, which will cost each student $2,500 and will last three weeks, will expose them to corollary practice areas, including copyright, trademark and estate planning. The academy also is a way to generate revenue for both Cleveland-Marshall and CWRU, Mr. Boise said, which is even more
Branching out: Onix Networking Corp. of Lakewood received a $34.9 million contract to provide Google software to a branch of the federal government. The U.S. Department of the Interior will use Google’s online email service as well as its online collaboration software, according to an online summary of the award. Onix is an information technology services company that also resells Google software products. Child’s play: The Cleveland Indians unveiled the latest alteration to 18-year-old Progressive Field, a long-planned conversion of a number of suites along the ballpark’s first-base line into an expanded Indians Kids Clubhouse. The Indians for many years have been studying how to put to better use some of Progressive Field’s underused areas. The team touts adults’ ability to see game action while their children are taking part in activities in the “Rookie Suite,” for ages 6 and under, and in the “Slugger’s Sandlot,” for 7 and older. Quick work: Quicken Loans Inc. plans to hire 100 new team members in its downtown Cleveland Web Center. The new hires, all of whom will be mortgage bankers, will join the company’s current team of more than 300 at the M.K. Ferguson Building, 1500 W. Third St.
THE COMPANY: Preformed Line Products Co., Mayfield Village THE PRODUCT: Coyote One Closure Preformed Line, which makes products and systems employed in the construction and maintenance of overhead and underground networks, says the new Coyote One has “enhanced its comprehensive fiber optic closure lineup.” The Coyote One uses a segmented end plate to provide independent access to every cable that enters the closure. The company says installation “is quick, re-entry is simple using common tools, and no other cables are disrupted in the process.”
THE COMPANY: Diebold Inc., Green THE PRODUCT: 4G LTE enabled ATM Diebold bills its new ATM as the first in the world to use 4G technology. Working with Verizon, Diebold said it integrated 4G LTE technology “to create a new channel for communication to and from the ATM.” While many ATMs communicate with the financial institution and the transaction processor, Diebold’s new ATM can communicate with monitoring centers and other service providers.
Another slick deal in Youngstown ■ Count George Pofok, a senior vice president at the Cresco real estate brokerage, among the beneficiaries of the oil and shale gas boom in Ohio. Mr. Pofok reports he represented Boston-based STAG Partners in the $3.4 million sale of its building at 1100 Performance Plaza in Youngstown to Artificial Lift Systems, a service provider to oil and gas drillers that is a unit of Weatherford International Ltd. He noted the company won the building for less than the $3.8 million asking price. Mr. Pofok joins with others in real estate who suspect the push from businesses serving the oil and gas market quickly may exhaust the inventory of competitive existing buildings in the eastern part of Ohio. Now that would be a change. — Stan Bullard
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
For every action there is an equal and opposite reaction
The nation comes around to Toby Cosgrove’s way of thinking
■ A real estate domino that extends to Cleveland is falling in North Carolina. The Business Journal in Winston-Salem, N.C., reported that the owner of the GMAC Insurance complex in Winston-Salem “has defaulted on its mortgage and walked away from the 485,000-square-foot property in lieu of foreclosure.” The paper said the change in ownership “comes amid speculation that the building’s chief tenant, GMAC Insurance, could be moving within two years into a downtown Cleveland building being renovated by its parent company, AmTrust Financial Services.” These types of things are never easy: GMAC’s lease runs through September 2014. The renovations in Cleveland aren’t scheduled to be done until later that fall, the paper reported.
Goodbye Kitty: The WildCat — a 42-year-old Cedar Point staple — has been put to sleep. Cedar Point announced plans to remove the WildCat roller coaster, which was nearing the end of its useful life, prior to the Sandusky park’s opening day this Saturday, May 12. The removal will make way for the new “Celebration Plaza,” which will serve as the backdrop for the park’s new multimillion-dollar “Luminosity” laser, light and pyrotechnic show. Cedar Point said the plaza expansion was one of “several initiatives that will beautify the park midways and enhance guests’ experiences.”
important in this sluggish economic climate, during which law school applications have plummeted. Plus, it’s a good way to sell Cleveland, he added. “We thought this was a good way to attract students from other parts of the country here,” Mr. Boise said. “That’s important for both law schools.” After the academy, participating students may compete for about a dozen externships with a variety of organizations, including the Cleveland Browns and the Greater Cleveland Film Commission. — Michelle Park
■ Cleveland Clinic CEO Toby Cosgrove sometimes takes heat for his vehement anti-smoking/anti-obesity stance, but a piece in the most recent edition of Fortune argues that he’s essentially right on the money in diagnosing why the cost of health care in the United States is rising so fast. “The great majority of America’s staggering $2.6 trillion health care tab (as of 2010) was spent treating lifestyle diseases,” the magazine noted. “While we rightly worry about health care costs rising 8% or 9% a year, we spend well over 50% of our costs on diseases caused mostly by the way we choose to behave.” Indeed, Fortune said, “If Americans behaved just a little differently, our health care costs could settle down to a sustainable growth rate that matches the economy’s growth, or could even fall further. … If we would smoke and drink a little less, walk a little more, eat a few more vegetables and fruits, and lose some weight, the effect would be far more dramatic than most people suspect.” This idea is slowly taking hold in the country. “I got pilloried in The New York Times three years ago when I talked about not hiring obese people,” Dr. Cosgrove tells Fortune. “Now it’s OK to talk about it.” For legal reasons, the magazine noted, Dr. Cosgrove “can’t refuse to hire the obese, but if he could, it would send a message: Being obese isn’t OK.”
The appeal of trivia for $100, Alex ■ Deep into a Washington Post profile of “Jeopardy!” host Alex Trebek is a charming, Cleveland-related tidbit. The story gets some insight from Robert Knecht Schmidt, a patent agent and law school student in Cleveland who started J! Archive, an online database of every game board, contestant and result since Mr. Trebek’s first show in 1984. The appeal of Jeopardy! is simple, he said: Viewers enjoy pitting themselves against players who’ve passed the show’s rigorous application and audition process. “Trivia is representative of the culture,” said Mr. Schmidt, 31, who appeared on two episodes in 2010. “The show has changed ... but it’s still hard.”
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