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United execs laud efforts to back local hub Early results of campaign to encourage businesses to fly merged airline on track By JAY MILLER jmiller@crain.com RENDERINGS PROVIDED

BROWNS, CLEVELAND’S TOP CHEFS TEAM UP Symon, Whalen, Sawyer will be featured in stadium’s club, suite levels; parties, corporate functions also now have access

By JOEL HAMMOND jmhammond@crain.com

The challenge from Jeff Smisek, the CEO of United Airlines, was simple. And, at least so far, it appears that challenge to the Cleveland business community is being met. “Every hub needs to earn its value every day,” he told an audience of Northeast Ohio civic and business leaders at a November 2010 luncheon in downtown Cleveland. “The key for Cleveland is to have a level of

business travel so that we can have either consistent profitability or have that hub’s profitability in a clear line of sight (ahead).” The Greater Cleveland Partnership-led marketing campaign that arose from Mr. Smisek’s comments — dubbed “United for Cleveland’s Hub” — began in earnest in January. Early returns look good. “Cleveland is to be commended” for encouraging customers to choose United Airlines, said Greg Hart, See UNITED Page 24

NOTICE TO READERS

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he Cleveland Browns are making changes to their catering offerings in the premium seating areas of Cleveland Browns Stadium, and the new provider will bring with it the cachet of a few local heavy hitters. Already with presences at Quicken Loans Arena, Michael Symon and Rocco Whalen will be featured in Aramark’s new offerings in the suites and club level at Browns Stadium. They’ll be joined by fellow well-known restaurateur Jonathon Sawyer. The Browns have formed a new company, Cleveland Browns See CHEFS Page 8

INSIDE: Jonathon Sawyer is preparing Italian concept for a University Circle opening next year. Page 8

Crain’s print edition to return July 9 Crain’s will not publish a newspaper on Monday, July 2. For the latest Northeast Ohio business news during our hiatus, visit www.CrainsCleveland.com.

Region’s manufacturers buoyed by buying binge Cash surplus has led to bevy of acquisitions By GINGER CHRIST gchrist@crain.com

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Some of Northeast Ohio’s largest manufacturers are on a buying spree that shows no signs of abating. Flush with cash from three years of post-recession sav- Sullivan ings, they’re putting their reserves to use in the purchase of companies. Since June 2011, the 10 largest publicly traded manufacturing companies in Northeast Ohio acquired 29 businesses, more than half of which were based outside the United States. In the previous

year, the numbers were nearly similar. Among the buyers is RPM International Inc. The Medina-based maker of coatings and sealants completed five transactions in its fiscal 2012, which ended May 31, and has plans for more, according to chairman and CEO Frank C. Sullivan. The company is considering purchasing specialty coatings and building materials companies in both North America and overseas, Mr. Sullivan said. See BUYING Page 6

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MAKING IT Analyzing compensation trends across various sectors in Northeast Ohio ■ Page 15 PLUS: EARNINGS POTENTIAL ■ COST OF LIVING ■ & MORE

Entire contents © 2012 by Crain Communications Inc. Vol. 33, No. 25

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CRAIN’S ON THE WEB Crain’s expanded photo slideshows ■ Crain’s has expanded its offering of photo slideshows, from an inside look at Calfee’s striking new space in downtown Cleveland to this week’s gallery of The Country Club in Pepper Pike, which is preparing to host the U.S. Women’s Amateur. To view our shooters’ latest work, click on the multimedia section at www.CrainsCleveland.com.

REGULAR FEATURES Big Issue ......................11 Best of the Blogs ..........26 Classified .....................25 Editorial .......................10 Going Places ................12

List: Highest-paid CEOs ..................22-23 Personal View...............10 Tax Liens......................14 Reporters’ Notebook.....26

WWW.CRAINSCLEVELAND.COM

JUNE 25 - JULY 8, 2012

THE STATE OF INTELLECTUAL PROPERTY Ohio has nearly 2.7 intellectual property-supported jobs, the fifth-highest total in the country, according to a new report from the U.S. Chamber of Commerce’s Global Intellectual Property Center. The report measured research and development spending, the number of scientists and engineers, and the amount of patents, trademarks and copyrights produced to determine the number of jobs supported by the IP industry. Here are data for the top five IP states:

State

IP-supported jobs

IP-supported job wages

California

7.39 million

$65,171

Texas

4.62 million

$55,148

Illinois

2.83 million

$56,525

New York

2.78 million

$69,581

Ohio

2.69 million

$48,646

SOURCE: U.S. CHAMBER OF COMMERCE; WWW.THEGLOBALIPCENTER.COM

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First Fed of Lakewood seeing loan demand rise

INSIGHT

Companies’ mobile dos, don’ts lists growing With more devices in the workplace, firms’ policies more detailed

Bank’s originations double, and its competitors are taking notice

By CHUCK SODER csoder@crain.com

By MICHELLE PARK mpark@crain.com

Three years ago, if a company had a policy regarding how its employees should use their mobile devices, it consisted of maybe a few pages, max. Now some companies that work with mobile device management firm Vox Mobile Inc. of Independence have policies that are 10 or 12 pages long. The influx of so many different high-powered mobile devices has made life more complex for the people charged with managing them, according to several information technology experts in Northeast Ohio. Over the past two years, many local businesses that previously issued nothing but companyowned BlackBerrys have started letting employees use iPhones, iPads and Android phones, too. Thus, they’ve got more devices to secure and support. And their employees have toys with all sorts of capabilities that can be abused and misused. Making matters even more difficult, many businesses are starting to let employees use their own smart phones and tablet computers, as opposed to company-owned devices, to tap into corporate networks that often contain sensitive data. More than 70% of Vox Mobile’s clients do so already or are moving in that direction, said Jeff Fuggit, vice president of marketing for the company. “This is a tidal wave,” he said of the “bring your own device” trend.

There’s not much at First Federal of Lakewood that isn’t growing, but here’s what some say is most surprising. At a time when most bankers report unimpressive loan demand, First Federal in the first five months of this year doubled its loan originations, or new loans, over the year-ago period to $350 million. It’s posting record numbers, both in number of loans and dollars, according to Thomas J. Fraser, executive vice president and chief operating officer. First Federal has increased its lending — predominantly residential mortgages but also multifamily and commercial loans — both in the communities it entered through its December 2010 acquisition of Century Bank and in its pre-existing footprint. None of the increase includes purchased loans; rather, all of the loans were originated by First Federal’s Fraser employees, Mr. Fraser said. “We’ve seen a strong purchase activity this year, which could be signaling better housing conditions in Northeast Ohio than we’ve seen,” Mr. Fraser said, noting that 60% of the institution’s loan growth has been in home purchases. Much of the mortgage business today is in refinancing, though industry insiders say they’re hearing anecdotally that a shift from refinances to purchases is occurring. First Federal’s competitors have noticed its “very aggressive approach to growing,” said Robert L. Palmer, president and CEO of the Community Bankers Association of Ohio, citing conversations he’s had with bankers in this region. “Loan demand is anemic at best and to see them

Erecting a ‘virtual barrier’ Companies aren’t about to stop using the latest consumer gadgets, given how popular and powerful they are. Instead, they’ve had to figure out how to See MOBILE Page 23

MARC GOLUB

Radio executive Tom Wilson expects to launch a new rock station, WLFM-LP 87.7, in late July.

MAKING AIRWAVES Radio industry veteran says new station will use lots of local content to compete with satellite, Internet options By MICHELLE PARK mpark@crain.com

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om Wilson has taken to the Cleveland airwaves successfully before — to the tune of a multimillion-dollar payday in 1999 — and he’s fixing to do it again. Mr. Wilson, who with his partners sold two of the city’s top-rated stations, WDOK-FM, 102.1, and WRMRAM, 850, in a four-station package deal 13 years ago for more than $200 million, is launching a new radio station here. He’s confident the local content and local personalities he plans to deliver will prove profitable, even in this era of satellite and Inter-

net radio. Mr. Wilson, who has spent three decades in the broadcasting business, expects to launch the new station, WLFM-LP, 87.7, in late July. Two weeks ago, the station began running a four-song loop to test its signal, playing the fight songs of the Cleveland Browns, Indians and Cavaliers, and “My Town” by The Michael Stanley Band. That spawned speculation that it will be a sports format, though the Ohio Media Watch blog noted: “For all we know, the sports-themed songs are an attempt to ‘sound Cleveland’ — as few songs exist that mention the city by Lake Erie.” That’s exactly it: Mr. Wilson says See RADIO Page 9

See LAKEWOOD Page 25

LOANS UP AT FIRST FED LAKEWOOD First Federal of Lakewood has steadily increased its loan origination as it’s grown overall. Here, tracking that rise in new loans, with the 2012 figure through May 31 — which projects to $850 million for the year:

Year

Loan originations

2012 (first 5 months)

$350 million

2011

$477 million

2010

$412 million

2009

$362 million

SOURCE: FIRST FEDERAL OF LAKEWOOD

THE WEEK IN QUOTES “We ... give companies the ability to have the best in Cleveland dining, and that’s very important for the corporate function side of things.”

“Acquisitions are ... quicker and in many ways safer than the process of establishing a presence in a developed world from scratch.”

— Jim Ross, vice president of business development for the Cleveland Browns. Page One

— Frank C. Sullivan, CEO of RPM International Inc. Page One

“It’s been a long process, but we have a USGA-quality course and we’re ready for it.” — Nancy Heinen, member of The County Club in Pepper Pike and co-chair of the U.S. Women’s Amateur tournament being held there Aug. 6-12. Page 5

“We are finding we are compensating IT folks and engineers at a higher rate of growth than other types of positions.” — Beth Stec, MCPc vice president of corporate communications and human resources. Page 15

“What you can do with those dollars (earned in Cleveland) is demonstrably higher than what you can do in Atlanta or Chicago.” — Mike Milby, president and CEO of executive recruiting firm Ratliff & Taylor. Page 20

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JUNE 25 - JULY 8, 2012

‘Highway’ built, OneCommunity now searching for willing test drivers Software developers able to capitalize on nonprofit’s high-speed network By CHUCK SODER csoder@crain.com

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OneCommunity’s 1,735mile fiber-optic network is almost entirely built. Now the Cleveland nonprofit can focus more of its energy on what Scot Rourke Rourke describes as the bigger goal: getting people to create software that harnesses the network’s power. “The highway’s done,” said Mr. Rourke, OneCommunity’s president and CEO. “What kinds of cars are we going to put on this? And we want lots of cars on it.” The organization — which offers high-speed Internet access and information technology services to governments and nonprofits in Northeast Ohio — is increasing its efforts to reach out to companies, universities and entrepreneurs who could come up with new ways to take advantage of the network’s bandwidth. The nonprofit isn’t alone in its quest: The National Science Foundation two weeks ago announced that it selected Northeast Ohio as one of 25 regions that will participate in the U.S. Ignite partnership, a national effort designed to spark the creation of new software programs that can make the most of ultra-fast Internet speeds. OneCommunity, which is leading U.S. Ignite’s work in Northeast Ohio, could receive funding for the effort through the National Science Foundation, and it aims to raise money and in-kind support from other organizations, too. The nonprofit hasn’t yet laid out a list of action steps, but it already is talking to several “major players” who could come up with ideas for software and develop the tools, Mr. Rourke said. OneCommunity — which earlier this year formed a “Smart Region” team that will advise the group on the effort — might even create a prize competition to get area computer science students interested.

Testing, testing What kind of software might they create? Many programs likely would be based around the idea of helping people communicate via high-definition video, Mr. Rourke said: Picture doctors talking face-to-face with distant patients, teachers interacting

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with classes full of students from around the world or judges arraigning suspects without meeting them in person. Developers also could create better software dispatch systems for police departments and better mapping tools for local governments. They might even come up with tools to help manage the flow of electricity through your appliances or the flow of cars on a busy street. Though some software programs can do these types of things, many don’t take advantage of the speeds that can be achieved through fiberoptic networks, Mr. Rourke said. However, Mr. Rourke said he expects the United States eventually will have a more robust broadband network. Entrepreneurs and companies that want to prepare for that day can test their ideas on OneCommunity’s infrastructure. The network is a great test bed, he said, given the number of hospitals, schools, libraries, government agencies and nonprofits connected to it. OneCommunity also has a relationship with the Case Connection Zone, a group of more than 100 homes in the University Circle area that for research purposes were provided similar Internet connections. Most OneCommunity customers and all Case Connection Zone participants have 1-gigabit-per-second Internet connections, which is more than 100 times faster than typical cable and DSL Internet speeds. Some hospitals on the OneCommunity network subscribe at even faster speeds, Mr. Rourke said. Developers would be hard-pressed to find another region where so many institutions have gigabit-speed connections, he said. “There are not that many other networks, especially ones you can develop on,” he said.

We’re top three! Joe Kochan agrees. The cofounder of U.S. Ignite said that, because of OneCommunity, Northeast Ohio is “ahead of the game” when compared to other U.S. Ignite regions. The organization has powerful infrastructure, deep relationships to the institutions that use it and connections to researchers who can help maximize its capabilities.

“They are very much ahead of the pack. Certainly in our top five; probably in our top three,” Mr. Kochan said. Through U.S. Ignite, the National Science Foundation aims to spur the creation of about 60 high-tech software programs focused on education and work force development, advanced manufacturing, health care, transportation, public safety and clean energy. The project is intended to show how the country might benefit if it upgrades its broadband infrastructure, Mr. Kochan said. “What if you had unlimited bandwidth with more capabilities?” he said. The country’s Internet infrastructure needs an upgrade, Mr. Rourke argues. By streaming online videos and music, people already are becoming “super users” of data, often without realizing it, he said. With better infrastructure and software designed to exploit it, the United States among other things will be able to cut the cost of government services, health care and education while also improving the delivery of those services, he said. For instance, Mr. Rourke said he expects online education to become a lot more popular — and a lot better — in the future. “The experience is going to be more enriching. You can get Chinese from China,” he said. On the government front, he described how, after South Korea started providing a large number of government services via the Internet, service satisfaction rates went up and the size of government agencies went down. OneCommunity already has helped Jeff Mowry, Cuyahoga County’s first chief information officer, apply for three grants to fund IT collaboration projects that the county didn’t end up winning. The nonprofit’s broadband network, which is used by roughly 30 county facilities, also plays a crucial role in helping the former Chrysler executive execute his part of the county’s Western Reserve Plan, which is the county’s effort to cut the cost of government in Northeast Ohio by selling services to cities in the area that may not be able to provide them as efficiently. “Having the technology infrastructure that OneCommunity brings to the table helps us get to that Western Reserve vision,” Mr. Mowry said. ■

Former Case professor will lead Weatherhead Case Western Reserve University has tapped one of its former professors, Robert E. Widing II, as the new dean of its Weatherhead School of Management. Mr. Widing, who currently serves as the dean of the Macquarie School of Management in Sydney, Australia, served as assistant professor at

Weatherhead from 1988 to 1993. He will replace Mohan Reddy, who announced last summer he would return to teaching full time after serving as dean for five years. “Rob Widing possesses the depth of experience and breadth of perspective required to lead in an era of increasing complexity and interna-

Volume 33, Number 25 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the third week of May and fourth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136

ON THE WEB

Story from www.CrainsCleveland.com.

tional engagement,” Case Western Reserve University president Barbara Snyder said in a news release. “He also appreciates the vital importance of strategic thinking, philanthropy and continuous improvement of academic offerings.” Mr. Reddy ascended to the deanship in December 2006 after serving about five months in an interim capacity. During his tenure, he helped redesign many of Weatherhead’s programs and brought a sense of stability back to the business school. ■

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Patio Enclosures leads growing home improvement contractor By GINGER CHRIST gchrist@crain.com

Great Day Improvement LLC, a local private equity group, is building a name for itself east of the Mississippi, and it’s starting the process in its own backyard. The Cleveland-based group has been on the acquisition trail since its formation in 2010, buying three brands in Ohio in less than two years. Through those acquisitions, Great Day is constructing for itself an identity as a full-scale home improvement contractor. Its portfolio now includes Central Aluminum Co. of

Columbus, a custom producer of aluminum extrusions; SoftWall Finishing Systems LLC in Sharon, Ohio, a producer of fabric-covered wall panels; and Patio Enclosures Inc., a manufacturer, retailer and distributor of sunrooms, solariums, patio and porch enclosures, among other products. Great Day is using Patio Enclosures, with its well-known jingle and developed customer base, as the face of its expansion. Great Day has 250 employees, about 100 of whom work out of the Patio Enclosures headquarters in Macedonia. Since acquiring Patio Enclosures

in December 2010, Great Day has opened seven new retail branches, bringing the total to 17 companyowned sites and 11 franchise sites. It also expanded the dealer network to 20 dealers, up from about 15 at the end of 2010, giving the company 48 retail locations in 28 states. And Great Day isn’t pulling the shades on growth just yet. The company has a strategic plan that involves opening more Patio Enclosures retail sites, developing a greater distribution network, establishing an online presence and acquiring more brands. “We’re poised for tremendous

growth,” said John Fitzpatrick, general manager of the Cleveland market for Patio Enclosures. Great Day’s sales were up 30% in 2011 and are on track to show similar increases in 2012. Bill Goddard, vice president of sales for Patio Enclosures, said he sees opportunity in the home improvement market. With the residential housing market still on the path to recovery, there is room for growth both as it rebounds and in the interim as homeowners choose to upgrade and repair their existing homes, he said. Plus, the company plans to continue to diversify, entering more areas

Country Club preps for U.S. Women’s Am By JOEL HAMMOND jmhammond@crain.com

If the members at The Country Club in Pepper Pike are leery of their club being overtaken for a week in early August by 156 women’s amateur golfers and some of their families, they sure have a funny way of showing it. Members at the club, after all — along with many big-name Northeast Ohio corporations — are footing the bill for the 112th U.S. Women’s Amateur, one of the United States Golf Association’s most prestigious tournaments. The tournament, which features two days of stroke play fol-

ON THE WEB: For more photos of The Country Club, visit www.CrainsCleveland.com/CountryClub. lowed by five of match play to whittle a field of 156 to one, will be held at The Country Club on Aug. 6-12. All told, individual and corporate donors, with the help of the Greater Cleveland Sports Commission, raised more than $500,000 to stage the tournament. That total covers all transportation, meals for the players — officials expect more than 2,500 meals will be served — for the entire week, security and other components. The entire event is free to the public, and spec-

tators will have inside-the-ropes access all week. The USGA visited the club almost four years ago and approved it for its first USGA event since 1935, when it played host to the U.S. Men’s Amateur. Tournament cochair Nancy Heinen said the USGA was impressed by the challenging, rolling course — from which the women most often will play from the men’s tees, with the course measuring 6,512 yards — and liked the Cleveland-area venue. “It’s been a long process, but we have a USGA-quality course and we’re ready for it,” said Ms. Heinen, a member of the club who is a retired

of the home improvement market. “If we just do one thing, you can’t have any hiccups. It really diversifies our company,” Mr. Goddard said. “We ... continue to be on the hunt for great brands.” He said the company is interested in complementary companies, such as window or awning companies. “Just because we sell somebody else’s right now, doesn’t mean we can’t own it in the future,” he said. The company also plans to expand its geography west through distribution at big box retailers and through commercial distribution at hotel chains. ■

The difficult par-3 ninth hole at The Country Club in Pepper Pike will be a key test in August’s U.S. Women’s Amateur tournament. RUGGERO FATICA

BP executive. Her co-chair, Scott Wilson, is a recently retired partner at Cleveland law firm Calfee, Halter & Griswold. Now in the home stretch, the USGA has paid recent visits to map out pin locations and areas to make the course more challenging. Country Club officials, meanwhile, still

are trying to line up volunteers and make other final preparations. The Country Club course was designed in 1930 by William Flynn, who also designed famed courses Shinnecock Hills on Long Island and Cherry Hills in Colorado. In 2005, the course was restored by by Brit Stenson of IMG Design. ■

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Buying: Pace picks back up as industry rebounds continued from PAGE 1

“Acquisitions are a way of quickly establishing a base of business that you can then expand from,” Mr. Sullivan said. “It’s quicker and in many ways safer than the process of establishing a presence in a developed world from scratch.” Just last week, RPM announced the acquisition in Brazil of Viapol Ltda., a maker of building materials, in a deal that Mr. Sullivan said “establishes a substantial footprint for RPM and our many industrial and consumer businesses in the exciting Brazilian market.” Mr. Sullivan said acquisitions are

an attractive option for companies looking to invest in an environment in which traditional investment options, such as U.S. Treasury bonds, aren’t giving companies profitable returns. “Leaving your money in cash is a bad idea,” said Mr. Sullivan, whose company had $735 million in cash and available lines of credit as of Feb. 29. That’s double what the company carried in the way of cash and credit lines seven years ago. The extra reserves are giving companies that hold them a leg up on acquisitions because they can take quick action when opportunities

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arise. And opportunities are becoming more plentiful as owners that delayed selling during the downturn look to cash in on the upswing in business values, local executives say.

Where to invest For Lincoln Electric Holdings Inc., finding a place to spend the money generated by the Euclid-based maker of welding equipment had been a problem until recently. The $300 million in cash Lincoln Electric had on its balance sheet as of March 31 wasn’t there because the company was trying to be conservative following the recession. Rather, Lincoln Electric hadn’t had enough opportunities to invest it. The acquisition environment, particularly in 2009 and 2010, was depressed because of the decline in business valuations, said Vince Petrella, Lincoln Electric’s chief financial officer. “It was not so much that we weren’t interested,” Mr. Petrella said. “It’s more that the sellers were unwilling to separate themselves from their properties because valuations had declined so rapidly.” However, since the manufacturing sector rebounded, Lincoln Electric has had its foot on the acquisition accelerator. In the past 12 months, it has bought four companies — Wayne Trail Technologies Inc., an Ohio-based maker of automated systems and tooling; Weartech International Inc., a California-based producer of cobaltbased hard facing and wear-resistant welding consumables; Applied Robotics Inc., a Nevada-based manufacturer of CNC cutting tables and accessories; and the welding operation of Maryland-based Techalloy Co., a producer of nickel alloy and stainless

steel welding consumables.

Building reserves When Joseph Gingo joined Akronbased A. Schulman Inc. in 2008 as CEO, he immediately set to work increasing cash levels at the supplier of plastic resins, in order to stabilize the company. As of last Feb. 29, the end of A. Schulman’s fiscal second quarter, the company had $95.8 million in cash and $201.5 million in untapped credit lines. “If you want to grow and increase profits, one of the areas you have to look at is acquisitions,” Mr. Gingo said. “When you have a lot of cash, you can buy things.” In the past year, A. Schulman has agreed to acquire Elian SAS, a French producer of specialized color master batch products, for $63 million, and bought a majority interest in an Argentina-based maker of rotational molding materials. Because Europe and the United States have been slower-growth markets, A. Schulman has focused on expanding in emerging markets where there is more growth potential, Mr. Gingo said. That’s the thinking behind the company’s 50-50 joint venture agreement with National Petrochemical Industrial Co. of Saudi Arabia to produce polypropylene compounds at a plant in that Middle Eastern nation. A. Schulman’s initial investment in the relationship is about $14 million, with project costs for the Saudi plant estimated at $70 million. “Several aspects of this deal will accelerate A. Schulman’s expansion and visibility in its priority growth markets of Africa, India and the Middle East while better serving our existing global customers with high-quality polypropylene compounds,” Bernard Rzepka, general manager and chief operating officer of A. Schulman, Europe, Middle East, Africa, said in announcing the joint venture June 11.

Parker picks up the pace

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Parker Hannifin Corp. decided to preserve cash and be more cautious about acquiring companies during the recession, according to Aidan Gormley, the company’s director of corporate communications. That’s not the case anymore. “Today, we are back to our more normal pace and have a strong pipeline of opportunities we are evaluating,” Mr. Gormley said. “Our considerably strong cash flow, low debt and excellent credit rating give us significant capacity to invest in growth initiatives such as regional expansion, innovative new products and systems, and acquisitions that enhance our business.” Parker has acquired four companies in the past year and plans to look for more opportunities in the motion and control markets, Mr. Gormley said. Each acquisition is one that will

DEALING WITH IT Acquisitions in the last year by Northeast Ohio’s top 10 publicly traded manufacturing companies, according to Crain’s research: EATON CORP. Nine acquisitions, including a May 21 announcement of plans to acquire Cooper Industries plc, an electrical equipment supplier based in Dublin, Ireland, for $11.8 billion. J.M. SMUCKER CO. Acquired in January a majority of the North American food service coffee and hot beverage business of Sara Lee Corp. in an all-cash transaction. LUBRIZOL CORP. Four deals, including last week’s agreement to buy Lipotec SA, a Spanish company that makes ingredients for personal care products. NORDSON CORP. Four deals, including June’s for New Castle, Pa.-based Xaloy Superior Holdings Inc., a maker of melt delivery components for plastic injection and extrusion machinery. PARKER HANNIFIN CORP. Four deals, including acquiring Snap-tite Inc., an Erie, Pa.-based manufacturer of high-pressure fluid power components for the oil and gas, industrial and research markets. TIMKEN CO. Two deals for companies specializing in drive chains, roller chains and gear-drive systems. TRANSDIGM GROUP Three, including February’s deal for Phoenix, Ariz.-based AmSafe Global Holdings Inc. for $750 million in cash. expand the company’s product lines or technology offerings, allow it to enter a new market or to expand geographically or drive aftermarket sales. The company’s goal is to grow revenues at a 10% compounded rate annually, with half that growth generated from acquisitions, Mr. Gormley said. Still, acquisition-minded companies aren’t throwing all caution to the wind. A number of public companies are carrying far more cash today than they did before the recession, RPM’s Mr. Sullivan said. Nonfinancial corporate cash balances at the end of the first quarter of 2012 were $1.74 trillion, up 0.7% from the previous quarter and up 25% from the first quarter of 2008, according to the June 7 Federal Reserve Flow of Funds report. “I think going forward companies are going to operate with a larger cushion of cash and excess liquidity on an ongoing basis than, let’s say, they did five to seven years ago,” Mr. Sullivan said. ■

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Once-booming Medina County homebuilder now reeling Owner entangled in Chapter 11 bankruptcy filing, targeted in court by multiple lenders By STAN BULLARD sbullard@crain.com

When home building boomed last decade, Unmistakably Premier Homes of Wadsworth ranked repeatedly as the most prolific builder in Medina County. The local outfit led by Wadsworth native Stephen Kovack slugged it out with national builders such as Ryan Homes and others as they harvested its fields for home sites. Now Mr. Kovack is struggling to hang onto the Wadsworth office building that houses Unmistakably Premier’s headquarters and is weathering a blizzard of legal woes. In a bid to retain the building, the 7972 Ridge Road LLC that Mr. Kovack controls has filed for voluntary Chapter 11 reorganization in the U.S. Bankruptcy Court Northern District of Ohio. The builder also is the target of more than $1.6 million in judgments in Medina and Cuyahoga county common pleas courts. The largest is a $1 million judgment to satisfy a note filed by Fifth Third Bank. Moreover, an unfinished home at 5588 Bilney Court in Lafayette Township, owned by Unmistakably Premier Homes, sits skeleton-like in a neighborhood populated with dozens of homes the builder sold in better times. Lafayette Township Trustee Lynda Bowers, a realty agent herself, said she fields calls from Bilney Court neighbors when plastic sheets on the walls rustle too loud in a big wind or pieces of wood blow off in a storm. The sight that galls neighbors most, she said, is that they see workers in trucks with Unmistakably Premier logos driving through the massive subdivision. New homes are rising again as the worst realty debacle since the Great Depression wanes across the nation. Ms. Bowers hopes that Medina County and her township can nab some money that Ohio Attorney General Michael DeWine will make available to help local governments cope with foreclosures. She hopes to use it to demolish the battered Bilney house. “Most people think of old, dilapidated housing in urban areas needing demolition,” she said in an interview, “but that’s not the case here,”

said. “Buyers are back. As a volume builder, this is what you face. In the 1990s there was a toilet shortage. I had 40 homes waiting for toilets.” Despite the plethora of legal and financial wrangles, the June 1 bankruptcy filing refers solely to the 1392 High St. office building owned by 7972 Ridge Road LLC. The Prudential Kovack Realtors brokerage operated by his sister, Michele Boyd, and several tenants also are in it. Mr. Kovack said PNC did not want to extend his loan on the office building, but he wants to keep it. He

built it. The bankruptcy filing notes Unmistakably Premier was not paying its rent and would move. “Why pay the rent when they are not renewing the loan?” Mr. Kovack said. The court filing says 7972 Ridge filed for reorganization to protect the asset because PNC Bank had secured a foreclosure order in Medina County Court of Common Pleas. The firm’s filing maintains it is eligible for bankruptcy reorganization because the more than $1 million loan by PNC Bank and another for $635,000 for Woosterbased Wayne Savings Community Bank exceed the $1.3 million appraisal for it set by the Medina

Make no mistake The homebuilder also is the subject of a website dubbed “Mistakably Premier Homes” where dozens vent complaints about building quality or alleged nonperformance on home-sale contracts. The site has 45 names on a petition calling on the builder to honor warranties and contracts. Of the website, Mr. Kovack said it’s hard for people to understand how some houses keep going up but not others as different loans fund them. Banks and buyers are not the

only ones miffed with Premier. Pritts Concrete Inc. of Rootstown, Ohio, last April received a judgment in Medina County Court of Common Please for $414,541 in unpaid bills. A call to the firm was returned by an attorney, Chris Wetherbee, but his call was missed Friday morning and he did not return a follow-up message by deadline last week. Of the lien, Mr. Kovack said, “They are just protecting themselves from the bank.” Now he sees Ryan Homes building on lots in Dover Highlands and Tiberon Trace in Wadsworth Unmistakably Premier might have sold. “All that money,” he said, “is leaving here.” ■

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‘Beat up like everyone else’ In a phone interview, Mr. Kovack, Unmistakably Premier founder and owner, blamed the Bilney house on Huntington Bank pulling his line of credit as it stopped funding home builders in 2010. “We’ve been beat up like everyone else,” Mr. Kovack said. “We built 120 homes in 2010. We had (more than) 36 homes to start, with earnest money down, when the big banks pulled our financing. I would say we were one of the last ones to experience what other (smaller) builders had earlier.” Mr. Kovack said he is trying to get funds to complete 40 homes he has under contract. He hopes to clear the decks to rebuild his business. He said he hopes to land money from hedge funds to start building with new resources by August. “You get through it,” Mr. Kovack

sheriff’s office. The sale only netted one $990,000 bid, according to the bankruptcy filing.

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Sawyer preparing Italian concept for University Circle By KATHY AMES CARR clbfreelancer@crain.com

Before Jonathon Sawyer opened the French-inspired Greenhouse Tavern, he and some of the restaurant’s co-pilots traveled to France for some research and Sawyer development. He went to Tokyo to more fully integrate himself with the Japanese metropolis and cuisine before unveiling Noodlecat. Now the chef has recently returned from a 40-day jaunt in Italy, the bulk of the time spent in Trentino, where

Mr. Sawyer engrossed himself in the culture in preparation for a planned spring 2013 opening of an Italian concept targeted for Uptown in University Circle. “The concepts are representations of our experiences,� Mr. Sawyer said. The chef is constructing a menu inspired by the cuisine of the northern Italian Trentino region, which highlights single-grain pastas, potatoes, cabbages, apples, rich cheeses, pork and freshwater fish. “I think the restaurant will be well-received because it gravitates

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Greenhouse pastry chef receives honor Greenhouse Tavern and Noodlecat pastry chef Matt Danko is scheduled to be in Los Angeles today, June 25, for one sweet honor. Mr. Danko, 29, has been named one of 20 “Young Guns� by Eater, a national restaurant, bar and nightlife blog. The site defines Young Guns as its “annual roll call of the next guard — the most promising newbies in food, wine and hospitality.� “It’s really exciting,� Mr. Danko

Mr. Sawyer said he sells each month between 500 and 1,500 bottles of the boutique vinegar. The production and bottling process shuttles between the basement of the chef’s Shaker Heights home and The Greenhouse Tavern. To address the production limita-

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Hospitality Group, that will feature another of Mr. Symon’s B Spot restaurants, a duplicate of Mr. Whalen’s Rosie and Rocco’s restaurant at the Horseshoe Casino Cleveland, and Sawyer’s Street Frites, which will feature the signature item from Mr. Sawyer’s Greenhouse Tavern on East Fourth Street in downtown Cleveland. “Bringing in three of the preeminent chefs in the region, we think, is a way to re-energize, revitalize and add a nice component to our premium offerings,� said Jim Ross, the Browns’ vice president of business development. “There’s local equity there; they’re all visible members of the community.� With Levy Restaurants’ contract to provide services in the stadium’s premium areas expiring, the Browns received proposals from many concessionaires, including Levy and Delaware North Sportservice, the latter being the Browns’ general concessions provider. But Aramark Sports and Enter-

tainment, a Philadelphia-based arm of Denver-based Aramark, stood out when the Browns visited other venues at which Aramark provides similar premium services. In Cleveland, the company will operate in the stadium’s two club areas, its suites and at the 200-plus corporate events, weddings and parties to which the stadium plays host each year. The latter business is an area the Browns want to grow, according to Mr. Ross, so Aramark’s ability to bring Messrs. Symon, Whalen and Sawyer on board helped. “The chef component gives us a unique hook to host more corporate functions,� Mr. Ross said. “We open up those stands and give companies the ability to have the best in Cleveland dining, and that’s very important for the corporate function side of things. “Aramark presented a plan that really hit on their ability and track record at other buildings; they’ve driven that (non-gameday) business at other buildings.� Kevin Kearney, Aramark’s district

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said. “It’s cool for the restaurant, but it’s one more reason why this city is great.� The pastry artist is the only Young Gun from Ohio, of 2,000 applications. Mr. Danko began working three years ago at the Greenhouse Tavern as an intern before accepting a full-time position as a cook. Mr. Sawyer two years later gave him the reins to contrive the dessert menu at the gastropub. — Kathy Ames Carr

tions, the chef is prototyping a new flagship vinegar with a partner in Columbus. Mr. Sawyer, who in April opened a Noodlecat stand at the West Side Market, said he expects this year to generate between $4.5 million and $6 million in sales. â– 

Chefs: Browns eye non-gameday events

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toward our Austrian, Hungarian, Slovakian and Germanic heritage,� he said. He plans in September to send to Italy Greenhouse Tavern chef Brian Goodman, who will head up the yetto-be-named eatery. Like his other two establishments, Mr. Sawyer anticipates the Italian concept will become a certified green restaurant. Once the project comes online, Mr. Sawyer expects to boost his operation’s current employment of about 100 to between 160 and 170. Meanwhile, the chef and his staff have been busy churning out artisan vinegar, which plays a role in many of the restaurants’ dishes. In February, it hit the shelves of local shops such as neighboring retail outfit Dredger’s Union, as well as Publican Quality Meats restaurant in Chicago and Houston grocer Revival Market. He’s also working with Cleveland Heights author Michael Ruhlman to offer the vinegar online through OpenSky, which sells products endorsed by celebrities and experts.

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manager in the Cleveland area, said the company’s success in that arena has been fueled by the proliferation of football-only stadiums across the NFL. With only 10 games and at best a handful of concerts on the calendar, these stadiums go unused for major portions of the calendar. “There’s been an opportunity there for greater facility utilization at these stadiums,� Mr. Kearney said. “You’re looking at a lot of open dates, and we’ve had tremendous success using the premium spaces for special events. We think having these chefs will make the facility more attractive for (special event) usage.�

Howdy, neighbor The Browns didn’t have to look far for at least one Aramark reference: The company opened B Spot, a burger restaurant by Mr. Symon, on The Q’s main concourse, and Bar Symon, on the arena’s club level, in 2009. Before last season, Aramark opened Mr. Whalen’s Rocco’s Nachos and Tacos at The Q. Mr. Sawyer, in addition to the Greenhouse Tavern, also owns Noodlecat, on Euclid Avenue near East Fourth, in downtown Cleveland. At The Q, the Cavaliers were trying to reinvest in the facility and update and refresh concepts, according to Mr. Kearney, who spearheaded the initial partnership with Mr. Symon. Mr. Kearney said Mr. Symon and his business partner, Doug Petkovic, got Aramark thinking about an expanded partnership with Messrs. Whalen and Sawyer, which presented itself when the Browns sought a new provider in their premium areas. “These guys are Cleveland champions and Cleveland sports fans,� Mr. Kearney said. “We’ve been discussing different opportunities with them for a number of years.� Aramark, which operates at over 150 venues in the United States and Canada, including Blossom Music Center in Cuyahoga Falls, is in the beginning stages of construction of the new stands at Cleveland Browns Stadium. Mr. Kearney said the company’s goal is to have the new spaces finished by July 29, when country music stars Kenny Chesney and Tim McGraw play at the stadium. ■

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Radio: Stations develop Crain’s receives 10 Press Club honors unique niche in market continued from PAGE 3

the station will work to sound Cleveland. He has planned a rock and entertainment talk format driven by a team of about a dozen people who will take to the streets of Cleveland and put Clevelanders on the air. (What kind of rock is still up in the air, and yes, he’s open to involving local artists.) “We just see a need in the market,” Mr. Wilson said. “Radio has become so homogenized and corporate throughout the country that the localism has vanished. What we’re doing is bringing that back.” The goal is to hire local personalities and immerse them at rib cook-offs, county fairs and the like, Mr. Wilson said. He’s in talks with the Rock and Roll Hall of Fame about promotions, too. “We just can’t play music because anybody can go anywhere to pick up music,” he said. “Our whole thrust will be music and entertaining talk. Pandora (Internet radio) and Sirius (satellite radio) don’t blend those two together, and they’re certainly not local. “We want to be a station that everybody talks about at Starbucks in the morning because of our programming — because it’s different, it’s entertaining and it’s fun,” he added.

Powering up After selling his Cleveland stations in 1999, Mr. Wilson continued his broadcast work in other markets, including Las Vegas, where he and his partners operate a television station, and in Chicago, where they recently leased their radio station to Merlin Media. Now, his company, Murray Hill Broadcasting, holds the license to the Channel 6 low-power television station and its accompanying 87.7 FM radio. (The license has been in Mr. Wilson’s hands for several years, just through a different company.) They plan to broadcast what they’re doing on air on television, too, eventually, Mr. Wilson said. “There’s nothing like launching a new station in your own market,” Mr. Wilson said. “It’s fun to be back in Cleveland to launch a local Cleveland radio station. All your ties are here.” According to the National Association of Broadcasters in Washington, D.C., there are 13,585 radio stations on air, a number that’s been trending up for several decades. Despite some consolidation in terms of radio ownership, local owneroperators are not all that unusual, according to Dennis Wharton, executive vice president of communications for the association, which represents roughly 8,000 member radio and television stations. There are some 3,000 owners of radio stations in the United States, he estimated. While he wouldn’t be more specific, Mr. Wilson said he’s spending “significant money” on the equipment and salaries needed to get WLFM-LP up and running. He’s in the process of hiring talent and production staff, as well as account executives who will sell advertising and develop partnerships. He’s looking at two locations for the physical station. While he’s well aware of the lower overhead costs of Internet radio — “we could launch

“The (stations) that are going to be the most profitable are those that invest the time and research in developing talent (and) programming that is targeted to the local community.” – Tom Wilson, radio executive 25 Internet radio stations next week if we wanted” — he said he wants “a real radio station.” The station will stream online, though, so listeners can pick up the audio from anywhere. Though he doesn’t know Mr. Wilson or the Cleveland market, Mr. Wharton thinks Mr. Wilson has a solid shot at success. “Good local radio is no different today than it was 15, 20 years ago,” he said. “The ones that are going to be the most profitable are those that invest the time and research in developing talent (and) programming that is targeted to the local community. You just can’t be a jukebox in the sky and succeed as a local radio station long term. There are so many options for the listener that were not there 15 (or) 20 years ago. “The unique niche about radio is that we can have a connection to the local community that none of these satellite (stations) or Pandoras have,” Mr. Wharton added. “So it can sometimes cost more money to hire news crews and talent that is local as opposed to running an announcer outside the market, but if they do it right, it can be hugely successful.”

Crain’s Cleveland Business was honored with 10 awards, including second place in the category of Best Business Publication in Ohio, in the statewide Excellence in Journalism awards competition presented by The Press Club of Cleveland. In the Open Print competition among all print publications in Ohio, editor Mark Dodosh won first place in the category of single editorial for “What a waste,” which chastised elected officials in Columbus for failing to eliminate tax breaks that are of dubious economic benefit to the state. Also, government reporter Jay Miller won second place in the category of analysis for “Road to turnpike deal may be rough,” which looked at the challenge Gov. John Kasich may face in trying to work a deal to lease the Ohio Turnpike. Crain’s received three awards for its visual content. Cartoonist Rich Williams won first place in the category of single cartoon for an editorial cartoon that commented on the challenges faced by local governments in merging services. Also, Kathy Ames Carr and graphic artist Lauren Rafferty received a second-place award for best single-page tabloid design and another second-place award for best business publication cover for “Don’t stick a fork in the

Warehouse District just yet,” an illustration for a story that looked at the competition among restaurants in and around downtown Cleveland. In the competition among nondaily newspapers, assistant editor Joel Hammond won first place in the sports writing category for “The lack of luxury,” which examined the over-abundance of luxury seating at Progressive Field. In the competition among business publications, manufacturing reporter Dan Shingler won second place in the general news category for “Eaton suit over trade secret theft may be dead due to improprieties,” which reported on the effects on Eaton Corp. of legal missteps in a Mississippi court. Also, sections editor Amy Ann Stoessel, managing editor Scott Suttell, and Messrs. Miller and Shingler received second place in the category of feature package for “Up in the air,” stories that looked at the future of local air service and what it might mean for the region. And in new media, finance reporter Michelle Park received second place in the online general news category for “Kelley & Ferraro LLP files for Chapter 11 bankruptcy protection,” whch told the back story of a feud between the widow of co-founder Michael Kelley and the firm’s other

Miller

Williams

Rafferty

Hammond

Shingler

Stoessel

Suttell

Park

namesake partner, James Ferraro. The Business Courier of Cincinnati won first place in the Best Business Publications category in which Crain’s received second place. ■

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An ‘immediate world’ What’s “doing it right,” though? For one, hiring people who know the region, who can name landmarks during their traffic reports and build a trust with listeners, Mr. Wharton said. Mr. Wilson said he’s on it. Some say the days when local personalities shine in locally owned and operated radio are gone, and Mr. Wilson agrees. “I do — I think radio’s changed completely,” he said. Still, Mr. Wilson’s love of the business clearly remains strong, and he plans to serve listeners everything but syndicated material. If something happens at 9 a.m., WLFM-LP will have the capability to implement something related to it at 9:15. “That’s the beauty of media: It’s an immediate world,” he said. “If something happens in the market, we can be on the air immediately.” Craig Karmazin, president and CEO of Good Karma Broadcasting, the Wisconsin-based parent of ESPN Cleveland, anticipates the new station will be “intense” competition. But Mr. Karmazin isn’t sorry to see a new station enter the market. For one, he expects it to “make the overall pot bigger” in terms of potential advertisers. And he added, “The real excitement of it for someone in the industry is (we’re getting) a creative, successful, energetic person … who is saying, ‘I want to be in radio in Cleveland, Ohio.’ For someone who’s made that same choice, it’s really exciting. It shows the opportunity that exists in this market.” ■

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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

Square deal

F

rom the early days of this publication, we’ve expressed a desire for a dramatic makeover of Public Square in downtown Cleveland. It’s heartening to know that Mayor Frank Jackson is of a similar mind, because the benefits the city could gain in creating a grand public space in the heart of town could be greater now than at any time in Cleveland’s history. Cleveland never will be able to develop a public space to rival New York’s Central Park. However, a reconfiguration of Public Square into one big public park or two large rectangular parks rich in green space could give a boost to the ongoing transformation of downtown Cleveland into a place where people no longer just work, but, more importantly, now live. Even city dwellers want a break from concrete and busy streets. A remade Public Square where they could enjoy walks with their dogs or the occasional public concert would provide one more inducement for downtown living, and could encourage the further redevelopment of empty office buildings into apartment and condo properties. A park-like Public Square also would be a welcome lunchtime space for office workers, and could serve as an inviting front door to the city for those visitors emerging from the Horseshoe Casino or using the Regional Transit Authority’s Red Line rapid transit train to come downtown from Hopkins airport. The recent Marine Week activities the U.S. Marine Corps staged in part at Public Square show the energy a large, open public space can produce throughout downtown. For Marine Week, Public Square was closed at Ontario Street and Superior Avenue, which bisect the square and divide it into four quadrants. Families and friends gathered together to climb on a tank, hold a bazooka or talk to the Marines assembled at the square. They had fun, with many wandering downtown’s streets in search of places for lunch or dinner. Yes, closing the square screwed up traffic that week. But we’re confident traffic planners could figure out ways to keep cars and trucks moving if a permanent change was made in Public Square’s configuration. A transportation planning firm hired by Mayor Jackson’s Group Plan Commission has recommended that Public Square be split into two big rectangles by closing Ontario, which runs north-south, but leaving Superior open to east-west vehicular traffic. A study by the planning firm, Nelson Nygaard of San Francisco, should serve as an excellent starting point for talks among civic leaders of how to proceed with a change at the square. We’d be disappointed if the status quo winds up winning out after this review process. Public Square as it is today isn’t the welcoming, enjoyable place it could — and should — be. It is too sterile, and it’s too chopped up to use in an effective manner for bringing people together. The heart of Cleveland’s downtown is in need of major surgery, and we hope it happens under a mayor who sees the need for it as much as we do.

FROM THE PUBLISHER

MidTown’s new look hard to believe

I

the demand for downtown housing and magine Euclid and Chester avenues businesses — especially biomedical — of 40 years ago, staggered by the would be leading the redevelopment of aftermath of the urban riots of the Euclid Avenue. Oh, yes, and there would 1960s and wave after wave of outbe several blocks of new housing along migration to the suburbs. Neither roadChester Avenue near the campuses of way was one that drivers were comfortthe Cleveland Clinic and University Hosable on as they commuted to downtown. pitals. And downtown’s Public Square There may not be a more dramatic, and University Circle would be nearly visceral transformation served by a sleek new bus service anywhere in our city than along BRIAN that looked and felt like a train, those roadways between down- TUCKER complete with pleasant, shiny town and University Circle, and passenger stations. much of the credit can go to a Right. Back then, you would neighborhood economic develhave looked at me like I was opment corporation that argucrazy. And if you were like most ably is Cleveland’s best: MidClevelanders, you had probably Town Cleveland Inc. given up on that stretch of real Recently, I had the privilege estate. Not the folks behind of taking part in MidTown’s MidTown Cleveland, who had a annual meeting — its largest to vision and faith that there was value in date — something I’ve done for the past that land in the future. They were right. four years. The change has been remarkLearn about this great success story. able, and if you doubt that, just drive those You’ll find new pride in what Cleveland two streets. If it has been a long time has achieved. And it’s just beginning. since you made that trip, you will be **** shocked by the transformation. THE UTICA SHALE NOW is part of our Imagine it’s 1970, and I uttered this regular conversation, and certainly is a forecast 40 years into the future: Develbig part of what we’re planning for this opers would not be able to keep up with

publication. And it goes way beyond how much the big oil players have shelled out for the mineral rights along our state’s eastern border counties. The fact that Ohio’s shale oil is rich with resources not found in the shale plays in neighboring states means, for example, that the plastics businesses that once fled to Louisiana may be returning to the state of their origin. Also, as we reported recently, watch for the construction of natural gas refilling stations, because it’s likely that big fleet operators are already planning their shift away from gasoline. That’s not some futurist-speak. Recently, Dan Shingler, our reporter on the shale beat, wrote about a deal between Shell Oil and TravelCenters of America to build at least 100 natural gas refilling spots at its highway operations. The world is changing at an incredibly fast pace. That’s why we are launching our new Shale magazine, which will be delivered to our readers as well as geo-targeted financial executives in all the shale states. This is a game-changer, folks, and we want to be there to tell you the story. ■

PERSONAL VIEW

Third Frontier threatened by partisanship By RONN RICHARD, TED KALO, DANIEL R. CLAYPOOL, ROBERT AUFULDISH and ED FITZGERALD

S

ince 2002, policymakers across the nation have looked to Ohio’s Third Frontier as a model program to modernize and grow state and regional economies. They have admired Third Frontier for successfully leveraging $1 billion of state spending into more than $6 billion of combined federal and private investment. They have admired Third Frontier’s foresight in financing emerging technology companies — especially renewable energy — at the early stages of their growth, when funding is most needed and the returns highest. But most of all, policymakers have admired Third Fron-

Mr. Richard is the president and CEO of the Cleveland Foundation. Mr. Kalo is a Lorain County commissioner. Mr. Claypool is an Ashtabula County commissioner. Mr. Aufuldish is a Lake County commissioner. Mr. FItzGerald is Cuyahoga County’s executive. tier for keeping its decisions untainted by politics, despite multiple regime changes in Columbus and across the nation. This reputation led Ohio voters to support the funding of Third Frontier twice, most recently with a $700 million bond measure in 2010. It was a reputation well deserved, gained through well-chosen and active investment activities. In 2011 alone, Third Frontier awarded millions to emerging firms, including, locally, Kent

Displays, a manufacturer of flexible LCD products; CardioInsight, a medicalimaging company with origins at Case Western; Akron-based EchoGen for a heat energy recovery system; and Parma’s GrafTech and their graphite-based fuel cell components. In recent months, the very fundamentals that made the Third Frontier a model for the nation are in jeopardy. Gov. Bob Taft promised Third Frontier as a nonpartisan initiative, a mission Gov. Ted Strickland supported and maintained. This history of non-partisanship must continue. Despite the budding investment opportunities offered statewide by our rapidly developing high-technology sector, there’s concern that — as of this writing — Third Frontier has not released funds See VIEW Page 11

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JUNE 25 - JULY 8, 2012

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

11

Streetsboro window maker moving Pa. production here

THE BIG ISSUE How do you feel about the statewide ban on texting while driving?

Acquisition opens new markets for Soft-Lite LLC By GINGER CHRIST gchrist@crain.com

KATHLEEN STEPHENS

CHRISTINA FERRONE

WILL TARTER JR.

LAURIE WALKER

Westlake

Westlake

Brecksville

Aurora

I believe it’s the right thing to do from a safety perspective. … It’s so tempting when you get a text or a message, and I think it’s a prompt that’s absolutely driving people to make poor driving decisions and lack of awareness on the roads.

I think it’s critical that we keep others in mind and eyes on the road.

I definitely think it’s an important issue, and I think it’s one of those things that people can not realize the impact that texting while driving can have. … It’s a level of consciousness that needs to be raised among the general public.

As the mother of two 20somethings, I think there needs to be something done in terms of safety. … I don’t know if the ban is the answer to it, but I think something needs to be done.

➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.

A maker of vinyl replacement windows and doors based in Streetsboro is moving production of Gorell brand windows to its local plant. Soft-Lite LLC in March acquired Gorell Windows & Doors, a manufacturer based in Indiana, Pa., through a court-ordered receivership sale in Allegheny Common Pleas Court in Pittsburgh. The 294person company, which now goes by the name Soft-Lite Gorell, is hiring 40 to 50 people to handle the additional manufacturing output at its 200,000-square-foot Streetsboro plant. The company also retained Gorell’s sales and customer service employees and is maintaining Gorell’s retail shop in the town of Indiana.

Roy Anderson, president of SoftLite Gorell, said the acquisition of Gorell, which was a major competitor of Soft-Lite, gives the company a greater geographic footprint and variety of product offerings. He anticipates sales growth of 50% from the acquisition. The company generates $50 million to $100 million a year in revenue. While Soft-Lite currently serves the Midwest, Northwest and Atlantic seaboard, Gorell expands that presence to Florida, Texas and other southern states. In addition, Gorell manufactures an impact product — windows and doors designed to withstand high-impact situations such as hurricanes — not in Soft-Lite’s portfolio. Mr. Anderson said SoftLite also is considering other acquisitions that could help grow the company, including at least one on the West Coast. ■

View: Wind project would position region as a national leader Lake, Lorain, Ashtabula and Cuyahoga counties, to demonstrate the commercial potential of wind power and thereby attract private funding for further expansion and research. Breaking with the Third Frontier’s record for investing foresight, the program denied funding to LEEDCo, despite approval recommendations from outside reviewers for the Ohio Department of Development and two business representatives on the board. The decision also ignored reports from both private observers praising the significant short- and long-term benefits this pilot program would bring the state. This pilot project alone would yield more than 500 jobs in construction, research and associated fields, with attendant increases in retail spending, tax revenue and housing demand. In the long term, lowered energy costs and a renewable, low-carbon source of energy provided by Lake Erie wind would significantly improve energy prices and business costs. Looking beyond the price of elec-

continued from PAGE 10

for a project in six months. The fiscal year ends in June, and while state funds will roll over, the opportunity to receive supplemental federal funds could be missed. Also, the projects being considered stray from the program’s stated mission of fostering early stage entrepreneurship. These worrying trends call Third Frontier’s hardearned national reputation into question, and threaten to betray the mission approved and funded by the voters of Ohio. Recently, the Lake Erie Energy Development Corp. (LEEDCo) applied for a $5 million grant from Third Frontier to help fund construction of an initial set of turbines, seven miles off the coast of Cleveland. LEEDCo is the nonprofit organization tasked with building an offshore wind industry in Lake Erie — the first such industry anywhere in the United States. This project was initiated by the Cleveland Foundation, NorTech, the city of Cleveland, and

RECENT TRANSACTIONS FROM OUR CLEVELAND HEADQUARTERS:

integrate

tricity, we must recognize that LEEDCo’s wind power advances have given Northeast Ohio the lead in growing an industry. While the natural advantages of Lake Erie’s constant, high-energy winds eventually will draw investment, the chance to be the national leaders in offshore wind is unique and temporary. Receiving financing and support from the Third Frontier Commission could help LEEDCo win up to $50 million in federal grants it has applied for to help finance construc-

tion of the offshore wind farm. However, the impact of this seemingly small project reaches beyond the tens of millions in additional funding it could bring to Northeast Ohio; we have within our grasp the opportunity to once again be the capital of an American industry. Instead, ignoring the advice of outside reviewers and business representatives, Third Frontier turned its back on the progress our region has made and places in jeopardy the immense sums of external funding

that could be awarded to Ohio for related research, job creation and opportunities for Ohio’s businesses. The commission’s decision represents a worrying departure from an insightful and highly successful strategy, and it may signal the reversal of Ohio’s recent strides towards national technological leadership. For that reason, we are asking Ohio Third Frontier to reconsider their tradition-breaking denial and reconsider funding the LEEDCo application. ■

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Virtual Hold rolling out new products Callback software moves into mobile devices, TVs By CHUCK SODER csoder@crain.com

The next time you need to talk to someone at a call center, you may not need to dial a phone number. At least not if Virtual Hold Technology LLC’s latest products take off, as the fast-growing Fairlawn company is in the process of launching software that would give contact centers a way to call you before you call them. A few banks that already use the company’s core technology — which allows contact centers to call you back instead of putting you on hold — are rolling out mobile applications that use the company’s new Conversation Bridge software, and a cable company is plugging similar software into apps for both mobile devices and Internet-connected TVs. It’s up to Virtual Hold’s clients to develop the front end of both the mobile and TV apps, which allow their customers to troubleshoot problems on their own first. Virtual Hold’s technology comes into play if they need more help; in both the mobile and TV apps, end users can

press buttons that tell the contact center to give them a call as soon as possible. They also can schedule the call, choosing from a list of times generated by Virtual Hold’s core software, which can estimate how long it will be before a contact Hayden center employee becomes available. That employee won’t start from square one. He or she already will know that the end user has been through the troubleshooting steps in the app, said Eric Camulli, vice president of marketing for Virtual Hold, which has 110 employees, up from 85 at the start of 2011. That feature is key, said Paul Stockford, research director for the National Association of Call Centers of Hattiesburg, Miss. His members have been clamoring for a good way to connect with customers via mobile devices, in particular. “That’s a pretty good first step,” he said. The new products will be a big part of Virtual Hold’s growth plans, said Wes Hayden, who two weeks ago was announced as the company’s new CEO. Mr. Hayden, who replaced Kevin

Sjodin, started consulting with Virtual Hold to develop its product strategy about a year ago. At the time, the company already was working to create Conversation Bridge-style tools, and it already offered a call-back button customers could add to their websites. Mr. Hayden, however, suggested the company put a bigger focus on those products. The mobile app offering is particularly timely; many Virtual Hold clients are developing mobile apps or plan to do so over the next 18 months, said Mr. Hayden, who has led multiple companies related to contact centers. Not only has Virtual Hold added about 25 employees over the past 18 months, but the company has more than doubled the size of its staff over the past five years, according to Crain’s Cleveland Business’ annual list of Northeast Ohio software developers. Virtual Hold’s revenues have grown by an average of 25% each year for the past three years, Mr. Camulli said. The company expects sales this year in the range of $25 million to $30 million. ■

JUNE 25 - JULY 8, 2012

GOING PLACES JOB CHANGES CONSTRUCTION GILBANE BUILDING CO.: Jon Fischer to senior project engineer; Tom Ruminski and Praem KanagaRaj to project engineers; John Coughlin and Christopher Kowalczyk to assistant project engineers.

Melda

Ibrahim

Swartz

Williams

Sweeney

LaRochelle

GREAT LAKES CONSTRUCTION CO.: Chris Stutz to operations manager.

CONSULTING HURON CONSULTING GROUP: Geoffrey Frankel to managing director, financial consulting.

EDUCATION NOTRE DAME COLLEGE: J. Scott Swain to director of athletics.

director of communications, industrial sector.

SOUTH UNIVERSITY: Bruce Campbell to dean of academic affairs and operations, Cleveland campus.

NONPROFIT

UNIVERSITY OF PHOENIX CLEVELAND CAMPUS: Stephen C. Quick to campus college chair, School of Business. WHITE HAT MANAGEMENT: Maggie Ford to chief academic officer; Joe Weber to chief financial officer; Pete Zacharias to DELA (Distance & Electronic Learning Academies) controller; Carrie McLain to DELA business manager; Stephanie Coney to call center coordinator/ board relations liaison; Rodd Coker to vice president, business development; Roy Berlocker to senior director, procurement and facilities.

FINANCE OHIO COMMERCE BANK: Ronald Schultz to vice president, commercial lender.

FINANCIAL SERVICE CEDAR BROOK FINANCIAL PARTNERS LLC: Joshua S. Melda to partner.

AKRON CHILDREN’S HOSPITAL FOUNDATION: Cheryl Williams to director, corporate partnerships.

REAL ESTATE TRANSACTION REALTY: Michael Smith to sales associate. WEBER WOOD MEDINGER/ CORFAC INTERNATIONAL: Kevin Riley to vice president.

SERVICE SAFEGUARD PROPERTIES: Kellie Chambers to assistant vice president, property preservation; Russ Klein to assistant vice president, quality assurance and training; Steve Meyer to assistant vice president, high risk and hazard claims; Travis Anderson to director, vendor management; Tim Rath to director, property preservation, regionals. TODAY’S BUSINESS PRODUCTS: Dennis Vargo, Paul Kruger and Eileen O’Connor to sales associates; Leann Teagno to customer service representative.

TECHNOLOGY HEALTH CARE SUMMACARE: Mumtaz Ibrahim, M.D., to chief medical officer.

SOFTWARE ANSWERS: Robert Sweeney to client services manager, ProgressBook.

LEGAL

BOARDS

BAKER HOSTETLER: Martin T. Booher to partner.

CUYAHOGA COUNTY NEXT GENERATION COUNCIL: Ludgy A. LaRochelle (Licata & Toerek) to chairman.

BENESCH: Scott E. Swartz to of counsel. OGLETREE DEAKINS: Natalie M. Stevens to associate. ULMER & BERNE LLP: Michael T. Tangry to associate. WICKENS, HERZER, PANZA, COOK & BATISTA CO.: Kimrey D. Elzeer, Timothy Pillari, James L. Miller and Christine C. Covey to associates.

MANUFACTURING EATON CORP.: Kelly Jasko to

JUNIOR LEAGUE OF CLEVELAND INC.: Hermione Malone (University Hospitals) to president.

AWARD JOHN CARROLL UNIVERSITY ALUMNI ASSOCIATION: Robin L. Baum (Zinner & Co. LLP) received the Alumni Medal.

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

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CRAIN’S CLEVELAND BUSINESS

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Six suburban hotels change ownership Purchase prices could be key indicator for other properties going forward By STAN BULLARD sbullard@crain.com

A portfolio of six suburban Cleveland hotels, operating under flags such as Courtyard and TownePlace by Marriott, has gained a new owner in a $44.8 million transaction by Boston-based asset manager CrossHarbor Capital Partners. The seller was Ozre Lodging LLC, a New York City-based realty affiliate of the Och-Ziff Capital Management Group LLC, an asset manager for institutional investors. Ozre in 2005 bought the hotels for $44.6 million from their original developer, The Richard E. Jacobs Group of Westlake. David Sangree, president of the Hotel Leisure Advisors consultancy in Lakewood, said the virtually unchanged sale price likely indicates the properties are performing today at about the same level as they did in 2005. As there have been few arms-length hotel sales recently in the region — most recent transfers have been distressed sales — the CrossHarbor purchase prices will be important, Mr. Sangree said. They will establish some basic hotel values in the region after the recession, he said.

THE ROSTER The six hotels in suburban Cleveland that have changed ownership: ■ Courtyard Cleveland Independence, Independence ■ Courtyard Cleveland Hopkins Airport Hotel, Middleburg Heights ■ TownePlace Suites, Middleburg Heights ■ Courtyard Cleveland North, North Olmsted ■ Courtyard, Westlake ■ TownePlace Suites, Westlake However, Mr. Sangree said the prices only will be one factor, as hotel valuations are based on performance and locations of various properties. According to Cuyahoga County land records, the CrossHarbor affiliate, CIP II Buckeye Hotel Landlord LLC, paid $10.3 million for the Courtyard Cleveland Independence, 5051 W. Creek Road in Independence; $9.5 million for the Courtyard Cleveland Hopkins Airport Hotel, 7345 Engle Road in Middleburg Heights; and $5 million for the TownePlace Suites, 7325 Engle Road, also in Middleburg

Heights. The sale also included the Courtyard Cleveland North, 24901 Country Club Blvd. in North Olmsted, for $6.4 million. Two Westlake hotels, the Courtyard and TownePlace at 25050 and 25052 Sperry Drive, respectively, sold for $13.4 million, according to a single deed transfer for both properties. A Marriott International spokeswoman said Marriott itself will continue to manage the Courtyard in Independence. However, the Middleburg Heights and Westlake hotels will be managed by Sage Hospitality, a Denver-based hotel management and development concern, according to a June 18 news release from the company. “Marriott has been an incredible partner for Sage Hospitality and we look forward to adding these important properties to our portfolio,” said Walter Isenberg, Sage president and CEO, in the news release. A Sage spokeswoman declined to discuss the sale of the property or change in management. A CrossHarbor spokeswoman declined comment. Ozre officials did not return two calls by deadline last week. ■

JUNE 25 - JULY 8, 2012

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.

Date released: April 3, 2012 Type: Employer’s withholding Amount: $389,841

LIENS FILED

CMC Pension Services Inc. 3690 Orange Place, Beachwood ID: 34-1448997 Date filed: Sept. 2, 2009 Date released: April 10, 2012 Type: Employer’s withholding Amount: $28,484

PGT Construction Inc. 9900 York Theta Drive, North Royalton ID: 20-1054167 Date filed: May 22, 2012 Type: Employer’s withholding Amount: $210,481 Diversified Digital Group Inc. 6775 Industrial Parkway, North Olmsted ID: 34-1942032 Date filed: May 8, 2012 Type: Employer’s withholding, unemployment, corporate income Amount: $192,058 Southwest Cleveland Sleep Center Inc. 17900 Jefferson Park Road, Suite 102, Cleveland ID: 34-1938990 Date filed: May 18, 2012 Type: Employer’s withholding, failure to file complete return Amount: $172,736 Hal-Mark Associates Inc. ETS Travel 9697 Brookpark Road, Parma ID: 34-1770173 Date filed: May 3, 2012 Type: Employer’s withholding Amount: $139,950 Beckett & Chambers Inc. 1786 E. 47th St., Cleveland ID: 34-1015905 Date filed: May 18, 2012 Type: Employer’s withholding, unemployment Amount: $138,122

LIENS RELEASED Affordable Supply Center Inc. 720 E. 152nd St., Cleveland ID: 20-3513654 Date filed: Feb. 13, 2012 Date released: April 17, 2012 Type: Employer’s withholding Amount: $137,303 Al Ihsan School Inc. 4600 Rocky River Drive, Cleveland ID: 34-1961620 Date filed: Jan. 20, 2012 Date released: April 10, 2012 Type: Employer’s withholding, unemployment Amount: $11,751 Anegada LLC 48 Northfield Road, Bedford ID: 20-1703791 Date filed: April 30, 2008 Date released: April 10, 2012 Type: Employer’s withholding Amount: $59,195 Anegada LLC 48 Northfield Road, Bedford ID: 20-1703791 Date filed: Dec. 1, 2008 Date released: April 10, 2012 Type: Employer’s withholding Amount: $21,405 Cleveland Business Consultants LLC 526 Superior Ave., E. Suite 1111, Cleveland ID: 11-3678151 Date filed: Oct. 20, 2011

Cleveland Business Consultants LLC 526 Superior Ave., E. Suite 1111, Cleveland ID: 11-3678151 Date filed: Dec. 16, 2011 Date released: April 3, 2012 Type: Failure to file complete return Amount: $80,437

Gellner Engineering Inc. 2827 Brookpark Road, Parma ID: 34-1383557 Date filed: Nov. 10, 2011 Date released: April 17, 2012 Type: Employer’s withholding Amount: $12,163 Head Builders Inc. 15293 Sandalhaven Drive, Cleveland ID: 34-1437352 Date filed: May 12, 2011 Date released: April 26, 2012 Type: Employer’s withholding Amount: $23,077 J R Hudak Inc. 6465 Pebblecreek Drive, Independence ID: 34-1675388 Date filed: Jan. 24, 2012 Date released: April 10, 2012 Type: Unemployment Amount: $13,510 Le Clairs Custom Cabinetry Inc. 21706 Lunn Road, Strongsville ID: 34-1712180 Date filed: Nov. 30, 2011 Date released: April 17, 2012 Type: Employer’s withholding Amount: $28,967 Pioneer Environmental Systems Inc. 20536 Krick Road, Walton Hills ID: 06-1682390 Date filed: Nov. 29, 2011 Date released: April 3, 2012 Type: Employer’s withholding Amount: $10,375 Reeder Properties Inc. 1192 Holmden Ave., Cleveland ID: 34-1834472 Date filed: Nov. 22, 2011 Date released: April 10, 2012 Type: Employer’s withholding, corporate income Amount: $10,998 R J Evans & Assoc Inc. 31035 Cannon Road, Solon ID: 34-1163720 Date filed: Feb. 19, 2009 Date released: April 17, 2012 Type: Employer’s withholding Amount: $39,733 Varrsity Constructors LLC 23209 Miles Road, Suite A, Cleveland ID: 20-5305272 Date filed: Jan. 10, 2012 Date released: April 3, 2012 Type: Employer’s withholding, failure to file complete return Amount: $12,776 Victory Solutions LLC 6505 Rockside Road, Suite 175, Independence ID: 20-4833667 Date filed: Oct. 7, 2011 Date released: April 3, 2012 Type: Employer’s withholding Amount: $23,803

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T

he fields of Northeast Ohio’s employment landscape are blooming with opportunity in engineering, health care and technology. Higher pay in these sectors along with current and future job availability align with national trends, according to local and national salary and wage data. The region is fertile ground for growth in these occupations, with a commanding presence of globally oriented health care and technology companies. But, finding qualified people to fill these positions remains a challenge for employers. “It appears that demand for positions in engineering, IT and health care is being influenced, in part, by a supply shortage for talent within these fields,” said Marty Mordarski, director of membership and research for ERC in Mayfield Village.

The human resources organization in May released its 2012 wage and salary survey data, which provide a snapshot of the current jobs environment in Northeast Ohio, including some of the highest- and lowest-paying nonexecutive occupations. The 2012 wage and survey information are based on positions for which ERC surveys; the surveys don’t cover salaries for occupations

MANAGEMENT

such as surgeons or lawyers. The Bureau of Labor Statistics also provides comprehensive occupational information for the Cleveland-Elyria-Mentor MSA, based on 2011 annual mean wages, and covers the aforementioned positions as well as executive pay. This section takes a closer look at the region’s high- and low-paying occupations, based on these and other sources. — Kathy Ames Carr

Mean annual wage: $104,330

MAKING IT

Analyzing how well — or poorly — Northeast Ohioans are paid

See TOP Page 18

120,0000

100,0000

CONSTRUCTION Mean annual wage: $48,340 SOURCE: RESEARCH BY BALDWIN-WALLACE ECONOMICS PROFESSOR VERONICA Z. KALICH

$80,000

INSIDE THIS SECTION

Social services: $45,360

■ We chatted with area career and college counselors to gauge their views on what careers have the greatest earning potential in Northeast Ohio and outside the region. PAGE 17 Construction: $48,340

Education/librarians: $51,760

Life/physical scientists: $59,900

Business/finance: $63,790

Health practitioners: $70,280

Architecture/engineering: $71,720

Computer/math: $73,406

■ A look at the impact of the recession on wages, including the effect of lost jobs and changes in the employment market. PAGE 16 Legal: $85,460

Management: $104,330

$60,000

A

ccording to the Bureau of Labor Statistics, the highestpaid positions in Northeast Ohio belong to obstetricians and gynecologists, who earn an annual mean wage of $207,700, followed by physicians and surgeons at a little more than $200,000. Chief executives earn an average of $198,660, while psychiatrists bring home $177,000. Other six-figure professions include: ■ Dentists, $163,430 ■ Architectural and engineering managers, $119,850 ■ Computer and information systems managers, $115,240 ■ Aerospace engineers, $107,020 According to ERC’s membership survey, specialized engineers in Northeast Ohio generate an average median base salary of $74,152. Programmers and software engineers come in second, at $70,349, followed by safety managers, at $69,656. The average median base salary of a nurse, another high-demand occupation, is $68,578. Registered nurses are in some of the greatest demand within local health care systems. The Cleveland Clinic has a need for specialty nurses in cardiac,

According to research by Veronica Z. Kalich, a professor of economics at Baldwin-Wallace College, these are the top 10 occupations in Northeast Ohio, ranked by mean annual wage. All values are derived from data collected by the Bureau of Labor Statistics from employers in all industry sectors in the ClevelandElyria-Mentor metropolitan statistical area, and are as of May 2011, the most recent available. The figures take into consideration both high-paying and low-paying positions in each category.

$40,000

By KATHY AMES CARR clbfreelancer@crain.com

Mean annual wage: $70,280

HIGHEST-PAID OCCUPATIONS

$20,000

AT THE TOP

HEALTH CARE PRACTITIONER

■ A look at other factors, including benefits, unions and education, that go into pay. PAGE 19 ■ How does Northeast Ohio stack up with other parts of the country in terms of salaries and cost of living? PAGE 20 ■ Miscellaneous data, including Northeast Ohio’s highest-paid athletes, and more. PAGE 21

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CRAIN’S CLEVELAND BUSINESS

JUNE 25 - JULY 8, 2012

Add up recession’s local toll, get $3.6B in lost earnings Salary ‘compression’ in existing work force could keep some pay down By AMY ANN STOESSEL astoessel@crain.com

F

rom 2001 to 2011, Cuyahoga County lost $3.6 billion in annual earnings. “That’s an astonishing figure,” said local economist George Zeller, who provided the statistics compiled from unemployment tax records. “We were over $4 billion before the recent gains. … This recession was very damaging.” The downturn’s effect on the region’s earnings was multi-faceted, from loss in jobs and changes to the employment market to adjustments in individual wages. While more recent figures show a reverse in the downward trend in overall earnings — the county actually gained nearly $672 million

from 2010 to 2011 — Mr. Zeller said Ohio never really recovered from 2000-02 before heading into the most recent recession. “The good news is average earnings are actually increasing,” he said. “Those are actual real gains.” Certainly, there are aspects in earnings that may not be reflected in the numbers, meaning in some cases more people working in a position may be earning less or vice versa. The seven-county region’s employment numbers also increased from 2010 to 2011, adding 13,145 jobs, a 1.1% uptick. In all, 158,189 jobs were lost in the same region from 2000-11, an 11.2% drop. “We want to get the jobs back, and we want to get their wages up, too,” Mr. Zeller said.

Mr. Zeller said the recovery is being driven by growth in high-wage manufacturing jobs. However, public sector cuts are slowing down the recovery. “The problem is the recovery is way too slow,” Mr. Zeller said, noting that at the current rate of recovery it will take 12 years to recover previously lost jobs in the region. In Cuyahoga County, that same figure is 21 years, and statewide, it’s nine years.

Recession results Of course, jobs and their corresponding wages were not the only losses from the recession. For those who remained employed during the downturn, existing earnings often took a hit. “What we did see was more

across-the-board pay cuts,” said Marty Mordarski, director of research and membership at ERC. Additionally, wage freezes and lower salary adjustments became more common. For example, actual salary increases in 2001 were 4.4%, according to ERC’s 2011-2012 Wage & Salary Adjustment Survey. In comparison, that number was 2.7% in 2010 and 2.8% in 2011. “It was very reactive. … I think it started happening before it got really bad,” Mr. Mordarski said. Mr. Mordarski said industries in which there was the most stagnation in terms of wage freezes and cuts were manufacturing, particularly for lower-skilled production, maintenance and service positions. In addition, at the height of the recession it was common to see health care institutions and nonprofits implement wage freezes, cuts and hiring freezes. Of note, however, is that the dip in salary adjustments is not unique to the most recent economic downturn. It also dropped to 2.6% in 2002, hovering at a little over 3% until 2010. “We saw a big dropoff after 2001,” Mr. Mordarski said. “That has not changed much really since then.” Katie Talarico, ERC’s survey manager, said employers last year started moving away from pay freezes. That doesn’t mean, however, that earnings will catch up to where they would have been had the recession not occurred. “It’s very unlikely their employer’s going to come back and make up for that,” Mr. Mordarski said. To that end, what’s known as “pay compression” is a resulting phenomenon of the recession. While the market calls for increased pay for new talent, especially for positions in high demand, salaries within the existing work force still are being negatively affected by the impacts of past cuts and freezes. “It puts organizations in a really challenging position,” he said. “That happens if you really stagnate. … The best practice is to adjust their rates.”

Structural issues Another result of the recent recession is a lot of “structural unemployment,” said Bruce McCain, chief investment strategist at Key Private Bank. A lot of jobs that disappeared simply are not coming back, which in itself is having an effect on some earnings levels. “This was a harder recession than

Did you know bees give directions to other bees through dance?

UP AND DOWN On average, Northeast Ohio employers provided actual pay increases of 2.8% in 2011, according to data from Mayfield Village human resources firm ERC. A look at past actual and projected pay increases:

Year

Actual

Projected

2011

2.8

2.8

2010

2.7

2.7

2009

3.1

3.3

2008

3.4

3.3

2007

3.5

3.3

2006

3.4

3.3

2005

3.4

3.3

2004

3.6

3.2

2003

3.3

3.0

2002

2.6

3.7

2001

4.4

4.1

most,” Dr. McCain said. “Household incomes have taken a pretty heavy beating.” Whole industries permanently reduced the number of people they need, so the state of being underemployed may have become permanent for some. “It was a recession on steroids,” he said. Baby boomers felt the brunt of structural unemployment, although Dr. McCain said each generation’s earnings may be affected in some way by the recession. Members of Generation X are facing a “bottleneck,” not having the opportunity to rise in pay or position since many Baby Boomers remain in the work force. Millennials, meanwhile, are facing high levels of debt and may not have the same opportunities in term of compensation as their predecessors. As for household incomes, they’re simply not rising as fast as they once did, especially as gas, food, college and health care costs increase, Dr. McCain said. And while it’s a trend that’s been long in the making, “it’s becoming much more excruciating painful for people.” Still, economist Mr. Zeller stressed that there are positive trends — and reasons to be hopeful. “Earnings are still holding up by and large,” he said. “That’s good, that’s part of the recovery. … That means this recovery is genuine. ■

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MAKING IT

JUNE 25 - JULY 8, 2012

CRAIN’S CLEVELAND BUSINESS

Job prospects trending up in IT, emerging industries By JUDY STRINGER clbfreelancer@crain.com

T

he notion that there aren’t any decent jobs out there simply isn’t true, according to the area’s college and career counselors, who say employment — and in many cases earnings — prospects for today’s students are good. And that’s not only the case for the fast-growing fields of health care, information technology and financial services, they say, but also for older sectors, such as manufacturing, and emerging ones, like alternative energy. “With regards to technology, computer science and information sciences, we can’t fill all the positions with the number of students we have available,” said Carmen CastroRivera, director of career services at Baldwin-Wallace College. The U.S. Bureau of Labor Statistics forecasts that employment of computer software engineers alone is expected to increase by 32% nationally between 2008 and 2018, which is much faster than the average for all occupations. The demand for computer information managers and computer systems analysts in Ohio will increase 13% and 14%, respectively, in the same time period. And salaries in information technology are strong. Jody Patterson, career counselor with Kent State’s Career Services Center, said she has seen starting salaries in IT-related jobs increase 3% in the last year. “We are talking about starting salaries well over $50,000, sometimes in the $60,000s,” Ms. Patterson said. Computer information research scientists and actuaries in Greater Cleveland clear more than $100,000, according to Baldwin-Wallace professor of economics Veronica Kalich. Such statistics debunk the perception that high-paying IT jobs are outsourced overseas. IT positions requiring lots of client and customer interaction or decision-making or that have security implications have remained in the U.S. and are on a growth curve, Ms. Castro-Rivera said.

nurse), and continue on from there to complete an associate degree or bachelor’s degree in nursing or allied health.” Accounting, auditing and related financial service positions are another bright spot. Ohio is expected to add 16% more accounting jobs between 2008 and 2018 with a similar increase in the number of auditing jobs. The BLS reports that the median annual wage of accountants and auditors was $61,690 in May 2010. “In times when things are more uncertain in terms of the financial picture, we all want people with expertise to help manage our insurance, retirement planning accounts and investment accounts,” Ms.

Castro-Rivera said. “For corporations, when there is not a lot of money for day-to-day operations, they need people who can handle it well.”

Making jobs A local manufacturing resurgence and the alternative energy industry are expected to provide increased opportunities for students who get the necessary expertise. Liz Walton, adult education director at CVCC, said the grubby manufacturing jobs of the past have given way to clean advanced manufacturing jobs — many of which are going unfilled as too few get the training necessary to replace retiring, experienced workers. Here in the Cleveland area, CNC

operators, charged with operating computer-control machines or robots in automated manufacturing processes, averaged slightly more than $36,000 a year as of May 2010, according to the BLS. According to Ms. Coyne, not a day goes by that a manufacturer doesn’t call CVCC looking for a machinist, CNC operator, maintenance technician or welder. Schools like hers provide a range of certification programs, but don’t have enough students to meet the escalating demand. “I think many students have old-fashioned views of manufacturing jobs as dirty, boring or declining. In fact, careers in advanced manufacturing offer exciting opportunities for people inter-

ested in designing and improving products, operating high-tech tools and machinery, analyzing problems and coming up with creative solutions,” she said.

Going into the unknown Of course, there are other fields expected to be fruitful here in Northeast Ohio. Dr. Kalich pointed out that legal jobs, along with business and financial professionals and health care practitioners, rank high both in terms of salary potential and concentration in the area. It is also impossible to know what new fields or jobs might materialize as a result of new technologies or products. “In 2012, we are seeing a lot of positions related to social media that did not even exist four years ago,” said Hilary Flanagan, director of John Carroll’s Center for Career Services. ■

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MAKING IT

CRAIN’S CLEVELAND BUSINESS

JUNE 25 - JULY 8, 2012

Top: Pay at startups lower initially, but jobs offer return continued from PAGE 15

oncology, research, surgery, critical care, and labor and delivery, said Christine Durigg, director of staffing and recruitment. Engineer employment is healthy at firms such as Cleveland-based MCPc, a technology solutions provider that last year hired 27 engineers to bring to 78 its current engineer headcount and to 367 its overall employment. The majority of these occupations are virtualization-focused, as cloud computing becomes more ubiquitous. “When it comes to this type of talent, companies are challenged with compensating appropriately,” said Beth Stec, MCPc’s vice president of corporate communications and human resources. “We are finding we are compensating IT folks and engineers at a higher rate of growth than other types of positions, so if the market is trending toward a two-, three- or four-percent pay increase, the engineering team gets over double that.” The engineering talent pool is a highly selective group. According to a March 2012 U.S. News and World Report story, the unemployment rate is about 2% for engineers. Observers see demand for positions that include biomedical, aerospace and automotive — sectors that have or are developing substantial roots in Northeast Ohio. Wickliffe-based Lubrizol is thinking even bigger because the specialty chemicals company now is owned by Warren Buffett’s Berkshire Hathaway Inc. Its recent acquisition strategy outlines a plan to reach $10 billion in sales, and it places an emphasis on acquisitions for Lubrizol’s advanced-materials unit.

Tom Tomasula, director of global talent acquisition at Lubrizol, said he expects the company will need to hire more chemists and chemical and mechanical engineers. Of course, there’s also recruiting for specialized jobs that, at the getgo, don’t offer much compensation. When Robert Hatta, vice president for entrepreneurial talent at JumpStart Inc., seeks candidates to fill positions at early stage companies and startups, he seeks a highly targeted, exclusive group. “It’s not for everyone, but you offer something special: a chance to play a critical, high-impact role in delivering an innovative new product to market and (potentially) creating significant wealth in the process,” Mr. Hatta said. “The tradeoff between shorter-term lower compensation is the longerterm potential in stock options.” The right individuals not only need specific technical skills, but must have the right personality. “It’s hard to find people who do, and have demonstrated the desire to take risks in job security and compensation,” Mr. Hatta said. The venture development organization recruits nationally, although Mr. Hatta and others work closely with talent attraction group Global Cleveland, the Northeast Ohio Software Association and local colleges and universities to source regional talent. A shortage in qualified employees is a concern among technology industry professionals, and Northeast Ohio is not unique. “It’s worse in Seattle, San Jose … the tech meccas,” Mr. Hatta said. “The shortage here could easily be addressed with an open-minded, aggressive approach toward

HIGH- AND LOW-PAYING NON-EXECUTIVE OCCUPATIONS IN NE OHIO The average median base salary figure for each occupation was calculated using data excerpts from the following surveys conducted by ERC: 2012 ERC Salary Survey; 2012 ERC Wage Survey; and 2011 ERC Non-Profit Compensation Survey. The salary figure reported for each occupation is an average of median salaries across applicable job titles from entry level through management level. Executive and director position types were excluded to prevent skewed averages. ERC’s annual salary and wage surveys report data on hundreds of positions for thousands of employees. Go to www.ercnet.org for more information.

Higher-paying occupations

Median salary, 2011-12

Specialized engineering

$74,152

Programmers/software engineers

70,349

Safety (i.e. risk manager)

69,656

Nursing

68,578

IT analysts

67,044

Lower-paying occupations

Median salary, 2011-12

Warehouse/distribution laborers

$30,577

Misc. production (i.e. painting, coating)

32,483

Administrative support

33,515

Patient/client services

33,910

Assemblers/fabricators

35,712

recruiting, where companies train employees or graduates.”

At the bottom Food preparation and related service positions are on the other end of the spectrum, with annual mean wages not much higher than a full-time minimum wage income. According to the Bureau of Labor Statistics’ May 2011 look at the Cleveland-Elyria-Mentor area, dishwashers and lifeguards earn just

under $18,000 a year. Fast-food cooks, restaurant hosts and hostesses and cooks are paid in the $18,000 to $19,000 range. Home health and personal care aides earn annual salaries in the low $20,000s. Other lower-paying occupations include: ■ Child care workers, $22,660 ■ Funeral attendants, $23,280 ■ Veterinary assistants, $23,410 ■ Preschool teachers, except special education, $23,650

Exposure

According to ERC’s membership survey, jobs that fall into the lowestpaying categories are found in warehouse, production, administration and client/patient services. Many of these jobs have low education and skill requirements with highly repetitive duties, according to ERC, although exceptions are in the social and human services areas. Education and social work pay about $10,000 more than manual laborers and production workers, whose average median base salaries are in the low $30,000s. Of course, even lower income levels strain an estimated 39,000 families, or 12.2% of Cuyahoga County’s population, who have annual income levels below $15,000, according to the U.S. Census Bureau’s 2010 American Community Survey. Many of these workers no doubt rely on minimum-wage jobs in sectors such as food service or retail. These positions typically rely on weekly schedules, so workers often aren’t guaranteed 40-hour work weeks. A working adult supporting a family and earning $7.70 an hour means he or she likely needs to choose between basic needs such as food, child care, health care, quality housing or reliable transportation, said Emily Campbell, Williamson Family Fellow for Applied Research at the Cleveland-based Center for Community Solutions, a research and advocacy group on health, social and economic conditions. “However, a parent earning minimum wage makes so little that their family would probably qualify for public assistance like food stamps, Medicaid or housing assistance,” she aid. “But it’s very difficult to live on minimum wage, earning $16,000 a year.” ■

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20120625-NEWS--19-NAT-CCI-CL_--

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1:47 PM

Page 1

MAKING IT

JUNE 25 - JULY 8, 2012

Many factors play into compensation Benefits, unions, degrees all are part of formula By KATHY AMES CARR clbfreelancer@crain.com

T

he compensation formula can be tricky, as considerations beyond skill and experience factor into the wages and salaries of Northeast Ohioans:

■ Employers with benefits: Bonuses, stock options, health insurance and sick days are just some of the benefits employers offer beyond salary. Perhaps tuition reimbursement, retirement contributions or profit sharing also are part of the package. No matter the mix, organizations offer benefits as a way to recruit, retain and reward employees, although they come at a cost. About 25% of an organization’s total budget is allocated toward compensation, while an additional 8% is directed toward benefits, according to Mayfield Village-based ERC’s 2012 Turnover and HR Department Practices Survey. Non-manufacturers in general spend more of their total budgets on compensation and benefits, though in some sectors such as nonprofit and government work, more emphasis may be placed on benefits because of certain restrictions such as union contracts that control salary levels. ■ Does it pay to be in a union?: Whether nonunion workers are paid less than unionized workers depends on a lot of factors, said Marty Mordarski, director of membership and research at ERC. A union worker may be paid a higher gross rate, but depending on the size of the union dues, he or she may take home less pay than a nonunion employee. However, union workers’ total compensation in some cases may be higher. According to 2011 national data from the Bureau of Labor Statistics, the union membership rate of the U.S. work force was 11.8%, essentially unchanged from 11.9% in 2010. More than half of the 14.8 million union members in the United States lived in seven states, including Ohio, where membership was about 600,000. In 2011, union members had median weekly earnings of $938, while those who were not union members had median weekly earnings of $729. ■ A degree’s worth: With the cost of education skyrocketing in recent years, the value of a college or advanced degree has been called into question. But as 2011 BLS data show, the more educated you are, the likelier you are to generate a heftier income. The average median weekly earnings in 2011 were $797. Individuals with a high school diploma earned $638. Employees with a bachelor’s degree made about $1,053 each week, while workers with master’s degrees were paid $1,263. Those with doctorates earned $1,551 per week. Unemployment among individuals without a high school diploma was 14.1%, and 9.4% for those with a high school diploma. The jobless rate among those with bachelor’s degrees was 4.9%; 3.6% for people with master’s degrees; and 2.5% for individuals with doctorates.

■ Gender: It’s difficult to track gender and salary equality in the workplace because so many factors, including education and experience, are tied to compensation and benefits. But ERC’s Top Performer survey offers a glimpse into one way that gender may factor into the work force. The survey was completed by top-performing employees at Northeast Ohio organizations applying for the NorthCoast 99 Award from 2009 to 2011. In general, more women are working in lower-paying positions than men. For example, management and supervisory roles and technical and engineering roles typically pay more than office,

administrative, and health and human services jobs. “From an HR perspective, there are so many factors to consider when establishing pay, it doesn’t even make sense to consider nonperformance-related considerations like your shoe size, hair color or race and gender. Why limit your ability to employ the best people?” said Mr. Mordarski, noting that it’s unlikely employers purposefully are factoring gender into their hiring practices. “If an employer isn’t providing pay that matches the needs of the talent that they need to be successful, that organization is going to struggle to attract and retain top talent, period,” he said. ■

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MAKING IT

CRAIN’S CLEVELAND BUSINESS

JUNE 25 - JULY 8, 2012

When pitching Cleveland, recruiters tout cost of living Salaries often don’t stack up to other cities By JENNIFER KEIRN clbfreelancer@crain.com

I

n the fight for fresh talent, consider Margy Judd to be Northeast Ohio’s closer. As CEO of Executive Arrangements, it’s Ms. Judd’s job to help her clients — heavy-hitting local employers like the Cleveland Clinic, American Greetings and Eaton Corp. — sweeten the deal for out-of-town job candidates with an enticing glimpse of life in Northeast Ohio. By digging into the interests of the candidate and his or her family, Ms. Judd and her team of guides create customized tours of the city, visiting schools, sampling restaurants, touring cultural institutions and browsing desirable communities. “We’re usually asking them to leave the biggest cool cities in the country,� said Ms. Judd, who claims an 80% success rate. “If we can tap into the things that make them tick as a family, we can figure out if Northeast Ohio will work for them.� Salary numbers alone often don’t favor Northeast Ohio’s job market in the competition against other cities.

It’s the work of recruiters, employers and city cheerleaders like Ms. Judd to bring the Cleveland area to the top of a potential employee’s heap.

Who’s the competition? Ms. Judd can cite examples of helping her clients land talent from far-flung places such as San Francisco, San Antonio, New York City and even Tokyo. But results like that aren’t typical, said Mike Milby, president and CEO of executive recruiting firm Ratliff & Taylor. “It’s always hard to recruit off the coasts,� he said. “Our major competition (for talent) would be similarly situated cities whose economic base is similar to ours.� Judging solely by numbers, Cleveland’s compensation performance against national and regional competitors isn’t impressive. Our mean annual salary across professions of $43,690 is 3% lower than the national mean annual salary, according to May 2011 Bureau of Labor Statistics data, which analyzes the Elyria-ClevelandMentor metropolitan statistical area.

Looking more closely by occupation, a registered nurse makes 6% less than the national average, a chemical engineer 12% less, and a chief executive 3% less. On the lower end of the pay scale, cashiers make 5% less than the national average, telemarketers 22% less, and personal trainers 12% less. National survey data collected by the Economic Research Institute in Redmond, Wash., look more closely at how we fare against our competition cities. Occupations like CFOs, secondary school teachers and software engineers make slightly more here than in Columbus and Pittsburgh, but less than their colleagues in Detroit and Chicago. “If you look at those numbers in a vacuum, it’s not a fair comparison,� says Marty Mordarski, director of research and membership for the Employers Resource Council, which conducts local salary surveys. “One of the strong advantages Cleveland has is that its cost of living is significantly lower than other areas.�

Quality of life, quantity of dollars It’s the job of recruiters like Mr. Milby — who estimates that 30% to 40% of his candidates are from outside of Northeast Ohio — to put such

WE ARE ROETZEL.

COST OF LIVING COMPARISONS Experts say that Cleveland’s cost of living should be factored in when comparing salaries to those offered elsewhere. While Cleveland’s cost of living is comparable to some of its Midwest neighbors, it’s much lower than what might be found on the coasts. (On the chart, 100 is the national average.)

Category

Cleveland

Pittsburgh

Los Angeles

Overall

90

87

147

Grocery

111

106

108

Health

106

98

108

Housing

46

47

248

Utilities

101

101

109

Transportation

101

113

111

Miscellaneous

110

97

106

SOURCE: SPERLING’S BESTPLACES.NET

figures in perspective. “There’s an assumption that if you work in Cleveland you will get paid less than if you were to work in Chicago,� Mr. Milby said. “But what you can do with those dollars is demonstrably higher than what you can do in Atlanta or Chicago.� Numbers in perspective tell a brighter story. Cleveland ranked 16th on this year’s Forbes “20 Most Affordable Cities� list, down from No. 8 last year, and it was one of four Ohio cities to make the list. Cleveland’s Consumer Price Index of 215.6 is 6% lower than the national average of 229.8. Ms. Judd also points clients to salary calculators like that at Sperling’s BestPlaces.net, which incorporates data on salaries, home

prices, crime, health care expenditures and more to create a cost of living analysis. That site gives Cleveland a cost-of-living score of 90 — with 100 as the national average — as compared to 105 in Atlanta, 116 in Chicago, 159 in New York City and 185 in San Francisco. Ms. Judd says cost of living is the top factor in making a client choose a job in Cleveland, combined with what she calls the low-hassle factor — shorter commutes, less traffic and easy accessibility by air. “Our relative weakness is nothing more than the unfortunate reputation Cleveland has outside of Northeast Ohio,� Mr. Milby said. “But one of our greatest strengths is that once people are here, they don’t want to leave.� ■

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3:50 PM

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MAKING IT

JUNE 25 - JULY 8, 2012

CRAIN’S CLEVELAND BUSINESS

21

THISANDTHAT ON THE DOTTED LINE An ERC/NOCHE survey recently reported average signing bonuses offered to recent grads.

Industry

Avg. bonus

Manufacturing

$2,583

Non-manufacturing

$2,000

Nonprofit

HIGHEST-PAYING OCCUPATIONS NATIONALLY

The 2012 ERC/NOCHE Intern & Recent Grad Pay Rates & Practices Survey also indicated pay levels for recent college graduates with common degrees

Degree

The Bureau of Labor Statistics tracks salary data from occupations nationwide; a look at those occupations and their 2010 median pay:

Occupation

2010 median pay

No. of grads

Avg. salary

Business/marketing, associate

4

$31,093

Oral surgeons, orthodontists

Information technology, associate

3

$37,000

Chief executives

$165,080

Accounting, bachelor’s

11

$36,912

Dentists

$161,020

Business administration, bachelor’s

5

$35,880

Judges/magistrates

$119,720

Chemistry, bachelor’s

5

$39,833

Architectural/engineering managers

$119,260

Computer science, bachelor’s

17

$50,000

Prosthodontist

$118,400

Engineering, bachelor’s

81

$51,455

Podiatrists

$118,030

$166,400 or more

n/a

All organizations

Org. size

GRADUATE PAY

$2,350

Avg. bonus

1-50

n/a

51-250

$1,833

251-500

$2,500

Over 500

$4,333

NORTHEAST OHIO’S HIGHEST-PAID ATHLETES A look at Cleveland’s top-earning pro athletes, with salary figures used from either current or next compensation year: ■ DEREK LOWE, pitcher, Cleveland Indians: $15 million (the Atlanta Braves, who traded Lowe to Cleveland, pay $10 million of his 2012 salary) ■ TRAVIS HAFNER, designated hitter, Indians: $13 million ■ JOE THOMAS, offensive lineman, Cleveland Browns: $10.5 million ■ ANDERSON VAREJAO, forward, Cleveland Cavaliers: $8.4 million ■ AHTYBA RUBIN, defensive lineman, Browns: $7.7 million ■ LUKE WALTON, forward, Cavaliers: $6.1 million ■ JOE HADEN, cornerback, Browns: $5.8 million ■ KYRIE IRVING, guard, Cavaliers: $5.5 million ■ GRADY SIZEMORE, outfielder, Indians: $5 million ■ SHIN-SOO CHOO, outfielder, Indians: $5 million ■ DANIEL GIBSON, guard, Cavaliers: $4.8 million ■ ASDRUBAL CABRERA, infielder, Indians: $4.6 million ■ CHRIS GOCONG, linebacker, Browns: $4.5 million SOURCES: COT’S BASEBALL CONTRACTS; HOOPSHYPE.COM; SPOTRAC.COM

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 25 - JULY 8, 2012

HIGHEST PAID CEOS RANKED BY 2011 COMPENSATION Executive (Age) Company

Total compensation 2011 2010

% change

Salary

Bonus

1

W. Nicholas Howley (59) TransDigm Group Inc.

$20,665,146 $10,955,780

88.6

$690,000

$1,000,000

$0

$17,855,610

$0

$0

$1,119,536

$244.6

95.2

2

Anthony J. Alexander (60) FirstEnergy Corp.

$18,328,895 $11,627,657

57.6

$1,340,000

$0

$9,135,872

$882,829

$2,872,416

$4,028,743

$69,035

$885.0

19.3

3

Alexander M. Cutler (60) Eaton Corp.

$13,586,010 $12,798,596

6.2

$1,203,000

$0

$2,438,434

$2,267,902

$4,458,058

$3,115,441

$103,175

$1,350.0

45.3

4

Donald E. Washkewicz (62) Parker Hannifin Corp.

$12,955,520 $17,312,616

(25.2)

$1,155,000

$0

$4,361,877

$2,928,118

$2,785,554

$1,513,284

$211,687

$1,109.6

30.0

5

James W. Griffith (58) Timken Co.

$12,856,522 $7,711,127

66.7

$1,058,334

$0

$1,098,020

$2,630,760

$4,624,356

$3,283,000

$162,052

$454.3

65.3

6

Richard J. Kramer (48) Goodyear Tire & Rubber Co.

$12,223,070 $10,134,391

20.6

$1,000,000

$0

$683,230

$1,829,996

$6,751,400

$1,899,524

$58,920

$343.0

NM

7

Glenn M. Renwick (56) Progressive Corp.

$9,615,767 $9,605,558

0.1

$750,000

$0

$7,500,007

$0

$1,237,500

$0

$128,260

$1,015.5

-4.9

8

Stephen D. Newlin (59) PolyOne Corp.

$8,433,326 $7,511,135

12.3

$946,538

$0

$1,285,508

$1,282,148

$4,088,859

$520,514

$309,759

$172.6

6.2

9

Christopher M. Connor (55) Sherwin-Williams Co.

$8,150,048 $7,735,200

5.4

$1,221,987

$0

$2,774,922

$2,212,752

$1,508,000

$0

$432,387

$441.9

-4.5

10

Thomas W. Swidarski (53) Diebold Inc.

$7,047,263 $5,531,245

27.4

$840,000

$0

$2,408,475

$1,522,800

$1,000,000

$1,075,308

$200,680

$144.8

NM

11

Frank C. Sullivan (50) RPM International Inc.

$6,900,209 $5,434,034

27.0

$850,000

$0

$3,104,310

$1,750,000

$1,020,000

$63,915

$111,984

$203.5

13.5

12

Alfred M. Rankin Jr. (70) Nacco Industries Inc.

$6,733,740 $10,531,524

(36.1)

$1,217,000

$0

$1,426,409

$0

$1,589,048

$1,871,523

$629,760

$162.1

103.9

13

Joseph A. Carrabba (59) Cliffs Natural Resources Inc.

$6,437,179 $5,595,592

15.0

$955,500

$0

$3,104,793

$0

$1,880,410

$446,046

$50,430

$1,619.1

58.8

14

Paul G. Greig (56) FirstMerit Corp.

$6,363,713 $5,510,259

15.5

$791,250

$0

$1,999,995

$0

$1,400,000

$1,923,463

$249,000

$119.6

16.2

15

John M. Stropki (61) Lincoln Electric Holdings Inc.

$6,148,538 $4,967,208

23.8

$828,000

$0

$877,730

$935,023

$2,514,766

$965,281

$27,738

$217.2

66.8

16

Richard K. Smucker (63) J.M. Smucker Co.

$5,488,384 $7,977,283

(31.2)

$853,000

$17,060

$2,475,000

$0

$1,053,500

$1,032,317

$57,507

$450.5

-10.8

17

Joseph M. Scaminace (58) OM Group Inc.

$5,026,819 $4,623,249

8.7

$945,120

$0

$1,265,692

$1,102,520

$1,598,198

$14,211

$101,078

$37.9

-54.5

18

Beth E. Mooney(1) (56) KeyCorp

$4,955,665 $2,449,276

102.3

$1,265,339

$0

$1,428,828

$1,179,843

$958,800

$5,290

$117,564

$920.0

66.1

19

Edward F. Crawford (72) Park-Ohio Holdings Corp.

$4,632,634 $1,997,153

132.0

$750,000

$0

$1,567,500

$0

$1,476,520

$336,575

$502,039

$29.4

93.8

20

James F. Kirsch (54) Ferro Corp.

$4,621,676 $4,742,543

(2.5)

$907,000

$0

$833,800

$2,450,550

$136,050

$0

$294,276

$31.6

455.4

21

David J. LaRue(2) (50) Forest City Enterprises Inc.

$4,530,441 $2,375,299

90.7

$561,683

$0

$1,239,992

$719,999

$1,935,000

$6,851

$66,916

($86.5)

NM

22

Michael F. Hilton (57) Nordson Corp.

$4,515,269 $4,139,840

9.1

$700,000

$0

$1,146,150

$859,250

$1,400,000

$329,825

$50,044

$214.8

14.7

23

Craig S. Shular (59) GrafTech International Ltd.

$3,820,307 $3,333,873

14.6

$762,500

$0

$2,180,691

$769,600

$0

$25,891

$81,625

$153.2

-12.3

24

Joseph M. Gingo (66) A. Schulman Inc.

$3,728,371 $4,688,808

(20.5)

$810,000

$0

$2,168,163

$0

$615,600

$0

$134,608

$47.3

-5.5

25

Samuel F. Thomas (60) Chart Industries Inc.

$3,716,444 $2,515,730

47.7

$650,000

$0

$946,971

$799,269

$1,181,895

$0

$138,309

$44.1

118.6

26

Gerald B. Blouch (65) Invacare Corp.

$3,653,640 $3,204,967

14.0

$850,000

$0

$645,480

$969,149

$776,730

$301,289

$110,992

($4.1)

NM

27

Kevin M. McMullen (51) Omnova Solutions Inc.

$3,458,268 $3,729,815

(7.3)

$690,727

$882,000

$692,125

$0

$1,026,327

$90,027

$77,063

$9.7

-90.4

28

Richard J. Hipple (59) Materion Corp.

$3,402,061 $3,674,956

(7.4)

$754,038

$0

$798,222

$825,998

$813,158

$206,712

$3,933

$40.0

-13.9

29

Zev Weiss (45) American Greetings Corp.

$3,229,672 $3,881,709

(16.8)

$980,740

$0

$648,543

$0

$996,039

$544,215

$60,135

$57.2

-34.3

30

Walter M. Rosebrough Jr. (58) Steris Corp.

$3,052,301 $3,019,503

1.1

$750,000

$0

$1,115,450

$534,359

$555,900

$0

$96,592

$130.9

211.0

31

John C. Corey (64) Stoneridge Inc.

$2,863,853 $3,714,673

(22.9)

$700,000

$0

$2,088,904

$0

$0

$0

$74,949

$49.4

328.1

32

Thomas M. O'Brien (45) TravelCenters of America LLC

$2,607,250 $2,344,100

11.2

$300,000

$1,400,000

$907,250

$0

$0

$0

$0

$23.6

NM

33

Daniel B. Hurwitz (48) DDR Corp.

$2,604,345 $4,023,359

(35.3)

$616,000

$0

$0

$0

$1,934,240

$0

$54,105

($15.9)

NM

34

Jeffrey I. Friedman (60) Associated Estates Realty Corp.

$2,598,907 $3,301,317

(21.3)

$500,000

$0

$1,050,000

$0

$795,200

$101,977

$151,730

$5.3

NM

35

Steven L. Gerard (66) CBiz Inc.

$2,501,825 $2,156,012

16.0

$675,000

$168,500

$489,060

$423,000

$445,500

$0

$300,765

$28.0

14.3

36

Robert G. Ruhlman (55) Preformed Line Products Co.

$2,361,450 $2,370,100

(0.4)

$688,500

$0

$688,500

$0

$688,500

$0

$295,950

$31.0

34.1

37

Matthew A. Ouimet(3) (54) Cedar Fair LP

$2,346,135 N/A

N/A

$400,685

$416,712

$1,500,000

$0

$0

$0

$28,738

$72.2

NM

38

Michael D. Siegal (59) Olympic Steel Inc.

$2,287,697 $970,843

135.6

$750,000

$0

$755,175

$0

$529,259

$0

$253,263

$25.0

1,071.2

39

John C. Orr (61) Myers Industries Inc.

$2,159,976 $2,210,527

(2.3)

$725,000

$990,623

$387,840

$0

$0

$0

$56,513

$24.5

NM

40

Marc A. Stefanski (57) TFS Financial Corp.

$1,882,444 $3,244,812

(42.0)

$1,080,000

$0

$0

$0

$574,668

$127,693

$100,083

$25.1

NM

Rank

Company net income in Nonequity Change in All other 2011 Stock awards Option awards incentive plan pension value compensation (millions)

Company net income % change from 2010

RESEARCHED BY Deborah W. Hillyer

20120625-NEWS--23-NAT-CCI-CL_--

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JUNE 25 - JULY 8, 2012

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Executive (Age) Company

Total compensation 2011 2010

% change

Salary

Bonus

41

Theodore K. Zampetis (67) Shiloh Industries Inc.

$1,136,964 $318,785

256.7

$481,250

$0

$0

$220,925

$408,346

$0

$26,443

$8.9

81.9

42

David W. Michelson (54) National Interstate Corp.

$894,854 $913,469

(2.0)

$390,000

$0

$0

$0

$479,825

$0

$25,029

$35.6

-9.8

43

James O. Miller (59) First Citizens Banc Corp.

$532,116 $367,411

44.8

$293,846

$0

$0

$0

$0

$233,000

$5,270

$4.0

NM

44

Gil Van Bokkelen (51) Athersys Inc.

$457,120 $453,111

0.9

$404,500

$40,000

$0

$0

$0

$0

$12,620

($13.7)

NM

45

Daniel E. Klimas (53) LNB Bancorp Inc.

$424,375 $621,771

(31.7)

$400,000

$0

$0

$0

$0

$0

$24,375

$5.0

-6.8

46

Patrick W. Bevack (65) United Community Financial Corp.

$419,421 $315,788

32.8

$306,958

$0

$0

$80,400

$0

$0

$32,063

$0.2

NM

47

John S. Gulas (53) Farmers National Banc Corp.

$398,331 $488,844

(18.5)

$275,603

$0

$0

$0

$108,288

$7,350

$7,090

$9.2

2.5

48

Robert J. King Jr. (56) PVF Capital Corp.

$395,371 $731,259

(45.9)

$300,000

$0

$0

$73,500

$0

$0

$21,871

($7.9)

NM

49

Thomas G. Caldwell (54) Middlefield Banc Corp.

$358,448 $356,196

0.6

$265,239

$52,650

$0

$4,375

$0

$0

$36,184

$4.1

64.1

50

Rick L. Hull (59) Ohio Legacy Corp.

$340,458 $641,339

(46.9)

$225,000

$100,000

$0

$0

$0

$0

$15,458

$1.8

NM

51

Michael S. Lipscomb(4) (65) Sifco Industries Inc.

$304,000 $263,800

15.2

$0

$0

$29,000

$0

$0

$0

$275,000

$7.4

63.1

52

Joseph G. Kaveski (51) Energy Focus Inc.

$302,224 $308,385

(2.0)

$225,000

$0

$0

$76,002

$0

$0

$1,222

($6.1)

NM

53

Ronald E. Klingle (64) Avalon Holdings Corp.

$260,000 $175,000

48.6

$160,000

$100,000

$0

$0

$0

$0

$0

$0.8

NM

54

Steven Tsengas (74) OurPet's Co.

$209,678 $224,564

(6.6)

$203,462

$0

$0

$4,050

$0

$0

$2,166

$0.1

-87.7

55

Rodney C. Steiger(5) (63) Wayne Savings Bancshares Inc.

$200,078 N/A

N/A

$192,308

$0

$0

$0

$0

$0

$7,770

$1.7

-21.4

56

Eloise Mackus Central Federal Corp.

$182,800 $190,762

(4.2)

$180,000

$100

$0

$0

$0

$0

$2,700

($5.4)

NM

57

Leonard R. Stein-Sapir (73) Morgan's Foods Inc.

$141,622 $150,522

(5.9)

$121,154

$0

$0

$0

$0

$0

$20,468

($2.2)

NM

58

Robert L. Bauman (71) Hickok Inc.

$102,074 $131,354

(22.3)

$101,858

$0

$0

$0

$0

$0

$216

($0.5)

NM

Rank

Company net income in Nonequity Change in All other 2011 Stock awards Option awards incentive plan pension value compensation (millions)

Source: Company proxy statements. 2011 net income and net income % change provided by S&P Capital IQ, www.spcapitaliq.com. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. The Book of Lists and enhanced versions of most lists, with more companies, are available to purchase at www.crainscleveland.com. (1) Ms. Mooney was named chairman and CEO effective May 1, 2011. (2) Mr. LaRue was named president and CEO on June 10, 2011. (3) Mr. Ouimet joined Cedar Fair as president on June 20, 2011. He became the CEO on Jan. 3, 2012. (4) Mr. Lipscomb is retained on a contract/consultancy basis. (5) Mr. Steiger was named president and CEO on Jan. 15, 2011.

Mobile: App access part of policies continued from PAGE 3

mitigate the problems that come with them. After years of using nothing but BlackBerrys, Safeguard Properties of Valley View started supporting other devices about a year ago and now is letting some employees access the corporate network with their own mobile devices, said George Mehok, chief information officer for the company. Safeguard inspects and maintains defaulted and foreclosed properties. The company, which works with a lot of banks, had to be cautious about letting employees access sensitive data on devices they own, Mr. Mehok said. To protect that information, on each device Safeguard installs Good Technologybrand software that is designed to create a virtual barrier between corporate data and personal data. “We have an obligation to protect our clients’ data. It would not be possible without something like Good Technology,” he said. Good Technology Inc. of Sunnyvale, Calif., is one of several companies that sell software with the ability to segregate corporate data from personal on mobile devices, which makes it easier to secure sensitive information and erase it if a device is lost. Those products are starting to become popular among larger companies, and for good reason, said Brian Stein, president and chief operating officer of mobile

strategy firm Pervasive Path Consulting LLC of Solon. Companies trying to manage mobile devices with software that can’t make that distinction could run into problems if, say, an employee loses a smart phone only to find it later — after their employer has used the software to erase everything on it. “If you wipe somebody’s pictures of their kids … they’re going to be pretty upset,” he said.

The root of the problem Revol Wireless of Independence aims to start installing some kind of mobile device management software on the Android smart phones that some Revol employees now use, said Jim Bryson, manager of infrastructure for the wireless carrier. The company also aims to create a mobile device policy, but it won’t do so until it starts installing the device management software, he said. Without the software, Revol has no way to enforce the policies Mr. Bryson wants to create, such as one that would prohibit employees from “rooting” their Android phones. That process lets users change the way the phones operate, which could pose security risks, he said. IPhones and iPads can be tampered with, too, through a process called jailbreaking. Some mobile device management software can detect when a phone has been rooted or jailbroken, Mr. Bryson said. “You’re essentially giving anyone

… access to everything on the phone,” he said. No such process exists for the BlackBerry, a device that made it “very easy to lock down devices and enforce policy,” he said. Being able to remotely wipe data from employee iPhones, iPads and Androids minimizes the risk that someone might find sensitive data by rooting or jailbreaking a lost device, according to Karen Anzuini, chief information officer for Cleveland law firm Benesch Friedlander Coplan & Aronoff LLP. Thus, it is “very important for people to let us know immediately if someone loses the device,” Ms. Anzuini said. Broadening the number of devices employees can use has created a few issues for Benesch, she said. For one, the number of calls to Benesch’s information technology help desk has gone up by roughly 10% to 15%, she estimated. Plus, the law firm’s network has been strained at times by the sheer number of devices trying to access the law firm’s email system at the same time, she said. Benesch’s wireless network also does a lot of heavy lifting, which is why the law firm late last year installed a second network that employees at its Cleveland office can use for personal reasons. “There are people who want to be able to stream Pandora (music service) or whatever at the office,” she said.

To download or not to download Using a company device to stream Pandora or watch movies on Netflix after work is fine so long as employers aren’t stuck with data charges afterward, said Revol’s Mr. Bryson, who used to work for Vox Mobile and briefly worked for Good Technology. “There’s got to be something in the policy to call that out,” he said. Some company policies specify which applications employees can and cannot download, said Nate Kurash, account executive for Bennett Adelson, an IT services firm and mobile software developer in Independence. Companies such as Verizon provide services that let businesses set up their own app stores, where they

23

Company net income % change from 2010

RESEARCHED BY Deborah W. Hillyer

privately can give employees access to custom software and commercial apps they might need for work purposes, Mr. Kurash said. Companies that let employees use Android phones also may want to regulate the number of models employees can support, according to both Mr. Kurash and Mr. Fuggit, of Vox Mobile. For one, different phones use different versions of the Android operating system, making it hard to secure a fleet of different models, Mr. Fuggit said. Plus, companies using custom mobile software might find that their programs don’t work right when they introduce a different phone, Mr. Kurash said. “If that’s the case, we may have to update our application,” he said. ■

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

JUNE 25 - JULY 8, 2012

United: Other cities have suffered after losing airline hubs continued from PAGE 1

United’s senior vice president/network. “It is incredibly helpful.� He added, “Year over year, (Cleveland Hopkins International Airport’s) performance is better than some other hubs in terms of profitability. The hub is in a far better place than it would have been without the efforts of the team in Cleveland.� Guidelines on the “United for Cleveland’s Hub� website suggest that small and midsized businesses allow employees to choose United when the carrier’s flight is within $200 of the competing lower airfare. Large corporations, the guidelines suggest, should consider a threshold as high as $300.

“Our anecdotal experience would suggest we’ve got several hundred companies now trying to do that,� said Joe Roman, president of the Greater Cleveland Partnership. “We’re seeing people creating those policies.� Following on that effort, United also is making a push to sign up Northeast Ohio companies to its RewardOne and PerksPlus programs, the corporate equivalent of frequent flyer reward programs. Evan Koppel, United’s Cleveland-based regional sales manager, said his sales staff is getting a positive response from their business clients. “Of those companies (the sales staff has contacted), we’re pretty pleased with our performance,� he

said. “What we are seeing in the community is a heightened awareness of how important this whole initiative is.�

Freshening up the place Mr. Roman said the focus of the marketing campaign is convincing businesspeople and business travel decision makers who buy the largest chunk of premium airline tickets — the kind that generates most of an airline’s profit — to fly United from Cleveland Hopkins even if it means paying a little more than a ticket on another airline or at another airport. In addition to a website (http://tinyurl.com/87c69xk), GCP is communicating regularly with its

14,000 members and is advertising on radio stations WCPN-FM 90.3 and WTAM-AM 1100. The marketing effort is designed to stay ahead of the game and avoid the fate of cities such as Cincinnati and Pittsburgh that have lost hubs in the last few years after their hub airline merged with another air carrier. In May 2010, Continental Airlines, which operated a hub at Cleveland Hopkins for several decades, announced it would merge with United, prompting fears the hub would be lost. Cleveland Hopkins itself is an active participant in the preservethe-hub effort, spending $60 million this year, and $530 million over five years, to improve the airport’s ap-

pearance and passenger experience. “We’re steadily trying to build a new airport in place,� said Ricky Smith, director of the Cleveland Airport System, which operates Hopkins and Burke Lakefront Airport. “We’re overhauling the ticketing area, and next year we’ll be refacing the terminal and then replacing the existing short-term parking lot.� Beyond physical changes, the airport is emphasizing its softer side to potential customers. Today, June 25, is Business Traveler Appreciation Day at Cleveland Hopkins. The airport is offering business travelers free coffee, free shoe shines and discounts at airport shops, among other perks. It even has created a Wall of Fame that will honor an inaugural group of road warriors.

A ‘pretty nice niche’ at Hopkins

Congratulations 2012 Finalists Meet Northeast Ohio’s Leading Human Resources Professionals t+BDRVFMJOF#FMM$JVOJ1BOJDIJ t4V[BOOF#MPPNÜFME6OJUFE8BZPG (SFBUFS$MFWFMBOE t,BUIZ#SBVO1SPGPSNB t$IBSNBJOF#SPXO'PSFTU$JUZ&OUFSQSJTFT t,SJTUB'SB[JFS#SBOE.VTDMF*OD t"NZ'SFODI0&$POOFDUJPO t&MJTF)BSB"VWJM$VZBIPHB$PVOUZ t1BUUZ)BSUNBOO.FEJDBM.VUVBMPG0IJP

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Not all firms, because of companywide travel policies, can jump on the bandwagon of this local program. But they understand the value of a higher level or air service. If an Eaton Corp. traveler tries to book a flight out of Akron-Canton Airport, a note pops up that suggests using Cleveland Hopkins as long as the airfare differential is $200 or less, said William B. “Barry� Doggett, senior vice president of public and community affairs. Mr. Doggett added that of the 1,500 departures from Cleveland Hopkins by Eaton employees during the first five months of 2012, the share of United bookings is up “a couple percent� over 2011. Lee Thomas, managing partner of the Cleveland office of the Ernst & Young accounting firm, said his 1,600 employees must adhere to firmwide travel guidelines and satisfy the clients who usually end up footing the bill for the firm’s travel. “There is not specific leeway for United,� he said. “But because their flights are the ones we want, we can get on the direct flight as long as the client is supportive of that.� United currently offers about 175 flights daily from Cleveland Hopkins, slightly lower than it did before the 2010 merger announcement. It has nonstop flights to 57 destinations, with about two-thirds of those being the only direct flights to those cities. With larger United hubs at Chicago’s O’Hare International Airport and Washington Dulles International Airport in the Washington, D.C., area, a Cleveland hub was viewed by many airline industry observers as excess baggage. And while many in the industry continue to question the ability of the Cleveland hub to survive, it has some supporters. Joseph Schwieterman, a professor and director of the Chaddick Institute for Metropolitan Development at DePaul University in Chicago, and a planner for United before he entered academia, thinks the hub can have a future. “They were making some good money in Cleveland,� he said. “I would be surprised if they substantially downsize Cleveland.� Noting that the majority of United’s flights in and out of Cleveland are on smaller, regional jets, Mr. Schwieterman said it wouldn’t make sense to move that traffic to crowded O’Hare or Dulles, taking slots now filled by more profitable international and transcontinental flights. “It’s a pretty nice niche for United that hasn’t been a drain on its bottom line,� he said. ■

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JUNE 25 - JULY 8, 2012

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Lakewood: Bank enhances marketing continued from PAGE 3

Growth pattern

growing loans the way they’re growing loans raises everybody’s attention,� Mr. Palmer said. “I’m not aware of any other community banks that are experiencing that kind of growth in terms of originations in that short period of time.� First Federal’s market share for home purchase mortgages was 5% in 2010 and increased to 9.4% in 2011, according to CoreLogic’s Marketrac. Mr. Fraser attributes the growth to plans laid in 2007 to gain market share as other institutions’ asset quality sank and lenders began to pull back. The institution is offering competitive rates, but they are not market-leading rates, he noted. Mr. Fraser also attributes the success to consistent underwriting, close relationships with the real estate community, the surge in real estate lending in general given the historically low interest rates and increased marketing.

Lakewood’s namesake mutual bank, which today counts $1.35 billion in assets, completed the integration of Parma-based Century Bank in September. The acquisition added five branches, bringing its total to 18, and all but one of Century’s 36 employees. First Federal’s growth has not ebbed since. The bank has increased its staff to 315 from 205 in early 2010 — including the 35 from Century — largely to support its lending push and to handle added compliance mandates. Those hired include mortgage originators, loan processors and underwriters, and Mr. Fraser anticipates adding 10 more loan officers by year-end, plus another dozen support personnel. Since the acquisition closed, deposits across all five former Century Bank branches have grown nearly 9%, Mr. Fraser said. And over the last 12 months, the

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bank has invested more than $2 million in new and upgraded facilities, Mr. Fraser said, including a new First Federal branch in Strongsville, a rebuilt retail plaza in North Olmsted that it now shares with Malley’s Chocolates and AT&T, and significant upgrades and new signage at all of the former Century branches. It plans to open a loan production office in the Ohio City area in July to bring its number of such offices to seven statewide, and may open another in Cleveland by yearend, too, Mr. Fraser said. Mr. Fraser says his institution needs to be bigger to better absorb across a larger asset base increased compliance costs, which largely are the result of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It will continue to consider expansion opportunities that arise, he said, including single-branch or other bank acquisitions and asset purchases.

Of course, those customers must know you’re there. First Federal executives received the results of a branding study last summer, which Mr. Fraser said affirmed that people recognize the 77-year-old institution’s name and the tagline, “We’ve Been Here, We’ll Be Here.� But given its bigger footprint, the bank’s leaders also believed it was

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“The end goal is to be best positioned to continue our form of mutual ownership and to serve the communities we’re in,� he said. “We have to have enough size and scale to be able to offer all the products that our larger competitors do (while) at the same time keep the focus solely on our customer.� First Federal, which as a mutual is owned by its members, not shareholders, began offering e-statements this year and plans to roll out mobile banking in the third quarter. “We think there’s an opportunity for community banks that have transparent products and fair pricing to win over customers,� he added.

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important to tell Greater Cleveland that it serves the entire region, Mr. Fraser said. (The acquisition of Century’s branches expanded its footprint farther east and south than it’s been historically, Mr. Fraser said.) To that end, First Federal’s marketing budget is double what it was two years ago. The bank is spending more on billboard, television, Internet and radio ads, he said. The institution also has introduced another tagline — “Greater Cleveland’s Community Bank� — to reflect its bigger self. The Community Bankers Association of Ohio’s Mr. Palmer said it’s not common currently to see a community bank spending more money to get its name out there, given the perspective that there’s not a whole lot of loan demand. While it’s clear that First Federal’s being aggressive, as with any lending portfolio, time will tell the quality of its originated loans, Mr. Palmer noted. Given the environment, most community banks still are being more stringent and conservative than they were five years ago, he added. ■

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JUNE 25 - JULY 8, 2012

THEINSIDER

THEWEEK JUNE 18 - 24 The big story:

Although they appear less optimistic than they did a year ago, most Northeast Ohio business leaders expect their bottom lines to grow this year. According to a survey conducted by the Audit Committee Institute of KPMG LLP, 70% of business leaders in this region believe profits will increase in 2012, slightly lower than the 75% response registered a year ago. In addition, 32% plan to increase headcount, down from 45% a year ago. ACI conducted the survey during a roundtable meeting attended by nearly 60 board members and business leaders from Northeast Ohio companies.

The Spanish acquisition: Specialty chemicals company Lubrizol Corp. of Wickliffe agreed to buy Lipotec SA, a Spanish company that makes ingredients for personal care products. The acquisition “complements Lubrizol’s global personal care ingredients business, strengthening its offering of high-performance technology solutions to marketers of formulated skin care products,” Lubrizol said. Lipotec, founded in 1987, is headquartered in Barcelona.

Sealing the deal: RPM International Inc. acquired Viapol Ltda., a Brazilian producer of building materials and construction products. The Medina-based maker of coatings and sealants did not disclose what it paid for Viapol, which is based near Sao Paulo and has annual sales of $85 million. However, RPM said it expects the acquisition to be accretive to earnings after year one. Viapol, founded in 1990, will become part of The Euclid Chemical Group, a unit of RPM’s Building Solutions Group that serves construction and rehabilitation markets worldwide.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Guess who owns some LNB preferred shares? ■ Umberto P. Fedeli has put his money where his mouth is. The vocal shareholder of LNB Bancorp Inc. had offered to infuse capital into the parent company of Lorain National Bank so that it could retire its Troubled Asset Relief Program, or TARP, investment from the U.S. Department of the Treasury. So when the Treasury Fedeli announced it would auction the preferred shares it held in LNB, it seemed appropriate to ask Mr. Fedeli if he bought some. The president and CEO of The Fedeli Group, an insurance brokerage in Independence, did bid successfully on some of the preferred shares with a group of investors, but said he isn’t authorized to speak for all of them, so he wouldn’t disclose how much they bought or what they paid in total. However, the Treasury did reveal publicly that bidders of LNB’s 25,223 shares paid $869.17 per share, a price Mr. Fedeli called a “significant discount” from the original par value of $1,000. “We did not purchase as much as we would have liked, (but) we think it’s a good investment,” Mr. Fedeli said. “We bought this on a discount, so we’ll get a good return as is, even without (the dividend rate) going to the higher amount.” He was referring to the 80% jump the

WHAT’S NEW

opened global innovation centers in Germany and Mexico. The Akron-based supplier of plastics resins said the innovation centers are the A. Schulman Academy in Kerpen, Germany, near Cologne, and the POLYnnova Group in San Luis Potosi, Mexico, one of the main industrial centers in central Mexico. A. Schulman said the centers will enable the company and its partners and customers “to undertake research and development activities that are of shared interest.”

Experienced hands: Executives with Cleveland Clinic and Ernst & Young LLP joined the board of trustees of Team NEO, the nonprofit group charged with attracting businesses to the region. Thomas J. Graham, a hand surgeon and chief innovation officer of Cleveland Clinic Innovations, has been involved in the development of the new Cleveland convention center and medical mart. C. Lee Thomas is managing partner of the accounting firm’s Cleveland office and has specialized in the manufacturing industry.

This and that: Private equity firm Western Reserve Partners LLC in Cleveland opened an office in Dallas. Ken Hirsch, a managing director and co-founder of Western Reserve Partners, is moving to Dallas. … Another out-of-market law firm opened an office in Northeast Ohio in response to the energy potential of the Utica shale fields. Pittsburgh-based Babst Calland said it’s continuing the expansion of its growing energy practice with its newest office, which is at the PNC Center in downtown Akron.

Akron’s alumni, development teams game for new space ■ The stands at University of Akron’s InfoCision Stadium have yet to fill up with fans, but the planned move of the university’s alumni and development offices will put the prime piece of real estate at full occupancy. The university plans $3.6 million in construction to outfit the remaining shell space in the nearly 3-year-old stadium with new digs for the university’s alumni and development teams. Construction is slated for completion by the end of next year. “The view of campus and the City of Akron is amazing (from the stadium),” said Kimberly Karson, the university’s assistant vice president for alumni and college centered development. “We can host local corporations, VIPs and alumni to show off the view and talk about the big picture of the campus.”

150 people today do the work of 900 from years ago

THE COMPANY: Ridgid, Elyria THE PRODUCT: SeeSnake Max rM200 Camera System With its newest product, Ridgid is helping plumbers take the long view of their work. The company, which makes equipment for the professional trades, says the SeeSnake Max rM200 system “combines portability and versatility to provide plumbing professionals with an easy-to-use solution for inspecting longer and tighter lines up to 200 feet in length and 1½ inches to 6 inches in diameter.” The inspection system “offers an efficient way to handle the most demanding jobs,” Ridgid says. Features include improved reel mechanics for easier passage through tight turns, an ultra-compact camera capable of providing optimal lighting through narrow spaces, and an upgraded cable to provide greater abrasion resistance and allow users to push further with less effort. Ridgid says the inspection system also comes with a built-in docking system for attaching upcoming viewing monitors. It’s compatible with the Ridgid SeeSnake CS10 and CS1000 digital recording monitors. Additionally, the product comes equipped with an integrated transport system to make it easily portable on a job, the company says. Users can either carry the reel or use an optional wheel system to meet job-site needs.

In addition to serving as the future home for the alumni and development teams, InfoCision also houses the College of Education’s sports science and wellness programs. The Zips, who went 1-11 in each of the last two seasons, will get a fresh start on the field this fall with new head coach Terry Bowden, who joined the university in December. — Timothy Magaw

Radisphere takes fundraising break, but not from growth ■ Having raised about $80 million in financing over the last five years, Radisphere National Radiology Group has no immediate plans to seek out additional equity and instead will focus on adding to its roster of customers in the coming years, according to company CEO Scott Seidelmann. “Given the size of the market and growth opportunity, if we need more capital to pursue something strategically, then we’ll go and get it,” Mr. Seidelmann said. Radisphere, which has its largest office in Beachwood and provides remote and onsite radiology services to community hospitals around the country, has about 30 clients. Mr. Seidelmann expects that number to grow to as many as 100 in the next few years. The company, which recently moved from Commerce Park to Park East Drive in Beachwood, has seen marked growth since its founding in 2001. The company’s revenue for the first five months of 2012 alone, for instance, increased 36% over the like period in 2011. As the company adds clients, Mr. Seidelmann also expects to add to the sales and marketing team. — Timothy Magaw

BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.

A world of innovation: A. Schulman Inc.

In the mood to buy: Associated Estates Realty Corp. plans to sell 5.5 million of its common shares in a public offering and use the proceeds, in part, to fund property acquisitions and development. The real estate investment trust also plans to grant the offering’s underwriters a 30-day option to buy up to an additional 825,000 of its common shares.

dividend rate on the preferred shares is slated to take in February 2014 unless LNB redeems the shares for cash first. LNB had set the minimum bid price at $744.50 per share. The company did not buy back any of its own preferred shares, according to a filing with the Securities and Exchange Commission. The Treasury’s auction of LNB preferred shares generated about $22 million in net proceeds for the Treasury. Though it’s true the Treasury paid more for the shares in December 2008 ($25.2 million), it received more than $4.3 million in dividend payments from LNB over the life of the investment, a Treasury spokesman said. —Michelle Park

■ Dow Jones took note of a phenomenon that reflects how the economy’s efficiency sometimes gets in the way of growing the employment base. The news service reported that furnaces and other machinery to make steel on the west side of ArcelorMittal’s Cleveland Works were fired up last month for the first time in almost four years. However, the company, which makes coiled steel products used to make cars and appliances, added just 150 people to run operations that a dozen years ago were staffed by about 900 people. “With the ability to raise output through improved efficiency and automation, companies have had the option of adding employees slowly or running with permanently smaller work forces,” according to the story. Dow Jones cited Federal Reserve data showing that since the middle of 2009, “manufacturing output has been growing at an annual rate of 6.5%, but just 21% of the manufacturing jobs lost during the recession have been restored.” To drive down costs and preserve margins, ArcelorMittal “has leaned on technology at Cleveland Works to improve productivity and output,” Dow Jones reported. “The mill’s man-hours per ton of steel — a measure of labor costs and output — has fallen to about one man-hour per ton from five hours in the 1960s.”

Eaton Corp. takes up tax dispute with the IRS ■ Cleveland-based Eaton Corp. is challenging the Internal Revenue Service in U.S. Tax Court, “arguing that the agency broke agreements dealing with how the company moves assets and money across international borders, a volatile issue in the tax world,” Reuters reported. Eaton “is contesting a $75 million tax bill that the IRS imposed on the company in a case that could have broad impact on other companies’ ‘transfer pricing’ practices, the industry term for shifting assets across borders to reduce taxes,” according to the news service. The company awaits a court date in the case. Reuters reported that the IRS tax bill “hit Eaton as the agency in December 2011 revoked two deals it had negotiated with the company.” Known as “advance pricing agreements,” or APAs, the pacts address how Eaton handled its transfer pricing issues. “Eaton’s annulled agreements marked the first time in four years that the agency had canceled APAs, a worrisome sign for multinational corporations increasingly frustrated by costly IRS delays in negotiating these deals,” Reuters reported. The news service said businesses “worry that APAs take too long to finalize, cost too much and may not be as air-tight as expected when it comes to preventing squabbles with the IRS over transfer pricing.” In May, Eaton announced plans to buy Cooper Industries of Dublin, Ireland, and plans to move its corporate headquarters to that country. Reuters notes that the top corporate tax rate in Ireland is 12.5%; the top rate in the United States is 35%.

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RONALD MCDONALD HOUSE

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20120625-NEWS--28-NAT-CCI-CL_--

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