Crain's Cleveland Business

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VOL. 33, NO. 30

Offices at Burke first in plan for lakefront

BROWNS SALE ANALYSIS: WHAT MOTIVATED RANDY LERNER?

Geis Cos. will lease 20 acres, talk with tenant

By STAN BULLARD sbullard@crain.com

DAVID RICHARD/ASSOCIATED PRESS

Outgoing Cleveland Browns owner Randy Lerner (left) converses with president Mike Holmgren at practice in Berea on July 28, after news of a potential sale leaked.

Tax, liquidity concerns play role Uncertainty over capital gains rate, potential for hefty estate tax factor in

By JOEL HAMMOND jmhammond@crain.com

Randy Lerner might have been sick of the Cleveland Browns’ poor on-field performance and fans’ criticism of him.

Or, as suggested last week by his top executive at Aston Villa — Mr. Lerner’s team in the English Pre-

mier League, the top soccer league in the world — it simply could be that Mr. Lerner never felt connected to the Browns after inheriting the team from his late father, Al, in 2002.

As is his way, Mr. Lerner may never say publicly what led him to sell the Browns to Tennessee businessman Jimmy Haslam III in a deal they reached last Thursday,

Aug. 2, and that now faces a vote of NFL owners.

However, tax and estate planning considerations likely played a big role in the decision, local investment advisers and tax lawyers say.

In the Browns and Villa, Mr. Lerner owns two pricey assets; Forbes valued the Browns at $977 See BROWNS Page 25

An office campus is in the works to become the first project out of the starting blocks in Mayor Frank Jackson’s plans to make lakefront development a reality near Cleveland’s central business district.

Geis Cos. of Streetsboro, a suburban contractor and developer that has developed a strong taste for city projects the last few years, is pursuing a plan to gain control of parts of Burke Lakefront Airport’s parking lot and western lakefront edge near the USS Cod submarine museum. Geis would use the land for an office building, and perhaps more construction in the future, near North Coast Harbor.

The Jackson administration this Wednesday, Aug. 8, will submit to Cleveland City Council legislation See BURKE Page 4

INSIDE Retail center redos popular Owners of older retail centers across Northeast Ohio are investing in fixups in hopes of drawing new tenants. PAGE 3

Accrediting body again issues show-cause order for Chancellor U.

By TIMOTHY MAGAW tmagaw@crain.com

itation could be a crippling blow to Chancellor, as its students no longer would be eligible for federal financial aid. That outcome would cut off a critical revenue stream for the institution.

The Higher Learning Commission slammed Chancellor, formerly known as Myers University, in

February 2010 with a similar showcause order, but the university learned in March 2011 it would remain accredited after a year-long review process. Three months later, Chancellor moved from Cleveland’s Midtown area to an office park in Seven Hills off Rockside Road.

Now, the accrediting agency has

found that things in its view aren’t going swimmingly at Chancellor, though university president Robert Daugherty suggests otherwise. Mr. Daugherty contends the latest show-cause order is a criticism of the for-profit education business in general rather than an indictment See CHANCELLOR Page 26

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For the second time in the last three years, Chancellor University is at risk of losing its accreditation, which if yanked could jeopardize the future of the small, for-profit college in Seven Hills.

Citing concerns with Chancellor’s leadership, financial health and the quality of its academic programs, the Higher Learning Commission in Chicago — the university’s accrediting body — issued a “showcause” order in late June demanding Chancellor prove it deserved continued accreditation. Losing accred-

World

Trade Conference

see page 9

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At-home nat gas fuel race pits big vs. little Grant helps Eaton join fray, but well-known Dan Moore has head start

By DAN SHINGLER dshingler@crain.com

We might learn soon which is better at bringing innovation to market — a large international corporation with more resources at its disposal than some nations, or a successful entrepreneur with a nimble and adept organization and a track record of turning imagination

into commercial success.

It’s Eaton Corp. vs. Dan T. Moore in the race to turn American homes into natural gas filling stations, and folks in the natural gas industry are cheering them on, even though they might not care who wins.

Eaton is the new entry, announcing July 20 that it had won a coveted grant from the U.S. Department of Energy’s Advanced Research Projects

Agency-Energy — mercifully best known as ARPA-E — to develop an inexpensive filling system that consumers could hang on their garage walls and use to refuel vehicles that run on natural gas.

Under terms of the grant, Eaton will use $3.4 million from ARPA-E and $800,000 of its own researchand-development money to develop a home refueling station that can

sell for $500 or less. The goal is to bring out a working prototype that can be moved into manufacturing by the end of 2015.

“The key reason that ARPA-E came out with this solicitation and this program is really so they Moore can push widespread deployment of natural gas for passenger cars in the U.S.,” said Eaton vice president for government programs, Chris Herbst.

THE WEEK IN QUOTES

Investing in private equity, with more perks

— Joseph G. Corsaro, Corsaro & Associates law firm in Westlake.

Page One

— Robert Daugherty, president, Chancellor University. Page One

“Last year, we were still kind of in growth mode. This year, it’s a little more stagnant.”

— William Gaskin, president of the Precision Metalforming Association. Page 7

“The attorney won’t pick up the phone and make the obnoxious collections phone call. … What’s important for them is managing that relationship.”

— Sam Shipley, chief information officer, Ulmer & Berne. Page 9

“In choosing to stay behind when the country is evolving toward a more unified America, the leadership of the Boy Scouts is doing young Scouts a disservice.”

— From a Personal View by Ginger Casey. Page 10

See FUEL Page 9

INSIGHT

“If buyers know your family has been left with a pile of crap to clean up, you’re not going to get what it’s worth.”

“Every member of the leadership team ... would swear in a court of law, on the Bible and the U.S. Constitution that this institution is significantly better than it was when it (last) got off show-cause.”

“An ARPA-E grant is an enormously significant award. It’s very hard to get. ... This is huge for us,” Mr. Herbst said.

Mr. Moore agrees on that point.

“We applied for that as well, but didn’t get it,” he said, informed of Eaton’s initiative while Mr. Moore was navigating a motorcycle from Sudan to Egypt on one of his annual

Fund sponsors courting those with piles of cash

By MICHELLE PARK mpark@crain.com

CHUCK SODER

A 275-seat Quaker Steak & Lube soon will open at the reimagined Lakewood Plaza.

SPICING UP SHOPPING New, existing owners of Northeast Ohio’s older retail centers work to make them more alluring for customers

By STAN BULLARD sbullard@crain.com

A

t Garfield Mall, its new owner, Glimcher Group of Pittsburgh, plans to dress up its façades, add new signs and rename it Garfield Commons in a quest for tenants to cure a 16% vacancy rate at the 38-year-old shopping center.

Garfield Heights Mayor Vic Collova is overjoyed. He was happy when a court-appointed receiver repaved the pockmarked parking lot while the property at 12532 Rockside Road went through a foreclosure proceeding capped by Glimcher’s purchase.

“Its problem is age,” the mayor said of the 300,000-square-foot property. “It’s very popular, with Marc’s and other tenants. Its biggest vacancy is probably the

STEPHEN HERRON

Garfield Mall in Garfield Heights

empty movie theater that closed 15 years ago.”

What’s happening at Garfield Mall reflects a low-key revival in Northeast Ohio’s shopping center trade. New owners, sometimes buying distressed assets, and existing owners are undertaking improvements at older retail centers while developers plan construction of new ones as the business shakes off years of downturn-induced ennui.

See SHOPPING Page 12

These are opportune times to be holding the cash that private equity funds want.

Most private equity fund sponsors that are out raising money this year know it’s an investor’s market. Just ask John M. Saada, a partner at Jones Day who advises on private equity matters.

“Most sponsors realize that it’s more important to get a fund closed than to argue with their investors,” Mr. Saada said.

Investors, or limited partners, are receiving a greater share of the fees that portfolio companies pay to fund sponsors, and they’re demanding — often successfully — that sponsors delay collecting any profit as portfolio companies are sold until investors are paid back their investments.

According to Preqin, a provider of information for the alternative assets business, more than 1,870 private equity funds are seeking capital worldwide. Industry experts say a combination of more funds pursuing capital and fewer investors willing to put their money into them has led to friendlier terms for investors.

“When everyone’s pockets were lined with cash … then Blackstone (the private equity behemoth) didn’t really have to listen” to investors’ desires, said Tim Milanich, director of private investments for Case Western Reserve University’s Office of Investments.

“In the past, they’d say, ‘Well, we have six people behind you that will take” an investment on our terms, Mr. Milanich said.

That’s not the case any longer for many fund sponsors, also known as general partners.

“You’re not going to see private equity firm managers building houses in Hawaii because of the management fees” they collect, Mr. Saada said.

“You’ll see the general partners See INVESTING Page 11

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Burke: Offices could fuel other projects continued from PAGE 1

UPCOMING EDITORIAL FEATURES

OHIO MBA GUIDE Issue date: August 27 Ad deadline: August 16

authorizing the city’s Division of Port Control to enter into a one-year option with Geis to lease 20 acres at the airport’s west end closest to the harbor.

Ricky Smith, director of port control, said the option to lease, which could be renewed for a second year, gives Geis the ability to negotiate with a prospective tenant interested in the location. The option also gives the developer time to conduct planning studies of the site and prepare plans for the project, Mr. Smith said.

“That option leaves the city the authority to entertain proposals from other developers if they come forward,” Mr. Smith said. “If Geis does not proceed, they will give the city the results of the studies, which would be helpful in continuing to pursue development of the site.”

Mr. Smith said he does not know the identity or size of Geis’ prospective tenant.

Mr. Smith said the city has made it clear that Mayor Jackson’s lakefront development plan — the latest in a series of lakefront plans presented

by Cleveland mayors over the last three decades — would need private participation to make it a reality. The city approached developers with the idea developing lakefront properties, but none responded until Geis surfaced.

“Geis has a very strong track record and is committed to Cleveland” while also being native to the region, Mr. Smith said. “Geis has the capability and shared our urgency to develop the lakefront. We feel they are the right firm to pursue it.”

A downtown development source who viewed the plans said they are preliminary and rely on details that would be filled in after gaining a substantial anchor for the project.

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The plans rest on landing a big office tenant; a long shot would be Cuyahoga County, which is searching for more than 200,000 square feet to replace its antiquated administration building at Ontario Street and Lakeside Avenue and to consolidate offices spread throughout downtown.

However, a lakefront headquarters would be removed from easy public access to county offices.

The public will get an idea which developers and property owners are likely to take their shots at bagging the county’s offices at a bidders’ conference slated for tomorrow, Aug. 7. Bids will be due Sept. 14.

Rumbles about Geis undertaking a waterfront plan are staples of conversation at commercial real estate gatherings. David Browning, managing director of CBRE Group Inc.’s Cleveland office, said Geis has previewed the plan with several big office building tenants and he expects to hear a formal announcement soon.

“They are developing some exciting plans for the city property in and around the Cod and the airport,” Mr. Browning said. “There will be an opportunity to do large-scale office development there.”

Shades of Baltimore?

Under Mayor Jackson’s lakefront plan, the area on the south side of the Burke air terminal — dubbed the “Burke Redevelopment District” on city planning documents — would include more than 500,000 square feet of office space in four buildings of two to nine stories. The buildings would be clustered in a circular pattern around the inlet housing the Cod. Asked if the concept further divides the city’s downtown office market into independent segments, Mr. Browning argued that the plan uses the lakefront acreage to house a substantial tenant that might not be accommodated elsewhere downtown.

That worker-rich tenant could seed the development of restaurants and wine bars along East Ninth Street, Mr. Browning said. Under Mayor Jackson’s plan, the Cleveland-Cuyahoga County Port Authority would develop the area surrounding the East Ninth Street Pier and waterfront museums, the Rock and Roll Hall of Fame and Museum and Great Lakes Science Center.

Mr. Browning speculated that if the plan had been in place earlier, downtown might have stood a better chance at keeping Eaton Corp.’s headquarters (the company is building a massive structure in Beachwood) or landing American Greetings Corp., which plans to leave its longtime complex in Brooklyn for a planned headquarters at Crocker Park in Westlake.

Mr. Smith, a Baltimore native, recalled that the Maryland city’s famed Inner Harbor project provided it with a new level of prime, class A office space, which opened the door for other tenants to move into the vacated area.

“That created a whole new set of prospects for downtown office space that set off a boom in the town,” Mr. Smith said.

“(Geis Cos. is) developing some exciting plans for the city property.”

– David Browning, managing director, CBRE Group Others are less upbeat. W. Dennis Keating, a professor at the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, said that when the mayor’s lakefront plan was adopted earlier this year, he greeted it with skepticism.

“This seems a piecemeal plan, with parts accomplished by the city, the port authority and the Cleveland Browns,” said Dr. Keating, who holds a doctorate in regional planning. “I would have felt better if there were a developer standing with the mayor who had a plan and financing when the mayor announced it.”

However, Dr. Keating acknowledged that piecemeal development beats stalled plans — if the pieces actually get done. Mr. Smith said the mayor has emphasized that if the business community does not participate in the plan, it will not become a reality.

They get things done Greg Geis, who with his brother, Fred, operates Geis Cos., responded to calls with an email saying, “We look forward, pending council approval, to helping in the redevelopment of the Burke Redevelopment District. We hope to aid the city and county in realizing the beginning of a long time dream that is the waterfront development.”

Geis Cos.’ skills as a contractor give the company an edge in getting things done versus other developers that rely on outside contractors, said the downtown development source, who requested anonymity because he is not authorized to discuss the Geis plan.

The Geis brothers also have earned their stripes in doing nontraditional development in the city.

In Cleveland’s Midtown neighborhood, a partnership including the Geis brothers, frequent partner James Doyle and the Coyne family produced MidTown Tech Park, which broke new ground by putting a suburban office-warehouse project in an older city commercial district.

They’ve recently unveiled plans to buy and renovate what would be a third building that would be part of the tech park.

Negotiating a deal for city-controlled land would make a lakefront project easier to finance than if the project required an outright land purchase from an investor or private owner.

However, having the quietly determined Mayor Jackson as its advocate may be the strongest card in Geis’ hand. At the topping off ceremony earlier this summer of Ernst & Young Tower along the east bank of the Cuyahoga River, the mayor clearly was happy to show off the office building to naysayers who maintain that Cleveland lacks waterfront development. Lakefront projects would give him more ammunition to silence the critics.

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Volume 33, Number 30 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the third week of May and fourth week of May, the fourth week of June and first week of July, the third week of December and fourth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2012 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877824-9373.

REPRINT INFORMATION: 800-290-5460 Ext. 136

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Insurer Family Heritage Life to sell for $218 million Broadview Heights firm says publicly traded Torchmark can open new markets

By MICHELLE PARK mpark@crain.com

A Broadview Heights insurance company has agreed to be acquired for $218.5 million in a deal its local leaders expect will position the company to expand sales into Canada and its 50th state: New York.

Publicly traded Torchmark Corp.’s acquisition of Family Heritage Life Insurance Co. of America is expected to close in the fourth quarter. Founded in 1989, Family Heritage employs slightly more than 100 people and is on track to do more than $200 million in revenue this year.

Its acquisition was initiated because Family Heritage’s original parent company, Southwestern/Great American Inc. of Nashville, Tenn., wanted liquidity and because Family Heritage wanted a parent company that could support its growth aspirations, said Douglas Kelly, vice president of marketing for Family Heritage.

McKinney, Texas-based Torchmark appears to be a good fit, Mr. Kelly said, because it offers insurance products similar to those of Family Heritage and has strong credit ratings and multiple distribution channels.

Family Heritage sells life insurance and supplemental health insurance, which is designed to help families cover indirect expenses of a major medical issue, including lost wages and transportation to medical care, Mr. Kelly said. Its products are sold by 1,200 captive sales agents around the country, and it has more than 225,000 policies in force.

“We see a lot of benefits to the marriage,” Mr. Kelly said of the acquisition.

HEALTH CARE DIRECTORY Crain’s Cleveland Business on Sept. 17 will publish its 15th Health Care Directory, a listing of companies and organizations that provide health care services in Northeast Ohio.

Go to www.crainscleveland.com/ section/hcd to view the Health Care Directory.

If your company or organization has never submitted information for the directory, send an email requesting a survey to Deb Hillyer at dhillyer@crain.com. The email must include company name, address, phone number and a contact name.

Incomplete requests will not receive a response. The deadline to submit a survey is Aug. 22.

The directory will be divided into 20 categories: addiction services; associations and professional groups; biotechnology; dentists and dental groups; fitness and wellness; health insurance underwriters (only those companies listed as Health Insuring Corporations by the state of Ohio); home health; hospice; hospitals and hospital systems; laboratories; medical equipment and imaging; mental health; occupational health/occupational therapy; outpatient services; pharmaceuticals; physical therapy/rehabilitation; physicians and physician groups; prescription services; senior and long-term care services; and women’s health services.

“We have a lot of growth opportunities in the markets that we serve, and we’ll continue to focus on those,” he said. “But there are markets that we don’t currently have access to (and) Torchmark operates in both of those markets and should be able to assist us in navigating our way into those markets.”

Both New York state and Canada are attractive because they offer small town and rural markets, the types Family Heritage tends to serve, Mr. Kelly said. Navigating New York

state’s insurance regulations would have required Family Heritage to incur a considerable expense, the company’s leaders believed, so Torchmark’s experience there will be beneficial, he said.

Torchmark’s other subsidiaries operate independently, and the company has told Family Heritage leaders to expect to do the same, Mr. Kelly said. Family Heritage’s name and headquarters will stay, he said, and Torchmark is “anxious to retain all of the employees and all of the agents.”

Moving forward, Family Heritage may begin selling Torchmark products, and vice versa, Mr. Kelly said.

While the company will add

A.

“There are markets that we don’t currently have access to (and) Torchmark operates in both those markets.”

– Douglas Kelly, vice president of marketing, Family Heritage Life Insurance people as it grows, Mr. Kelly said, “I wouldn’t expect a huge balloon of employment.”

“We’ve managed to keep our employment growth lower than our revenue growth through process improvement and automation,” he said.

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Phone messages and an email to a Torchmark official were not returned by Crain’s deadline last Friday, Aug. 3. However, in a news release announcing the acquisition, Torchmark’s co-CEOs were quoted as saying that the transaction meets the criteria they established several years ago for acquisitions.

“Family Heritage offers protectionoriented insurance to middle-income families through a captive agency force that we believe we can help grow,” the release said. “The company has a track record of solid premium growth and strong underwriting margins with a business plan that incorporates a variable-cost marketing structure.”

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Geis brothers among latest bidders for Acacia

By STAN BULLARD sbullard@crain.com

Real estate developers are playing another round in their quest to land Acacia Country Club in Lyndhurst as a potential development site.

Charles Longo, Acacia president, confirmed that the club has received bids from three suitors for the 160acre property at 26899 Cedar Road.

However, he declined to disclose the amounts of the offers or to identify bidders because the club’s

board has not selected an offer and communicated it to its members.

Competition for the parcel has increased since the club’s membership in June spurned a $12 million bid from Visconsi Cos., a Pepper Pike shopping center developer.

Though Mr. Longo wouldn’t name names, Leonard Carr — Mayfield Heights law director and, until recently, an Acacia member, who sued the club over its land deals — and another source who requested anonymity said the bids include a

venture involving the Geis brothers of Streetsboro and a separate offer from Visconsi. Mr. Carr said those bids are in the $15 million to $16 million range.

A nonprofit also is in the bidding, Mr. Carr said.

James Doyle, who shares an office with builders Greg and Fred Geis, confirmed the trio has submitted a bid for Acacia through Hemisphere Development Co. Mr. Doyle declined to discuss the firm’s plans if it lands the property.

Barry Fader, Visconsi’s senior vice president of business development, declined comment. Messrs.

Fader and Doyle declined to disclose the size of their offers for the bucolic golf course.

Acacia offers a land-rich development opportunity in the monied, built-up eastern suburbs. Moreover, the 1921-vintage country club sit across the street from Beachwood Place Mall and the Legacy Village lifestyle center, two of the region’s premier retail centers.

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After raising $10M, local oil and gas group bankrupt

By MICHELLE PARK mpark@crain.com

A local group of oil and gas companies that raised nearly $10 million from investors has filed for bankruptcy and has consented to a judgment from the Securities and Exchange Commission that requires it to pay $4.5 million to the SEC. Preferred Financial Holdings Co. of Cuyahoga Heights, its four subsidiaries and the companies’ founder and former chief financial officer, Michael A. Bodanza, were sued by the SEC on July 27. The same day, the companies filed for Chapter 11 protection from creditors in the U.S. Bankruptcy Court for the Northern District of Ohio.

The bankruptcy was filed in cooperation with and the full knowledge of the SEC, said Karl May, lead counsel for Mr. Bodanza and the companies, which include the subsidiaries: Preferred Drilling Co., Preferred Financial Investment Co., Preferred Financial Leasing Co. and

Preferred Well Management Co. “That was a more efficient way to administer the financial affairs of the companies,” Mr. May said. “We are hopeful that we can achieve significant revenues to distribute to the investors.”

Most of the companies’ investors are Northeast Ohioans, Mr. May said.

The companies will be wound down to collect as much value as possible for their assets, which include leases on land in Tennessee, interests in producing wells and some equipment, Mr. May said.

The SEC in its lawsuit against Preferred Financial Holdings paints a picture of an energy exploration company that did little exploring.

According to the suit, irreparable damage to the only operating drilling rig owned by Preferred Drilling severed the only revenue stream the subsidiary had.

Preferred Financial Holdings has about $2.5 million in assets but $7.4 million in liabilities, “very few on going operations, limited income

streams and almost no cash on hand,” according to the SEC’s lawsuit. That suit charges that Mr. Bodanza made fraudulent misrepresentations and omissions in offering and selling Preferred securities.

In a consent order approved by U.S. District Court Judge Christopher A. Boyko last Tuesday, July 31, Mr. Bodanza and the companies agreed to the SEC’s final judgment without admitting or denying the allegations of the SEC’s complaint.

Mr. Bodanza, who previously worked as an investment adviser, is liable for $410,207, all but $154,000 of which was waived based on his statement of financial condition dated March 1. The Preferred Financial Holdings companies are to pay the SEC $4.48 million plus prejudgment interest in the amount of $268,143.

After it collects the money, the SEC may propose a plan to distribute the funds, subject to the court’s approval. If the SEC determines that the money will not be distributed, the funds would be sent to the U.S. Department of the Treasury.

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According to the SEC’s lawsuit, Preferred Financial Holdings was formed in 2006 to engage in oil and gas exploration, drilling and leasing through operating subsidiaries. Between November 2006 and June 2007, Mr. Bodanza sold $1.4 million in equity membership units and $1.79 million in promissory notes to 25 different investors, the suit said.

Almost immediately after the completion of the initial offering, Preferred Financial Holdings faced a cash shortage, the lawsuit said, and without consulting outside advisers, Mr. Bodanza decided to sell promissory notes similar to those sold during the initial offering.

Between June 2007 and August 2010, Mr. Bodanza raised at least $6.76 million from at least 61 investors through the sale of unregistered promissory notes, according to the suit, which also noted that most of the later investors did not qualify as accredited investors under

the Securities Act. During the same period that the later promissory notes were sold, Preferred Financial Holdings suffered through losses from its operating subsidiaries of $1 million in 2007, $2.2 million in 2008, $1.8 million in 2009 and $1.3 million in 2010, the lawsuit said.

“Bodanza nonetheless depicted Preferred Holdings’ oil and gas operations in a positive light and failed to disclose to most investors that the company had suffered significant losses from 2007 through 2010,” the SEC alleged.

Errors of omission alleged The lawsuit stated that Mr. Bodanza failed to disclose to investors that Preferred Financial Holdings in early 2008 removed its chief operating officer, who was a founding member of the company, and sued him for causing the company to suffer damages of $3 million to $4 million. The SEC also said the company didn’t reveal that the only drilling rig held by the drilling subsidiary suffered an irreparable breakdown in August 2008.

In addition, the SEC said Mr. Bodanza failed to disclose to at least three individuals who bought promissory notes in 2010 that the proceeds would be used to make payments to other investors.

Preferred Financial Holdings has failed to repay most of the investors whose promissory notes have come due and is unable to pay the remaining investors, the lawsuit said.

The company has paid only $2.3 million in principal and interest to the later note investors.

Also according to the suit, Preferred Holdings in February 2011 sent investors a “status report” that mentioned some of its setbacks and problems and disclosed that the company needed to pursue additional sources of financing in order to continue operations. It also disclosed the existence of an SEC investigation and Mr. Bodanza’s resignation as CFO pending resolution of the investigation.

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7

Area companies warily watch Europe as manufacturing slows in countries outside of the euro zone, namely in South America. Mr. Schauer said there is opportunity for growth in places such as Venezuela, where the company already does limited business.

to further its research-and-development efforts.

So far, Mr. Gingo said, the problems A. Schulman is seeing in Europe “have yet to translate into the Americas or into Asia.” But that doesn’t mean they could not.

“Are we worried? Yes, of course we are,” Mr. Gingo said.

Worried? Of course

It’s a small world

For A. Schulman Inc., an Akronbased supplier of plastics resins, the European slowdown has meant a greater reliance on American and Asian markets.

A. Schulman typically generates two-thirds of its sales in Europe.

“Europe is slow,” said Joseph Gingo, CEO and president of A. Schulman.

“It’s affecting manufacturing. It’s affecting many things.”

A. Schulman’s sales during the third quarter, which ended May 31, fell 6.8% from the comparable quarter in 2011. The company attributed the decline to a 7% decrease in unit volume and $23.5 million in negative effects of foreign currency translation.

“Fortunately, we’re not in southern Europe. We’re in northern Europe.

We’re in the strongest parts of a weak Europe,” Mr. Gingo said.

The company mostly operates in northern European countries such as Germany, where in June it even opened a global innovation center

The impact of the euro zone on local manufacturing isn’t isolated to one or two companies.

In their most recent quarterly earnings reports, both RPM International Inc. and Eaton Corp. identified the European slowdown as a contributor to weaker sales.

“The big theme here is, ‘U.S. market stays strong.’

Non-U.S. markets, not much of a recovery expected this year,” Alexander “Sandy” Cutler Cutler, Eaton chairman and CEO, said in a July 23 earnings conference call.

While Eaton’s net income in the second quarter rose 14% from a year earlier, its sales slipped 0.5%.

“The uncertainty in Europe, as well as slower economic growth rates in China, India and Brazil, resulted in weakness in a number of our end markets,” Mr. Cutler noted in Eaton’s second-quarter earnings release.

At RPM, European sales represent about 20% of the company’s total sales, Frank Sullivan, chairman and

Those with customers there adjust terms, look to healthier economies

By GINGER CHRIST gchrist@crain.com

Northeast Ohio manufacturers are feeling ripple effects from economic troubles in Europe, woes that appear to be contributing to an overall slowdown in the U.S. manufacturing sector.

Although the sector still is in expansion mode, growth in U.S. manufacturing slowed in June to its weakest rate in 37 months, according to the JPMorgan Global Manufacturing Purchasing Manufacturing Index.

The index — a survey of 10,000 purchasing executives — also showed that global manufacturing hit a three-year low and contracted for the first time since last November.

It’s a slowdown largely attributed to weakness in the euro zone.

Local companies with customers in the troubled European market say they have been forced to look to other geographic areas for profitability.

PMI Industries Inc., a Clevelandbased manufacturer of underwater cable assemblies for seismic vessels, sends on average two-thirds of its goods overseas. It doesn’t have any customers in Ohio; its closest U.S. client is in Pittsburgh.

Thus, to keep sales afloat, PMI has become more flexible with European customers to secure their

continued business.

The company is working with European customers on cash flow issues and even is taking on some financial risk in providing product months before anticipated delivery and payment dates, said Robert Schauer, PMI president. That way, customers that don’t have cash upfront still can receive their orders in time for use on their ships.

Mr. Schauer said such flexibility is invaluable in the underwater cable industry, which has a seasonal window for monitoring.

Those efforts, coupled with cutting costs, are designed to show customers value and earn their continued business through, Gingo and hopefully after, the European economic slowdown.

“You have to be a little bit nimble and agile. You have to be much more forward-thinking,” Mr. Schauer said.

Even so, PMI’s global business sales are down 20% from its traditional levels, a decline that started last October.

Apart from devoting more attention to its European customers, PMI also is shoring up its sales with increased business with the U.S. Navy.

Other plans for drumming up sales involve looking for customers

With Wi th iits tss ccon onve veni ve nien entt lo loca cati tion ti on aand nd eeas asyy ac as acce cess ce ssib ss ibilililit ib ityy to t he hhea it eeaart r t ooff do down w nto wnto tow wnn Clleeve eveela land nd,, it it’s ’s ttim im me too pput ut Burr ke to work for you o r co comp mpan any. y. FFin indd ou out more at buurk r keair eairirpo ea port po rt.c rt .com .c m.

CEO of RPM, said in a July 23 earnings conference call.

“We are beginning to see declines in sales and earnings across some of our European operations,” Mr. Sullivan said. “This is compounded by the continuing deterioration of the euro versus the U.S. dollar.”

However, RPM’s presence largely in northern Europe and not the more volatile southern countries, such as Greece, has proven to be an advantage, Russell Gordon, chief financial officer and vice president of RPM, said in the earnings conference call.

‘A little more stagnant’ William Gaskin, president of the Precision Metalforming Association, a trade association in Independence, said economic activity in his industry has slowed but isn’t a concern.

“Last year, we were still kind of in growth mode. This year, it’s a little more stagnant,” Mr. Gaskin said.

PMA’s July Business Conditions Report, a survey of 129 metalforming companies, showed mixed results.

While 19% of participants (up from 11% in June) said they expected economic activity to improve in the next three months, 36% (up from 32% in June) believed activity would fall.

Likewise, 26% of companies (down from 31% in June) expected to see an increase in orders in the coming months, while 34% anticipated a decrease (up from 33% in June). ■

B U R K E MEANS BUSINESS.

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Cloud support demand fuels Paragrid IT outfit hiring regional salespeople, seeking more space in Cleveland

By CHUCK SODER csoder@crain.com

Ryan Berg said he and his colleagues at Paragrid Inc. have decided to “quit being wusses.”

The company, which provides data hosting services and helps companies set up their desktop computer systems so that almost all computing funcBerg tions take place in a data center, has more than doubled the size of its staff since early 2011 and is looking to double again over the next year.

Paragrid, which employs 22, has expanded quickly to take advantage of the growing demand for desktop virtualization and cloud computing services, which is a term for services delivered via the Internet, said Mr. Berg, Paragrid’s president.

“It’s like a surfer on a wave. If you

“Paragrid has always been there for us when we needed them day or night.”

– Jason Church, chief information officer, NRP Group LLC don’t start pedaling fast enough, it’s just going to go right underneath you,” he said.

Paragrid over the past six months has pushed to build its sales team.

The company since then has hired five sales people focused on the Cleveland, Columbus, Cincinnati, Chicago and Detroit areas, Mr. Berg said, though Paragrid is in the process of replacing two of the recent hires. One quit and one was fired for performance issues, he said, acknowledging the challenge that comes with hiring and managing remote employees.

Mr. Berg said he expects 2012 sales to exceed $5 million, which would be a significant increase over last year’s sales, which he would not disclose. Paragrid has been profitable since it was founded in 2009, Mr. Berg said, but the company has had an easier time of late attracting customers, who now sometimes call Paragrid before the company calls them.

“We finally said, ‘You know, this is working,’” he said.

Paragrid in June moved into 2,000 square feet of temporary office space on Rockside Road in Independence because staying in its previous location, a 6,500-squarefoot office in Tyler Village, in Cleveland’s Midtown neighborhood, would have meant extending its sublease by three years. The company now is looking for roughly 7,000 to 8,000 square feet in Midtown or downtown Cleveland, with the option of expanding further.

Paragrid has helped real estate services firm NRP Group LLC of Garfield Heights cut its data storage costs by updating the company’s data storage network, said Jason Church, chief information officer for NRP Group. Paragrid also helped NRP convert more than 200 personal computers into virtual desktops, which has let the company manage the machines from afar, said Mr. Church, who praised Paragrid’s service.

“Paragrid has always been there for us when we needed them day or night,” he said.

■

AUGUST 6 - 12, 2012

GOING PLACES JOB CHANGES ARCHITECTURE KA ARCHITECTURE: Robert A. Weeks to vice president, business development.

CONSTRUCTION

Weeks

Laird

Lipinski

Taylor

Dussault

Matthews

Myers

Megerian

Krieger

WELLS FARGO ADVISORS: Ryan Myers to financial adviser.

Angell

Kim

Baer

WESTERN RESERVE PARTNERS: Andrew C. Foster to analyst.

Kuzmick to assistant editor, Motorcycle & Powersports News, and associate editor, BodyShop Business.

GILBANE BUILDING CO.: Thomas Laird to executive vice president.

EDUCATION KENT STATE UNIVERSITY: Tomas A. Lipinski to director, School of Library and Information Science.

NORTHEAST OHIO MEDICAL UNIVERSITY: Charles T. Taylor to dean, College of Pharmacy.

FINANCIAL SERVICE GREAT LAKES FINANCIAL GROUP: Chad Nykiel to financial analyst.

NORTH POINT PORTFOLIO MANAGERS: Lisa Kwiecien to portfolio assistant.

PRICE FOR PROFIT: Ben Dussault to associate; Carol Matthews to administrative coordinator.

PWC: Gregg Muresan and Michael Olecki to tax partners; Michael Pratt and James Will to assurance partners; Jeff Briner to advisory principal.

SS&G: Tony Rispoli to director, business development.

HEALTH CARE CASE WESTERN RESERVE UNIVERSITY SCHOOL OF MEDICINE AND UNIVERSITY HOSPITALS CASE MEDICAL CENTER: Dr. Cliff A. Megerian to chairman, Department of Otolaryngology.

SOUTHWEST GENERAL HEALTH CENTER: Richard W. Kondas to clinical manager, Urgicare Centers.

INSURANCE CHICAGO TITLE INSURANCE CO.: Adair Krieger to national commercial service coordinator.

MEDICAL MUTUAL: Tom Dewey to director, financial analysis and cost and budget.

LOGISTICS JARRETT LOGISTICS SYSTEMS INC.: Matt Angell to vice president, logistics operations.

MANUFACTURING EATON CORP.: Jen Molnar to director, Eaton Business Excellence Assessment Program; Chuck Jenkins to corporate director of safety.

G.W. BECKER INC.: Art Goforth to regional sales manager.

MOEN INC.: Ji Kim to director, global design.

SAMUEL, SON & CO.: Rick Snyder to vice president and general manager, USA Pickling Operations.

MARKETING AKHIA: Chris Jackson to creative director; Nick Pfahler to senior art director; Linda Fantone and Matt Rumer to art directors; Isabelle Jones to copywriter and concept developer; Brianna Kelly to designer; Niki Forner to associate art director.

MEDIA BABCOX MEDIA INC.: Gina

NONPROFIT HANNA PERKINS CENTER FOR CHILD DEVELOPMENT: Karen Baer to CEO. LEGAL AID SOCIETY OF CLEVELAND: Kari White to supervising attorney for intake and the Volunteer Lawyers Program; Mary Beth McConville to senior attorney for intake and the Volunteer Lawyers Program; Megan Sprecher to senior attorney and project leader, Community Advocacy Program.

STAFFING PRINCETONONE: Kalee Vectirelis to recruiting coordinator and researcher.

TECHNOLOGY BRITESKIES: Larry Jansen to iSeries senior developer; Heather Maryo to senior solutions manager; Prathyusha Takkillapati to junior WebSphere commerce developer.

BOARDS WILLIAM K. THOMAS INN OF COURT, A CLEVELAND CHAPTER OF THE AMERICAN INNS OF COURT: Philip S. Kushner (Kushner & Hamed LPA) to president; Avery Friedman to president-elect; Colleen A. Mountcastle to secretary treasurer; Adam Fried and Tariq M. Naeem to membership chairs; Sandhya Gupta and Adrienne Kirshner to program chairs; Marlon A. Primes and Greg Scott to members-at-large; Christine T. McMonagle to counselor; Joan Synenberg to past president.

WIRE-NET: Mark Dawson (Cleveland Steel Tool Co.) to chairman; Tim Rosengarten to vice chairman; Larry Fulton to secretary/treasurer.

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

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Ulmer software aids bill collection; other firms buy in

By MICHELLE PARK mpark@crain.com

If your attorney seems more aware of that hefty balance you owe his firm each time you call, you might thank — though that may not be your word — Ulmer & Berne LLP. The Cleveland-based law firm developed and now is selling to its brethren a patent-pending software that displays on an attorney’s computer screen a small pop-up of client information — including past-due amounts — when a client calls. It even pops up with the data before the second ring.

Conceived to improve Ulmer & Berne’s own account collection rates, the technology — called Client Relationship Console — has proven compelling to six other firms that have paid Ulmer & Berne for its use and installation. So, not only is the technology helping Ulmer & Berne

round up past-due revenues, but it’s reeling in a new revenue stream for the law firm, too.

“Back starting in 2009, firms were really having problems with cash flow because clients weren’t paying their bills,” said Sam Shipley, Ulmer & Berne’s chief information officer.

To address the problem, Ulmer & Berne’s information technology team developed the Client Relationship Console and introduced it internally in November 2009. The aim was to prompt attorneys to address more frequently debts owed during client-initiated calls.

“The attorney won’t pick up the phone and make the obnoxious collections phone call … because what’s important for them is managing that relationship so they will get follow-up work,” Mr. Shipley said.

The numbers show the technology is working, Mr. Shipley said.

Ulmer & Berne measures its

Fuel: Market for natural gas cars still in neutral continued from PAGE 3

two-wheeled adventures.

What Mr. Moore does have is a head start. For three years he’s been working to develop a home refueling station at a price point accessible to consumers — something less than the roughly $5,000 that current models cost. Most of that work has been through his Cleveland company, NatGasCar.

Pressure-packed challenge The holy grail for both Eaton and NatGasCar is the creation of a small unit, about the size of a large backpack and weighing less than 50 pounds, that can hang on a garage wall and can be connected to a home gas line. Essentially a compressor, it’s job would be to take the low pressure gas provided by a home gas line and compress it to a few thousand pounds of pressure per square inch (PSI) so that it could be injected into a vehicle powered by natural gas.

Both Eaton and Mr. Moore are convinced that the market for natural gas vehicles is set to take off.

So far, it barely has scratched the surface, Mr. Herbst said, accounting for only 13 million vehicles worldwide and about 120,000 in the United States, with most of those in commercial fleets rather than in residential garages.

The energy and automotive industries face a classic chickenand-egg dilemma. Without easy access to fuel, consumers are not likely to demand natural gas cars and automakers aren’t excited about producing them. Likewise, without large numbers of natural gas vehicles on the road, retail fueling stations aren’t likely to be built.

But, with cars able to run on natural gas for half the cost of gasoline or less, most observers think the henhouse will explode if the problem can be solved. So Mr. Moore and Eaton both hope to design and build the first chickens to get things going.

The race is on Eaton is putting staff from its Innovation Center in Southfield, Mich., as well as its advanced hydraulics team from Minnesota on the project, Mr. Herbst said. Once

the refueling system is perfected, Eaton likely will invest more money to bring the system to production — but it also will be gaining valuable intellectual property along the way, Mr. Herbst predicts. That know-how might come in handy if the natural gas vehicle business grows the way many observers expect and the way the gas industry and the government hopes.

“The whole purpose behind this is to develop that intellectual property,” Mr. Herbst said.

Mr. Moore is also confident.

Eaton’s $500 price point is lower than what he’d been aiming for so far, but he’s also working on a timeline that would bring his product to market ahead of Eaton, he said.

Eaton and Mr. Moore say the refueling systems must be safe, reliable, quiet and easy to use and that there are technological hurdles yet to clear for both development groups.

“I think we’re a ways away still,” Mr. Moore said. “But I’d like to think that we’re closer than they are.”

Mr. Moore is no stranger to product development. A longtime entrepreneur in traditional industries, such as automotive supply, he more recently has become known for developing products such as better helmets for athletes and soldiers and better armor for U.S. military vehicles. He isn’t afraid to get his hands dirty, or blow things up, to get a product to market.

On the other hand, Mr. Moore said he realizes Eaton is in a whole other dimension in terms of size and resources, and that he’d be foolish not to respect a company with the technological abilities of Eaton.

“Eaton’s a very strong company and a very big company — run by a very good person (CEO Alexander Cutler), and I have a lot of respect for them,” Mr. Moore said.

“But I also have a lot of respect for what we’re doing,” he said.

Goliath gives affirmation So far, Mr. Moore isn’t being outspent. He already has invested more than the $3.4 million Eaton is receiving as a grant, he said.

And as for battling Goliath, Mr. Moore said he’s fine with that, too

Ulmer & Berne’s technology does not present information to attorneys all the time: If there isn’t relevant information or action that needs to be taken, no pop-up appears. Plus, accounts receivable data for Ulmer & Berne lawyers only pops up after

a client’s balance outstanding has exceeded $10,000 and more than 60 days past due, Mr. Shipley said.

That’s customizable, though, he noted.

“We don’t want to pester clients,” he said.

Ulmer & Berne in December 2010 incorporated a subsidiary called Bridgeview Technologies to sell the software. Cole Valley Software, an Idaho company and vendor of Ulmer & Berne, is selling it on its behalf.

The patent for the technology was filed in 2010, and Ulmer & Berne began marketing it to other firms in 2011.

Brownlee LLP, a Canadian law firm, bought the system a few months ago and is integrating it with its phone system.

“The lawyers are so caught up doing their own work that they don’t really pay attention to their accounts receivable,” said Stephen J. Moss, system administrator of the

75-lawyer Brownlee firm. “Maybe, sometimes, they just trust the client’s going to come up with the money. Then, two months turns into four months, and four months turns into a year. So this program can refresh their memory. Hopefully, we can bring in the money that we lost (wrote off) in the past.”

Mr. Shipley declined to say how much Ulmer & Berne charges for the technology, but Mr. Moss called the price “reasonable.” He said his firm invested less than $10,000, but expects to collect hundreds of thousands of dollars it might not have before.

Today, the technology’s pop-ups only appear when money is owed.

But Ulmer & Berne plans by the fourth quarter to add the capability that, among other things, can alert attorneys to cross-selling opportunities or to court rulings they should share with certain clients.

■

— he even finds some validation in it.

“Having Eaton get in the business is just one more piece of recognition that natural gas is the way the (auto) industry is going to go,” Mr. Moore said.

The gas industry hopes that’s true.

The American Gas Association, not known for encouraging government involvement in business matters generally, applauded the recent round of ARPA-E expenditures that included the Eaton grant.

“The new ARPA-E MOVE program

is focused on the right challenges at the right time,” AGA president and CEO Dave McCurdy said. “Their leadership can motivate the kind of game-changing innovations that will help us displace foreign oil with clean, domestic natural gas.”

■

collections by the average length of time it takes for the firm to collect cash owed it. In October 2009, the average was 92 days. By Dec. 31 of the same year, the period decreased to 86 days, and by year-end 2010, it dropped to 76. At year-end 2011, it stood at 64, where it remains.

That steady progression means the firm has carved a whole month off its collections cycle, which affords it more cash on hand to finance growth and to pay its own bills, Mr. Shipley said.

“Our firm has met budget goals for three years in a row,” he noted.

Selective memory

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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

Loss No. 1

B

aiju Shah not only is extremely bright, but the only CEO that BioEnterprise Corp. has ever known also has an excellent, self-deprecating sense of humor.

After Mr. Shah announced last month that he would be leaving BioEnterprise to run a new drug development company in Cleveland, a well-wisher who congratulated him on his new job said the nonprofit would have big shoes to fill in replacing him.

Mr. Shah responded by saying he only wears a size 9.

Ah, but the footprints Mr. Shah will leave behind once he exits BioEnterprise are of a guy with shoes the size of Shaquille O’Neal’s. That’s why we don’t envy the BioEnterprise board in finding someone who’ll lead the organization with the same purpose and zeal as Mr. Shah.

Prior to 2000, Cleveland wasn’t in the conversation when talk turned to cities that attract venture capital investment. A prime reason BioEnterprise was given life in mid-2002 was to help connect local, early stage companies that were developing medical devices and bioscience technologies with venture capital firms.

Mr. Shah became the trusted intermediary who made many of those connections happen. He was instrumental in putting Cleveland on the map in the venture capital world because he introduced the monied interests to promising companies they found to be good investments.

Success has bred more success over the last decade. Just last week, BioEnterprise released its latest Midwest Health Care Venture Investment Report, which showed Midwest health care startups received $491 million in investments in the first half of 2012 — the highest six-month total in five years. A total of 33 Cleveland-area companies grabbed $83.6 million of that amount, or 17% of the region’s haul.

Only Minneapolis has topped Cleveland as a venture capital magnet in the Midwest over the last seven years. That’s impressive, but we’d argue that Cleveland for the foreseeable future needs a strong biotech advocate in the mold of Mr. Shah to keep that trend going. We wish the BioEnterprise board well in choosing a new champion for the region.

Loss No. 2

S

teve LaTourette is part of a vanishing breed in Congress — a lawmaker who doesn’t put party affiliation ahead of common sense when approaching his job. Now, the wear and tear that comes with occasionally breaking party ranks apparently has become too much for Rep. LaTourette, who last week announced he won’t seek a 10th term in the U.S. House of Representatives.

It was Rep. LaTourette and Squire Sanders partner Fred Nance who in 2005 led the successful effort to save the Cleveland office of the Defense Finance and Accounting Service. The collaboration and hard work that were necessary to salvage the DFAS center against all odds are indicative of the traits Rep. LaTourette brought to his job in Congress.

Washington and Northeast Ohio will be the poorer for his exit.

FROM THE PUBLISHER

Mad as hell? You’d better believe it

R

for the battle with the arch-conservative emember Howard Beale, the Tea Party faction that has infected the TV newsman in the 1976 film GOP. He reminds me of the Jeff Daniels “Network” who cascaded into character in the new HBO series, “The craziness with his on-air rant?

Newsroom.” Except, of course, that part He urged his viewers to go to their about having women throw drinks in his windows, open them up and scream — face. as he did more than once while pleading You see, Steve LaTourette has indeed with folks to turn off their televisions — been a thinking-man’s Repub“I’m as mad as hell and I’m not lican, and has prided himself in gonna take it anymore!”

BRIAN working with his colleagues That’s me.

TUCKER from both parties to get real Right now. things accomplished for us.

And it’s because of Steve And now, soured by the LaTourette. parochial, narrow-minded, acerWait, now don’t get me wrong. bic chaos that reigns on Capitol I think highly of the soon-toHill, he has called it quits, retire congressman from Greater joining the likes of Maine’s Cleveland’s far eastern commuhighly respected, longtime U.S. nities. He made a name for Sen. Olympia Snowe and other himself prosecuting that crazed moderates who despise the “never-comMormon cult of killers, and then served promise” mentality that has infected our Northeast Ohio well in the U.S. House of political discourse.

Representatives for most of the past two “For a long time now, words like ‘comdecades. He was a Republican who also promise’ have been considered to be thoughtfully represented the old-line dirty words,” he said last week while Democrats in his district. announcing his intention to retire. He He was a moderate and proud to work said he always had believed strongly that with the folks across the aisle to get “the art of being a legislator is finding things done for us. He didn’t much care

common ground.”

Rep. Marcia Fudge, the Warrensville Heights Democrat whose district sits next to his, told our editorial board a few months ago how much she appreciated lawmakers who could work with the other side for common good. Last week, she lamented the departure of a respected colleague from the Ohio delegation.

“We need more people like Steve who are gracious and willing to reach across the aisle,” she told The Plain Dealer last week. “I will miss his wit and ability to get things done.”

Remember the so-called “Grand Compromise” that was being cooked up by President Obama and House Speaker John Boehner? The two sides would agree to both tax increases and entitlement reductions to help bring this nation out of its plunge into debt.

Couldn’t do it because the Tea Party despises tax increases. Moderates such as Steve LaTourette threw up their hands, or worse, quit. And guess who gets left behind? Reasonable Americans who expect their elected officials to lead us out of this mess, rather than wallow in it.

I’m mad as hell. How about you?

■

PERSONAL VIEW

Support for anti-gay scouts is surprising

By GINGER CASEY

T

he decision by the Boy Scouts of America to continue their policy of discrimination against gay youth and leadership is tremendously disappointing.

National scout leadership obviously decided to dig in on their policy because their coffers are full enough to withstand the departure of those who oppose their anti-gay stance. Boldly, they are not going to change.

So where is the money coming from?

According to the Christian Science Monitor, Mormon churches sponsor some 23% of BSA troops. AT&T is a huge sponsor, despite having the first corporate gay and lesbian employee resource group in the nation, formed in 1987 to expand

Ms. Casey is a journalist who lives in Bratenahl. awareness of the value of diversity in their work force. ExxonMobil is also a big sponsor, as is General Electric and Boeing.

Closer to home, a look online at the Greater Cleveland Council’s 2011 annual report reveals an astounding number of leaders from our community represented on the Boy Scout council and board.

Senior executives from most of Northeast Ohio’s most successful public companies, largest banks, law firms, universities and hospitals participate on the board and support the scouts with corporate and personal money.

All of these community leaders interact with gays and lesbians on a daily basis; they supervise them, they work along-

side them, they may even report to them.

I would guess that all of these companies and institutions have hiring and work policies that prohibit discrimination based on sexual orientation — yet here they are, working with and supporting an organization that openly and actively discriminates against gay youth.

Most of these companies are also part of the Greater Cleveland Partnership’s diversity and inclusion initiative. This is also disappointing.

What I find equally distressing is the support provided by the United Way of Greater Cleveland, which many view as the conscience of our community. Not only does it directly support the Boy Scouts, but it allows the agency to be a pass-through portal for others to support See VIEW Page 11

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

View: Boy Scouts often shape youngsters’ views

THE BIG ISSUE If you had the money, would you invest in the Cleveland Browns?

continued from PAGE 10

ARTHUR BERRY JR.

JORDAN GREYTAK

TRISHA RAYMOND

JASON WORTMAN

Cleveland

Parma

Cleveland

Cleveland

I’m a football fan, a sports fan and a Browns fan.

Yeah, I’d invest in it.

I actually doubt that I would. I’d probably invest more money into the film industry here in Cleveland because that’s a growing market.

I would invest in what is around the Cleveland Browns because ... there’s just a lot of stuff that can be built up within the community right around Browns stadium.

No, I wouldn’t. I wouldn’t see the return on it. I wouldn’t invest in any sports team.

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

Investing: Funds fear revenue losses continued from PAGE 3

making a little less than they did in their heyday.�

Resilience Capital Partners in Beachwood, which last month announced the closing in May of a $222.5 million fund, is sharing with investors in this fund a greater percentage of the fees that the portfolio companies will pay to it for buying and advising the companies, said Bassem A. Mansour, co-CEO of the private equity firm. He characterized the increase as moderate.

Linsalata Capital Partners in Mayfield Heights closed on its sixth fund in June. According to Eric V. Bacon, co-president and senior managing director, Linsalata held steady on its management fee, but is sharing “modestly� more of the transaction and advisory fees paid to it by portfolio companies. “We’re retaining less and less for ourselves,� Mr. Bacon said.

But wait, there’s more Besides sharing more of the fees paid to it by its portfolio companies, Resilience Capital Partners is one of a number of private equity firms nationwide agreeing to an arrangement called the European waterfall, Mr. Mansour said.

Under such arrangements, fund sponsors agree not to collect any returns for themselves until all the capital the fund has drawn down from its investors, plus any specified returns, have been paid. The practice means fund sponsors must wait longer to receive their share of any profit.

Some fund sponsors also are extending better terms to parties that invest before a fund’s first close to attract early participation — understandable, given that the time it takes to raise a fund has doubled in the last couple years, industry insiders report.

Another change giving Linsalata’s Mr. Bacon pause is that fund sponsors more often are setting lower thresholds at which limited partners can stop providing funds for their agreedupon commitments. The percentage of “yesâ€? votes required to approve such an action decreased in Linsalata’s newest fund, meaning fewer votes are necessary, Mr. Bacon said. “I find that (trend) a little worrisome,â€? he said. “If you got into the situation that we were in three years ago where the entire financial situation was melting down ‌ if (the investing parties) were to have a

problem of their own, suddenly, they vote to say, ‘OK, let’s stop.’ There could be unintended situations that allow that to trigger, and it really wasn’t in the best interest of the majority of the (limited partners), but it still could happen.�

Operators of private equity funds are bracing for the loss of revenues they’re negotiating away, said a spokesperson for one local private equity firm, who asked not to be identified because the firm is raising money. “We’re being very thoughtful, trying to figure out where we can be more efficient,� the spokesperson said.

The spokesperson said those efficiency measures already have involved combining certain positions.

Haves and have nots Many attribute the increased popularity of investor-friendly terms to the publication in 2009 of desired best practices by the Institutional Limited Partners Association, a trade association of investors.

Mr. Bacon said the changes also are the result of the maturation of the private equity business. The terms of every new fund Linsalata has raised over more than 20 years have been increasingly favorable to

11

its investors because there’s more knowledge among investors and fund sponsors of the various situations that can arise, he said.

Some observers say more favorable terms for investors are a lasting change. Others predict the pendulum eventually will swing back somewhere in the middle. “I don’t think it’s permanent at all,� Jones Day’s Mr. Saada said. “The more demand (to invest in private equity), the better leverage the general partners will ultimately have.

(When) there’s more money out there, they can be choosier and can negotiate.�

For that very reason, some funds haven’t extended friendlier terms at all. Mr. Saada said hugely successful West Coast venture capital funds have no shortage of investors vying to invest in their next funds. Thus, they still can dictate terms and charge higher management fees.

Mr. Milanich of Case Western Reserve University agreed. “If you’re a really good venture, you can do whatever the hell you want,â€? he said. “If you’re not a ‘have,’ for the most part, you’re bending over backward today just to get funded.â€? â–

the Scouts as well.

In recent years, the United Way has increased its support despite the fact that the Boy Scouts continue to discriminate against the very at-risk youth the United Way claims it is trying to protect. Their website states that it supports the Boy Scouts because the group “encourages youth to develop good habits and attitudes of good citizenship.�

Certainly, they do not believe that discrimination is good citizenship.

Now that the Boy Scouts have made it clear that they are not interested in changing — not now, not ever — maybe the United Way should consider changing its policy before their next fundraising campaign.

It does not take a rocket scientist to see how the Boy Scouts’ anti-gay position can lead to bullying or worse.

Take a look at the Westboro Baptist Church of Kansas City, which conducts inflammatory anti-gay protests outside the funerals of soldiers — the very soldiers who died defending, in part, their right to free speech. In McConnelsville, Ohio, someone killed a gay man’s eight horses last year, locking the barn and spray-painting, “fags are freaks� and “burn in hell� across the sides of the building before burning it to the ground.

The Boy Scouts of America claims to provide “the nation’s foremost youth program of character development and values-based leadership training.� By keeping certain boys out, what they are really doing is contributing to the dark vacuum of ignorance, encouraging young Scouts to discriminate, an attitude many will carry into the future workplace.

The University of Alabama was a great school back in the 1950s but became greater when it opened its doors to all Americans. Even the U.S. military, one of the most archaic institutions we have, finally got it right and eliminated its “don’t ask, don’t tell� policy, realizing that the services need good leaders and soldiers from all walks of life.

In choosing to stay behind when the country is evolving toward a more unified America, the leadership of the Boy Scouts is doing young Scouts a disservice. They will not be prepared for the world that awaits them. And the companies and agencies that support the Boy Scouts’ continued discrimination are not being honest as they try to have it both ways — supporting a group that tells gay youth they are not welcome, while at the same time telling the rest of us how gay-friendly and inclusive they are.

The Scouts do not have to change if they do not want to; that’s the beauty of America. Divergent points of view are protected under the Constitution. They are, after all, a private organization and can make their own rules.

However, as citizens, shareholders and taxpayers, we can stand up and refuse to allow our money to go to supporting their policy and holding their meetings in public schools, libraries and recreation centers.

We can refuse to support the companies and institutions that support the Boy Scouts’ discrimination. And we can refuse to support a United Way that continues to fund the Scouts, while at the same time, telling us that they care about the needs of families and children. â–

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

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

LIENS FILED Merritt Medical Inc. 4572 Renaissance Parkway, Suite A, Warrensville Heights ID: 34-1532282 Date filed: May 18, 2012 Type: Employer’s withholding, unemployment Amount: $22,251 Hal-Mark Associates Inc. ETS Travel 9697 Brookpark Road, Parma ID: 34-1770173 Date filed: May 18, 2012 Type: Employer’s withholding, unemployment, corporate income Amount: $19,653 Signature Interiors Inc. 13275 Strathmore Drive, Valley View

ID: 34-1881664 Date filed: May 8, 2012 Type: Employer’s withholding Amount: $17,730 Ralph Siegenthaler Inc. 5584 Mayfield Road, Lyndhurst ID: 34-1292394 Date filed: May 22, 2012 Type: Employer’s withholding Amount: $17,132 Carol D Hill and Associates Inc. 55 Public Square, Cleveland ID: 34-1567772 Date filed: May 22, 2012 Type: Employer’s withholding, failure to file complete return Amount: $16,801 Greenwich Partners LLC 17000 St. Clair Ave., Cleveland ID: 27-2941122 Date filed: May 24, 2012 Type: Employer’s withholding Amount: $14,334 Markiewicz Automotive LLC 5081 Warrensville Center Road, Maple Heights ID: 26-3591657 Date filed: May 24, 2012 Type: Employer’s withholding Amount: $12,080 MJV Asset Management Inc. 3895 W. 214th St.,

Fairview Park ID: 26-4096787 Date filed: May 10, 20112 Type: Employer’s withholding Amount: $11,545 Emerald Painting & Decorating Inc. 496 E. 200th St., Euclid ID: 34-1846730 Date filed: May 22, 2012 Type: Employer’s withholding Amount: $10,978 First Choice Homecare Inc. 601 Towpath Trail, Suite C, Broadview Heights ID: 34-1876809 Date filed: May 22, 2012 Type: Employer’s withholding Amount: $10,228 Corporate Installation Specialists Co. LLC 2500 Brookpark Road, Suite 211, Cleveland ID: 26-3821506 Date filed: May 24, 2012 Type: Employer’s withholding, unemployment Amount: $10,008 Leonardos Bridal & Formal Boutique 19111 Detroit Road, Rocky River ID: 26-3613084 Date filed: May 8, 2012 Type: Employer’s withholding Amount: $9,432

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AUGUST 6 - 12, 2012

Shopping: Owners see increased tenant activity continued from PAGE 3

The rejuvenation of older centers from Lakewood to Solon epitomizes retail’s reawakening the best. They’re located in heavily developed areas with well-established demographics.

They are far afield from the last decade’s rush to the region’s outer suburbs as retailers chased the housing boom’s new rooftops.

The makeovers show how modest improvements — still typically costing millions — may hike profitability of older centers as owners capture resurgent tenant interest.

Bruce Haney, managing partner of the Pittsburgh-based Echo Realty shopping center development concern, said his company’s multimillion-dollar redo of Solar Shopping Center, 6509 SOM Center Road, as Solon Village reflects the times.

“From smaller tenants, there is a reawakening of interest as the economy improves. There is very, very strong appetite for new space,” Mr. Haney said. “However, it’s very, very hard to develop ground-up real estate for many reasons. The anchor tenants are not there. Moreover, given the compression of rental rates due to the overall economy, it is hard to get deals to pencil. So, you’ll see a lot more deals done where you can buy an existing center at a reasonable price.”

Echo Realty, an independent company that has several principals of the Giant Eagle supermarket chain as part of its ownership, is undertaking the Solon project to replace a dated, 55,000-square-foot Giant Eagle with a new, 99,000-squarefoot store. Moreover, it will be a Market District store, which boasts upscale offerings amid a design with more expensive finishes.

“Giant Eagle brought this to our attention. They loved Solon and had a store that is very old and undersized for the Solon area,” Mr. Haney said. “It so happened, the existing center could be redesigned to accommodate the new store.”

Echo Realty bought Solon Square May 8 from its long-term owner, Solar Center Ltd., for $7 million and began construction three days later.

Echo Realty will move some of its tenants to another part of the shopping center while it rebuilds one wing, and it will construct an 11,000-square-foot building for other tenants, Mr. Haney said.

“We’re able to retain more than a half-dozen tenants who have longestablished businesses in Solon and add retailers who want to get into that market,” Mr. Haney said.

Right time, place, price About 26 miles away at 15412 Detroit Ave. in Lakewood, Levey & Co. of Akron is involved in a massive re-engineering of the 1950s-vintage Lakewood Plaza that CEO Larry Levey jokes dates to 1776.

A 275-seat Quaker Steak & Lube restaurant soon will occupy part of a retail center that was a top Lakewood hangout when it boasted a long-defunct Manners Big Boy restaurant. The 12-year-old Discount Drug Mart in the center also is undergoing expansion and updating.

“This is an exciting project that will extensively change the streetscape,” Mr. Levey said, noting updates to the exterior of the property will constitute a “360-degree renovation.” He’s not kidding: The center’s

parking lot borders and serves a public park on its northern side, so even that side is part of the $3 million makeover.

Mr. Levey said his firm has done other acquisitions and renovations in its 30-year history and has found that every one is unique due to its location, layout and tenant mix.

Lakewood Plaza filled the bill for the firm to buy the property for $2 million because of market conditions nationally and regionally.

“Land (for new centers) is hard to find and hard to interest new tenants in. Financing is hard to get,” Mr. Levey said. “Retail in general in some areas is very mature and saturated. But there are pockets where older retail can be renovated.”

Levey was attracted to Lakewood Plaza because it’s located in the middle of the densely populated suburb at a highly visible location across from Lakewood Public Library.

Likewise, Garfield Mall attracted Glimcher because of the strong demographics and access to Garfield Heights neighborhoods and its history as a shopping location, Craig Polard, Glimcher leasing director, said in a news release issued after the firm bought the center.

The distressed mall also traded at a mouth-watering discount. Glimcher — a different firm from publicly traded Glimcher Realty Trust of Columbus — paid $5.7 million June 13 for a property valued at almost $11 million for property tax purposes.

Small but significant Keith Hamulak, a senior associate at CBRE Group Inc.’s Cleveland office, said shopping center owners on one hand are reacting to recordlow interest rates and on the other to a resurgence in leasing activity after a four-year drought.

“Activity is significantly better,” Mr. Hamulak said. “Tenants have been coming in and kicking the tires (on new locations) for the last four years. Now it looks like they are ready to come in and execute deals for small- and medium-sized spaces.”

He noted that stores of 100,000 square feet and larger that spawned so much development action the past decade have been quiet until two recent projects.

However, a Walmart Super Center is slated for construction in South Euclid at Oakwood Commons this year. Levey & Co. also wants to replace a Walmart now in Fairlawn at its own project in Copley Township in a deal fraught with neighborhood opposition.

A just-completed CBRE survey reports retail vacancy in Northeast Ohio dropped two percentage points over the last year to 10.3%. It’s a modest change but snaps long-term rising vacancies and shows the ability of the region to begin absorbing space despite empty big box spaces.

However, the improvements are uneven. Some areas have higher vacancy than others, with Middleburg Heights and Rocky River at 15%, Elyria at 16% and Bedford at 24%. Activity also is concentrated at the utilitarian or low end of the market, CBRE notes, among grocery stores and off-price discounters.

“This is nominal activity relative to what we have experienced historically. A few of these should have been done years ago,” Mr. Hamulak said. “But it’s happening.”

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From training programs and employee engagement to health care and wellness benefits, today’s human resources professionals must be masters at navigating all levels and nuances of the work force.

For the second year, Crain’s Cleveland Business is honoring with its Archer Awards the work of Northeast Ohio’s HR experts.

In all, 18 finalists were selected, with judges taking into consideration a variety of qualities, including leadership, best practices, achievements and community involvement.

Judges were Sandi Guy, divisional director of human resources, CBiz; Phil Goldstein, vice president, human resources, American Greetings Corp.; Patricia Stumpp, senior vice president,

human resources, Invacare Corp.; Tom Tomasula, HR partner, Engineered Polymers and LifeScience Polymers, Lubrizol Corp.; Stephen Malia, retired senior vice president and chief human resources officer, Owens-Illinois; Reginald Stover, vice president, people and talent development, Fairmount Minerals; and Tim Alberts, vice president of human resources, Kaiser Permanente.

Winners will be announced at an event from 5:30 p.m. to 8:30 p.m. Aug. 14 at the InterContinental Hotel, Cleveland.

Also at the event, a Lifetime Achievement Award will be presented to Thomas E. Hopkins, The SherwinWilliams Co. senior vice president of

human resources. (See story below.)

Judges for the Lifetime Achievement Award were 2011 recipients of Archer Awards: Michelle Meers, director of human resources, PlayhouseSquare; Zachary Simon, director of global executive talent acquisition, Eaton Corp.; Christopher Mauer, executive vice president and director of human resources, FirstMerit Bank; and Bill Busby, vice president of sales and marketing and former vice president of HR, US Endoscopy.

For information about the Archer Awards event and to purchase tickets, go to www.CrainsCleveland.com/ archertix or contact Erika Singleton at 216-771-5371 or esingleton@crain.com.

LIFETIME ACHIEVEMENT AWARD

FINALISTS

Thomas E. Hopkins

“He’s as good with the board of directors as he is with the people out in the field.”

Jacquelyn Bell

– Nancy Rodeno, vice president of organizational effectiveness, The Sherwin-Williams Co.

Human resources coordinator

Senior vice president of human resources THE SHERWIN-WILLIAMS CO.

B

right, compassionate, capable. Trusted, respected, humble.

Those are all words used by Nancy Rodeno, vice president of organizational effectiveness, The Sherwin-Williams Co., to describe her boss and friend, Thomas E. Hopkins.

Mr. Hopkins, senior vice president of human resources at SherwinWilliams, is the recipient of this year’s Lifetime Achievement Award, selected for the honor by a panel of 2011 Archer Awards winners.

“This is a guy with an incredibly good heart,” said Ms. Rodeno, who was hired by Mr. Hopkins. “A great blend of intellectual and emotional intelligence.”

After first working as a juvenile

counselor, Mr. Hopkins began as an intern with Sherwin-Williams, where he has gone on to spend his entire career in human resources.

“He makes the investment to really get to know and connect with people,” said Ms. Rodeno, who also noted Mr. Hopkins’ work for the human resources profession as a whole. “He’s as good with the board of directors as he is with the people out in the field.”

Indeed, Mr. Hopkins has been helping to lead work force development, training and diversity efforts at the 38,000-employee Cleveland-based paint maker for the past 31 years.

One of Mr. Hopkins’ most notable initiatives is the company’s management training program, which recruits college graduates and actively works to create a talent pipeline.

It’s a model that has been expanded throughout the company, building in part off the idea that running a paint store is a course in running a business.

“Tom’s incredible legacy for the

company will be our management training program, which he really was the father of,” said Christopher Connor, chairman and CEO of Sherwin-Williams. “It’s really created the leadership that runs the company today. ...

“Tom made working in a paint store a job that required a college education, and it’s really differentiated our company dramatically from our competitors.”

It’s an accomplishment of which Mr. Hopkins is proud; he even points to the company’s chief operating officer, John G. Morikis, as one of those who started out in the training program.

Still, he is not apt to take full credit for the culture and company that Sherwin-Williams is today.

He points to those around him, especially other members of the executive team, including Mr. Connor, who he has known for years.

“We are a very relationshipintense organization,” Mr. Hopkins said. “We’re not a plugand-play organization.”

CIUNI & PANICHI INC. FROM THE NOMINATION: Anthony Constantine can appreciate Jacquelyn Bell’s professionalism, having gone through her employee intake process.

Mr. Constantine, who is senior manager at accounting firm Ciuni & Panichi in Beachwood, said as part of the nomination that Ms. Bell is the most impressive human resources professional with whom he has worked.

“Jacki treats everyone with respect and makes them feel welcome,” Mr. Constantine stated in the nomination. “She is a wonderful ambassador for the firm and a true leader.”

In nearly six years with Ciuni & Panichi, Ms. Bell has done a lot to ensure that the company hires good employees and that they are healthy, productive and happy, according to the nomination.

On the recruiting side, she has worked to build close relationships

with college professors and accounting departments. Doing so not only has helped guide students to Ciuni & Panichi, but it also has allowed the company to weigh in on the curriculum at those schools in an effort to better prepare students, the nomination said.

For existing employees, Ms. Bell implemented the company’s wellness program, family events and a dining program for employees who work late. Such efforts have helped increase the tenure of the average Ciuni & Panichi employee by more than 30%, the nomination said.

She’s a fan of teamwork: Ms. Bell often will put teams together to manage big tasks. She helps guide them through the process but allows them to make their own decisions.

Ms. Bell also has a good rapport with a lot of people at the company, which has helped her play key roles in several initiatives. For instance, she did a lot to get people energized about an effort to improve the “soft skills” of company employees, the nomination said.

“Jacki’s unique personality makes her a good bridge between management and staff,” the nomination said.

She’s involved in the Boys and Girls Club, the Society for Human Resources and the Solon and Beachwood chambers of commerce.

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ARCHER AWARDS

CRAIN’S CLEVELAND BUSINESS

Suzanne Bloomfield Human resources/ equal opportunity director UNITED WAY OF GREATER CLEVELAND FROM THE NOMINATION: It’s easy to see what Suzanne Bloomfield values in an employee.

She likes ethical people.

Technical people.

People who can communicate, build relationships and solve problems. She likes people who focus on serving customers and achieving goals, both long and short term.

Those are the seven core competencies by which new hires and existing employees are judged at the United Way of Greater Cleveland.

The core competency system — which has been adopted by other United Way organizations, too — isn’t the only initiative she’s taken on since becoming director of human resources for the local organization.

Ms. Bloomfield also worked with

AUGUST 6 - 12, 2012

“(She is) one of three leaders who pulled together our entire shift in culture and relations management.”

Kathy Braun

– K. Michael Benz, retired president and CEO, United Way of Greater Cleveland

FROM THE NOMINATION: Kathy Braun is charged with an unenviable task: making sure employees at 750 independent Proforma offices nationwide — a nearly 50% increase in employees since her arrival at the company five years ago — all are representing the Independence company in the same professional manner.

Proforma franchisees offer graphic communication solutions through commercial printing, promotional products and other services.

The company “demands a talented

colleagues and outside HR professionals to develop a customer relations management program designed to help employees improve how they engage with donors, volunteers and other people connected to the United Way. In addition to her human resources duties, Ms. Bloomfield also manages the insurance plan that the United Way offers to qualified nonprofits in Greater Cleveland. She’s working with a consultant and the plan’s vendors to develop wellness initiatives designed for employees of those nonprofits.

In a letter attached to the nomination, K. Michael Benz, who until recently was president and CEO of the United Way of Greater Cleveland, stated that Ms. Bloomfield has done a lot to make sure the nonprofit is more intensely focused on its customers and its donors.

He described her as “one of three leaders who pulled together our entire shift in culture and relations management.”

Outside of work, Ms. Bloomfield teaches a class at Cleveland State University designed to help human resources professionals win “Professional in Human Resources” certification from the Society for Human Resource Management.

She also serves on the board of ERC, a human resources services organization in Mayfield Village.

Her input on the board is highly valued, according to ERC president Pat Perry.

“She is well respected by her peers as knowledgeable, ethical and extremely hard working,” he said in the nomination.

Cindy Torres Essell

Your true colors are seen in your dedication to us.

Congratulations Tom, on receiving an award that recognizes how much you’ve given all of us over the years.

From your colleagues at Sherwin-Williams.

Tom Hopkins Recipient, Archer Lifetime Achievement Award

Associate director, professional development and diversity THOMPSON HINE LLP FROM THE NOMINATION: Cindy Torres Essell has been more than competent in making sure lawyers at Thompson Hine are more than competent as they advance throughout the law firm.

She led the development and implementation of the firm’s “competency model,” which “describes the observable performance expectations of all of our lawyers below the partner level,” according to the nomination.

Before lawyers are promoted, “they must demonstrate that they have the knowledge, values, attitudes and skills required to practice law competently,” the nomination stated.

Non-partner lawyers are slotted at one of three levels — associate, mid-level associate or senior associate — and are assigned a corresponding set of competencies to meet before they’re considered to move to the next level.

With the help of the firm’s inhouse IT staff, a Learning Manage-

Human resources manager PROFORMA

Charmaine Brown Director of diversity and inclusion FOREST CITY ENTERPRISES FROM THE NOMINATION: Charmaine Brown’s role at real estate developer Forest City, the 15thlargest public company in Northeast Ohio, according to Crain’s research, has led to numerous new initiatives at the company.

For the first time, Forest City has a diversity component to its formal strategic plan, with Ms. Brown, after commissioning consultant help from Diversity Inc., implementing diversity metrics and initiatives that have been embraced by the company’s top leaders.

“She is a sought-after confidant on a variety of issues from employee concerns to leadership advice, by

ment System was developed to enable partners to track their attainment of the competencies, and the HR pro is developing a new training curriculum for the firm based on the competency model.

She also coordinates the Partnering Committee, which is a group of non-partner lawyers from all Thompson Hine offices that convenes quarterly to discuss key issues and concerns and helps the firm identify ways to address them.

Her work in the diversity area enabled Thompson Hine to be recognized as an inaugural recipient of the Diversity & Inclusion Trailblazer Award presented by the Cleveland Metropolitan Bar Association.

The award is given to a law firm or corporate legal department that “contributes to an inclusive culture for its work force, with its clients and/or within the community,” the nomination said.

A major factor in receiving the award was the associate director’s work in launching a partnership with Forest City Enterprises Inc. and the Commission on Economic Inclusion that provides executives “with the information and tools that can help them drive diversity within their own organizations.”

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and dedicated staff to ensure its franchise owners’ needs are consistently met,” the nomination said.

“Communicating the importance of this philosophy begins with a potential employee’s first contact with Proforma — in many cases, Kathy Braun,” it said.

With Proforma’s overall growth came an expansion of its human resources department, through which Ms. Braun implemented new standards in performance evaluation, management diversity, internal and external communication expectations, and coaching plans. Those efforts resulted in a 45% decrease in the company’s turnover rate.

“Communication barriers existed

both within and among departments that needed to be broken down to ensure smoother functioning,” Ms. Braun was quoted as saying in the nomination.

In addition, Ms. Braun has used her talents to spearhead Proforma’s charitable campaigns.

Employees have embraced the Adopt-A-Family program and have helped provide hot breakfasts to the homeless at the West Side Catholic Center. Ms. Braun also leads Proforma outside its local area with creative drives to support the troops.

“Energetic and always ready with a smile, Kathy makes you want to work for Proforma — and to perform well while working there,” the nomination said.

everyone from line workers to senior executives,” said Forest City executive vice president Andrew Passen in the nomination.

But Ms. Brown also serves Forest City and the region at large in the public arena. She has been an ad hoc leader with the Greater Cleveland Partnership’s Commission on Economic Inclusion, while also pushing an effort to bring C-suite leaders together to “identify actionable initiatives for enhancing the business community’s commitment to diversity,” the nomination said.

Ms. Brown, who’s been with Forest City for eight years, also sits on the board of and chairs the human resource committee for the Northern Ohio Minority Supplier

Development Council, Family Connections and Milestones Autism Organization.

She also is a member of the United Way of Greater Cleveland’s Human Resource Advisory Committee and assists the Consortium of African American Organizations, or CAAO, an umbrella consulting organization for black professional organizations in Northeast Ohio.

She has urged Forest City employees to donate meeting opportunities for an annual CAAO auction, according to William Holdipp Jr., the manager of research and member services at CAAO. “She is a true gem in this community,” he wrote in the nomination.

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Krista Frazier Human resources specialist BRANDMUSCLE INC. FROM THE NOMINATION: Krista Frazier epitomizes what talented human resources pros are all about: helping new employees acclimate and grow productively within BrandMuscle, a Beachwood company that sells software that allows companies to customize marketing materials for a local audience.

One of her tasks was to quickly create a program to greet new hires and apprentices, called “on-boarding” in human resources parlance. She created a presentation and resource package for new hires dubbed the BrandBuddy program. The intern variation, called Brand-Apprentice, won second place in the Northeast

Ohio Software Association’s Best of Tech Awards.

With respect to current associates, Mrs. Frazier selected and customized a learning, performance and succession planning management system software that helps develop emerging leaders and improve areas of weakness among new hires.

As BrandMuscle is quick to adopt new technology, she capitalized on the “cool” factor of the system to garner its acceptance at the firm, according to the nomination. She also coaches managers on employee reviews, and she even has launched a business book club at the firm to help new managers improve their knowledge of employee matters and to hone their coaching skills.

Another of Mrs. Frazier’s tasks connects the company to the com-

ARCHER AWARDS munity. She chairs the firm’s efforts for good works — called its Pivots Program — and spent her own time promoting a bike ride for Ronald McDonald House and working with South Euclid schools on a drive for school supplies for needy children.

All of that is quite a track record for the University of Colorado graduate who joined 150-person BrandMuscle less than two years ago and has been in the human resources field for less than six.

Mrs. Frazier also has participated in BrandMuscle’s outside events and an industry forum on behalf of the company.

“She represents our company in an impeccably professional way,” the nomination said, “and her energy is enthusiastic and contagious.”

AUGUST 6 - 12, 2012

Amy French Director of marketing and human resources OECONNECTION LLC FROM THE NOMINATION: Amy French’s skills as a manager prompted her appointment to a second job as OEConnection’s director of marketing as well as director of human resources.

“Her natural ability to lead” was one of many reasons the nomination cited for her gaining control of a second function, which needed stability,

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and a role answering directly to the CEO of the provider of software used by original equipment manufacturers to sell wares to the broader marketplace.

Described as charismatic, poised and a clear communicator, Ms. French serves as the human resources director for the 240-person Richfield company where she has worked for eight years. She has been in employee benefits for 20.

Paul Johnson, OEConnection’s senior vice president for sales and service, said in a letter supporting Ms. French’s nomination that, “Unlike many HR professionals, she works with us to stay focused on what we can do, not what we should be doing.”

Colleagues describe the Allegheny College graduate as a guardian of the firm’s culture, working to create a place where people want to work and grow.

That was demonstrated last year when she partnered the OEConnection management with an outside consultant to create a competencybased recruiting and retention program. The effort compares the

Elise Hara Director of human resources and employment counsel CUYAHOGA COUNTY FROM THE NOMINATION: Cuyahoga County in 2011 experienced marked change when a new government was put in place, and an experienced human resources professional was needed to make sense of the sprawling changes coming down the pike.

That’s where Elise Hara fits into the equation.

Prior to Ms. Hara’s hiring, not a single human resources professional on the county’s payroll was certified. But believing in the value of an experienced team, Ms. Hara incentivized her staff with pay increases if they obtained the proper certifications.

“She believes that the first step to improving morale at the county

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Director of corporate learning and development MEDICAL MUTUAL OF OHIO FROM THE NOMINATION: Patty Hartmann, who has been a human resources professional for 25 years, believes in developing staff at all levels of Medical Mutual of Ohio’s 2,600employee organization.

From current and new employees to current and emerging leaders, Ms. Hartmann’s efforts have been critical to ensuring the right talents are in place to meet the company’s future business challenges.

“With the advent of health care

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abilities of job and promotion candidates to skills the company decided are needed by the most successful of its managers.

Moreover, for associates to keep growing, Ms. French led the creation of Career Development Month, during which workers meet with their supervisors to determine ways to improve and gain promotion potentials.

Another part of her job is overseeing community participation.

She helped coordinate the formation of an annual computer programming contest at Baldwin Wallace University, a program that OEConnection sponsors. She also helped plan and coordinate the company’s first companywide community engagement program, where employees donated an afternoon to local charitable programs.

“Amy’s approach to leadership is simple: She provides clear direction and communication as well as a great deal of autonomy for each associate to grow his/her career,” the nomination said. “She empowers her team to do their job how they best see fit.”

starts by providing professional and expert HR support,” the nomination stated.

Ms. Hara also was responsible for revamping much of the human resources team, with more than 30% of her 62-person staff being new hires. The new staff members, according to the nomination, were hired “because of their level of expertise, education and field specific certifications.”

Moreover, under Ms. Hara’s leadership, the human resources team organized the county’s first mandatory supervisory training, which is conducted quarterly to ensure consistent messages and directions are delivered across the county’s various departments.

“To date, the sessions have served as the building blocks to a unified evaluation process, clearer communication skills and education on the implementation of various policy changes,” the nomination said.

Additionally, because of County Executive Ed FitzGerald’s plans to regionalize services throughout the county, he asked Ms. Hara to offer her team’s services to mayors throughout the county who don’t have the resources to hire a fulltime human resources staff.

Robert Hatta Vice president of entrepreneurial talent JUMPSTART INC. FROM THE NOMINATION: With Robert Hatta in the driver’s seat, startup companies with Chevy budgets can enjoy Cadillac-quality human resources services.

Mr. Hatta and his team serve as HR consultants to JumpStart Inc.’s portfolio companies, whose HR departments “are practically nonexistent,” the nomination said.

They solicit, screen and interview talent for free or at dramatically discounted rates and also teach companies to follow best practices.

Jamie Herbst Director of human resources MENORAH PARK CENTER FOR SENIOR LIVING FROM THE NOMINATION: Under Jamie Herbst, the focus on superb customer service skills isn’t a onetime hiring consideration. Rather, it’s a biweekly lesson.

Ms. Herbst implemented 12 years ago and maintains to this day a customer service training program for staff that has enabled Menorah Park Center for Senior Living to consistently achieve the highest customer service rankings from not only clients, but third parties as well.

Every two weeks, the entire organization receives formal customer service training, for which Ms. Herbst coordinates a staff of 40 trainers and develops new lesson plans.

“Jamie’s devotion to (the) customer service training and interviewing program … marks her as a step above her peers,” the nomination said.

“She does not see her focus as solely inspiring and mentoring other HR professionals, but anyone with a key position at Menorah Park,” it continued. “There is always a caring component built into the regular workshops that Jamie has

and face-to-face networking events and underwrites HR-related costs, including recruiters’ fees and moving expenses.

“If it comes down to a few thousand dollars that make the difference on whether a client can hire somebody in Florida who needs relocation assistance, to finding somebody who’s not as good in the position but is here locally, we want to remove those barriers,” the nomination quoted Mr. Hatta as saying.

Mr. Hatta also recently implemented a formalized mentoring program that positions more than 20 established individuals from successful regional companies to mentor earlier-stage companies.

The aim is to grow the program to 40 to 60 mentors by year-end.

Outside his JumpStart role, Mr. Hatta is a board member of Global Cleveland, an organization focused on attracting and welcoming newcomers and boomerangers and connecting them economically and socially to opportunities throughout Greater Cleveland.

Through that position, he supports and promotes networking events.

His other involvements have included acting as a judge for the LaunchTown Entrepreneurship Awards, an idea competition, and actively promoting the first online Cleveland BioMedical Job Fair, a five-day, online-only event that drove thousands of applicants to the many tech-oriented jobs available in the region.

developed that focus on HR topics, such as legality and hiring, handling disciplinary issues and trends in recruitment and retention.”

Ms. Herbst also instituted management roundtables that meet monthly to discuss critical management topics. As such, “the managers at Menorah Park are trained to treat people well,” the nomination said.

That appears to be paying off: Menorah Park enjoyed a low 6% turnover rate among full-time staff last year — “remarkable for a senior living campus,” where the industry average is 40% to 50%, the nomination said.

Reaching beyond Menorah Park’s four walls, Ms. Herbst encourages the staff to give, and has taken a leadership role in charitable campaigns for the Jewish and general communities, facilitating, for example, the Week

“Jamie’s devotion to (the) customer service training and interviewing program ... marks her as a step above her peers.”

– Nomination for Jamie Herbst for Rainbow program for Rainbow Babies and Children’s Hospitals.

She also initiated the Ohio State versus Michigan food drive.

Congratulations to Charmaine Brown and all the finalists for The 2012 Archer Awards.

– Nomination form for Patty Hartmann Ms. Hartmann has introduced programs at all levels to ensure every employee has the tools needed to succeed. Some of Ms. Hartmann’s other efforts include developing a process for succession planning in order to ensure the ongoing development of leadership skills within the company.

Additionally, she spearheaded the development of a new program to identify and develop entry-level talent for critical business needs within the company.

Beyond Medical Mutual, Ms. Hartmann is involved with the Westlake schools’ PTA program and the St. Clarence Catholic Church in North Olmsted. This year, she also received the YWCA Women of Excellence Award.

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At any given time, there are more than 70 open jobs at JumpStart portfolio companies, and Mr. Hatta and his team use a combination of social media and conventional recruitment procedures to connect businesses and potential hires.

In the 2 ½ years he’s been with JumpStart, Mr. Hatta and his team have helped place 200 employees at portfolio companies.

“He has taken on the challenge with gusto and has put several key programs in place … that are of measurable benefit to our clients,” said Lynn-Ann Gries, JumpStart chief investment officer and cofounder, in the nomination.

His team also organizes workshops

“Patty understands the need to help the company manage large-scale change and ensure employee engagement throughout the changing times.”

reform, the need to retain current knowledge and talent is critical as is the need to ensure the development of new skills and behaviors that are necessary to compete in new markets,” the nomination said. “Accordingly, Patty understands the need to help the company manage large-scale change and ensure employee engagement throughout the changing times.”

As part of her efforts, Ms. Hartmann designed mandatory training for the company’s leaders to help them understand the impact of a respectful workplace on employee engagement. This was followed with open training for all employees to help them understand how a respectful culture leads to a positive work environment and company success.

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Mark Ludwig Vice president of global risk management and process improvement; assistant secretary CHART INDUSTRIES INC. FROM THE NOMINATION: For the past decade, Mark Ludwig has shaped Garfield Heights-based Chart Industries Inc.’s benefits, incentives, training and develop-

Clayton Morris Director of human resources CITY OF TWINSBURG FROM THE NOMINATION: Clayton Morris serves not only as director of human resources for the city of Twinsburg but also fills the same role for the city of Streetsboro. On top of that, he is the equal employment opportunity officer for the village of Woodmere and has served as a consultant for other area communities.

“Clayton truly lives and breathes

ARCHER AWARDS

AUGUST 6 - 12, 2012

ment programs.

“His innovative ideas have continued to keep the company on the leading edge,” the nomination said.

“There is great support for the initiatives he leads because people trust that Mark has set clear goals, ones that are in alignment with the company’s priorities, and has vetted the strategy proposed to reach these goals.”

Chart Industries has undergone a number of changes in the past 10 years, and along the way Mr.

Ludwig has served as an anchor, helping the company’s leaders understand employees’ needs and clearly communicate through transitions.

“Mark has demonstrated his abilities in good times and bad,” the nomination said. “More than once, Chart’s business conditions dictated the need for layoffs.

Mark did not shy away from these difficult assignments. He told people straight, did not sugarcoat, yet did so respectfully and fairly.”

Mr. Ludwig is known for his ability to identify management

candidates who fit in well with Chart Industries’ culture. He has helped the company hire several executives, including one director, one executive vice president and four vice presidents. He also brought in the Lominger system of hiring, a structured approach that uses pre-set questions.

Mr. Ludwig’s skill at attracting employees also is evident during acquisitions, of which Chart Industries has had 11 in the past six years. He always flies to the sites of the acquired companies to speed up the integration process and has succeeded in attracting

talent in the Czech Republic, Italy and China, among other countries.

In his time at Chart, Mr. Ludwig co-founded the company’s Operational Excellence Team, a group of operations, quality, accounting and human resources personnel working to make Chart leaner. He also introduced the company’s Healthy Living Program, which uses a results-based system to promote employee wellness, and he played a big role in Chart’s decision during its lean years to freeze its defined benefit plan and focus instead on its 401(k) plan.

human resources,” the nomination said. “If he did not, he would not take on these additional activities beyond his key role with the city of Twinsburg.”

Mr. Morris in 2007 joined the city of Twinsburg and since then has brought all eight collective bargaining negotiations in-house, a move that saved the city thousands of dollars; and he has helped the city find ways to maintain service to the community amid a 12% decrease in revenue, which he accomplished by getting department heads to look at labor costs strategically.

During his time with the city of Twinsburg, Mr. Morris helped the city deal with the closing of the Chrysler Stamping Plant. He played a key role in adopting wage concessions, instituting staffing freezes and passing an income tax ballot initiative to help the city handle the reduced income.

Mr. Morris also stepped up in 2008 after Twinsburg lost a police officer in the line of duty and worked to help the police and fire departments after the tragedy.

“He set a standard as the police department worked through the investigation and trial,” the nomination said. “As you can imagine, those were dark days at city hall and Clay was on hand to arrange counseling and attend to any need, whether in city hall or in our extended grieving community.”

Mr. Morris also has formalized the use of assessment processes in the Twinsburg police department and has put in an automated application process.

In Streetsboro, where he has worked since December 2011, Mr. Morris has saved the city $75,000 by negotiating union contracts in-house and saved $160,000 in this year’s premium without reducing the benefit plans for employees.

Apart from his work for Twinsburg, Streetsboro and other area communities, Mr. Morris is on the state Society for Human Resource Management committee, is a coach for the Stow Soccer Club and has served as an assistant scout master for the Boy Scouts of America.

Jenna Nightingale Human resource manager NESTLÉ RESEARCH AND DEVELOPMENT FROM THE NOMINATION: Jenna Nightingale only has worked at Nestlé Research and Development for two years, but she’s already made an impact at the company, especially through succession planning initiatives, diversity advocacy and employeecoaching programs.

“Her down-to-earth approach to working with people helps them to get past resistance to change and has earned her the trust of staff at all levels of the organization,” the nomination said.

Working with employees who often have little contact with the parent company, one of Ms. Nightingale’s first initiatives was the implementation of off-site team meetings to build cohesion

between members of the leadership team who spend most of their time working remotely as a group.

Ms. Nightingale’s next push was to bring in group coaching for Nestlé leaders. She herself went through a women’s coaching program.

“This was not only for her own professional development, but to be an active example of the benefits of self-assessment and coaching.

Following her lead, her entire management team completed 360 evaluations and are in the process of identifying individual coaching opportunities,” the nomination said.

Ms. Nightingale also works to promote Nestlé in the community. She created an internship program, developed relationships with universities and with high schools to promote interest in science education, and organizes company-sponsored volunteer programs for Nestlé staff, the nomination said.

“It can be a challenge to drive these kinds of changes through an organization as the sole representative of HR in the company and it is a testament to Jenna’s leadership that she has come so far is such a short amount of time,” the nomination said.

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Stamy Paul Executive director, human resources BEN VENUE LABORATORIES INC. (A BOEHRINGER INGELHEIM COMPANY) FROM THE NOMINATION: Stamy Paul’s career as a human resources professional began at Eaton Corp., where she served for more than six years. It then took her to Avery Dennison Corp. and finally to Ben Venue Laboratories.

She joined Ben Venue at a time when the company was facing big challenges, including the threat of an FDA warning on its product.

“Ben Venue’s leadership solicited Stamy’s help in an effort to transform the company culture from command and control management to one of engagement, devel-

opment and shared achievement,” the nomination said. “Working with her partners on the Ben Venue executive team, she has essentially topgraded the personnel and transformed the entire landscape of the company, although the evolution continues.”

Ms. Paul earns high marks for her ability to attract and develop top scientific and production talent with a new systematic approach to recruiting. Over the past four years, the company has hired more than 600 employees using Ms. Paul’s talent acquisition strategies.

Under her leadership, Ben Venue also revamped its benefits strategy, including the introduction of domestic partner benefits.

When an internal review resulted in a voluntary work stoppage at the company’s Bedford facility, so that

equipment could be updated and maintained, Ms. Paul shifted some resources from production to training and to avoid losing valuable talent.

“Stamy has been an integral member in the development of our Site Strategy. Our business has faced significant financial and regulatory challenges and the only way to respond and overcome these challenges is to re-ground our Site Strategy on our strongest asset — our people,” George Doyle, Ben Venue president and CEO, wrote in a recommendation accompanying Ms. Paul’s nomination.

“She has also been a clear leader in developing strategic plans for our desired Culture Change: a culture of mutual respect, diversity, employee engagement and performance,” the nomination said.

degree in psychology and a master’s degree in public administration from Ohio State University. He also earned a law degree from Cleveland Marshall College of Law. He joined the company in 1980 and held a number of human resources positions until he was named vice president of human resources in 2005. He was elevated to his current position in 2011.

Parker’s diversity strategy also has been a focus for Mr. Serbin. He assembled a global team to spell out the business case for inclusion and diversity, initiated a formal training program and established key metrics for inclusion and diversity.

Talent attraction and retention also are under Mr. Serbin’s umbrella. As such, he has built the company’s efforts to attract and retain talented technology workers, especially in growing markets such as India and China.

Additionally, Mr. Serbin has focused on managing the company’s health care benefits, developing wellness and preventive medicine programs.

In a letter accompanying the nomination, Parker Hannifin chairman, president and CEO Donald E. Washkewicz said Mr. Serbin “truly understands and actively advocates for the value

that employees have in the success of our growing organization, and the foundation they provide for our future success.

“Every day, Dan exhibits the personal traits that we look for in our employees,” he wrote. “He is open and friendly, humble in success, conveys genuine caring for others ... and (is) innovative in developing programs that advance our goals.”

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2012 EVENT

FILE PHOTO/HAL STATA

Daniel S. Serbin Executive vice president, human resources PARKER HANNIFIN CORP. FROM THE NOMINATION: Much of Daniel S. Serbin’s focus at Parker Hannifin Corp. is on the concept of employee empowerment.

According to the nomination, Mr. Serbin is leading teams at Parker “to define Employee Empowerment as a business differentiator that creates a competitive advantage for us by reflecting our unique values, promoting a structured approach to teamwork, recognizing the contribution of all employees, and holding us accountable for results.” The teams are being created and trained at Parker facilities across the world.

In January, Mr. Serbin led an effort to survey the company’s 60,000 employees to measure employee perceptions of both empowerment and engagement.

More than 86% of Parker’s work force responded to the survey, which was administered worldwide and translated into 30 languages.

Mr. Serbin earned a bachelor’s

Attendees prepare for the presentation of last year’s Archer Awards. This year’s event will be held at the InterContinental Hotel, Cleveland.

The 2012 Crain’s Cleveland Business Archer Awards reception, presented by Howard & O’Brien Executive Search, will be held next Tuesday, Aug. 14, at the InterContinental Hotel, Cleveland.

Tickets still are on sale and will be available until this Friday, Aug. 10. For

more information or to register for this year’s event, call Erika Singleton at 216-771-5371, or email her at esingleton@crain.com.

To view coverage of last year’s inaugural Archer Awards class, visit http://www.crainscleveland.com/ section/ARCHER_Event.

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Diane Shields Vice president, human resources BENDIX COMMERCIAL VEHICLE SYSTEMS LLC; KNORR-BREMSE GROUP FROM THE NOMINATION: Her colleagues at the headquarters of Knorr-Bremse Group — an international maker of braking systems for rail and commercial vehicles based in Munich, Germany — say Diane Shields is a thought leader.

Back home in Elyria, her boss at the headquarters of Bendix Commercial Vehicles Systems LLC, which is the North American affiliate of Knorr-Bremse, agrees.

“Diane is an outstanding human resources and business leader,”

into today’s entity employing 2,700 workers.

“Diane is viewed as a thought leader and frequently sought out as a mentor in developing talent for Knorr-Bremse Group,” wrote Marc Pastowsky, vice president for corporate human relations at Knorr-Bremse. “She has truly been a key member in transforming Knorr-Bremse into a global organization from a personnel standpoint.”

Among other best practices, Ms. Shields has championed building a culture of wellness at Bendix. She also launched an engineering development program to build the company’s talent pool. The industry is forecasting a severe shortage of engineers in the next few years.

“Always thoughtful and engaging, Diane counts among her strengths

“Diane counts among her strengths ... the instinctive ability to build teams and bridge gaps whether across the ocean or across the hall.”

– Nomination form for Diane Shields Joseph J. McAleese, Bendix’s president and CEO, wrote in support of Ms. Shields’ nomination. “She is constantly focused on ensuring our organization is being developed to execute our strategic plans from a people, structure and process standpoint.”

Ms. Shields, who has worked for Bendix for more than 15 years, has managed the personnel-side transition of Bendix Commercial Vehicle Systems from a subsidiary of Honeywell International Inc.

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an innate ability to build and maintain strong relationships ... and the instinctive ability to build teams and bridge gaps whether across the ocean or across the hall,” the nomination said.

“She’s pragmatic, she’s intelligent, and she possesses a keen strategic insight that enables her to align and engage the projects and services necessary to effectively anticipate and proactively address the needs of an ever-changing business.”

Congratulations to the 2012 class of Archer Award finalists!

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Tom Tercek Director of global benefits THE LUBRIZOL CORP. FROM THE NOMINATION: Given the centrality of health care and wellness issues in today’s corporate HR environment, it makes sense the program Tom Tercek devised for his company is called Lubrizol Essentials.

But this is no standard wellness program.

“Tom’s vision is to develop multiple approaches to integrate the many aspects of an employee’s life into balance with their work,” the nomination stated. “His approach integrates employee health, safety, family, career, and social and financial needs into a balanced program to support the individual and is a strong influence on our culture as the accountable caring energizes employees and appeals to their values.”

To connect with the scientific community — Wickliffe-based Lubrizol is a maker of specialty chemicals — Mr. Tercek branded Lubrizol Essentials “with a ‘molecule’ formed by health, safety, family, career, social and financial ‘elements,’” according to the nomination.

Mr. Tercek is a 23-year Lubrizol veteran who has a long-term relationship with a key nonprofit that deals

“Tom has excelled as a team player, is willing to teach and mentor others ...”

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2011 WINNERS

– Barb Belovich, executive director, Health Action Council with health and wellness issues.

In 1997, Mr. Tercek began working with what then was known as the Health Action Council of Northeast Ohio. During his eight years of service as board chair, he helped transform the group into the Health Action Council Ohio, a statewide group with nearly 200 employer members. The nonprofit serves as a voice for Ohio employers that offer health benefits and wellness services.

Barb Belovich, executive director of the Health Action Council, said in the nomination that Mr. Tercek leads by example.

“Tom has excelled as a team player, is willing to teach and mentor others, is attentive to detail and committed to timeliness and is consistently producing quality work as chair of the (Health Action Council) Group Purchasing Committee,” Ms. Belovich said in the nomination.

The council is in the midst of a procurement process for a pharmacy benefit manager for 93 member employers worth more than $600 million annually.

“This is the fourth three-year contract for which (Mr. Tercek) has led the process, each time refining and improving the approach, teaching new employer members in our growing program along the way,” she said in the nomination.

A group of 2011 Archer Award finalists and winners gather on stage after last year’s event.

FILE PHOTO/HAL STATA

HR EXECUTIVE OF THE YEAR, PUBLIC COMPANY Steve Becker, senior vice president of human resources, Sterling Jewelers

INNOVATION Lori Hedrick, vice president of human resources, Marcus Thomas LLC

RISING STAR, NONPROFIT Lauren Rudman, human resources performance specialist, Greater Cleveland Regional Transit Authority

HR EXECUTIVE OF THE YEAR, PRIVATE COMPANY Tina Myles, InfoCision Management Corp.

INNOVATION Zachary Simon, director of global executive talent acquisition, Eaton Corp.

RISING STAR, PUBLIC COMPANY Leonora Yurichak, corporate human resources manager, CBiz Inc.

INNOVATION Patricia Stumpp, senior vice president of human resources, Invacare Corp.

CITIZENSHIP AWARD Daniel Blain, senior vice president, Jewish Federation of Cleveland

HR EXECUTIVE OF THE YEAR, NONPROFIT Michelle Meers, director of human resources, PlayhouseSquare Foundation INNOVATION Bill Busby, vice president of sales and marketing/former vice president of human resources, US Endoscopy

RISING STAR, PRIVATE COMPANY Megan Busovicki, human resources manager, AdvoCare Group

LIFETIME ACHIEVEMENT Christopher Mauer, executive vice president and director of human resources, FirstMerit Bank

20120806-NEWS--22-NAT-CCI-CL_--

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

AUGUST 6 - 12, 2012

LARGEST LAW FIRMS

RANKED BY NUMBER OF LOCAL ATTORNEYS(1)

Firm Local address Rank Phone/Website

Local attorneys Partners

Female partners

Minority Of partners Associates counsel

Staff

Salary for Worldwide associate hired attorneys from law school

Offices

Top local executive Title

1

Jones Day North Point, 901 Lakeside Ave., Cleveland 44114-1190 (216) 586-3939/www.jonesday.com

205

68

8

1

97

40

681

2,400

$145,000

37

Christopher M. Kelly Cleveland partner-in-charge

2

Baker Hostetler(2) 1900 E. Ninth St., Suite 3200, Cleveland 44114 (216) 621-0200/www.bakerlaw.com

193

103

21

3

39

14

415

822

$135,000

11

R. Steven Kestner, national executive partner; Hewitt B. Shaw, Cleveland office managing partner

3

Calfee, Halter & Griswold LLP The Calfee Building, 1405 E. Sixth St., Cleveland 44114 (216) 622-8200/www.calfee.com

138

77

16

1

29

15

274

155

NA

2

Brent D. Ballard, managing partner; Thomas F. McKee, chairman

4

Thompson Hine LLP 127 Public Square, Suite 3900, Cleveland 44114 (216) 566-5500/www.thompsonhine.com

128

63

17

2

47

18

314

360

$120,000

7

Deborah Z. Read, managing partner; James B. Aronoff, partnerin-charge

5

Squire Sanders (US) LLP(3) 127 Public Square, Suite 4900, Cleveland 44114 (216) 479-8500/www.squiresanders.com

126

64

14

5

41

21

351

1,346

$130,000

37

Frederick R. Nance, regional managing partner; David S. Goodman, Cleveland managing partner

6

Tucker Ellis LLP 925 Euclid Ave., Suite 1150, Cleveland 44115 (216) 592-5000/www.tuckerellis.com

109

47

6

2

28

34

242

154

NA

5

Joseph Morford managing partner

7

Ulmer & Berne LLP 1660 W. Second St., Suite 1100, Cleveland 44113 (216) 583-7000/www.ulmer.com

103

61

10

2

32

10

259

187

NA

4

Kip Reader managing partner

8

Benesch, Friedlander, Coplan & Aronoff LLP 200 Public Square, Suite 2300, Cleveland 44114 (216) 363-4500/www.beneschlaw.com

99

54

6

2

39

5

236

165

$105,000

7

Ira C. Kaplan managing partner

9

Hahn Loeser & Parks LLP 200 Public Square, Suite 2800, Cleveland 44114 (216) 621-0150/www.hahnlaw.com

96

53

8

3

29

14

191

129

$110,000

7

Lawrence E. Oscar, managing partner, CEO; Allan S. Kopit, partner-in-charge, Cleveland office

10

Reminger Co. LPA 101 Prospect Ave. W., Suite 1400, Cleveland 44115 (216) 687-1311/www.reminger.com

83

66

14

3

13

4

192

123

NA

10

Stephen E. Walters CEO, president

10

Roetzel & Andress 1375 E. Ninth St., One Cleveland Center, 9th Floor, Cleveland 44114 (216) 623-0150/www.ralaw.com

83

55

15

2

28

0

207

206

NA

13

Bradley A. Wright, Akron partner-incharge; Douglas E. Spiker, Cleveland partner-in-charge

12

McDonald Hopkins LLC 600 Superior Ave., E., Suite 2100, Cleveland 44114 (216) 348-5400/www.mcdonaldhopkins.com

77

49

4

1

22

6

154

136

NA

6

Carl J. Grassi, president Shawn M. Riley, managing partner, Cleveland

13

Brouse McDowell LPA 388 S. Main St., Suite 500, Akron 44311 (330) 535-5711/www.brouse.com

70

49

17

0

16

5

126

70

$83,000

3

Marc B. Merklin, managing partner; Joseph T. Dattilo, partner-incharge, Cleveland

14

Frantz Ward LLP 2500 Key Center, Cleveland 44114 (216) 515-1660/www.frantzward.com

67

37

6

1

22

5

120

67

$115,000

1

Partnership

15

Buckingham, Doolittle & Burroughs LLP 1375 E. Ninth St., Suite 1700, Cleveland 44114 (216) 621-5300/www.bdblaw.com

60

44

9

2

11

5

129

74

NA

4

John P. Slagter managing partner, president

16

Gallagher Sharp 1501 Euclid Ave., 6th floor, Cleveland 44115 (216) 241-5310/www.gallaghersharp.com

52

34

8

2

16

2

104

56

NA

3

Thomas E. Dover managing partner

16

Taft Stettinius & Hollister LLP 200 Public Square, Suite 3500, Cleveland 44114 (216) 241-2838/www.taftlaw.com

52

33

4

2

10

7

92

325

$105,000

7

Stephen M. O'Bryan partner-in-charge, Cleveland

18

Weston Hurd LLP 1301 E. Ninth St., Suite 1900, Cleveland 44114 (216) 241-6602/www.westonhurd.com

51

38

7

1

5

8

89

62

NA

3

Carolyn M. Cappel managing partner

19

Walter & Haverfield LLP 1301 E. Ninth St., Suite 3500, Cleveland 44114-1821 (216) 781-1212/www.walterhav.com

50

34

4

0

13

3

98

50

NA

1

Ralph E. Cascarilla managing partner

20

Krugliak, Wilkins, Griffiths & Dougherty Co. LPA 4775 Munson St. N.W., Canton 44718 (330) 497-0700/www.kwgd.com

47

36

4

NA

11

NA

90

47

NA

5

Terry A. Moore managing director

20

Vorys, Sater, Seymour and Pease LLP 1375 E. Ninth St., Suite 2100, Cleveland 44114 (216) 479-6100/www.vorys.com

47

19

2

0

14

6

75

360

$120,000

6

F. Daniel Balmert, managing partner, Akron; Anthony J. O'Malley, managing partner, Cleveland

22

Weltman, Weinberg & Reis Co. LPA 323 W. Lakeside Ave., Suite 200, Cleveland 44113 (216) 685-1000/www.weltman.com

44

16

6

1

28

0

610

115

NA

10

Alan H. Weinberg, managing partner; Bob Weltman, senior partner

23

Critchfield, Critchfield & Johnston Ltd. 225 N. Market St., Wooster 44691 (330) 264-4444/www.ccj.com

41

26

5

0

8

2

89

41

$50,000

4

Daniel H. Plumly managing member

24

Day Ketterer Ltd., Attorneys at Law 200 Market Ave., Suite 300, Canton 44702 (330) 455-0173/www.day-ketterer.com

40

31

4

0

7

2

73

40

NA

3

Robert E. Roland managing attorney

24

Fay Sharpe LLP 1228 Euclid Ave., 5th floor, Cleveland 44115 (216) 363-9000/www.faysharpe.com

40

21

4

1

15

4

87

40

$95,000

1

Management Committee

26

Kohrman Jackson & Krantz PLL 1375 E. Ninth St., 20th floor, Cleveland 44114 (216) 696-8700/www.kjk.com

37

24

6

0

11

2

62

37

$87,500

2

Marc C. Krantz managing partner

27

Brennan, Manna & Diamond 75 E. Market St., Akron 44308 (330) 253-5060/www.bmdllc.com

36

21

2

1

14

1

68

53

NA

4

Lee S. Walko Matthew A. Heinle co-managing members

27

Pearne & Gordon LLP 1801 E. Ninth St., Suite 1200, Cleveland 44114 (216) 579-1700/pearne.com

36

13

1

1

18

4

71

36

NA

1

20120806-NEWS--23-NAT-CCI-CL_--

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AUGUST 6 - 12, 2012

Firm Local address Rank Phone/Website

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Local attorneys Partners

Female partners

Minority Of partners Associates counsel

Staff

Salary for Worldwide associate hired attorneys from law school

Offices

23

Top local executive Title

29

Buckley King LPA 600 Superior Ave., 1400 Fifth Third Center, Cleveland 44114 (216) 363-1400/www.buckleyking.com

31

17

7

3

12

2

62

56

NA

7

Brent M. Buckley managing partner

29

Cavitch Familo & Durkin 1300 E. Ninth St., 20th floor, Cleveland 44114 (216) 621-7860/www.cavitch.com

31

20

0

2

9

2

53

31

NA

2

Michael C. Cohan president

29

McCarthy, Lebit, Crystal & Liffman Co. LPA 101 W. Prospect Ave., Suite 1800, Cleveland 44115 (216) 696-1422/www.mccarthylebit.com

31

18

2

0

6

7

59

31

NA

1

Kenneth B. Liffman managing principal

29

Wegman, Hessler & Vanderburg 6055 Rockside Woods, Suite 200, Independence 44131 (216) 642-3342/www.wegmanlaw.com

31

16

2

0

13

3

58

31

NA

1

Keith A. Vanderburg managing partner

33

Mazanec, Raskin & Ryder Co. LPA 34305 Solon Road, Cleveland 44139 (440) 248-7906/www.mrrlaw.com

29

9

0

0

20

1

67

30

NA

2

Joseph F. Nicholas managing partner

33

Wickens, Herzer, Panza, Cook & Batista Co. 35765 Chester Road, Avon 44011 (440) 695-8000/www.wickenslaw.com

29

14

1

0

12

3

72

29

NA

2

Matthew W. Nakon president, CEO

35

Davis & Young 1200 Fifth Third Center, 600 Superior Ave., E., Cleveland 44114 (216) 348-1700/www.davisyoung.com

28

19

3

0

5

4

58

28

NA

4

Thomas W. Wright president, managing partner

35

Dworken & Bernstein Co. LPA 60 South Park Place, Painesville 44077 (440) 352-3391/www.dworkenlaw.com

28

12

1

1

13

1

67

28

NA

2

Howard S. Rabb managing partner

35

Littler Mendelson P.C. 1100 Superior Ave., 20th Floor, Cleveland 44114 (216) 696-7600/www.littler.com

28

20

7

1

6

2

61

925

NA

56

Sue Marie Douglas office managing shareholder

38

Porter Wright Morris & Arthur LLP 925 Euclid Ave., Suite 1700, Cleveland 44115 (216) 443-9000/www.porterwright.com

27

17

7

0

9

1

42

262

$110,000

6

Hugh E. McKay partner-in-charge

38

Stark & Knoll Co. LPA 3475 Ridgewood Road, Akron 44333 (330) 376-3300/www.stark-knoll.com

27

19

1

0

6

27

42

27

NA

1

John K. Krajewski managing partner

40

Javitch Block & Rathbone LLC 1100 Superior Ave., 19th floor, Cleveland 44114 (216) 623-0000/www.jbandr.com

26

11

3

1

15

1

282

53

NA

8

Bruce A. Block Joel H. Rathbone co-managing partners

40

Tarolli, Sundheim, Covell & Tummino LLP 1300 E. Ninth St., Suite 1700, Cleveland 44114 (216) 621-2234/www.tarolli.com

26

NA

NA

NA

NA

NA

NA

NA

NA

1

Management Committee

42

Roderick Linton Belfance LLP One Cascade Plaza, 15th Floor, Akron 44308 (330) 434-3000/www.rlbllp.com

24

10

1

0

10

4

20

NA

NA

1

Kay Belfance partner

42

Sutter O'Connell 1301 E. Ninth St., Suite 3600, Cleveland 44114 (216) 928-2200/www.sutter-law.com

24

10

4

1

14

0

65

26

$80,000

2

Lawrence A. Sutter managing partner

continued on PAGE 24

Merging tradition with today For 109 years, our law firm has played a vital role in the story of Cleveland.

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20120806-NEWS--24-NAT-CCI-CL_--

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

AUGUST 6 - 12, 2012

LARGEST LAW FIRMS

RANKED BY NUMBER OF LOCAL ATTORNEYS(1)

Firm Local address Rank Phone/Website

Local attorneys Partners

Female partners

Minority Of partners Associates counsel

Staff

Salary for Worldwide associate hired attorneys from law school

Offices

Top local executive Title

44

Meyers, Roman, Friedberg and Lewis 28601 Chagrin Blvd., Suite 500, Cleveland 44122 (216) 831-0042/www.meyersroman.com

22

NA

NA

NA

NA

NA

44

NA

NA

NA

Peter Turner managing partner

44

Turocy & Watson LLP 127 Public Square, Key Tower, 57th floor, Cleveland 44114 (216) 696-8730/www.thepatentattorneys.com

22

6

2

2

15

1

40

22

NA

2

Gregory Turocy managing partner

46

Nicola, Gudbranson & Cooper LLC 25 W. Prospect Ave., Suite 1400, Cleveland 44115-1048 (216) 621-7227/www.nicola.com

21

NA

NA

NA

6

2

17

21

NA

1

Management Committee

46

Ziegler Metzger LLP 925 Euclid Ave., Suite 2020, Cleveland 44115 (216) 781-5470/www.zieglermetzger.com

21

8

0

0

12

1

35

21

NA

3

Richard T. Spotz Jr. managing partner

48

Zashin & Rich Co. LPA 55 Public Square, 4th floor, Cleveland 44113 (216) 696-4441/www.zrlaw.com

20

2

0

0

16

2

37

21

NA

2

Andrew A. Zashin Stephen S. Zashin co-managing partners

49

Fisher & Phillips LLP 9150 S. Hills Blvd., Cleveland 44147 (440) 838-8800/www.laborlawyers.com

19

12

1

0

5

2

35

275

NA

27

Steven M. Nobil managing partner

50

Schneider, Smeltz, Ranney & LaFond PLL 1111 Superior Ave., Suite 1000, Cleveland 44114 (216) 696-4200/www.ssrl.com

17

10

1

0

5

2

32

17

NA

1

James D. Vail managing partner

50

Seeley, Savidge, Ebert & Gourash Co. LPA 26600 Detroit Ave., Cleveland 44145 (216) 566-8200/www.sseg-law.com

17

7

1

0

0

1

30

17

NA

1

Gary Andrew Ebert administrative partner

52

Bonezzi Switzer Murphy Polito & Hupp Co. LPA 1300 E. Ninth St., Suite 1950, Cleveland 44114 (216) 875-2767/www.bsmph.com

16

12

1

0

4

0

39

16

$55,000

2

Steven J. Hupp managing director

52

Kelley & Ferraro LLP 127 Public Square, Suite 2200, Cleveland 44114 (216) 575-0777/www.kelley-ferraro.com

16

6

0

0

10

0

74

16

NA

1

James L. Ferraro managing partner

52

McGlinchey Stafford PLLC 25550 Chagrin Blvd., Suite 406, Cleveland 44122 (216) 378-9905/www.mcglinchey.com

16

5

1

0

5

5

28

171

NA

10

Mark Edelman, managing member, Cleveland office; Rodolfo J. Aguilar Jr., managing member, firm

55

Carlisle, McNellie, Rini, Kramer & Ulrich Co. LPA 24755 Chagrin Blvd., Suite 200, Cleveland 44122 (216) 360-7200/www.carlisle-law.com

15

5

1

0

10

0

82

16

$60,000

2

Management Committee

55

Stumphauzer | O'Toole 5455 Detroit Road, Sheffield Village 44054 (440) 930-4001/www.sheffieldlaw.com

15

6

0

0

9

0

29

15

$75,000

1

Dennis M. O'Toole senior partner

RESEARCHED BY Deborah W. Hillyer Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com. (1) Numbers as of June 1, 2012. (2) Starting salary for associates includes a $5,000 stipend. (3) $130,000 starting salary plus $9,000 stipend.

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CRAIN’S CLEVELAND BUSINESS

25

Browns: Sports franchise values continue to grow continued from PAGE 1

million in its latest valuations of NFL teams, while Villa’s value was put at $240 million in the magazine’s last soccer team rankings, in 2009.

But, “being cash rich (and) asset rich are two very different things,” said Jeff Malbasa, chief operating officer at Spero-Smith Investment Advisers Inc., a wealth and asset management advisory firm in Beachwood.

“Whether it’s you, me or Randy Lerner, you have to concentrate on short-term liquidity,” Mr. Malbasa said, “and that’s even more the case in an uncertain estate and tax environment.”

Memories of Art Modell Investment advisers say the most pressing need for liquidity for Mr. Lerner and any high-net-worth individual relates to estate taxes, a matter made more important for the divorced Mr. Lerner.

If Mr. Lerner, whose net worth approaches $1 billion, according to Forbes, were married, he might be more willing to wait to sell the team, as he would leave it to his spouse upon death, delaying an estate tax bill of $350 million or so. But because the 50-year-old is divorced, his family would inherit his assets and be forced to pay that tax within nine months of his death.

It’s not uncommon for estate planning and liquidity issues to come into play in sports ownership, as evidenced by the experience of the late Art Modell, the man who moved the original Cleveland Browns in 1996 to Baltimore.

Mr. Modell owned 50% of the Browns and had an interest in Stadium Corp., the entity that leased Cleveland Municipal Stadium from the city of Cleveland and managed it for Indians and Browns games.

Most of Mr. Modell’s assets were tied up in the Browns.

But instead of selling all or part of his stake in the team to address his need for cash, the then-71-year-old Mr. Modell took a reported $50 million relocation bonus from the state of Maryland. After the move, he would sell the team in stages to businessman Steve Bisciotti.

Mr. Modell was trying to help his family avoid the problem faced by the heirs of former Cincinnati Bengals co-owner Paul Brown. Mr. Brown’s estate was left with a $36 million judgment from the Internal Revenue Service after the team’s patriarch died in 1995.

Avoiding a pile of crap There is an estate tax deferral option for those whose assets are in closely held businesses, such as pro sports teams, according to Jeff Perlmuter, an estate planning specialist at Cleveland law firm Frantz Ward LLP. If Mr. Lerner were to die while still the Browns’ owner, whoever inherited the team could defer the first payment for five years and have 10 years to pay the estate tax bill, Mr. Perlmuter said.

While a sale now won’t help Mr. Lerner avoid a scheduled jump in the federal estate tax to 55% from 35% next year, it will give him and his family the necessary liquidity to avoid a fire sale transaction, where potential buyers know the Lerner family must unload the team to meet its tax obligations should he unexpectedly die. In turn, those buyers could offer less for the franchise.

ON THE WEB: Catch Crain’s Joel Hammond discussing the sale on 92.3 The Fan. http://tinyurl.com/ d77v6wh “If buyers know your family has been left with a pile of crap to clean up, you’re not going to get what it’s worth,” said Joseph G. Corsaro, who specializes in tax law at his law firm, Corsaro & Associates in Westlake.

There also is uncertainty surrounding the immediate future of capital gains taxes, which were part of President George W. Bush’s wideranging cuts in his first term. That rate cut, to 15%, was extended by President Barack Obama for 2012, but by all accounts, the capital gains rate will jump at least to 20%, with another 3.8% hike coming as part of President Obama’s plan to fund Medicaid.

Depending upon November’s presidential election, some advisers are warning clients that rate could go even higher, no matter who’s elected; some fear a jump to as high as 35%.

For Mr. Lerner, whose father invested $530 million to buy the new Browns franchise in 1999, the difference between a 15% capital gains tax and a 23.8% rate could mean a $41.3 million hit on a $1 billion sale, the reported value of the deal. In the case of a jump to 35% in the capital gains tax, Mr. Lerner could take a hit of $94 million above what he’d pay at 15% if he were to wait until 2013 or beyond to sell.

Mr. Haslam will pay Mr. Lerner $700 million upon completion of the deal and another $300 million at a later date; media outlets have reported that the second payment will come on the fourth anniversary of the deal.

Demand outpaces supply Mr. Haslam, president of Pilot Corp., which manages truck stops nationwide, is paying an amount about 2% above Forbes’ valuation if media reports of the deal’s value are correct. It generally is regarded as a good price for Mr. Lerner, with the Browns playing in the 17th-largest media market in the country and with its well-known struggles.

But even with securing a slight premium in his deal, Mr. Lerner appears in a hurry to sell a franchise in a league where team values keep climbing.

The NFL, after all, is rolling in dough, thanks to ever-increasing national TV money: Last September, ESPN agreed to a new “Monday Night Football” deal that included a 73% increase in payments to the league, to $1.9 billion a year. And in December, the NFL signed new contracts with NBC, CBS and Fox that collectively will pay the league about $4.25 billion a year, a 6% to 7% jump over those networks’ previous deals.

Because the TV money continues to expand, there is a limited supply of teams on the market; there’s also plenty of demand for them due to potential investors sitting on cash, according to Michael Rapkoch, president and founder of Sports Value Consulting LLC, a company in Addison, Texas, that provides sports team valuation and advisory services in all four major leagues.

And across those leagues, the sales that do occur continue to outpace projections. Illinois businessman Shahid Khan bought the NFL’s

JAY LAPRETE/THE ASSOCIATED PRESS

New Browns owner Jimmy Haslam speaks Friday at Browns headquarters in Berea.

Jacksonville Jaguars for $760 million, which was above the team’s $725 million valuation from Forbes.

(Teams roundly reject the magazine’s valuations, reasoning that the magazine only can estimate without access to their books.)

In the NBA, the Memphis Grizzlies, Golden State Warriors and Detroit Pistons all sold for over Forbes’ valuations, though the deal for the Warriors came at a premium

because of the team’s planned move to San Francisco. The Grizzlies were bought by a Silicon Valley entrepreneur for $350 million, or about $80 million more than Forbes’ projection.

However, the NFL remains the gold standard for sports leagues, which is why teams with mediocre records such as the Browns still can fetch big dollars.

“The circumstances are unique to each situation, but there aren’t

many teams in football for sale,” said Mr. Rapkoch, who noted that the median ownership tenure in the NFL is 20 years.

Mr. Rapkoch said Mr. Lerner “either wanted to sell for his own reasons, or he was presented an offer that was too good to turn down.”

“If an NFL team comes up for sale, you’re talking about the top league,” Mr. Rapkoch said. “There’s high demand.”

■

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AUGUST 6 - 12, 2012

Chancellor: Executives say school’s financials remain strong continued from PAGE 1

of his school’s operations.

“Every member of the leadership team and the board of trustees would swear in a court of law, on the Bible and the U.S. Constitution that this institution is significantly better than it was when it got off showcause” last time, Mr. Daugherty said.

Higher Learning Commission officials wouldn’t comment beyond what’s stated in the show-cause order, which Chancellor — as required by the accrediting agency — must display on its website. However, the order — a link to which is found under a “Public Disclosure Notice” in small type at the very bottom of Chancellor’s home page — offers a critical, albeit vague, review of the college’s operations.

The commission, for one, expressed concern regarding Chancellor’s ability to operate with “integrity to ensure the fulfillment of its mission” because of “issues related to conflict of interest.” When asked why the commission would make such a charge, Chancellor’s Mr. Daugherty said, “I honestly have no idea.”

Moreover, the commission cited issues related to Chancellor’s financial

self-sufficiency, enrollment, student retention and strategic planning.

Peers weigh in Prior to the issuance of the showcause order, a group of peer reviewers from other academic institutions visited Chancellor in order to advise the commission on whether the university deserved continued accreditation.

Mr. Daugherty claims the Higher Learning Commission’s board went against the peer reviewers’ recommendations — “a pretty serious thing to overturn,” he added. Mr. Daugherty, however, wouldn’t share the peer reviewers’ report with a Crain’s reporter on advice of legal counsel, citing potential litigation.

According to Mr. Daugherty, Chancellor’s financial status is strong — a finding he said is affirmed in the peer reviewers’ report. He said the U.S. Department of Education recently assigned the institution a fiscal health score of 1.78, whereas anything above a 1.5, according to a description on the department’s website, “indicates the institution is considered financially responsible.” The government

scores institutions on a sliding scale from a negative 1.0 to a positive 3.0.

Mr. Daugherty said the Department of Education’s scoring doesn’t take into account revenue generated from licensing fees or the sale of property, such as the sale last year for $7 million of Chancellor’s former online MBA program bearing the name of retired General Electric CEO Jack Welch to Virginia-based Strayer Education Inc. Mr. Daugherty said last week that Chancellor is on track to be financially selfsustaining from its operations by December.

Chancellor’s enrollment, according to Higher Learning Commission data last updated in April, includes 105 full-time undergraduate and 28 full-time graduate students. The university also boasts 215 part-time undergraduate and 175 part-time graduate students.

On the academic front, Chancellor provost Steve Kerr, a former GE executive hired in 2009 to help develop the school’s business curriculum, argued in an interview last week that despite the Higher Learning Commission’s assertions, the quality of the university’s acad-

emic offerings is on the upswing.

He indicated the school’s coursework offers, for example, a more personalized approach to students than in the past.

What’s next By early September, Chancellor must make its pitch for continued accreditation by means of a report detailing how it has ameliorated the Higher Learning Commission’s concerns. Commission officials will visit the university the following month, with its board expected to make a final ruling in February.

“I’m not sure it’s a setback,” Mr. Daugherty said when the term was used by a reporter to describe the latest show-cause order. “We’ve been here before, and I’m confident we’ll get through it again.”

The Higher Learning Commission placed Chancellor on probation in 2009, and the university slipped to the more serious show-cause status early the following year.

Mr. Daugherty came on board at Chancellor amid those troubles in the summer of 2010 following a series of leadership changes made it unclear who was at the university’s

helm. Prior his arrival, both Bob Barker, a former University of Phoenix executive, and George Kidd, former president of Tiffin University, held stints running the college.

Messrs. Daugherty and Kerr said Chancellor rather would spend its time working on projects that benefit students than employ the manpower needed to satisfy the commission’s demands. Still, the university plans to charge ahead with its strategic plan.

The university this September plans to launch its new MBA program, which has been in development since the Jack Welch program was sold to Strayer last November.

While only about 10% of the roughly 250 students enrolled in the Jack Welch program stuck with Chancellor, Mr. Kerr said it was still too soon to tell whether the loss of the MBA program that many people had seen as Chancellor’s lifeline would be a detriment to the university.

“We are very proud of the changes we’ve made,” Mr. Kerr said. “We inherited a bad situation and I think since then it’s not just happy talk, but there are higher standards.”

■

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AUGUST 6 - 12, 2012

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

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THEINSIDER

THEWEEK JULY 30 - AUGUST 5 The big story: The Lerner family era of Cleveland Browns ownership is nearing an end. Browns owner Randy Lerner reached a deal last week to sell the team to Jimmy Haslam, president of Knoxville, Tenn.-based Pilot Corp., for about $1 billion. Mr. Haslam will need to divest his minority stake in the Pittsburgh Steelers to take ownership of the Browns. NFL owners still need to approve the sale. See related story, Page One Best in years: Biomedical companies in Northeast Ohio are raising more venture capital than they have since 2007. During the first half of 2012, 33 Cleveland-area companies raised a total of $83.6 million in venture capital, according to the Midwest Health Care Venture Investment Report, released by BioEnterprise Corp. By comparison, 18 companies raised $50.2 million during the first half of 2011. In the first half of 2010, 17 companies raised $36.7 million. The dollar figure is rising partly because many biomedical companies in Northeast Ohio no longer are early-stage startups, said BioEnterprise president Baiju Shah.

Power tower: The July 31 sale of the 57 remaining Avenue Tower condominiums for $6.9 million marked the resolution of most of the litigation over construction of the tower at downtown Cleveland’s Avenue District. The move puts the condo units on the market as upscale apartments. Zaremba Management of Fairview Park will manage the property, now owned by a group including developers Tony Panzica, Fred Geis and Timothy Zaremba.

Innovative approach: The Cleveland Clinic

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

Printing plant news that’s worth printing

becomes effective Aug. 11 if no appeal is filed. — Jay Miller

■ The Cuyahoga County Board of Revision, which hears challenges to the assessments for tax purposes of property values in the county, has found its actions in the news in recent months.

But one action probably won’t get much coverage. That’s the big, $13.3 million reduction in value of The Plain Dealer publishing plant on Tiedeman Road in Brooklyn.

Cuyahoga County fiscal officer Wade Steen made that observation to a group of public officials at a meeting last Thursday of the First Suburbs Consortium. Mr. Steen was reporting to the suburban public officials who are part of the consortium on the recent county property re-valuation and the workings of the fiscal office, which includes the Board of Revision.

He told the group that 2012 re-valuation is showing property values beginning to rise again in their communities. But he added that most can expect some tax revenue loss from the Board of Revision decisions and he cited the PD reduction in particular.

According to the online Board of Revision complaint file, Plain Dealer Publishing Co. won a $13,317,200 reduction in the value of its printing plant, to $46,841,200 from $60,158,400, which equates to a 22% drop.

The decision was recorded July 11 and

Managing the managers’ costs

MILESTONE

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

tapped ProMedica, a Toledo-based health system that operates 11 hospitals, as the latest member of its growing Innovation Alliance — a collaborative effort designed to lead to the commercialization of medical technologies. ProMedica is the third health system to join the effort, which is steered by Cleveland Clinic Innovations, the business development arm of the Clinic.

This place is going to the dogs, and it helps

Hitting on all cylinders: A California manufacturer’s relocation to Mentor will bring the area 100 full-time jobs. JE Pistons, a maker of high-performance forged pistons that is owned

by Performance Motorsports Inc., plans to move to the site of Wiseco Piston Inc., a Mentorbased unit of Performance Motorsports that makes forged aluminum pistons. With the consolidation, an additional $3.5 million in annual payroll will be generated and $12.4 million in existing payroll will be retained in Mentor.

Effort pays off: After three months of negotiations, the United Steelworkers union reached a tentative agreement on a new four-year contract with Veyance Technologies Inc. in Fairlawn. The union said the settlement covers workers at four U.S. locations. It came a few days after members voted to authorize a strike against the maker of auto parts and rubber engineered products. Members still must ratify the contract.

This and that:

The General Services Administration, the federal government’s purchasing and property arm, is auctioning two low-rise buildings on the campus of NASA Glenn Research Center. GSA has launched the bidding at an attention-getting $200,000 — a swell price for two buildings totaling 200,00 square feet, on nearly 10 acres. … More proof of Cleveland’s chops as a running town arrived last week as Positively Cleveland, Competitor Group Inc. and the Rock and Roll Hall of Fame and Museum announced the first Rock ‘n’ Roll Cleveland Half Marathon will take place Oct. 5, 2013.

■ The Ohio Third Frontier Commission wants to make sure JumpStart Inc. of Cleveland and the other five nonprofits that form the nucleus of the state’s Entrepreneurial Signature Program aren’t spending too much on management and other administrative expenses.

The commission is gathering salary data from the six nonprofits and asking them to say which positions on their staff are mainly administrative and which are focused primarily on providing assistance to entrepreneurs, which is the program’s goal.

During the commission’s July meeting, commissioner Bruce Langos suggested those costs be capped if they are too high.

The commission is in the process of re-evaluating the Entrepreneurial Signature Program, one of the bigger initiatives within the Third Frontier, a broader technologyfocused economic development program.

In June, commission members decided to delay a vote that would have provided $40 million in grants to fund the six nonprofits and other organizations that they work with for two years. They’ll take a two-day retreat to discuss the program later this month and

THE COMPANY: The Ohio Blow Pipe Co., Cleveland THE OCCASION: Its 80th anniversary The company, founded in 1932 in the city it still calls home, increasingly is a citizen of the world, too.

Ed Fakeris, president and CEO of Ohio Blow Pipe, said 2011 “was a record year for sales volume due to our record export sales,” and 2012 “continues on with strong sales and exporting to China, Vietnam, Malaysia, and throughout South America.”

Ohio Blow Pipe engineers, fabricates and installs custom air conveying systems, as well as dust and oil mist collection systems, for a variety of uses, including production of cans, corrugated boxes and folding cartons; document destruction; printing, paper and bindery services; and recycling.

The company’s patented AirScreen system is found in beverage, food and aerosol can manufacturing plants worldwide.

“We integrate all of the scrap-generating production equipment that forms and trims the cans … and convey the scrap with our air conveying and separating technology from the manufacturing process away from these machines,” according to a statement from Mr. Fakeris.

For information, visit www.OBPairSystems .com.

■ An Akron restaurant is among what The Wall Street Journal called “a smattering of upscale restaurants” that are expanding to let dog owners dine al fresco with their pets.

“Restaurants generally take underutilized outdoor patio space where owners can dine with their dogs,” The Journal reported.

“Some have separate menus with special entrees for dogs: anything from lamb stir fry to meat loaf to scrambled eggs with bacon bits.

When the pooch needs to take a bathroom break, space is provided at the side or behind the restaurant, complete with waste pickup bags.”

D’Agnese’s at White Pond, a restaurant in Akron, spent three years getting its dog menu off the ground.

“The restaurant’s first application to allow animals on the patio was denied three years ago because it didn’t comply with health codes,” according to The Journal.

“Recently, a separate entrance for dogs was added ... because animals are forbidden from walking through the restaurant.”

But restaurant owner Joe Gallagher got the permit to serve dog fare in June. He lists ingredients such as locally grown corn, organic chicken, wild rice and stone-ground oats on a biscuit-shaped dog-food menu.

Already, he estimated a 25% increase in revenue from about 40 dogs a week.

If you want to add brain power, swim in this stream ■ Looking for some smart Twitter accounts to add to your stream from the microblogging

will start voting on awards at the end of the second day.

Asked via email what prompted him to propose the cap, Mr. Langos said he wants to ensure taxpayer money is spent efficiently.

“This is not about the amount (being spent on the Entrepreneurial Signature Program) but more about the amount being focused and targeted in specific areas,” said Mr. Langos, who also is chief operating officer of Teradata Corp., a data analytics company in Dayton. — Chuck Soder

ArcelorMittal extends a hand to the lakes ■ One of the last chances to see Steven LaTourette — at least as a congressman — might be today, Aug. 6, when the Geauga County Republican headlines an event to announce $8.2 million in grants for Great Lakes restoration projects.

Rep. LaTourette will be joined by officials from steelmaker ArcelorMittal and government agencies involved in managing the lakes.

ArcelorMittal, the private financier of the grants, says the money will be used to fund 34 projects, including four in Ohio, aimed at preserving the lakes’ ecology.

Various government agencies that are working on the projects are expected to match those dollars, creating more than $16 million in total project funds, ArcelorMittal said in announcing the initiative.

The event is slated for 10 a.m. at the Lake Erie Bluffs Park in Perry Township. — Dan Shingler

platform? Mashable.com, a leading tech website, suggests you make sure the feed from a magazine with business operations in Geauga County is at the top of your list.

The website offered 25 suggestions for Twitter accounts “that will increase your general knowledge of a wide range of topics: science, technology, human rights, the environment and more.” Ranked in the No. 1 position is @mental_floss, an extension of mental_floss magazine. The magazine, bought last year by British-born magazine publisher Felix Dennis, has business operations led by a Geauga County couple, Toby and Melanie Maloney.

Mashable.com said the account is “perfect for knowledge junkies,” helping them learn “little-known facts across many topics, whether pop culture, sports or science.”

The magazine is in good company. Among the Twitter feeds on the list are those for NASA, Melinda Gates and the Massachusetts Institute of Technology.

A long winning streak is in jeopardy ■ “It’s ugly out there and it could go worse.”

That’s how Reuters described the outlook for third-quarter U.S. corporate earnings, in a story that included comments from Edward Hemmelgarn, founder and chief investment officer of Shaker Investments in Beachwood.

“Third-quarter earnings of Standard & Poor’s 500 companies are now expected to fall 0.1% from a year ago, a sharp revision from the July 1 forecast of 3.1% growth,” Reuters reported. That would be the first decline in earnings since the third quarter of 2009.

“We’re looking at really slow growth,” Mr. Hemmelgarn told the news service. He added, “Any company that does any overseas business is citing the fact that the rise in the dollar, especially against the euro, has hurt their revenue and earnings.”

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