Crain's Cleveland Business by Crain's Cleveland Business

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5/24/2013

2:45 PM

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JANET CENTURY

Entrepreneurs Art Geigel, left, and Matt Strayer moved into a renovated house on Chelton Road in Shaker Heights. In the background is a dry-erase wall that will include a drop-down screen with an overhead projector.

SHAKING THINGS UP WITH STYLE Shaker LaunchHouse is becoming home for revived neighborhood of hopeful entrepreneurs By CHUCK SODER csoder@crain.com

village of entrepreneurs is starting to take root on the rundown street behind the Shaker LaunchHouse business accelerator. The city of Shaker Heights has bought and renovated two previously vacant homes that soon will be shared by nine entrepreneurs, and it may renovate a third city-owned house on the street for the same purpose. Both Shaker Heights and LaunchHouse also plan to convince private investors to renovate more houses in the Moreland neighborhood and market them to entrepreneurs. If the strategy works, it won’t just revive the neighborhood; it will create a close-knit community where entrepreneurs help each other build companies and create

JANET CENTURY

The house at center is one of two previously vacant homes in the Moreland neighborhood of Shaker Heights that soon will be shared by nine entrepreneurs. jobs, said Todd Goldstein, a partner at LaunchHouse. Two years ago, the business accelerator worked with the city to turn an abandoned auto dealership into an open, colorful gathering place for 60 startup companies and 200 or so people who visit at least once a week. Mr. Goldstein said he believes the Moreland neighborhood could come to resemble the Kansas City Startup Village. See STYLE Page 23

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INVESTING GUIDE Individuals are putting more thought into charitable causes ■ Pages I-1 to I-7 PLUS: SUPERSTAR 10 ■ MARKET CAP LEADERS ■ & MORE

20130527-NEWS--26-NAT-CCI-CL_--

5/23/2013

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20130527-NEWS--1-NAT-CCI-CL_--

5/24/2013

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$2.00/MAY 27 - JUNE 2, 2013

COSE adjusts with times, widens reach Small business advocacy group, local chambers offer joint deals By JAY MILLER jmiller@crain.com

JANET CENTURY

SHAKING THINGS UP WITH STYLE

It’s Electric ■ Lincoln Electric president and CEO Christopher L. Mapes, left, is aiming to reach $4.5 billion in revenue by 2020. PAGE 3 ■ Northeast Ohio community colleges are increasing efforts to engage with their alumni and help them “come home.” PAGE 3

Committee’s roadmap is complex, extensive

By CHUCK SODER csoder@crain.com

JANET CENTURY

Akron nonprofit is outlining future NEO development By JAY MILLER jmiller@crain.com

It’s hard to get business people to think 30 years into the future. So it was no surprise that few business people were playing leading roles when an urban planning group, awkwardly named the Northeast Ohio Sustainable Com-

munities Consortium, recently held a series of workshops to engage in such long-range thinking. The workshops were the first set of three series continuing in the months ahead that are designed to involve people in deciding how to rebuild the region after the physical and economic decline of the last three decades. It didn’t help that NEOSCC, as the Akron-based nonprofit calls itself, was wooing people to its sessions with terms such as “regional visioning” and “scenario planning.”

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INSIDE

Shaker LaunchHouse is becoming home for revived neighborhood of hopeful entrepreneurs village of entrepreneurs is starting to take root on the rundown street behind the Shaker LaunchHouse business accelerator. The city of Shaker Heights has bought and renovated two previously vacant homes that soon will be shared by nine entrepreneurs, and it may renovate a third city-owned house on the street for the same purpose. Both Shaker Heights and LaunchHouse also plan to convince private investors to renovate more houses in the Moreland neighborhood and market them to entrepreneurs. If the strategy works, it won’t just revive the neighborhood; it will create a close-knit community where entrepreneurs help each other build companies and create

The Council of Smaller Enterprises is making a course correction aimed at broadening access to its services and expanding its geographic reach beyond Northeast Ohio.

The small business advocacy group has taken a hard look at how the small businesses it serves are evolving and is changing its approach to helping them achieve their goals. It also hopes the changes will boost the finances of the 14,000member organization as the role chambers of commerce play in the business community has changed and membership has declined. COSE’s leaders see its financial base moving from nearly 100% of revenue coming from membership dues to less than 50% from dues as it moves ahead.

Individuals are putting more thought into charitable causes ■ Pages I-1 to I-7 PLUS: SUPERSTAR 10 ■ MARKET CAP LEADERS ■ & MORE

Get a glimpse of the Rock and Roll Hall of Fame’s Rolling Stones exhibit at www.CrainsCleveland.com.

See ROADMAP Page 22

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5/24/2013

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

COMING NEXT WEEK

POVERTY IS SPREADING Between 2000 and 2011, the population of U.S. cities living below the poverty line increased by 29%, according to data from the Brookings Institution. That’s bad enough, but during the same period, the ranks of the poor in suburbs nationwide grew 64%. There now are more poor people living in the suburbs, 16.4 million, than in cities, 13.4 million, though the poverty rate remains higher in cities than in the suburbs. Here’s data for the Akron and Cleveland areas, where 113,671 and 324,040 people, respectively, live in poverty:

Schools in the spotlight What is the appeal of boarding schools, and what students do they attract? Crain’s will address that and much more, including a look at school events and a goodbye to Magnificat president Sister Carol Anne Smith, in next week’s Prep and Parochial Schools section.

Change in number of poor, 2000-2011

REGULAR FEATURES Big Issue .....................10 Classified ....................24 Editorial ......................10 From the Publisher ......10

Going Places ...............13 Reporters’ Notebook....25 Tax Liens.....................11 What’s New..................25

Healthiest Employers & Champions of Corporate Wellness

MAY 27 - JUNE 2, 2013

Poverty rate 2011

City of Akron

+50.8%

28.9%

Akron suburbs

+96.9%

11.8%

City of Cleveland

+7.3%

34.3%

Cleveland suburbs

+85.2%

11.7%

Source: Brookings Institution; www.brookings.edu

Honoring the best in our healthcare industry 1.

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 Fax: (216) 694-4264 www.crainscleveland.com Publisher/editorial director: Brian D. Tucker (btucker@crain.com) Editor: Mark Dodosh (mdodosh@crain.com) Managing editor: Scott Suttell (ssuttell@crain.com) Sections editor: Amy Ann Stoessel (astoessel@crain.com) Assistant editor: Kevin Kleps (kkleps@crain.com) Sports Senior reporter: Stan Bullard (sbullard@crain.com) Real estate and construction Reporters: Jay Miller (jmiller@crain.com) Government Chuck Soder (csoder@crain.com) Technology Dan Shingler (dshingler@crain.com) Energy, steel and automotive Tim Magaw (tmagaw@crain.com) Health care and education Michelle Park (mpark@crain.com) Finance Rachel Abbey McCafferty (rmcafferty@crain.com) Manufacturing and energy Research editor: Deborah W. Hillyer (dhillyer@crain.com) Cartoonist/illustrator: Rich Williams Marketing director: Lori Yannucci Grim (lgrim@crain.com) Events Manager/Operations & Logistics: Christian Hendricks (chendricks@crain.com) Events Manager/Promotions & Sponsor Relations: Jessica Snyder (jdsnyder@crain.com)

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5/24/2013

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MAY 27 - JUNE 2, 2013

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

INSIGHT

Community colleges extend reach, hands Two-year schools are amping up efforts to reach alumni for funds, engagement By TIMOTHY MAGAW tmagaw@crain.com

When Al Moran arrived at Cuyahoga Community College about five years ago, he was shocked to learn the state’s largest community college didn’t have an active

alumni association to tap into the roughly 900,000 people who have received some sort of education through the institution since its inception in the early 1960s. So, over the last few years, Tri-C quietly has been building an infrastructure that will allow the college

to find and engage those who have employed the college’s services at one time or another. At present, Tri-C’s Alumni & Moran Friends Association boasts more 8,000 members, but Mr. Moran anticipates that figure to grow substantially over the

next year in the wake of the college’s 50th anniversary celebration. “It’s time for them to come home,” said Mr. Moran, Tri-C’s vice president for marketing and communications. “We want to tell them that it’s time to reconnect with your alma mater and become engaged in what we do here.” Tri-C isn’t alone in its quest, as its smaller counterparts in Northeast Ohio — Lakeland Community

College in Kirtland and Lorain County Community College — are exploring how they might infuse life into their fledgling alumni outreach efforts. Monetary challenges brought on by enrollment declines and reductions in taxpayer support have helped fuel the flurry of activity, as community colleges across the country look to broaden their fundraising base. See COMMUNITY Page 24

The heat on smart meters intensifies FirstEnergy will install 37,000 more devices in suburbs By CHUCK SODER csoder@crain.com

MARC GOLUB

Lincoln Electric president and CEO Christopher L. Mapes hopes the company reaches $4.5 billion in revenue by 2020.

2020 VISION IS VERY BRIGHT Lincoln Electric CEO expects company to double its revenue in 10-year period

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com

incoln Electric Holdings Inc., already a giant in the world of welding, has big plans for 2020. The welding equipment manufacturer is looking to double its sales from 2010 by then, with its sights set on $4.5 billion in revenue, said president and CEO Christopher L. Mapes. The company will try to do so by continuing to grow globally, by acquiring more related businesses and by creating new products. See VISION Page 8

Another 37,000 FirstEnergy Corp. customers are about to get smart meters, but will they sign up for programs that use the technology to take stress off the regional power grid? Most probably won’t, if the first phase of the pilot project is any indication. In 2011, FirstEnergy installed smart meters at 5,000 homes and businesses along Interstate 271. The devices allow the Akron-based electric company to read meters via the Internet, which made it possible for FirstEnergy to create its demand response program, which gives cash credits to customers who use less energy when demand is particularly high — namely, when it’s really hot outside. Some of the customers even let FirstEnergy automatically turn the temperature on their thermostats up by a few degrees. But many of those 5,000 smart meter customers didn’t participate in the demand response program. Just 12% signed up for it after it was launched last summer. See METERS Page 22

THE WEEK IN QUOTES “There will always be a need for that local chamber that has the pulse of the local business community. But a lot of them can’t do both that and provide high-quality content that we have the ability to do.” — COSE chairwoman Sharon Toerek, a partner in the Independence law firm of Licata & Toerek. Page One

“Because of what’s not in the new order, there’s some recognition of the good work we’ve done. But what is in the order is still a fair amount of hard work that needs to be accomplished.” — Allen S. Lencioni Sr. (above), president and CEO, Geauga Savings Bank. Page 6

“People across the board are happy because if they stayed in the market, they have had full recovery with some exciting returns for the past four years now, since the market bottomed out in March of 2009.” — Joe Heider, regional managing principal, Rehmann Financial Group in Westlake. Page I-1

“(Donors) want to make sure the charities are being efficient.” — Brian Dean, an executive vice president in retirement plan services at Cleveland-based CBiz Inc. Page I-1

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5/24/2013

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

MAY 27 - JUNE 2, 2013

LEASED 30600 CARTER STREET SOLON, OHIO

Newmark Grubb Knight Frank is pleased to announce that Omicron Granite has leased 24,192 square feet at 30600 Carter Street in Solon. Visit Terry Coyne represented the landlord TerryCoyne.com Or Call Terry at and Kristy Hull represented the tenant. 216.453.3001

1350 Euclid Ave, Ste. 300 Cleveland, Ohio 44115

STAN BULLARD

Duke Realty Corp. has placed its two Corporate Plaza office buildings on Rockside Woods Boulevard in Independence on the market.

Duke looking to speed its exit from Cleveland, Cincy Indianapolis-based realty company puts big Rockside Road buildings on market By STAN BULLARD sbullard@crain.com

CORPORATE RETREAT FOR SALE Barns/Shop Buildings

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In commercial real estate lingo, “cherry picking” means a buyer plucks a seller’s best assets and leaves the lesser ones on the tree. In a bit of role reversal, Duke Realty Corp. is offering the cherries from its Northeast Ohio portfolio in the company’s latest effort to sell its way out of the region. The best office buildings owned by the Indianapolis-based real estate investment trust on the Rockside Road office corridor in Independence went on the market again last Monday, May 20. This time, they are packaged with properties in suburban Cincinnati and St. Louis in a 17-building portfolio of 2.3 million square feet that is listed with Cassidy Turley Commercial Real Estate Services of Indianapolis/Cincinnati. Duke will sell the properties as a portfolio or in smaller packages, according to Cassidy Turley’s listing for the assignment on CoStar, an online realty data service. No asking price is given, but each property boasts top-quality tenants and high occupancies, so it will take millions to land any of the buildings. Duke’s three Corporate Circle office buildings on Oak Tree Boulevard and its two Corporate Plaza office buildings on Rockside Woods Boulevard have the highest occu-

STAN BULLARD

Duke Realty Corp. is selling its best office buildings on the Rockside Road office corridor in Independence. pancies, from 83% to 96%, and are its newest local holdings, constructed between 1989 and 2000, according to CoStar. Altogether, they include more than 600,000 square feet of office space, Cassidy Turley said in a news release. The five buildings are among 13 office buildings on the Rockside office corridor that the REIT has tried to sell since 2005, when it announced plans to exit the region for stronger markets. The REIT sold its industrial properties and stellar office portfolio in Cleveland’s eastern suburbs before

the Great Recession shut down Duke’s exit plans. As a corporate strategy, Duke has shifted its focus to industrial and medical office buildings and now seeks to reduce its exposure in the Midwest. As the market recovered, Duke sold its trio of North Olmsted office buildings in 2011. None of four Cassidy Turley brokers working the listing could be reached by Crain’s last week. Jones Lang LaSalle’s Cleveland office does the leasing and management of the area properties because Duke shed its local staff years ago. ■

Volume 34, Number 21 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2013 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

20130527-NEWS--5-NAT-CCI-CL_--

5/23/2013

1:55 PM

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20130527-NEWS--6-NAT-CCI-CL_--

5/24/2013

11:58 AM

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CRAINâ€™S CLEVELAND BUSINESS

2501 HARVARD AVE., NEWBURGH HTS.

WWW.CRAINSCLEVELAND.COM

MAY 27 - JUNE 2, 2013

BY THE NUMBERS: GEAUGA SAVINGS BANKâ€™S PROFITS AND ASSETS 2012

2011

2010

2009

2008

$910,000

1.03M

(1.05M)

36,800

(528,000)

RTA Harvard Garage - For Lease â€˘ â€˘ â€˘ â€˘

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Profit (loss) Source: Geauga Savings Bank

2012

2011

2010

2009

2008

Assets past due 30 to 89 days (in millions) $1.809 3.995 Note: As of Dec. 31, 2012; Source: Federal Deposit Insurance Corp.

3.458

4.939

8.114

2012

2011

2010

2009

2008

Average assets (in millions) $402.9 Source: Federal Deposit Insurance Corp.

421.6

436.7

476.1

517.2

Geauga Savings is banking on reaching the â€˜rainbowâ€™ By MICHELLE PARK mpark@crain.com

When Allen S. Lencioni Sr. assumed the helm at Geauga Savings Bank in Newbury in December 2008, he remembers a pretty candid bank regulator telling him he shouldnâ€™t unpack his bags, â€œbecause I probably wasnâ€™t going to be here long.â€? â€œIt was partly said in jest, but things were pretty tough here,â€? said Mr. Lencioni, Geauga Savingsâ€™ president and CEO. The very next month, the bankâ€™s regulators, the Federal Deposit Insurance Corp. and the Ohio Division of Financial Institutions, jointly issued the bank a cease-and-desist order, telling Geauga Savings to stop operating with inadequate capital

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and to stop engaging in hazardous lending and lax collection practices, among other things. The document was 29 pages long. Still, Mr. Lencioni unpacked, bought a house and moved his wife to town. After working for decades for troubled institutions in the Chicago area, he was no stranger to the task at hand. More than four years later, it appears Geauga Savings officially is headed in the right direction, even if itâ€™s not out from under its regulatorsâ€™ microscope. Regulators terminated the ceaseand-desist order on April 2 and on the same day issued a consent order, laying out the improvement they continue to expect from the institution, which had average assets of $403 million in 2012. The new order requires Geauga Savings to reduce within six months of April 2 its adversely classified, or problem, assets to no greater than 75% of what they were in the bankâ€™s most recent exam in late 2012, and to reduce them within 12 months of April 2 to no greater than 50% of what they were. â€œItâ€™s challenging, although weâ€™re going to hit the first mark probably this month,â€? Mr. Lencioni said. â€œWeâ€™ve attacked the low-hanging fruit.â€?

Going down, down, down According to data reported to the FDIC, the bankâ€™s assets that were past due 30 to 89 days totaled $1.8 million as of last Dec. 31. That figure was down 54% from $3.9 million as of Dec. 31, 2011, and down 78% from $8.1 million as of Dec. 31, 2008. That improvement has involved a combination of collecting on loans, charging off and selling others, and restructuring others still, according to Mr. Lencioni. A lot of the bankâ€™s problem assets â€” which are primarily residential and commercial real estate mortgages â€” werenâ€™t delinquent, but instead didnâ€™t carry current financial information about the borrowers and had terms that were too long and lacked enough covenants, he noted. Besides reducing problem assets, the new consent order requires Geauga Savings executives to improve the bankâ€™s earnings, and restricts them from adding a new senior executive officer or board member, entering into any new line of business and declaring or paying any dividend without regulatorsâ€™ written consent.

Still, Mr. Lencioni sees the termination of the cease-and-desist order as a sign that the regulators approve of what has been done and where the bank is headed. â€œI feel like Iâ€™m halfway home on a long journey,â€? he said. Still in effect, however, is a regulatory order for Geauga Savingsâ€™ holding company, Maple Leaf Financial Inc., based on the parentâ€™s â€œexcessive debt,â€? Mr. Lencioni said.

Seeking the rainbowâ€™s end The January 2009 order reads like a terse laundry list of things Geauga Savings failed to do. Its regulators alleged â€œinadequate internal routines and controls,â€? â€œspeculative or hazardous investment practices,â€? and â€œoperating with management whose policies and practices are detrimental to the bank and jeopardize the safety of its deposits.â€? As a further sign of their disapproval, the regulators ordered the bank to hire a new CEO, chief financial officer, chief lending officer and chief credit risk officer. â€œBecause of whatâ€™s not in the new order, thereâ€™s some recognition of the good work weâ€™ve done,â€? Mr. Lencioni said of his team. â€œBut what is in the order is still a fair amount of hard work that needs to be accomplished.â€? Now, the aim is to grow the bankâ€™s earnings by building on its lending programs. Mr. Lencioni projects Geauga Savings will put on its balance sheet $20 million to $30 million in net loans this year. Though the assets of the bank arenâ€™t likely to grow because it simultaneously will be selling loweryielding securities, new lending should improve the bankâ€™s net interest margin and pave the way for profit, Mr. Lencioni said. â€œIt wonâ€™t come fast enough to make a difference this year, but it sets the stage for next year very nicely,â€? he said. Regulators continue to want the bank to maintain adequate capital, something thatâ€™s more challenging when an institution has more problem loans, Mr. Lencioni said. Mr. Lencioni expects this newest consent order to remain in effect for a year or longer. If and when the bank frees itself of regulatory orders, its resources can focus more on growing the bank and less on compliance, and the FDIC premiums it pays should drop, he said. â€œThis is a step toward being released completely, and thatâ€™s the end of the rainbow,â€? Mr. Lencioni said. â–

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MAY 27 - JUNE 2, 2013

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Huntington’s lending is growing with vertical approach Specialized teams have boosted business By MICHELLE PARK mpark@crain.com

In the year since it promoted a 33-year banking veteran to oversee its specialized “vertical” lending teams, Huntington National Bank has brought to eight the number of such teams that cater to specific business sectors. Rick Remiker, Huntington’s executive managing director for specialty banking, said three new teams launched in the last year under his watch are tailored to provide commercial banking services to companies in food and agribusiness, international banking and energy. Huntington also added, prior to Mr. Remiker’s promotion, a university banking team early last year and teams for health care banking and franchise finance in mid-2011. The bank’s teams for equipment finance

and private equity were launched in 2001 and 2010, respectively. In most cases, Huntington bankers previously served the sectors, but the creation of specialized teams means bankers now are delivering to only one sector services ranging from cash management and loans to private banking. And it’s not just dedicated bankers: Each so-called vertical has dedicated risk professionals and portfolio managers, too. Such specialization is helping the bank grow its business lending, Huntington executives say. In a recent statement about expectations for 2013, executives attributed the bank’s “robust” commercial and industrial loan pipeline, in part, to “the positive impact from our investments in specialized commercial verticals.” “Huntington, if you take a look

back at our quarterly and annual results, has had good loan growth over the last six to eight quarters,” Mr. Remiker said. “I can assure you that a lot of that is the result of our investments in these specialty banking areas.” Over the past year, Huntington has added more than 10 people to its specialized teams, Mr. Remiker said. Though its headquarters are in Columbus, a number of Huntington’s vertical leaders are in Cleveland, including Mr. Remiker; the executives who oversee the health care and equipment finance teams; and Karen Davies, whose promotion to overseeing portfolio management for all eight of the specialty teams was announced in late April. Banks increasingly have been specializing their business banking efforts in recent years, according to Mr. Remiker. Customers are demanding it, he said, and the recent financial crisis underscored the im-

portance of dedicated professionals who stand to better mitigate risk. “We learned a lot of lessons and realized it’s important to have welleducated … industry experts who understand all of the different cycles a business can go through,” Mr. Remiker said. Agriculture, for example, has unique needs because of its harvest-based cash flow cycle.

Targeted practices Though specialization in commercial lending has “been around forever,” a number of institutions that operate in Ohio have introduced teams that cater to those involved in the Marcellus and Utica shale plays, noted Jeff Quayle, senior vice president and general counsel for the Ohio Bankers League. To Mr. Quayle’s point, Cincinnati-based Fifth Third Bank late last year announced a new energy banking team, and Cleveland-

based KeyBank added a shale team. Key also launched in 2011 its nonprofit and enterprise health care groups, a spokesman said. A number of banks that operate in Northeast Ohio have had targeted teams for the better part of a decade, but are experiencing growth. PNC Bank, as an example, launched its agriculture banking specialty in 2000 and its health care team in 2004. “Two years ago, I had one health care banker, now I have three,” said Elena Ray, senior vice president and business banking market manager in Northeast Ohio for PNC. “That’s an investment that’s multiplied throughout the country. “It’s a very profitable segment,” Ms. Ray said of health care banking, noting competition in it has intensified. “It’s a growing segment. There are changes in health care. Every time there is change, it’s an opportunity for a bank. It’s an opportunity for us to finance.” ■

Pension plans outperform contribution plans over long haul By JERRY GEISEL Business Insurance

Defined benefit pension plans consistently have earned higher rates of return than defined contribution plans — predominately 401(k) plans, according to an analysis released last week. From 1995 through 2011, the median annual rate of return for defined benefit plans was 8% compared with about 7.3% for defined contribution plans, Towers Watson & Co. found.

“DB plans have some inherent advantages that have helped them historically outperform their 401(k) counterparts, such as lower investment fees, longer investment time horizons and management by investment experts,” said Dave Suchsland, a senior retirement consultant in Towers Watson’s Philadelphia office, in a statement. In 2011, the most recent year for which information is available, the difference in rates of return for defined benefit and defined contribution plans was especially sharp.

The median rate of return for defined benefit plans that year was 2.7%. By contrast, defined contribution plans had a negative rate of return of 0.2%. That nearly threepercentage-point difference in median rates of return was the widest margin since 1995, the first year of the Towers Watson analysis of rates of return for the two types of plans. That difference in 2011 investment performance may have been aided by defined benefit plan sponsors shifting more plan assets from equities to long-duration bonds,

according to Towers Watson. “That move proved to be successful from a total investment return perspective, as the performance of long-duration bonds far outpaced that of equity markets during 2011,” Towers Watson said. In all, median rates of return for defined benefit plans were higher than defined contribution plans in 13 of the 17 years Towers Watson analyzed. The highest rate of return for defined benefit plans during those 17 years was in 2003, when the plans had a median rate of return of 21%

versus a median rate of return of 19.6% for defined contribution plans. The best year for defined contribution plans was 2009, with a median rate of return of 20.9% versus 15.5% for defined benefit plans. The worst year for both defined benefit and defined contribution plans was 2008, the year in which the equities’ markets plunged as the Great Recession deepened. ■ Jerry Geisel is editor-at-large with Business Insurance, a sister publication of Crain’s Cleveland Business.

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Mr. Mapes, who stepped into the role of CEO at the end of 2012, doesn’t take credit for Lincoln Electric’s vision. He also doesn’t feel pressure to leave his mark. As a former board member, Mr. Mapes said he just views himself as one of the senior leaders carrying out the plan put in place a few years ago. “We’re investing in the long term,” Mr. Mapes said of the company’s strategy. Mr. Mapes was elected to the company’s board in 2010, when he was working as an executive vice president at water heater manufacturer A. O. Smith Corp. He was appointed to be Lincoln Electric’s chief operating officer in 2011. The 51-year-old Mr. Mapes was a good choice for Lincoln Electric’s CEO position because of his broad global experience at A. O. Smith, said executive chairman John M. Stropki. Mr. Stropki, who had been the company’s president and CEO before Mr. Mapes’ appointment, began talking to the board about retirement a few years ago. The company wanted to have time to look for the best candidate, and Mr. Mapes stood out when he joined the board. He preformed in an “exemplary” fashion as COO, Mr. Stropki said, and quickly rose to the top of the list of potential CEO candidates. Mr. Stropki, who is 62 and recently celebrated 40 years with the company, said Lincoln Electric wanted to make sure its CEO could focus on the long-term “2020 Vision” plan. In recent years, Lincoln Electric has focused on short-term plans, which can be affected drastically by acquisitions or economic recessions, Mr. Stropki said. The long-term plan gives employees goals while working toward growth for shareholders. The company created the 2020 Vision plan as a way to tie together its employees and customers globally. It helps its approximately 10,000 employees around the world, from India to China to Russia, to get on the same page and understand the goals Lincoln Electric is working toward, Mr. Mapes said. Customers expect the same performance and quality across the world, so the employees’ work needs to be consistent. The plan launched in 2010. By 2012, Mr. Mapes said the company already was above its goals. In that time, four acquisitions were finalized and sales were up to $2.9 billion in 2012, a 6% increase from 2011. The company does not share annual guidance, said director of investor relations Amanda Butler, so there are no public, per-year targets to measure against. The plan’s basic components are simple: It emphasizes the company’s core competencies, such as expertise in the welding process and a strong global infrastructure, and identifies potential drivers of growth, such as acquisitions and leading the market with its product portfolio.

What’s new? Plenty The company has had a robust few years in research and development and put a particular focus there during the recession. It paid

THE WORD ON LINCOLN ELECTRIC “We’re investing in the long term.” – Christopher L. Mapes, president and CEO

“It all comes down to looking at Lincoln Electric as the welding experts.” – Mapes

“We see that as a long-run improved marketplace for Lincoln.”

“We support what they do. We support their growth.” – Bill Cervenik, mayor, Euclid

– Mapes, on new business opportunities in the shale regions of Ohio and Pennsylvania off with a wealth of new products, Mr. Mapes said, including a virtual welding machine for training and the Power Wave quality control and software system. “New products are critical,” Mr. Mapes said. They are important because the company has its most profitable results when it releases a new product, as there is no competition at that point, Ms. Butler said. In 2009, as the recession took hold, Lincoln Electric put a strong emphasis on research and development, and it has increased that investment in terms of money and employees each year since, she said. Last year, the company produced 107 new products, which is a record. To compare that to past performance, the company a decade ago was averaging about 50 new products annually, Ms. Butler said. The majority of new ideas come from talking to customers about unmet needs and from adapting to new uses, Ms. Butler said. There is a trend toward using different types of materials now, and those materials need new kinds of welding techniques and products, she said.The research and development program wouldn’t be as strong without Lincoln Electric’s investment in training and education. Members of its annual engineering classes, which start in the late spring or early summer, spend 10 to 12 months learning the specifics of the company. Lincoln Electric looks at it as a fifth year of college for its employees, Mr. Mapes said. There are about 30 students in this year’s class, Mr. Mapes said, the largest class yet. Once students finish, they’ll be deployed throughout the company. The training program is about reinvesting in the company and committing long term to employees, Mr. Mapes said.

Mi casa es su casa Lincoln Electric also welcomes visitors, such as customers, trade groups and schools, to its plants and training centers. Mr. Mapes said there were more than 6,000 visitors to the headquarters in Euclid last year. In May, individuals from farm equipment maker Deere & Co. were visiting to learn more about the welding process and related technology. Those types of visits are valuable to Lincoln Electric because they help bring the company closer to its customers, Mr. Mapes said. They offer a chance to learn more about its

varied customers’ welding applications and hear about any problems they might have. “It all comes down to looking at Lincoln Electric as the welding experts,” he said. New business opportunities, such as the shale energy play in Ohio and Pennsylvania, also could help the company grow. Mr. Mapes said it was difficult to pinpoint a difference by dollar amount at this point, but that the increased need for pipelines to transport shale gas and oil would lead to an increased need for welding. And the low-cost natural gas will strengthen the industries that use it for their operations. “We see that as a long-run improved marketplace for Lincoln,” Mr. Mapes said.

Global vision, too This type of expansion is nothing new for Lincoln Electric. Part of the company’s strength is its diversity in the regions, markets and industries it serves, which allows it to ride out cyclical changes. Two areas in which the company is particularly interested in growing are automation and alloy technology. Two of 2012’s four acquisitions were in automation: Wayne Trail and Tennessee Rand. Mr. Mapes expects the company’s employee base will increase a bit because of the expected acquisitions during the 2020 Vision time period, but it won’t be anything dramatic. The acquisitions typically don’t involve layoffs, but employee counts can be kept down through retirement-based attrition and through increased productivity measures, he said. Mr. Mapes also sees growth opportunities internationally, particularly in Latin America, Asia and Africa. In order to grow internationally, he said, the company must make sure all the appropriate legal entities are in place in the target area, and it must talk to customers there to find out exactly how they’re using welding in their work. “It’s that kind of work that’s really required for us to be successful longer term,” Mr. Mapes said. Euclid Mayor Bill Cervenik said the company’s growth and investments show a commitment to Euclid and Northeast Ohio, too. He called the relationship between the company and the city strong and positive, and said he’s seen a number of expansions at the plant in his nearly 10 years as mayor. “We support what they do,” he said. “We support their growth.” ■

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PUBLISHER/EDITORIAL DIRECTOR:

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

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

Scott Suttell (ssuttell@crain.com)

OPINION

New guy II

t’s apparent that Dr. Akram Boutros is in the healing business. The specialist in internal medicine officially doesn’t become president and CEO of the MetroHealth System until the end of this week. However, he already is working to mend MetroHealth’s at-times rocky relationship with Cuyahoga County government, which subsidizes the safety net hospital, and to cover the scar left by Dr. John Brennan when he backed out of his commitment to become MetroHealth’s next CEO. The strange case of Dr. Brennan occurred just last November, so the wound is still fresh. He’s the head of a medical center in New Jersey whom the MetroHealth board proudly introduced as its chosen leader after a year-long search, only to change his mind just two weeks later. Dr. Boutros isn’t oblivious to the embarrassment the episode caused MetroHealth, nor of the skepticism that may be voiced about the depth of his own commitment to his new employer. In a recent meeting with Crain’s, the physician-turned hospital executive-turned consultant signaled he intends to remain in the job for the long haul. The 51-year-old Dr. Boutros went so far as to say he wants to end his career leading a health care system, and that he relished the opportunity to run an organization rather than remain a consultant to hospitals in need of operating advice. “It was frustrating because I couldn’t implement” the plans his consulting firm devised, he said. The incoming CEO also isn’t ignorant of the friction points that have existed between MetroHealth and county government under County Executive Ed FitzGerald, who has accused MetroHealth’s leadership of failing to keep its finances and decision-making processes open to the public. “I’ve made a commitment to transparency with all our constituents,” inclusive of patients, doctors, employees, taxpayers and government bodies, Dr. Boutros said. And even though he is fresh off a stint in the consulting world, Dr. Boutros seems intent on responding to another of Mr. FitzGerald’s complaints — namely, MetroHealth’s repeated use of high-priced consultants during the tenure of its previous CEO, Mark Moran, who had been a consultant himself. “I have not and will not use a lot of consultants at MetroHealth,” he said. “They don’t have to live with the consequences (of their recommendations), and it sends a signal that we don’t know what we’re doing.” Of course, the job of leading a health system — especially one that serves more of the urban poor than the others in town — involves more than a good public relations bedside manner. Dr. Boutros ultimately will be judged on how efficiently MetroHealth operates and on how well it fulfills its mission of “saving lives, restoring health, promoting wellness, and providing outstanding, life-long care accessible to all.” One encouraging sign is that he doesn’t plan to be an ivory tower CEO. He already has been visiting departments of the hospital unintroduced to see what goes on there. “Nothing happens (in the office) that is not sanitized,” he said. We wish him well.

FROM THE PUBLISHER

Obama team wades through a quagmire beleaguered Obama administration. ournalists love great quotes. They Members of the committee wanted to can make or break a story. And someknow about emails and docutimes, they’re downright ments that appear to show that head-scratchers, like this one BRIAN the IRS division under question from the front page of The Wall TUCKER decided to target groups with Street Journal last week: “ ‘I titles that included conservaHave Not Done Anything tive-sounding terms such as Wrong,’ IRS Official Says.” “tea party” and “patriot.” The That came from the opening newspaper said the emails statement of Lois Lerner, head “were written in 2011 about of the IRS’ tax-exempt division, decisions made in 2010.” to the House Oversight & GovFurther, in a development ernment Reform Committee. that just added to the flames Ms Lerner, whose division is aclicking at the administration’s feet, the cused of targeting conservative groups for increased scrutiny, adhered to her story said that the “Treasury Department earlier promise and refused to answer a inspector general’s office overseeing the single question from the lawmakers on IRS received the internal emails in July the committee. 2012, but didn’t issue a report condemnShe instead chose to invoke the freeing the practice until last week.” doms accorded to her under the ConstiIt doesn’t take a genius to understand tution’s Fifth Amendment to refrain that the president’s re-election camfrom commenting, so as to avoid any paign was in full swing in July 2012. The self-incrimination. pressure is now on those involved to Now, that could be a very temporary prove that they didn’t consciously hide bit of silence. My guess is this mess is this from the public until now in order to going to get nothing but bigger for the enhance the president’s chance at a

second term. Add to that the revelations about the mishandling of the raid in Libya that took the lives of America’s top diplomat and three others, and this amounts to a fullblown political firestorm that’s not about to die down soon, given the seriousness of the accusations and the horrid partisan fighting that has consumed Washington (and Columbus, for that matter). This all appears — and I underscore that term because many questions must still be answered — that some members of this administration’s team made decisions based on pure politics and the appearance it might give to the public if facts were known or questions answered honestly, instead of spun. The term “plausible deniability” from the famed Watergate hearings comes to mind, as underlings did the dirty work so that higher-ups could say they never knew. But spin and appearance are central to politics in our media-crazy world, irrespective of party affiliation, and this will be no different. What remains to be seen is how far the fire spreads. ■

THE BIG ISSUE Are all the traffic troubles caused by the filming of the new Captain America movie worth the economic boost government leaders say it will give the city?

JEREMY POPE

JIM SOBCZAK

MATT VRTOVSNIK

SUSAN POHLY

Shaker Heights

Bay Village

Mentor

Willoughby

No. Economically, it is not worth the time lost in traffic. Imagine how much time is lost by everyone getting into and out of the city and the change in logistics because of the movie. I don’t think it’s worth the bragging rights of saying we had a Hollywood movie shot here.

Yes, it’s worth it. It brings money into the city. I think it’s better to see it done here than in New York and Los Angeles. It’s been fun for me to watch from my office window as the moviemakers blow up stuff.

I think it’s worth it. It’s nice to see people walking around downtown to see the filming. There’s always going to be traffic. You just have to strategize how you are coming in. I’d rather be looking at car crashes and film crews than watching construction.

They are. It wasn’t really that bad — it was a few minutes. If nothing else, it brings some attention to the city. A little inconvenience is worth it.

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TAX LIENS 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 Webluk Machine Corp. 635 Golden Oak Parkway, Oakwood Village ID: 34-1191973 Date filed: March 20, 2013 Type: Employer’s withholding, nemployment Amount: $214,985 Internet Escape LLC 12532 Rockside Road, Garfield Heights ID: 27-1706957 Date filed: March 7, 2013 Type: Employer’s withholding Amount: $147,948 JJAM Management Inc. 7000 Egypt Road, Medina ID: 36-3908012 Date filed: March 20, 2013 Type: Corporate income Amount: $106,534 Ohio Textile LLC Ohio Textile Recycling 1719 E. 39 St., Cleveland ID: 27-4054589 Date filed: March 28, 2013 Type: Employer’s withholding, employer’s annual federal tax return Amount: $66,544 Premier Marketing Group Inc. 2530 Superior Ave., Cleveland ID: 34-1736080 Date filed: March 14, 2013 Type: Employer’s withholding, unemployment Amount: $55,338 NRC Management Inc. 2120 S. Green Road, Suite 2, South Euclid ID: 34-1960019 Date filed: March 20, 2013 Type: Unemployment, failure to file complete return Amount: $39,732 Su Roc Inc. Sushi Rock 1276 W. 6 St., Cleveland ID: 34-1889227 Date filed: March 14, 2013 Type: Employer’s withholding Amount: $28,401 City View Mechanical Inc. 6111 Carey Drive, Suite 2, Valley View ID: 20-0205114 Date filed: March 20, 2013 Type: Employer’s withholding Amount: $28,096 First Step Child Enrichment Center Inc. 5550 Northfield Road, Maple Heights ID: 34-1957536 Date filed: March 28, 2013 Type: Employer’s withholding, return or organization exempt from income tax Amount: $21,824 Carla Bella Spa Inc. 8803 Brecksville Road, Brecksville ID: 20-0283600 Date filed: March 14, 2013 Type: Employer’s withholding, unemployment, corporate income Amount: $21,070

Tradesman Tavern Inc. 5746 State Road, Parma ID: 83-0369263 Date filed: March 20, 2013 Type: Employer’s withholding, unemployment Amount: $14,941 Dogtopia Ltd. an LLC 2624 Noble Road, Cleveland Heights ID: 42-1620555 Date filed: March 7, 2013 Type: Employer’s withholding Amount: $14,316 Euclid Fine Foods Inc. 16044 Euclid Ave., East Cleveland ID: 35-2174080 Date filed: March 21, 2013 Type: Employer’s withholding, unemployment Amount: $10,318 Kacirek Funeral Home Inc. 4114 Shelley Drive, North Olmsted ID: 34-1366591 Date filed: March 20, 2013 Type: Corporate income Amount: $9,799 PLAN Enterprises Inc. 20898 Drake Road, Strongsville ID: 30-0291421 Date filed: March 7, 2013 Type: Employer’s withholding, corporate income Amount: $9,688 Travel Partners Inc. 27221 Wolf Road, Bay Village ID: 34-1860209 Date filed: March 14, 2013 Type: Employer’s withholding Amount: $9,629 Diversified Laundering Services LLC 11004 Avon Ave., Cleveland ID: 27-1709684 Date filed: March 7, 2013 Type: Employer’s withholding Amount: $9,442 Hot Dog Ltd., an LLC 559 Prospect St., Berea ID: 01-0739742 Date filed: March 7, 2013 Type: Partnership income Amount: $7,800 DJM Creations and Design LLC Up-N-Away Balloons & Bouquets 4124 W. 144 St., Cleveland ID: 76-0782210 Date filed: March 7, 2013 Type: Employer’s withholding, unemployment Amount: $7,294 Xtra Hands Home Healthcare Inc. 14330 Claremont Ave., Middleburg Heights ID: 34-1955690 Date filed: March 28, 2013 Type: Employer’s withholding Amount: $6,818 Muscular Disease Society of North Eastern Ohio 11100 Euclid Ave., BHC 5098, Cleveland ID: 34-6555861 Date filed: March 14, 2013 Type: Employer’s withholding, return of organization exempt from income tax Amount: $5,769 Good Harvest Foods Market Inc. 3038 Payne Ave., Cleveland ID: 34-1943972 Date filed: March 14, 2013 Type: Employer’s withholding Amount: $5,615

LIENS RELEASED Childrens Community Access Program Inc. 5000 Euclid Ave., Suite 204,

Cleveland ID: 34-1810688 Date filed: April 20, 2007 Date released: Feb. 27, 2013 Type: Employer’s withholding, unemployment, failure to file complete return Amount: $80,978 Fulton Manufacturing Industries LLC 6500 W. Snowville Road, Brecksville ID: 20-0826194 Date filed: Jan. 28, 2013 Date released: Feb. 7, 2013 Type: Employer’s withholding Amount: $98,743 Fulton Manufacturing Industries LLC 6500 W. Snowville Road, Brecksville ID: 20-0826194 Date filed: Jan. 15, 2013 Date released: Feb. 7, 2013 Type: Employer’s withholding Amount: $20,491 Horizon Electric Co. 15100 Arden Ave., Lakewood ID: 34-1942993 Date filed: Nov. 30, 2011 Date released: Feb. 12, 2013 Type: Employer’s withholding, unemployment Amount: $125,257 Les Amis Salon and Spa Inc. 1370 Ontario St., Room 800, Cleveland ID: 51-0417347 Date filed: Feb. 23, 2009 Date released: Feb. 5, 2013 Type: Employer’s withholding, unemployment Amount: $20,233

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Ohio Beverage Systems Inc. 9200 Midwest Ave., Garfield Heights ID: 34-1427949 Date filed: May 5, 2008 Date released: Feb. 12, 2013 Type: Employer’s withholding Amount: $138,093 Ohio Family Realty Inc. 26747 Brookpark Ext., North Olmsted ID: 42-1552978 Date filed: March 24, 2011 Date released: Feb. 27, 2013 Type: Employer’s withholding Amount: $7,903 RJL Waterfront Holdings I LTD 1148 Main Ave., Cleveland ID: 32-0035888 Date filed: Dec. 28, 2010 Date released: Feb. 28, 2013 Type: Employer’s withholding Amount: $55,293

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Schneider Company Air Conditioning Contractors Inc. 7464 Serio Drive, Independence ID: 34-1640062 Date filed: Jan. 22, 1008 Date released: Feb. 5, 2013 Type: Employer’s withholding Amount: $62,268 U S A Parking Systems Inc. 1325 Carnegie Ave., Cleveland ID: 34-1695245 Date filed: Dec. 15, 2010 Date released: Feb. 27, 2013 Type: Employer’s withholding Amount: $51,090 Westlake Pizza Inc. 24533 Center Ridge Road, Westlake ID: 20-8706195 Date filed: Dec. 15, 2010 Date released: Feb. 5, 2013 Type: Employer’s withholding Amount: $14,192

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Injection molding distributor has Parma presence Technical center is ‘a very important milestone’ for Absolute Haitian Corp. By BILL BREGAR Plastics News

By opening a technical center in Parma, Absolute Haitian Corp. of Worcester, Mass. — distributor of China-built Haitian and Zhafir injection molding machines — now has a big presence in the Midwestern heart of the U.S. plastics industry. North America is the fastestgrowing export market for Haitian International Holdings Inc., which is China’s largest manufacturer of injection molding machines. Haitian International’s exports to the United States, Canada and Mexico have doubled from 6.3% of the company’s total exports in 2011 to 12.9% in 2013, said Helmar Franz, executive director of Haitian International. About 140 customers and supplier officials attended an open house May 9 at the 20,000-square-foot center in Parma. They toured the building, saw three injection presses molding parts and heard an address from Mr. Franz. The center

opened in the fall. Mr. Franz called the Parma technical center “a very important milestone” for Haitian International, which reported 2012 sales of $1 billion from more than 22,000 machines shipped. Revenues from North America reached $41 million in 2012. That’s a small part of the company’s overall business, but an important one, because sales to the home market in China have been flat for several years, Mr. Franz said. Glenn Frohring, president of Absolute Haitian, said business rebounded sharply coming out of the recession in 2009, and officials decided to look for a building in the Midwest. “We grew quickly,” Mr. Frohring said. “So 2010 was better, and 2011 was super.” Absolute Haitian hired Randy Wendling as aftermarket operations director in 2011. His job was to find a location in the Cleveland area. “For manufacturing and our business, this is where the heart of

it is,” Mr. Frohring said. But Ohio also is a good location because of an abundance of qualified machinery people, he said, and Absolute Haitian’s short history played a key role in the decision to locate there.

Affinity for Northeast Ohio When Absolute Machinery Corp., a manufacturers’ representative and used machinery dealer, partnered with Haitian International in 2006, the Massachusetts firm started working with Molders Choice Inc., a Cleveland-area supplier of injection nozzles, screw tips and other items, to handle Haitian International spare parts. For service, Absolute signed up A.C. Wilson Enterprises Inc. in Middlefield, Ohio. “Ground Zero, seven years ago, were those guys,” Mr. Frohring said. “So our technical service team and parts team was based in Ohio.” Molders Choice is now leasing space in the Parma technical center. “It’s transparent to the customer,” president Kenneth Berger said. Mr. Frohring also lives in Newbury. He is the son of Glenn Frohring Sr., who founded vertical injection press maker Newbury Industries Inc. in 1957. It later be-

came part of Van Dorn Demag Corp. in nearby Strongsville. Mr. Frohring said Mr. Wendling looked at about 30 buildings for the technical center. Absolute Haitian owners Mr. Frohring, Nate Smith and Mike Ortolano toured 11, then whittled it down to three. The Parma building, which had housed a light-manufacturing operation, needed the least amount of work, and Absolute Haitian bought it. The new owners upgraded the electric power and added offices and hardwood floors throughout. The center has a customer training room.

Big on globalization West Michigan Molding Inc., a custom molder in Grand Haven, Mich., bought one of the machines on display at the open house — an all-electric Zhafir Venus with 337 tons of clamping force. Mark Lulofs, vice president of manufacturing, said it is the company’s first all-electric press. West Michigan Molding already has an 1,800-ton Haitian Mars press, and another 1,100-ton Mars is coming in mid-July, he said. Mr. Lulofs said automotive accounts for about 70% of his company’s business, including interior

parts. Haitian International now has a track record at the molder, which got its first Mars machine 1½ years ago. “Pricing was the first thing on our mind” when considering that Chinese press, Mr. Lulofs said. Officials saw a Haitian International machine running at another Michigan molder. Once it was installed, they studied the press against existing machines and it compared favorably, he said. “Actually, it’s been a trouble-free machine,” Mr. Lulofs said. In his speech at the open house, Mr. Franz, a native of Germany who has lived in China for the last eight years, said it’s important for Haitian International to have manufacturing and technical centers around the world. “American people, they know best what American people need,” he said. “Globalization is understanding cultures, understanding entrepreneurial environments, and addressing (them). Otherwise it’s a one-way street,” he said. ■ Bill Bregar is a reporter with Plastics News, a sister publication of Crain’s Cleveland Business.

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GUANGZHOU, CHINA — Plastic resin supplier A. Schulman Inc. is in the midst of an expansion that is more than doubling capacity at its compounding plant in Dongguan, China, part of a broader effort to make Asia a larger portion of its global sales. Fairlawn-based A. Schulman added a compounding line for engineering plastics in Dongguan in late 2012, and plans to add one more each for engineering plastics and masterbatches there in the next 18 months. It’s one of a series of investments planned to grow Asian revenues from less than 10% of the company’s global business to something more balanced with its other major regions, said Derek Bristow, vice president and general manager of Asia Pacific for A. Schulman, in an interview last Wednesday, May 22, at the Chinaplas trade show in China. “In the next five years we would like to quadruple sales in Asia,” Mr. Bristow said. “We have fairly ambitious growth plans for Asia.” Mr. Bristow said the company also is looking at buying other companies or factories. “Obviously we want to grow

organically, but we are looking seriously at finding acquisitions throughout Asia,” he said. The investments in Dongguan include the 9,000-metric-ton compounding line for engineering plastics and plans for two more lines of 15,000 tons each by the end of 2014. Those investments would bring capacity at the plant from 30,000 tons at the start of 2012 to 69,000 tons. “In China, we find that the engineering polymers business is doing better than we expected,” Mr. Bristow said. “China is actually our most profitable business in Asia.” He attributed the success in China partly to the company’s links with global manufacturers, and their need for material that meets their specifications at their China factories. The company in April opened its first factory in India, for manufacturing additive concentrates. Mr. Bristow said that factory’s first production line likely will fill up in six months and will require a second. The company also is looking at adding compounding capacity for engineering plastics in India in several years. A. Schulman plans a smaller capacity expansion in Malaysia as well, he said. It also has Asia Pacific factories in Australia and Indonesia. “Asia Pacific has got a much, much bigger chunk of the investment pie,” Mr. Bristow said. ■ Steven Toloken is a reporter with Plastics News, a sister publication of Crain’s Cleveland Business.

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CRAINâ€™S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

GOING PLACES CONSTRUCTION

THE AFFORDABLE CARE AC T

RUHLIN CO.: Michael Ciammaichella to vice president.

CONSULTING LIFE SAFETY ENTERPRISES INC.: Tom Shepard to director, business development.

Ciammaichella

Shepard

Kiper

M. Fishman

A Practical Workshop on Employer â€œPay or Playâ€? Thursday, May 30, 2013

SS&G PARKLAND: Michael Ferkovic to associate.

10:00 a.m. to Noon EDT Workshop

EDUCATION WHITE HAT MANAGEMENT: Steven Lubowicz to chief information officer.

WORKSHOP

McDonald Hopkins

JOB CHANGES

S. Fishman

Wienclaw

Brewer

Jaros

RSVP: mcdonaldhopkins.com or call: 216.348.5400 to register.

McDonald Hopkins Downtown Cleveland

ENGINEERING McDonald Hopkins LLC 600 Superior Ave., East, Suite 2100, Cleveland, OH 44114 â€˘ 216.348.5400 Carl J. Grassi, President Shawn M. Riley, Cleveland Managing Member Chicago â€˘ Cleveland â€˘ Columbus â€˘ Detroit â€˘ Miami â€˘ West Palm Beach

AUSTIN CO.: Ed Mackin to project manager; Matt Bedee to senior architect; Carl Veith to design specialist; Alex Kuchek to sales coordinator.

FINANCE

mcdonaldhopkins.com Ko

Francis

Valentino

Murton

Likins

Ellis

McGuire

Lowery II

HUNTINGTON BANK, NORTHEAST OHIO: Joe DiRocco to head, corporate banking; Rich Pohle to head, commercial portfolio management; Karen Davies to director, portfolio management for specialty banking.

FINANCIAL SERVICE GRANT THORNTON LLP: Tom Freeman to office managing partner; Jeff Robinson to leader, Cleveland audit practice; Chad Davies to leader, Cleveland tax practice. MERCER: Scott D. Kiper to office leader, Cleveland and Pittsburgh. RESILIENCE CAPITAL PARTNERS: Theodore Laufik to chief financial officer and chief compliance officer; Robert Northrop to senior vice president, operations group; Michael Cavanaugh to partner; Megan McPherson to vice president. SS&G HEALTHCARE: Grant Milby to practice manager.

FOOD SERVICE TRIMARK USA LLC: Mark Fishman to executive vice president; Steve Fishman to corporate vice president, vendor programs; Tom Wienclaw to president, TriMark SS Kemp.

HOSPITALITY

MARKETING HILEMAN GROUP: Alex Brasure to web/UX designer.

NONPROFIT AKRON COMMUNITY FOUNDATION: Margaret Medzie to vice president, development and donor engagement; Tracy Burt to director of marketing.

FIRSTENERGY CORP.: Randall A. Frame to regional president, Ohio Edison.

BOARDS NATIONAL TOOLING AND MACHINING ASSOCIATION: Dave Sattler (Sattler Cos.) to national secretary.

LUTHERAN METROPOLITAN MINISTRY: Rev. Andrew D. Genszler to president, CEO.

AWARDS

NATIONAL TOOLING AND MACHINING ASSOCIATION: Emily Lipovan to managing director; Jeffery Walmsley to director of membership and business development.

REAL ESTATE CBRE: Joseph W. Kearney to senior real estate manager.

SERVICE

LEGAL

FREEDONIA GROUP: Thomas Bowne to senior economist.

CALFEE, HALTER & GRISWOLD LLP: Todd Tucker to partner.

TECHNOLOGY

LIBRA INDUSTRIES: Jennifer Altstadt to president; Rod Howell to CEO.

UTILITY

EMERALD DEVELOPMENT AND ECONOMIC NETWORK: Irene Collins to executive director.

SAMMYâ€™S: Kelly Brewer to director of sales.

MANUFACTURING

manager; Shane Murton to managed services engineer; Mark Khalil to OSC analyst.

MCPC INC.: Terry Jaros to payroll manager; Tak-Wai Ko to rotational desktop technician; Jessica Francis to sales operations specialist; Meg Valentino to business applications

BEAUMONT SCHOOL: Joseph and Louise Gambatese, Richard and Robbin Garcia, and Dana and Christine Rose received the Beaumont Award. CLEVELAND TECHNICAL SOCIETIES COUNCIL: Garland Likins (Pile Dynamics Inc.) received the Robert B. Cummings Distinguished Leadership Award. ORT AMERICA CLEVELAND REGION: Stephen C. Ellis (Tucker Ellis LLP) and Mark M. McGuire (Eaton) received the 2013 ORT America Jurisprudence Award. UNITED WAY OF SUMMIT COUNTY: William Lowery II (Stouffer Realty) received the 2013 Young Philanthropist of the Year Award.

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

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

MAY 27 - JUNE 2, 2013

BRIGHT SPOTS Bright Spots is a periodic feature in Crain’s highlighting positive business developments in the region. To submit information, email Scott Suttell at ssuttell@crain.com. ■ Energy Focus Inc. of Solon said its Stones River Cos. subsidiary has been awarded contracts totaling $4.9 million for government buildings in the first four months of 2013. The orders represent approximately 50% growth compared with the like period last year and include installations of LED lighting in public housing projects and schools, according to Energy Focus. “We are pleased to see strong growth momentum in our lighting retrofit business, as government entities at national, state and local levels have embarked on initiatives to achieve higher energy efficiency,” said James Tu, the new executive chairman of Energy Focus, in a statement. “We are particularly excited about the increasing appeal of LED lighting over fluorescent even in projects that have fewer hours of operation, such as schools,” he said.

■ Mentor-based Steris Corp., a maker of equipment for sterilizing medical devices, and consulting firm Radcom Inc. of Hudson won the Communicator Award of Distinction, an award honoring communications professionals for creative excellence. Their entry, “Security Awareness,” was part of a webbased training program meant to educate employees on Steris’ corporate security concepts and policies. The International Academy of the Visual Arts will hold an awards celebration this Thursday, May 30, in New York City. This year’s winners were chosen from more than 6,000 entries from ad agencies, interactive agencies, production firms, in-house creative professionals, graphic designers and public relations firms. “I’m thrilled we won this award,” said Jo Ellen Frost, the Radcom instructional designer and storyboard writer on the project. “Security is an important subject for any organization, and I’m glad we were able to help Steris better train their employees to meet and exceed federal standards. Working with the

Steris team was a very positive experience.” ■ Four high school seniors, including two from Northeast Ohio, recently were awarded 2013 BioOhio Scholarships. They were chosen from an applicant pool of more than 300 entries from high schools in every part of the state, according to BioOhio, a bioscience trade association. This year’s recipients of the nonrenewable $1,250 scholarships include Kelly Haller of St. Joseph Academy of Cleveland, a Strongsville resident who plans to major in biomedical science at Ohio State University; and Lauren Misik of Niles McKinley High School, who will attend Youngstown State University and the Northeast Ohio Medical University (NEOMED) as a student in the medical program. The scholarship program was created in 2009 by BioOhio members to encourage and advance bioscience-related STEM education and career interests in Ohio. ■ The Interlake Steamship Co. of Middleburg Heights said it reached an agreement in principle with Shell Global to supply lique-

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“This move takes our dedication to environmental stewardship to the next level.” – Mark Barker, president, Interlake, on the company’s new agreement with Shell Global fied natural gas to support Interlake’s conversion of its fleet of nine vessels to LNG as the main propulsion fuel. When converted, the ships “are expected to be the first LNG-powered ships on the Great Lakes and among the first in the United States,” Interlake said in a news release. The company aims to convert the first vessel by spring 2015. It’s already working through engineering and design, seeking regulatory approval and securing financing. Shell would be Interlake’s exclusive supplier of LNG for each converted vessel. The conversion of Interlake’s vessels from heavy fuel-oil burning engines to engines that operate on LNG will require Interlake to make “significant capital investments” in its fleet, the company said. It did not disclose the size of those investments. However, the investments “are expected to result in significant environmental benefits,” the company said. “Interlake anticipates that the conversion to LNG will result in significant reductions of carbon dioxide, sulfur oxide, nitrogen oxide and particulate matter.” Mark Barker, president of Interlake, said in a statement, “This move takes our dedication to environmental stewardship to the next level. While the marine mode of transportation is already by far the most environmentally friendly way to move goods throughout the Great Lakes region, operating on LNG would further reduce our vessels’ environmental impacts.” ■ The National Business Incubation Association awarded Mike LeHere the 2013 Member Emeritus Award during a recent conference in Boston. This award recognizes an NBIA member for outstanding achievement in the business incubation field. Mr. LeHere retired last December as CEO of the Akron Global Business Accelerator in Akron. He began his incubation career in 1983 and had been an NBIA member since the association’s inception in 1985. The Akron Industrial Incubator — as the Akron Global Business Accelerator originally was known — opened in 1983 with Mr. LeHere at the helm. The program changed locations and names in 1996. Under Mr. LeHere’s leadership, the incubator “expanded and developed highlevel programs for U.S. companies and nondomestic firms,” according to the incubation association.

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■ Mitch Thompson, a Squire Sanders partner and deputy practice group leader of its Taxation & Benefits Practice Group, was elected president of The Tax Club of Cleveland, an association of tax professionals including law firms, accounting firms, and corporate tax departments. The Tax Club of Cleveland has about 300 members and focuses on professional development, educa-

tion, and networking opportunities. Squire Sanders said Mr. Thompson focuses his practice on corporate and international tax matters, and he has “extensive experience advising clients on U.S., non-U.S. and cross-border mergers, acquisitions, dispositions, restructuring, transfer pricing, U.S. federal tax credit and financing transactions.” ■ Johns Hopkins Medicine in Baltimore has integrated its Epic electronic medical record system with OnBase, the enterprise content management system of Westlake-based Hyland Software. The integration “provides clinicians and staff immediate access to patient information stored outside of the EMR, empowering staff to deliver superior patient care,” according to a news release from Johns Hopkins and Hyland. Johns Hopkins said it will use OnBase across the health care system in ambulatory and inpatient departments in its hospitals as well as in community physician practices to capture and securely store patient information. ■ Nexus Engineering Group LLC of Cleveland played a key role in the completion of a $400 million gas processing unit near Toledo for BP-Husky Refining LLC. The unit, dubbed Reformer 3, went online in early February and now is fully operational. Nexus provided engineering, regulatory compliance, commissioning and startup support and project management services to BP-Husky Refining. The project included the installation of a Naphtha Reforming Unit and upgrades to the refinery’s electrical system. The reforming equipment, which produces high-octane gasoline and hydrogen, will improve gasoline production efficiency, reduce energy consumption, and lower environmental emissions, Nexus said. The new reformer replaces three units built in the 1950s and 1960s. The electrical system modifications will improve the refinery’s supply reliability and capacity. “We are proud of our work as one team with BP-Husky and others whose dedication and determination made this project a success from its design and through a safely executed startup,” said David Wagner, principal process engineer at Nexus, in a statement. ■ Venture Lighting International of Streetsboro, a maker of metal halide lighting systems, said it has become an affiliate partner of the California Lighting Technology Center at the University of California, Davis. “We are very excited to develop this partnership with CLTC,” said Ken Hawley, vice president of sales and marketing for Venture Lighting, in a statement. “Their reputation for being a center of excellence in energy-efficient lighting and developing innovative technology is directly in line with Venture’s mission to increase the demand for energy-efficient lighting and provide the best all-white light options with the highest overall value to the customer.” The CLTC focuses on research, development and demonstration of lighting technology. It also works with legislative leaders and regulatory agencies on energy policy, lighting codes and building standards. ■

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INVESTINGGUIDE2013

MARC GOLUB

Ginger Mlakar, left, director of donor relations, and Kaye Ridolfi, senior vice president of advancement, are with the Cleveland Foundation, where donor-advised funds have increased in number from 374 to 429 in the last four years.

GIVING MORE THOUGHT T TO CHARITABLE CAUSES

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com

Donor-advised funds are growing in popularity as one way individuals work nonprofits into their financial strategies

oday’s donors — in Northeast Ohio and beyond — are looking for more control over the investments they make in charitable causes, said Brian Dean, an executive vice president in retirement plan services at Cleveland-based professional services company CBiz Inc. While arranging for gifts can “absolutely” be part of an overall investment strategy for a donor, Mr. Dean said many are taking the process more seriously, researching nonprofits closely, examining audits and annual reports. See CAUSES Page I-5

Bullish investors are navigating a brightened market Financial advisers say improving economy is leading to more willing risk-takers INSIDE ■ Cedar Fair is again the leader of the pack in Superstar 10. The list ranks the top publicly traded companies in Crain’s 15-county coverage area based on a trio of performance-based indicators. PAGE I-2 ■ This year’s market cap list is paced by Eaton Corp. PAGE I-3 ■ A ranking of the largest public companies. PAGES I-4 and I-6

By CHRISSY KADLECK clbfreelancer@crain.com

epending on the latest sensational cable news story or glaring example of gridlock in the nation’s capital, the average investor can be catapulted from one emotion to the next. Still, local financial advisers say improving economic conditions — brighter corporate balance

sheets, rising home values and the ability to decrease personal debt — have improved the overall sentiment of their clients. “People across the board are happy because if they stayed in the market, they have had full recovery with some exciting returns for the past four years now, since the market bottomed out in March of 2009,” said Joe Heider, regional managing principal for Rehmann Financial Group in Westlake.

In full disclosure, however, there still are a few troubling realities that can flip flop an investor’s mood from worried to confident, from hesitation to a willingness to take more risk, and from frustration to encouragement. But worry isn’t a bad thing, says Norm Klopp, managing partner of Midwest Investment Management in Cleveland. “Our experience as we talk to investors is that there is still a good

“People across the board are happy because if they stayed in the market, they have had full recovery with some exciting returns for the past four years now.” – Joe Heider, regional managing principal, Rehmann Financial Group degree of genuine hesitancy — it’s moved from fear to hesitancy — and that’s positive because of the See INVESTORS Page I-7

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I-2 CRAIN’S CLEVELAND BUSINESS

Cedar Fair again rides to the top

MAY 27 - JUNE 2, 2013

CRAIN’S SUPERSTAR 10 RK COMPANY

COMPOSITE SCORE

TOTAL 1-YR. NET NET INCOME RETURN RETURN 1-YR. ON EQUITY TOTAL RETURN INCOME ON % CHANGE RANK RETURN RANK EQUITY CHANGE RANK

1 Cedar Fair LP

42.37

43.07

63.55

Amusement park operator leads Superstar 10 for second year in a row, edging Sherwin-Williams

2 Sherwin-Williams Co.

53.98

42.81

35.22

3 TransDigm Group Inc.

27.63

36.57

55.78

By MARK DODOSH mdodosh@crain.com

4 Park-Ohio Holdings Corp.

70.36

7.99

31.24

5 Steris Corp.

35.27

24.30

17.71

T6 TravelCenters of America LLC 47

82.86

36.58

9.11

T6 PVF Capital Corp.

67.86

167.63

7.32

T6 Middlefield Banc Corp.

31.32

52.08

11.33

9 Nordson Corp.

30.17

6.38

31.98

10 Nacco Industries Inc.

49.85

-32.94

38.63

UN. That’s the stock symbol for Cedar Fair LP, the amusement park operator that among its 16 properties owns Cedar Point in its headquarters city of Sandusky and Kings Island near Cincinnati. Those three letters also could describe the ride that investors in Cedar Fair stock have had over the last two years. Thanks to another year of solid financial performance and nice increases in its return to stockholders, Cedar Fair for the second straight year tops the Crain’s Superstar 10, our annual look at public company performance in Northeast Ohio. Cedar Fair was able to pull off that feat even without the benefit in 2012 of a new roller coaster at

HOW THEY’RE RANKED Crain’s determines its Superstar 10 by obtaining a composite score for each publicly traded company in the 15-county coverage area. The composite score is the total of three rankings: ■ 12-month total return to shareholders ■ 2012 percentage growth ■ 2012 return on equity

SOURCE: S&P Capital IQ; www.spcapitaliq.com; Note: Three companies are tied for sixth place. its flagship park in Sandusky. This year, the company likely will be thrilling patrons and investors alike thanks to GateKeeper, its new winged roller coaster that began operating just two weeks ago with the start of Cedar Point’s 2013 season. As Cedar Fair CEO Matt Ouimet

told Crain’s reporter Timothy Magaw just last month, Cedar Point’s first new coaster in seven years already has fueled strong season pass sales and hotel bookings. “There’s no doubt that this will be a good year for Cedar Point,”

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Mr. Ouimet said. “I do think that it (GateKeeper) will be a catalyst to drive people who haven’t visited in a while to come back.” While Cedar Fair looks for a possible Superstar three-peat in 2014, four other companies that were on last year’s Superstar 10 list are among those that are part of the Superstar Class of 2013. Paint maker Sherwin-Williams Co., aircraft parts supplier TransDigm Group Inc., diversified manufacturer and supply chain management concern Park-Ohio Industries Inc., and Nacco Industries Inc., a producer of coal and small appliances and operator of the Kitchen Collection retail chain, all are repeat Superstars. This year they come in at Nos. 2, 3, 4 and 10, respectively; last year, they were Nos. 10, 3, 7 and 5. A trio of performance-based indicators determines which companies make up the Superstar 10. A composite score for each public company in the 15 counties Crain’s tracks was obtained by adding its rank on three different lists — 12-month total return to shareholders, percentage change in profits in the trailing 12-month period reported before April 30 versus the like period a year earlier, and return on equity during the latest 12 months reported by the company. As in golf, the lower the composite score, the better a company’s overall performance is considered to be. Take Steris Corp., the Mentorbased maker of medical sterilization equipment and hand sanitizer. It ranked 14th in one-year total return to shareholders, 16th in percentage change in profits and 13th in return on equity. Adding 14, 16 and 13 gives Steris a total score of 43, which puts the company at No.

5 on the Superstar list. Investors who put money into these companies a year ago largely were rewarded handsomely for their foresight. Six of the 10 companies in this year’s class saw their total returns to shareholders in the 12 months that ended April 30 exceed 40%, with TravelCenters of America gaining the most. The total return of the Westlake-based operator of highway travel centers shot up nearly 83%. The lowest total return among the Superstars was turned in by TransDigm with a hardly shabby 27.6%. In a rarity for the Superstar 10, three companies came in with identical composite scores and tied for sixth place on the list. The three are TravelCenters and two banking companies — PVF Capital Corp., the parent of Park View Federal Savings that agreed in February to be acquired by F.N.B. Corp. of Hermitage, Pa., and Middlefield Banc Corp., parent of Middefield Bank. Completing this year’s class, at No. 9, is Nordson Corp. in Westlake, a maker of automated spraying and dispensing equipment that has been an aggressive acquirer over the last year. Last May, Nordson agreed to buy for $200 million EDI Holdings Inc. of Chippewa Falls, Wis., a producer of proprietary extrusion dies for plastic processors, and the next month it cut another $200 million deal to acquire Xaloy Superior Holdings Inc., a company in New Castle, Pa., that makes components to process melted plastic resin in plastic injection and extrusion machinery. The acquisitions have extended Nordson’s reach into the flexible packaging business, which is viewed as a growth market. ■

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MAY 27 - JUNE 2, 2013

CRAINâ€™S CLEVELAND BUSINESS I-3

Hectic year gives Eaton firm grip on the market By SCOTT SUTTELL ssuttell@crain.com

tâ€™s been a busy 12 months for Eaton Corp., the company that now has the title â€” by a considerable margin â€” of the largest Northeast Ohio company as ranked by market capitalization. The maker of electrical and hydraulic parts in the past year has bought Cooper Industries plc of Dublin, Ireland, in an $11.8 billion transaction; moved the merged companyâ€™s corporate headquarters to Dublin; and opened a stunning new North American headquarters campus on a 53-acre property in Beachwood. Eaton shareholders received one share of the new company for each share of Eaton that they owned. Cooper shareholders received $39.15 in cash and 0.77479 shares of the new Eaton entity for each Cooper share. The result: Eatonâ€™s market capitalization as of April 30, 2013, surged 78.3% to $28.91 billion from $16.21 billion on April 30, 2012 â€” about three weeks before the Cooper deal was announced. That increase vaulted Eaton to the No. 1 slot on Crainâ€™s Cleveland Businessâ€™ 2013 list of Largest Public Companies ahead of last yearâ€™s leader, Akron-based electric utility FirstEnergy Corp. The last two years show thereâ€™s nothing like a big deal to provide a huge boost to market capitaliza-

tion. FirstEnergy zoomed to the top of the 2012 list with a 60.7% increase in market cap following its completion of a big merger with Allegheny Energy Inc. On this yearâ€™s list, FirstEnergy is No. 2, with a market cap of $19.49 billion, down 0.5% from $19.58 billion a year ago. Among Northeast Ohioâ€™s 10 largest public companies, only FirstEnergy and Canton-based Timken Co. saw a decline in market cap; Timkenâ€™s market cap fell 8.7% to $5.04 billion from $5.52 billion a year ago. However, the strong run of U.S. stocks in the past year provided a market cap boost to the vast majority of Northeast Ohio public companies. Among the 61 public companies on this yearâ€™s list, 42 posted gains in market cap from the 2012 list, while just 15 posted declines. Four companies â€” Hyster-Yale Materials Handling Inc. in Mayfield Heights, Cortland Bancorp in Cortland, National Bankshares Corp. of Orrville and Consumers Bancorp Inc. of Minerva â€” were not measured because they were not on the 2012 list. Hot on the heels of FirstEnergy for the No. 2 slot is SherwinWilliams Co. of Cleveland. The paintmaking giant shot to No. 3 on the 2013 list as its market cap rose 52.1% to $18.89 billion from $12.42 billion last year, when it was the fifth-largest public company in Northeast Ohio. Sherwin-

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TOP MARKET VALUATIONS (IN BILLIONS) RK COMPANY

VALUATION APRIL 30, 2013

VALUATION APRIL 30, 2012

PERCENT CHANGE

Eaton Corp.

$28.91

$16.21

78.3%

FirstEnergy Corp.

19.49

19.58

-0.5

Sherwin-Williams Co.

18.89

12.42

52.1

Progressive Corp.

15.25

13.02

17.2

Parker Hannifin Corp.

13.48

13.23

1.9

The J.M. Smucker Co.

11.20

9.02

24.2

KeyCorp.

9.20

7.69

19.7

TransDigm Group Inc.

7.64

6.38

19.7

DDR Corp.

5.82

4.11

41.8

5.04

5.52

-8.7

10 The Timken Co.

SOURCE: S&P Capital IQ; www.spcapitaliq.com Williamsâ€™ net income in 2012 rose 42.8%, to $631 million from $441.9 million, as the company benefited from substantial improvement in the U.S. housing market. Seven of the regionâ€™s 10 largest public companies saw their market cap rise by double-digit percentages in the past year. Outside of Eaton and Sherwin-Williams, the biggest gain among that group

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was at DDR Corp., the real estate investment trust in Beachwood, where market cap climbed 41.8%, to $5.82 billion from $4.11 billion. Several other companies saw their market caps increase at least 50% for the 12-month period that ended April 30, 2013. They included polymer materials provider PolyOne Corp., up 63.8% to a market cap of $2.01 billion,

good for No. 21 on this yearâ€™s list, four slots higher than a year ago; diversified manufacturer Park-Ohio Holdings Corp., up 71.7% to a market cap of $450.1 million, to No. 36 on the list; and travel plaza operator TravelCenters of America LLC, up 87.7% to a market cap of $340.3 million and No. 39 on the list. On a percentage basis, the biggest market cap gainers this year were bank holding company Central Federal Corp. of Fairlawn, up nearly 920% to $23.6 million from $2.3 million last year, and biopharmaceutical company Athersys Inc. of Cleveland, which saw its value rise 246.1% to $117.8 million. The biggest market cap tumble was experienced by Clevelandbased Cliffs Natural Resources Inc., an iron ore company that lost 63.2% of its value and now has a market cap of $3.27 billion. (When your company is in the global basic materials sector, prices are volatile â€” and so is your stock price and market value.) There are 24 public companies in Northeast Ohio with a market cap of at least $1 billion, which is down from 25 such companies last year. Out of the $1 billion-plus crowd is GrafTech International Ltd. of Parma, a maker of graphite electrodes and cathodes that saw its market cap fall 42.7%, to $967.7 million on April 30, 2013, from $1.69 billion a year earlier. â–

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20130527-NEWS--18-NAT-CCI-CL_--

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Page 1

INVESTINGGUIDE2013

I-4 CRAINâ€™S CLEVELAND BUSINESS

MAY 27 - JUNE 2, 2013

LARGEST PUBLIC COMPANIES RANKED BY MARKET VALUE

Company/Ticker symbol This Last Headquarters year year Phone/Website

Market value (millions) 4-30-2013

4-30-2012

Percent change

Net income (millions) 2012

2011

Percent change

2012 return on equity

Lines of business

Top local executive Title

Eaton Corp./ETN 1000 Eaton Blvd., Cleveland 44122 (440) 523-5000/www.eaton.com

$28,905.7

$16,212.6

78.3%

$1,217.0

$1,350.0

-9.9

8.1

Electrical, hydraulic, aerospace, truck and automotive products

Alexander M. Cutler chairman, CEO, president

FirstEnergy Corp./FE 76 S. Main St., Akron 44308 (800) 736-3402/www.firstenergycorp.com

$19,488.9

$19,580.9

-0.5%

$770.0

$885.0

-13.0

5.9

Electric utility holding company

Anthony J. Alexander president, CEO

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

$18,890.5

$12,422.2

52.1%

$631.0

$441.9

42.8

35.2

Coatings and related products

Christopher M. Connor chairman, CEO

Progressive Corp./PGR 6300 Wilson Mills Road, Mayfield Village 44143 (440) 461-5000/www.progressive.com

$15,254.9

$13,018.6

17.2%

$902.3

$1,015.5

-11.1

15.0

Insurance and financial company

Glenn M. Renwick president, CEO

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

$13,480.4

$13,232.7

1.9%

$1,034.7

$1,109.6

-6.7

19.4

Fluid power systems, electromechanical controls

Donald E. Washkewicz chairman, president, CEO

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

$11,198.7

$9,018.6

24.2%

$518.0

$450.5

15.0

9.9

Manufacturer of branded food products

Richard K. Smucker CEO

KeyCorp/KEY 127 Public Square, Cleveland 44114 (216) 689-6300/www.key.com

$9,198.1

$7,687.1

19.7%

$858.0

$920.0

-6.7

8.4

Bank holding company

Beth E. Mooney chairman, CEO, KeyCorp

TransDigm Group Inc./TDG 1301 E. Ninth St., Suite 3000, Cleveland 44114 (216) 706-2939/www.transdigm.com

$7,639.2

$6,382.4

19.7%

$334.0

$244.6

36.6

55.8

Designer and producer of W. Nicholas Howley highly engineered aircraft chairman, CEO components

DDR Corp./DDR 3300 Enterprise Parkway, Beachwood 44122 (216) 755-5500/www.ddr.com

$5,823.0

$4,107.0

41.8%

($25.8)

($15.9)

10 10

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

$5,041.4

$5,519.2

-8.7%

$495.5

$454.3

9.1

22.2

Friction management and James W. Griffith power transmission president, CEO products and services

11 14

Nordson Corp./NDSN 28601 Clemens Road, Westlake 44145 (440) 892-1580/www.nordson.com

$4,482.0

$3,487.4

28.5%

$228.5

$214.8

6.4

32.0

Adhesives, coating and sealant applicators

Michael F. Hilton president, CEO

12 12

Lincoln Electric Holdings Inc./LECO 22801 St. Clair Ave., Cleveland 44117 (216) 481-8100/www.lincolnelectric.com

$4,382.9

$4,104.9

6.8%

$257.4

$217.2

18.5

19.2

Designs and manufactures welding products

John M. Stropki, executive chairman; Christopher L. Mapes, president, CEO

13 13

RPM International Inc./RPM 2628 Pearl Road, Medina 44258 (330) 273-5090/www.rpminc.com

$4,293.2

$3,493.6

22.9%

$115.8

$203.5

-43.1

10.0

Specialty coatings for industrial and consumer markets

Frank C. Sullivan chairman, CEO

14 16

Forest City Enterprises Inc./FCE-A 50 Public Square, Suite 1100, Cleveland 44113 (216) 621-6060/www.forestcity.net

$3,434.5

$2,698.1

27.3%

$36.4

($86.5)

2.5

Owner and developer of real estate

Charles A. Ratner, chairman David J. LaRue president, CEO

15 15

TFS Financial Corp./TFSL 7007 Broadway Ave., Cleveland 44105 (216) 441-6000/www.thirdfederal.com

$3,360.1

$3,036.6

10.7%

$14.2

$25.1

-43.6

0.8

Bank holding company

Marc A. Stefanski president, CEO

16 7

Cliffs Natural Resources Inc./CLF 200 Public Square, Suite 3300, Cleveland 44114 (216) 694-5700/www.cliffsnaturalresources.com

$3,267.1

$8,871.2

-63.2%

($899.4)

$1,619.1

Full-service iron ore company

Joseph A. Carrabba chairman, president, CEO

17 17

Goodyear Tire & Rubber Co./GT 200 Innovation Way, Akron 44316 (330) 796-2121/www.goodyear.com

$3,073.8

$2,690.1

14.3%

$212.0

$343.0

-38.2

57.3

Tire manufacturer

Richard J. Kramer chairman, president, CEO

18 19

Chart Industries Inc./GTLS One Infinity Corporate Centre Dr., Suite 300, Garfield Heights 44125 (440) 753-1490/www.chartindustries.com

$2,571.0

$2,285.2

12.5%

$71.3

$44.1

61.8

10.2

Maker of cryogenic Samuel F. Thomas processes and equipment chairman, president, CEO

19 21

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

$2,429.5

$1,810.4

34.2%

$162.8

$130.9

24.3

17.7

Maker of sterile processing and infection prevention systems

20 22

Cedar Fair LP/FUN One Cedar Point Drive, Sandusky 44870-5259 (419) 627-2233/www.cedarfair.com

$2,336.0

$1,721.8

35.7%

$101.2

$70.7

43.1

63.6

Amusement and water A. Ouimet parks in the United States Matthew president, CEO and Canada

21 25

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

$2,016.3

$1,230.8

63.8%

$71.9

$172.6

-58.3

11.4

Provider of specialized polymer materials, services and solutions

Stephen D. Newlin chairman, president, CEO

22 20

FirstMerit Corp./FMER III Cascade Plaza, Akron 44308 (330) 996-6300/www.firstmerit.com

$1,879.9

$1,834.3

2.5%

$134.1

$119.6

12.1

8.2

Bank holding company

Paul G. Greig chairman, CEO

23 18

Diebold Inc./DBD 5995 Mayfair Road, North Canton 44720 (330) 490-4000/www.diebold.com

$1,852.3

$2,466.2

-24.9%

$78.5

$144.8

-45.8

9.7

Integrated self-service delivery systems and services

George S. Mayes Jr. COO

24 24

Applied Industrial Technologies Inc./AIT 1 Applied Plaza , Cleveland 44115 (216) 426-4000/www.applied.com

$1,778.9

$1,650.3

7.8%

$118.0

$102.1

15.6

16.4

Distributor and provider of industrial parts and service

Neil A. Schrimsher CEO

25 23

GrafTech International Ltd./GTI 12900 Snow Road, Parma 44130 (216) 676-2000/www.graftech.com

$967.7

$1,689.1

-42.7%

$117.6

$153.2

-23.2

8.7

Manufacturer of graphite electrodes and cathodes

Craig S. Shular chairman, president, CEO

26 29

Associated Estates Realty Corp./AEC 1 AEC Parkway, Richmond Heights 44143 (216) 261-5000/www.associatedestates.com

$900.1

$716.7

25.6%

$30.6

$5.3

474.2

7.6

Real estate investment trust

Jeffrey I. Friedman chairman, president, CEO

Hyster-Yale Materials Handling Inc. (1)/HY 5875 Landerbrook Drive, Suite 300, Cleveland 44124 (440) 229-5168/www.hyster-yale.com

$873.2

$98.0

$82.6

18.6

28.7

Global designer, manufacturer and marketer of lift trucks

Alfred M. Rankin Jr. chairman, president, CEO

28 27

OM Group Inc./OMG 127 Public Square, Suite 1500, Cleveland 44114 (216) 781-0083/www.omgi.com

$780.7

$768.6

1.6%

($38.9)

$42.0

Producer/marketer of metal-based specialty chemicals

Joseph M. Scaminace chairman, CEO

29 28

A. Schulman Inc./SHLM 3550 W. Market St., Akron 44333 (330) 666-3751/www.aschulman.com

$764.1

$726.4

5.2%

$51.8

$47.3

9.6

9.8

High-performance plastic compounds and resins

Joseph M. Gingo chairman, president, CEO

30 35

Ferro Corp./FOE 6060 Parkland Boulevard, Mayfield Heights 44124 (216) 875-5600/www.ferro.com

$609.4

$449.3

35.6%

($371.7)

$4.4

Manufacturer of specialty performance materials

Peter T. Thomas president, CEO

31 30

American Greetings Corp./AM One American Road, Cleveland 44144 (216) 252-7300/www.americangreetings.com

$584.7

$589.7

-0.8%

($7.9)

$82.8

Greeting cards; character Zev Weiss licensing CEO

9 11

Real estate investment trust

Daniel B. Hurwitz CEO

Walter M. Rosebrough Jr. president, CEO

See LIST Page I-6

20130527-NEWS--19-NAT-CCI-CL_--

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INVESTINGGUIDE2013

MAY 27 - JUNE 2, 2013

CRAIN’S CLEVELAND BUSINESS I-5

Causes: Donors often use investments continued from PAGE I-1

“They want to make sure the charities are being efficient,” Mr. Dean said. It’s a trend Ginger Mlakar, director of donor relations at the Cleveland Foundation, has noticed as well, and it may explain why donor-advised funds have become more popular in recent years. Donor-advised funds allow for more direct involvement in how a gift is spent over time, and it gives donors a look into how the Cleveland Foundation makes its funding decisions. Funds above $50,000 even get an assigned adviser from the foundation to aid in the selection of causes to which to give. According to the Cleveland Foundation, the number of donoradvised funds has increased from 374 funds in 2008 to 429 funds in 2012. They range from the minimum $10,000 investment to multimillion-dollar funds. And it’s not just the Cleveland Foundation seeing an increase in this type of giving. Laura J. Malone, director of gift planning at the American Endowment Foundation in Hudson, said the organization in 2012 accepted about $120 million in new contributions, doubling its amount of money in donor-advised funds from the year prior. The organization’s mission is centered on donor-advised funds; it aims to help donors and families establish an ongoing pattern of philanthropy through investments and planned giving.

Benefits all around According to the National Philanthropic Trust’s 2012 donor-advised funds report, which includes information on more than 650 charitable organizations nationwide, gifts to donor-advised funds made up about 3% of all charitable giving in 2011. Assets in donor-advised funds increased more than 17% from 2010 to 2011 to $37.43 billion. In general, taxpayers can get a deduction for donating up to 50% of their gross income, with some restrictions. With a donor-advised fund, the benefactor puts money into an account, getting his or her charitable deduction up front that first year, and then recommends charities for the fund to support over time. The money is invested, and donors can add to it, which

can result in additional tax deductions in later years. The flexibility and relatively low required investment is what makes donor-advised funds so attractive, said Kaye Ridolfi, the foundation’s senior vice president of advancement. It used to be that just the very wealthy could donate in this fashion by setting up a private foundation. CBiz’s Mr. Dean said donoradvised funds are a good bet for a donor who had a particularly strong year in terms of income, but isn’t sure where he or she would like to donate. The fund gives the option to offset income taxes by getting a big charitable deduction that year, but also gives more time to settle on which charities to support. Ms. Malone isn’t cheering the increase in donor-advised funds just yet, however. She said it’s difficult to tell if the growth was due to fears of the fiscal cliff or if it was a natural growth pattern. That will be more apparent at the end of 2013. And although she said she sees a need for more education on the donor-advised fund option among financial planners, she thinks there is an increased awareness of that particular charitable giving vehicle.

Taking stock of options At the Hospice of the Western Reserve, gifts of stock are the most popular alternative type of giving, aside from cash, and most of those contributions come at the end of the year, said chief development officer Sunny Masters. About 85% of the hospice’s funding comes from individuals, Ms. Masters said, and the organization accepts all kinds of gifts, from cash to real estate to insurance policies. The gifting of highly appreciated stock to charity allows donors to avoid capital gains taxes on earnings, Mr. Dean said. The donor — who must have held the stock for at least a year to be able to donate it — also gets a charitable deduction for the move. Ms. Malone of the American Endowment Foundation, who also encourages the giving of closely held stock such as that held by business owners, said this type of transaction is one of the best ways for donors to leverage their gift.

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Meanwhile, Naomi Ganoe, a senior manager at CBiz in Cleveland, said she has been seeing more people donating insurance policies to charity. With the insurance gift, there is no income to the donor anyway, Ms. Ganoe said, so there are no income taxes to avoid. But there is value to the gift, so donors can get a charitable deduction. Another related option, especially for older, midwealth clients who still need the cash flow, are gift annuities, Ms. Ganoe said. With those, a donor gives to a charity an asset, such as real estate or a portfolio of securities, and the charity and the donor reach an agreement on how much money the charity will regularly give back to the donor for a set period of time. The donors still get to take charitable deductions, but they don’t have to worry about running low on income.

TransDigm Group Inc.

406.69%

Sherwin-Williams Co.

264.80

Travel Centers of America LLC

256.66

PolyOne Corp.

213.83

J.M. Smucker Co.

158.89

Cedar Fair LP

150.90

Nordson Corp.

150.81

Park-Ohio Holdings Corp.

120.50

Nacco Industries Inc.

117.68

10 Chart Industries Inc.

108.69

SOURCE: S&P Capital IQ; www.spcapitaliq.com

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Win-win all around Finally, it also is not uncommon for a donor to use a required IRA distribution as a vehicle for giving — another move that can save costs for a donor, according to Ms. Ganoe. If an individual is older than 70½, the IRS requires an IRA withdrawal. If the taxpayer wants to avoid paying higher income taxes, he or she can transfer up to $100,000 directly to a charity, Ms. Ganoe said. That gift counts toward the required distribution, and by doing that, the donor does not get a deduction but he or she does avoid paying federal income taxes and Ohio income taxes on the funds. As with many personal financial strategies aimed toward nonprofits, the gift from the IRA is a winwin for the donor and cause alike. “If they are charitably inclined anyway, it’s a real benefit,” Mr. Dean said. ■

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INVESTINGGUIDE2013

I-6 CRAINâ€™S CLEVELAND BUSINESS

MAY 27 - JUNE 2, 2013

LARGEST PUBLIC COMPANIES RANKED BY MARKET VALUE

Company/Ticker symbol This Last Headquarters year year Phone/Website

Market value (millions) 4-30-2013

4-30-2012

Percent change

Net income (millions) 2012

2011

Percent change

2012 return on equity

Lines of business

Top local executive Title

32 34

National Interstate Insurance Co./NATL 3250 Interstate Drive, Richfield 44286 (330) 659-8900/www.natl.com

$570.4

$465.6

22.5%

$34.3

$35.5

-3.5

9.7

Specialty property and casualty insurance

David W. Michelson president, CEO

33 33

Materion Corp./MTRN 6070 Parkland Blvd., Mayfield Heights 44124 (216) 486-4200/www.materion.com

$541.5

$501.8

7.9%

$24.7

$40.0

-38.3

5.9

High-performance engineered materials

Richard J. Hipple chairman, president, CEO

34 31

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

$496.2

$552.4

-10.2%

$30.0

$24.5

22.3

13.0

Polymer and metal products; equipment for tire service

John C. Orr president, CEO

35 26

Nacco Industries Inc. (2)/NC 5875 Landerbrook Drive, Suite 300, Cleveland 44124 (440) 449-9600/www.nacco.com

$484.6

$950.2

-49.0%

$108.7

$162.1

-32.9

38.6

Coal mining, lift trucks, Alfred M. Rankin Jr. small electrical appliances chairman, president, CEO

36 39

Park-Ohio Holdings Corp./PKOH 6065 Parkland Blvd., Cleveland 44124 (440) 947-2000/www.pkoh.com

$450.1

$262.1

71.7%

$31.8

$29.4

8.0

31.2

Diversified manufacturer

Edward F. Crawford chairman, CEO

37 37

Preformed Line Products Co./PLPC 660 Beta Drive, Mayfield Village 44143 (440) 461-5200/www.preformed.com

$432.9

$307.9

40.6%

$29.3

$31.0

-5.5

12.2

Wire and cable products

Robert G. Ruhlman chairman, president, CEO

38 32

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

$429.1

$504.4

-14.9%

$1.8

($4.1)

0.3

Home health care equipment

Gerald B. Blouch president, CEO

39 42

TravelCenters of America LLC/TA 24601 Center Ridge Road, Suite 200, Westlake 44145 (440) 808-9100/www.tatravelcenters.com

$340.3

$181.3

87.7%

$32.2

$23.6

36.6

9.1

Interstate travel plazas; fuel, food, convenience stores and truck repairs

Thomas M. O'Brien managing director, president, CEO

40 38

CBiz Inc./CBZ 6050 Oak Tree Blvd. S., Suite 500, Cleveland 44131 (216) 447-9000/www.cbiz.com

$326.9

$304.2

7.5%

$31.1

$28.0

11.2

10.6

Provides outsourced business services

Steven L. Gerard chairman, CEO

41 36

Omnova Solutions Inc./OMN 175 Ghent Road, Fairlawn 44333 (330) 869-4200/www.omnova.com

$314.2

$362.2

-13.3%

$13.7

$9.7

41.2

10.3

Decorative and functional interior surfaces

Kevin M. McMullen chairman, CEO, president

42 41

Olympic Steel Inc./ZEUS 5096 Richmond Road, Bedford Heights 44146 (216) 292-3800/www.olysteel.com

$218.8

$230.4

-5.0%

$2.3

$25.0

-90.9

0.8

Steel service center

Michael D. Siegal chairman, CEO

43 40

Stoneridge Inc./SRI 9400 E. Market St., Warren 44484 (330) 856-2443/www.stoneridge.com

$211.3

$241.5

-12.5%

$5.4

$49.4

-89.1

3.6

Highly engineered electrical and electronic components

John C. Corey president, CEO

44 43

Shiloh Industries Inc./SHLO 880 Steel Drive, Valley City 44280 (330) 558-2600/www.shiloh.com

$167.4

$154.1

8.6%

$14.5

$8.9

62.9

13.7

Steel processing

Ramzi Y. Hermiz president, CEO

45 48

United Community Financial Corp./UCFC 275 Federal Plaza West, Youngstown 44503 (330) 742-0500/www.ucfconline.com

$136.7

$52.5

160.5%

($20.4)

$0.2

Bank holding company

Patrick W. Bevack president, CEO

46 44

Farmers National Banc Corp./FMNB 20 S. Broad St., Canfield 44406 (330) 533-3341/www.fnbcanfield.com

$124.0

$115.9

7.0%

$9.9

$9.2

7.8

8.2

Bank holding company

John S. Gulas president, CEO

47 51

Athersys Inc./ATHX 3201 Carnegie Ave., Cleveland 44115 (216) 431-9900/www.athersys.com

$117.8

$34.0

246.1%

($14.7)

($13.7)

Biopharmaceutical company

Gil Van Bokkelen chairman, CEO

48 46

PVF Capital Corp./PVFC 30000 Aurora Road, Solon 44139 (440) 914-3900/www.parkviewfederal.com

$97.9

$57.7

69.8%

$5.5

($8.1)

7.3

Bank holding company

Robert J. King Jr. president, CEO

49 45

Sifco Industries Inc./SIF 970 E. 64th St., Cleveland 44103 (216) 881-8600/www.sifco.com

$91.7

$105.6

-13.2%

$8.8

$7.4

18.1

13.8

Production, repair, plating, machining and marketing of jet engines

Michael S. Lipscomb president, CEO

50 49

LNB Bancorp Inc./LNBB 457 Broadway Ave., Lorain 44052 (440) 244-6000/www.4lnb.com

$67.1

$51.8

29.6%

$6.1

$5.0

22.1

5.5

Bank holding company

Daniel E. Klimas president, CEO

51 50

Middlefield Banc Corp./MBCN.PK 15985 E. High St., Middlefield 44062 (440) 632-1666/www.middlefieldbank.com

$56.4

$39.4

43.2%

$6.3

$4.1

52.1

11.3

Bank holding company

Thomas G. Caldwell president, CEO

52 47

First Citizens Banc Corp./FCZA 100 E. Water St., Sandusky 44870 (419) 625-4121/www.fcza.com

$55.6

$53.2

4.5%

$5.6

$4.0

41.0

5.4

Bank holding company

James O. Miller president, CEO

Cortland Bancorp/CLDB 194 W. Main St., Cortland 44410 (330) 637-8040/www.cortland-banks.com

$45.7

$2.9

$4.1

-28.5

5.9

Bank holding company

James M. Gasior president, CEO

National Bancshares Corp./NBOH 112 W. Market St., Orrville 44667 (330) 682-1010/www.discoverfirstnational.com

$38.9

$2.8

$2.6

7.6

6.2

Bank holding company

Mark R. Witmer president, CEO

Consumers Bancorp Inc./CBKM 614 E. Lincoln Way, Minerva 44657 (330) 868-7701/www.consumersbancorp.com

$33.0

$2.6

$2.5

5.1

9.1

Bank holding company

Ralph J. Lober II president, CEO

56 52

Wayne Savings Bancshares Inc. /WAYN 151 N. Market St., Wooster 44691 (330) 264-5767/www.waynesavings.com

$29.4

$26.3

12.0%

$1.7

-1.0

4.3

Bank holding company

Rodney C. Steiger president, CEO

57 60

Central Federal Corp./CFBK 2923 Smith Road, Fairlawn 44333 (330) 666-7979/www.cfbankonline.com

$23.6

$2.3

919.9%

($3.8)

($5.4)

Bank holding company

Tim O'Dell CEO

58 54

Ohio Legacy Corp./OLCB 600 S. Main St., North Canton 44720 (330) 263-1955/www.ohiolegacycorp.com

$15.4

$21.3

-27.8%

$0.1

$1.8

-93.7

0.6

Bank holding company

Rick L. Hull president, CEO

59 53

Avalon Holdings Corp./AWX One American Way, Warren 44484 (330) 856-8800/www.avalonholdings.com

$13.9

$21.7

-36.0%

($0.3)

$0.8

Hazardous and nonhazardous waste brokerage and management services

Ronald E. Klingle chairman, CEO

60 57

Datatrak International Inc./DATA 6150 Parkland Blvd., Suite 100, Mayfield Heights 44124 (440) 443-0082/www.datatrak.net

$10.6

$4.6

130.7%

($1.5)

($1.0)

Provider of clinical research services

Laurence P. Birch chairman, president, CEO

61 55

Energy Focus Inc./EFOI 32000 Aurora Road, Solon 44139 (440) 715-1300 /www.energyfocusinc.com

$10.3

$9.2

11.5%

($5.7)

($6.1)

Fiber optic lighting systems

James Tu executive chairman

Numerical information provided by S&P Capital IQ, www.spcapitaliq.com. The Market Cap and Total Return data used the April 30, 2013 close price for each company, net income figures represent trailing 12-month data through the quarter ending December, January or February depending on the fiscal year end of each company. NM=Not meaningful. (1) Hyster-Yale was spun-off from Nacco Industries Inc. and began trading on Oct. 1, 2012, on the New York Stock Exchange. (2) The decline in market value reflects the spin-off last Sept. 28 of its Hyster-Yale unit as a separate company.

RESEARCHED BY Deborah W. Hillyer

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INVESTINGGUIDE2013

MAY 27 - JUNE 2, 2013

Investors: Improvement is expected to continue in next 12 to 18 months continued from PAGE I-1

old adage that stock markets climb along a wall of worry. In other words, when no one is worried, itâ€™s time to get out,â€? said Mr. Klopp, an investment analyst and portfolio manager. â€œWeâ€™re still climbing that wall of worry. People are still worried about employment; they are still worried about their own personal finances; they are still particularly worried about the government finances and whatâ€™s going on in Washington.â€?

Risk takers Positive investor sentiment translates into a willingness to take risk, said Brian Rayle, a securities analyst who recently joined Dix & Eaton as a vice president specializing in investor relations. Mr. Rayle said there are things happening right now that point to bullish investor sentiment. â€œThe more confident you are, the more willing you are to take risks,â€? Mr. Rayle said. â€œIf you think the market is going down, you buy more puts. If you think the market is going to go up, you buy more calls, so the fact that calls are being bought at double the amount of puts means that people think things are going to go well.â€? (A call option is the ability to purchase a specific number of

shares by a certain date for a certain price. A put is the right to sell shares at a predetermined price by a certain date.) Indeed, Mr. Rayle also said Treasury bond purchases as a percentage of assets have been decreasing. â€œYou buy a Treasury bond with what they yield because youâ€™re scared,â€? he said. Mr. Heider, meanwhile, who has more than 30 years of working in retirement, estate, tax and business planning, said his clients now are asking him if they should be more aggressive. â€œWhen people start asking that question, itâ€™s usually indicative that the real bull (session) the market is about to run,â€? he said. â€œThose investors who have been sitting on the sidelines and with cash are about ready to start investing and that generally means that weâ€™ve got a pretty good period ahead of us. Those who have stayed out have certainly missed a great run, but I donâ€™t believe the run is over.â€? Ferenc Sanderson, a partner at hedge-fund research and advisory firm PrevInvest, which has offices in Cleveland and Rome, Italy, said following the great financial crisis, the mass-retail or middle-class investor wanted out of the volatility and risk associated with the stock market.

â€œYou saw a rotation into fixed income out of the stock market,â€? Mr. Sanderson said. â€œThere is still a lot of money on the sidelines. Will mass retail come back? I donâ€™t know. Thatâ€™s still a question.â€?

Getting back into the game Before 2008, investors would go into mutual funds, bonds and buy large numbers of stock regardless of what kind. Now people are into low-cost vehicles like ETFs â€” or Exchange Traded Funds â€” looking for yields and steady returns, he said. Mr. Heider said investors are concerned about what to do with the fixed income portion of their investment right now. High-net worth investors are moving into more private-equity type of investments, such as real estate, because they offer a higher yield with manageable risk, especially in a low interest rate environment. â€œThe market has substantial room for upward movement because of very low interest rates and the fact that corporate

CRAINâ€™S CLEVELAND BUSINESS I-7

TOP TWO-YEAR RETURNS TWO-YEAR RETURN AS OF APRIL 30, 2013

RK COMPANY

United Community Financial Corp.

197.70%

Cedar Fair LP

146.73

Sherwin-Williams Co.

128.90

TransDigm Group Inc.

93.23

First Citizens Banc Corp.

83.88

PVF Capital Corp.

82.52

Middlefield Banc Corp.

76.77

Chart Industries Inc.

74.51

Park-Ohio Holdings Corp.

72.51

10 Nacco Industries Inc.

65.59

11 PolyOne Corp.

59.50

12 Farmers National Banc Corp.

51.17

SOURCE: S&P Capital IQ; www.spcapitaliq.com

America is sitting on record amounts of cash which â€Ś theyâ€™ll redeploy into expansions and additional hires,â€? Mr. Heider said.

â€œThere are plenty of reasons to be optimistic as an investor that things are going to continue to improve in the next 12 to 18 months,â€? he said. â–

COMING UP Sends us your â€˜Who to Watchâ€™ nominations for law Crainâ€™s Cleveland Business in 2013 is continuing its series of â€œWho to Watchâ€? sections. The next section, slated for publication July 15, will highlight up-and-comers in Northeast Ohioâ€™s legal sector. If you think you know who will be among those leading Northeast Ohioâ€™s legal scene of the future, drop an email to sections editor Amy Stoessel, astoessel@crain.com, or call

216-771-5155. Please send in your suggestions no later than noon on Monday, June 3. There are no hard-and-fast requirements for this section, other than the candidate needs to exhibit the kind of potential that makes him or her someone to watch in law. Mark your calendars for the final section of the series, â€œWho to Watch: Finance,â€? on Nov. 25.

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MAY 27 - JUNE 2, 2013

Meters: 12% participation is the ‘norm’ Roadmap: ‘We’re overbuilt’ continued from PAGE 3

That’s not a bad percentage, according to Mark Durbin, manager of energy delivery and state communications for FirstEnergy. Mr. Durbin said it’s in the same league as participation rates for similar programs run by other utilities, a notion backed by others interviewed for this story. Plus, even at a 12% participation rate, the program could do a lot to relieve stress on the grid as the number of customers with smart meters grows, Mr. Durbin said. “The larger number you have, the more you can move the meter,” he said. That number will increase this summer, when FirstEnergy installs the 37,000 smart meters in the same group of East Side suburbs, which stretch from Mayfield Heights to Mentor. Phase two of the pilot project is intended to give the company a better sense of whether the smart meters and demand response programs are worth the investment. FirstEnergy is paying for half of the $60 million pilot project — which included several substations upgrades intended to improve other aspects of the area’s power grid — through fees its Ohio customers started paying in 2011. The rest is covered through a grant from the American Recovery and Reinvestment Act of 2009. The $787 billion economic stimulus bill financed $4.3 billion in “smart grid” projects. That federal money won’t be available if FirstEnergy decides to install even more smart meters and expand its demand response program. “Our focus right now is to see, does it really do what proponents say it’s going to do, as far as reducing usage?” Mr. Durbin said.

Turning up the heat Here’s how the demand re-

sponse program works: On particularly hot days, participating customers can carve 40 cents off their energy bills for every kilowatt-hour of power they don’t use, compared to the amount of electricity they used five days earlier. When one of those hot days is coming, FirstEnergy sends out messages via email, text and phone alerting participants about an opportunity to get that credit by saving energy during a particular time frame. Roughly half the participants chose to receive Internet-connected thermostats that allow FirstEnergy to control their air conditioners. Unless they opt out after receiving an alert, FirstEnergy will let the temperature rise a few degrees. If customers get hot, they still can crank up the AC manually. The rest of the participants in the program control their own thermostats. Neither group was much more active than the other, Mr. Durbin said. “For the most part, people participated,” he said. Participation in a demand response program run by the city of Wadsworth has been solid if not stellar, according to Gene Post, manager of the city’s utility division, Wadsworth Electric & Communications. The city, which is southwest of Akron, has installed smart meters at nearly all the 13,000 homes and businesses the utility serves. About 1,200 of those customers — just over 9% — opted to receive an Internet-connected thermostat that will allow the utility to dial back their air conditioners on particularly hot days this summer, assuming they don’t opt out via email. The city was aiming to get 3,000 customers to participate, Mr. Post said,

noting that he still believes the city can reach that figure eventually. Only 80 customers chose to receive load control devices that let the city-owned utility turn down their hot water heaters and pool pumps when demand for power is high, Mr. Post said. And only 85 signed up for a “time of use” program that charges them different rates for electricity depending on when they use it.

Incentives matter Overall, though, Mr. Post said he was happy with participation in the demand response program, which gives customers $25 for signing up and another $10 per month in the summer if they don’t opt out more than once. Reducing peak demand is important because it helps the utility avoid upgrading its infrastructure, he said. Customers should like it, too, he said. “It gives them an opportunity to save and be a little more engaged with us,” Mr. Post said. The city is paying for half of the $10.8 million project. The other half is paid for through the federal stimulus bill. Other utilities have struggled to get large percentages of their customers to sign up for demand response programs, said Marianne Hedin, a senior research analyst for Navigant Research of Boulder, Colo. She noted that FirstEnergy’s 12% participation rate is “pretty much the norm.” Participation rates hinge on the incentives — $25 per year is too small, Dr. Hedin said — and the amount of marketing utilities do. However, demand response programs should become more popular as more people become familiar with them. “The adoption of a new technology, a new practice, a new way of behaving, it takes time,” she said. ■

continued from PAGE 1

But its work — offering regional planners, transportation administrators and politicians a roadmap for the physical development of the region — could affect the ability of Northeast Ohio businesses to attract workers and even shape where and how businesses will expand. What’s more, if it can build a broad coalition, NEOSCC’s legacy could be reining in the cost of government, which has become a drag when it comes to attracting business investment. “This is picking up the pieces from the collapse of the industrial economy,” said Hunter Morrison, the former Cleveland city planner director who is director of NEOSCC, in an interview last Thursday, May 23. “We are the first region in the country to attempt to model abandonment on this scale,” Mr. Morrison said. “We’re developing the tools and dialogue to get to new solutions to this problem.” The federal government is financing this effort and similar programs around the country. The Department of Housing and Urban Development kicked in $4.25 million to get NEOSCC started, and local philanthropies, led by the Fund for Our Economic Future, added $2.3 million. While the voices of business people were not noticeable during at least three of the six workshops held in early May in places that included Akron, Cleveland, Oberlin and Warren, there is some recognition of its importance. Deb Janik, a senior vice president of the Greater Cleveland Partnership who oversees the regional chamber of commerce group’s infrastructure and physical development activities, is a bit overwhelmed by the scope of the NEOSCC undertaking and believes it may be too early for an organization such as hers to get involved. “From a business perspective, I think it’s something we have to come into in the right place,” Ms. Janik said. “It’s all going to boil down to zoning and assets and where is the work force, and where is the public transportation, and how do you know where the right (infrastructure) investments are.” The time for discussing those more concrete issues, Ms. Janik maintains, is not yet ripe. But she acknowledged the time will come before land use and zoning policies are set about whether a town will let a sewer line be extended to a new housing development that will increase the community’s cost for police patrols, or whether a transit agency can justify the cost of bus service that would reach a new call center or some other large employer. Those kinds of decisions will affect business growth and expansion.

On the right track? Brad Whitehead, president of the Fund for the Future, understands some of the trepidation business people may have in getting too deep in a highly technical planning process. Mr. Whitehead noted that the business and philanthropic communities are deep in their own analysis, one called the “Regional Economic Competiveness Study,” or RECS. That study, led by former Alcoa Inc. executive William Christopher, is expected to develop priorities for a regional economic strategy. But Mr. Whitehead said he believes the business study and the

NEOSCC planning process need to grow together. “When either businesses or citizens say, ‘Why are my taxes so high?’ the reason taxes are so high is because of runaway costs, which are in turn related to our development path,” he said. “Anybody who cares about taxes has to care about land use.” Mr. Whitehead said he believes the two planning tracks must be more closely connected. “You can’t separate land use from economic development, from transportation,” he said. “You’ve got to have workers close to employers, and you’ve got to have infrastructure costs that make you competitive. These are two sides of the same coin.”

Making a list At one of the NEOSCC workshops, on May 2 at the Akron Urban League, consultant James Minor prepared the 80 people who gathered for the session by framing the problem. The consultant from Sasaki Associates Inc., a Watertown, Mass., architectural and urban planning firm, pointed to a slide that indicated that as a group, local governments in Northeast Ohio today are spending 1.5% more money than they take in. By 2040, his projections indicate, that deficit will grow to 19.9%. “The most fiscally strong county in 2040 will be weaker than the weakest county today,” Mr. Minor predicted. He went on to say that it is building and maintaining infrastructure — roads, sewers, utility lines — that are driving up the cost of government. “Infrastructure is one of those things that really drives fiscal impacts,” Mr. Minor said. “It’s the highest single determinant in understanding the fiscal health of the community.” The attendees then broke into table groups with a map of the region. They were asked to discuss what land use decisions they would be make and what infrastructure projects they believed deserved the highest priority when public money was tight for development. After an hour’s discussion, the table groups presented their ideas to the larger group. Many wanted better transportation between Akron and Cleveland and Lorain, some even specifying rapid transit connections. Others fenced off large swaths of undeveloped land for recreational use. Most also believed it was important to commit tax money to clearing away abandoned homes for the redevelopment of the central cities of Cleveland, Akron and Canton.

‘We’ve overbuilt’ Talking with Crain’s editors and reporters in March of this year, Mr. Morrison explained why he believes this kind of regional planning effort is needed. He said 40 years ago planners assumed the 12-county region, then with a population of 3.8 million people, would grow by one million people. That didn’t happen. “This region is about 300,000 people fewer than it was in 1970, but our (developed acreage) has grown by over 20%,” Mr. Morrison said. “We built the region we planned in 1970, but we don’t occupy it. We’re overbuilt.” The NEOSCC process, he maintains, could avoid that mistake again. ■

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CRAIN’S CLEVELAND BUSINESS

Style: Six more entrepreneurs are ready to move into second renovated house continued from PAGE 1

That’s the brand name for a residential area along the Kansas-Missouri border that started attracting entrepreneurs and media attention after Google connected the neighborhood to its ultrafast fiber-optic Internet service. “Now you’ve got the makings of a startup village here in Shaker Heights,” he said. A former real estate investor, Mr. Goldstein said he has talked to a few private investors who have expressed interest in the area. There is a lot of demand for nearby housing among LaunchHouse entrepreneurs who want to live — and in some cases set up home offices — near the accelerator, he noted. On the first day that they could apply, 19 entrepreneurs affiliated with the for-profit business accelerator put in requests for the nine slots available in the first two houses on Chelton Road.

The right environment Among the applicants was Art Geigel. He and two other LaunchHouse entrepreneurs on May 10 moved into the house at 3553 Chelton Road, which had been owned by an out-of-town investor who owed back taxes on the property. Now the co-founder of iOTOS — a startup that makes hardware and software designed to let people control beer taps, garage doors and other products from a smart phone — can walk to LaunchHouse. And his commute will become even shorter once a door is cut through the fence that separates his new backyard from the LaunchHouse building. Being so close makes it easy “to get out of the house and work in an environment with lots of creative people,” said Mr. Geigel, who pays $400 a month, utilities included, for his place in the house. He gets to live with creative people, too. Now he easily can share ideas and work through business issues with his roommates, Matt Strayer and A.J. Mihalic. They founded Widdle, a startup developing software designed to help people sift through their social media feeds. The three entrepreneurs became friends last year when their companies went through the LaunchHouse Accelerator, a boot campstyle program designed to help startups find customers as quickly as possible. “It’s really nice to have living with you the type of people you’d want to hang out with anyway,” Mr. Geigel said.

True fixer-uppers Shaker Heights bought and renovated the houses with the help of a $250,000 grant from the federal Neighborhood Stabilization Program. The funds must be used to provide housing for people with low to moderate incomes, and many entrepreneurs trying to launch high-growth companies fit the bill. Even if their companies become profitable, in the early years they often funnel much of the money back into their businesses. The neighborhood is in need of repair. Next to Mr. Geigel’s new home is a house with a boarded-up entrance. This past winter, the city demolished two dilapidated houses

JANET CENTURY

Art Geigel, Matt Strayer and A.J. Mihalic operate Widdle, a startup software company, out of this renovated house in Shaker Heights.

“It’s really nice to have living with you the type of people you’d want to hang out with anyway.” – Art Geigel, co-founder, Widdle, on the LaunchHouse he shares with his business partners on nearby lots. Now the empty lots are marked by big patches of straw. The second house for entrepreneurs at 3599 Chelton Road had been in foreclosure. The two entrepreneurial houses are intended to show what can be done with other homes in the neighborhood. The two, 1920s-era houses each include a wall painted so that it acts like a white board. The houses now have power outlets all over the place, even on the ceiling for projectors. The city also aims to find money to connect the buildings to LaunchHouse’s fiber-optic Internet line, which is provided by the broadband nonprofitOneCommunity, said Kamla Lewis, director of neighborhood revitalization for Shaker Heights. “This is really the next important step,” said Ms. Lewis, who wouldn’t provide an address for the third city-owned house on Chelton Road.

Infiltrating a community By the end of the month, six more entrepreneurs are expected to move into the second house, said Lou Tisler, executive director of Neighborhood Housing Services of

Greater Cleveland. The nonprofit took ownership of both buildings from Shaker Heights this month and is playing the role of property manager. The city also has worked to attract established businesses and their employees to the Moreland neighborhood. One of those businesses was LaunchHouse. The city two years ago renovated the former Zalud Oldsmobile dealership on Lee Road to provide a large, visible space for the fast-growing business accelerator, which also makes small investments in startups. Now the city is putting up $150,000 to renovate 3,000 square feet on the building’s second floor for Good Greens, a growing LaunchHouse company that makes nutritional snack bars. Since LaunchHouse moved into the former car dealership, Shaker Heights has wanted to find a way to get entrepreneurs from the accelerator to live nearby, Ms. Lewis said. Guiding them to Chelton Road not only puts them near LaunchHouse, but also increases the odds they’ll form new connections with their entrepreneurial neighbors, she said. “Having a concentration is important because you want to create a collaborative community,” she said. And that community will keep growing, if Todd Goldstein has his way. “Over time our goal is this whole street, this whole community,” he said. ■

WHAT IGNITES YOU? E D U C AT I N G P H Y S I C I A N S , P H A R M A C I S T S A N D H E A LT H C A R E R E S E A R C H E R S

n e o m e d . e d u

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COSE: Services are more accessible Community: Alums are redefined continued from PAGE 1

Among the changes is a program, begun last fall, to open COSE’s educational, group purchasing and information resources to small businesses that belong to one of the many suburban Northeast Ohio chambers of commerce. It is offering a reduced-rate membership in COSE to members of those chambers. COSE believes its size — it has a staff of more than 50 — allows it to offer a breadth and depth of services few chamber groups in the country can match. And it has tailored its shared services to complement, rather than compete with, the suburban Northeast Ohio chambers “There will always be a need for that local chamber that has the pulse of the local business community,” said COSE chairwoman Sharon Toerek, a partner in the Independence law firm of Licata & Toerek. “But a lot of them can’t do both that and provide high-quality content that we have the ability to do.” COSE also is looking at offering those same services on an a la carte, fee-for-service basis to members of chambers and small-business organizations in other parts of Ohio. “Our focus is helping small business owners achieve their idea of success,” said COSE president Steve Millard. “I don’t care where they are; I want to help them.”

A bias against joining In a meeting last Tuesday, May 21, with Crain’s editors and reporters, COSE volunteer leaders and staff members outlined how, with its 40th anniversary just past, the small business advocate is adapting to a world where business owners have a broad array of organizations a company can join — if the owners even want to affiliate with a bricks-and-mortar entity. “It’s a pretty well-known fact that membership in trade associations has shrunk,” said Rion Safier, COSE’s vice chairman and managing director of CoreFocal Inc., a Westlake business services provider. “The (Gen) Xers and Yers are not big joiners.” In addition, the recession and increased competition in the market for health insurance both cost COSE membership. Until 2006, COSE built and ran its own health insurance program, which helped it gain members among businesses, such as one-person shops, that couldn’t get reasonably priced health coverage elsewhere. That year, it contracted exclusively with Medical Mutual of Ohio to handle the insurance program. COSE membership peaked at more than 16,000 at that time and has declined since.

Listening, then responding The organization’s re-evaluation began in February 2011 when COSE brought together about 250 members for what it called a Small Business Summit, a brainstorming session. “We put a lot of time and energy into asking small businesses how their lives have changed and how their world has evolved, and (we’re) trying to adapt the product and the services that COSE offers to the challenges they face on a day-

Contact: Phone: Fax: E-mail:

to-day basis,” Ms. Toerek said. From that process, Mr. Millard said, COSE detected a need to make its services more accessible to “time-impoverished” small businesses owners. It’s translating that discovery into a concierge-style approach to organizing and distilling information, such as how to access capital, into formats that small businesses can access more easily. It also is slicing its membership into life-cycle segments, acknowledging that different groups of its members have different needs. It first will attempt a program for its youngest businesses that will be called “Startup Solutions” until a better name if found. Ms. Toerek said specialized nonprofit organizations, such as JumpStart (for growing entrepreneurial businesses), Magnet (manufacturers) and NorTech (emerging technologies), are attracting some businesses that otherwise might have joined the organization she leads. But she maintains a revamped COSE still will be left with a large pool of potential members for its programs, especially its energy and advocacy programs. Through its group buying power, COSE offers members ways to save money on electricity and natural gas and has developed relationships with financial institutions to help members finance energy-efficiency investments. “We work with big vendors on a big scale,” Mr. Millard said. “So we’ve got access to 35 suppliers for that energy program.” COSE also will be selling the value of its state government advocacy, believing it has the lobbying capacity and savvy to represent small businesses and smaller chambers of commerce across the state.

Hand-in-hand relationships COSE already is offering affiliate memberships to members of 14 suburban chambers, including those in Ashtabula County, Brunswick, Euclid and the Heights Hillcrest area. To affiliate with COSE, a company in the Heights Hillcrest area with two to five employees would pay annual dues of $350 — $200 for the Heights-Hillcrest Chamber and $150 for COSE. Joining COSE directly would cost $300 annually. Angie Pohlman, executive director of the Heights Hillcrest group, said about one-third of her group’s 300 members have taken advantage of the affiliate program since last fall. In particular, she believes her members will benefit from COSE’s government advocacy program. “We’re a two-person staff,” Ms. Pohlman said. “They have a staff of people dedicated to small business advocacy.” Sheila Gibbons, executive director of the Euclid Chamber of Commerce, said COSE staff members helped her put together what she calls “street teams” — groups of Euclid chamber board members and COSE staffers literally knocking on the doors on unaffiliated businesses selling membership. “It’s been great for us to walk in to some of these businesses that we haven’t had a chance to meet yet,” Ms. Gibbons said. ■

Denise Donaldson (216) 522-1383 (216) 694-4264 DDonaldson@crain.com

continued from PAGE 3

“In the advancement arena at community colleges, alumni relations is by far the hottest topic out there,” said Paul Heaton, director of the Center for Community College Advancement at the Council for Advancement and Support of Education in Washington, D.C. “Everybody is talking about it, and everybody is trying to figure out what to do,” Mr. Heaton said. “As is the case at most community colleges, they’re trying to figure out how to do more with fewer resources.”

Redefining ‘alumni’ The malaise surrounding community colleges’ alumni outreach has been rooted in a notion — one that some suggest might be misguided — that their alumni don’t feel the same connection with their campuses as those who attended four-year institutions. Some say the lack of on-campus housing or robust athletic programs, and the many students who transfer to other institutions before earning a degree, hamper their ability to reconnect. However, Mr. Heaton said recent research contradicts those claims, as it suggests donors don’t completely transfer their allegiance to four-year institutions. “I think community colleges have done a good job of perpetuating that myth,” Mr. Heaton said. “In some respects, it’s become a self-fulfilling prophecy.” Local community colleges appear to be heeding the call to change, as they expand upon the traditional definition of “alumni” and reach out to prospects who only might have taken a class or two at their institutions. At Tri-C, more than 35,000 students have transferred from the community college to a four-year school over the last five years. “All of those people we’re trying to reach,” Mr. Moran said. “It’s the alumni and friends association. We want you if you just have an affinity for the institution.” Lakeland is on the same path. Within the last year, Lubrizol Corp., the Wickliffebased specialty chemicals maker, gifted Lakeland $5,000 for a consultant to give Lakeland’s alumni outreach efforts a onceover, said Bob Cahen, executive director of the Lakeland Foundation. Besides reaching out to those who might have taken just a few classes at the school, Mr. Cahen said Lakeland is exploring how it might engage former students in ways other than through discounts at the campus bookstore or free theater tickets. The college instead is looking at new volunteering, networking and mentoring opportunities for alumni. While still early in the process, Mr. Cahen said Lakeland also is looking to “create

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structures through our foundation” that tie graduates to specific departments within the college, as they might have more allegiance to a specific program than Lakeland as a whole. “Our view is that we can’t just go out and ask for dollars,” Mr. Cahen said. “What we need to do is take that intermediary step and get them back and feeling good about their community and Lakeland. The dollars will flow after that.” Given that the area’s community colleges are financed in part through levies, the newly energized alumni base could be used to drum up support for the respective institutions in their communities. The fiveyear levy that supports Tri-C, for one, is slated for renewal next year. “Imagine an army out there of 30,000 Tri-C alumni and friends putting out yard signs and going to door,” Mr. Moran said. “They’re offering support not just from their pocketbook, but from their heart.”

Where are the resources? Because of their size, community colleges often run leaner operations than their four-year counterparts, and as such, their alumni operations typically are handled by a small staff or a single person. At Lakeland, for example, the college’s alumni outreach falls under the purview of the college’s foundation, which in all has about five people on staff. “The problem with all this there’s only so much we can do,” Mr. Cahen said. A survey released in March by the Council for Advancement and Support of Education found a correlation between the amount of time a college spends on alumni relations and the amount of private support it receives from its former students. “The fundamental rule in fundraising is you don’t get if you don’t ask,” Mr. Heaton said. “They have ceded this territory to the four-year schools. The vast majority of community college students end up living in the area that these schools service. That is a huge pool.” The survey also noted community colleges tend to do a poor job of tracking their former students and keeping in touch on a regular basis — something Tri-C, for one, said it is looking to improve upon. The college recently poured over LinkedIn for profiles with any mention of Tri-C. Also, Lorain County Community College is in the process of developing a strategic plan focused on improving communication with former students. “Because of their history and their nature and so many students transfer, the students themselves don’t really consider themselves alumni,” Mr. Heaton said. “Community colleges have to do a better job communicating with students on campus and once they leave.” ■

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20130527-NEWS--27-NAT-CCI-CL_--

5/24/2013

2:34 PM

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MAY 27 - JUNE 2, 2013

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

THEINSIDER

THEWEEK MAY 20 – 26 The big story: The Plain Dealer began filling in details for its reduced print home delivery schedule. Starting Aug. 5, the newspaper will be home delivered four days a week, not three as previously announced. It will publish full newspapers on Wednesday, Friday and Sunday as well as an abbreviated Saturday edition focused on sports and automobile classifieds. The Plain Dealer described the three-day-a-week full newspapers as a “premium print experience, with larger news sections and expanded local coverage,” plus a free-standing opinion section. Ignore the ‘nonsense’: Cleveland Cavaliers and Horseshoe Casino Cleveland co-owner Dan Gilbert expanded on his plans for the permanent casino, or Phase II, that he plans to build along the Cuyahoga River behind Tower City Center in downtown Cleveland. At the annual meeting of Positively Cleveland, Mr. Gilbert sought to answer skeptics who question Gilbert whether his Rock Gaming LLC ever will build a new, $500-million casino to augment the temporary, or Phase I, casino now operating in the former Higbee Building. “People are saying you’re not going to build Phase II,” he said. “That’s nonsense.” The curtail falls: The Cleveland Play House announced unexpectedly that Michael Bloom closed out his tenure as the theater troupe’s artistic director effective with the May 19 finale of the 2012-13 season after nine seasons at the helm. Play House directors will form a committee to conduct a national search for Mr. Bloom’s suceessor. Laura Kepley, currently associate artistic director, will serve as interim artistic director for the 2013-14 season. For the good of the order:

Sister Judith Ann Karam, who for 15 years has led the Sisters of Charity Health System, will resign from her post as president and CEO come July 26 to accept the position of congregational leader of the Sisters of Charity of St. Augustine, the founding religious community of the health system. In light of the change, the health system’s board named general counsel Terrence P. Kessler as interim president and CEO effective July 28.

Buffing their image: Medical imaging firm ViewRay Inc. in Oakwood Village said it had raised another $15 million from seven investors since May 8. The company has developed a machine that can obtain real-time images of a cancerous tumor while doctors shoot the tumor with radiation. ViewRay has raised nearly $100 million in venture capital since early 2008.

Numbers guy: KeyCorp found the replacement for its chief financial officer, Jeffrey Weeden, who announced earlier this month that he’s retiring from the banking company after nearly 11 years in the post. The new CFO is Donald R. Kimble, who spent the last nine years as CFO of Huntington Bancshares Inc. Far apart: RPM International Inc. said the U.S. Bankruptcy Court in Delaware issued an opinion estimating current and future asbestos claims associated with two bankrupt RPM units at about $1.17 billion — far higher than the number the company had in mind. The court’s opinion concerns Bondex International Inc. and Specialty Products Holding Corp., which filed for bankruptcy in May 2010 with plans to set up their own asbestos-victims trust to resolve future and current lawsuits. RPM said Bondex and Specialty Products “firmly believe the opinion substantially overstates the amount of their liability and is not supported by the facts or the law.” It said Bondex and Specialty Products “intend to appeal” the opinion.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

‘Like’ Benesch, and make them pay

■ Cleveland-headquartered law firm Benesch wants the community to know it likes to give, and wants the community to “like” its Facebook page so that it gives more. The firm announced last Tuesday, May 21, that it will give $1 to the victims of last week’s tornadoes for every Facebook “like” its page gains through this Wednesday, May 29. Though Benesch’s official word is that it will donate up to $5,000 to the American Red Cross Disaster Relief Fund to aid the victims in Oklahoma and neighboring states, if its new “likes” warrant it, it likely will give more than that amount, said Liz Boehm, Benesch’s interactive marketing manager. Ms. Boehm, who has family in the Oklahoma City area, has maintained the firm’s social media pages since January, when she was promoted to her current position. Many observers say law firms have been slow to adopt social media, and Ms. Boehm herself — as president of the Ohio chapter of the Legal Marketing Association — acknowledges it, but says firms are recognizing that the absence of a social media presence puts them “behind the game.” “If you don’t have that presence, I think people will notice,” she said. Benesch itself joined Facebook in late

October, and had 86 likes before posting its fundraising offer. As of mid-morning last Friday, its likes had increased 516% to 530 likes.—Michelle Park

Akron General begins to strut its stuff ■ Akron General Health System has launched a major marketing blitz — its first in several years — in hopes of re-establishing itself in a market that has been consumed over the last decade by its muchlarger competitor, Summa Health System. The advertising and marketing campaign, which is slated to run through year’s end, is focusing on Akron General’s position as a wellness leader, according to Tom Neumann, senior vice president for strategy, marketing and communications at Akron General. Besides its medical center in downtown Akron, Akron General operates a slate of health and wellness centers throughout Northeast Ohio. The wellness concept was driven by Dr. Thomas “Tim” Stover, an Akron General veteran who has served in the CEO role since early last year. “We’ve invested in wellness for the past 16 years, and we’re not just talking about wellness but investing in it and making it happen,” said Mr. Neumann, who joined the system last year to help reinvigorate its marketing efforts. The campaign’s tagline is “My Health. My Life.” It’s supported with messaging that Akron General has the resources to guide consumers toward a healthy lifestyle. Mr. Neumann wouldn’t disclose the cost

WHAT’S NEW

BEST OF THE BLOGS

COMPANY: Vitamix Corp., Olmsted Township PRODUCT: Modular Blending System

Excerpts from recent blog entries on CrainsCleveland.com.

The maker of highend blending equipment for commercial and home use says its new technology increases speed of service and accuracy of “drink build” via a “compact, quiet package that blends to precisely the same smooth consistency every time.” The Modular Blending System was created for high-volume, drive-through restaurants. Its fully automated ice, puree and blending system “provides faster, consistent, more accurate, hands-free recipe builds of smoothies and other blended treats,” Vitamix says. The accuracy of the drink build “improves cost of goods by reducing waste,” according to the company, and the system optimizes space by taking up less than 30 linear inches of counter space. Vitamix says the Modular Blending System “consistently takes less than 45 seconds from order to cap on the drink, with limited operator involvement, thanks to the system’s one-step dispensing process.” The system can be operated with one or two blenders, automated puree dispense or pump dispensing, automated ice dispense or ice scoop dispensing, or with automated pitcher rinsing to quickly prepare the container for the next drink, according to the company. For information, visit www.vitamix.com.

Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.

Cup of coffee pays off ■ Surgical Theater LLC of Cleveland was featured in a nearly 3½-minute segment of “Erin Burnett OutFront” on CNN. Dr. Warren Selman, neurosurgeon-inchief at University Hospitals and medical director of Surgical Theater, explained how the company’s software enables doctors to practice on 3-D images of their patients’ brains while supervised remotely by other surgeons. For instance, images of brain aneurisms can be rotated to enable surgeons to determine the best course of action. The CNN piece noted that Surgical Theater’s launch stems from a chance encounter Dr. Selman had in a coffee shop with company co-founders Moty Avisar and Alon Geri, two former Israeli Air Force officers. The story likened Surgical Theater’s technology to flight simulators that help pilots practice critical missions. Dr. Daniel Barrow, a neurosurgeon at Emory University in Atlanta, was impressed by the Surgical Theater technology. “Every time I’ve seen it, it gets better and better,” he said.

Watch what you say ■ Ohioans, WTF? The Marchex Institute recently used callmining technology to aggregate data from more than 600,000 phone calls placed from consumers to businesses across 30 industries. After scanning for curse words and linking the frequency of those words with all 50 states, Forbes.com reported, “they found people in Ohio are more likely to curse than any other state.” Right behind us are the potty-mouthed residents of Massachusetts, Arizona, Texas and Virginia. People from Washington state are least likely to curse.

of the campaign, which was developed with Hitchcock Fleming & Associates Inc. of Akron. — Timothy Magaw

Trainer trains its sights west ■ The Cleveland Industrial Training Center has continued its expansion and is in line to take its expertise out west, according to its director. The training center offers classes in CNC (computer numerical control) and Swiss CNC machining, with current locations in Cleveland, Akron and Mentor. Director Timothy J. Duffy said a Colorado-based business recently approached him with an interest in replicating the program at its shop. The agreement isn’t official yet, but Mr. Duffy hopes it will be finalized in early June. The Cleveland Industrial Training Center program must be coupled with a local manufacturer, Mr. Duffy said, and it offers hands-on training on real machines in real plants. The training center’s Swiss CNC program, which began in 2010, has been getting national attention of late, Mr. Duffy said. The high-precision machines are relatively expensive and outside training programs are rare. He said he has seen people travel from as far as Texas for seats in a one-week class. The center only enrolls seven students at a time in its full-length, five-week Swiss CNC program at both the Cleveland and Mentor sites, and Mr. Duffy said the program has 100% job placement for those graduates who don’t already have jobs. — Rachel Abbey McCafferty

“According to the data, Washingtonians curse about every 300 conversations, whereas Ohioans swore about every 150 conversations,” Forbes.com says. In addition, the Marchex data found Ohio is one of the “least courteous” states, ranking as the fifth least-likely state to say “please” and “thank you.” The least courteous state is Wisconsin; the most courteous is South Carolina.

Gaming is good for you (maybe) ■ Researchers are looking closely at whether some computer games can “ward off the cognitive declines that usually come with age,” The Wall Street Journal reported. However, a Cleveland Clinic official quoted in the story was a bit of a skeptic. The Journal said a government-financed study found that playing a game called Double Decision — it involves matching motor vehicle and road signs amid a series of increasing distractions — “can slow and even reverse declines in brain function associated with aging, while playing crossword puzzles cannot.” The study builds on an earlier large trial, which found that older people who played various cognitive games “had better health-related outcomes, driving records and performed better at everyday tasks such as preparing a meal.” Some doctors say there still isn’t enough evidence to prove such exercises will help people in everyday life. “What they do is they train you with a computer program to do better on a test” of cognitive function, Barbara Messinger-Rapport, director of the Clinic’s Center for Geriatric Medicine, told The Journal. “But does that mean you do better on real-life activities that utilize those skills such as driving … or managing your medications?”

20130527-NEWS--28-NAT-CCI-CL_--

5/23/2013

2:11 PM

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Crain's Cleveland Business

Published on May 24, 2013

May 27 - June 2, 2013 issue

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