Crain's Cleveland Business

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Vol. 31, No. 19

INSIDE S-W still cleans up Sherwin-Williams continues to paint itself as a leader in the ultracompetitive paint and coatings market. For example, the company has developed a new coating that makes removing graffiti an easier chore. Read Dan Shingler’s story on Page 3.

MARC GOLUB

Casino bill up against deadline Lawmakers grapple with key issues, assure legislation will pass to advance development By JAY MILLER jmiller@crain.com

The Ohio Legislature has less than a month to pass a bill that will set oversight for the four casinos voters approved last November, but because several key issues haven’t been resolved, a bill has not even

been introduced. State Rep. Kenny Yuko of Richmond Heights, who is one of the Democratic legislators drafting the casino-enabling legislation, said he hopes to have a joint House-Senate bill ready for introduction when the General Assembly reconvenes this week after an election hiatus.

“I didn’t realize how damned complicated these things are,” Rep. Yuko said as he ticked off the issues he has yet to resolve in the expected bill. “We’ve been working on it since November.” But, he added, “In six years in the Legislature, this is the first bill I’ve worked on that I know is going to pass.” Maggie Ostrowski, a spokeswoman for Senate Republicans and state Senate president Bill Harris, said she expected the legislation to

Indians solicit plans from architects By JOEL HAMMOND jmhammond@crain.com

Banks, real estate investors make deals to reduce exposure, redeem value By STAN BULLARD sbullard@crain.com

A

See LOANS Page 11

See CASINO Page 25

Changes to ballpark appear on deck for Progressive Field

LOAN INTERESTS CUT LOSSES mid the darkest, dreariest business environment that Mark Munsell has weathered in 30 years of commercial real estate investing, JPMorgan Chase & Co. of New York came knocking. All told, the bank that held the note on Mr. Munsell’s Commerce Park IV and V office buildings in Beachwood knocked three times on his door. The bank sought to shed the $22.4 million loan. What would Mr. Munsell’s partnership pay for it? Finally, they struck a deal: By getting a loan from another lender that Mr. Munsell declined to identify, he paid off the loan for $14 million. A flick of JP Morgan’s pen cut $8.4 million from the property’s overhead. “It was very advantageous for me and my investor group,” the president of Munsell Realty Advisors Inc. in Beachwood said, adding, “I’m hearing more and more of those kinds of stories.”

move quickly once it is introduced. “They are getting very close,” she said. “The effort has been to try to work with the (Democraticcontrolled) House to get agreed-to language, considering the short time frame.” Still, the legislation will sidestep the thorny issue of how to account for the new money that will flow to cities and counties from the casinos. Some mayors are concerned that the money the casinos bring in will offset state

FILE PHOTO/MARC GOLUB

Mark Munsell, president of Munsell Realty Advisors Inc., said he was approached by JPMorgan Chase & Co. to shed a $22.4 million loan that the New York bank held. Mr. Munsell then borrowed money through another lender to pay back JPMorgan, at a total of $14 million.

Changes are afoot at Progressive Field, and not just in the form of some early season callups from the minors. The Indians soon will announce an agreement with an architect to make potentially significant changes to the ballpark. The goal of the effort, according to Indians vice president of public relations Bob DiBiasio, would be to “reshape and revive this wonderful facility.” “It is now time to look to the future to make sure Progressive Field continues to provide the total fan experience for decades to come,” Mr. DiBiasio said. What the changes will be remains to be seen, though it appears anything may go. The Indians in March invited architects and engineers to submit makeover plans. The selected group will work with the team to conduct a facility assessment review, Mr. DiBiasio said, then ultimately develop a master redevelopment plan. Doug Hoffman, a principal at the Cleveland office of architectural firm Weber Murphy Fox, said seven local outfits, including his, were invited to submit plans for redevelopment. Other local firms invited were Bialosky & Partners Architecture; Hershman Architects; OSports Architecture (a division of Osborn Engineering); URS Cleveland; Vocon; and Westlake Reed Leskosky. Moody Nolan in Columbus and Kansas City-based Populous, formerly HOK Sport, which originally designed Jacobs Field in the early 1990s, also were invited to submit plans.

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See INDIANS Page 21

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SPECIAL SECTION

SMALL BUSINESS Urban agriculture is becoming a viable industry within Northeast Ohio ■ Page 17 PLUS: TAX CREDITS ■ BOAT LINE ■ GRAND OPENINGS ■ & MORE

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CORRECTION A May 3, Page One story on the failure last December of the former AmTrust Bank mischaracterized the nature of a document that had been prepared in response to a Nov. 4, 2009, letter to the bank from the federal Office of Thrift Supervision. The letter notified the bank’s board that AmTrust was “significantly undercapitalized” and had until the end of that month to file a capital restoration plan with the regulator. According to Christopher Meyer, an attorney for Squire, Sanders & Dempsey who is representing AmTrust Bank’s former parent, AmFin Financial Corp., in a bankruptcy case, a draft of the document that was to be sent to the Office of Thrift Supervision was not described by him as a capital restoration plan, as stated in the story.

COMING NEXT WEEK Finance section We take a look at some of the financial trends and issues facing those working in Northeast Ohio.

REGULAR FEATURES Classified .................26 Editorial ...................10 Going Places ............15 List: Manufacturing companies ........22, 24 Tax Liens ..................14

WWW.CRAINSCLEVELAND.COM

MAY 10-16, 2010

SIGNS OF LIFE In the Cleveland/Elyria/Mentor MSA, nonfarm payroll employment is up, jobless claims are down and housing permits are on the rise; maybe this fledgling recovery is real after all. The state of Ohio each month issues what it calls a “Leading Indicator” report looking at key statistical measures. So far in 2010, the numbers are more positive, though there’s a long way to go to reach economic health:

Measure Nonagricultural wage, salary employment (seasonally adj)

Feb.

March

% change % change Feb.-March last 12 months

989,000

1.01M

1.9%

-0.8%

Unemployment insurance claims

10,321

10,239

-0.8%

-46.6

Avg. work week in manufacturing

40.0

40.1

Valuation of housing permits

$21.6M

$46.9M

SOURCE: OHIO DEPARTMENT OF JOB AND FAMILY SERVICES

0.3 117.6

5.5 108.0

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 editors: Joel Hammond (jmhammond@crain.com) Sports Kathy Carr (kcarr@crain.com) Marketing and food Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Shannon Mortland (smortland@crain.com) Health care and education Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Manufacturing Arielle Kass (akass@crain.com) Finance and legal Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing/Events manager: Christian Hendricks (chendricks@crain.com) Marketing coordinator: Laura Franks (lfranks@crain.com) Advertising sales director: Mike Malley (mmalley@crain.com) Account executives: Adam Mandell (amandell@crain.com) Dirk Kruger (dkruger@crain.com) Nicole Mastrangelo (nmastrangelo@crain.com) Dawn Donegan (ddonegan@crain.com) Business development manager & classified advertising: Genny Donley (gdonley@crain.com) Office coordinator: Toni Coleman (tcoleman@crain.com) Production manager: Craig L. Mackey (cmackey@crain.com) Production assistant/video editor: Steven Bennett (sbennett@crain.com) Graphic designer: Kristen Wilson (klwilson@crain.com) Billing: Susan Jaranowski, 313-446-6024 (sjaranowski@crain.com) Credit: Todd Masura, 313-446-6097 (tmasura@crain.com) Circulation manager: Erin Miller (emiller@crain.com) Customer service manager: Brenda Johnson-Brantley (bjohnson-brantley@ crain.com) 1-888-909-9111

Crain Communications Inc. Keith E. Crain: Chairman Rance Crain: President Merrilee Crain: Secretary Mary Kay Crain: Treasurer William A. Morrow: Executive vice president/operations Brian D. Tucker: Vice president Robert C. Adams: Group vice president technology, circulation, manufacturing Paul Dalpiaz: Chief Information Officer Dave Kamis: Vice president/production & manufacturing Kathy Henry: Corporate circulation/audience development director G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Subscriptions: In Ohio: 1 year, $59; 2 years, $102. Outside of Ohio: 1 year, $102; 2 years, $180. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-888-909-9111 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation

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INSIGHT

Even minus hub, Continental still owes Hopkins MARC GOLUB PHOTOS

Perhaps the coolest new product in development at Sherwin-Williams’ Breen Technology Center in Cleveland is a transparent coating that makes graffiti easier to remove, as staff painter Mike Czyrba demonstrates.

If airline reduces service after merger, it remains on hook for millions in lease, construction fees By JAY MILLER jmiller@crain.com

PATENTLY UNIQUE Sherwin-Williams using innovation to take aim at improving customers’ efficiency while staying ahead in competitive paint, coatings market

If Continental Airlines Inc. were to abandon hub operations at Cleveland Hopkins International Airport upon consummating its planned merger with United Airlines, it would still be on the hook for more than $120 million in costs here. It’s unlikely the new United Airlines would pull out of Cleveland entirely, of course. But the cost of a reduction in service at Hopkins while the airline retains its longterm and fixed obligations there would be substantial.

A key to the merger of Continental and United that was announced May 3 is cost savings. Officials of the two airlines have said they expect the merger to reduce expenses or increase revenue of the combined operation by $1 billion to $2 billion annually by 2013. Those benefits could come through a reduction in the number of flights offered, higher fares and layoffs. Executives of the combined airline also expect to incur at least $1 billion in one-time costs, such as employee severance, as a result of the merger. But they also may be anticipating the expense of reducing See CONTINENTAL Page 4

THE WEEK IN QUOTES By DAN SHINGLER dshingler@crain.com

S

herwin-Williams Co. officials might not be happy until the paint applies itself and then cleans up afterward. With about 30 new patents a year coming out of its Breen Technology Center on the east bank of the Cuyahoga River in downtown

Cleveland, the company increasingly uses innovation to distinguish itself in the ultra-competitive paint and coatings market. “This is where I come to see the future,” said Sherwin-Williams CEO Chris Connor during a visit last Wednesday, May 5, to the tech center, where the company unveiled some of its latest new products. See UNIQUE Page 21

“The less desirable the asset class, the better the terms. The banks would rather work with the borrower or a replacement owner before getting the property back. Foreclosure is the last thing on their list.” — Ryan Sommers, president, the Gray Fox Capital Ltd. accounting firm in Concord. Page One

“(The Indians are) looking at their underperforming areas and asking, ‘How can we restructure?’ You’re not physically altering it to where, in five years ... you can’t go back and undo it.” — Mark Rosentraub, chair of the department of sport management at the University of Michigan. Page One

“The great thing about urban agriculture is that it ... unites the rural and urban areas, and we realize a common destiny.”

“We wanted dock access closer to Cleveland; if we could get stationed closer to the city, it would minimize our expenses.”

— Brad Whitehead, president, the Fund for Our Economic Future. Page 17

— Lance Woodworth, director of operations for Put-In-Bay Boat Line. Page 20

Questions about health care reform boost business for attorneys, consultants By SHANNON MORTLAND smortland@crain.com

Complex 2,400-page bill intimidating for companies, who are seeking out help

Consultants and attorneys across Northeast Ohio are seeing healthy increases in business from companies and individuals trying to make heads or tails out of the 2,400 pages of the new federal health care bill. Many professional advisory firms are boosting their staffs to handle the onslaught of inquiries brought on by the landmark legislation that Congress passed and President

Barack Obama signed into law in March. “People are starting to digest the bill and think about how to position themselves,” said Jeff Kapp, a partner in the health care practice of Cleveland law firm Jones Day. “They’re reading the tea leaves.” Indeed, companies have a lot of questions for human resource consulting firm Oswald Cos., said

Bob Klonk, an executive vice president at Oswald. Hundreds of business people took part in a recent Oswald-sponsored webinar seeking help in interpreting and understanding various parts of the bill and how it will affect them, Mr. Klonk said. Specifically, businesses are eager to learn more about provisions in the reform bill such as dependent

coverage, preventive care, retiree care and small business tax credits, he said. “Anytime there’s confusion, there’s anxiety,” Mr. Klonk said. “We’re trying to calm them down.” Eric M. Simon, a partner in the health and life sciences practice of Cleveland law firm Taft Stettinius & Hollister LLP, said many firms are trying to push information to their

clients through seminars and client alerts. “The health reform bill is so enormous that businesses don’t know what it means for them,” he said. “We’re boiling it down into bite-size pieces so people start to become more comfortable.” Thomas Ferkovic, managing partner at SS&G Health Care Services LLC in Akron, said his company is fielding questions about reform in general and how it will change the way See BOOST Page 8

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Continental: Some leases run through ’27 continued from PAGE 3

service at various airports. The fear in Northeast Ohio is that the new United Airlines would find some of its savings by abandoning Cleveland Hopkins as a hub airport — an airport an airline uses as a center for moving passengers from smaller “spoke” cities to other cities. To do so, though, would be expensive for the airline because a large portion of Continental’s costs here are fixed obligations. Even if it reduces service here, the airline will continue to pay these costs until bonds are paid off and leases and other agreements expire.

Bonded to Hopkins The biggest nut for Continental in

Cleveland is a series of special revenue bonds issued in 1998 for the construction of Concourse D, which is key to the hub concept because it is used by Continental for its regional jet service. Ricky Smith, director of the city’s Department of Port Control, which oversees Cleveland’s airports, said that debt is a direct obligation of Continental, though it was issued through the city to take advantage of lower borrowings costs. It’s on the city’s books at $120.3 million. The rest of Continental’s obligations at Hopkins are in the form of landing fees and long-term leases. According to financial information released by Hopkins officials, Continental paid $33 million toward

“We’re trying not to cede to panic.” – Ricky Smith, director of Department of Port Control, City of Cleveland the operation of the airport in 2009. Landing fees, which are charges incurred per 1,000 pounds of gross weight of the aircraft making the landing, accounted $14.2 million of that amount in 2009. That cost would be reduced if the merged airline cut flights, though Continental is governed by a master lease agreement that runs through 2015. The rest of Continental’s costs at the Cleveland airport — $18.8 million a year — is for lease obligations for gates the airline operates in concourses C and D and for hangar and other ancillary services. The expiration of those leases ranges from December 2019 to December 2027. That portion of Continental’s annual expenses at Hopkins would not drop if the airline was to cut the number of flights out of the airport.

No need to panic It potentially will take years to integrate the two air fleets into a single airline. It also will be months before federal regulators even approve this union, and longer still for the two commercial air powers to merge their work forces and ground operations. Only then will the consolidated airline decide which routes — and hubs — to keep, which to grow and which to discard. Cleveland Mayor Frank Jackson moved quickly to protect the interests of Cleveland Hopkins, enlisting the support of the local congressional delegation and pressing the city’s case with Continental CEO Jeffrey Smisek, who will be CEO of the merged airline. At a news conference May 3, the mayor said he and Mr. Smisek agreed to meet to discuss Hopkins’ role in the new airline. “He was willing to have a conversation about Cleveland in the new structure,” Mayor Jackson said. The mayor also asked Mr. Smith, the director of port control, to convene a panel of air service, financial, legal and regulatory experts to advise the mayor as the planned merger proceeds. Asked about the impact of the merger in a telephone interview last Friday, Mr. Smith described his approach as measured. “We’re trying not to cede to panic,” he said. Mr. Smith was reluctant to speculate about the role of Hopkins in the future of the new United Airlines. Instead, he said, he would rely, at least for now, on assurances the city has received from the airline. But he’s planning to make the city’s case as the merger progresses. “We’re working to help them not just maintain the hub (in Cleveland) but we will present a plan to them to grow the hub,” he said. “We are one of the few airports in their new system that has capacity to grow.” ■

Volume 31, 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 © 2010 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $1.50. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. (888)909-9111. REPRINT INFORMATION: 800-290-5460 Ext. 136

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Tax credits fuel growth at med device firms Mercury emissions from Mentor, Akron companies planning expansions By CHUCK SODER csoder@crain.com

Three medical device makers gearing up for significant expansions were among a handful of Northeast Ohio companies that received state tax credits over the past few weeks. The three companies — Steris Corp. and U.S. Endoscopy, both of Mentor, and Theken Spine LLC of Akron — received a total of $4.67 million in job creation tax credits, which apply to increases in their payrolls, as well as other incentives awarded to encourage big expansions planned at each company. Steris, which makes decontamination products, received a 65% job creation tax credit valued at $2.27 million over 10 years as part of an expansion plan that is supposed to create a total of 313 jobs in Mentor over the next three years, according to Ron Traub, economic and community development director for the city. The company previously announced plans to move 240 positions to Mentor from Erie, Pa., by the end of 2011. The city last week approved its own $1.3 million tax credit to encourage the expansion, Mr. Traub said, adding that the company also was in conversations about expanding in Alabama and Mississippi. The expansion will involve the construction of a two-story, 55,000-squarefoot office building on Steris’ headquarters campus, Mr. Traub said. Steris has yet to release many details on its plans. U.S. Endoscopy also has received state and local incentives to fuel a growth plan

expected to include a physical expansion and the addition of 150 jobs in manufacturing, engineering and office positions. The company today employs 290 in Mentor and 350 globally. “This has been an interesting two weeks for the biotech industry in the city of Mentor,” Mr. Traub said. U.S. Endoscopy, which makes accessories for gastrointestinal surgery and other endoscopic procedures, received a 50% state job creation tax credit valued at $555,000 over seven years, which complements an $871,000 grant it received from the city of Mentor in April. The company plans over the next six months to identify a location where it could acquire 75,000 square feet to 100,000 square feet of space, said chief financial officer Peter Brumbergs. U.S. Endoscopy most likely would buy or lease an existing building, creating offices, manufacturing operations and warehouse space. It aims to move into the additional space in 2011, he said.

Positive local sign In Akron, Theken Spine LLC received a 55% state job creation tax credit valued at $1.85 million. The maker of spinal implant products reported to the state that it expects to create 199 jobs during the seven years the tax credit is in place. The tax credit shows the company’s willingness to grow locally, which some may have questioned after Theken Spine and a few related companies were acquired in 2008 by Integra LifeSciences Holdings Corp. of Plainsboro, N.J. The credit requires

the company to maintain operations in the state for at least 10 years. Theken director of marketing Rachael Smith declined to provide details on the company’s expansion plans. “Things are still in a development phase,” Ms. Smith said. Steris, which was founded in 1987 and has annual sales of about $1.2 billion, is often mentioned when economic development officials give examples to show how the region can be successful in the biomedical industry. The other two companies, though smaller, have grown in recent years. The Theken family of companies now employs 100, up from 59 in October 2007, and U.S. Endoscopy’s revenues have risen by 20% to 30% during each of the past five years, Mr. Brumbergs said. “If the economy would have been better, we would’ve done even better than that,” he added.

And beyond medicine … Also receiving state tax credits were Cleveland Range LLC of Cleveland and InterGroup International Ltd., which is based in Warren but a month ago opened a Euclid operation. Cleveland Range, which makes steam cooking equipment for businesses, hospitals and schools, was awarded a 50% credit valued at $160,000. The company expects to create 80 jobs over the course of the sixyear credit. InterGroup International, which makes plastic resins from post-industrial plastic waste and sells thermoplastic vinyl and metal-nylon boards, received a 45%, fiveyear credit valued at $65,000. The company plans to hire 42 more people during the five-year period. ■

boilers next EPA target By WASTE & RECYCLING NEWS

The U.S. Environmental Protection Agency is proposing to cut emissions of mercury and other substances from U.S. boilers, process heaters and solid waste incinerators. “Strong cuts to mercury and other harmful emissions will have real benefits for our health and our environment, spur clean technology innovations and save American communities billions of dollars in avoided health costs,” said EPA administrator Lisa P. Jackson. “This is a cost-effective, common sense way to protect our health and the health of our children, and get America moving into the clean economy of the future.” The proposals cover two types of combustion units. The first type of unit, boilers and process heaters, burns fuel such as natural gas, coal and oil to produce heat or electricity. These units also can burn nonhazardous secondary materials such as processed tires and used oil. The second type of unit, commercial and industrial solid waste incinerators, burns solid waste. Large boilers and all incinerators would be required to meet emissions limits for mercury and other pollutants. Facilities with boilers also would be required to conduct energy audits to find cost-conscious ways to reduce fuel use and emissions. Smaller facilities, such as schools, with some of the smallest boilers, would not be included in these requirements, but they would be required to perform tune-ups every two years. EPA will take comment on these proposed rules for 45 days after they are published in the Federal Register, and will hold a public hearing on these rules soon thereafter. For more information on the proposals and details on the public hearings, visit www.epa.gov/airquality/ combustion. ■ (Waste & Recycling News is a sister publication of Crain’s Cleveland Business.)

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Closed auto dealers gain small victory in bankruptcy case Performance scores on which Spitzer, others shuttered by Chrysler were judged now open By DAN SHINGLER and NEIL ROLAND

Alan Spitzer and about 250 other rejected Chrysler Group dealerships currently in arbitration proceedings with the automaker will gain access to their Chrysler Spitzer performance scores — and those of their competitors — under a decision by a federal bankruptcy judge last week. Mr. Spitzer was the largest Chrysler dealer in the nation to lose his franchises, with seven of his eight stores affected. His dealerships in Akron, Cleveland, Columbus, Lakewood and Sheffield all were cut from the Chrysler network, as were locations in Pennsylvania and Florida. U.S. Bankruptcy Court Judge Arthur Gonzalez in New York has unsealed each dealer’s spreadsheet of about 30 performance categories for use in arbitration, a copy of the judge’s decision shows. The judge also held that each dealer can get copies of the performance charts of rivals to whom the dealer was compared when the dealer was terminated, according to the decision. “Gonzalez, who had ruled against the dealers at every turn, surprisingly ruled in the dealers’ favor,” said Mr.

Spitzer, who co-chairs and helped found the Committee to Restore Dealer Rights, which lobbied Congress to force Chrysler into arbitration last year. “I’m just wondering if he’s starting to realize he was in fact duped by Chrysler, because he was,” said Mr. Spitzer, who has maintained all along that Chrysler has not been forthcoming with accurate information in its bankruptcy case and its decisions to close dealers. Mr. Spitzer said his lawyers are working to get the spreadsheets he needs from Chrysler. In the meantime, he said he hopes the company will negotiate a settlement with him to keep at least some of his dealerships open. If that doesn’t happen, Mr. Spitzer said, he will go to arbitration. So far, Chrysler has won three of the four arbitration cases that have been heard, including one in Cincinnati. But Mr. Spitzer said only two of those cases — both in Florida — were adequately defended by their dealers. Those two cases were split, with one ordered to close and Chrysler forced to keep the second open. “As far as I’m concerned, the score is one to one,” Mr. Spitzer said.

OPEN THE CASE Last week, a federal bankruptcy judge ruled Alan Spitzer and other auto dealers in arbitration proceedings can access their Chysler performance scores, which include about 30 performance categories used in arbitration. Additionally, these auto dealers can access their rivals’ scores, which were used when comparing each other when it came to termination. Mr. Spitzer hopes being forced to share more information with dealers may force Chrysler to settle. “I’m guardedly optimistic that they’ll wake up and do the right thing some day,” Mr. Spitzer said.

Ray of hope Losing a case and being forced to release more information to dealers might put pressure on Chrysler to settle, Mr. Spitzer said. “I wouldn’t say I’m significantly more optimistic, but I’m guardedly optimistic that they’ll wake up and do the right thing some day,” he said. In arbitration, dealerships can use these spreadsheets to evaluate the validity of Chrysler’s explanations of why they were shuttered, said dealer lawyer Leonard Bellavia, of Mineola, N.Y. “We intend to show the many discrepancies between what Chrysler asserted in the bankruptcy hearings

as criteria for rejection against what they now allege in the arbitrations, to show that Chrysler will argue whatever suits its purpose at that given time,” Mr. Bellavia said. Chrysler has described each spreadsheet as “a historical track record” of sales and financial performance that incorporates comparisons between a dealership and competitors in its market area. In the wake of Judge Gonzalez’s decision, Chrysler said it already was producing the spreadsheets sought by individual dealers. “This decision validates what Chrysler Group is already doing and that the company is properly following both the Bankruptcy Court rulings and the discovery provisions of the Federal Dealer Arbitration Statute,” the company said in an e-mail. Chrysler added: “The process to determine which dealership contracts were rejected evaluated dealership performance and market factors using data-driven criteria and was applied to every dealer.”

Limited cooperation alleged Mr. Bellavia disputed Chrysler’s statement, saying the company has been producing only fragments of dealer performance scores in arbitration. “Chrysler had been providing only a very limited excerpt from the arbitrating dealer’s spreadsheet, which redacted all of the performance metrics,” he said.

Mr. Spitzer said Chrysler so far has not been willing to share with dealers the criteria the company used to decide which dealerships to close — and he still wants to see it. “In our view, they have not complied with the law in terms of the criteria,” Mr. Spitzer said. “The legislation requires them to give the specific criteria that was used to terminate the dealer and they’ve never given it.” Another dealer lawyer, Mark Ornstein of Orlando, agreed. Mr. Ornstein, whose arbitrations on behalf of three Florida clients were completed last week — he won one and lost two — said he tried to obtain from Chrysler the criteria used to terminate the dealers. “All we got were fragments,” he said. “We went into the hearing totally blind. I don’t think my clients were ever given the real reason why they were terminated.” Last week, a rejected-dealers’ group urged all its members in arbitration with Chrysler to have their lawyers obtain their individual spreadsheets from the automaker immediately, as Mr. Spitzer already is doing. Mr. Spitzer said he still hopes to resolve his situation by midsummer. ■ (Dan Shingler is manufacturing reporter with Crain’s Cleveland Business and Neil Roland is Washington reporter with Automotive News, a sister publication.)

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Crain’s honors region’s health care heroes Winners were honored in nine categories at the 2010 Health Care Heroes awards reception, held last Thursday afternoon, May 6, at the Cleveland Marriott Downtown at Key Center. About 275 people attended the reception for the third annual award program. The nine winners were drawn from a pool of 27 finalists. Here are the winners in each category: ■ Volunteer: Dr. Nicholas Marko, neurosurgery resident, Cleveland Clinic ■ Allied Health: Beth Shapiro, social worker, Hospice of the Western Reserve ■ Physician: Dr. Chester H. Ho, chief, spinal cord injury, Louis Stokes Cleveland VA Medical Center ■ Advancements in Health Care: Dr. Joseph Baar, director, breast cancer research, Ireland Cancer Center, University Hospitals Case Medical Center; and associate professor, Case Western Reserve University

JASON MILLER

Scott Misischia, the director of northern Ohio sales for Anthem, addresses the crowd at Crain’s Health Care Heroes event Thursday afternoon. School of Medicine ■ Employer Achievement in Wellness: Herbruck Alder ■ Nurse (Nonhospital setting): Adriana T. Whelan, nurse practitioner, The Free Medical Clinic of Greater Cleveland ■ Nurse (Hospital Setting): Michele

Reali-Sorrell, assistant nurse manager, nurse educator, Huron Hospital ■ Health Care Advocate (Individual): Helen Moss, founder and managing trustee, The Helen Moss Breast Cancer Research Foundation ■ Health Care Advocate (Organization): Voices for Ohio’s Children An independent panel of judges reviewed more than 100 nominations this year as part of the selection process for the 2010 Health Care Heroes awards. The judges were: Lois A. Bowers, managing editor of Medical Economics; Martha K. Raymond, a registered nurse and managing editor of Contemporary Pediatrics; Sheryl Stevenson, managing editor of Ophthalmology Times; Julia Talsma Kotowski, a medical marketing consultant; Tracey Walker, managing editor of Formulary; and Ron Rajecki, a freelance writer with 25 years of experience in the trade press for titles such as Modern Medicine.

Boost: Law firms adding to health care ranks continued from PAGE 3

health care is delivered. While some questions can be answered now, many more will need to wait for regulations to be handed down from the Internal Revenue Service, the U.S. Department of Labor and the U.S. Department of Health and Human Services before specific advice can be given, Mr. Ferkovic said. Regulations are expected as early as late summer for some provisions that go into effect in September and in 2011, though many more regulations will be crafted in the following years, said Alan Schabes, a partner in

the health law group at Clevelandbased law firm Benesch Friedlander Coplan & Aronoff.

In search of more staff That expected uptick in business is prompting some firms to boost their staffs of health care experts. Among them is Benesch, which now has 20 health care attorneys. “I would love to hire more,” Mr. Schabes said. “If I could find them, I would hire them.” Health care lawyers are in high demand across the country, and he expects that situation to continue in the coming years. Stephen Sozio, a partner in Jones Day’s health care and government investigations practice, said his law firm is looking to expand its 89member team of health care attorneys nationwide, but he admits the competition will be stiff. “It’s one of the few growth areas within the legal industry,” he said. Likewise, SS&G expects to add five to 10 employees over the next year to its current staff of 105 who work in Ohio, Michigan, Pennsylvania, Florida and South Carolina, Mr.

:+<

Ferkovic said. Cleveland law firm Baker & Hostetler also is trying to boost its number of health care attorneys as clients look for ways to “survive and/or thrive under health reform,” said Steven Eisenberg, a partner in the firm’s health care practice. Of particular interest will be health care litigators, Mr. Sozio said. The Obama administration has set aside money to fulfill its promise to crack down on fraud and abuse in the health care system, he said. The reform bill also has sweetened the pot for whistleblowers, who now can make more money for reporting fraud. “This statute makes it easier to recover and eliminate some of the defenses relied upon by health care providers,” Mr. Sozio said. While many regulations still are on the drawing board, it’s never too early to start preparing for the effects of health reform, Mr. Eisenberg said. “We have directional guidance but we don’t have concrete guidance,” he said. “(But) our clients that will do well are the ones who are more proactive and are really thinking about it.” ■

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MAY 10-16, 2010

PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

Be cool

N

o one wants to see the combined airline that would result from the merger of Continental Airlines and United Airlines close its hub in Cleveland. But the combative stance taken by U.S. Rep. Dennis Kucinich in responding to the merger’s perceived threat to the hub operation at Cleveland Hopkins International Airport doesn’t seem to us to be the best approach to securing its presence over the long haul. The ink was still wet on the merger agreement between the two big airlines and Rep. Kucinich already was proclaiming last week that he was “prepared to use the full power and authority of my office to see to it that Cleveland’s interests are protected and air passengers nationally are protected.” By power, he meant using his position as chairman of the House Domestic Policy Subcommittee to investigate whether the combination should pass antitrust muster. “The Clayton Antitrust Act makes it very clear that if any of the parties inflicts substantial economic harm, that can be a reason to deny a merger,” the congressman said. The threat against the corporate machine was vintage Kucinich, and oh so predictable. But we’re not sold on the benefits of wielding an antitrust stick to get the two airlines to do Cleveland’s bidding. In exploring whether a Continental-United union would be anticompetitive in nature, the Justice Department largely will focus on broader issues such as whether their combined routes would create too much dominance in certain markets and whether concentrating more overall market share in the hands of fewer airlines would translate into pricing nightmares for flyers. Determining the local fallout from whether the two airlines operate six, seven or all eight of their current domestic hubs after they merge likely will be lower on Justice’s antitrust checklist. We also question whether positioning Cleveland as an adversary of the two airlines’ plans is the right tack to take if the city hopes to court their favor and so maintain the hub status Hopkins has enjoyed thanks to its collaborative relationship with Continental. Rather than rely on hot rhetoric to intimidate the airlines, let’s be cool and accentuate the positive instead. How about rallying the business community and even leisure travelers to join in a letter-writing campaign that would thank Continental for its presence here and would express the writers’ commitment to make the combined airline their first choice if it were to keep a Cleveland hub? And why not start putting together a business case for keeping the operation here, just like U.S. Rep. Steve LaTourette and attorney Fred Nance (among others) did when the federal government was ready to pull the plug on the Cleveland office of the Defense Finance and Accounting Services? If nothing else, work on the latter could serve to sell another airline on expanding its presence in Cleveland should Hopkins become the odd airport out in the hub plans of a united Continental-United. It definitely would be more productive than listening to civic leaders engage in panicked talk that assumes the worst outcome for Hopkins in this unfolding story.

FROM THE PUBLISHER

Some good news entering the inbox

T

what once was Ohio steel country. here are few better ways for me That same day, we offered a story from (and the 22,000-plus others who Columbus Business First, the capital read it daily) to get an overall city’s weekly business newspaper, that look at Ohio’s economy than by reported Nationwide Insurance Co. scanning our popular Morning Roundup plans to hire 1,400 people across its e-mail. Lately it’s been offering a fair national operation, with 600 of the addiamount of evidence that the economic tions here in Ohio. A company official malaise could be coming to an end. told the newspaper that while On Thursday last week, our its property and casualty lines roundup (you can sign up for BRIAN are still “in a pretty tough envithis and all our other e-mail TUCKER ronment,” the additions reflected news products at www.Crains solid first-quarter results and Cleveland.com) included several were in response to business stories of promising developdemands. ments in the Buckeye State. And there was this lead paraAmong them was a web report graph from a story on (The from The Vindicator in YoungYoungstown/Warren) Business town that linked to a feature Journal web site: “After 18 story by Inc. magazine on the months of pervasive gloom, impressive efforts ongoing to dealmakers from Ohio are increasingly remake the Mahoning Valley town into a more positive about the mergers-andmecca for tech start-ups. acquisitions environment.” While it’s not the first national media Central to the story was a survey organization to report on the Youngstown released by the Cleveland chapter of the revival (National Public Radio did a Association for Corporate Growth and similar story a few months ago), Inc. the financial data firm Thomson Reuters offered more evidence that a new that showed that 94% of the state’s dealeconomic era has begun in the heart of

makers (lawyers, investment bankers, accountants, etc.) expected an uptick in merger-and-acquisition activity in the next six months. “Many factors are contributing to the increased M-and-A activity, including the greater willingness of business owners to consider a sale because their businesses have stabilized, significant improvement in the debt markets over the last six months, and the potential change in the capital gains tax rate in 2011,” said Thomas Littman, president of Kirtland Capital Partners. By the way, 82% of those responding to the survey identified the current economy as a buyers’ market. That’s one reason we have decided to present a business breakfast on just that theme on Wednesday, May 19, at the Ritz-Carlton Hotel. Expert panelists will help educate attendees on how to determine whether it’s time to sell a business or time to reinvest to increase its value for the future, whether to hand off to the next family generation or sell at a profit at a later date. You can register at www.CrainsCleveland.com. ■

AND COUNTING ... What has been the most important public health initiative of the past 30 years? (Asked during the 2010 Health Care Heroes awards event)

Crain’s Cleveland Business is celebrating its 30th year as Northeast Ohio’s premier source of business news with a special double issue, which will feature profiles of the 30 most influential Clevelanders. As part of the celebration, we also are reflecting on the most memorable events of the past three decades with weekly polls — some of which can be found in this space — trivia questions, online content and video interviews. You can get in on the fun by visiting CrainsCleveland .com/30thanniversary.

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CRAIN’S CLEVELAND BUSINESS

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11

Loans: Lucrative deals emerge continued from PAGE 1

Sudden deadlines set by lenders for borrowers to buy a loan can yield huge slashes in principal outstanding, a surprisingly pleasant outcome in this dour time as real estate finance begins to resemble a vast casino. As lenders reduce their commercial real estate exposure big-time and developers learn unaccustomed lessons about the value of reducing leverage on properties, some win at slots like Mr. Munsell and reap huge savings. Other developers play dice, pursuing distressed loans as a way to grab properties at big discounts. That’s a strategy Mr. Munsell eschews, because making a go even of properties he knows is tough in the recession. Meanwhile, the traditional loan workout process is under way. Other developers with properties suddenly worth less than the loan as a result of losing tenants or missing a property tax payment keep a poker face as they talk to lenders, putting more cash on the table to get outstanding loan principal reduced, win a loan extension or renew a loan that is tough to replace with another lender. In Mr. Munsell’s case, JPMorgan Chase made the loan Dec. 21, 2007, and did not get it sold to the mortgage-backed securities market before the market essentially shut down in summer 2008. He stressed that his loan was performing, had plenty of term left and that the buildings are distress-free, as the two towers at 23240 and 23250 Chagrin Blvd. are 93% leased. Officials at JP Morgan did not respond to three calls and e-mails about the deal.

Playing chicken Other, less esoteric, examples of such deals abound as lenders look to trim their commercial real estate exposure and real estate investors learn how hard it is to reduce leverage. John Ferchill, CEO of the Cleveland-based Ferchill Group real estate development concern, recently fielded a question at a NAIOP Northern Ohio trade group function about how his firm handles talks with lenders. “We play chicken with lenders,” the blunt Mr. Ferchill said, noting he would take no follow-up questions from the media. Robert Monchien, president of Forest City Land Group Inc., the homebuilder-oriented land division at the big Cleveland-based real estate developer, said examples of profiting from lender woes were scarce in the past because “there was none of it before the downturn. They are few and far between.” “We expect to see more of this as banks get more realistic in the valuations that they have on these assets.” Mr. Monchien said. He should know.

Mr. Monchien and his team have spent the last two years looking for ways for Forest City to profit from lender woes or those of other residential land developers. In Forest City’s case, it reported $11 million in income from early extinguishment of land-loan debt in 2008. Mr. Monchien said in an interview the income resulted from Forest City buying a loan for “substantially” less than its original value on 800 acres it owns in Tucson, Ariz. Likewise, Forest City reported last month that it gained a 54% ownership interest in the 3,000-acre Woodforest planned community in Houston for a $7 million investment. The Texas deal is in one of the few U.S. metro areas where the new-home market has some life to it. Forest City played substitute banker in that deal. Mr. Monchien said it replaced a mezzanine, or secondary, loan for a lender liquidating its land-loan portfolio. The key part of the deal to Forest City was that the primary lender is happy with the project, he said, and will continue to extend financing for adding streets and other infrastructure in the project. Mr. Monchien refused to identify lenders involved or specific dollars. Why? “We may want to do business with them again,” he said. Listeners to some Forest City conference calls with securities analysts and in the most recent conference call of Developers Diversified Realty Corp. of Beachwood will hear the phrase “loan forgiveness” listed in the strategies for coping with their debt loads. Forest City spokesman Jeff Linton said he could not elaborate on such deals on the commercial front. Developers Diversified spokesman Scott Schroeder declined comment.

“All of those assets are out of favor with banks,” Mr. Sommers said. “The less desirable the asset class, the better the terms. The banks would rather work with the borrower or a replacement owner before getting the property back. Foreclosure is the last thing on their list.” Rick Ferris, president of the Sequoia Realty brokerage in Mentor, said he approached lenders with such offers on four small shopping centers he owns throughout Northern Ohio. He said he thought it would be “a bonus for everyone” in tough times. Rebuffed, Mr. Ferris wondered recently, “Had I defaulted on my loans, it might have been a different answer.”

CreatingValue.

Time for a trim Mark Jablonski, president of CenterMark Development of Cleveland and a former realty consultant and bank loan officer, estimates banks are taking haircuts of as much as 15% on distressed commercial loans and 30% on distressed residential loans in the region. In this homebuilder-decimating time, land loans for residential projects are toxic and prices the sweetest. Mr. Jablonski said he has been trying to meet bank workout officers for the past two years to find such properties, but rarely gets in with former colleagues. “From that, I conclude their key approach — at least for now — is to work out loans with the owners if the current owner has been a good boy and is willing to roll up his sleeves,” Mr. Jablonski said, a sentiment others echo. He expects more problems ahead — a point reinforced by banks continuing to recruit loan workout specialists. ■

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Off the books However, indications abound of such goings-on even among smaller Northeast Ohio players, down to small businesses that own their own building. “If you would have told me a year ago banks would be selling these notes for 50 cents on the dollar, I’d have been surprised,” said John Funk, director of the real estate unit at the Cleveland-based Maloney+Novotny accounting firm. “Now there’s more of it than I thought would be happening. The banks have already written off the loans. They want them off their books.” Ryan Sommers, president of the Gray Fox Capital Ltd. accounting firm in Concord, said he has seen realty-owning clients negotiate discounts in principal of 25% to 40% on loans of $500,000 to $2.5 million on four Northeast Ohio properties — a mixed-use project, a shopping center and two land loans on would-be new home developments.

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MAY 10-16, 2010

French eatery to open in revamped Euclid Ave. building Zinc re-creates ambience of famed New York bistros with ‘approachable’ menu offerings By KATHY AMES CARR kcarr@crain.com

Chef Tom Quick said he hopes his new French restaurant inspired by various New York bistros will bring a kind of joie de vivre to downtown Cleveland. The $1 million, 10,000square-foot Zinc Bistro + Bar + Bakery is planning a soft opening in late May to Quick coincide with the grand opening of

developer K&D Group’s $65 million renovation of 668 Euclid Ave. The former Atrium Office Plaza is a mix of commercial and residential space within which Zinc is located. “We’re going to be an approachable French-American restaurant,� said Mr. Quick, operator and head chef. Zinc, which Mr. Quick said is slang for “bistro� in French, is scheduled to officially open June 8 with a raw bar and a menu that

ranges from the $7 field green salad to a $32 Hen and Lobster Fricassee — a hen breast cooked with lobster and cognac tomatoes in lobster stock. “Most of our menu items will be $18 to $24,� he said. Mr. Quick said he also is seeking certification through the Green Restaurant Association to become Northeast Ohio’s second green-certified eatery, like The Greenhouse Tavern on nearby East Fourth Street. “We want to be as environmentally friendly as we can,� he said.

Elements of Zinc Zinc’s 5,000 square feet of interior space will accommodate 140 patrons. Its nearby bakery will sell homemade

croissants and other handmade items along with bakery provided by Seballos Pastries of Cleveland. The outdoor patio will have another 5,000 square feet for dining and entertainment, with a stage for bands, an outdoor fire pit, a bar and seating for about 100. To give the eatery its classic ambience, the doors and mirrors will be frosted and scripted with words in French. Zinc also integrates mosaic tile floors, bronze fixtures and burgundy booths beneath a 17-foot ceiling — along with a zinc countertop at the beverage and oyster bar. Mr. Quick said he partnered with Cleveland Range, a maker of steam cooking equipment, to give the open

KATHY AMES CARR

Zinc officially will open in June at the renovated 668 Euclid Ave. building. kitchen energy-efficient technology that improves food quality. The combi-oven steamer, for example, cooks foods such as spinach for a longer time at 80 degrees instead of 212 degrees using dry gas instead of water. The process preserves the food’s nutrients and vitamins. Mr. Quick said he also plans to use as much locally grown food as possible from urban agriculture operations.

Warming up

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Zinc’s chef is no newcomer. Mr. Quick was an executive chef at the Warehouse District’s well-known but now defunct Piccolo Mondo between 1992 and 1999, where he worked with Lola and Lolita chef and owner Michael Symon. He then opened in 1999 Epiq, a bistro in Concord. Mr. Quick said the economy led to the demise of the eatery in November 2008, shortly after the collapse of the financial markets. A few months later, in March of last year, Mr. Symon helped Mr. Quick take a jaunt around New York City, where he observed the culinary techniques of chefs at notable New York establishments such as the bustling brasserie Balthazar and the French bistro Pastis. Mr. Quick settled on a concept that has characteristics of those eateries, such as the zinc-covered countertop and interior dĂŠcor, and felt the rejuvenated downtown area near East Fourth Street could sustain a new upscale restaurant. General manager John Williams, whom Mr. Quick recruited from Boston, said he likened Cleveland’s burgeoning restaurant trade to that of Beantown, where at every spin and turn there’s a James Beard awardwinning establishment. “We’re in a fantastic location among brilliant restaurateurs here,â€? Mr. Williams said. “A chef’s creations come through their dishes, and this city embraces the movement of composed dishes.â€? â–

GET DAILY NEWS ALERTS FROM CRAIN’S ! Register for free e-mail alerts and receive: ■The Morning Roundup: A collection of the day’s business news from Ohio’s daily papers ■Daily headlines: A collection of Crain’s-produced news and blog items from the day ■eCleveland!: A weekly guide to arts and leisure in Northeast Ohio

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WHAT’S COOKING What’s Cooking looks at the business of Northeast Ohio’s restaurants, breweries and wineries. To submit information, please e-mail assistant editor Kathy Carr at kcarr@crain.com. ■The Cleveland Indians and their food and beverage partner last week announced a new partnership with the Food Network, which will create signature dishes for Progressive Field’s suite menus. The announcement at the ballpark was the rollout of a multiyear agreement between the lifestyle network and Delaware North Cos.’ Sportservice division, which operates concessions and premium dining at more than 50 sports and entertainment venues across the United States. Sportservice’s chefs also will be introducing Food Network-branded items at other ballparks in the coming weeks; among them are the Milwaukee Brewers’ Miller Park and the St. Louis Cardinals’ Busch Stadium. “Food is a huge part of the experience that fans have at sports events, so we are thrilled to be working with the Food Network to bring more exciting and delicious dishes to ballparks, stadiums and arenas throughout the country,� said Sportservice president Rick Abramson. Delaware North will build and operate the Food Network-branded concepts, while the network will provide training and marketing support.

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

â– A Downtown Cleveland Alliance blogger says a vegan cafĂŠ in Boardman is expanding into Cleveland. Robert Carillio said the Flaming Ice Cube soon will be occupying space at The Park Building on Public Square in downtown Cleveland. The Flaming Ice Cube opened in 1997 and offers an eclectic selection of natural and artistic vegan products. “I have been a longtime customer of the cube — and its unique eclectic gift shop at their flagship restaurant in Youngstown (Boardman) and I can say with utmost confidence that it is a first-class establishment offering unique, fresh and healthy and satisfying food alternatives,â€? Mr. Carillio wrote. â– A Medina-based producer of refrigerated foods has unveiled a technology

that improves the quality of food preservation and makes the product taste more natural. Sandridge Corp. said its new, highpressure processing system eliminates harmful bacteria, so chemicals such as benzoates and sorbates used to preserve food and extend shelf life no longer are needed. The processing system uses cold water under high pressure rather than the traditional thermal process and preservatives to provide minimally processed foods with improved taste, texture and nutritional value, the company said. “We have committed to this technology, not only because food safety is our highest priority, but because we firmly believe that foods with fewer preservatives and clean labels are the right thing to provide to the consumers of today,� said CEO Mark Sandridge.

Survey notes M&A industry optimism The mergers and ON THE WEB Story from Beachwood acquisitions market is www.CrainsCleveland.com. private equity looking up. firm Kirtland More than 90% of Ohio dealmakers Capital Partners, said in a statesaid they expect the environment ment that while he didn’t expect for deals to improve over the next mergers and acquisitions to reach six months, according to a survey pre-recession levels, he was “bullish by the Association for Corporate on the outlook� for 2010. Growth and Thomson Reuters. “Many factors are contributing The twice-yearly survey interto the increased M&A activity, viewed 681 investment bankers, including the greater willingness of private equity professionals, corpobusiness owners to consider a sale rate development officers, lawyers, because their businesses have accountants and business consulstabilized, significant improvement tants, including 35 from Ohio. in the debt markets over the last In Ohio, 94% reported they six months and the potential change expect more activity in the coming in the capital gains tax rate in months. Thomas Littman, president 2011,� Mr. Littman said. — Arielle Kass and senior managing partner of

two business offers one big reward

■The Greenhouse Tavern keeps reaching new heights. The restaurant on East Fourth Street, which is Ohio’s first certified green restaurant, is incorporating a new rooftop urban garden that will grow herbs and vegetables for use in the eatery’s dishes. Even the dirt is more environmentally friendly. The soil is the product of compost from the restaurant’s food waste. The urban garden will be part of the rooftop dining terrace. Implementing sustainable business practices is at the core of the mission of Chef Jonathon Sawyer, who was named this year one of Food & Wine magazine’s Best New Chefs.

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1

Only new Key Merchant Services customers who open an account between 4/30/10 and 6/30/10 are eligible. (Application must be approved by 6/30/10). Services subject to the terms of the service agreement. Your $225 Key Possibilities gift card will be mailed to the signer on the account within 90 days of meeting offer requirements. Limit one $225 gift card per business. Employees of KeyBank, its afďŹ liates and subsidiaries are not eligible for this offer. You must have a valid U.S. mailing address on 6/30/10 to be eligible for this offer. Offer is subject to cancellation without notice, and cannot be combined with any other Key Merchant Services offer. The Key Possibilities card is subject to the terms of the Key Possibilities Cardholder Agreement. MasterCard is a registered trademark of MasterCard International Incorporated. The card is issued by KeyBank pursuant to a license by MasterCard International Incorporated. All rights reserved. 2 Between 5/1/10 and 7/30/10, open a Key Business Free Checking account, and enroll in either Online Banking or Key Business Online and complete two Bill Pay transactions by 10/1/10 to get a cash gift. Your gift will be deposited into your account within 90 days of meeting requirements. Offer available to businesses without an existing checking account at KeyBank as of 4/30/10. Offer not available to businesses that have opened a KeyBank checking account in the last 12 months. Employees of KeyBank, its afďŹ liates and subsidiaries are not eligible for this offer. Limit one gift per qualifying account. Limit one gift per business. The value of the gift will be reported on Form 1099-INT. Accounts closed within 180 days of account opening will be charged a $25 account early closure fee. Accounts overdrawn or closed as of 10/1/10 are not eligible for this offer Accounts titled as Trust Accounts, Estate and No Access are excluded from eligibility. Offer is subject to cancellation without notice, and cannot be combined with any other business checking offer. Other miscellaneous charges may apply. All rights reserved. Š2010 KeyCorp. KeyBank is Member FDIC. Key.com is a federally registered service mark of KeyCorp. CS10653

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WWW.CRAINSCLEVELAND.COM

MAY 10-16, 2010

TAX LIENS Jones Lang LaSalle is pleased to announce Cleveland’s newest team members

The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.

LIENS FILED

Brian Conroy Senior Vice President

Scott Pick Senior VIce President

brian.conroy@am.jll.com

scott.pick@am.jll.com

Jon Vanderplough Vice President jon.vanderplough@am.jll.com

Foods for Life Inc. Hobart Health Foods 5629 Pearl Road, Parma ID: 34-1253739 Date filed: April 22, 2010 Type: Employer’s withholding, unemployment Amount: $16,287 Bud May Inc. Maynard Co. 16850 Hummel Road, Brook Park ID: 34-1279706 Date filed: April 7, 2010 Type: Employer’s withholding Amount: $16,167

For real estate services: Robert J. Roe Managing Director + 1 216 861 7171

Unique Landscaping Contractors Inc. 19691 Euclid Ave., Euclid ID: 34-1796902 Date filed: April 12, 2010 Type: Employer’s withholding

www.us.joneslanglasalle.com/cleveland © 2010 Jones Lang LaSalle IP, Inc. All rights reserved.

5_3_2010_Conroy_Pick_Vanderplough_CRAINS PHOTOS4x5 Ad Grid (2).indd 1

5/4/2010 10:49:55 AM

Amount: $14,925 Etcetera Services Inc. Housework Etc. Unpacking Etc. P.O. Box 40041, Bay Village ID: 34-1816713 Date filed: April 20, 2010 Type: Employer’s withholding Amount: $14,905 Palekote Enterprises Inc. Landrys Trucking 13250 Strathmore Drive, Valley View ID: 34-1698520 Date filed: April 15, 2010 Type: Employer’s withholding, unemployment Amount: $14,760 Power Alarm Inc. 25086 Lakeland Blvd., Euclid ID: 34-1344538 Date filed: April 22, 2010 Type: Employer’s withholding Amount: $14,410 Automatic Stamp Products Inc. 1822 Columbus Road, Cleveland ID: 34-0665901 Date filed: April 12, 2010 Type: Employer’s withholding, unemployment Amount: $13,719 Yorkshire Ventures Ltd. Payday Professional Employer 25111 Miles Road, Suite C, Cleveland ID: 34-1881212 Date filed: April 7, 2010 Type: Employer’s withholding, unemployment Amount: $13,438 Integrity Investigations LLC 1991 Crocker Road, Suite 600, Westlake ID: 20-1915641 Date filed: April 12, 2010 Type: Employer’s withholding, unemployment, failure to file complete return Amount: $13,167 Atlantis Co. 105 Ken Mar Industrial Parkway, Broadview Heights ID: 34-1634230 Date filed: April 7, 2010 Type: Employer’s withholding Amount: $9,159 6506 Fleet Ave. LLC K & S Food & Gift 6506 Fleet Ave., Cleveland ID: 34-1937990 Date filed: April 7, 2010 Type: Employer’s withholding,

partnership income, failure to file complete return Amount: $9,091 Wrightway Care LLC P.O. Box 19440, Cleveland ID: 42-1696536 Date filed: April 27, 2010 Type: Employer’s withholding Amount: $8,536 New Image Media Inc. 26210 Emery Road, Suite 308F, Warrensville Heights ID: 34-1929688 Date filed: April 8, 2010 Type: Employer’s withholding Amount: $8,283 Tiburon Technologies 6200 Rockside Woods Blvd., Suite 200, Independence ID: 34-1744650 Date filed: April 27, 2010 Type: Employer’s withholding Amount: $8,001 Weekare Daycare Inc. 4934 Broadview Road, Cleveland ID: 34-1695141 Date filed: April 20, 2010 Type: Employer’s withholding Amount: $7,795 A & L Restaurants Inc. 19245 Detroit Road, Rocky River ID: 04-3778906 Date filed: April 27, 2010 Type: Failure to file complete return Amount: $7,626 Agape Home Health Care 540 E. 105th St., Suite 3058, Cleveland ID: 06-1725145 Date filed: April 27, 2010 Type: Employer’s withholding Amount: $7,594 Technology Services Group of Ohio P.O. Box 470456, Broadview Heights ID: 77-0598034 Date filed: April, 7, 2010 Type: Employer’s withholding Amount: $7,101 Master Care Landscaping Inc. 924 Aintree Park Drive, Mayfield Village ID: 34-1863169 Date filed: April 12, 2010 Type: Employer’s withholding Amount: $7,029 Sahabs Lead Solutions Inc. 2940 Noble Road, Suite 103, Cleveland Heights ID: 02-0535339 Date filed: April 12, 2010 Type: Employer’s withholding Amount: $6,545

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

GOING PLACES JOB CHANGES ARCHITECTURE DOMOKUR ARCHITECTS: Michael Augoustidis to architect.

MEDIA DOWNTOWN: Kenric Hall to general manager.

CLEAR CHANNEL OUTDOOR: Sara Hechko and Jonathan Bollin to account executives.

INSURANCE

NONPROFIT

CHELKO CONSULTING GROUP LLC: Rowdy White to consultant.

GIAMBRONE CONSTRUCTION INC.: Eric Melkerson to chief estimator; Justin Gottron to assistant estimator.

MANUFACTURING

THE VILLAGE AT MARYMOUNT: Sarah Mathis to director of outpatient rehabilitation; Janet Lincoln to manager, skilled care unit.

EATON CORP.: Jack Matejka to senior vice president, internal audit.

REAL ESTATE

THE KRILL CO.: Jeffrey R. Gliebe to CEO, co-chairman; David F. Fischback to co-chairman; Douglas J. Fischback to senior vice president, secretary; Daniel J. Audia to senior vice president.

MARKETING

TRANSACTION REALTY: Robert A. Baus and Dave Lamka to sales associates.

DISTRIBUTION

OPTIEM LLC: Stacey Zur to account executive.

CONSTRUCTION

APPLIED INDUSTRIAL TECHNOLOGIES: Jeffrey C. Jung to director of government sales; William C. Kershaw to director of government business development and government marketing.

Jung

Kershaw

Crawford

Tout

White

Zur

AKHIA: Megan Becka, Foluke Balogun and Olivia Mihalic to assistant account executives; Nicole Katz to designer; Kathryn Seitzinger to account executive.

SERVICE ACTIVE PLUMBING SUPPLY CO.: Stu Bennett to vice president, sales. GABLES SEARCH GROUP INC.: David Freeman to account executive.

I-X CENTER: Jim Buckley to vice president, sales; Eric German to vice president, marketing and business development.

AWARDS

INFOCISION MANAGEMENT CORP.: Brian Feisthamel to director of quality assurance. SUNTROL CO.: Thomas C. Decker to sales consultant.

BOARDS FRIENDS OF THE INDEPENDENCE LIBRARY: Charlene Paparizos to president; Jim Szatkowski and Eileen Hawkins to vice presidents; Joann Zak Bernhofer to secretary; Barbara A. Kraig to treasurer; Maxine Melosovich to membership chair. THE FOUNDATION CENTER CLEVELAND: Deborah D. Hoover (Burton D. Morgan Foundation) to chair; Robert B. Jaquay to immediate past chair.

CITY YEAR: Eric Wobser (Ohio City Near West Development Corp.) received the Comcast Leadership Award. THE FULBRIGHT PROGRAM: Patrick G. Coy (Kent State University) received a Fulbright Scholar Award to Botswana. NETWORK FOR TEACHING ENTREPRENEURSHIP: Greg Malkin (University School) received the 2010 Teacher of the Year Award.

RETIREMENT THE KRILL CO.: Shawn G. Dixon, chairman and CEO, after 36 years of service.

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

'REATĂĽTHINGSĂĽHAPPENĂĽWHENĂĽĂĽ YOUĂĽMEETĂĽATĂĽAĂĽ&AIRMONT Buckley

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EDUCATION THE CLEVELAND INSTITUTE OF MUSIC: Megan Bush Granson to director of development.

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KENT STATE UNIVERSITY: John R. Crawford to dean, College of the Arts.

FINANCE HUNTINGTON BANK: Collin Knisely to senior vice president, senior relationship manager; John Neumann to commercial team leader, middle market group.

ov e r a c e n t u ry o f l e g e n da ry m e e t in g s

FINANCIAL SERVICE SKODA MINOTTI: Mike Fairbanks to telecommunications and network engineer; Donna Marko to financial planning assistant; Scott Foos to help desk technician.

HEALTH CARE CLEVELAND CLINIC: Dr. David Bronson to president, Cleveland Clinic Regional Hospitals; Fred DeGrandis to chairman, Cleveland Clinic Community Physician Partnership and Quality Alliance. SOUTHWEST GENERAL: Dr. Susan E. Tout to medical director, emergency services.

HOSPITALITY EMBASSY SUITES CLEVELAND

World War II Conferences of the Allies at Fairmont Le Château Frontenac, QuĂŠbec, 1943–1944

Drafting the United Nations Charter at The Fairmont San Francisco, 1945

John Lennon and Yoko Ono’s Bed-in for Peace at Fairmont The Queen Elizabeth, MontrÊal, 1969

15

G7 International Economic Summit at Fairmont Le Château Montebello, QuÊbec, 1981

Photo: Fairmont Heliopolis & Towers, Cairo

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MAY 10-16, 2010

Middleburg Heights mortgage specialist sees turmoil as chance to grow New exec pumps $3M into Home Lending Source By ARIELLE KASS akass@crain.com

The Home Lending Source in Middleburg Heights is gearing up to grow.

Armed with a $3 million investment and a plan to add people and branches in the coming year, the mortgage company is eyeing the turmoil in its industry and looking forward to becoming a bigger player.

The company, which previously was known as Consumers Mortgage Corp. of Ohio, has a new executive team and is aiming to originate $60 million in mortgages each month. Its current volume is about $200 million in mortgage originations each year, or about $16.6 million each month. “We have a strong will to succeed

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lending to small businesses is a #1 priority for us ESBI International Salon

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here,” vice president Zubin Nagpal said. “There is an opportunity in the long run for a substantial market share in the mortgage industry.” Mr. Nagpal, with his father, Naresh Nagpal, made the $3 million investment in the company. Mr. Nagpal said he chose to get involved in the business because he sees consolidation in the mortgage industry and wanted to be involved as it changes. He also said it fit his and his father’s profiles as investors. His father joined the board of Home Lending Source but does not have an executive role. The younger Mr. Nagpal said his father is a serial entrepreneur who has had “phenomenal success” growing businesses and profitably scaling them up. The elder Mr. Nagpal was founder of hospital administration company Acute Care, which later merged with Inphynet Bone, Muscle and Joint Inc. and Omni Home Health Care. Zubin Nagpal, prior to his involvement at Home Lending Source, worked as a consultant at economic strategy consulting firm CRA International and private equity firm Nine Rivers Capital. Doug Reilly, the company’s CEO, said Home Lending Source has less than 0.1% of the nation’s mortgage business, but that new rules from the Federal Housing Administration requiring lenders to have at least $1 million in assets could knock nearly 98% of the country’s mortgage lenders out of the business. The old requirement had been $250,000, and Mr. Reilly said it will rise as high

as $2.5 million in the coming years. Mr. Reilly said combined with the state of the mortgage market, the new rules leaves room for companies such as his to grow. In addition to Ohio, Home Lending Source is lending in Arizona, California, Florida, Michigan and Tennessee. The 80-employee company is “very close” to opening offices in Colorado, Oregon and Washington, Mr. Reilly said, has plans for a branch in Charlotte, N.C., and opened three Florida branches in April. The majority of any new jobs, Mr. Reilly said, would be in Ohio as they support the new branches. Over the past year, the company has invested in infrastructure and systems, Mr. Reilly said. It added new compliance software, an accounting system, a new loan-origination system and a new pricing engine. While the company now sells its mortgages to banks such as Bank of America and JP Morgan Chase, Zubin Nagpal said, it is changing its business model to allow it to service the mortgages as well. “It’s a longer payback,” Mr. Reilly said. Over the past several years, Home Lending Source has kept to a “plain vanilla” approach, Zubin Nagpal said, allowing the company to make good loans and stay out of the trouble some other mortgage companies found themselves in. “It’s a really great time for us to move forward and grow the organization,” Mr. Reilly said. “We’re trying to keep a focus and look at the long term. We’re building a machine that’s scalable.” ■

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MAY 10-16, 2010

INSIDE

20 TAX TIPS: CLASSIFICATION ISSUES LINGER FOR SERIES LLCS.

17

SMALL BUSINESS

JASON MILLER

Baldwin-Wallace graduates Matthew Pietro (from left), Sarah Sampsell and Todd Alexander received a $20,000 grant from the city of Cleveland and Neighborhood Progress Inc. to start Central Roots, a garden that is scheduled to open in June at East 59th Street and Thackeray Avenue.

Vision to reuse decaying inner-city land for urban farms, gardens takes shape; advocates see potential for self-sustaining industry

FROM P VACANT TO VIBRANT

By KATHY AMES CARR kcarr@crain.com

icture this: Cleveland’s landscape reinvigorated with life in the form of urban farms and market gardens. It may be a long way off, but the idealistic vision for the city slowly is taking root as farmers and other entrepreneurs reuse vacant land and parking lots for urban agricultural initiatives. Some of the projects are modest in scope, but advocates say that this industry, though still in its infancy, has the potential to become over the next couple of decades a viable sector with locally based urban growers, sellers and

Health reform bill’s tax credits will boost small firms — if they can decipher rules Limited usage, variables offer obstacles in taking advantage By SHANNON MORTLAND smortland@crain.com

H

ealth care reform watchers have two words for small businesses: tax credits. Under the health care reform bill that passed in March, small businesses immediately became eligible for tax credits if they provide health insurance to employees.

That provision is the single biggest concern for small employers with regard to the health reform bill, and the federal government recently sent postcards to 4 million small businesses across the country to explain how to receive the tax credit, said Robert Klonk, executive vice president of insurance brokerage firm Oswald Cos. As with any legislation, the tax credit portion of the law likely won’t be easy to understand. There are several stipulations and rules to abide by to receive the credits, so small employers need to be talking to consultants, brokers and insurers to figure it all out, See CREDITS Page 18

See FARMS Page 19

S H O R T TA K E S ■ STRIKE A POSE: Lululemon athletica, an athletic apparel company best known among yoga aficionados, has opened a location at ETON Chagrin Boulevard. The combined retail showroom and yoga studio is located in an alley space between Fleming’s Prime Steakhouse and Wine Bar and Penzeys Spices. The outside is adorned with the retailer’s signature red and white; a large garage door, formerly used for deliveries, serves as a fresh-air aperture for yoga sessions. Lululemon’s showroom previously had been located on Cedar Road in Beachwood. In addition to the ETON location, the retailer has one other Ohio store, which is located in Columbus. Store hours are 11 a.m. to 5 p.m. Wednesday through Saturday and by appointment.

■ MOTHER ALWAYS KNOWS BEST: Mom Corps, a national staffing company, is opening a franchise in the Akron/Canton area. Mom Corps provides employers access to potential workers ready to fill in on an as-needed basis. Candidates are given flexible employment opportunities, which help toward balancing a career with personal needs and responsibilities. Kimberly Symonds of Wooster is the regional owner of Mom Corps-Akron/ Canton. Prior to starting this franchise, Ms. Symonds spent more than 13 years as an executive with several nonprofit health care organizations. Mom Corps was founded in July 2005, and it has grown to more than 40,000 candidates nationwide seeking flexible work schedules. Its client base has expanded to several hundred companies.

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18 CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

MAY 10-16, 2010

SMALL BUSINESS

Credits: Some plans grandfathered in GRANDOPENINGS continued from PAGE 17

said Steve Millard, executive director of the Council of Smaller Enterprises. The tax credit even differs depending on certain variables. Companies with fewer than 25 employees who make an average annual wage of less than $50,000 can get a tax credit of up to 35% of what the business pays toward health insurance premiums for its employees, Mr. Klonk said. The company also must pay at least half the premiums to be eligible for the credit, he added. The more employees a company has and the more money those employees make on average, the less the tax credit will be. As of 2013, the maximum tax credit for these employers goes up to 50%, said Ethan McPeake, a benefit consultant for CBiz Inc., a management, benefits and accounting consulting firm in Cleveland. However, a company with fewer than 10 employees with an average annual wage of less than $25,000 can get all the money they pay for premiums back in tax credits, Mr. Klonk said. But the tax credit won’t be around forever, Mr. Millard warned. A company only can apply for the tax credit twice before 2013 and twice after 2013, he said, so firms need to figure out when the credit would be most beneficial.

“Small employers should talk to a financial adviser about how to use this tax credit,” Mr. Millard said. “They can save some money with it.” As of Sept. 23, companies of all sizes will be required to allow parents to keep adult children on their insurance until age 26, said Meryl Kaplan, managing consultant at Findley Davies Inc., a Cleveland human resources consulting firm. That sounds easy enough, but it could get tricky with the implementation of Ohio House Bill 1, which mandates that Ohio employers allow parents to keep adult children on their insurance plan until age 28, she said. The big difference between the two mandates is that the federal plan says the adult child can be married while the Ohio law says they can’t be married, she said. “The state law is more generous, so it’s likely that companies will have to comply with the state rule,” Ms. Kaplan said.

Just sit tight The federal government is passing along its own bit of generosity by grandfathering in some health care plans that businesses already provided for employees when the reform bill was passed. Under the bill, companies will be able to keep the insurance plans

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If you are a small construction or engineering company, or provider of goods or professional services, we invite you to apply for our SBE program. Small businesses are invited to learn more about the program at one of our workshops: SBE Certification Workshop—Cuyahoga

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GREENSTREET SOLUTIONS

“Small employers should talk to a financial adviser about how to use this tax credit. They can save some money with it.” – Steve Millard executive director, Council of Smaller Enterprises they had on March 23 even if they don’t meet the minimum standards for health care coverage created by the reform bill, Mr. Millard said. These companies also will not have to pay the federal penalties now in place for companies that don’t provide the minimum health care coverage for employees, he said. Small employers should be careful not to make too many changes to those plans if they want to remain safe under the grandfather clause, he said. Though most of the health reform bill’s provisions exclude small businesses, it’s still a lot to evaluate and understand. Outside of the tax credit, Mr. Millard is advising small employers to sit tight until the federal government clarifies how many of the provisions will be implemented at later dates. “Don’t make any major changes at this point until we see how this thing plays out a little bit,” he said. ■

P.O. Box 39247 Solon 44139-9953 www.greenstreethome.us GreenStreet Solutions actively partners with homeowners to identify and correct conditions that cause energy waste. GreenStreet Solutions’ home energy auditors walk the homeowner through the process, pointing out opportunities to improve energy efficiency and educating them about equipment, technology and behaviors that will help reduce home energy use. GreenStreet provides specific recommendations, contractor support and financing options in one turn-key package. GreenStreet Solutions’ parent company, Vectren Source, is an energy company that supplies natural gas to customers throughout Ohio and the Midwest. 1-888-476-2010 info@greenstreethome.us

ASPHIRE SOLUTIONS LLC P.O. Box 770730 Lakewood 44107 www.asphiresolutions.com AspHire Solutions LLC, founded by Melinda White, is a full-service professional recruiting and human resource consulting firm offering flexible service options to companies of all sizes. The firm aims to provide clients with candidates and professional human resource services in the categories of sales and marketing; human resources; health care; information technology; management; finance and accounting; and administrative services. AspHire’s services also include career coaching; professional development skills training;

employee retention programs; business transformation and change management; performance, conduct and behavior management; and organizational design and development. Ms. White has more than eight years of experience in human resources and recruiting, and she has a bachelor’s degree in applied arts and a master’s of education degree in adult learning and development. 330-416-3949 melinda@asphiresolutions.com

TITANS GYM AT THE ATRIUM 619 Prospect Ave. Cleveland 44115 www.titansgymcleveland.com Titans Gym at the Atrium is owned and operated by Geoff Delgrosso. The facility will be open 24 hours a day, 365 days a year for members. Titans will have staff on site from 5 a.m. to 9 p.m. Monday through Thursday; 5 a.m. to 7 p.m. Friday; and 9 a.m. to 4 p.m. Saturday and Sunday. Along with a 22,000-squarefoot gym, Titans will have a tanning facility as well as a full-service cafe and smoothie bar. Member amenities will include free group fitness classes, and locker rental and laundry service. 216-574-2875 To submit a new business, send the following information by e-mail to Amy Ann Stoessel at astoessel@ crain.com: business name; address; city and ZIP; web site; brief description of business; business phone number; business fax number; business e-mail address; and date that business opened. Call 216-7715155 with questions.

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CRAIN’S CLEVELAND BUSINESS 19

SMALL BUSINESS

Farms: Urban agriculture spurs economy continued from PAGE 17

distributors cultivating a self-sustaining region. “The local food industry, of which urban agriculture is a part, is experiencing double-digit growth,” said Brad Whitehead, president of the Fund for Our Economic Future. “The great thing about urban agriculture is that it goes beyond business. It unites the rural and urban areas, and we realize a common destiny.” Last June, the Fund invested $250,000 into the Ag-Bio Cluster Initiative, a network of Northeast Ohio community leaders, officials and other advocates that works to advance the local food industry. In a similar vein, the nonprofit community developer Neighborhood Progress Inc. is evaluating the potential for urban agriculture through a series of Cleveland-area projects, said Bobbi Reichtell, senior vice president for programs. According to Ms. Reichtell, residents within the 16-county Northeast Ohio region consume about $8 billion in food each year, but less than 2% of that consumption is of local food. “If we could get to 10%, that’s $800 million going back into the local economy,” she said.

is to build a winery in that area, which is about one mile from the Cleveland Clinic.

Down on the farm Meanwhile, more residents in the city of Cleveland and Northeast Ohio suburbs are turning to local farmers for produce by becoming members of community supported agriculture programs. CSAs are composed of community members who pay in advance a certain amount — usually between $500 and $600 a year — to become shareholders of a local farm. In return for the investment, the

members receive local produce throughout the growing season, and the upfront cash infusions boost the farm operation. Although these partnerships are not new concepts, the number of members continues to grow, said Brad Masi, founder of Oberlin-based New Agrarian Center, which helps areas grow local food systems. There are at least 24 farms throughout Northeast Ohio that participate in the CSAs, of which an estimated 3,000 residents are members. “They’re great marketing tools for farmers, and there’s the social component too,” Mr. Masi said.

“People know where their food is coming from, and they develop relationships with these local farms.” Even as urban agriculture continues to grow within Northeast Ohio, there are some challenges to converting the region into one with a fully self-sustaining urban agriculture industry, said Darwin Kelsey, executive director of the Cuyahoga Valley Countryside Conservancy, which is working to revive vacant farms throughout Northeast Ohio. “We’re at the beginning of a curve,” he said. “We’re not simply producing new farmers, but new locally owned businesses could develop to facilitate the distribution of food. “ Even though the urban agriculture industry is gaining ground, it likely won’t be a significant income gener-

ator for years. Central Roots’ Mr. Alexander, for example, doesn’t expect to earn any income in the first two years, as any money generated will be reinvested into developing the business. While Mr. Alexander and his partners, Matthew Pietro and Sarah Sampsell, work other jobs for supplemental income, their goal is to orient Central Roots into a full-time business. They plan within three to five years to sell herbs and produce such as arugula and sprouts that aren’t always readily available. He hopes to eventually sell sauces, salsas and other food lines. “We see this as an opportunity to create a core business that allows us to have different revenue streams,” Mr. Alexander said. ■

A SECOND OPINION SAVED US *

Selling a concept According to Neighborhood Progress, there are 3,300 acres of vacant land and 15,000 vacant buildings within Cleveland’s city limits. The nonprofit and the city of Cleveland funded this year through a project called Re-Imagining Cleveland the development of 56 pilot projects aimed at repurposing 15 acres of vacant land. The land reuse projects are expected to be complete by fall. The initiatives will join 175 community gardens and 40 market — or for-profit — gardens currently in Cleveland. The pilots either improve Cleveland’s green infrastructure, or they are urban agricultural projects such as gardens, orchards and vineyards. Each received between $2,800 and $20,000 in funding, and the entrepreneurs of the urban agricultural projects agreed to commit to their ventures for five years. Among those initiatives is a twoacre market garden called Central Roots, which was spearheaded by three recent Baldwin-Wallace College graduates. The organizers hope to have the garden at East 59th Street and Thackeray Avenue operational by June. Although the initial selling season only will run through October, the entrepreneurs already have plans to transform the venture into a yearround operation. Todd Alexander, a partner in the Central Roots pilot, said urban agriculture not only has economic and environmental benefits but social implications, too. “The locals are on board,” he said. “We knocked on the doors of Thackeray residents, and they signed letters of support. Urban communities need fresh food, but they don’t always have access to it.” The Re-Imagining project also has spurred Mansfield Frazier to rethink the use — or lack thereof — of three half-acre lots in the Hough neighborhood. The Hough resident is using a $15,000 grant to develop The Vineyards of Chateau Hough, and his goal

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20 CRAIN’S CLEVELAND BUSINESS

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SMALL BUSINESS

Classification question holds back series LLCs

S

mall business owners soon may have the option to reorganize their business interests under a new entity structure. Eight states so far have passed legislation permitting a new type of business structure called a “series limited liability company.” As its name suggests, it is a series of business interests all contained within a master LLC. The series structure offers some appealing benefits, but its acceptance still is developing. Ohio has not yet authorized series LLCs, but the key to such acceptance in Ohio and the rest of the United States depends largely on when and how the Internal Revenue Service will recognize the series LLC structure for tax purposes. A series LLC is an umbrella structure under which any number of members, managers, interests or assets might reside. It could have common members with similar ownership interests, common members with varying interests or different members with unrelated interests. The series structure would provide some isolation of assets and interests within the structure from legal liabilities of other assets and interests within the structure. It also might provide some tax benefits that would appeal to business owners. As an example, consider the business structure of an operation that manufactures furniture. It might also have some retail sites, warehousing and delivery vehicles, and it might even offer financing to customers. Under a typical LLC structure, all those activities and assets would be held in a single LLC, and segregating them legally would require multiple LLC structures.

PETERDEMARCO

TAX TIPS Under a series LLC, however, each of those distinct processes could be structured under an individual LLC, and each of those LLC structures could have multiple related or unrelated parties as partners in the business. Then the entire system would be held under a series LLC, with each structure under the master LLC legally isolated from the others. That has obvious implications for protections from liability, which is one of the objectives of an LLC in the first place, to place limitations on the liability of those who are partners in the LLC. But from a tax standpoint, it might also offer some flexibility. Tax rules allow a business entity that is not an S corporation or a C corporation and has at least two members to make its own election about how it will be treated for federal income tax purposes — either as an association taxable as a corporation or as a partnership. If the entity has a single member or owner, it can elect to be classified as a corporation or disregarded as an entity separate from its owner. The advent of the series LLC raises a question about whether the series would be classified as a single entity for tax purposes, or whether the IRS would permit each entity

within the series to elect its own classification. The IRS has not yet issued any definitive guidance on that question, and that may be one of the key reasons the series LLC is not yet the law of the land in all 50 states. Just as the LLC structure evolved slowly in the early ’80s until the IRS ruled on how it would be classified for tax purposes, the series LLC likely is awaiting a similar IRS ruling before legislatures and legal experts will begin embracing the structure on a wider scale. The IRS has given a hint as to how it might proceed in authoritative guidance. In a private letter ruling, the IRS said it would consider that each series in a series LLC would determine its tax classification separately and distinctly from other interests inside a master LLC. However, the IRS preliminary views are just that — preliminary — so it doesn’t give legal and accounting experts enough certainty to begin acting on it. There are legitimate questions, about whether separate structures would be viewed by authorities as excessive or aggressive measures meant purely to achieve an objective of avoiding taxes. Authorities have taken a very dim view of such maneuvers in recent years. There is still uncertainty over the series LLC’s future, but if and when the IRS makes its view clear, small firms in Ohio can watch for legislative action that would lead to some potentially appealing new options. ■ Mr. DeMarco is vice president and director of the tax services group for the regional accounting and business consulting firm of Meaden & Moore, headquartered in Cleveland.

Boat line’s expansion a smooth ride so far Lorain dock, Cleveland trips popular in trial runs By JOEL HAMMOND jmhammond@crain.com

T

he Put-In-Bay Boat Line’s expansion into Lorain and Cleveland early on has been a win-win-win-win, and it shows no signs of faltering. The company worked out the kinks and saw strong demand for its Cleveland trips; the cities of Lorain and Cleveland stand to benefit from an influx of visitors; and visitors benefit from an even easier trip into Cleveland or the islands. The company and the Lorain Port Authority worked in conjunction on the expansion since mid-2008, when the Port Authority approached the Port Clinton-based company about taking better advantage of Lorain’s shoreline. Put-In-Bay Boat Line already had operated three Jet Express boats, seating 380, 395 and 149 people, between Port Clinton and Sandusky and the Lake Erie Islands. In late August, the Jet Express IV began weekend trips to the islands and periodic trips to Cleveland, the latter mostly based around the Browns’ schedule. “(Expanding further into Cleveland) fit into our business plan,” said Put-In-Bay Boat Line director of operations Lance Woodworth, who said the company previously had made trips to Cleveland, originating from the islands. “We wanted dock access closer to Cleveland; if we could get stationed closer to the city, it would minimize our expenses.” This year’s Lorain season will begin May 28 with an expanded schedule, including Wednesday wine tastings, Friday night Cleveland trips for Indians games (though passengers are not required to attend the Indians game, only to be on the boat when it leaves North Coast Harbor), Sunday lazy-river cruises (July and August) and Browns shuttles.

Showing off their cities Browns shuttles provided the biggest success in last year’s trial run; the Browns’ Oct. 25 game against Green Bay drew so much interest, Put-In-Bay Boat Line brought in one of its bigger boats to haul 240 passengers to Cleveland. Mr. Woodworth notes that was an anomaly; typically, those larger boats are unavailable for such fill-in duties. The Port Authority owns 51% of the boat, and receives a dockage fee from Put-In-Bay Boat Line and $1 per ticket sold, while the company is responsible for maintenance and upkeep of the boat. A portion of the funding for the boat’s purchase came from federal earmarks secured by U.S. Rep. Betty Sutton. “This is very important to our hard work to diversify Lorain’s economy and take advantage of the lake,” said Richard Novak, the executive director of the Lorain Port Authority. “It’s a tremendous opportunity to bring new business and new people in.” It’s a chance to show off the Black River Landing area, which features green space, a yearly sum-

PHOTO PROVIDED

The Jet Express IV, on its way to a Cleveland Browns game last fall from its new dock at Black River Landing in Lorain. mer festival, a farmers’ market and nearby restaurants and small businesses. The hope is that when Cuyahoga County residents or others from Northeast Ohio depart for the islands from Lorain, rather than Port Clinton or Sandusky, they’ll discover Lorain’s perks and spread the word. “The Jet Express in Lorain will show visitors that Lorain is a great destination for outdoor recreation,” said Lynne Lisner, the marketing and communications manager of the Lorain County Visitors Bureau, “and is one of many new additions that will help us increase tourism and its economic impact.” Meanwhile, for Cleveland, it’s not just a ride to Cleveland Browns Stadium, but rather another chance for infrequent visitors to check out downtown’s newest attractions. Both Mr. Novak and Positively Cleveland vice president of marketing Tami Brown said while the cruises are based around sporting events, about 10% of passengers on each trip simply catch a ride to enjoy what Cleveland has to offer. “This is a terrific product and service that will be a big benefit,” Ms. Brown said. “We love when residents get around in the region, and this is an easy way to do it.”

Navigation plans Mr. Woodworth, from Put-In-Bay Boat Line, said the company will take “baby steps” to gauge the reception of its foray into Cleveland and Lorain before considering expanding, but growth always is a possibility. With 50 trips scheduled this season from Lorain — compared to 7,000 from other locations, according to Mr. Woodworth — the addition will not make up a major portion of the company’s business this summer. The current offerings, meanwhile, are just fine for Donnie Dombrosky, president of the Amherst Browns Backers, whose group attends one game a year and jumped at the chance to ride the boat last year. “This year, people already are contacting me about (taking the Jet Express),” said Mr. Dombrosky, a retired postal service worker. “We enjoyed ourselves; we did what we usually do, and saved $40 on parking and get on and off the boat right where we needed to be.” ■

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Unique: Customers pay Indians: Bar settings received well elsewhere more for better product continued from PAGE 1

continued from PAGE 3

This year’s glitziest offering is a transparent coating that, while it may not clean up after its own application, promises to make removing graffiti an easier chore for municipalities, departments of transportation and commercial property owners. A simple power washer can remove graffiti from the coating, even if the unwanted paint has been allowed to cure for days. Other new developments might not be as visible to the general public, but they’re aimed at some of Sherwin-Williams’ core markets. For instance, the company has debuted automotive paints that do not require baking and can dramatically increase a body shop’s output, and marine paints that can be applied directly to wet and rusty ship hauls or oil platforms. The roughly 300 chemical engineers and researchers at the tech center produce about 30 patents a year for Sherwin-Williams, Mr. Connor said. To get that sort of innovative output, he said, the company invests about 1.4% of its sales in research and development, outspending all or most of its competitors in this regard. Growth in Sherwin-Williams’s sales also have meant more money for R&D. Its sales last year were $7.1 billion compared with $5 billion in 1999. As a result, R&D expenditures steadily have risen over the decade, to $101.8 million in 2009 from $78.2 million in 1999.

A different path Mr. Connor said there are two approaches to investing in R&D in the paint business. One, he said, is to focus on developing technologies that will make the production of paint more efficient and less expensive. “We’ve abandoned that approach,� he said. Instead, Sherwin-Williams is going down the second path of working to develop paints that can perform better or do more things. Examples in the last few years have been paints that can absorb room odors, or which can be applied in temperatures as low as 35 degrees to extend the work season for contractors. Such paints and coatings are often not inexpensive. The new antigraffiti coating, for example, costs about $75 per gallon and only covers about half the area that would be covered by a gallon of paint. But about 60% of the company’s business comes from professionals such as commercial contractors, governmental entities and building maintenance professionals. That audience, Mr. Connor said, fully realizes that spending an extra few dollars on a can of paint or a specialized coating is far better than spending many more dollars on preparation work, cleanup or increased maintenance costs. For instance, Mr. Connor said, the city of Los Angeles alone spends $28 million a year removing graffiti, so applying a coating that lasts 15 years and allows those maintenance costs to be cut dramatically probably makes sense. It also makes sense, then, that Sherwin-Williams is courting Los Angeles and other cities as new customers for the product. Besides, Sherwin-Williams gets a

BY THE NUMBERS The R&D team at SherwinWilliams’ tech centers produce about 30 patents a year, which takes plenty of money. How the company does it: ■S-W invests 1.4% of its annual sales in research and development, which, according to the company, is more than its competitors spend in this area. ■The company’s growth over the past decade has meant more money with which to work: S-W spent $101.8 million in research and development last year, up about 30% over 1999, when it spent $78.2 million.

return on its R&D investment in other ways. Innovations that first are sold to professional contractors often make their way into the company’s consumer products. And innovations that bring in new customers improve Sherwin-Williams’ ability to sell that same customer more products, according to Mr. Connor and analysts who follow the company. “What you’re seeing here is a constant good stream of new products — they lead the industry,� said Chuck Cerankosky, an analyst who follows Sherwin-Williams for the institutional research firm North Coast Research in Cleveland. “Stuff you see other companies bragging about was often delivered (by Sherwin-Williams) to professional contractors years before,� Mr. Cerankosky said. “They’re not just a paint company. They’re a coatings company, and they’ve never forgotten the importance of that.�

Eden for engineers Mr. Cerankosky said SherwinWilliams has been correct so far in betting that contractors will pay more for a better product that reduces labor costs. Consumers might not care if they can paint in 40-degree weather, he said, but it’s a big deal to commercial painters. “Those are things only a contractor would love,â€? he said. “The professional is considering a lot of things when he purchases a coating, not the least of which is will it do the job, but the efficiency of the product.â€? Cleveland continues to play a central role in the company’s innovation strategy. Sherwin-Williams has closed research facilities in Chicago and Detroit in the last 10 years and moved their work to Cleveland. It maintains other, smaller tech centers across the world — more than 40 of them — but more than half of its 600 R&D employees work in Cleveland, said company spokesman Mike Conway. “I’ve never brought an engineer in here on a day like today when they didn’t love the place,â€? Mr. Connor said. Cleveland also might be the best place for Sherwin-Williams to find the talent it needs, the CEO said. The company draws engineers from the University of Akron’s strong chemical engineering program, and the strong base of chemical companies in Northeast Ohio also means there is plenty of chemical engineering expertise in the area. â–

Messrs. Hoffman and DiBiasio said independently that the team left the request open-ended, allowing the firms to use their respective imaginations to improve the park. Weber Murphy walked through the ballpark in April, submitted its plan and was notified about two weeks ago that it was out of the running, Mr. Hoffman said. Mr. Hoffman, whose firm previously did renovation work on Progressive Field’s concession areas and created the Batter’s Eye Bar in center field, said his firm’s plan included more opportunities for fans to aid the team’s green efforts, incorporating more of Cleveland’s ethnic cuisine into the park’s food offerings and altering the underutilized luxury suites, perhaps into more children’s areas. A spokeswoman at Populous said early last week the Indians imminently were expected to announce an agreement with an architect. Asked whether that architect was Populous, the spokeswoman said, “Not necessarily.� Populous has designed 17 of Major League Baseball’s 30 stadiums, according to ballparksof baseball.com. Mr. DiBiasio said the team wasn’t that close to an announcement, though he wouldn’t provide a specific timeline. Subsequent calls to Populous went unreturned.

Sweet suite ideas needed The Indians have struggled filling the stadium’s 121 suites and recently converted two into a “presidential suite� behind home plate. This year, they also transformed a suite into their “FanCave,� featuring video games, a billiards table, a wall of high-definition televisions and other unique amenities.

Entering a weekend home series against the Detroit Tigers, the team is last in Major League Baseball in attendance at 14,153 per game, more than 1,000 less, on average, than Toronto, the next-lowest. Last year, the Indians were 25th in the majors in attendance. “We are currently working to develop a strategic plan that encompasses ‌ the wants and needs of our fans from a variety of issues that matter to them most, including sightlines, culinary trends, comfort (and) the audio/visual experience to name a few,â€? Mr. DiBiasio said. He said the team wants to keep Progressive Field “one of America’s premier ballparks, one our fans will continue to be proud to call their home.â€? Part of an eventual master plan may involve incorporating more bar-like settings into areas where the playing field is visible, said Mark Rosentraub, a former Cleveland State professor and now the endowed chair of the department of sport management at the University of Michigan. The Indians have had success with the Bud Light Party Deck in

right field, but Mr. Rosentraub said even their club seating area along the first base line, which includes food and non-alcoholic beverages with the price of tickets, has a disadvantage: Much of the best food selection is indoors, away from the field. Mr. Rosentraub said the Washington Nationals, among other teams, have had success with such bar-like arrangements. Like the Indians’ party deck, Nationals Park features a bar/seating area in center field where a ticket includes $20 for food purchases. “They’re looking at their underperforming areas and asking, ‘How can we restructure?’â€? Mr. Rosentraub said. “You’re not physically altering it to where, in five years if things change, you can’t go back and undo it.â€? According to The New York Times, the Baltimore Orioles also are considering changes to their stadium, Oriole Park at Camden Yards, which opened in 1992 and kicked off a building boom of newera stadiums. The Orioles’ stadium seats over 48,000, or about 6,000 more than Progressive Field. â–

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CRAIN’S CLEVELAND BUSINESS

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MAY 10-16, 2010

LARGEST MANUFACTURING COMPANIES RANKED BY FTE LOCAL EMPLOYEES(1)

Company Address Rank Phone/Web site

Full-time Full-time equivalent equivalent local employees employees in Ohio

Parent company Headquarters

Local manufacturing facilities

Products manufactured locally

Top local executive Title

1

Timken Co. 1835 Dueber Ave., S.W., Canton 44706 (330) 438-3000/www.timken.com

3,700

4,500

Canton

Canton

Special alloy steel and bearing components

James W. Griffith president, CEO

2

Swagelok Co. 29500 Solon Road, Solon 44139 (440) 248-4600/www.swagelok.com

3,600

3,600

Solon

Solon, Highland Heights, Strongsville

Industrial fluid system components

Arthur F. Anton president, CEO

3

Ford Motor Co. One American Road, Dearborn 48126 (800) 392-3673/www.ford.com

3,500

6,180

Ford Motor Co. Dearborn, Mich.

Avon Lake, Brook Park (3), Walton Hills

Finished vehicles (E-series vans), vehicle engines, vehicle transmissions, vehicle stampings

NA

4

Sherwin-Williams Co. 101 Prospect Ave., NW, Cleveland 44115 (216) 566-2000/www.sherwin-williams.com

3,006

3,592

Cleveland

Cleveland, Bedford Heights Coatings and related products

5

The Babcock & Wilcox Co. 20 S. Van Buren Ave. and 91 Stirling Ave., Barberton 44203 (330) 753-4511/www.babcock.com

2,227

2,558

McDermott International Inc. Barberton, Copley, Euclid Houston

6

Parker Hannifin Corp. 6035 Parkland Blvd., Cleveland 44124 (216) 896-3000/www.parker.com

2,164

NA

7

The Lubrizol Corp. 29400 Lakeland Blvd., Wickliffe 44092 (440) 943-4200/www.lubrizol.com

2,072

8

Rockwell Automation Inc. 1 Allen-Bradley Drive, Mayfield Heights 44124 (440) 646-5000/www.rockwellautomation.com

9

Components, parts and tubes for power plants, industrial and government applications

Christopher M. Connor chairman, CEO Richard L. Killion, president, COO, Babcock & Wilcox Power Generation Group Inc.

Cleveland

Akron, Avon, Elyria, Fairlawn, Kent, Mentor, Ravenna, Strongsville, Wadsworth, Wickliffe, Youngstown

Valves, hoses, fittings, actuators, filters, E. Washkewicz pumps for pneumatic/hydraulic applications, Donald chairman, president, CEO components and systems used on aircraft

2,072

Wickliffe

Avon Lake, Chagrin Falls, Painesville

Lubricant and fuel additives, rubber additives, plastics, personal care products

James L. Hambrick chairman, president, CEO

1,794

1,898

Rockwell Automation Inc. Milwaukee, Wis.

Twinsburg, Warrensville Heights

NA

Steven A. Eisenbrown sr. vp, architecture and software

Bridgestone Americas Inc. 1200 Firestone Parkway, Akron 44317 (330) 379-7000/www.bridgestoneamericas.com

1,715

1,935

Bridgestone Americas Inc. Nashville, Tenn.

Akron, Brook Park, Columbiana, Findlay, Sandusky

Vibration-isolating rubber, foam products, race tires

Yasutaka Enoki president, Bridgestone Americas Product Development

9

Eaton Corp. 1111 Superior Ave., Cleveland 44114 (216) 523-5000/www.eaton.com

1,715

2,971

Cleveland

Brooklyn, Parma, Aurora, Euclid

Aerospace, hydraulic and electrical components

Alexander M. Cutler chairman, president, CEO

11

Nestle Prepared Foods Co. 30003 Bainbridge Road, Solon 44139 (440) 349-5757/www.nestleusa.com

1,626

1,626

Nestle S.A. Vevey, Vaud Switzerland

Solon

Stouffer's, Lean Cuisine prepared frozen food meals

Bob Leonidas president, CEO, Nestle Prepared Foods Co.

12

ArcelorMittal 3060 Eggers Ave., Cleveland 44105 (216) 429-6000/www.arcelormittal.com

1,612

2,397

ArcelorMittal Chicago, Ill.

Cleveland, Warren

Steel: hot-rolled, cold-rolled, coated sheet, carbon and alloy plate, tubular

Terry Fedor general manager, ArcelorMittal Cleveland

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Bob Dobrowsky, Partner • 216.274.6511

13

Avery Dennison 8080 Norton Parkway, Mentor 44060 (440) 534-6000/www.averydennison.com

1,512

2,154

Pasedena, Calif.

Painesville, Mentor, Concord, Strongsville, Brunswick

Pressure-sensitive roll materials; industrial, medical, automotive adhesive products and tapes; digital media

Donald Nolan group vice president, Roll Materials Worldwide

14

General Motors Corp. 300 Renaissance Center, Detroit 48265 (313) 556-5000/www.gm.com

1,400

10,500

Detroit

Lordstown, Parma

Vehicles, automotive parts and transmissions

Al McLaughlin plant manager, Parma Metal Center

15

Scott Fetzer Co. 28800 Clemens Road, Westlake 44145 (440) 892-3000/www.berkshirehathaway.com

1,386

1,626

Berkshire Hathaway Omaha, Neb.

Avon, Bedford, Chagrin Falls, Cleveland, Wooster

Vacuums, medical supplies, electrical enclosures and supplies and utility truck bodies

Kenneth J. Semelsberger chairman

16

Ben Venue Laboratories Inc. 300 Northfield Road, Bedford 44146 (440) 232-3320/www.benvenue.com

1,314

1,279

Boehringer Ingelheim Ingelheim, Germany

Bedford

Injectable pharmaceuticals

Thomas J. Murphy president, CEO

17

Republic Engineered Products Inc. 2633 Eighth St., NE, Canton 44704 (800) 232-7157/www.republicengineered.com

1,310

1,310

Grupo Simec Guadalajara, Mexico

Lorain, Canton, Massillon

SBQ steel bars and billets and value added bar finishing

Jaime Vigil president, CEO

18

Invacare Corp. One Invacare Way, Elyria 44035 (440) 329-6000/www.invacare.com

1,297

1,290

Elyria

Elyria

Custom power wheelchairs, seating, custom A. Malachi Mixon III manual wheelchairs chairman, CEO

19

Alcoa 1600 Harvard Ave., Cleveland 44105 (216) 641-3600/www.alcoa.com

1,245

1,245

Alcoa Inc. New York, NY

Cuyahoga Heights, Cleveland, Barberton

Automotive, truck, aerospace wheels, aerospace parts, industrial products

William F. Christopher exec. vp, Alcoa; pres., Alcoa Engineered Products & Solutions

20

The J.M. Smucker Co.(2) 1 Strawberry Lane, Orrville 44667 330-682-3000/www.smuckers.com

1,200

NA

Orrville

Orrville

Fruit spreads and toppings

Timothy P. Smucker, chairman, coCEO; Richard K. Smucker, exec. chairman, co-CEO

21

Delphi Packard Electrical/Electronic Architecture 5725 Delphi Drive, Troy 48098 www.delphi.com

1,086

1,086

Delphi Corp. Troy, Mich.

Warren, Vienna, Rootstown

NA

James A. Spencer, vp and pres., Delphi Packard Electrical/Electronic Architecture

22

Philips Healthcare 595 Miner Road, Highland Heights 44143 (440) 483-3000/www.philips.com/healthcare

1,025

NA

Royal Philips Electronics Amsterdam, The Netherlands

Highland Heights

Imaging systems including those for computed tomography (CT), nuclear medicine and magnetic resonance (MR).

James Fulton sr. vice president, Imaging Systems

23

GE Lighting (unit of GE Appliances & Lighting) 1975 Noble Road, East Cleveland 44112 (216) 266-2222/www.gelighting.com

1,000

2,050

GE Fairfield, Conn.

Cleveland, East Cleveland, Ravenna

Lighting products

Michael B. Petras Jr. president, CEO, GE Lighting

24

Goodrich Landing Gear 8000 Marble Ave., Cleveland 44105 (216) 341-1700/www.goodrich.com

890

1,605

Goodrich Corp. Charlotte, N.C.

Cleveland

Landing gear

Mike Brand president

25

Myers Industries Inc. 1293 S. Main St., Akron 44301 (330) 253-5592/www.myersindustries.com

871

999

Akron

Middlefield, Wadsworth, Jefferson

Plastic containers, plastic planters and nursery grower flats, plastic under-hood car parts

John C. Orr president, CEO

26

Severstal Warren Inc. 999 Pine Ave. SE, Warren 44483 (330) 841-8218/www.severstalna.com

800

800

Severstal North America Dearborn, Mich.

Warren

Iron and steel for the further rolling and processing of light flat rolled steel products

Wilbur Winland vice president, general manager

See LIST Page 24

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CRAIN’S CLEVELAND BUSINESS

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MAY 10-16, 2010

LARGEST MANUFACTURING COMPANIES RANKED BY FTE LOCAL EMPLOYEES(1)

Full-time Full-time equivalent equivalent local employees employees in Ohio

Company Address Rank Phone/Web site

Parent company Headquarters

Local manufacturing facilities

Products manufactured locally

Top local executive Title

27

Steris Corp. 5960 Heisley Road, Mentor 44060 (440) 354-2600/www.steris.com

778

856

Mentor

Mentor

Biological and chemical indicators, sterilization systems

Walter M. Rosebrough Jr. president, CEO

28

Luk USA LLC 3401 Old Airport Road, Wooster 44691 (330) 264-4383/www.lukusa.com

750

NA

The Schaeffler Group Herzogenaurach, Germany

Wooster

Torque converters, torque converter clutches

Marc McGrath president

29

PolyOne Corp. 33587 Walker Road, Avon Lake 44012 (440) 930-1000/www.polyone.com

729

770

Avon Lake

Avon Lake, Massillon, Norwalk

Specialized polymer materials

Stephen D. Newlin chairman, president, CEO

30

Lockheed Martin Akron 1210 Massillon Road, Akron 44315 (330) 796-2038/www.lockheedmartin.com

700

700

Lockheed Martin Bethesda, Maryland

Akron

Support products corporate-wide

Rick Perez vice president, Akron site lead

30

Newell Rubbermaid 3200 Gilchrist Road, Mogadore 44260 (330) 784-7141/www.newellrubbermaid.com

700

NA

Newell Rubbermaid Inc. NA Atlanta

Rubbermaid food and home products

Joseph Soldano director, Ohio operations

32

Step2 Co. LLC 10010 Aurora-Hudson Road, Streetsboro 44241 (330) 656-0440/www.step2.com

699

699

Step2 Holdings LLC Streetsboro

Streetsboro

Plastic, rotationally molded childrens’ toys and home and garden products

Jack Vresics president, CEO

33

PPG Industries Inc. 3800 W. 143rd St., Cleveland 44111 (216) 671-0050/www.ppg.com

660

660

Pittsburgh

Cleveland, Strongsville

Automotive coatings

Richard Bauer operations director, Americas

34

Associated Materials 3773 State Road, Cuyahoga Falls 44223 (330) 929-1811/www.associatedmaterials.com

612

641

Cuyahoga Falls

Cuyahoga Falls

Windows

Thomas N. Chieffe president, CEO

35

Colfor Manufacturing locations in Minerva, Malvern and Salem www.aam.com

578

578

American Axle & Manufacturing Inc. Detroit

Malvern, Minerva, Salem

Forged and machined products

Peter Griffin plant manager, Colfor

36

Meggitt Aircraft Braking Systems Corp. 1204 Massillon Road, Akron 44306 (330) 796-4400/www.aircraftbraking.com

535

535

Meggitt PLC Akron

Akron

J.J. Williams, executive vice Aircraft wheels, brakes and related systems president and general manager global operations

37

MFG - Molded Fiberglass Co. 2925 MFG Place, Ashtabula 44005 (440) 997-5851/www.moldedfiberglass.com

525

525

Ashtabula

Ashtabula

Fiber glass reinforced parts for the automotive and heavy truck markets, bathware

Richard S. Morrison CEO

38

The Wooster Brush Co. 604 Madison Ave., Wooster 44691 (330) 264-4440/www.woosterbrush.com

520

520

Wooster

Wooster

Paintbrushes, rollers, painting equipment

Allan Rodd president

Lincoln Electric Holdings Inc., which is usually on this list, did not respond by deadline. Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. (1) Employee numbers as of March 31, 2010. (2) Employee number is from The Daily Record, Oct. 23, 2009.

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Casino: Revenue allocation concerns communities continued from PAGE 1

general fund allocations to communities. Voters last November approved a constitutional amendment that will bring four Las Vegas-style gambling casinos to Ohio, one each in Cincinnati, Cleveland, Columbus and Toledo. Penn National Gaming Inc. of Wyomissing, Pa., will own and operate the casinos planned for Toledo and Columbus, investing at least $600 million to build the two facilities. Rock Ventures LLC, a Livonia, Mich., company controlled by Dan Gilbert, principal owner of the Cleveland Cavaliers and Quicken Loans Inc., will own casinos in Cleveland and Cincinnati. Language in the constitutional amendment requires the Legislature to pass enabling legislation within six months of passage — giving the Legislature a June 3 deadline, Rep. Yuko said.

Details, details However, legislators last week still were crafting the rules for appointing members to and operating the Ohio Casino Control Commission. The constitutional amendment set the commission at seven members appointed by the governor and approved by the Senate. However, those members must include a lawyer, a certified public accountant and a law enforcement professional. The board also must include a resident of one of the four counties that will host casinos and no more than four members of any political party. “So we could end up looking for a Democratic lawyer from Cleveland,” Rep. Yuko said jokingly. The bill also is likely to include provisions that would allow casino operators — in particular Rock Ventures, which has announced plans for a $600 million Cleveland casino — to begin temporary operations before construction of the permanent casinos can be completed. Rep. Yuko said he hopes Rock Ventures will open what he called a “Phase One” casino in the Higbee Building in downtown Cleveland that can operate until 2013, when the permanent casino is scheduled to open. Another sticking point for the

ON THE WEB

Story from www.CrainsCleveland.com.

Law firm expands with N.Y. office The law firm Roetzel & Andress has moved into the Big Apple. The new office, at 245 Park Avenue in New York City, is an addition to the firm’s offices in Ohio, Florida and Washington, D.C. The firm said it has a number of attorneys licensed in New York and the move helps the firm expand its geographic footprint in the eastern part of the country. “New York City serves as the nation’s financial capital, and the needs of the companies resident and transacting business there are well-matched with our firm’s strengths,” chairman and CEO Timothy J. Ochsenhirt said in a statement. The firm did not say how many attorneys will be based in the new office. — Arielle Kass

legislation is whether to allow the casinos to get 24-hour liquor licenses, a measure that is opposed by many bar and restaurant operators. Casinos in states bordering Ohio do not permit 24-hour liquor. Only Nevada and New Jersey permit the practice, so Rep. Yuko doesn’t think it will fly here. Rep. Yuko said he floated briefly the idea of allowing smoking in the casinos, despite Ohio law that forbids nearly all indoor smoking in the state. “I was told, ‘Don’t even think about that,’” he said.

Follow the money Area mayors, however, are more concerned about one issue that won’t be in this casino-enabling

legislation — how the Legislature will view the casino revenue that flows to their communities. During the campaign to pass the casino amendment, a potential tax windfall made the issue attractive to many public officials because it would bring new tax revenue into their communities. Now, however, they are concerned that with an extremely tight state budget on the horizon in 2011, the Legislature will cut state Local Government Fund money in the next state budget and that lawmakers will offset all or part of those local allocations from the general fund by how much particular communities are receiving from the casino tax.

“The rumor that has been circulating is that whatever money we bring into our area” from casino taxes, the Legislature “will cut us on the local government fund,” said South Euclid Mayor Georgine Welo. The tax rate on gaming revenues will be 33%, which the Department of Taxation has estimated could bring in $650 million in new tax revenue annually, once all four casinos are operating. School districts will get 34% of the revenue, and 10% would go to operate the gaming commission, law enforcement training and gambling addiction education. But 51% of the total would be split among the 88 county governments,

with the state’s eight largest cities receiving half their county’s allocation and the four cities hosting casinos receiving additional tax money. In the case of Cleveland, its entire share of Local Government Fund money could be wiped out. The city received $4.67 million of that money in 2009, according to a state tax department spreadsheet. The department’s estimate of the city’s annual share of casino tax revenue when all four casinos are operating is $29.7 million. Discussion of this issue will need to wait until the Legislature grapples with the next two-year budget, according to Rep. Yuko. “It’s not an issue we can deal with at this point,” he said. ■

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CRAIN’S CLEVELAND BUSINESS

Contact: Phone: Fax: E-mail:

Genny Donley (216) 771-5172 (216) 694-4264 gdonley@crain.com

WWW.CRAINSCLEVELAND.COM

MAY 10-16, 2010

REAL ESTATE

AUCTION

AUCTION JUNE 8

INDUSTRIAL SPACE

CRESCO real estate

OFFERED REGARDLESS OF PRICE BY COURT ORDER! 400 N. State St., Medina, OH 44256 10232 Pifer Rd., Wadsworth, OH 44281 10,831 Sq. Ft. Former Ready Mix Concrete Show-room/ Plant with Warehouse 5,112 Sq. Ft. on 2.95-Acres; Zoned I-1. 18' Ceilings; 2 Truck Storage Drive-Ins; 1 Dock; minutes from I-271, Building on I-71 & I-80 (Ohio Turnpike). 8.83-Acres; Zoned I-2. Minutes from Suggested Opening Bid: $50,000 I-71, I-271, I-76 & I-77. 300 N. State St., Medina, OH 44256 Suggested Opening Bid: $15,000 12,890 Sq Ft. Former Concrete 1151 W. Bagley Rd., Berea, OH 44017 Block Plant Zoned BRCD (Berea Rd. Commercial) on 3.42-Acres. Frontage on W. Bagley & Berea Ind. Pkwy. 16'-22' Ceilings; Located minutes from Hopkins Airport, Rail Served; Multiple Docks. I-71, I-480 & I-80 (Ohio Turnpike) Suggested Opening Bid: $20,000 Suggested Opening Bid: $30,000 800-820 Progress Dr., Medina, OH 44256 10,950 Sq. Ft. N. State St., Medina, OH 44017 Metal Panel (Adjacent to the North End of 400 N. Maintenance/ State St.). 4.6-Acre Development Site. Warehouse on 22+ Acres; Zoned I-1. 350' of Frontage on N. State St., Zoned Minutes from I-71, I-271, I-76 & I-80 I-1; minutes from I-71, I-271, I-76 & I-80 (Ohio Turnpike). (Ohio Turnpike). Suggested Opening Bid: $10,000 Suggested Opening Bid: $45,000 Inspections for All the Above Properties at 400 N. State St., Medina, OH May 20, 27 & June 3, from 1:30 to 3:30 PM 2301 Progress St., Dover, OH 44622 3251 Brightwood Rd., Midvale, OH 44653 14,178 SF Corp. 26,560 Sq. Office on 6-Acres. Ft. Ind./ Contact Broker for Warehouse Current Occupancy on 5-Acres; Info. Adjacent to New I-77 Schneider’s 20' Ceilings; 6 Drive-Ins & 1 Dock, Crossing Interchange. Easy Access SR 250. Fenced lot. Easy Access to I-77 & SR 250. Suggested Opening Bid: $150,000 Suggested Opening Bid: $45,000 On-Site Inspections for Both the Above Properties May 20, 27 & June 3, from 10:00AM to 12:00 NOON

OFFERED ABSOLUTE, REGARDLESS OF PRICE! FORMER LAKE BUSINESS PRODUCTS HEAD QUARTERS 38322 Apollo Pkwy., Willoughby, OH 44094 - 20,334 SF Office/Warehouse on 1.2 Acres; Zoned L-1. Minutes from I-90, Rt 2 & I-271; 1 Drive-In & 1 Loading Dock. 5,000 SF 2nd Floor Lease in Place. Suggested Opening Bid: $145,000 ON-SITE INSPECTIONS: May 20, 27 & June 3, 1:00 - 3:00 PM

2155 St. Clair & 2126 Hamilton Cleveland, OH 44114 - SOLD AS ONE PARCEL. St. Clair: 6,500 Sq. Ft. Retail, Office, Warehouse with Dock & 2 BR Rental Apt., Zoned: Com. Hamilton: 4,000 Sq. Ft. Garage/Warehouse Bldg. 1 Drive Thru Bay & 1 Drive-In Door. Suggested Opening Bid: $45,000 ON-SITE INSPECTIONS: May 19, 26 & June 2, 10:00 AM- 12:00 NOON

MOHICAN RIVER INN & EVENT CENTER — Loudonville, OH Jacuzzi Suites; Owners Townhome; & Addl. Apartment. Event Center for groups to 150; The Pavilion; The Meadow; Fern Landing; & Stargazer Playground. Restaurant w/ Liquor License and Commercial Kitchen. Mohican River Inn: over-looking river, in Canoe & Camping Capital of Ohio. — Lakeview Holdings Directs Sale — 16124 Country Rd. 23, Loudonville, OH PUBLISHED RESERVE: $397,00 44842. Exit 204 off I-71, S. on OH-83 to BIDDING COMMENCES @ $260,000 OH-3, SW. to Wally Rd., Scenic Byway ON-SITE INSPECTIONS: (CR 23), E, 5 miles to Site. Built 1980’s & May 21, 28, & June 5: 2 - 4 PM Recently Renovated. Room types include www.mohicanriverinn.net 42 Double-Doubles; 6 Kings including two

For Brochure, Terms of Sale & Bid Packet Call: 216-360-0009 Gordon Greene, OH RE Broker & Auctioneer Michael Berland - Court Appointed Auctioneer

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Industrial and Office Spaces to Fit Any Need! 216.520.1200 • www.crescorealestate.com

Available Office Space INVESTMENT OPPORTUNITY - Class “A” Office and Innovation Center consisting of 97,845 sf - leased thru 2018 - Bob Garber, SIOR SUBLEASE OPPORTUNITY - attached parking - full floor - 19,322 sf - below market rates $13.50/sf as-is - term thru 8/31/2014 private offices or open areas - Patrick Reardon, SIOR BEACHWOOD SUBLEASE - recently renovated offices - below market lease rate - 4,595 sf large open floor plan - signature Chagrin Blvd. building - John Glasstetter, SIOR 4,500 SF 2 STORY COMMERCIAL BUILDING AT FLEET & I-77 - divisible with separate entrances - perfect live/work layout - sale or lease - Tom West, SIOR WHY RENT? PERFECT 2006 OFFICE CONSTRUCTION - 2,500-14,000 sf available digital monument on Route 82 (Northfield) - rpietro@crescorealestate.com - Rico Pietro, SIOR

Available Industrial Space GREAT SUBLEASE OPPORTUNITY - or possible sale - 170,000 sf - high ceiling - 8 docks - rail - sprinkler - office - Armand Aghajanian 80,456 SF FEATURE RICH MANUFACTURING FACILITY - available for lease/sale in Valley View - 14,000 sf of office - multiple cranes - in excellent condition - Simon Caplan, SIOR, Eliot Kijewski or George Pofok, SIOR

FOR SALE - Solon - 35,000 sf single tenant - modern facility - great condition - 4,500 sf office area - 18’ clear - 1 DI - 5 Docks - great headquarters building - Matt Beesley, SIOR, Bob Garber, SIOR, Simon Caplan, SIOR or Eliot Kijewski AVAILABLE FOR LEASE AT BELOW MARKET RATES - Rt. 57 Elyria - great I-480/Rt. 10 access - 3,000 to 32,000 sf - cranes available - Ken Anderson or Kevin Kelly I-480 & W. 130th STREET - freestanding 20,000 sf facility with 3,000 sf of office - for sale - Fred Christie, SIOR FIRST OFFERING - 18,900 sf on 1.21 acres - 9,900 sf of above standard office - excellent condition - 16’ clear - 3 DI’s - central location with highway access - Joe Barna, SIOR or George Pofok, SIOR 13,359 SF BUILDING FOR SALE OR LEASE - near Hopkins, I-71 and I-480 - extremely well maintained and clean - available immediately - Kevin Kelly AIRPORT AREA - units available from 2,464 sf to 11,737 sf - competitive rates - docks and drive-ins - 16’ clear - Pamela Bertovich HIGHLY VISIBLE - multi-tenant building in Westlake for lease - 3,000-6,070 sf - 14’ to 16’ clear George Pofok, SIOR or Kevin Kelly

OFFICE SPACE

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NOTICE OF BUSINESS OPPORTUNITY The Cleveland Airport System of the City of Cleveland is soliciting proposals from qualified persons and firms interested in undertaking a market analysis and the development of site specific implementation plans for selected properties at Cleveland Hopkins International and Burke Lakefront airports, consistent with the master plans for the airports, and the City’s North Coast Harbor. Interested parties may obtain a copy of the Request for Qualifications, free of charge, under the Business Information section at www.clevelandairport.com; by calling (216) 265-6086; by written request addressed to Procurement Section, Department of Port Control, 5300 Riverside Drive, P. O. Box 81009, Cleveland, Ohio 44181-0009 or by e-mail to dcartellone@clevelandairport.com. Proposals are due by 4:00 p.m. EDT Wednesday, June 30, 2010

NOTICE OF BUSINESS OPPORTUNITY The Cleveland Airport System of the City of Cleveland is soliciting proposals from qualified persons and firms interested in providing and implementing a software solution to streamline the process of lease, property, space and contract administration at Cleveland Hopkins International and Burke Lakefront airports. Interested parties may obtain a copy of the Request for Proposal from www.clevelandairport.com under the Business Information section. If you have any difficulty accessing the website, please email ydavis@clevelandairport.com to request a copy of the Request for Proposal. Proposals are due by 4:00 p.m. EDT Friday, June 25, 2010

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THEINSIDER

THEWEEK MAY 3 – 9 The big story: Cleveland Mayor Frank Jackson hopes to work amicably with Continental Airlines as it merges with United Airlines. But the mayor said his first priority is protecting the level of air service that passes through Cleveland Hopkins International Airport and the jobs of the people who work there. Mayor Jackson said he spoke with Continental CEO Jeffery Smisek prior to the May 3 merger announcement and that Mr. Smisek has agreed to meet with him soon to discuss Hopkins’ role in the merged airline. “We will protect our interests,” the mayor said. “Even though we have had a great relationship (with Continental) over the years, it is business and we will be looking out for our interests.” See our editorial, Page 10, and article, Page 3.

Down to business: Voters by a wide margin approved state Issue 1, a $700 million bond issue for Ohio’s Third Frontier technology initiative. The measure, pitched as a job-creator with a proven track record since the introduction of the Third Frontier program in 2002, won the support of 62% of voters. The victory extends bond money for the program through 2016. New at the helm: The Cleveland-Cuyahoga County Port Authority has a new CEO — William D. Friedman, a consultant to several port authorities and former CEO of the Ports of Indiana. The port authority board voted unanimously to hire Mr. Friedman. He officially will join the operator of the Port of Cleveland on June 1. The port authority has been without a permanent leader since last November, when Adam Wasserman resigned abruptly amid Friedman concerns about the authority’s financing and expansion plans. The new port authority CEO will be paid $200,000 a year. Mr. Wasserman was paid $283,000 a year.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Big boost for the EcoBoost ■ Good news for Ford workers at the company’s Brook Park engine plant: The 3.5-liter EcoBoost engine the plant began making last year is a big hit with consumers. “We are winning import buyers with EcoBoost,” says Amy Marentic, Ford’s North American group marketing manager for cars and crossovers. “Even better, this new customer is younger and more affluent,” she said. Since August, Ford has sold more than 10,000 EcoBoost-equipped vehicles in North America. The engine is available on the 3.5-liter V-6 offered in the Ford Taurus SHO and Ford Flex and on Lincoln MKS and Lincoln MKT. In a recent survey, 100% of Lincoln MKS owners said they were satisfied with the engine, according to the automaker, which said demand for vehicles with the engine “continues to meet or exceed Ford’s internal sales expectations,” The Brook Park plant can use the support — the United Auto Workers union hopes to convince Ford to make still more engines at the plant in the future. — Dan Shingler

Try dipping into your own wallets, judge tells lawyers ■ Judge Pat E. Morgenstern-Clarren is keeping an eye on the books. The U.S. Bankruptcy Court judge in Cleveland warned attorneys last Thursday, May 6, in AmFin Financial Corp.’s bankruptcy case to

WHAT’S NEW

Big investor on board:

Cedar Fair Entertainment Co. reached an agreement with its largest unitholder that will allow Q Investments of Fort Worth, Texas, to be an active participant in the company’s selection of new directors. As part of the agreement, Q Investments, a pair of hedge funds that led the opposition to Cedar Fair’s nowdropped bid to be acquired by private equity firm Apollo Global Management, will dismiss a lawsuit it filed April 29 in Delaware against Cedar Fair. Sandusky-based Cedar Fair will increase its board to nine members from seven following the company’s 2010 meeting of unitholders on June 7.

To keep up with local business news as it happens, visit www.CrainsCleveland.com.

■ Liggett Stashower’s internship program has bested those of corporate conglomerates such as Disney, ESPN, Google, The New York Times — and even the White House.

COMPANY: Precision Laser Therapy, Beachwood PRODUCT: Low-level laser therapy Precision Laser Therapy is using a technology developed in the 1960s to treat a problem that’s timeless: hair loss. The company says its laser therapy system has 20 Class IIIA lasers, 190 red LEDs and 171 infrared LEDs housed in a large plastic hood (similar to a hair dryer) that directs light on the scalp. “The combination of specially configured diodes and individual lasers awakens cells within the hair follicle from dormancy and stimulates cell metabolism without causing damage or injury to tissue,” Precision Laser says. The system uses an illuminated camera wand that obtains magnified images of scalp and hair. Its database captures a user’s information and treatment details, and it records images required to document progress in re-growing hair. For information, visit www.precisionlasertherapy .com. Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.

According to InternshipKing.com, an online internship community, the Clevelandbased branding firm’s program was voted fourth among the 50 best company internship programs. The top three were Intuit, Sirius XM and Moosejaw Mountaineering and Backcountry Travel Inc. Liggett said its internship program is successful because it immerses interns into the business; therefore, interaction and teamwork are large parts of the experience. Mentors also take interns to local TV and radio stations, printing companies, photography studios and networking events to learn firsthand more about the industry. Liggett each year hires six to 10 juniors and seniors from colleges nationwide as interns. The 60-employee agency employs 10 former interns. — Kathy Ames Carr

COSE, SBA play matchmakers ■ The Small Business Administration and the Council of Smaller Enterprises have entered the matchmaking game. For the fifth time, the groups are sponsoring a series of 15-minute, pre-arranged meetings for small businesses with more than 40 buyers such as NASA, the Environmental Protection Agency, the Cleveland Clinic and Diebold Inc. Most of the 1,800 spaces for the event this Tuesday and Wednesday, May 11 and 12, are gone; those that remain are mainly in construction. The meetings will be held at Browns Stadium. For more information, visit http://tiny.cc/hti08. — Arielle Kass

BEST OF THE BLOGS The end is near — for those huge muffins at Au Bon Pain

advanced energy priorities. The regional technology advocacy group now will put more emphasis on positioning Northeast Ohio to become a hub for technologies related to electric vehicles, storing electricity, controlling its distribution and turning waste into energy. NorTech also said it was awarded a $300,000 federal grant that it will use to create “roadmap” plans meant to guide the region’s efforts to build industries related to each of those four technology categories. Publicly traded Kindred Healthcare Inc. of Louisville, Ky., bought Stratford Commons, a nursing, rehabilitation and assistedliving facility in Glenwillow. Terms of the transaction were not disclosed. Stratford Commons operates 105 nursing and rehabilitation center beds and 136 assisted-living beds. It offers skilled nursing, rehabilitation and assisted-living services for shortterm, post-acute rehabilitation stays. Kindred said it has begun renovations of Stratford Commons.

In the world of interns, this shop is near the top

Excerpts from blog entries on CrainsCleveland.com.

In focus: NorTech has decided upon its top

Kindred spirits:

change their work schedules and eating habits if they continued to feel the need to charge clients for dinners and late-night taxi rides. “It makes my antennae stand up,” the judge said of some billing practices and the out-ofpocket expenses billed to some clients. “I generally do not believe that’s an expense that should be borne in a creditor case. Come to work in daylight, leave in daylight, bring your lunch.” Judge Morgenstern-Clarren went on to tell senior attorneys it was their responsibility to mentor younger associates, saying they should not be using the AmFin case to make up for bottom-line pressure. “This case is not the answer to their billable hours problem,” she said. Judge Morgenstern-Clarren noted that one attorney had not charged in increments less than an hour, and urged lawyers to pay attention to charges that were submitted. The case involves the holding company formerly known as AmTrust Financial Corp. It filed for bankruptcy last Nov. 30, days before AmTrust Bank failed and was taken over by New York Community Bank with assistance from the Federal Deposit Insurance Corp. — Arielle Kass

■ The Cleveland Clinic is helping the Au Bon Pain restaurant chain make its menu a little healthier. Nation’s Restaurant News reported that Au Bon Pain is testing miniature baked goods at six stores in Boston, Chicago and Cleveland. The smaller pastries are half the size of Au Bon Pain’s regular baked goods. There currently are five items being tested, including small muffins and croissants. Each item is priced around $1.19, slightly more than half the price of a regularsize pastry. Ed Frechette, senior vice president of marketing at Au Bon Pain, told the newspaper the idea is the result of a request from doctors at the Clinic, where the 220-unit Au Bon Pain operates a restaurant. “We have a good relationship with (the Clinic), and they really wanted us to provide healthier baked goods,” he said. “We agreed this would be a good fit, though we still offer full-sized pastries as well.” Score another one for the fatbusters at the Clinic.

Forest City development aids a D.C. neighborhood’s rebound ■ A Washington, D.C., neighborhood has taken a turn for the better, in part with the help of Cleveland-based Forest City Enterprises. For 50 years, Southwest Washington “was divided in half by a mall and an office complex that withered with age,” The Washington Post wrote. “Like the freeway that isolates

the neighborhood from downtown, Waterside Mall left its community without a center.” But today, The Post said, as a result of a redevelopment project led by Forest City, “The mall is gone, two gleaming glass office towers with a splashy ground-floor Safeway supermarket have risen in its place and the road that was mothballed to build it is back, with wide sidewalks for pedestrians.” A pedestrian-friendly, mixed-use project called Waterfront Station is the first of three legs of an $800 million redevelopment of 1.2 million square feet for offices, the same amount of residential space and at least 110,000 square feet devoted to shops and restaurants, The Post reported. Forest City, which is developing Waterfront Station with Vornado/ Charles E. Smith, is still trying to line up financing for the second phase.

Would you fear the tax man less if he were an Akron nerd? ■ The coming TV Land series ”Hot in Cleveland” is generating lots of interest here for obvious reasons, but it might not be the only show set in Northeast Ohio available for your viewing pleasure. In an April 30 roundup of pilot season, when the television networks sift through dozens of sample episodes to determine what will be on TV in the fall, The Wall Street Journal highlighted a show called “Tax Man,” which is described as “a workplace comedy set at an Internal Revenue Service office in Akron.” The formula is a “nerdy version” of “30 Rock,” and it boasts some brand-name talent: Ron Howard and Brian Grazer are executive producers, and Martin Short is one of the stars. Brent Forrester, a writer on “The Office,” wrote the pilot.

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