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7/25/2014
JULY 28 - AUGUST 3, 2014
2:52 PM
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CRAIN’S CLEVELAND BUSINESS
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THEINSIDER
THEWEEK JULY 21 - 27 The big story: The Ohio Bureau of Workers’ Compensation settled its longstanding legal dispute with a group of small business owners. The BWC agreed to pay as much as $420 million to a group of 270,000 Ohio employers who joined a class-action suit filed by a group of Clevelandarea employers in 2007. The settlement, which still needs approval by the appeals court, ends a planned appeal by the BWC to the Ohio Supreme Court. Both a Cuyahoga County Commons Pleas judge and a three-judge Eighth District Court of Appeals panel agreed that plaintiffs in the case were entitled to refunds from the BWC for premium overpayments made between 2001 and 2008.
Change afoot: Gerald B. Blouch will retire by month’s end as president and CEO of Invacare Corp., the hard-pressed, Elyria-based maker of wheelchairs and other home health care equipment. Come July 31, Blouch also will retire as a member of the company’s board. Robert K. Gudbranson, the company’s senior vice president and chief financial officer, was named interim president and CEO. Blouch joined Invacare in 1990 and assumed the role of CEO in January 2011, succeeding longtime CEO A. Malachi Mixon III. Mixon, Invacare’s board chairman, said the company is “searching for a successor who can take the company to the next level.”
Signs of life: Hikma Pharmaceuticals agreed to buy the massive Ben Venue Laboratories complex in Bedford and its R&D team — but will Hikma bring the troubled facility back to life? The London-based company has said only that it “will evaluate the potential to partially reactivate” the drug manufacturing complex to support “its medium and long term growth plans.” Ben Venue shut almost all production at the site in December, after spending several years and hundreds of millions of dollars trying to fix quality-control problems. For now, Hikma plans to move some of the equipment at the site to its other manufacturing facilities. Meating space: Michael Symon is bringing his interpretation of Cleveland barbecue to East Fourth Street. Mabel’s BBQ is scheduled to open this fall in the space formerly occupied by La Strada, just steps away from Symon’s flagship Lola Bistro. The 110-seat eatery will serve lowand slow-cooked, dry-rubbed barbecue using local oak and applewood. A ballpark mustardbased sauce featuring cider vinegar, Ohio maple syrup and chiles will kick up flavor and heat. Liz Symon, who designed Lola, Lolita, Roast and all B Spot interiors, will coordinate the aesthetics in partnership with Cleveland architect Richard Lalli and Scott Richardson of Cleveland-based Richardson Group. Bus stop: The people who bring tourists by bus to the Rock and Roll Hall of Fame and Museum, the Great Lakes Science Center and the Horseshoe Casino Cleveland are themselves coming to Cleveland. The American Bus Association said it will bring 3,500 delegates to its 2017 Marketplace, its annual convention, to the Cleveland Convention Center on Jan. 14-17, 2017. 40 more years: Cuyahoga County Council agreed on an extension of a portion of the county hotel bed tax. The issue now will be presented to the city of Cleveland and suburban communities. A majority of the county’s 59 municipalities must sign off before the tax can be extended. The 10-1 vote on an amendment changes the life of the tax from 20 years to 40 years. A 1.5% portion of the tax, set to expire when bonds used to build the Rock and Roll Hall of Fame and Museum are paid off in the coming months, will be available in the future for capital improvements for major events.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
A baseball revolution advances off the field ■ Major League Baseball’s “Moneyball” movement — popularized by Michael Lewis’ 2003 book and the 2011 movie that starred Brad Pitt — began in the 1990s. For the Cleveland Indians, the same basic principles — using data to make more informed decisions — became much more prevalent on the business side when Mark Shapiro transitioned from president to general manager after the 2010 season. Andrew Miller, who started as a Tribe baseball operations intern in 2006 before making the move with Shapiro to business, said there is one very big difference between the Moneyball approaches of the two sides of a big-league organization: collaboration among big-league teams. “What’s really exciting is when you look at the nascent stages of Moneyball from the baseball ops side, it’s sort of happening on the biz side (now),” said Miller, a 39-yearold former University of California baseball player who spent six years working in finance in Silicon Valley before going to graduate school at Northwestern University. “There are four or five teams that are involved in trying to come up with similar methods and answer similar questions.” In the four years since transitioning from baseball to business, Miller has been promoted to senior vice president of strategy and business analytics. One of his hires, business analytics manager Gabe Gershenfeld, said the “collaborative nature” of MLB business teams “is appealing.” “On the baseball side, it’s a zero-sum game,” Gershenfeld said. That’s not the case in business. “Someone
isn’t going to buy our ticket or a San Diego Padres ticket based on information we share with them,” Miller said. — Kevin Kleps
CWRU professor’s attention to detail wins court support ■ A Case Western Reserve University law professor was one of the first to challenge language in the Affordable Care Act that a U.S. appeals court struck down last week. Back in 2012, Case Western Reserve’s Jonathan Adler and The Cato Institute’s Michael Cannon argued in a paper that any federally established health insurance exchange does not have the authority to dole out health insurance subsidies. As they read the interpreted the law, the wording only allowed health insurance subsidies through state exchanges. Many states, including Ohio, have punted their exchanges to the feds. Last Tuesday, a panel of the U.S. Court of Appeals for the District of Columbia Circuit held that an Internal Revenue Service regulation permitting subsidies through the federal exchange wasn’t a proper interpretation of the law. On that same day, however, a panel of the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., came to the opposite conclusion, setting the stage for another Obamacare showdown at the U.S. Supreme Court. About a year ago, Adler testified before a U.S. House subcommittee on the issue and advised legislators that the IRS was overstepping its bounds in issuing the regulation. “This subcommittee has asked for my views on the legal basis for the IRS and Treasury Department rule purporting to extend the availability of tax credits and cost-sharing subsidies to federal exchanges. My con-
WHAT’S NEW
BEST OF THE BLOGS
COMPANY: Chemsultants International Inc., Mentor PRODUCT: Fish Allure scented bait tapes
Excerpts from recent blog entries on CrainsCleveland.com.
Peel, stick, catch. That’s the motto Chemsultants has adopted for its new product, the Fish Allure scented bait tapes. Chemsultants recently unveiled Fish Allure at the International Convention of Allied Sportfishing Trades in Orlando, Fla., a showcase for the latest innovations in fishing gear and accessories. This product is a scent strip that can be placed on any hard bait. After “thousands of lab trials,” Chemsultants says, its scientists “have created a proprietary polymer film that stores and releases amino acids, steroids, and other active ingredients at the precise levels needed to exceed a fish’s scent threshold.” The strips are available in multiple sizes and can be placed on any bait. This adhesivebacked product, when placed in water, is activated and “causes the emission of scent that provokes the fish to strike,” according to the company. Chemsultants says the scent “remains with the lure rather than floating away, and the clear thin tab doesn’t interfere with the functionality of any type of lure.” Each strip provides up to 60 minutes of fishing, the company says. For information, visit www.fishallure.com.
Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.
Take our advice on sin ■ Milwaukee might want what Cleveland is selling, from a tax policy perspective. The city of Milwaukee is looking for advice from outsiders — including some from Cleveland — about how to pay for cultural facilities and a new downtown arena. Milwaukee’s Cultural and Entertainment Capital Needs Task Force “is considering ways to pay for a new arena to replace the BMO Harris Bradley Center and to fund other regional facilities, including museums and performance arts centers,” according to the Milwaukee Business Journal. The group met recently “to hear from the leaders of business associations in Cleveland, Denver and Oklahoma City, three communities that are a source of ideas for Milwaukee. The menu of options includes sales, sin and event ticket taxes. The paper says Cleveland “has successfully used a sin tax on alcohol and cigarettes to provide grants to cultural and sports institutions.” That tax, in case you’ve somehow forgotten, amounts to about 30 cents on a pack of cigarettes and oneand-a-half cents on a $5 beer. Joe Roman, president and CEO of the Greater Cleveland Partnership, Roman which led the campaign that persuaded voters to renew the sin tax, told the newspaper, “We looked at it as ‘how can we raise the resources we need, but not threaten anything else, not threaten other services?’ There were some bar owners who were against it. I wouldn’t say it was anywhere near a movement. It was a few people and their efforts were support-
clusion is simple: There is none,” Adler said at the time. — Timothy Magaw
Browns complete first pass of year with Value City ■ A new partnership with Value City Furniture will give Cleveland Browns fans a chance to get an early look at Johnny Manziel. The Browns are partnering with the Columbus-based company for a pass that will give fans first dibs on spots to watch training camp and faster entry to FirstEnergy Stadium on game day. This year, sparked in part by the hubbub that has ensued since the team drafted Manziel in the first round, the Browns are asking fans who plan to attend any of the 13 training camp practices in Berea to register on the team’s website. Those who do will get a chance to enter the Browns’ training facility 30 minutes early, via the Value City Furniture Easy Pass. Browns vice president of fan experience and marketing Kevin Griffin said fans who are signed up for a particular practice can then register online for the easy pass. “It’s a unique concept we’re rolling to camp and extending to game day,” Griffin said. The easy passes will continue when the games begin on Aug. 23 (the Browns’ preseason home opener against the St. Louis Rams) and Sept. 14 (the regular-season opener at FirstEnergy Stadium against the New Orleans Saints). While the training camp passes are based on each individual practice, the Value City Furniture Easy Passes for the season will be good for all 10 home games. — Kevin Kleps
ed by the beer and wine distributors.” Roman said the tax referendum lost in the city of Cleveland by a margin of about 200 votes, but the majority of voters countywide supported it.
Ugly numbers ■ Ohio is one of 14 states where gun deaths exceeded motor vehicle deaths in 2011, the last year for which complete federal data were available. The New York Times said a report from the Violence Policy Center “confirms yet again the lunacy of America’s loose gun policies.” The states with this dubious distinction in 2011 were Alaska, Arizona, Colorado, Illinois, Louisiana, Maryland, Michigan, Nevada, Ohio, Oregon, Utah, Vermont, Virginia and Washington state, as well as the District of Columbia. In Alaska, for example, there were 126 gun deaths and 87 motor vehicle deaths. The numbers in Ohio were 1,227 gun deaths and 1,178 motor vehicle deaths.
The money flows ■ Ann Arbor, Mich.-based Plymouth Ventures said it reached a final close for Plymouth Venture Partners III, which surpassed its fundraising target of $60 million and will invest in “growth-stage businesses located in the Great Lakes region,” including in Cleveland. With the close of the PVP III, Plymouth Ventures said it now has more than $100 million in committed capital under management. “Deal flow is strong, and we are excited about the opportunities we are seeing in the Great Lakes region,” said the firm’s managing partner, Mark Horne. “My partners and I look forward to deepening our involvement in cities such as Cleveland, Cincinnati, and Indianapolis, while continuing our emphasis across the state of Michigan and in the Chicago metro area.”