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Effort gears up to mount school levy campaign
Bank seeks receiver for Akron-based lumber firms In lawsuit, Huntington fears Empire ‘insolvency’
Backers will seek help from businesses, but face a crowded ballot
By MICHELLE PARK mpark@crain.com
By TIMOTHY MAGAW tmagaw@crain.com
The coalition that got behind legislation to reform the operations of the Cleveland Metropolitan School District is scrambling under a tight deadline to put together a campaign aimed at passing this November a school operating levy for the first time in 16 years. The coalition of Mayor Frank Jackson, school district officials, the Greater Cleveland Partnership and local foundations is on the verge of tapping a consulting firm to lead the campaign. Firms already interviewed for the job are led by seasoned political gurus Bill Burges, Alan Melamed and Jeff Rusnak.
Roman
Jackson
Also, GCP is gearing up to solicit the business community to help foot the bill for what advocates anticipate will be a $1 million effort. “Clearly we will ask business community to fund the campaign effort, and we’ll start that soon,” GCP president Joe Roman said. “But even more importantly than that, because this will be such a crowded and expensive campaign field, we’ll work very hard with our members to ensure their Cleveland-resident employees have the information necessary to make an informed decision.” Even John Kasich, Ohio’s Republican governor who worked with Cleveland’s Democratic mayor to move a bill enabling the reform plan’s implementation through the Legislature, is
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See LEVY Page 5
STAN BULLARD
Forest City Enterprises is considering converting to apartments the Halle Building, on Euclid Avenue in downtown Cleveland, shown here looking east on Euclid.
Halle Building could enter downtown apartment mix Office space on upper floors would be replaced by up to 200 rental units under nascent plan
By STAN BULLARD sbullard@crain.com
The Halle Building in downtown Cleveland, well-known thanks to “The Drew Carey Show” and a celebrated role as the former home of Mr. Jingeling, may become apartments under a plan Forest City Enterprises Inc. is considering. The former Halle department store at 1228 Euclid Ave. is now an office building on its upper floors with retail space on the first floor and basement, but the office use
could be relegated to memory if the Cleveland-based developer pursues the idea. Forest City is weighing converting part or most of the structure in the PlayhouseSquare neighborhood to more than 200 apartments and retaining its first floor as retail space, according to a source who declined to be identified because he is not authorized to discuss the plan. Although Forest City isn’t showing its hand, real estate observers agree the concept makes sense. Downtown See HALLE Page 6
NEW PROJECTS ABOUND A sample of planned or proposed apartment projects in downtown Cleveland, a list to which the Halle Building could be added. Avenue Tower: A joint venture has proposed to buy the long-stalled tower condo project and turn it into 57 highend rentals. Rosetta Building: MRN Ltd. plans to spend $17 million to convert five floors to 85 market-rate apartments at 629 Euclid Ave.
May Co. Building: The Floridabased owner, Morgan Reed Group, is studying whether to turn the empty upper floors of the building on Public Square into apartments. Hanna Annex: K&D Group of Willoughby announced plans to buy the building from the PlayhouseSquare Foundation for conversion of the office building into 102 apartments. East Ohio Gas Building: Reports have K&D as the buyer of the building
at 1717 E. Ninth St., also for conversion to apartments. Truman, Schofield buildings: A total of 76 apartments are proposed for the buildings, at 1020 Euclid Ave. and 2000 E. Ninth St., respectively, by their longtime owners, groups associated with principals of CRM Real Estate Services of Cleveland. Plans for the Schofield Building continue to include a hotel.
The future of a group of lumber companies based in Akron is unclear after a judge ordered a receiver to take control of the companies amid allegations that a large amount of the assets pledged as collateral for millions of dollars in bank debt either does not exist or may be at risk. In a lawsuit filed June 11 in Cuyahoga County Common Pleas Court, attorneys for Huntington Bank requested that a receiver be appointed to operate Empire Enterprises Inc., a forest products and building materials distribution holding company; its subsidiary, Empire Wholesale Lumber Co., which has been in business for 63 years; and two other affiliated entities. “By all accounts, defendants are unable to pay plaintiff amounts due to it, thereby creating a presumption of insolvency,” Huntington stated in its lawsuit. The filing said the bank “reasonably believes that a significant portion of the inventory and receivables defendants pledged to plaintiff may not exist or may be in danger of being lost or materially damaged.” “The immediate appointment of a receiver is necessary as (Empire is) unable to pay their debts as they See LUMBER Page 7
INSIDE UH continues to bolster its cancer program In addition to its $260 million Seidman Cancer Center, opened last year, University Hospitals has opened a new facility in Westlake and is upgrading one in Geauga County. PAGE 7 PLUS: ■ Some Cleveland marketing agencies are pitching themselves as the perfect coach for sports teams and organizations. PAGE 12
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Entire contents © 2012 by Crain Communications Inc. Vol. 33, No. 27
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CRAIN’S CLEVELAND BUSINESS
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IT’S A STEAL
COMING NEXT WEEK
Auto thefts in Ohio in 2011 declined for the eighth straight year, but they went in the wrong direction in the Cleveland and Akron markets and increased. New data show more than 6,600 cars were stolen last year in the Cleveland/Elyria/Mentor market, up 17.3% from 2010, while Akron thefts rose 16.9% to 1,217. Relatively speaking, though, Ohio is not a high-auto theft state, with only the Cleveland and Toledo markets ranking in the top 100 nationwide in theft rate per 100,000 residents. Here’s the data for the six Ohio markets in which at least 1,000 cars were stolen last year:
2012 Women of Note We profile 15 of Northeast Ohio’s most prominent and successful female business leaders, employed at some of Northeast Ohio’s biggest companies.
2011 2010 2011 thefts per 2011 auto thefts auto thefts 100K pop. nat. rank
City
REGULAR FEATURES Big Issue ..................9 Classified ..............18 Editorial ..................8 From the Publisher ..8 Going Places ..........11
JULY 16 - 22, 2012
Letter ......................9 List: Nursing homes..17 Personal View ..........8 Reporters’ Notebook..19 The Week ..................19
Cleveland/Elyria/Mentor
6,603
5,630
319.25
57
Columbus
4,223
4,445
227.23
104
Cincinnati/Middletown
3,039
3,404
144.53
207
Toledo
1,784
1,722
274.35
79
Dayton
1,647
1,683
194.82
133
Akron
1,217
1,041
173.51
164
2012 Women of Note Honorees Virginia “GiGi” Benjamin, Partner and chair of the public law & finance group Calfee, Halter & Griswold LLP
M. Joan McCarthy, President and owner MJM Services
Anne Bitong, Executive director, Akron Marathon Charitable Corporation
Marsha Mockabee, President and chief executive officer, The Urban League of Greater Cleveland
Diane Downing, Senior vice president for corporate affairs, Huntington Bank
Beth E. Mooney, Chairman and chief executive officer, KeyCorp
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Dr. Jih-Fen Lei, Director, research and technology, NASA Glenn Research Center
Ali Whitley, President Akron Area Board of Realtors
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Jobs coming to Medina-area auto supplier SFS mum on topic, but Sharon Township meeting reflects plans By DAN SHINGLER dshingler@crain.com
Medina County appears on the verge of getting an employment boost with a significant expansion of one of its larger manufacturers, the Sharon Township plant of SFS intec Inc. SFS officials did not return three telephone calls to discuss the matter, and township and county officials
said they have yet to see any project details. But several township and county officials said they expect SFS, which makes cold-forged fasteners and other parts for the automotive industry and other customers, to seek a renewal of its existing tax abatement and that they’re working to help the company expand locally. “At this point, we don’t have any official communication on it,” said Medina County commissioner
Stephen Hambley. “Nothing’s come to the commissioners yet, but the (Medina County) Economic Development Corp. is working with them, as well as Sharon Township and the Highland School District.” Bethany Dentler, executive director of the Medina County Economic Development Corp., confirmed the organization is “in the process of working with (SFS),” but added that “it’s premature for me to comment”
on what the company may do. According to a July 5 post on Akron.com, an expansion at SFS was discussed at a June 26 meeting of the Sharon Township board of trustees, but minutes of that meeting have yet to appear on the township’s website. The story said the trustees discussed the matter, including SFS’ plans to add 100 employees to the 73 workers it employs now in Sharon Township. One supplier of SFS, who asked to remain anonymous, said he was told See JOBS Page 6
ABOUT THE COMPANY More about SFS intecInc., which is expected to increase its employment level dramatically: What it makes: Cold-forged fasteners and other parts for the automotive industry and other commercial applications Global headquarters: Switzerland North American headquarters: Wyomissing, Pa. Local plant: Sharon Township Current local employment: 73
INSIGHT
Banks’ ADA compliance at ATMs under scrutiny Institutions must provide access at machines for visually impaired; some named in lawsuits By MICHELLE PARK mpark@crain.com
JASON MILLER
Scott Roulston, managing director of Burdette Asset Management, in downtown Cleveland last week
PATIENT INVESTOR Financial vet Scott Roulston looks to profit on life insurance policies By MICHELLE PARK mpark@crain.com
A
rguably, the most appealing part of the pitch Scott D. Roulston has been delivering around town is that his investment opportunity is one that isn’t tied to stock market zigzags or interest rates. The harder sell to some investors, at least initially, is that they are betting on life expectancies and will profit when people die, and stand to profit more if people
die sooner than expected. Mr. Roulston, former CEO of investment research and management firm Roulston & Co., which later became Fairport Asset Management, is now in the life settlements business. In that line of business, investment funds buy up people’s life insurance policies and pay on the premiums until those people die; the death benefits then can be collected, investors hope, for a profit. Burdette Asset Management, See ROULSTON Page 10
HOW LIFE SETTLEMENT INVESTING WORKS Investment funds, such as Burdette Asset Management of Kirtland Hills, can buy people’s life insurance and pay premiums, collecting the benefits when those people die. What’s in it for policyholders? They’re able to sell their policies
instead of maintaining them because they’re retiring and their companies no longer need key person life insurance on them, said Scott Roulston, Burdette’s managing director. Others do so because their beneficiaries have passed away or because they want
cash to give to charity. “Where it makes economic sense for the seller is where they are getting more from selling (the policy) than if they just turned it in for the cash surrender value from the life insurance company itself,” Mr. Roulston said.
New requirements for automated teller machine accessibility for the blind took effect March 15, but some Northeast Ohio banks and credit unions are not yet in compliance, while others have been named as defendants in lawsuits that allege they’ve failed to do what’s required with their ATMs. Published in September 2010 and mandated as of mid-March of this year, new Americans with Disabilities Act standards require all of a financial institution’s ATMs, with few exceptions, to have auxiliary aids and services, including voice instructions, headphone capabilities and privacy provisions, such as the blacking out of screens
when audio components are used. Dollar Bank, Huntington Bank and PNC Bank are three institutions operating locally that have been named in civil rights complaints that, as of July 5, have been brought against 20 institutions by the Pittsburgh law firm of Carlson Lynch Ltd. on behalf of a man who is visually impaired. Dollar Bank has filed a motion to dismiss, asserting that Robert Jahoda’s claim that an ATM malfunctioned, leaving him unable to use its voice guidance feature, is not the basis for an ADA claim. While many banks report they’ve been compliant with the new mandates — some well before the March 15 deadline — other institutions continue to work toward See ATMs Page 12
THE WEEK IN QUOTES “There is too much Class B (office) space in the market. That’s what led us to apartments at Hanna Annex. ... It’s better to repurpose to where the buyers are.” — Allen Wiant, vice president for strategic development, PlayhouseSquare Real Estate Services. Page One
“Very few physicians are out above the radar within the first year. … (Dr. Carrie Diulus is) building a program, not just doing surgery there.” — Dr. Edward Benzel, chairman of neurosurgery, Cleveland Clinic. Page 13
FORTY UNDER 40 NOMINATIONS It’s time to dust off your portfolios and strut your stuff as Crain’s Cleveland Business solicits candidates for the 2012 version of its annual Forty Under 40 section. In the Nov. 19 issue, Crain’s will profile 40 individuals under the age of 40 who already have made marks for themselves in Northeast Ohio’s business and civic circles. Candidates can nominate themselves or can be nominated by someone else. The only catch is that their birthdays must be on or after Nov. 20, 1972.
To nominate someone via our website, go to “Features” on the toolbar and click on “Forty Under 40,” where you’ll find the “How to Nominate” link. Or, send background information of no more than a single page on your nominee to editor Mark Dodosh via email at mdodosh@crain.com or via regular mail at 700 W. St. Clair Ave., suite 310, Cleveland 44113. Please include the nominee’s date and year of birth. Nominations must be received by the close of business on Monday, Aug. 6.
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Port levy banks on suburbia County residents to ANALYSIS full port board that the agency decide fate of city- toaskthecounty voters for an increase of more than 400% in the levy the focused tax increase agency traditionally uses to maintain By JAY MILLER jmiller@crain.com
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Just how thoroughly do suburbanites embrace the notion that the health and vitality of the region’s core city is critical to the future of Northeast Ohio? And perhaps more importantly, how willing are they to pay to maintain and restore that health and vitality? Cuyahoga County residents may answer those questions in November: The Cleveland-Cuyahoga County Port Authority intends to put a greatly increased tax levy on the ballot. The plan is for the Port Authority to use a substantial majority of the $90 million the levy would raise over five years for a variety of waterfront infrastructure improvements along Lake Erie and the Cuyahoga River — all in the city of Cleveland. This notion of the importance of the central city to the vitality and future of Northeast Ohio has been gathering steam for nearly a decade. It stems partially from a recognition that economies are regional, not local, and it’s also an acknowledgement by suburbanites that they want the social, cultural and recreational amenities that are found only at the urban core. They like the restaurants, nightclubs and theaters they find downtown and in neighborhoods such as University Circle, Tremont, Ohio City and DetroitShoreway. At a meeting last Thursday, July 12, when a committee recommended
its docks, Matt Carroll, chief of staff to Cuyahoga County executive Ed FitzGerald, offered the support of his boss for the levy and the expanded role of the Port Authority. Mr. Carroll said the question Mr. FitzGerald most often fields at town hall meetings around the county is when the lakefront will be opened up for greater public access.
Footing the bill A principal reason for expanding financial responsibility countywide for the waterways is demographic. In 1950, Cleveland’s population was 914,808, while the rest of the county had 475,724 people. The 2010 census showed the city with 496,815 people, while the suburbs were home to 883,307. In 1950, the city, with 66% of the county’s population, could afford to support what were regional amenities on its own. The money suburbanites spent downtown at the city’s department stores, restaurants and theaters turned into paychecks for city residents and taxes for the city treasury. That’s no longer the case, with only 31% of county residents living in the central city. Now, most of the paychecks go to suburbanites and the city gets only a portion of the tax revenue. It’s also a reality that the shift of 400,000 people from the city to the county took with it people who had higher incomes and paid more property taxes than those left behind in the city.
Can you spare a $20? One element that will be used to justify the added expense to voters is the plan to use $25 million of the levy money to build a long-sought pedestrian bridge from the Mall overlooking Lake Erie down to the museums and Cleveland Browns Stadium on the lakefront. The city, the county and the Port Authority all expect that bridge to spur further development, satisfying the desire of suburbanites
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Filling the cracks The biggest portion of the new levy money, $43 million over five years, would be spent to stabilize sections of the Cuyahoga River where the riverfront threatens to erode the shipping channel. The greatest threat, and most expensive repair, would occur at Irishtown Bend below West 25th Street near the West Side Market. There, Riverbed Road is closed because of a widening crack that is threatening to send pavement into the river. It’s a repair the financially strapped city of Cleveland has been unable to fund for years. Stabilizing the hillside and repairing the road would allow a hiking trail that begins in the Cuyahoga Valley National Park to find its way to the lakefront at Whiskey Island, a destination sought by the region’s avid hikers. Another big chunk of the money, about $12.5 million, would cover 25% to 35% of the cost of the dredging that keeps the shipping channel on the Cuyahoga River navigable by big lake freighters. The federal government used to pay all that cost, but Congress decreed in the mid-2000s that local communities eventually would pay a portion, too. The legislators didn’t care who paid the local match, and the city, county and Port Authority have struggled to find the money in their existing budgets. Without dredging, the river could become too shallow for freighters that carry iron ore to the ArcelorMittal steel mill, threatening jobs held by both city and county residents. ■
Osborne sells shares to pay down debt
Coleman Cable, Inc.
“
and city dwellers for a lakefront playground. The Port Authority’s tax levy, currently a modest 0.13 mills, has been unchanged for 45 years. Lately it has been costing taxpayers about $3.50 for every $100,000 of real estate value. The proposed levy increase is to 0.67 mills, raising the cost to about $20 for every $100,000 of property value. The new levy would boost revenue to the Port Authority from about $3.25 million a year to about $18 million a year, or $90 million over the five-year life of the levy.
Mentor businessON THE WEB Story from consisted solely man Richard Osborne www.crainscleveland.com of the sale of Mr. apparently is closer Osborne’s shares. to paying off his lender in an Erie, Mr. Osborne’s son and business Pa., bankruptcy case, thanks to his partner, Gregory Osborne, previously successful July 12 sales of stock in told Crain’s that, assuming the overallotment sale was completed, the Gas Natural Inc. $8 million would be used to pay After previously selling 700,000 down debt in the Erie bankruptcy shares of the natural gas marketing case, which involved three other company’s stock for a little more Osborne-owned companies. Those than $7 million, Mr. Osborne last companies — the John D. Oil and Thursday finished selling another Gas Co., Oz Gas Ltd. and Great 100,000 shares when the company Plains Exploration LLC — owe closed an over-allotment option on roughly $30 million to Charter One, a secondary offering of its common the Cleveland-based bank subsidiary stock. That offering, the first phase of RBS Citizens N.A. of which was completed on July 2,
Mr. Joseph P. Langhenry – President, Watteredge
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bined 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
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Levy: Time is short to mobilize support for issue continued from PAGE 1
poised to support the levy. His spokesman, Rob Nichols, said, “If the governor lived in Cleveland, he would vote for it, and the governor will give the mayor whatever help he needs.” Mayor Jackson wouldn’t go as far to say the reform package would lose its legs without additional taxpayer support. However, he did acknowledge in an interview with Crain’s the levy’s fate would determine whether “we can use those tools in the most effective way so there is an impact.” “There is no question about the need,” the mayor said in reference to the cash-strapped district, which is staring down a $65 million budget deficit. “The question is, will (voters) support paying for that need?” The district unsuccessfully sought more levy dollars in the mid-2000s, but supporters argue the sweeping reform legislation signed this month by Gov. Kasich offers a foundation unlike they’ve had in the past on which to base their pitch. For one, they said it demonstrates the district is serious about righting its ship. “It really is about having a plan in place that voters can depend on for different ways of getting better results with their tax dollars,” said Cleveland schools CEO Eric Gordon. Key provisions of the legislation include the ability for high-performing charter schools to share
levy dollars, the potential for longer school days, a pay structure where teachers are rewarded for performance, and the creation of a public-private watchdog panel that would weigh in on which charter school operators could set up shop in the city.
Time is of the essence Levy supporters must contend with a narrow window leading up to the Nov. 6 election in which to organize and make their pitch to voters. Election Day already is less than four months away, and the period to convince many voters is even shorter given the early-voting opportunities that begin in October. Wendy Leatherberry, a local political consultant who has served on the Cleveland Heights-University Heights school board and worked on levy campaigns in the past, said while more time for wooing voters always is preferable, the levy campaign coinciding with a presidential election could be a blessing. In off election years, Ms. Leatherberry said, local campaigns need to spend an enormous amount of time identifying and mobilizing voters. “In a presidential year, to some extent at least, you can anticipate that other forces have done that for you,” Ms. Leatherberry said. “I would anticipate that other campaigns will be willing to assist in some fashion of sharing the foot
“We know what we need, and we’ve made that clear. ... The district has to do what it needs to do, but we hope they consider our request.” – John Zitzner, president, Friends of Breakthrough, the fundraising arm of Breakthrough Schools, the charter school partner of the Cleveland Metropolitan School District power.” When asked whether the tight time frame was a disadvantage, GCP’s Mr. Roman cited the shortest successful campaign in which his organization had been involved — the six-week effort in 1990 to pass a sin tax to support the Gateway baseball/arena complex downtown — as proof of his group’s ability to mobilize voters. “I think it’s achievable because we’ve got a great team coming to the table,” Mr. Roman said. “It’s not as if this team is suddenly going to wake when the school board decides to put something on the ballot.”
Details are at hand While he wouldn’t share specifics, Mr. Gordon said the district’s board is “closing in” on the size of the levy it plans to send to voters and how much of it would be doled out to high-performing charter schools partnering with the district. The district must submit its request to place a levy on the ballot to the Cuyahoga County Board of Elections no later than Aug. 8.
Among those groups that would benefit from approval of a levy would be Breakthrough Schools, the district’s chosen charter school partner. The group plans to organize its students’ parents in support of the levy, said John Zitzner, president of Friends of Breakthrough, the fundraising and advocacy arm of the charter school network. Breakthrough receives state and federal dollars for its operations, though significantly less than the Cleveland public schools. Mr. Zitzner said the group comes up $3,000 short to cover the total cost of educating each one of its students. While that gap is expected to shrink to $2,000 per child in the coming years as the organization grows, the hope is the potential levy dollars could help bridge that gap. “We know what we need, and we’ve made that clear to Eric (Gordon) and the other folks, but beyond that it’s not really our decision,” Mr. Zitzner said. “Eric’s got a big deficit himself. The district has to do what it needs to do, but we hope they consider our request.” ■
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Story from www.CrainsCleveland.com.
Barberton firm acquires in Mexico Preferred Compounding in Barberton, a supplier of proprietary and custom mixed rubber compounds, said it’s expanding south of the border by acquisition. Company executives said they have purchased for an undisclosed price JevsaMex, the Mexican compounding operation of Iacp Jevsa of Barcelona, Spain. JevasMex’s 66,000 square-foot plant is in the city of San Luis Potosi in central Mexico. The plant is operating and JevsaMex’s former customers in Mexico now are served by Preferred Compounding de Mexico. “For several years we’ve heard from our U.S.-based customers that they want us to fill their needs for high-quality custom compounds in Mexico,” Preferred Compounding CEO Ken Bloom said in a statement. Scott Lieberman, who will manage the Mexican plant, said the acquisition “gives us an operating mixing facility and a trained work force in the heart of Mexico’s industrial area.”
B U R K E M E A N S B U SINESS.
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Halle: Office vacancies remain high Jobs: Officials place high continued from PAGE 1
Cleveland apartment occupancy is a sky-high 96%, according to the Downtown Cleveland Alliance. Waiting lists are common. Young professionals who favor downtown living are pursuing rental units fervently. Conversely, high vacancy rates dog downtown office buildings, particularly properties that do not fit in the most desired, or Class A, category. Overall, downtown had a 23% office vacancy rate as of last Wednesday, June 11, according to online realty data firm CoStar. In an office market of 34 million square feet, CoStar says nearly 7 million square feet sits empty. CoStar reports about 210,000 square feet is available in the 383,000-square-foot building that Forest City converted from a department store to offices in 1986.
Where the buyers are Allen Wiant, vice president for strategic development at PlayhouseSquare Real Estate Services, said the foundation that operates restored theaters and several buildings in the city’s Theater District weighed concerns similar to those of the Halle Building’s owner when it decided last year to shed the Hanna Annex Building to K&D Group for a planned conversion to apartments. Hanna Annex stretches south to Prospect Avenue on East 14th Street from the Hanna Building, 1501 Euclid Ave. “There is too much Class B (office) space in the market,� Mr. Wiant said. “That’s what led us to apartments at Hanna Annex. Throughout downtown, we have to rationalize the amount of office space we have. It’s better to repurpose to where the buyers are.�
Increasingly, those buyers are apartment renters, as opposed to companies that want office space. Mr. Wiant said he has no direct knowledge of Forest City’s plan and does not doubt the market dynamics for the shift. The Halle Building also would benefit from PlayhouseSquare’s amenities. However, he wonders if the building would adapt well to apartments because of its large floor sizes. There is precedent downtown for such a conversion. A former department store that turned into an office building at 668 Euclid Ave. became the Residences at 668, where the apartments created by K&D have been full since a 2010 opening. Besides, Mr. Wiant said, “If anyone knows how to do it, it’s Forest City.�
They have the know-how Forest City spokesman Jeff Linton said the company does not comment on potential projects unless it is ready to roll on them, in part because projects it chooses to pursue undergo a thorough internal review process. Forest City executives talk regularly on conference calls about the company’s apartment portfolio. The developer recently opened the tallest residential building in the Western Hemisphere, known by its address as 8 Spruce St., in Manhattan. It also has rehabilitated old buildings to apartments — the projects range from a former tobacco warehouse, now Lucky Strike Lofts, at Tobacco Row in Richmond, Va., to the former U.S. Public Health Service Hospital that became apartments at the Presidio military complex, now a national park. Forest City also has sold hundreds of apartments the past few years and is pursuing new apartments at
its existing projects, as at its Stapleton mixed-use project at the site of the former airport of that name in Denver. Last month, Forest City executives and others gathered in Parma for a ceremonial ribbon-cutting at its Hummingbird Pointe Apartments, a new name for the former Parmatown Towers, where it totally renovated the late 1960s-vintage property. The project included a new, 14,000-square-foot amenity center with a 300-person ballroom for private events, indoor and outdoor pools and a fitness center. The building at 6871 Ames Road offers more than 200 apartments — including scarce three-bedroom units — in a neighborhood where Forest City has nearly 1,000 additional units in three other buildings. Ralph McGreevy, executive vice president of the Northeast Ohio Apartment Association trade group, said the rebranding and updating at Hummingbird is a good sign. “Any time Forest City spends money in Cleveland, it’s a good thing,â€? Mr. McGreevy said, though he also has not heard about a Halle retrofit. Despite the substantial Parma investment, Forest City in recent times primarily has disposed of assets in the Cleveland market. In the last 12 months, it deeded the former Chase office tower at Tower City Center and sold the Ritz-Carlton Cleveland Hotel and land at Tower City to affiliates of casino operator Rock Ohio Caesars Inc. Forest City lists several cities such as New York, Washington, D.C. and Los Angeles as its target markets because they offer high rents, population growth and high barriers to entry — pluses that Cleveland lacks. â–
value on manufacturing continued from PAGE 3
by SFS that the company’s payroll could swell to 300 after the expansion. However, Ms. Dentler cautioned against pinning hopes on such a high number, which she deemed “questionable.� In a July 12 telephone conversation with Crain’s, Sharon Township trustee Ray Lurtz declined to put a number on the potential increase in employment and said trustees are still waiting for details. “That hasn’t been presented to us formally,� Mr. Lurtz said, when asked about the expansion and related tax abatement request. “We’re not sure what the deal is yet.� However, the township is expecting a request to be made, Mr. Lurtz said. SFS this year will reach the end of a 15-year township tax abatement, Mr. Lurtz said. Assuming the company makes a formal request, the final decision on a new abatement would be made by the county board of commissioners, with input from Sharon Township, he said.
A good, and big, neighbor Local government officials everywhere put a high value on manufacturing jobs these days. That’s in part because they provide relatively high wages to workers who likely could not garner them in other sectors, while also providing a spinoff effect that supports other suppliers and area businesses. “We’re very fortunate that they did choose our area for a significant North American manufacturing
“They’re the largest company in the township, and they’re good local neighbors.â€? – Ray Lurtz, trustee, Sharon Township facility here ‌ years ago,â€? Ms. Dentler said. In Sharon Township, SFS is a big deal, even though its payroll might be too small to make an impact in a larger community. “They’re the largest company in the township, and they’re good local neighbors,â€? Mr. Lurtz said of the company, which is headquartered in Switzerland. SFS does not break out revenues for its business units. However, SFS had sales worldwide of about $720 million in 2011 and more than 3,300 employees, according to its website. The Swiss company on its website lists five salesmen for its Medina County operation and states that four of them work in automotive products. The automotive sector has been one of the strongest sectors of the state and national economy since the end of the last recession. Sales of U.S. autos dipped to fewer than 10 million units a year in 2009, but they since have climbed, and cars were selling at an annual rate of more than 14 million vehicles in June. Many automakers posted sales gains of 20% or more last month compared with their June 2011 sales. â–
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— being held at LaCentre in Westlake and presented by CBiz — including how to register, visit http:// www.crainscleveland.com/section/ WON. There, you also can find a list of this year’s honorees, a short video preview of their stories, coverage of past events and stories about past honorees.
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UH continues to beef up fast-growing cancer program By TIMOTHY MAGAW tmagaw@crain.com
University Hospitals’ cancer program got a big boost when the health system opened its $260 million cancer hospital last year, and UH hasn’t slowed in pumping millions of dollars into what it perceives as one of its strongest and fastestgrowing service lines. UH’s cancer program has seen a four-fold increase in the number of new patients over the last decade — with, on average, about 8,000 new cancer patients pouring into the system each year, according to Dr. Nathan Levitan, president of UH
Seidman Cancer Center. While University Hospitals’ 120bed Seidman cancer hospital on Euclid Avenue in Cleveland was the largest statement of UH’s commitment to its cancer program, the health system continues to muscle up its cancer treatment centers and to attract top-tier physicians. “There is an aging population in Northeast Ohio, and the number of patients with cancer is increasing,” Dr. Levitan said. “That certainly impacts the number of patients coming to us. Because of the convenience factor of our locations and the investments we’ve made in broadening and deepening the services
Lumber: Lawsuit centered on inaccessible inventory continued from PAGE 1
become due,” Huntington’s filing read. Huntington also alleged that the defendants “have failed to detect a multi-million dollar fraud with respect to accounts and inventory pledged to (Huntington) as collateral, resulting in an advance to defendants from plaintiff exceeding defendants’ borrowing base by approximately $6 million.” In an atypically fast, nextday turnaround, Judge Richard J. McMonagle granted on June 12 the bank’s emergency motion for appointment of a receiver. According to court records, the receiver — Tim L. Collins, a partner at the Cleveland law firm of Collins & Scanlon LLP — is to operate Empire until its operations are restructured or stabilized, until a buyer or other source of capital is secured to repay the company’s debt, or until its assets are liquidated to repay its debts.
Oh, Canada Huntington’s filing states the bank and Empire agreed in August 2010 to a $30 million revolving credit loan. It further states that Empire on June 4 and June 5 of this year disclosed to the bank that more than $8 million of inventory serving as bank collateral was being held at or was in transit to a location owned by a company in Canada called Boix Le Roux, and that the inventory no longer was accessible. To complicate matters further, the lawsuit states that Empire officials also notified Huntington that a receiver had been appointed by a court in Quebec to take control of the assets of Boix Le Roux at the demand of a Boix Le Roux creditor. Besides the hang-up with the inventory, Huntington said Empire informed the bank that $2.1 million of accounts receivable due to Empire from Lumber Services — a company related to Boix Le Roux — was no longer collectible based on Empire’s understanding that Lumber Services had closed indefinitely. In addition, the lawsuit states that Empire officials told Huntington the sole employee responsible for communications with Boix Le Roux and Lumber Services recently committed suicide. According to the filing, Huntington officials on or about June 5 advised Empire that the inventory and accounts receivable in question no longer could be used in calculating
the amount Empire could borrow. Despite that notice, Huntington alleged in its lawsuit, Empire submitted a borrowing base certificate in which Empire continued to claim the inventory and accounts receivable as eligible for calculating its ability to borrow. It also filed a draw request for more than $560,000 on or about June 6, Huntington stated in court papers. In response, Huntington said in its lawsuit, the bank sent Empire a notice of over advance and a demand for payment. Empire has not paid Huntington as demanded, its lawsuit alleges. In all, Huntington claims Empire owes it more than $19.4 million.
we provide, we’ve seen remarkable growth in the program.” UH’s latest cancer treatment site — and 10th in all — is a 13,100square-foot space in Westlake at St. John Medical Center, which University Hospitals co-owns with the Sisters of Charity Health System. UH also is in the midst of a $5.5 million upgrade at its Geauga Medical Center in Claridon Township, where it will add radiation capabilities to its existing oncology services. Moreover, UH is investing $30 million in a new proton therapy center at the main cancer hospital, which system officials say will make University Hospitals one of the few providers in the country to offer the new form of radiation treatment.
More likely in store University Hospitals CEO Tom Zenty reported this spring during his annual State of the System address on the continued growth of the health system’s cancer program, noting that discharges and new patients at the new cancer hospital so far this year exceeded projections. Also, patient volumes at many of the program’s satellite locations throughout Northern Ohio also were ahead of projections. First-quarter
volumes, for example, were up 34% year-over-year at the Seidman Cancer Center location at University Hospitals’ Firelands Medical Center affiliate in Sandusky. University Hospitals officials wouldn’t disclose where the health system might set up additional ambulatory sites for UH’s cancer program, but indicated more could be established in the future. “If we’re asked to look at other opportunities for collaboration in other geographic areas, we are open to those discussions,” Dr. Levitan said. “We have extended more widely in the last few years. We are certainly open to having more discussions as we’re approached.”
A draw for top talent UH’s push further into the region isn’t unusual, considering health care in general is shifting toward more community-based locations, according to Bill Ryan, president and CEO of the Center for Health Affairs, an advocacy group for local hospitals. “UH has always been regarded as a very good hospital for the treatment of cancer, particularly certain kinds of cancer, so I think what it basically says is that they’re going to
continue to invest in this program because it’s important to the community and important to attracting physicians to their facilities rather than the system down the road,” said Mr. Ryan, referring to the Cleveland Clinic. Dr. Levitan said University Hospitals already lured several highprofile doctors thanks to the investments in the cancer program. Recent hires include Dr. Lyndsay Harris, who has worked at Harvard, Yale and Duke universities, to head UH’s breast cancer program; Dr. Goutham Narla from Mount Sinai School of Medicine in New York as a research scholar who specializes in identifying cancer-causing genes and developing drugs to target them; Dr. Marcos de Lima from the MD Anderson Cancer Center in Houston to lead the bone marrow transplant program; and Dr. David Mansur from Siteman Cancer Center in St. Louis to serve as medical director of the new proton center. “Top physicians in country are certainly interested in the environment and quality of care, the technology and tools, and certainly also interested in the sophistication of their colleagues,” Dr. Levitan said. ■
Investigation in progress Asked if Empire lied about the assets it possessed or lost those assets, Mr. Collins replied, “We’re investigating, and we’re not in a position to comment.” An ongoing investigation by Mr. Collins will attempt to root out what happened at Empire, what happened involving the Canada company, what losses Empire has incurred and whether there are sources of recovery, he said. As of last Wednesday, July 11, no criminal charges have been filed related to the alleged fraud, Mr. Collins said. A Huntington spokesman said bank officials would not comment. Empire Wholesale Lumber was founded in 1949, according to state records. According to Mr. Collins, the company laid off two weeks ago five people who bought and sold lumber for it, leaving 23 staff members who perform those functions. Those layoffs were not the result of any alleged fraud, Mr. Collins said. Altogether, including senior management and clerical staff, Empire Wholesale Lumber employs about 40 people, he said. Mr. Collins said the company also recently closed its office in Portland, Ore., which leaves it with 10 offices. Mr. Collins said he could not divulge the company’s assets and liabilities. The company’s survival depends on whether there is someone who wishes to buy Empire, he said, noting that discussions with prospective purchasers have taken place. Mr. Collins said another option is for the owners of the company to resolve Empire’s issues with Huntington, which could involve a refinancing of its debt. ■
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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
Fly right
C
ivic leaders could have hit the panic button in spring 2010 when United Airlines and Continental Airlines announced their plans to merge. Instead, the Greater Cleveland Partnership laid plans to make a business case for retaining the Cleveland hub operation of the combined airline, in part by encouraging business travelers in particular to fly United. Two years later, United appears to like what it is seeing. “The hub is in a far better place than it would have been without the efforts of the team in Cleveland,” United senior vice president/network Greg Hart told Crain’s reporter Jay Miller for a Page One story late last month. GCP deserves credit for mobilizing the troops with its “United for Cleveland’s Hub” campaign, which talks up the benefits of an airline hub operation to the region’s economic competitiveness. But the real heroes are the businesses that are letting their employees use United even when ticket prices on other air carriers are cheaper. Just as United doesn’t want to operate a hub that isn’t consistently profitable, the companies that buy the tickets for their employees to fly from city to city must be conscious of their bottom lines, too. A hit to their travel accounts isn’t a blessed event. Nonetheless, many businesses recognize that in order to enjoy for years to come the higher level of service that a hub operation brings, they may need to suffer some short-term pain to their wallets. GCP president Joe Roman said his chamber of commerce group’s anecdotal experience “would suggest we’ve got several hundred companies” that are allowing employees to choose United over cheaper flying options. That’s great. It’s even better that United is noticing, and is making its own push to keep customers coming to its Cleveland hub. The airline is working to sign up companies in Northeast Ohio to its RewardOne and PerksPlus programs, the corporate equivalent of frequent flyer reward programs. And of the companies United’s sales staff has contacted, “we’re pretty pleased with our performance,” said Evan Koppel, the airline’s regional sales manager in Cleveland. Contrast the positive, purposeful approach that GCP and the business community took to retaining the Cleveland hub to the combative stance taken toward United and Continental in May 2010 by U.S. Rep. Dennis Kucinich. Rep. Kucinich back then essentially threatened the two airlines’ plans to combine by stating that the Clayton Antitrust Act “makes it very clear that if any of the parties inflicts substantial economic harm (on a community), that can be a reason to deny a merger.” As we stated in this space at the time, the congressman opted for heated rhetoric to intimidate the airlines when the better route was to be cool and to accentuate the positive in the long-running relationship between Cleveland and Continental. GCP took the high road, and Cleveland stands to be better for it.
FROM THE PUBLISHER
Political season already is heating up
S
camps as well as their surrogate groups. o, how do you think our country’s It’s hard to believe that the undecideds secretary of state is feeling these are being swayed much by the vitriol in days about her “Shame on you, the ads. Barack Obama” quote? But rancor is what we have come I know, politics is a weird business to expect from candidates and their and candidates say whatever might be campaign consultants. And as much as I “moving the needle” at the time, but it’s think it’s getting worse, the reality is that hard to believe then-Sen. Hillary Clinton it’s probably been ever thus; it’s ever could have imagined that just that the huge amounts of the guy she was lambasting in BRIAN money pouring into the swing the 2008 presidential primary TUCKER states make us even more aware. battle would end up being her I doubt that the South Dakota boss. TV markets are getting the So now, we in this swing same dose of this nonsense. state of swing states are being And when it’s not some bombarded by that television inventive strategist digging up a ad from the Mitt Romney filmed quote like the abovecampaign accusing President mentioned “shame on you” Obama of being untrustworthy. tidbit, it’s the candidates themAnd my guess is that the ad is selves in a scratch-your-head moment. resonating with enough people and Witness last week’s appearance by Mr. making enough of an impact that we’ll Romney at the national meeting of the keep seeing it for a while. NAACP. Lucky us. What on earth was he thinking? Was I cannot recall a presidential election he thinking? in which we saw such a barrage of TV ads I mean, standing before a gathering of so early and with so much repetition. influential black delegates from around Money is being spent like water by both
the country and telling them that the best candidate to take care of the interests of the African-American community is him? Did he really think that there wouldn’t be enough boos and bad comments to be picked up by the TV camera crews? He’s at the national meeting of an organization created and maintained for the betterment of the black citizens of this country, many of whom still support this nation’s first president of African-American descent, and he says that? Now, Mitt Romney is a smart guy. And I’m sure he has a bevy of very smart people working on his campaign staff. And I’m just as certain he has hired very bright campaign strategists. That speech was vetted. Words can be very powerful, and these were chosen carefully. But for the life of me, I just can’t understand what they though this would do to help their candidate. I’m trying to imagine Mr. Romney rehearsing this speech. Do you think they had mock audience members there cheering? ■
PERSONAL VIEW
Buy lemonade, inspire an entrepreneur By DEBORAH D. HOOVER
I
t’s a familiar rule of thumb that large enterprises often spring from the most humble beginnings. Ford Motor Co. got its start with the restless tinkering of an apprentice machinist named Henry Ford, who went on to pioneer mass production. Sam Walton grew his giant global retailing empire, Wal-Mart, from a single cramped five-and-dime emporium on the public square in a dusty little Arkansas town. In similar fashion, more than one Fortune 500 CEO has attributed their first crucial lessons in business to their childhood experience of running their own lemonade stands. And why not? In its own modest way, running a good lemonade stand requires thinking about
Ms. Hoover is president and CEO of the Burton D. Morgan Foundation. product development, cost of materials, labor availability and, of course, that allimportant factor, location. Doing it well, and counting up one’s profits, helps whet the appetite for more. All of which is why The Burton D. Morgan Foundation — named for our own Northeast Ohio entrepreneurial success story, the late Mr. Morgan of Morgan Adhesives and so many other successful enterprises — supported Lemonade Day in dozens of locations across the region this year. Working with many area schools and organizations, we helped cover the costs of an innovative national program that helps kids and their adult sponsors learn the nuts and
bolts of launching a successful lemonade stand. By so doing, we hope to plant the seeds for later business successes. After visiting stands from East Cleveland to Hudson to South Akron, our staff came away renewed in our belief that the program is achieving everything we had hoped and more. At one stand in the small town of Salem, Ohio, we watched as 7-year-old Cordelia, barely 4 feet tall, worked her stand (along with her mom) at a modest farmer’s market. The second grader left little to chance. She offered four flavors of lemonade, and her stand was brightly festooned with hand-drawn signs. If that wasn’t enough to beckon passers-by to stop, Cordelia made sure to make eye contact and chat them up. See VIEW Page 9
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CRAIN’S CLEVELAND BUSINESS
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LETTERS
THE BIG ISSUE
IB classes fall short; try post-secondary instead
Would you allow an energy company to drill for natural gas on your land?
■ After reading the article “IB curricula rigorous — and expensive” in the June 18 edition of Crain’s Cleveland Business, as a parent of an IB graduate, I have a word of advice to any student considering entering an IB program — don’t. The International Baccalaureate (IB) program is often promoted as a step above Advanced Placement (AP) classes in rigor and benefit for those who complete the courses. The article here was no exception. Unfortunately, reality does not meet the IB rhetoric. First, while an IB course of studies is difficult, that does not necessarily equate with academic rigor. A great deal of the work required of IB students is little more than large quantities of “busy work,” with an academic value that is in no way proportionate to the effort required. Additionally, while some colleges and universities will offer credit for successful completion of IB courses, many do not. Most students do not choose their college or university based on whether or not the institution offers credit for IB programs. In any case, they usually do not choose a college until late in their junior year, if not during their senior year. By then, they already will have made the decision about whether they will enter a high school IB program. Those students who decide that their education would be best furthered at a school that does not give credit for IB work would certainly have been better served in AP classes. Furthermore, the open secret about college credit offered for IB courses (and to a lesser extent, AP courses) is that even in universities that do provide credit for these programs, many times credit is given only for the very highest of scores. While I saw no evidence of Marxist indoctrination in the IB courses, I did see firsthand that inconvenient facts and conclusions drawn in an IB essay that are not politically popular with the graders in Geneva, Switzerland, will be punished in the grade given. While I have no doubt that understanding other cultures is useful, if not vital, in today’s world, a thorough knowledge of one’s own country’s history and a recognition and acceptance of its values should not be punished. Students should not feel a need to apologize for being Americans. Those students who want both a challenging course of studies and college credit for their efforts are far better served in a post-secondary program in which college courses are actually taken and for which the student receives both high school and college credit. College credit gained in this way is far more widely recognized than IB or even AP credit for the simple reason that it isn’t just equivalent to college credit; it is college credit. The most telling part of the article was the quote from one educator that IB was “sort of a way to say we’re serious.” In other words, it’s a marketing tool for the product they are selling — their school’s diploma. Here’s one final piece of advice for students that will serve them well beyond the SAT exam — understand
9
the meaning of the phrase “caveat emptor.” John Cunniff Akron
Community should fund health care for all citizens ■ I am an avid reader of Brian Tucker’s “From the Publisher” commentary, and just wanted to put my two cents’ worth in regarding the July 9 column, “Health care model still not healthy.” Mr. Tucker states, “It’s clear we cannot afford the current model, which has been built upon the shoulders of employers across the land.” Employers may shoulder health care plan selection and design; however, the costs of the plans are ultimately paid for by employees. Every job I have ever applied for had the health and prescription plan along with other health options such as dental and optical included in the “total compensation package.” I believe it would be reasonable to say that health care plans have been the result of ongoing labor negotiations and competition among employers who are after the best talent, and are not some form of generosity from employers. One aspect of the Affordable Care Act that could be a major benefit to employers and employees is the pooling efforts of each state to provide affordable and competitive plans. These efforts should result in lower overall plan costs, either paid for by employers or employees. This is the usual result of pooling and cost sharing to obtain purchasing power. Health care should be viewed in light of the model involved in funding public schools. In that system, everyone pays or contributes regardless of whether they have children in the system; the result and goal is educated and productive citizens in the work force. As for who pays the bill, a wealthy person living in a $1 million home pays more in property taxes than, say, the guy in a $100,000 home. But that is how most public programs are; life isn’t always fair. Wasn’t one of the founding principles of our country that from many we should be one? We need to restore our sense of community and pride of accomplishment as a community. Something like the needs of the many outweigh the needs of the one. Together we are strong as a nation, a state, a county, or a city. A strong community pulling together for the good of all will always move forward. However, a community pulling itself apart will fail as a house divided against itself. The Affordable Care Act is not perfect, just like the framers of the law are not perfect. However, the political powers of this country should pull together, discuss, reshape, and provide for the health, safety and welfare of all Americans, not just their own special interests. Loren Sengstock Twinsburg
JOSEPH GAUNTNER
CHRIS JUNGJOHANN
CALVIN CASEY
COM DUFFY
Cleveland
Broadview Heights
Cleveland
Rocky River
No. My lot is 130 feet by 50 feet. I’d be concerned about it being in a neighborhood where people live.
Hell no. We don’t know what the repercussions are. We don’t know what chemicals can potentially spill. Or if the there is a leak, what would happen?
I wouldn’t because of all the damage it could do.
No. I’d have to know a lot more about it and see what the environmental impact would be. Also, it could lower my property value — or increase it.
➤➤ Watch more of these responses by visiting the Multimedia section at www.CrainsCleveland.com.
View: Spark kids’ entrepreneurial spirit continued from PAGE 8
By day’s end, she had cleared $150, or three times her goal. Why do so many people patronize these stands? Is it always because they’re thirsty? Career expert Pete Liebman, who ran a lemonade stand of his own as a kid, attributes it to something else — “something I call The Lemonade Stand Principle, which states that older people like to help younger people who are ambitious and enthusiastic.” I think he’s right about that. But it will take much more collective effort than that if this country is to have any hope of hatching the
next generation of wealth creation. During a recent presentation in Akron, Jim Clifton, president and CEO of the Gallup organization, noted that, to spark the next stage of economic growth in America, we’ll need about 2 million startups a year. The current number is only about one-fifth of that. That’s where such programs as Lemonade Day come in. In America, we now have about 15 million kids in middle school and about 15 million more in high school. As students delight in their summer activities and look forward to the next school year, we hope that the adults in our
community will think about taking an active role in inspiring the next generation of entrepreneurs. How? Consider volunteering for Junior Achievement in an eighth-grade classroom next fall. Or perhaps mentor the business club at a local high school. Or encourage your school district to participate in Lemonade Day 2013 next spring. There are so many ways to help the next generation experience the thrill of starting and managing a business. And, of course, the next time you pass a lemonade stand, be sure to stop and buy a glass. ■
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Roulston: Some ‘uncomfortable’ with investment strategy continued from PAGE 3
the Kirtland Hills investment firm for which Mr. Roulston is managing director, may be the only one in Cleveland dedicated exclusively to life settlements. Mr. Roulston says Burdette has attracted some local endowments and foundations, as well as high-net-worth individuals and registered investment advisers, mostly from Northeast Ohio. However, he would not identify his investors, citing client agreements. Burdette opened last year and did an initial close of its first fund on June 29. The anticipated size of the fund is $50 million when fully funded. Documents that would reveal how much Burdette has raised so far were not publicly available as of last Wednesday, July 11. This month, Burdette began buying up, one by one, life insurance policies that policyholders no longer want or need. Policyholders may opt to sell their policies instead of maintaining them themselves because they’re retiring and their companies no longer need key person life insurance on them, Mr. Roulston said. Others do so because their beneficiaries have passed away or because they want cash to give to charity. “Where it makes economic sense for the seller is where they are getting more from selling (the policy) than if they just turned it in for the cash surrender value from the life insurance company itself,” Mr. Roulston said. “There’s no coercion involved,” he added. “It happens when somebody has a legitimate desire to sell their policy and an investor on the other side says, ‘I’m willing to invest
“It is now a regulated industry. When it wasn’t regulated, I think a lot of people appropriately were very nervous about investing in this market.” – Scott Roulston, managing director, Burdette Asset Management and take the risk.’”
A relative of viaticals Though he’s worked in the investment business since 1982, Mr. Roulston didn’t know life settlements existed until Burdette founder Dett Hunter approached him in 2010. The life settlements business is not new, but it is more regulated than it ever was, said Mr. Roulston and others involved in the field. It emerged as an offshoot of the viatical settlement business that developed in the 1980s as a source of life insurance liquidity for AIDS patients and other terminally ill policyholders. That early form of the business was an ugly “circus,” according to Dell Judd, senior vice president of Oswald Cos., a Cleveland-based insurance brokerage. “They were really capitalizing and taking advantage of people in desperate situations who had AIDS,” Mr. Judd said of the policy buyers. “The industry has become more regulated and far more civilized in the last 10 years.” Mr. Judd is a state-licensed broker who represents people who want to sell their life insurance policies. His licensure is one example of the increased regulation of the business. Life settlements brokers began to need such licensing just a few years ago. Both sides in the life settlements transaction now have advocates in place: Sellers are represented by brokers such as Mr. Judd, and the
buyers are represented by licensed closing agents called providers. “That’s one of the reasons why we decided to start BAM, because it is now a regulated industry,” Mr. Roulston said of Burdette Asset Management. “When it wasn’t regulated, I think a lot of people appropriately were very nervous about investing in this market.” Unlike viaticals, life settlements involve policyholders who are not terminally ill but generally have a life expectancy of less than 12 years. Typically, the insured is at least 70 years old and may have health impairments. Medical records must be made available to enable underwriters to project life expectancy. Mr. Roulston wouldn’t disclose the details of how Burdette picks policies because he considers it to be proprietary.
The ‘ick’ factor Life settlements aren’t common. And for some investors and people with life insurance, the premise feels a bit “icky,” he acknowledged. One person who manages a pool of institutional capital locally said two or three firms, including Mr. Roulston’s, have approached the manager’s fund in recent months about investing in life settlements. While it’s attractive to invest in something that isn’t connected to equities or economic growth, the institutional investor said the fund has declined to invest in life settlements. “I think there’s a little reluctance
when you hear of life insurance — trying to profit from people’s deaths,” said the institutional investor, who asked not to be identified. “That makes it a little (bit of an) uncomfortable type of investment to consider.” As for people who are insured, Oswald’s Mr. Judd said there are some “who are not necessarily comfortable with someone holding a life insurance policy on their life.” Tom Strauchon, managing director for private client services for Akronbased Sequoia Financial Group LLC, said many clients feel uncomfortable that investors who buy their policies will know who they are and may not have their best interests at heart. “The people who are buying have a disincentive to see me live to my full life expectancy,” or so the thinking goes, Mr. Strauchon said. “If you close your eyes and think about the darkest side of this … I’d tell you, you don’t want Tony Soprano to be the guy buying your life insurance policy — you catch my drift?” Mr. Roulston said personal information and medical records are shared with life settlements buyers, but the confidentiality of the information is protected by the Health Insurance Portability and Accountability Act, or HIPAA.
Death is sure; payoff isn’t Though the payoff from an investment tied to death may seem like a sure thing, there are risks to the life
Exposure
settlements business. The greatest is that the longer an insured person lives, the longer a purchaser such as Burdette is paying premiums on the policy it bought. “You have to be very good at underwriting to mitigate that risk,” Mr. Roulston said. Other risks include an inability to find sellers, though Mr. Roulston said there currently is an abundant supply of sellers and a limited amount of capital investing in life settlements. The supply of policies should increase as the population ages, but so should demand for them, Mr. Roulston predicted, and that situation could compel firms such as Burdette to pay more for policies, driving returns lower. A spokesman for The American Council of Life Insurers said the trade association doesn’t have data on whether funds investing in life settlements are increasing and doesn’t know of any person or organization that tracks them. The spokesman said the council’s board adopted in 2010 a statement urging policymakers to ban the securitization, or bundling, of life insurance settlements because it believes such bundling would expose senior citizens and investors to increased risk of fraud. The spokesman noted that the council opposes securitization of life settlements, not life settlements per se. The concern, the spokesman said, is that if life insurance policies are securitized, promoters of such arrangements will need to find a sufficient volume of policies to build their inventories, creating a big incentive for the writing of insurance policies just to sell them in the secondary market. ■
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
GOING PLACES
TAX LIENS
JOB CHANGES
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.
CONSULTING CENTRIC CONSULTING: Rahul Pavanan to business analyst.
FINANCE FIRST PLACE BANK: Louis J. Dunham to CEO.
Monte
FIRSTMERIT CORP.: Jay M. Dobkowski to vice president and director, commercial marketing channel management; W. Robert Manning Jr. to senior vice president and director of operations.
CLEVELAND HEARING & SPEECH CENTER: David J. Abood (Accenture) to president; Daniel T. Brezovec to vice president; Steven J. Shore to secretary; Mark A. Quarm to treasurer; Grover C. Gilmore to immediate past president.
HUNTINGTON: Michael Monte to senior banker, health care. THIRD FEDERAL SAVINGS & LOAN ASSOCIATION: Meredith S. Weil to chief operating officer. WESTFIELD BANK: Jeffrey Honaker to senior vice president, market leader.
Polish
Mitchell
CLEVELAND METROPOLITAN BAR ASSOCIATION: Carter E. Strang (Tucker Ellis LLP) to president; Jonathan B. Leiken to president-elect; Bruce G. Hearey to vice president.
FINANCIAL SERVICE
COMMUNITY HEALTH VENTURES INC.: Charles Billow (The Billow Co.) to chairman.
BROCKMAN, COATS, GEDELIAN & CO.: Kristian Doty to tax associate.
HOSPICE CARE OHIO: Rev. Sandy Selby (Furnace Mission) to chair.
KBS CAPITAL MARKETS GROUP: Luke A. Bobey to regional vice president, Ohio River region.
NATIONAL ASSOCIATION FOR SPORT AND PHYSICAL EDUCATION: Stephen Mitchell (Kent State University) to president-elect.
WELLS FARGO ADVISORS: Scott Polish to branch manager, Mentor.
NONPROFIT MALTZ MUSEUM OF JEWISH HERITAGE: Lynda A. Bender to executive director.
TECHNOLOGY NET ACTIVITY INC.: Sonny Kumar to business consultant. PARAGON CONSULTING: Shashanka Nalanagula to developer.
BOARDS AKRON GENERAL FOUNDATION: Mark Mosley (Huntington Wealth Advisors) to chairman; Richard Harris to vice chairman. AKRON GENERAL HEALTH SYSTEM: Mark Lerner (GoJo Industries) to chairman; William Babcox to vice chairman. AKRON GENERAL HOSPITALS: William Frantz (Sandridge Food Corp.) to chairman; Theresa Carter to vice chairman. AKRON GENERAL PARTNERS: Anthony Tricomi (PFI Displays Inc.) to chairman; J. Bret Treier to vice chairman.
PARTNERS PHYSICIAN GROUP: Michael Gallucci (The Cornerstone Co.) to chairman; Elliot B. Davidson to vice chairman. ST. AUGUSTINE HEALTH MINISTRIES: Karen McCarthy (Meaden & Moore Ltd.) to chair; Edward Hack to vice chair; Linda Sheehan to secretary; Charles Slone to treasurer. ST. AUGUSTINE SERVICES CORP.: Carmen Naso to chair; F. Barry Keefe to vice chair; Nancy Bouhall to secretary; J. Thomas Hannon to treasurer.
AWARDS ROSE-MARY CENTER: Steven M. Rini (Bank of America/Merrill Lynch Wealth Management) received the 2012 Angel Award.
RETIREMENT THIRD FEDERAL SAVINGS & LOAN ASSOCIATION: John P. Ringenbach, chief operating officer, after 20 years of service.
Send information for Going Places to dhillyer@crain.com.
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LIENS FILED MMK Group Inc. P.O. Box 445, North Olmsted ID: 20-2945521 Date filed: May 15, 2012 Type: Employer’s withholding Amount: $62,296 Ace Heating and Air Conditioning Co. 45654 Broadale Road, Cleveland ID: 34-1863584 Date filed: May 3, 2012 Type: Employer’s withholding Amount: $36,213 Ohio Natural Stone LLC 760 W. Bagley Road, Berea ID: 30-0260193 Date filed: May 3, 2012 Type: Employer’s withholding Amount: $33,133
Crossroads Reo Inc. 17149 S. Park Center, Strongsville ID: 13-4324891 Date filed: May 3, 2012 Type: Employer’s annual federal tax return Amount: $32,650 Leonard and Susan Fuchs Mizrachi School 26600 Shaker Blvd., Beachwood ID: 34-1400924 Date filed: May 8, 2012 Type: Employer’s withholding Amount: $31,855 S&B West 35th Investors LLC P.O. Box 181487, Cleveland ID: 26-3418940 Date filed: May 15, 2012 Type: Partnership income Amount: $30,810
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Mary Jo Feighan Inc. 6300 Somerset Drive, North Olmsted ID: 34-1947773 Date filed: May 8, 2012 Type: Employer’s withholding, unemployment Amount: $23,798 P A G Enterprises LLC 10637 Glen Forest Trail, Brecksville ID: 30-0057522 Date filed: May 15, 2012 Type: Employer’s withholding, corporate income, employer’s annual federal tax return Amount: $23,205 Quality Care Residential Homes Inc. 9402 Rosewood Ave., Cleveland ID: 75-3189085 Date filed: May 15, 2012 Type: Employer’s withholding, unemployment Amount: $22,648
Johnnys Tavern & Restaurant Inc. 3164 Fulton Road, Cleveland ID: 34-1571273 Date filed: May 15, 2012 Type: Employer’s withholding Amount: $30,062
Lakewood Pizza Inc. 16210 Detroit Ave., Lakewood ID: 20-1130641 Date filed: May 10, 2012 Type: Employer’s withholding, unemployment Amount: $22,488
Friar Enterprises Inc. 3435 Brookpark Road, Parma ID: 34-1242259 Date filed: May 3, 2012 Type: Employer’s withholding Amount: $28,345
Rybak & Associates Inc. 21821 Libby Road, Suite 102, Bedford ID: 03-0514289 Date filed: May 15, 2012 Type: Employer’s withholding Amount: $22,475
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JULY 16 - 22, 2012
Area marketers pitch assists to sports teams, organizations By JOEL HAMMOND jmhammond@crain.com
Pro sports teams may have some of the most recognizable brands in the world, but often their staffs more closely resemble those of small or midsize businesses. So, while they employ ticket sales and marketing staffs, they may not be able to fully handle in-house the growing number of ways to analyze their sales practices and look for new revenue possibilities. That’s where some Northeast Ohio marketing agencies are making inroads. Fathom Online Marketing, the second-largest marketing firm in Northeast Ohio according to Crain’s research published last year, in January hired former Cleveland Cavaliers analytics and relationship marketing executive Steve Kessen to head its sports marketing practice. Mr. Kessen joined Fathom from TeamWork Online, a recruiting service for professionals in the sports business. “Usually, there’s one person doing (marketing analytics) for an organization trying to reach $50 million or $100 million in revenues,” said Mr. Kessen, 29. “Teams are
small businesses. We have experts in digital marketing, and by having those resources, can go in and apply all the best practices.” Fathom already has signed on the Columbus Crew of Major League Soccer and the NFL’s New York Giants. For those clients, Mr. Kessen and Fathom offer, among other things, tips on search engine optimization — the practice of enhancing one’s results on search engines such as Google or Microsoft’s Bing — and re-target marketing. An example of the latter is when a fan looks for Giants-Jets tickets on Giants.com or StubHub and, upon leaving those sites, sees an ad on, say, Yahoo for Giants-Jets tickets. In addition, Fathom tracks customers’ clicks through emails it sends on behalf of its clients. When that same Giants fan receives an email from the team with a ticket offer, Fathom analyzes clicking habits and what ultimately was the cause of losing a potential sale after an email recipient leaves the site. “We’re helping teams make more data-driven decisions,” Mr. Kessen said. “Our purpose is to drive sales, and the way teams traditionally have done that is with an army of inside sales people. Our analytics
platform offers them a much greater vision of who the customer is and what they want.”
Some sizzle at Phizzle Meanwhile, the Cleveland office of San Francisco-based Phizzle is starting to see the fruits of its labor since it was established last November by three former Cavaliers executives. Phizzle specializes in providing sports teams and organizations with mobile marketing services — text messages and content delivered on smart phones or tablet computers — inside and outside of arenas. Jeff Ryznar, formerly the Cavaliers’ director of strategic marketing, said the company’s legwork now is paying dividends: Given its start last fall, Mr. Ryznar said few teams were looking for new providers or new technologies, with three of the big four sports leagues in season; teams typically adopt any new business methods during the offseason. Now, though, in addition to the Cavaliers and other teams that use Phizzle’s services, Mr. Ryznar said the company has partnered with Cleveland-based Home Team Marketing, which pairs 10,000 high schools nationwide with big advertisers, giving those schools added
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ton Building, 812 Huron Road, where Home Team has an office. Mr. Ryznar plans to add up to five employees once the move is complete to handle sales and creative duties. How does he pitch potential clients? “I had a vendor ask me, ‘Why do I need to use you? I have Twitter, I use Facebook,” he said. “I say, ‘You also can balance your checkbook, but you also have an accounting team.” ■
ATMs: Compliance adds cost continued from PAGE 3
compliance, though not all would say so on the record. At Cortland Savings and Banking Co., which operates in five Ohio counties, including Geauga and Portage, seven ATMs have been made compliant, but the bank awaits new, compliant machines for three branches, which should arrive within the next 30 days, said Jim Gasior, president and CEO. “It’s not an easy change to make,” Mr. Gasior said, adding it’s also one that increases costs without increasing revenues. “There are so many areas of regulation, not to make an excuse,” Mr. Gasior said. “I don’t have enough resources to allocate to the normal day-to-day stuff, let alone the compliance requirements (and) the examinations.” Robert Rutkowski, an attorney who advises credit unions, has had some clients ask him: Do we really have to comply with this? “We tell them, ‘Yeah, it’s serious as a heart attack and you should have already been in compliance,’” said Mr. Rutkowski, managing partner of the credit union department of Weltman, Weinberg & Reis Co. LPA in Brooklyn Heights. “But that costs money, and my clients — nonprofit cooperatives — don’t always have the funds.”
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revenue; the NBA Players Association; an expanded relationship with News Corp. to include its Fox networks; and IMG College, an arm of global marketing giant IMG that specializes in college media rights and other facets of college sports marketing. “We’re able to leverage digital assets with teams’ in-house marketing,” said Mr. Ryznar, Phizzle’s vice president of marketing. Phizzle has moved into the Cax-
Addressing the new ADA regulations isn’t cheap. Firefighters Community Credit Union spent more than $67,000 to upgrade two of its four ATMs and to replace the other two months before it was required, said Ben Laurendeau, president and CEO. And even though it bought used machines to keep its costs down, Unity Catholic Federal Credit Union still spent more than $50,000 on two ATMs and their installation in November, according to Tamlyn Straight-Schervish, president and CEO of the credit union in Parma. Cortland expects to spend a total of $102,000 to bring its ATM network into compliance. Mr. Gasior is among those who predict such added expenses will spur institutions to charge more ATM fees, though he said none are planned at present at Cortland. Emerald Group Credit Union in Garfield Heights is taking a more extreme step. It plans to remove this week its ATMs from two local high schools because “we cannot afford to invest thousands of dollars into new equipment that is installed and maintained in low volume locations,” said John R. Martin, president and CEO. The credit union operated the ATMs there for three years, serving students and staff.
“While the new ADA requirements will better serve a certain segment of our population, I question the overall impact on consumers,” Mr. Martin said. So does Weltman Weinberg’s Mr. Rutkowski, who knows of at least one other institution in Toledo that’s pulling its automated teller machine. “The overall irony is what bugs me,” he said. “This is a statute that’s supposed to increase access, and it’s having the opposite effect. If there are fewer machines today prior to this going into effect, then I would consider that to be an epic failure.”
Happy camper One party that isn’t lamenting the change is Green-based Diebold Inc., one of the world’s largest ATM makers. Diebold saw its first-quarter results benefit from accelerated ATM installations related to the ADA requirement deadline, a spokeswoman said. It’s anticipated some ADA-related activity will continue through the middle of the year. Executives with Diebold would not specify how much sales increased or whether it’s true that there’s a backlog of ATM orders. (Bankers say there is.) Banks owned nearly 125,000 Diebold ATMs in North America as of last December. In some cases, ATMs have needed software changes to provide the visually impaired with voice guidance; in other cases, hardware upgrades were necessary, said Dean D. Stewart, Diebold’s senior director of self-service product management.
The law is the law Asked whether he’s concerned that Cortland could become the next target of the growing string of civil rights lawsuits, Mr. Gasior replied, “I would be concerned if we were doing nothing. (But) we’ve ordered the machines, we’ve started the installation process. Our position would be, ‘Hey, look, we’re working on this. By the end of this year, we will have every machine converted to meet the requirements.’” While they may not say it on the record, it’s clear many bank and credit union leaders feel Carlson Lynch, the law firm that’s suing institutions for noncompliance, is on a witch hunt. But Bruce Carlson, a founding partner of the firm, countered that bankers have not been blindsided by these requirements. Dialogue about coming requirements had been taking place for years, and they had a yearlong grace period to get up to speed, he said. “Compliance means compliance,” he said. “This is an issue that is a very high-priority issue for the blind community and has been for a very long time.” ■
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N
ortheast Ohio is a health care mecca, so it’s a daunting task to pick just a handful of professionals to watch. In this section, we offer a cross section of just some those who are positioning
WHO TO
WATCH HEALTH CARE
DR. JENNIFER BAILIT Interim director, women and children’s patient care unit; perinatal executive director MetroHealth Medical Center
D
r. Jennifer Bailit, a maternal-fetal medicine specialist, has made it her career’s work to decrease the rate of preterm births in Ohio and nationwide. The Connecticut native earned a bachelor’s degree in political science at Brown University, but said that while assessing what she wanted to become, she knew she was interested in social and justice issues. “I had to decide whether I wanted to work on those issues as an academic or go out in the real world and address them,” Dr. Bailit said. She opted for the latter, though she puts her poli sci degree to work. Dr. Bailit is a member of the Ohio Perinatal Quality Collaborative
DR. CARRIE DIULUS Spine surgeon Medina Hospital, Cleveland Clinic
S
themselves as future leaders in their fields, or who may be more established but in new and transformative roles. We also ask others working within health care to weigh in on the many challenges facing the sector in the future.
he’s a rookie, but Dr. Carrie Diulus is building a spinal practice at the Cleveland Clinic’s Medina Hospital that’s commanding even the veterans’ attention. “Very few physicians are out above the radar within the first year,” said Dr. Edward Benzel, chairman of neurosurgery for the Cleveland Clinic, who has practiced for more than 30 years and is a mentor for Dr. Diulus, a spine surgeon. “She’s building a program, not just doing surgery there. “It is a male-dominated field, both orthopedics and neurosurgery. However, that’s changing,” Dr. Benzel said. “It’s people like Carrie who are helping to effect that change.” While Dr. Diulus, 38, knew early on that she wanted to be a doctor — she got her first microscope when she was 5 and worked as a medical assistant through her college years — she didn’t always aspire to practice this type of medicine. Indeed, she only changed to orthopedic surgery after a 2001 knee injury derailed her running and cycling career. Even after investing three years in a pathology residency, Dr. Diulus made the decision to switch, in part, because she knew she would enjoy in or-
IN
and has served the state department of health on perinatal quality measures. In 2011, she joined with U.S. Sen. Sherrod Brown in an effort to protest drug maker KV Pharmaceutical’s decision to raise the price of Makena — a drug designed to prevent premature birth in women who have had at least one previous preterm birth — to $1,500 per injection. Their effort included lobbying the Federal Trade Commission to open an antitrust investigation, and KV eventually lowered the price. Previously, Dr. Bailit and MetroHealth played roles in the National Institutes of Health’s study of Makena, writing the article that summarized the trial, which showed that Makena was effective in preventing preterm birth. And in 2008, according to Metro, she led an initiative at 20 top Ohio hospitals that encouraged doctors to stop inducing birth before 39
thopedic work more interaction with patients. Finally, after completing a six-year orthopedic residency at the Cleveland Clinic and three years in fellowship at the San Francisco Spine Institute, Dr. Diulus began practicing at the Cleveland Clinic in July 2011. What she has done since is help to build the new Orthopaedic and Spine Center at Medina Hospital. “We have been working hard to develop a multidisciplinary spine center here,” she said, citing how the center brings together surgeons like her and those in neurology, physical therapy, pain management and nutrition counseling. “That’s been a focus of the program here — looking at patients not just from a surgical standpoint.” The program serves two primary patient populations: older people with degenerative neck and back conditions, and younger people with sports-related injuries. Dr. Diulus has proven to be “a great glue to bring together and hold together team members,” Dr. Benzel said. “Even though she’s a relative rookie, she’s rapidly developing a strong reputation for being a physician who cares, who does the right thing,” Dr. Benzel said. “You can feel the love for Carrie. It’s palpable. Employees have enough confidence in her as a young physician to have their spouses see her. Feedback regarding patient satisfaction is very high. — Michelle Park
weeks in nonmedical situations, an effort that reduced those births by 60%. Now, the OPQC is extending that program into the other 80 hospitals statewide that deliver babies, in addition to working to increase the usage of antenatal steroids, according to Dr. Michele Walsh, director of neonatology at University Hospitals who also works on the OPQC. Antenatal steroids, given to women who will deliver before 32 weeks, helps prevent strokes in preterm babies and matures their lungs in order to decrease those children’s time on ventilators. Dr. Walsh said Dr. Bailit possesses the knowledge and savvy of obstetrics and the public policy perspective, as evidenced by her work with Sen. Brown, to succeed in her advocacy role. “She has been a remarkable change agent,” Dr. Walsh said. — Joel Hammond
MARY DOLANSKY Director, Robert Wood Johnson Foundation’s Quality and Safety Education for Nurses program; associate professor Case Western Reserve University
L
ike most people in the nursing profession, Mary Dolansky is in it because she wants to help people. The daughter of a nurse and the sister of another, Dr. Dolansky — she has a Ph.D. in nursing — wants to help other nurses, as well as their patients and the entire profession, by making nursing better. That is why she doesn’t spend much time with patients these days, but oodles of it with other nurses in her role as director of the Robert Wood Johnson Foundation’s Quality and Safety Education for Nurses program at Case Western Reserve University, where she also is an associate professor. To do the work she’s doing today, Dr. Dolansky gave up a 15-year career in direct patient care in 1999. “I believe that’s what I need to be in to lead the change,” she said, referring to her crusade to improve the profession. “It’s hard to lead change from the front line.” Today, she is the person many See DOLANSKY Page 16
WHAT THE HEALTH CARE COMMUNITY IS SAYING BILL RYAN President and CEO The Center for Health Affairs What types of attributes will be needed in tomorrow’s health care leaders? From the perspective of running a hospital, the biggest skill needed in tomorrow’s leaders is the ability to create relationships with the physicians that serve that hospital. Building that relationship (and) continuing to go out and find physicians for your particular hospital is going to be key. Hospitals will have to be responsible for care that happens outside their own four walls. As we go into this accountable-care approach and pay-for-performance models, hospital executives will have to figure out a way to integrate into the primary care systems in the community and make those doctors feel like part of the team as well. What are some of the most significant challenges going forward? I think the biggest challenge is shifting from a health care system that primarily fixes you when you’re sick to one that puts more emphasis on keeping you well. That’s a very different approach to health care than what we’ve had in this country for the last 100-some years. It’s a whole different approach that challenges the basic financial models and care delivery models that exist today. From a fundamental perspective, that’s the biggest challenge.
JANINE JANOSKY Vice president and head of the Center for Community Health Improvement Austen BioInnovation Institute in Akron What types of attributes will be needed in tomorrow’s health care leaders? Health care in the United States is on the cusp of a significant shift,
moving from a model of “sick care” for illnesses to a model of care for acute and chronic illnesses, as well as health promotion and wellness. Health care leaders of tomorrow need to augment and refocus their current modes of leadership to be ahead of this shift. Tomorrow’s health care leaders will concentrate our beacons of leadership toward transformational leadership. In leading through transformational leadership, the attributes that we will need are: the ability to define the vision during this time of shift; capability to set the direction; skills to serve as agents of change; creativity to respond innovatively to implementation tactics and issues; and the willingness to be accountable to a multitude of diverse constituents, including embracing new models and methods for communication. We as leaders will continue our passion for patient care, while we broaden this passion to include health promotion and wellness. What are some of the most significant challenges going forward? The most significant challenge as we move forward is the need for a cultural change resulting in innovative models for wellness and health care delivery. Our current health care delivery has been described as a “sick care system.” Our current delivery is responsive and excellent in caring for individuals who are ill, those seeking care for primarily acute medical issues. Recognizing now that health care must be a system, synergistic and innovative health systems and initiatives for care and wellness need to be created and implemented to rethink and retool health care delivery. We have made some significant progress, as we begin to create and implement for this move from acute care or “sick care” and toward maintaining ongoing patient health. These primarily include growing and strengthening our acute care delivery while expanding access to care and services, developing patient education and self-management for chronic disease, incorporating interprofessional health teams, and empowerment initiatives to facilitate health promotion and wellness, as well as new financial models and organizational restructuring.
INSIDE: Answers from other Northeast Ohio health care leaders. Page 16
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DR. JORGE GARCIAZUAZAGA Founder Apex Dermatology and Skin Surgery Center
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r. Jorge Garcia-Zuazaga’s flight into the Cleveland medical scene is not a typical one. Born in Puerto Rico and raised in Venezuela, Dr. Garcia-Zuazaga first served as a flight surgeon for the U.S. Marines before transitioning to the institutional side of medicine. After serving as director of Mohs surgery at University Hospitals’ Westlake Health Center for three years, last year he moved his dermatology practice —and his family — to Concord because he saw a need. Lake County did not have a doc-
JOE GIUFFRIDA President Great Lakes NeuroTechnologies Inc.
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t was during a senior design class at Case Western Reserve University that Dr. Joe Giuffrida realized he was studying the right subject. There, he saw a patient who had lost all use of his limbs open and close one of his hands. He just needed the help of a few electrodes, which were rigged to stimulate his hand muscles when he moved his shoulder. “Once I saw that, I was completely hooked on biomedical engineering,” he said. Today, Dr. Giuffrida is president of Great Lakes NeuroTechnologies Inc., which develops devices designed to monitor the symptoms of motion disorders and various bodily signals.
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tor performing Mohs micrographic surgery, a specialized surgery for skin cancer patients, full time. “People would have to wait two to three months. When you have skin cancer, you want to get this taken care of,” he said. “I tried to bridge the gap.” At the time, Dr. Garcia-Zuazaga had just earned his MBA from Case Western Reserve University and was willing to risk of self employment. “My parents, growing up in Puerto Rico, had businesses. Maybe it’s in my genes,” he said. Apex Dermatology and Skin Surgery Center in Concord now employs five people. At Apex, he started the Spot Check program, which ensures anyone with a new mole or a skin spot that’s changing or bleeding will re-
ceive an appointment within 72 hours. The goal is to detect skin cancer early and potentially save lives. Dr. Garcia-Zuazaga also speaks at senior centers, offers free skin cancer screenings and participates in national presentations. Dr. Kevin Cooper, professor and chairman of the department of dermatology at University Hospitals Case Medical Center and Case Western Reserve University, liked Dr. Garcia-Zuazaga enough that he hired him twice — first as a resident and later as a faculty member. “I think he has leadership capacity and he’s very engaging and charismatic and smart and capable,” said Dr. Cooper. “He could be a significant leader and mentor; there’s nothing holding him back.” — Ginger Christ
AL HAWKINS
Not only did he play an instrumental role in forming the company, which in 2010 spun off from Cleveland Medical Devices Inc., but he also helped develop the products, said Bob Schmidt, who is chairman and majority owner of both companies. Mr. Schmidt described Dr. Giuffrida as “a guy who makes things happen.” While studying at CWRU — where he earned a bachelor’s, master’s and doctorate in biomedical engineering — Dr. Giuffrida conducted research related to functional electrical stimulation and even worked with the patient he saw as an undergraduate. He also worked as an engineer for home medical products maker Invacare Corp. of Elyria and Cleveland Medical Devices, where he eventually became vice president and general manager of the company’s movement disorders
division, the precursor to Great Lakes NeuroTechnologies. The spinoff employs 20 people and brought in about $8 million in grant funding over the last 12 months, Dr. Giuffrida said. He would not give revenue figures for the company but said sales are divided about evenly between the company’s two main product lines. The Kinesia-brand movement disorder monitoring system is designed to provide a better way for doctors to estimate how much medication a patient needs and for drug companies to measure how well their products work. The BioRadio is used by researchers and educators to monitor bodily signals such as brain, heart and muscle activity. The Hinckley resident enjoys making wine, riding his 2006 Honda Shadow, playing golf and rooting for Cleveland sports teams. “I’m determined to never leave until one of my sports teams win,” he said. — Chuck Soder
KYLE GUSTAFSON
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CEO Milo Biotechnology LLC Part-time CEO-inResidence BioEnterprise Corp.
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l Hawkins is following a fairly simple career path. After his job is done at Milo Biotechnology LLC, he’ll start another company. Then another and another. “I don’t want to be doing anything else,” he said “I like creating new companies.” Today, Mr. Hawkins is both CEO at Milo Biotechnology, a startup testing a treatment for muscular dystrophy, and a part-time CEOin-Residence at BioEnterprise Corp., where he provides assistance
Assistant professor of pharmacy practice Northeast Ohio Medical University College of Pharmacy Clinical pharmacist Southwest General Hospital
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yle Gustafson, an assistant professor of pharmacy practice at the Northeast Ohio Medical University College of Pharmacy and a clinical pharmacist at Southwest General Hospital, wants to make sure his patients get the best care possible. And a key way he helps them avoid medication-related problems while they’re in the hospital is his work to improve the way their prescriptions are monitored. To that end, Dr. Gustafson is developing a program of medication reconciliation for patients at Southwest. The program is designed to minimize the risk that newly admitted patients will have problems with prescription interactions. The U.S. government’s Agency for Healthcare Research and Quality describes reconciliation as the process of reviewing a patient’s complete medication regimen at the time of admission and comparing, tracking and reviewing any new medications that may be prescribed in the hospital or upon discharge. The agency believes half of hospital admissions have one or more medication conflicts at the time of admission.
to other biomedical companies in Northeast Ohio. When BioEnterprise recruited him to move back home from Boston, they told him that his main job would be to find a technology, turn it into a company and leave the Cleveland-based nonprofit to focus on building the business, which he’ll eventually do if Milo Biotechnology can raise venture capital. Mr. Hawkins was amazed that someone would pay him to hunt for a company to start. He also liked the idea of being able to help the region he came from rebuild its economy. “That’s a long-term goal,” he said. “I will be here until I die.” A native of Columbia Station, Mr. Hawkins graduated from Lake Ridge Academy in nearby North Ridgeville before earning a bachelor’s
“People come in with a bunch of medications and somebody has to accurately assess whether what they are taking is right or wrong” and then follow their hospital stay and the administration of new medications and their impact on the hospital visit, Dr. Gustafson said. “Then we have to make sure they leave (the hospital) with the right medications.” Dr. Gustafson said Southwest’s medical reconciliation program uses pharmacists rather than the nurses, who traditionally would gather this information, because pharmacists are better able to focus on potential medical interaction problems. In addition to reducing errors, he said, medication reconciliation also can save the hospital money by avoiding patient complications. “That entire process is very difficult,” Dr. Gustafson said. “It is very difficult for every hospital in the country, and nobody has figured out how to do it right.” He’s trying to do it right. He also is working on putting a pharmacist in the emergency room to be an information resource for the doctors and nurses there. David Ferris, Southwest’s pharmacy clinical manager, said Dr. Gustafson “even goes the extra step and calls up (patients’) local pharmacist or their primary care physician or family members to try to determine what drugs the patient is taking.” Dr. Ferris also noted that Dr. Gustafson greatly has improved the quality and choice of antibiotics used to fight infectious diseases in patients and spends time in the hospital’s intensive care unit to monitor medications. — Jay Miller
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degree in economics from Emory University in Atlanta in 1996. Although he spent some time working for an insurance company, he never was keen on joining a major corporation. That attitude was reinforced by a professor he had while studying for his MBA at the University of Wisconsin-Madison. “He made it seem like it was OK to not want to work for a big company,” he said. There, he helped write business plans for professors trying to turn ideas into products, which led him and a partner to found Agave Group New Venture Consulting, which focused on startups and investors. They also founded TFX Bioscience, but the startup’s technology — which was meant to fight bioterror pathogens and protect plants from disease — didn’t work as expected. In 2007, he became director of
DAMIAN A. HENRI Associate; design leader, Simulation Based Learning Environment Architecture Bostwick Design Partnership
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arents and teachers at Solon High School thought that Damian Henri would pursue a career in theater or music, particularly since he started working summers at the former Sea World of Ohio in sound and lighting. However, he puts those talents to work today on a far different stage. He is involved in the rapidly evolving niche of designing simulation centers for health education, which provide hospital and surgical environments for high-tech mannequins that are increasingly popular in training next generations of health care practitioners. A recent assignment involved Mr. Henri in the multimillion-dollar surgical simulation center at the Cleveland Clinic’s Cole Eye Institute. Other recent projects include nursing skills labs at Cuyahoga Community College’s East and Metro campuses and for the Ohio State University College of Medicine. He also will present a poster on simulation-based learning environments at the International Conference and Idea Marketplace for the Society for College and University Planning, and he will be a speaker at the annual International Nursing Simulation/Learning Resource Center Conference. He has spoken at six other conferences since 2010. Work combining the technical requirements of doctors and university researchers particularly suits Mr. Henri. While studying architecture at Carnegie Mellon University, he also earned a minor in physics. That exposure gives him insight into what colleges and medical schools seek in their lab buildings or simulation centers. Robert Bostwick, president and design director at the firm, said Mr. Henri’s science experience helps him grasp issues his clients are working on and his theater background allows him to articulate their needs. Mr. Henri still enjoys music and theater, but on a personal basis. He met his wife, Laura, while they did a show in Euclid and last year they performed in Chagrin Valley Little Theater’s production of “Rocky Horror Picture Show.” — Stan Bullard
new ventures at Boston University, where he helped faculty start companies and managed the university’s business incubator and venture capital fund. Mr. Hawkins is an intelligent, creative and thorough person, said Bill Leimkuehler, chief operating officer of medical device maker Biolectrics LLC of Elyria. He noted how Mr. Hawkins looked at all sorts of technologies before settling on Milo Biotechnology’s muscular dystrophy therapy. “He’ll analyze a problem many times over and find an optimal solution before acting,” he said. He lives in Cleveland Heights with his wife, Jill, and their 4-year-old son, Leo. He enjoys hiking in the ravine that separates the suburb from Shaker Heights and playing pingpong in his basement. — Chuck Soder
WATCH IN HEALTH CARE
TIQUE OEFLEIN Nurse practitioner; team leader, palliative care unit Hospice of the Western Reserve
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ique Oeflein, a nurse practitioner at Hospice of the Western Reserve, knows firsthand how important palliative care is for patients with life-limiting illnesses. The mother of an autistic child, Mrs. Oeflein always wanted to have someone to turn to with questions about symptoms or for advocacy, physician referrals and guidance. As a nurse practitioner in Hospice’s palliative care unit, Mrs. Oeflein now is that person. She works to augment the care provided by primary physicians, helping manage patients’ symptoms and pain. Mrs. Oeflein for 10 years worked
CRAIN’S CLEVELAND BUSINESS as a registered nurse in a neonatal intensive care unit before earning in 2010 her master’s degree from Ursuline College. “I always was craving someone to help me with the little symptoms that came up,” Mrs. Oeflein said. “Learning about palliative care was exactly that person to me.” Now, only two years into her time with Hospice, Mrs. Oeflein is the team leader of the organization’s palliative care unit — Western Reserve Navigator, which incorporates social work into palliative care. She oversees 10 advanced practice nurses and is in charge of the medical side of the program. Judy Bartel, chief clinical officer at Hospice and the person who hired Mrs. Oeflein, said Mrs. Oeflein’s leadership abilities were apparent
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immediately. She had an ability to communicate with people at all levels, from patients to physicians. Ms. Bartel said since Mrs. Oeflein was promoted to team leader six months ago, she has gotten involved in national projects and even is reviewing chapters in a book on core curriculum for advanced practice and hospice nurses. “I can only imagine in a year’s time where she’ll be in palliative care,” Ms. Bartel said. Mrs. Oeflein isn’t short on ideas for the future. She said she would like to establish a partnership between Hospice and local inpatient palliative care services. “It’s a nice communication between the hospital stay and the home environment. It’s good health care,” she said. — Ginger Christ
WHEREVER YOU ARE, YOU’RE CLOSE TO GREAT CARE.
The nationally recognized care and expertise of The MetroHealth System is available at 17 convenient locations, from Beachwood to Westlake and from Cleveland to Strongsville. So you never have to go a long way to make a great comeback.
For a physician near you, please call 216-778-7878 or visit metrohealth.org.
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CRAIN’S CLEVELAND BUSINESS
DR. JONATHAN STAMLER Director, UH Discovery Institute University Hospitals
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aving co-founded five drug companies and made several medical breakthroughs, Dr. Jonathan Stamler’s career has been nothing short of prolific. But his latest venture at University Hospitals has the potential to be, as he characterized it, a game changer. After a 16-year career at Duke University, Dr. Stamler joined University Hospitals in 2010 to direct its fledgling Institute for Transformative Molecular Medicine — a role developed, in a sense, to create opportunities for physician scientists at University Hospitals and Case Western Reserve University. Physician scientists, he said, set apart academic medical centers such as UH Case Medical Center from their smaller counterparts. “When it comes down to it, it’s not just level of care (academic medical centers) provide, but the belief the patient has that the physicians there have a level of knowledge that is different and that they have something up their sleeve if there are problems,” said Dr. Stamler, a trained cardiologist and pulmonologist. “That something up their sleeve is really the purview of the physi-
DOLANSKY continued from PAGE 13
organizations turn to when they want to improve. For the past eight years, she has taught a course at CWRU on continual quality improvement, with students who are nurses, naturally, but also legal professionals, administrators, medical students and public health officials. In addition, she works closely with and mentors individual nurses and students, including four nurses currently working for the veterans administration and 15 students pursuing their doctorate degrees in nursing from CWRU. Her own post-graduate education has allowed Dr. Dolansky to tackle big challenges in her field. Her success in doing just that has made her a sought-after commodity, said Shirley Moore, professor and associate dean for research at Case Western Reserve’s Frances Payne Bolton School of Nursing. “Mary is probably most known for her skills at promoting collaborations — among different professional groups, among health care agencies and among learning institutions,” she said of her colleague.
cian scientist,” he said. “It’s their job to help try to change the standard of care to provide cuttingedge new technologies that move the needle.” Dr. Stamler’s latest task at University Hospitals is leading the UH Discovery Institute, the research arm of the health system’s $250 million drug development initiative known as the Harrington Project for Discovery & Development. The project is expected to help bridge a gap that experts in the biosciences field have referred to as the “valley of death” — the point in the development of a new drug at which it isn’t far enough along to attract outside investment to fuel the path to commercialization. “The nice thing about the Harrington project is it’s a national response to the problem,” Dr. Stamler said. Dr. Daniel Simon, director of the University Hospitals Harrington Heart & Vascular Institute and chief of the division of cardiovascular medicine, first worked alongside Dr. Stamler in the 1980s while training at Harvard. “Jonathan has the combination of questioning dogma and looking at things in a slightly different way,” Dr. Simon said. “In short, in that package, you could clearly identify there’s genius in there. There are very few people you meet like that.” — Timothy Magaw
“She builds teams that have the skills and passion for improving the care for patients.” When she was a practicing nurse, Dr. Dolansky saw too many mistakes, often because of flawed systems, policies and training procedures. Today, she helps students and practitioners wrestle with those same issues, as well as a slew of others being brought on by things such as new privacy laws and a rush toward technology. The profession and the health care arena in which it operates are both improving on all fronts, she said, though there’s still more work to do. Dr. Dolansky’s journey has taken her to Case Western Reserve after having served in quality improvement roles at University Hospitals and the MetroHealth System. Ultimately, she hopes to continue to work on quality improvements at a national level. Given her success so far, it’s tough to bet against her. At age 50, Dr. Dolansky figures she’s still got some time to work on the continued improvement of her profession. “I’ve got 20 more years — I’m really excited about that,” she said. — Dan Shingler
ALSO KEEP AN EYE ON ... SCOTT SEIDELMANN CEO Radisphere National Radiology Group Radisphere National Radiology Group, which provides remote and on-site radiology services to community hospitals, raised about $80 million in financing over the last five years. The growing company recently moved from Commerce Park to a new location on Park East Drive in Beachwood. Also, its revenue for the first five months of 2012 increased 36% over the like period in 2011.
NEOMED-CSU URBAN PRIMARY CARE INITIATIVE Northeast Ohio Medical University and Cleveland State University in May launched the NEOMEDCSU Urban Primary Care Initiative, aimed at identifying local minority high school students interested in medical careers and placing them on an education track with a focus on primary urban care. NEOMED president Dr. Jay A. Gershen and CSU president Ronald M. Berkman recruited the support of organizations such as
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WHAT THE HEALTH CARE COMMUNITY IS SAYING RICK CHIRICOSTA President and CEO Medical Mutual of Ohio
have much lower investment returns ...
TOM CAMPANELLA
What types of attributes will be needed in tomorrow’s leaders? In order to be successful, tomorrow’s health insurance industry leaders will need to be able to drive change throughout their organizations as the old model of risk selection becomes antiquated with the implementation of the Affordable Care Act (ACA). They will need to understand data analytics, valuebased benefit design and know how to develop models that lead to favorable outcomes and lower health care costs in the long run. ... Successful leaders in the health insurance industry will figure out how to do more with less, as administrative and product distribution costs are limited under the ACA. ... What are some of the most significant challenges going forward? Health insurance already is unaffordable to many, and costs are expected to continue to rise due to a number of factors. First and foremost, all insurers will be subject to additional fees and taxes, which will have to be passed on to policyholders. ... The elimination of underwriting and pre-existing condition limitations is a good thing from a social standpoint, but it is uncertain as to whether the law will be effective at controlling anti-selection, or individuals signing up for insurance only after a medical condition needing treatment is identified. ... Health insurers will struggle if their premium increases are not permitted to keep pace with the underlying health care cost increases. While the mandate is designed to help mitigate this problem, in the early years the amount of the penalty is so small that it will be ineffective at attracting the best risks to the insured pool. This problem is compounded by the fact that the rating factor based on age will be limited in the future to no more than 3 to 1, which is going to have the effect of significantly raising premiums for younger, healthier people, which will further reduce the likelihood of their purchasing insurance coverage. On top of those issues, the current interest rate environment is an additional challenge as health insurers will
Associate professor and director of the health care MBA program Baldwin Wallace University
St. Vincent Charity Medical Center and the Sullivan Alliance to Transform America’s Health Professions. Students will be paired with a single site throughout their fouryear medical school experience, allowing them, as initiative leaders put it, “to get to know the people of a particular neighborhood well and increasing the likelihood the student will return post-residency to practice within that area and to serve those residents.”
among other things, three Northeast Ohio health care systems in June 2011 launched the for-profit Community Health Collaborative. Currently involved are those founding members: EMH Healthcare, Parma Community General Hospital and Southwest General Health System. “This collaborative allows us to remain autonomous, remain responsive to our community, and to achieve the critical mass necessary for future success,” said Dr. Don Sheldon, president and CEO of EMH Healthcare.
COMMUNITY HEALTH COLLABORATIVE With the aim of achieving better economies of scale in terms of purchasing and physician retention,
What types of attributes will be needed in tomorrow’s health care leaders? Given the overall financial challenges that the health care stakeholders will be experiencing, it is critical that health care leaders have the ability to navigate these challenging waters. The core attributes that health care leaders will need to have include the following: the vision to know what is needed to be successful in the new health care marketplace, the ability to attract and develop outstanding leaders at all levels of the organization, and the integrity, passion and ability to inspire an organization to adapt to and succeed in this new value-based health care environment. What are some of the most significant challenges going forward? The primary funding sources for health care are Medicare, Medicaid and employers. All three funding sources are under severe financial stress, especially Medicare and Medicaid, which will result in major financial challenges for the health care stakeholders. Reimbursement to health care providers of service increasingly will be riskbased (bundled payments, capitation, etc.) vs. the current fee-forservice environment, which will require a transformation of how and what services will be provided, and in turn have a rippling effect on the entire health care industry. Finally, the empowered, financially engaged consumers, as a result of higher deductibles, etc., with increased access to user-friendly cost and quality information, will provide additional pressure on the health care stakeholders to meet their value-based expectations. ....
WILLIAM CONSIDINE President and CEO Akron Children’s Hospital What types of attributes will be needed in tomorrow’s leaders? If you are fortunate to become part of a children’s hospital family, really do consider it a privilege.
CLEVELAND CLINIC, OHIO UNIVERSITY PARTNERSHIP The Cleveland Clinic and Ohio
Stay humble. Be a continuous learner. Be a cheerleader for your organization and your people. ... But all health care leaders face tough challenges in an era when health care is rapidly changing. Tomorrow’s leaders will need to be open to new ways to do business and new funding models, such as accountable care organizations. Those not willing to adapt and embrace change will do a disservice to their organizations. Collaboration is and will continue to be key. The Austen BioInnovation Institute in Akron is a great example of the good that comes when hospitals, universities and others work together. It’s good for each organization, the region and, most important, the patients we serve. At the end of the day, the successful health care leader is the one who stays true to his or her organization’s mission and keeps it alive and relevant for the next generation. What are some of the most significant challenges going forward? The whole country has been debating health care lately, with many Americans glued to their televisions and computers June 28 for the Supreme Court’s ruling on the Affordable Health Care Act. The ruling was followed by a wide range of commentary, from thoughtful analysis to partisan applause and jeers. But it is time to move forward. It is not a perfect piece of legislation, but is a step in the right direction. The legislation’s strength is its emphasis on patient protection, but much more needs to be done. After years of adaptations, America’s health care infrastructure is way too complex and needs to be simplified. Patients need greater control of their health care decisions, and we need to focus on prevention and primary care. Treatment of chronic illness has led to an explosion in health care costs, yet so many of these conditions are preventable through better diet and lifestyle choices. We have lots of science on our side to establish metrics to measure the return of investment on our health care dollars. Two great places to start would be setting metrics on reducing the prevalence of childhood obesity and lowering infant mortality rates. An adage no one argues with is: Children are our future. University last month agreed to develop a Northeast Ohio regional extension campus of OU’s medical school that will be on the Clinic’s South Pointe Hospital campus. It’s no small undertaking, carrying a price tag of $49.1 million. OU’s $36 million commitment will provide support for building renovations as well as faculty, staff and operations to provide medical education. Cleveland Clinic’s contribution of $13.1 million includes capital improvements and renovations to the building, staff and operational support, as well as medical education support. The first class of 32 medical students is scheduled to begin in July of 2015.
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
17
LARGEST NURSING HOMES RANKED BY NUMBER OF CERTIFIED BEDS(1)
Name Address Rank Phone/website
Certified beds
Medicare provider number
Assets ($)
Net patient revenue ($)
Net income/ (loss) $
# of FTE employees
Cost report date
Type of ownership
Administrator Steven Raichilson
1
Menorah Park Center for Senior Living 27100 Cedar Road, Beachwood 44122 (216) 831-6500/www.menorahpark.org
360
365094
11,051,829
47,921,595
(665,014)
475.0
June 30, 2010
voluntary nonprofit, church
2
Park East Care and Rehabilitation 3800 Park East Drive, Beachwood 44122 (216) 831-4303/www.sunbridgehealthcare.com
274
365810
5,550,632
21,267,977
(992,900)
232.0
Dec. 31, 2010
proprietary, corporation
Bernard Centa
3
Montefiore One David N. Myers Parkway, Beachwood 44122 (216) 360-9080/www.montefiorecare.org
268
365046
33,574,950
27,088,501
(305,172)
329.9
June 30, 2010
voluntary nonprofit
Lauren B. Rock
4
West Bay Care and Rehabilitation 27601 Westchester Parkway, Westlake 44145 (440) 871-5900/www.sunbridgehealthcare.com
259
365451
4,560,174
16,477,626
(219,721)
189.0
Dec. 31, 2010
proprietary, corporation
Karen Williams
5
St. Augustine Manor 7801 Detroit Ave., Cleveland 44102 (216) 634-7400/http://staugustinemanor.org
248
365883
8,495,784
19,702,162
(480,215)
159.3
Dec. 31, 2010
voluntary nonprofit, church
Andrew Koha
6
Center for Clinical Care 8800 Carnegie Ave., Cleveland 44106 (216) 229-3300
220
365948
2,081,691
7,341,122
(1,475,700)
108.2
Dec. 31, 2010
proprietary, corporation
Monica Williams
7
Broadview Nursing Home 5520 Broadview Road, Cleveland 44134 (216) 749-4010/www.broadviewmulticare.com
218
365757
2,090,246
17,044,502
322,567
204.8
Dec. 31, 2010
proprietary, corporation
Isaac Lifschutz
8
ManorCare Rocky River 4102 Rocky River Drive, Cleveland 44135 (216) 251-3300/www.hcr-manorcare.com
209
365392
16,181,541
11,697,609
21,484
151.9
May 31, 2011
proprietary, other
Jody McConnell
8
Willow Park Skilled Nursing & Rehab.Center 18810 Harvard Ave., Cleveland 44122 (216) 752-3600/www.atriumlivingcenters.com
209
365828
2,475,659
11,663,526
10,712
162.5
Dec. 31, 2010
proprietary, other
Terri Plush
10
University Manor 2186 Ambleside Road, Cleveland 44106 (216) 721-1400
208
365832
1,916,952
9,169,157
130,858
128.3
Dec. 31, 2010
proprietary, corporation
Matthew Johnson
11
Carington Park 2217 West Ave., Ashtabula 44004 (440) 964-8446/www.carington.com
207
365286
9,282,138
13,023,079
1,906,087
166.6
Dec. 31, 2010
proprietary, corporation
Kelly Johnson
12
St. Luke Lutheran Community-North Canton 220 Applegrove St. NE, North Canton 44720 (330) 499-8341/www.stlukelutherancommunity.org
202
365521
15,573,599
16,077,073
1,394,479
244.0
Dec. 31, 2010
voluntary nonprofit, church
Evelyn Moore
13
Andover Village Retirement Community 486 S. Main St., Andover 44003 (440) 293-5416/www.andovervillageretirement.com
200
365411
2,486,846
10,680,187
(333,947)
133.0
Dec. 31, 2010
proprietary, partnership
Phillipp Panno
13
Hanover House Nursing and Rehabilitation Center 435 Avis Ave. NW, Massillon 44646 (330) 837-1741/www.communicarehealth.com
200
365292
2,165,558
13,424,896
195,005
164.0
Aug. 31, 2010
proprietary, corporation
Miranda Biglin
13
ManorCare Euclid Beach 16101 Euclid Beach Blvd., Cleveland 44110 (216) 486-2300/www.hcr-manorcare.com
200
365594
16,199,736
11,244,679
463,153
143.4
May 31, 2011
proprietary, other
Joe Wilson
13
Omni Manor 3245 Vestal Road, Youngstown 44509 (330) 793-5648/www.windsorhouseinc.com
200
365433
13,789,657
11,893,837
334,337
195.0
Dec. 31, 2010
proprietary, corporation
Paul Fabian
17
Pleasant Lake Villa 7260 Ridge Road, Parma 44129 (440) 842-2273/www.lhshealth.com
199
365706
3,582,481
19,035,137
756,206
242.8
Dec. 31, 2010
proprietary, corporation
James J. Taylor
18
Crandall Medical Center 800 S. 15th St., Sebring 44672 (330) 938-6126/www.copelandoaks.com
198
365574
4,828,812
14,912,613
69,595
234.3
Dec. 31, 2010
voluntary nonprofit
Robert Cameron
18
Golden Living Center at Western Reserve 9685 Chillicothe Road, Kirtland 44094 (440) 256-8100/www.goldenlivingcenters.com
198
365290
2,082,310
11,595,300
731,500
82.0
Dec. 31, 2010
proprietary, corporation
Amanda Eberhart
20
Greenbrier Senior Living Community 6455 Pearl Road, Parma Heights 44130 (440) 888-5900/www.communicarehealth.com
194
365192
2,302,302
13,598,588
(36,989)
167.5
March 31, 2011
proprietary, corporation
Jill Burke
21
Lutheran Home Inc. 2116 Dover Center Road, Westlake 44145 (440) 871-0090/www.concordreserve.org
192
365020
42,316,713
18,269,593
(317,168)
204.1
Dec. 31, 2010
proprietary, corporation
Janet M. Harst
22
Kindred Transitional Care and Rehabilitation - The Greens 1575 Brainard Road, Lyndhurst 44124 (440) 460-1000/www.kindredhealthcare.com
190
366114
14,934,151
16,818,185
(390,849)
168.3
June 30, 2011
proprietary, corporation
NA
23
Wickliffe Country Place 1919 Bishop Road, Wickliffe 44092 (440) 944-9400/www.lhshealth.com
188
365381
3,695,238
14,219,637
795,850
198.6
Dec. 31, 2010
proprietary, corporation
Deborah Farris
24
Lake Pointe Health Center 3364 Kolbe Road, Lorain 44053 (440) 282-2244/www.communicarehealth.com
182
365623
2,168,066
12,210,307
(221,408)
148.3
May 31, 2011
proprietary, corporation
Cathy Myers
25
Briarfield at the Ridge 3379 Main St., Mineral Ridge 44440 (330) 652-9901/www.briarfield.net
180
365823
13,177,055
10,884,204
(84,782)
142.0
Dec. 31, 2010
proprietary, partnership
Stacey Bettura
25
Suburban Pavilion 20265 Emery Road, North Randall 44128 (216) 475-8880/www.communicarehealth.com
180
365215
2,478,910
13,755,723
453,742
145.1
Aug. 31, 2010
proprietary, corporation
Mark Grippi
25
Wyant Woods Care Center 200 Wyant Road, Akron 44313 (330) 836-7953/www.communicarehealth.com
180
365779
1,960,681
13,220,961
532,704
154.2
March 31, 2011
proprietary, corporation
Judy Dennis
28
Pleasantview Care Center 7377 Ridge Road, Parma 44129 (440) 845-0200/www.pleasantview-care-center.com
179
365084
782,222
15,762,013
231,005
186.2
Dec. 31, 2010
proprietary, corporation
David Farkas
29
ManorCare North Olmsted 23225 Lorain Road, North Olmsted 44070 (440) 779-6900/www.hcr-manorcare.com
178
365310
12,746,706
13,783,942
1,137,530
169.3
May 31, 2011
proprietary, other
Daniel Zawadzki
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. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Information is from SNFData Resources LLC, www.snfdata.com and the nursing homes.
RESEARCHED BY Deborah W. Hillyer
To purchase this list and other published lists in PDF and Excel formats WWW.CRAINSCLEVELAND.COM/LISTS
20120716-NEWS--18-NAT-CCI-CL_--
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7/12/2012
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Page 1
CRAIN’S CLEVELAND BUSINESS
Contact: Phone: Fax: E-mail:
WWW.CRAINSCLEVELAND.COM
JULY 16 - 22, 2012
REAL ESTATE
Toni Coleman (216) 522-1383 (216) 694-4264 tcoleman@crain.com
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
AUCTIONS
INVESTMENT OPPORTUNITY
REAL ESTATE AUCTION / JULY 31 Incredible Retail Investment/Development Opportunity!
LAKECREST TOWN CENTER US-250, Sandusky, OH 44870
SHERIFF’S SALE
TO BE SOLD BY ORDER OF THE ERIE COUNTY COURT OF COMMON PLEAS CASE NO. 2011CV0374 Located in Sandusky, OH - ranked one of the top vacation destinations in America. Some of the strongest traffic counts and demographics imaginable. Just 1 hour west of Cleveland and East of Toledo. 3 PARCELS OFFERED INDIVIDUALLY
Parcel 1: Fully Improved 2.2 Acres ground leased to newly constructed Aldi Supermarket with multiple extensions & renewals. Current rent is $90,000 +/- per year. PUBLISHED RESERVE PRICE: $650,000 (2/3rds Sheriff’s Appraised Value)
Parcel 2: Fully Improved 7.5 Acres Parcel 3: Fully Improved 29 Acres with 5,000 S.F. building leased zoned PUD for a variety of possible to Sherwin Williams Paints with uses. Includes streets, sewer, water, multiple extensions & renewals. and storm water retention system. Extra acreage for expansion. Fully signalized intersection at Current rent is $82,620 +/- per year. US-250 and Dewitt. PUBLISHED RESERVE PUBLISHED RESERVE PRICE: $1,780,000 PRICE: $1,400,000 (2/3rds Sheriff ’s Appraised Value)
PUBLIC AUCTION Tuesday, September 11th @ 3PM 232,283 sq ft Former Lumberyard, Cleveland Ohio 8680 sq ft-2.47 Acres Truck Repair Facility - Tenant Occupied, Wickliffe Ohio 110,330 sq ft Industrial Bldg. Tenant Occupied, Wickliffe Ohio 50 Parcels of Vacant Industrial Land Wickliffe Ohio 66,490 sq ft-6.24 Acres Industrial Building -Tenant Occupied Warren Michigan 597 Acres Raw Land Alturas California For information and bid packages Williams & Lipton Company www.williamsandlipton.com License #2007000129
Chartwell Group, LLC · Chartwell Auctions, LLC Michael Berland, Court Appointed Auctioneer · www.chartwellauctions.com
For daily on-line
440-526-4500
FOR RENT 2,100 Sq. Ft. Penthouse Great Lake View. 3 Bdrm/2 Bath In-suite Washer/Dryer. Underground parking and much more! Call today.
216-228-7761 17600 Detroit, Lakewood www.RentCastlewood.com
LAND Outstanding Lot Macedonia, approx. 1/2 acre lot in prime location, beautiful view, close to recreation, shopping, interstates etc. Ready to build. 80's.
440-655-3647
LUXURY PROPERTIES
updates, sign up @ CrainsCleveland.com/Daily
Court ordered Land Auction
OFFICE SPACE
Tues July 24 @ 1 pm. Minimum opening bid is $250,000. Previously slated for 128 residential condo units. Parcel # 003-18B-07-268 is 14.89 acres with 738.44 feet of frontage on Skyview Dr. Located in Brunswick city. Parcel # 001-02B-01-016 is 0.96 acres and has 106.5 feet of frontage on Boston Rd just East of 42. Auction will take place at the Forest Hills Rec Center on Skyview. See the Auction website for full details. www.OhioRealEstateAuctions.com
Find out why: 120 + Leases signed in the past 12 months in the Superior Building and City Club Building
DOWNTOWN OFFICES *Included in Rate for 2000 s.f. + tenants:
Additional Amenities:
Internet Bandwidth 1 Storage room Discounted Parking Exterior Signage (Superior Building Only)
In building restaurants, barbershop, boutique 24 hour electronic access On site management Building Greeter/Doorman
Superior Building 815 Superior Ave.
City Club Building 850 Euclid Ave.
Contact: Abram Schwarz *Some restrictions apply 216-255-3913 or aschwarz@evbco.com
LUXURY PROPERTY FOR SALE
Smaller Offices and Suites Also Available
E-MAIL US YOUR AD...
Mineral Rights, Bonus, Surface Rights. I-77 and 541. $235,000.
(2/3rds Sheriff ’s Appraised Value)
On-Site Inspections: 12:00 Noon to 2:00 P.M., Thursdays, July 12, 19 & 26 For Brochure & Terms of Sale call Mark Abood or Mike Berland 216-360-0009
Auctioneers Jeff Bub and Barry Baker 877-Bid-Ohio
23 Acres, Guernsey County
Owner Operated Parking Garage Nearby
TColeman@crain.com
List your high-end real estate here for great high-end exposure.
To Advertise your Luxury Property contact Toni Coleman at (216) 771-5 5172
CLASSIFIED FOR SALE NOT FOR THE BIG BOYS
Stys Inc. Since 1962 Used 5 Stretch Wrap Machines $3,500 to $5,500. Pallet Racking, Forklifts, Scissor Lifts, Metal Working Machinery.
STYS
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BUSINESS SERVICES
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(800) 690-9409 www.flynnenvironmental.com
ATTENTION BUSINESS SERVICE OWNERS! Submit your business card to promote your service. To find out more, contact Toni Coleman at 216.522.1383
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20120716-NEWS--19-NAT-CCI-CL_--
7/13/2012
JULY 16 - 22, 2012
3:20 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
19
THEINSIDER
THEWEEK JULY 9 - 15 The big story: The Cleveland-Cuyahoga County Port Authority is planning to ask voters to approve a big increase in the Port Authority’s tax levy. The increase would raise a property owner’s annual taxes from $3.50 per $100,000 of assessed value to $20, a 471% increase. The levy would bring in about $18 million, or $90 million over the five-year life of the levy. If voters approve the November levy, the Port Authority will take on an expanded role in developing and maintaining public access to the waterfront. See story on page 4. In the pipeline:
Hilcorp Energy Co. and NiSource Gas Transmission and Storage, both of Houston, plan to build a large natural gas processing plant and pipeline system in Northeast Ohio and western Pennsylvania. The project is slated to come online in late 2013, when it will be able to process 200 million cubic feet of gas per day, fed to it by 50 miles of 20-inch pipeline that will be constructed for the project. A total price tag was not disclosed, nor was the location of the plant, which would process “wet gas” and remove from it valuable liquids used in the manufacturing of plastics and petrochemicals.
Merchant services: A publicly traded holding company plans to buy Electronic Merchant Systems of Independence in a cash-and-stock deal that could exceed $100 million in value. The acquisition should accelerate the local company’s growth, said Bipin Shah, chairman and CEO of the holding company, Universal Business Payment Solutions Acquisition Corp. of Chester County, Pa. Electronic Merchant Systems is a 250-employee business that resells payment card processing services and provides services related to electronic transactions. It’s high time: The end of litigation limbo is in sight for the Avenue Tower condominium project at the corner of East 12th Street and St. Clair Avenue in Cleveland. Cuyahoga County Common Pleas Judge John O’Donnell issued a journal entry foreclosing on the property and authorizing a settlement between Avenue District developer Nathan Zaremba and multiple lenders. The pact calls for a sale to an investor group that will operate the 57 unsold condominiums at the 10-story tower as rental apartments. Mine, all mine: Cliffs Natural Resources Inc. said its Cliffs Australia Coal Pty subsidiary agreed to sell its 45% economic interest in the Sonoma joint venture coal mine in Queensland, Australia, to QCoal Sonoma Pty. Cliffs expects to collect about $141 million Australian dollars, equal to $145 million U.S. dollars, in the transaction. The assets to be sold include Cliffs’ interests in the Sonoma mine along with its ownership of an affiliated wash plant.
Go with the flow: A U.S. Army unit awarded a $250,000 grant to a research partnership that will test the effectiveness of a urine management technology developed by a startup in Concord. The startup, Future Path Medical Holding Co., will share the grant money with its research partners, the Dwight David Eisenhower Army Medical Center in Georgia and the Center for Telehealth at Georgia Health Sciences University.
This and that: Kent State University concluded the largest fundraising campaign in its history by raising $265 million, surpassing its original goal by $15 million. … The Ohio Manufacturing Institute received a $150,000 grant from the Ohio Department of Development. The institute will develop a process to help Ohio manufacturers to access technical services offered by public and private resources in the state.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
This marketing gets to the heart of the matter ■ Talking about myeloperoxidase isn’t the best way to get people’s attention. Even if you abbreviate it to “MPO.” Thus, Cleveland HeartLab LLC, one of Northeast Ohio’s fastest-growing biomedical companies, has revamped the way it markets its flagship medical test. Now the Cleveland company encourages people to get “it” — inflammation testing — to see if they are at risk of suffering a heart attack. The blood test looks for MPO enzymes that are produced as a result of inflammation in a person’s blood vessels, which can cause a heart attack. The new tactic worked pretty well during a test run in April at the TEDMED 2012 conference in Washington, D.C. There, more than 500 people had Cleveland HeartLab check their blood for MPO and other biomarkers that suggest whether they are at risk of suffering a heart attack or stroke. Hundreds of people at the event were wearing stickers that read “I got it,” CEO Jake Orville said. “This is really helping us make our story sticky,” he said. Cleveland HeartLab can run a total of 103 tests on blood samples that they receive from doctors, but it’s the MPO test, which was developed by the Cleveland Clinic, that has helped the company attract attention. Several studies have shown that patients with high MPO levels are at greater risk of a heart attack, even if they don’t have high cholesterol or high blood pressure.
WHAT’S NEW
So, how healthy were the people tested at the conference? Of 335 samples analyzed, 41% had high cholesterol or low “good” cholesterol levels, 28% appeared to have hardening of the arteries and 12% had high MPO levels. About half the people with high MPO levels had normal cholesterol levels. — Chuck Soder
Proof that you’re never too young for politics ■ Cleveland City Councilman Joe Cimperman spends Thursdays with his infant son, Daniel. That included last Thursday, July 12, when he showed up at two public events carrying a backpack of diapers and other supplies over his suit jacket — along with a curlyhaired blond baby in his arms. Not only did Daniel not raise a fuss at either event, he turned out to be a great icebreaker for his father. In the morning, Mr. Cimperman appeared at a committee meeting of the ClevelandCuyahoga County Port Authority to offer his support for the agency’s plan to put a property tax increase on the Nov. 6 ballot; the increase is designed to clean up and enliven the Cleveland waterfront. (Read more on page 4.) That afternoon, he attended the ribbon cutting at Ariel International Center, a
Going postal has a new meaning
Kent Elastomer, a maker of both non-latex and natural rubber latex tubing, has released its line of Pro-Free non-latex tubing as a stock product for use in the medical and food-andbeverage sectors. The tubing feels soft to the touch and is “ideal for latex-sensitive applications where natural rubber latex is not an option,” the company says. It’s comprised of a lowdurometer TPE blend that is “designed to provide the same high level of performance offered by Kent’s natural rubber latex tubing,” according to Kent Elastomer. Pro-Free joins the company’s existing line of Free-Band latex-free tourniquets. Tubing is available in four standard sizes and packaged in 50-foot continuous lengths in a polylined, re-shippable carton, the company says. Benefits of the Pro-Free line “include its biocompatibility (and) the ability to be sterilized, as well as complying with all current and required regulations,” according to Kent Elastomer. The company says all orders are shipped from stock within three business days. For information, visit www.KentElastomer .com. Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.
You may not have heard the last on this project ■ The looming end of litigation over Avenue Tower in downtown Cleveland with its sale to investors does not end efforts by Cleveland-based homebuilder Nathan Zaremba to develop his Avenue District plan on East 12th Street. Mr. Zaremba will market and finish three unsold townhouses in the district near East 12th and Lindazzo Avenue. He even may build more units there on sites controlled by Fifth Third Bank. So says attorney Daniel Lindner, who represented Mr. Zaremba on both properties. Fifth Third had sued to recoup its land and townhouse loan in a May 7, 2010, case in Cuyahoga County Common Pleas Court and a related Medina County case. The Medina County case was settled July 5. The Cuyahoga case remains open for administration. Mr. Lindner stopped short of calling the bank and Mr. Zaremba partners, noting, “Let’s just say their interests are aligned.” — Stan Bullard
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
THE COMPANY: Kent Elastomer Products Inc., Kent THE PRODUCT: Pro-Free tubing
building along the lakefront that Ariel Ventures LLC, a finance and tax advisory firm, and its founding partner, Radhika Reddy, have renovated to be a center for international businesses. At both events, Mr. Cimperman took to the microphone with a cherubic Daniel clinging to his side. “I brought along my chief of staff,” he told both audiences as he began his remarks. — Jay Miller
■ The Postal Service’s financial woes are causing problems for all sorts of companies, including Novex Systems LLC in Valley View. With service cuts happening now and more on the way, The New York Times said Postal Service customers already are bemoaning delays. Among them is Novex Systems, which sends out thousands of utility bills and fundraising letters for nonprofit groups and “lost a major client after bills arrived three weeks after they were mailed,” The Times said. Michael Wheeler, Novex’s vice president, told the paper that a utility company that had been a client for more than 25 years pulled its account because of late deliveries. In March, “Novex had sent out water and sewer bills for the utility through first-class mail to customers in Nevada,” according to The Times. “The company expected the bills to arrive within a few days. But because of problems at a Reno, Nev., processing center, it was as long as three weeks before the bills were delivered.” As Mr. Wheeler noted, “Our client decided to go with a company closer to their delivery areas to make sure the mail got delivered on time.”
A backhanded compliment, but a nice one nonetheless ■ Some innovative businesses and ideas “are springing up in the least likely places,” FastCompany.com said, and Cleveland is one of the cities where that’s happening. “The Internet has lifted the cost and geographic barriers of starting a business,” according to the website. “That, combined
with the proliferation of local incubators and other support networks, has freed entrepreneurs all over the country to innovate, and take risks, without losing their shirt.” In its snapshot of Cleveland, FastCompany .com called attention to “a salient, if undercelebrated, fact of Cleveland’s talent pool: The city has a plethora of middle-aged workers with great ideas and experience in spades.” John Dearborn, president of Cleveland-based JumpStart Inc., said the average tech-job applicant here is in his or her mid40s and comes from traditional industry. “Older workers bring not just experience with them, they bring a whole network of people,” he said.
Here’s a project with some pop ■ TheAtlanticCities.com called attention to the Pop Up Rockwell project, a week-long installation in downtown Cleveland. “What do Cleveland bike advocates, Homeland Security officials, and the administrators of the Northern Ohio Regional Sewer District have in common?,” the website asked. They “all agree on the promise” of the Pop Up Rockwell project that ran April 2127 and transformed five blocks of downtown Cleveland “by the addition of a protected two-way cycle track, benches surrounded by flowers and grasses, and transit waiting stations complete with Wi-Fi.” Bike advocates liked the cycle track, while sewer officials “liked the way the plantings could trap and filter stormwater.” And a Homeland Security official “was thrilled by the atmosphere of safety the pop-up street created, by slowing traffic and attracting pedestrians to stop, sit and provide what he calls ‘natural surveillance.’” The project was designed by grad students from Kent State University’s Cleveland Urban Design Collaborative.
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