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VOL. 32, NO. 33
Insiders see slide as opportunity to buy Officers, directors snatch up shares before and amid last week’s gyrations At a time when many investors have scurried to sell, a number of Northeast Ohio company insiders have hurried to buy. In the days before, during and after last Monday’s stock market plunge,
Cliffs Natural Resources (CLF)
Olympic Steel Inc. (ZEUS)
Closing price, July 22: $99.86 Closing price, Aug. 9: $73.71 ■ Change: -26%
By CHUCK SODER csoder@crain.com
NEWSPAPER
74470 01032
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A less-than-enthusiastic group of Invacare Corp. engineers delivered what seemed like bad news. They had come up with a design that could improve the stability and agility of Invacare’s newest power wheelchair. Then they found out that an Australian company called Roller Chair already had a patent on it. Invacare CEO Gerald Blouch encouraged them to look on the bright side. “I said, ‘That’s the bad news. You know what the good news is? We own Roller Chair,’” said Mr. Blouch,
Blouch
Closing price, July 22: $48.76 Closing price, Aug. 9: $35.94 ■ Change: -26%
Buyers: ■ Aug. 5, Richard T. Marabito, chief financial officer: 2,000 shares ($49,580) ■ Aug. 5, Michael D. Siegal, chairman of the board/CEO: 1,500 shares ($37,185)
Invacare’s ‘One’ aimed at streamlined output
Stumpp
recalling the meeting from a few years back. For decades, Invacare’s business units all over the world have operated almost as if they were separate companies. The result: They sold a bunch See INVACARE Page 10
INSIDE Getting fit while at the office More companies are incorporating wellness programs and fitness centers into their facilities as a way to keep employees healthy and happy and, in turn, cutting health care costs. Read Dan Shingler’s story in our Health and Wellness section. Page 13
Buyers: ■ Aug. 8, Frank C. Sullivan, director: 3,000 shares ($99,660) ■ Aug. 8, John M. Ballbach, director: 1,000 shares ($36,560)
Energy companies rush to Ohio’s oil, promise billions Discovery in shale follows area’s natural gas boom By DAN SHINGLER dshingler@crain.com
Imagine tens of billions of dollars of private capital being invested in Ohio. Now stop imagining and keep reading, because a large oil and gas company says that’s exactly what’s about to happen thanks to a recent discovery of huge oil reserves in the shale rock beneath the eastern half of the state. How huge? Enough that $200 billion likely will be invested in the
Buckeye State over the next 20 years, predicts the man running the largest energy company working on Ohio’s shale. “When’s the last time any industry showed up and said, ‘I’m going to invest $10 billion a year in a state for a couple of decades?’ I think that’s about what’s going to happen in Ohio,” Chesapeake Energy Corp. CEO Aubrey McClendon recently told CNBC stock picker Jim Cramer. Oklahoma City-based Chesapeake and other companies have been See OIL Page 7
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See BUY Page 17
Timken Co. (TKR)
Closing price, July 22: $28.80 Closing price, Aug. 9: $20.73 ■ Change: -28%
Buyers: ■ Aug. 1, P. Kelly Tompkins, executive vice president: 2,500 shares ($223,000) ■ Aug. 2, Andres Gluski, director: 1,130 shares ($99,911)
directors and officers of companies including Cliffs Natural Resources Inc., Olympic Steel Inc. and Timken Co. have bought tens, and sometimes hundreds, of thousands of dollars of their companies’ stock. Among them were P. Kelly Tompkins, a Cliffs executive, who bought
LAUREN RAFFERTY ILLUSTRATION
By MICHELLE PARK mpark@crain.com
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IT COULD BE WORSE Cuyahoga and its six contiguous counties all had June unemployment rates below the state’s non-seasonally adjusted 9.2% average, according to data from the Ohio Department of Job and Family Services. Those seven counties were among just 28 of Ohio’s 88 counties that could make that claim. Northeast Ohio had four of the 10 counties with the lowest unemployment rates in Ohio.
Dose of reality Our Special Report section will look at health care construction in Cuyahoga and surrounding counties, what’s driving it and whether it’s sustainable.
County
June unemployment
Statewide rank
Delaware
6.6%
1 (tied)
Geauga
6.6
1 (tied)
CORRECTIONS
REGULAR FEATURES
Medina
7.0
5
The Aug. 8 list of Largest Foreign-Owned Companies included an incorrect first name and title for the top local executive of Philips Healthcare. The executive, Jay Mazelsky, is senior vice president and general manager of computed tomography and nuclear medicine.
Classified .....................18 Editorial .........................8 Going Places ................12 List: Suburban office buildings ..................16 Personal View.................8
Lake
7.4
6
Lorain
8.2
10
Portage
8.7
19
Cuyahoga
8.8
21 (tied)
Summit
8.9
24
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Governor’s JobsOhio plan ‘appalls’ Akron Mayor fears economic development blueprint ignores city’s interests By JAY MILLER jmiller@crain.com
It’s not that Don Plusquellic doesn’t like his city being a part of the region called Northeast Ohio. It’s just that Akron’s mayor believes strongly that Gov. John Kasich’s plan for a new nonprofit job creation agency, which lumps the Rubber
City in with Cleveland, Youngstown and Ashtabula, will hamper his ability to attract business investment to his community. “We are appalled at what’s happened,” Mayor Plusquellic said in a telephone interview last Thursday, Aug 11. The mayor was responding to a question about Gov. Kasich’s plan
to hand over oversight of state economic development efforts — and the disbursement of millions of dollars in loans, grants and tax breaks to businesses that want to grow — to a network of regional nonprofit organizations that will report to this new entity, JobsOhio, itself a nonprofit. Mayor Plusquellic, who is proud
of his administration’s over many of the financial successful efforts at keeping incentives the state offers two rubber company operto expansion-minded busiations from leaving Akron, nesses and those that are said the Kasich administralooking for homes for new tion “didn’t even have the ventures. Eventually, it also courtesy to come into town will control as much as and sit down with us and $100 million annually from the chamber (of com- Plusquellic state liquor profits that it merce) and the business will invest in helping comcommunity” to talk about how best panies create jobs. to do economic development. Instead of building a centralized JobsOhio is slated to take control See AKRON Page 4
INSIGHT
FACING COMMUNITIES’ NEW REALITY
Steris still optimistic, but doubt lingers
Armed with development pedigree, Neighborhood Progress boss embraces schools, immigrants as crucial next steps
Sales of new sterilization system lag as unit of J&J poses competitive threat
By STAN BULLARD sbullard@crain.com
By CHUCK SODER csoder@crain.com
T
wo things are clear immediately about Joel Ratner, the new president and CEO of Neighborhood Progress Inc. One: He is aggressive. Two: He speaks his mind. Although the mechanisms for doing so are uncertain at this point, Mr. Ratner said his charge is to broaden the nonprofit’s mission beyond the real estate development and financing role it long has played as an intermediary channeling corporate and foundation money to neighborhoods. “I’m not a real estate development guy,” Mr. Ratner said. “I’m not one of the Forest City Ratners. I bring a new way of thinking to NPI. It’s not to say real estate will not remain important for NPI. However, real estate development See RATNER Page 6
JANET CENTURY
Joel Ratner, president and CEO of Neighborhood Progress Inc., says he wants to better address “the new realities of the neighborhoods.”
THE WEEK IN QUOTES “A lot of the complexity had nothing to do with patient needs. It had to do with regulations.” — Gerald Blouch, CEO, Invacare Corp. Page One
“We think (the introduction of ‘narrow networks’) is going to continue because ... employers are looking for ways to control their health care costs.” — Mark Alder, area president of Gallagher Benefit Services. Page 7
“We believe that people who exercise and work out are more productive.” — Renee Barrett, fitness director, NASA Glenn Research Center. Page 13
“It can be hard to eat healthy at work because often people bring foods they are trying to get rid of from home.” — Kim Horvath, a registered dietitian with EMH Regional Healthcare System. Page 15
Despite a few hurdles — a big drop in shipments, regulatory issues and a big-name competitor — Steris Corp. says it could sell as many as 9,300 System 1E machines while hospitals still are scrambling to buy them. Even if it can reach that figure, though, there’s no guarantee Steris’ flagship product line will retain its lock on the market for endoscope sterilizers. Mentor-based Steris expects to have sold between 6,300 and 9,300 System 1E units by the time its fiscal year ends on March 31, 2012. By then, it will be illegal to use the original System 1 to clean endoscopes and other medical equipment. The U.S. Food and Drug Administration has given System 1 users until Feb. 2, 2012, to replace Steris’ older machine with the System 1E or a competing device. That’s why Steris is rushing to sell the System 1E, which it developed after the FDA revoked its approval for the original machine. The FDA said the agency never was asked to review several changes that the company made over the years to the System 1, which formerly accounted for about 10% of Steris’ revenues and even more of its profits, when related accessories and consumables are included. Steris will need to sell a lot more System 1E units in the next three quarters if it is to reach even the lower end of its sales estimate. The company sold just 700 units during the first quarter of fiscal 2012, which ended June 30, down from 1,300 during the fourth quarter of fiscal 2011. Steris sold about 50 System 1E units in December 2010, when it launched the product. During an Aug. 2 conference call, when a stock analyst asked why firstquarter System 1E sales fell 46% See STERIS Page 17
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Akron: Mayor sees Cleveland focus continued from PAGE 3
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bureaucracy to manage that task, JobsOhio intends to contract with six regional organizations that will assist businesses that want to expand. These organizations, including Team NEO, the 8-year-old Northeast Ohio economic development nonprofit, are to be JobsOhio’s development work force. Team NEO will be JobsOhio’s representative in 18 counties from Sandusky and Mansfield to the west and Ashtabula and East Liverpool to the east. Gov. Kasich believes this decentralized operation will help business development projects move, as he often says, “at the speed of business,” not at bureaucracy’s slow pace. But Mayor Plusquellic contends that Team NEO will be an impediment, hampering his ability to attract new businesses to Akron and Summit County. Had Gov. Kasich asked, Mayor Plusquellic said he would have argued for a structure that allowed his city and the Greater Akron Chamber to continue to have direct access to state programs, instead of working through a new organization that he maintains doesn’t have the experience of the Akron people in making deals work. The mayor cited in particular Akron’s successful efforts to keep the headquarters of Goodyear Tire & Rubber Co. and the groundwork his administration and the Akron chamber laid that retained the Bridgestone Americas technology center in Akron. Mayor Plusquellic said the new regional offices that are part of JobsOhio add another level of administration, which he found ironic, because, he noted, Gov. Kasich campaigned so loudly against state and federal bureaucracies that obstruct
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business. “It sounds like what we get out of Washington, the rhetoric and horseshit,” the mayor said. “(JobsOhio) sounds like the same bureaucratic crap that we’ve had to deal with from Washington.” In response to that earthy criticism, Gov. Kasich’s spokesman, Rob Nichols, said, “The mayor has been in office a quarter of a century and Akron has fewer jobs today than when he took office. Far be it for him to provide us with advice on how to create jobs.” Mr. Nichols said Ohio had to change the way it did job creation, since the state has been losing jobs for so long. “We look forward to showing him how JobsOhio will be even more successful for him,” Mr. Nichols said. “At the end of the day, we couldn’t keep doing what we were doing with economic development in the state. It was not working, we were bleeding jobs and the state was dying.”
Power brokers Mayor Plusquellic also complained specifically about Team NEO, which until now has focused on making national and international companies aware of expansion opportunities in Northeast Ohio. Under the JobsOhio plan, Team NEO also will play a big role in linking existing Northeast Ohio companies with state financial incentives available to businesses that want to expand or are being lured out of the region. Mayor Plusquellic complained that Team NEO, which he sees as a Cleveland-centric organization, will be usurping a role best handled by public officials, who he maintains have worked the hardest to find all the financial incentives available to keep businesses growing in their community. “This (Team NEO) is a big agency that has no control from elected officials or anybody (in government) as far as I’m concerned,” he said. “It’s granting them the power to do this. How do they do that sitting in one office in Cleveland?” Team NEO officials have worked hard to earn the trust of public officials in all parts of the region it serves. But efforts to resolve the tension between Team NEO and public officials in Summit County have not been fully successful, said various veteran economic development officials, who asked not to be identified. The feeling in Akron,
they say, is that Team NEO thinks about Cleveland first when it shows site selectors locations for new businesses. Tom Waltermire, CEO of Team NEO, said his organization, which employs 16 economic development professionals who market the region to the world, will rely heavily on the regional chambers of commerce and other business nonprofits in the region to carry out the JobsOhio programs. He said he will bring no more than five people into Team NEO’s Cleveland office to handle the JobsOhio workload. Asked about Mayor Plusquellic’s criticism of the new economic development system, Team NEO responded with a brief statement from spokeswoman Jenny Febbo: “We deeply value our relationship with the city of Akron; they have one of the most talented and committed economic development groups in the region. We’re very open to actively soliciting ideas and suggestions for the region, but we serve an 18-county region so it (any suggestions) would have to be something that works for all 18 counties.”
Time to build In an earlier conversation, Mr. Waltermire said he believed the reorganization of state economic development activities would help businesses looking to grow and he sounded sensitive to the concerns of mayors such as Mr. Plusquellic. “I’m sympathetic to public officials elected to spur economies inside their jurisdictions (who) want to have control of as many levers as possible over what’s going to happen inside their communities,” he said last Monday, Aug. 8, during a meeting with Crain’s editors and reporters. “If I was one of them, I’d feel the same way.” Gov. Kasich’s spokesman, Mr. Nichols, urged Mayor Plusquellic to work with Team NEO. “His distrust or rivalries with neighboring cities, we can’t help him with,” he said. “The governor has talked since January about Ohioans needing to put aside geographic squabbles and get rolling in the same direction. We have massive challenges in the state. This protecting one’s turf is not helpful.“ Mr. Waltermire, an Akron native, said he believes the new organization he is building can win the trust of the region’s public officials over time. “We’re going to need to build it,” he said. ■
COMING UP 2011 Emerald Awards reception Crain’s on Sept. 20 will for the third time honor our region’s sustainability champions at the 2011 Emerald Awards reception, held at the new Student Center at Cleveland State University. The awards identify companies and individuals adhering to the “triple
bottom line” — profits, people and planet. The event is sponsored by Fairmount Minerals and Cleveland.com. For more information and to register, visit CrainsCleveland.com/ emerald.
Volume 32, Number 33 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of May and fifth 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 © 2011 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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NYC group wins bid for KeyBank Center Ratner: Group diversifies And it may brings 200 more jobs to office site By STAN BULLARD sbullard@crain.com
The embattled, 23-story KeyBank Center in downtown Cleveland not only is about to get a new owner, but it also stands to gain a new tenant that could bring more than 200 jobs from the suburbs. AmTrust Realty of New York City was the winning bidder in a July 27 Internet auction for the lenderowned tower at 800 Superior Ave. If the purchase closes — and if an incentive deal is struck with the city of Cleveland — it will clear the way for more than 200 workers to come to the building from a unit in Seven Hills of sister company AmTrust Financial Services Inc., according to three sources familiar with the situation. Two of the sources said relocating AmTrust Financial jobs to Cleveland from outside the region also could be in the mix. None of the sources agreed to be identified because they are not authorized to discuss the unfolding situation publicly. AmTrust Financial — a small business insurer, workers’ compensation
coverage provider and warranty services concern — is not related to AmTrust Bank, the former owner of Ohio Savings Bank that now is part of New York Community Bank. Nathan Aber, president of AmTrust Realty, did not return multiple calls about the proposed purchase, nor did company officials in Seven Hills. Mr. Aber, a former executive at the famed but extinct Olympia & York realty firm in New York, launched AmTrust Realty in 1998 by buying 59 Maiden Lane, a 41-story building in Manhattan, according to Crain’s New York Business. AmTrust Realty in 2004 waded into the Chicago market and bought a 28-story skyscraper at 33 W. Monroe St., the former headquarters of the defunct Arthur Andersen consulting firm, according to Crain’s Chicago Business.
Big vacancies? No problem In situations similar to KeyBank Center, which soon will have a 60% vacancy rate, AmTrust Realty in the New York and Chicago deals was undaunted by buying buildings that were half empty. It bought 59 Maiden Lane at an auction. Today, 59 Maiden Lane is the
address of AmTrust Financial’s headquarters in New York, and it has offices at 33 W. Monroe in Chicago. Relocating AmTrust Financial’s operations in Seven Hills from a 60,000-square-foot building at 5800 Lombardo Center that is owned by an affiliate led by Michael Karfunkel — whose family is the equity behind AmTrust Realty — would give AmTrust Realty a base to rebuild the tenancy at KeyBank Center. Especially suiting such a move is that KeyBank Center includes a huge parking garage. AmTrust was the taker in an online auction by www.auction.com in which the structure sold for $7 million, following bidding that opened at $3.5 million. Even the larger figure is a huge vulture play for a property that last sold for $45 million in 2007. LNR Partners, a firm in Miami Beach specializing in buying distressed properties or managing them for lenders, had ordered the auction. LNR’s website last Thursday, Aug. 11, showed the office building at 800 Superior as “under contract.” LNR’s broker here, Michael Guggenheim of Guggenheim Realtors in Beachwood, declined to discuss the winning bidder’s identity. ■
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from strict real estate focus continued from PAGE 3
has changed dramatically (after the recession and foreclosure crisis). We need a demolition policy now, so we need to use all the tools beyond real estate we can to help the neighborhoods advance.” Though he grew up here and lives in Beachwood, Mr. Ratner said he is not related to the Ratner family with huge stakes at Forest City. Keeping the nonprofit’s real estate capabilities intact while expanding the scope of Neighborhood Progress is what Mr. Ratner said he now is investigating. He said his “musings” so far have been about engaging Neighborhood Progress in education with public and charter schools because successful neighborhoods tend to have at least one good school. Mr. Ratner said his group might assist schools with the property side of their operations or form affiliations with charter schools. He said he also hopes Neighborhood Progress can participate in assisting development associated with immigrant communities and economic development associated with the arts. “It’s not for every neighborhood, but where appropriate, we think it can help a neighborhood succeed,” Mr. Ratner said. “It’s not a one-sizefits-all type of thing.” Mr. Ratner became the top staff manager at Neighborhood Progress Jan. 3, succeeding Eric Hoddersen, who ran the organization for most of its history since its 1989 founding. Mr. Ratner joined the nonprofit after serving as president of the Raymond John Wean Foundation in Warren, which plays a role not unlike that of the Cleveland Foundation in Cleveland. Mr. Ratner joined Wean from a job at the Cleveland Foundation, where he managed its Neighborhood Connections program that awards small $5,000 grants to neighborhood programs. While Mr. Ratner now heads an organization that receives substantial money from the Cleveland and George Gund foundations, David Abbott, Gund’s executive director, said he hated to see Mr. Ratner leave his Warren job for Neighborhood Progress. Mr. Ratner brought Wean and the Mahoning Valley into the Fund for Our Economic Future, a foundation-led effort to foster economic change throughout the
region. Mr. Ratner “is a very aggressive guy, a smart guy. He tells you what he thinks,” Mr. Abbott said. He noted that Mr. Ratner had pushed the idea of regional government collaboration so effectively that three of the Fund for Our Economic Future’s grants to foster studies of government collaboration went to Mahoning Valley recipients.
Priming the pump Since its founding, Neighborhood Progress has pumped more than $20 million into local development projects. Through its Village Capital program, it assists neighborhood real estate projects with funds. And through its New Village Corp., the nonprofit helps community development corporations and private developers with projects too large or risky for them to undertake alone. Neighborhood Progress has played a role in more than $800 million in projects, such as the decade-old renovation of the 200,000-squarefoot Lee-Harvard Shopping Center with Forest City Enterprises Inc. It also is a co-developer with Pennrose, a Philadelphia real estate concern, in the creation of 72 apartments for the elderly in a $20 million project that recently got under way at the long-empty St. Alexis Hospital complex on Shaker Boulevard. Philip Star, an executive in residence at Cleveland State University who headed the now-defunct Neighborhood Development Center think tank, said Cleveland community development corporations tended to be more successful at large-volume housing development programs than others in the nation, but that time is past. “These are tough times for real estate development initiatives. With NPI’s efforts in reimagining Cleveland to find new uses such as gardens and green space for vacant land, it is already showing they are moving away from a real estate development model,” Mr. Star said. “They are moving to a community building model.” Community building focuses on emphasizing a neighborhood’s assets to its advantage. Asked how he would define victory in his new job, Mr. Ratner answers: “Helping get the system moving toward being responsive to the new realities of the neighborhoods.” ■
Submit information to be part of Crain’s Health Care Directory Crain’s Cleveland Business on Sept. 19 will publish its 14th 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 directory. If your company or organization never has submitted information for the directory, send an email requesting a survey to Deb Hillyer, 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. 24. Surveys already have been emailed to companies that were
listed in the 2010 directory. The directory will be divided into 18 categories: addiction services; associations and professional groups; 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; physical therapy/rehabilitation; physicians and physician groups; prescription services; senior and long-term care services; and women’s health services.
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Oil: Area provides energy Insurers offer ‘narrow’ networks outfits proper resources Plans provide savings on continued from PAGE 1
touting and producing natural gas from the shale in this part of the United States for a few years now, but this is the first time they’ve found a major oil reserve to boot. And it has Mr. McClendon more than a little excited. “We think this new Utica shale discovery, on top of the Marcellus shale discovery in western Pennsylvania … could be transformative events, not just for this area, but the whole U.S. as well,” Mr. McClendon said Aug. 1 on Mr. Cramer’s “Mad Money” television show. “This could be 25 billion barrels of oil,” Mr. McClendon said. “It could be one of the biggest discoveries in U.S. history.” That announcement came just after Mr. McClendon’s July 29 conversation with other securities analysts, where he said, “We are happy to report confirmation of market rumors that Chesapeake has made a major new liquids-rich discovery in the Utica shale of eastern Ohio.” Mr. McClendon predicted that his companies and others like it will spend $200 billion or more drilling in eastern Ohio and other portions of the Utica shale during the next two decades. Mr. McClendon estimated the find is worth $15 billion to $20 billion for his company and its shareholders. “In the Utica, we could be talking about 25,000 wells being drilled,” Mr. McClendon told “Mad Money.” So far, other drillers aren’t talking about the oil find — but it’s down there and big companies, such as Exxon Mobil, are going after it, said Terry Fleming, executive director of the Ohio Petroleum Council in Columbus. Estimates of the total amount of oil in the shale beds vary greatly, but they are all very big numbers, he said. “The estimates range from 38 billion barrels to 384 billion,” Mr. Fleming said. “Chesapeake is one of many companies that are purchasing leases and buying land in Ohio. … Just the sheer size of these companies and the land that’s being purchased tells me that they are serious.”
‘Ground zero’ for a boom? Mr. McClendon said his company could not have found oil in a better place. There is abundant water available — something Chesapeake needs for the hydraulic fracturing methods it uses to extract oil and gas from shale — and the topography of the area is easier to work with than what is found in Pennsylvania or West Virginia. And, he said, there is a large and willing local work force that his company intends to draw upon. “We’re in a part of Ohio which, frankly, is ground zero for what used to be known as the manufacturing belt of America and unfortunately in the last 30 years has been the Rust Belt,” Mr. McClendon told analysts on July 29. “But we think that our activity can help rejuvenate this area and we’re actually quite pleased with the quality of the work force, the size of the work force and we think, of course, there’s great transportation alternatives here, and we’re pretty close to the Ohio River. So if we need to barge out some oil, we can do that.” Chesapeake director of corporate development Keith Fuller told Crain’s via email that the company
is in the early stages of its hiring with regard to the Ohio oil find. It’s trying to fill 30 positions for drilling rig workers in Canton, he said, and expects to hire many more in the future. They will be a mix of Ohioans and others with industry-specific expertise, he said. “We’re in the beginning phase of hiring, so we will be looking for experienced industry professionals — some who are Ohioans who are moving back to Ohio — and once those are in place, the local hiring process will gain momentum,” Mr. Fuller said. “Initially, however, the larger number of hires will be made by area contractors and vendors.” Some of those contractors and vendors already are getting work from Chesapeake. It has contracted with several Ohio companies for services and supplies ranging from surveying work to building trailers to haul oil-field materials and equipment, said company spokeswoman Jacque Bland. Steelmakers such as Timken Co. in Canton, U.S. Steel in Lorain and V&M Steel in Youngstown already are feeling the positive effects — all have announced big expansions as they try to keep up with drillers’ demands for tubular steel. Other companies that make valves, fittings, pumps and other articles used in oil and gas drilling also say they are winning new business from the drilling and exploration.
Fueling local jobs Work for Ohio companies likely will increase and become more complex as the shale beds are developed, said Tom Stewart, executive vice president of the Ohio Oil & Gas Association. The work especially will kick in once drillers need to start moving large quantities of oil and gas from their wells to the market, Mr. Stewart said. “Now you’re talking about building pipelines and processing plants,” he said. The find also could provide cheap fuel and raw materials for Ohio manufacturers for years to come, Mr. Stewart said. For instance, plastics producers could use many of the hydrocarbons found in the shale beds to make plastic resins and could establish plants near this new feedstock. It would be a welcome development for area plastic molders and injectors, who long have complained about rising raw material prices while no new U.S. production was brought online. Chesapeake Energy’s latest announcement might be its biggest yet in terms of its impact on Ohio’s economy. The company is not going to say anything further for now, Ms. Bland said. But in transcripts of analyst conferences, the company seems to increase what it says is the potential for oil and gas drilling in the region’s shale beds. The company is confident about the oil, it told analysts, because Chesapeake has drilled 15 wells in Ohio and has pulled up 3,200 feet of core to study — all of it proving that the oil is there, Mr. McClendon has said. It also has been spending considerable time and money making sure it’s the company that will bring that oil to the surface. Chesapeake reports that during the last 18 months, it has spent between $1.5 billion and $2 billion to secure leases and drilling rights on 1.25 million acres in eastern Ohio. ■
health care, but further restrict patient choices By TIMOTHY MAGAW tmagaw@crain.com
Some health insurers are starting to offer businesses and individuals a break on their premiums in exchange for access to a smaller pool of doctors — an arrangement observers say could slow the growth of skyrocketing health care costs. Known as “narrow-network plans,” the trend has swept parts of the country and is emerging in Northeast Ohio. Although the idea of sacrificing choice might be a tough sell for some consumers, many in the insurance industry suggests that rising costs could make the tradeoff worthwhile. “Though they’re not for everyone, we have had a couple clients that moved in that direction,” said Mark Alder, area president of Gallagher Benefit Services, formerly Herbruck Alder. “We don’t have a crystal ball, but we think this is going to continue because what we’ve experienced is that employers are looking for ways to control their health care costs.”
This month, Aetna rolled out such a plan designed for small businesses that focuses on the use of hospitals and physicians within the Lake Health System in Lake County, said Jay Timm, president of Aetna’s Ohio and Kentucky markets. The plan shaves 12% off the price of Aetna’s traditional small-group insurance offering. “Without a doubt, the cost is driving this trend,” Mr. Timm said. Mr. Timm said driving most of an insurance plan’s patients toward a particular health system is “a much tighter approach,” as it allows Aetna to work with those physicians to keep costs low — a goal, he noted, that is harder to achieve with a broad network of physicians and hospitals. “There’s such a variation in health care costs from physician to physician, and when you blend those together, it makes for a significantly expensive product,” he said. Likewise, Kaiser Permanente is looking to steer more customers away from other health care providers by promoting its new insurance offerings, dubbed “signature plans,” that emphasize the use of the insurer’s own doctors that Kaiser says provide the greatest value. To make way for an anticipated
surge in business for the group’s in-house medical providers, Kaiser Permanente is opening three new medical offices in the region, bringing its total count to 13. “What our signature plans do for us is that we’re saying to customers, patients and employers that this is a higher-performing group in our stable of health care products,” Dr. Ronald Copeland, president and executive director of the Ohio Permanente Medical Group, said. “There’s less choice in the number of locations because the value proposition is much higher.” Other insurers are exploring the concept in the region but haven’t yet pulled the trigger. A spokeswoman for Anthem Blue Cross and Blue Shield in Ohio, for one, said there were ongoing discussions about the possibility of introducing narrow network plans, but there was no confirmation or time frame for a rollout. UnitedHealthcare launched pilots throughout the country, but Patricia Horvath, executive director for the company’s Northern Ohio region, said in an email that the company was keeping tabs on pilots in other markets “to see if a model emerges that would create the right fit for customers in our region.” ■
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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
Deal with it
B
lame the messenger. That’s the age-old game Treasury Secretary Timothy Geithner engaged in when he accused Standard & Poor’s of showing “really terrible judgment” in downgrading the credit rating of the U.S. government to AA+ from its hallowed AAA status. However, anyone who has read S&P’s reasons for its Aug. 5 action quickly will realize the terrible judgment rests with elected officials in Washington because of their ongoing failure to put the government’s finances on stable, sustainable footing for the long haul. Keep in mind that S&P’s action didn’t come out of nowhere. S&P fired a warning shot April 18 that the credit rating might be subject to a downgrade if Congress and the Obama administration didn’t devise a plan to bring the government’s runaway debt under control. It took until the first days of August, with the prospect of the United States defaulting on its debt unless its debt ceiling was raised, for a contentious Congress to patch together an agreement to reduce spending by at least $2.1 trillion over the next 10 years. But S&P was unimpressed, and it downgraded the government’s credit rating just a few days later. Mr. Geithner would complain in an Aug. 7 interview that S&P showed “a stunning lack of knowledge about basic U.S. fiscal budget math” and that the company “drew exactly the wrong conclusion from this budget agreement.” But we think quite the opposite. One correct conclusion is that Washington continually puts off until tomorrow issues it should have dealt with yesterday. Exhibit A is the budget agreement itself, which is short on details of how the savings will be achieved. Rather, it calls for the formation of a 12-member Joint Select Committee on Deficit Reduction to come up with proposals for at least $1.2 trillion in spending cuts. As S&P notes in its downgrade announcement, that committee won’t present its savings package until late November, and even then, “Congress and the Administration could modify any agreement in the future.” The other correct conclusion is of broader, longer-term consequence. It is the view expressed by S&P that “the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned” when it warned just four months ago of a possible credit downgrading. S&P bemoans the “political brinksmanship”(sic) it has seen in recent months, with the implicit fear being that the uncertainty spawned by this approach to governing won’t end any time soon. The stock markets have been affirming this lack of confidence in our elected officials with a decline that began not after the S&P announcement, but in the fourth week of July. Rather than wag a finger at S&P, Mr. Geithner, his boss and Congress should get the message and use the rating downgrade as their excuse to get serious in dealing with the U.S. debt burden. The alternative is to risk another reduction in the credit rating within two years — a prospect S&P raised as a possibility in its Aug. 5 announcement. That’s a road no one should want to go down.
FROM THE PUBLISHER
Ruling offers test of White Hat style
I
for those who are governing the schools. t will be fascinating to watch the Mr. Brennan long has argued that his legal fight that most likely will ensue company does a great service and is after last week’s salvo by a Franklin changing the lives of students who had County judge against David Brennan’s been struggling. His critics, however, White Hat Management Co., the Akroncomplain that Mr. Brennan’s political based, for-profit operator of 30 charter influence has led to changing the rules to schools across Ohio. benefit White Hat. Common Pleas Judge John Bender One of the most audacious ruled that Mr. Brennan, historiexamples came during the recent cally a big Republican Party BRIAN budget fight, when amenddonor, must release a detailed TUCKER ments sought by White Hat that accounting of how White Hat would enable for-profit operaspends the millions in tax tors to run their schools without dollars it receives. Judge Bender supervision somehow made it wrote that Ohio law “clearly and into the massive budget bill. unambiguously requires operaHouse Speaker Bill Batchelder, tors of community schools to long a respected voice in provide their governing authorColumbus, actually said at one ities with a detailed accounting point that he didn’t know how of how public funds are spent.” such amendments made it into the Not surprisingly, White Hat argues budget bill. It couldn’t have been anything that as a private company, such informato do with the millions that Mr. Brennan tion should be confidential. Several schools has contributed or raised over the past in Akron and Cleveland are suing to couple of decades. terminate their management agreements Anyway, the outrage prompted lawwith White Hat, complaining that the makers to strip the amendments from company runs the schools with disregard
the budget bill, and now this ruling by Judge Bender has added fuel to the fire. But much like some forest fires work to replenish the land, so to can this case. Charter schools, when run properly, can achieve marvelous things. The successful models such as Cleveland’s Breakthrough Schools are forcing civic leaders — even folks such as Mayor Frank Jackson — to rethink how schools should be run. Teacher unions, long a powerful force in Ohio politics, are being forced to face the possibility of reforms in a system that for too many years has protected mediocre performance. Polls show that most Americans are very worried about education. We all know it’s the only way for America to regain global prominence, but we lack the will to institute systems that have led to other nations blowing by us in literacy and academic achievement. We must consider every possible idea, even forprofit school operators, if they operate with a transparency that shows they are responsible in the ways they’re spending public dollars. ■
PERSONAL VIEW
Jobs solution should be Congress’ focus By SHERROD BROWN
A
fter a long and contentious debate, Congress recently passed last-minute compromise legislation to avoid default and reduce the deficit. While not perfect, this bipartisan agreement avoids default, reduces the deficit by $2.7 trillion, rejects attempts to dismantle Medicare, and beats back efforts to undermine Social Security and other lifelines for middleclass Ohioans. Members of Congress — myself included — have returned to their home states and districts to meet with constituents, visit small businesses, tour factories, and attend roundtables with senior citizens and retirees. But when the House and Senate are called back into session in September, there is no doubt that we must turn our attention back to
Mr. Brown is the senior U.S. senator from Ohio. the top concern for most Americans: job creation. Ultimately, the debate about the budget deficit should be a debate about job creation. There are millions of Americans who would rather be working or paying taxes than collecting unemployment insurance, Medicaid, or foreclosure assistance from the federal government. But we will never solve our larger budget problem if we don’t solve the jobs problem. And if we want to spur a sustained economic recovery in Ohio and across the country, bolstering our manufacturing sector is critical. Over the past three decades, financial services jumped from about 11% of our GDP to about 21.5%. Meanwhile, manufacturing has gone from 25% of GDP to
11%. Ohio has lost hundreds of thousands of manufacturing jobs in the last decade. Why does this matter? First, manufacturing jobs pay 20% more on average than service jobs and have strong multiplier effects, supporting jobs in other sectors of our economy. Wealth begins when you make it, when you mine it or when you grow it. It is hard to see how we have a strong economy without a vibrant manufacturing base. Since the beginning of the recession, we’ve seen profits at large financial institutions and other service firms increase, while our nation’s unemployment rate hovers around 9%. Unlike wealth created by complex financial products, wealth created by expanded manufacturing production requires a bigger work force, greater supplier networks, and an entire web of See VIEW Page 9
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THE BIG ISSUE Do you think the economy is heading for a second recession?
BETH LEVY
BRUCE BROWN
VALERIE BUCKLES
JIM LEVINE
Cleveland
Solon
Cleveland
Chagrin Falls
Yes, I do. The economy has not really recovered from the initial (recession). ‌ I don’t know if I’d call it a second one or a continuation of the first. I’m still waiting for the economy to bounce back.
No. I have full faith and confidence in our president and our legislators that they will not allow that to happen again.
No. I live (downtown) and I see things growing, so it’s very encouraging.
I hope not. ‌ I would say the prospects for a second recession seemingly are good. I’m hoping Cleveland would be insulated from that from all the new projects that are going on (downtown).
➤➤ Watch more people weigh in by visiting the Multimedia section at www.CrainsCleveland.com.
LAND AVAILABLE FOR DEVELOPEMENT 2096 LANDER ROAD, MAYFIELD HTS., OHIO
NE Ohio UAW’s ‘us vs. them’ outdated ■In the Aug. 4 edition of The Wall Street Journal, I read an interesting article on current UAW president Bob King, who now touts the end of the era where it was “us versus them.� Maybe Mr. King should contact his UAW affiliates here in Northeast Ohio and advise them that the state of Ohio mandates a balanced budget — and it is the responsibility of the governor and the Legislature to ensure that the state does not run in the red. To the Ohio UAW, I translate Mr. King’s message into this suggestion: “Use your brains rather than the old-fashioned confrontational practices that destroyed the auto industry in NE Ohio — back off in your support of those that want to overturn the recently enacted measures that will accomplish the ‘balanced budget’ mandate.� The state of Ohio cannot and should not have to
deal with unions that form their position in the same confrontational manner as the UAW of yesteryear: “us versus them.� Northeast Ohio’s UAW contributed mightily to the closure of the following plants — because, to the UAW locals, it was a matter of “us versus them� and “by damn� they said, “We’ll let our plant close before we give in.� Just in my lifetime I can recall the following closures in these local UAW auto/truck/forklift plants: Chevrolet Brook Park; Ford Walton Hills; Chrysler Twinsburg; General Motors Euclid; Terex (Euclid and Cleveland); The White Motor Co.; Towmotor; most of the Ford engine and foundry complex in Brook Park; the Lorain Ford complex; Collinwood’s Eaton plant; the Avon Lake truck trailer facility. My listing is of just the “biggies�
View: Manufacturing sector key continued from PAGE 8
upstream and downstream workers. Second, a strong industrial base is critical to creating economic prosperity and maintaining American global leadership. The decline of manufacturing has corresponded with stagnant wages and an increasing reliance on credit as families have struggled to get by. The past three decades have been tough for middle- and low-income earners trying to secure a better life for their families. So it’s no surprise that many Ohioans — like many Americans — believe that the economy no longer works for them. The big question asked by Ohioans is how will we rebalance our economy, replace the hundreds of thousands of Ohio jobs that have been lost, and rebuild our middle class? The answer, again, lies in manufacturing. Our capacity to out-compete and out-innovate other countries — to create good-paying American jobs — depends on our capacity to outmanufacture and out-innovate them. And in Ohio, we know how to make things. Manufacturing means sophisticated engineering and innovation found on the factory line. It means opportunities for engineers with
Ph.D.s and workers with high school diplomas who have mastered a craft over thirty years of labor. Manufacturing expertise is found in our universities and business incubators, strengthened through our partnerships at the local, state and federal level. It’s found at NASA Glenn, Kent State, Case Western Reserve, Cleveland State and all across Ohio. But we need to build on that foundation to ensure that we create American jobs and rebuild America’s middle class. Two ways we can do that is through our tax and trade policies. We need tax policies that create a favorable business climate to foster private-sector growth and create jobs at home. These tax credits need to be permanent and predictable — for investors and companies. We also need trade policies that can help rebuild American manufacturing. Trade law enforcement has meant more steel jobs in Lorain and Youngstown, more tire jobs in Findlay, and more paper jobs in Hamilton. Ohio businesses can compete with any in the world, as long as there’s a level playing field. We cannot forget the tremendous responsibility ahead of us. That means getting back to work on job creation, with manufacturing at its core. â–
that said goodbye to manufacturing in Northeast Ohio. The militant UAW locals really have a lot to be proud of; essentially, they destroyed Cleveland as an auto parts and truck manufacturing center. Congratulations! Now, the remnants of that same UAW seek to hobble a governor and Legislature that have shown the guts to stand up to the state government unions in the name of fiscal sanity. Will the UAW ever learn, or will it continue to tear apart the fabric of our society so as to perpetuate its own selfish agenda?
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Known for dome, ASM HQ interior gets redo
Pension plan adviser: Shift to save capital By PENSIONS & INVESTMENTS
Upgrades achieve goals, early signs show By DAN SHINGLER dshingler@crain.com
It’s not often that a local architectural firm, as well as its client, gets to restore the work of not one, but two noteworthy architects — but that’s what happened this year when ASM International refurbished its headquarters. “It was a one-of-a-kind experience,” said Scott Dimit, managing principal of Dimit Architects in Lakewood, who along with his wife and interior designer, Analia Nanni Dimit, worked on the project for ASM, a nonprofit involved in materials science. The most famous piece of architecture at the site in Novelty is the huge geodesic dome that spans the entire building and its garden, which was based on a patented design by famed architect Buckminster Fuller. But the dome was not part of the 14-month renovation completed in July. What needed work was ASM’s building, a semicircular modern edifice with 50,000 square feet of office space. The building, designed by noted local architect John Terence Kelly, was built in 1959 at a cost of $2.4 million. It had strayed from its original beauty and simplicity over the decades, said ASM managing director Stanley
PHOTO PROVIDED
The headquarters of ASM International, a materials science nonprofit based in Novelty, recently underwent a $6 million interior upgrade. The goal was to restore some of the simplicity of the original building, constructed in 1959. Theobald, who has worked in the building since 1978 with the exception of a six-year absence in the 1990s. “Our goal was to take the building back to its original intent,” Mr. Theobald said. Among the tasks in the total renovation were refinishing the building’s cast concrete floors, stripping wallpaper from copper wall panels that had fallen out of favor in the 1970s, installing new air conditioning and other mechanicals. It even involved redoing the building’s green roof, which was designed to be covered with grass long before the modern concept of “green buildings” caught fire with the general public. There were challenges. For example, the concrete floors had metal in them to make them stronger and also had copper tubing in them to
carry hot water and heat — something Mr. Theobald said contractors were not expecting, nor happy with when they hit them with their grinders. And some things couldn’t be done. For example, the building does not have modern double- or triple-pane glass windows, and because of its historic landmark status none could be installed if ASM was to secure $2 million in federal and state tax credits for the project. But those obstacles were overcome and the project not only was finished on time, but also was within its $6 million budget, Mr. Theobald said. And the project surpassed some of its goals, such as reducing the cost to cool the building by 30%. Since better windows could not be used, Mr. Theobald said he was worried about reaching that goal.
Invacare: Effort produces efficiencies continued from PAGE 1
of different products that weren’t all that different. That’s why Invacare decided to overhaul the way it develops products. The Elyria-based company for nearly a year has been working to synchronize its product development teams and whittle down a massive list of products to a shorter lineup that it will sell worldwide. The five-year effort should help Invacare design better products faster and leave engineers with more time to innovate, according to Mr. Blouch and senior vice president of human resources Patricia Stumpp, who is helping lead the One Invacare initiative. Producing more of the same products also should save the company money on manufacturing and marketing, Ms. Stumpp said. Until now, she said, “If we sold beds in three places, we also designed beds in three places, made beds in three places.”
‘A lot of singles and doubles’ The One Invacare initiative should help the maker of medical equipment and supplies realize $100 million in added profit by 2015. The company has not broken out how much of the $100 million is expected
to come from savings and how much is expected to come from new revenue, according to Lara Mahoney, director of investor relations and corporate communications. Invacare plans to use some of that money to double to $50 million the amount it spends on research and development each year, said Mr. Blouch, who in January replaced A. Malachi Mixon III as Invacare’s CEO. Mr. Mixon, who suffered a stroke in April 2010, remains chairman of the board. Work that Invacare already is doing at its plant on Taylor Street in Elyria provides one example of the efficiencies the company aims to achieve. The custom wheelchairs the plant makes traditionally have been sold to U.S. customers. Last year, however, the plant started producing a new power wheelchair, the base of which Invacare is incorporating into a similar model it sells in Europe. Mr. Blouch gave another example: The company previously had five product development teams designing power wheelchairs for different regions of the world. Now it is transitioning to one team with subdivisions focused on different types of power wheelchairs. For instance, one division focuses on rear-wheeldrive chairs, while another will deal with front-wheel-drive models.
The One Invacare initiative led the company to close a factory in Denmark and move the work to Sweden, and more consolidation may occur where it makes sense, Ms. Mahoney said. The effort also drove Invacare to move a few of its product development centers, and some employees chose not to relocate. Invacare may cut some positions that are redundant, Mr. Blouch said. Staff reductions, however, should not account for “a big portion” of the projected $100 million in added profit, most of which will come from many small improvements, he said. “It’s a lot of singles and doubles,” he said. The previous system had remained in place because Invacare’s strategy for decades was to buy companies that already made products designed to meet the regulations of and receive reimbursements from government health care programs in the countries they served, Mr. Blouch said. Now Invacare simply will modify products to meet the needs of local markets. “A lot of the complexity had nothing to do with patient needs,” he said. “It had to do with regulations.”
Power shift The transition is changing the roles of executives throughout the
But in July the building’s electric bill was $8,500 — a decrease of more than 60% from bills it had seen in past summer months, when ASM paid more than $22,000 for a month’s worth of juice. New air conditioning units, better ventilation, modern window shades and zoned thermostats brought about the savings, he said. Perhaps no one would be happier to see the building brought back to its original glory than the late Mr. Kelly. Mr. Theobald said the architect last saw the structure in the 1980s, when ASM asked him what he thought of plans to alter its footprint with a less conservationminded design. “He just looked at me and said, ‘Don’t mess with my structure,’ and he was out of here in 30 seconds,” Mr. Theobald recalls. ■
company and often leaving them with less autonomy than they had before, Mr. Blouch said. Because of the new corporate structure, executives now often can’t make important decisions “without collaborating with someone else.” Such restrictions may sound bad, Mr. Blouch noted, but they should help Invacare’s product development efforts stay focused and lean. “Think of the power that brings to the supply chain,” he said. Ms. Stumpp, head of human resources, is overseeing the program’s implementation. A year ago she led an effort to fill four headquarters positions meant to help the company design, make and sell a global product lineup. The company hired Doug Newlin — who previously was head of research and development for blood transfusion technology firm Fenwal Inc. of Lake Zurich, Ill. — as senior vice president of global engineering. It also hired John Remmers — who previously had responsibility for global manufacturing, purchasing and product development at TTI Floor Care North America of Glenwillow — as senior vice president of global supply chain and operations. Two existing Invacare executives, Carl Will and Lou Slangen, were promoted to senior vice president of global commercial operations and senior vice president of corporate marketing/chief product officer, respectively.
Pension funds should be prepared for long-term weakness, even if in the short term they take very defensive positions in portfolios and focus on protection of capital, instead of returns. “What pension funds should be concerned with is we are in a different (and) a weak market and economic regime that could last many years,” said Andrea Malagoli, director at Buck Consultants. Ms. Malagoli said Standard and Poor’s decision to downgrade the federal government’s credit rating “is one manifestation of the unraveling of excesses. … Way too much leverage in the system in both the private and public sector. All the monetary and fiscal policies have mainly shifted the problems, not eliminated them. “Pension funds need … to have courage to abandon some commonly established investment policies and look at policies that are far more discretionary and dynamic and more responsive to current market events,” Mr. Malagoli said. “In this market, dynamic asset allocation is key. ... They need to make allocation decisions a lot faster.” For corporate plans, uncertainty over the downgrade isn’t likely to trigger allocation changes, said Ethan Kra, senior partner and chief actuary with Mercer. “Most companies don’t sell on a panic,” Mr. Kra said. “They tend to take a deliberate approach and try to follow a logical process.” Mr. Kra said the bigger issue will come up in 2012, which is the end of the seven years afforded under the Pension Protection Act for reaching 100% funding. ■
It’s also Ms. Stumpp’s job to inform employees about the program and get them energized about working toward global goals as opposed to regional ones. To that end, she has organized online discussions, created a newsletter related to the One Invacare initiative and implemented CultureWizard, an online tool designed to help employees learn how to work with people from other cultures. “I’m still the one beating the drum,” she said. Centralizing product development should help the company operate more efficiently, said Elliott Schlang, managing director of Great Lakes Review, an institutional research boutique in Shaker Heights. Mr. Schlang said he doesn’t doubt that the program will hit its goal of adding $100 million to Invacare’s bottom line by 2015. “In the past when they’ve made goals, they’ve generally been able to reach them,” Mr. Schlang said. Joshua Zable said the same thing. Mr. Zable — a senior analyst who covers medical device, diagnostics and equipment companies for WJB Capital Group in New York — added that connecting Invacare’s engineering teams across the globe will help them share ideas. Though Mr. Zable likes the plan, implementing it, he said, will be Invacare’s biggest challenge. “The No. 1 issue is really executing,” Mr. Zable said. ■
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Exit planning advisers join forces TravelCenters sees value Local professionals establish nonprofit arm in buying Westlake site to cope with coming wave of retiring boomers By MICHELLE PARK mpark@crain.com
With the aim of becoming a resource for small and midsize business owners, a group of 44 Northeast Ohio professionals is forming the nation’s first local chapter of the Exit Planning Institute. The institute is a Chicago-area nonprofit with a mission of assisting business owners in planning how they’ll exit their companies. The institute’s Greater Cleveland-Akron chapter is to incorporate in 30 days, according to Christopher Snider, who has led the effort to form the group. Mr. Snider said the chapter will foster collaboration among attorneys, wealth managers, accountants and others who will assist what many believe to be a coming tsunami of baby boomers leaving their businesses. “I know myself that when owners come to me, they’re not prepared,” said Mr. Snider, founder and president of Aspire Management Inc., a firm in Brunswick that provides exit planning, value enhancement and investment banking services. “I’d say none of them were prepared when they came to me.” Mr. Snider cited a book titled “The $10 Trillion Opportunity,” which asserts that about 7 million business owners will exit their busi-
“One out of two companies is going to change hands in the next 10 to 15 years.” – Peter Christman, co-founder, Exit Planning Institute nesses over the next 10 to 15 years, creating $10 trillion in potential wealth transfer. The local chapter aims to be an educational resource for business owners and a networking channel for advisers, Mr. Snider said. Plus, he’d like the group to develop best practices that can be shared. “I just think as advisers, if we’re working together on a common mission, something good is going to come out of it,” Mr. Snider said. “I told the EPI, we’ll build a model here in Cleveland, and we can take it across the country and let the other (certified exit planning advisers) use it,” he said. Peter Christman, who co-authored “The $10 Trillion Opportunity” and co-founded the Exit Planning Institute in 2005, calls the Greater Cleveland-Akron chapter the “prototype.” The plan is to establish local groups in other cities, including Miami, Dallas, Atlanta and Detroit, he said. “One out of two companies is
going to change hands in the next 10 to 15 years, so all the advisers whether wealth managers, financial planners, CPAs — want to be exposed and get involved in exit planning,” Mr. Christman said. In May, Mr. Snider hosted an exit planning awareness event, which about 85 people attended. It was there that the seed for the local chapter was planted. On the agenda for the local group are educational events for business owners and advisers. The group also wants to conduct with partnering institutions research on exit planning, Mr. Snider said. For example, he’d like to survey private equity firms to see what their experience has been as it relates to companies that have had exit plans in place. Did the firms pay more for such businesses? Did they find that those businesses were better because they had a plan? Harold Maxfield Jr., a shareholder and board member with Cleveland law firm Cavitch Familo & Durkin, is setting up the legal structure of the chapter. He said he joined for the opportunity to network and to share ideas and clients. Mr. Maxfield said many of the people he represents possess most of their wealth in the business, which makes exit planning all the more important. However, those owners are involved in running the business daily. “It’s difficult for them to focus on the next step,” he said. ■
Company plans to retain current outside tenants By STAN BULLARD sbullard@crain.com
TravelCenters of America LLC likes the building that houses its headquarters operations in Westlake so much that it bought the property for $5 million. The structure, known as the Point 5 building, is at 24601 Center Ridge Road. Andy Rebholz, TravelCenters chief financial officer, said the company wanted to control its environment and believes the building will be a good investment compared with continuing to rent the structure. Its lease was slated to expire next year. Mr. Rebholz said the company searched for other properties before deciding that “where we are is the best place for us.” TA, as TravelCenters does business, has about 350 employees in the building and occupies more than 75% of the 98,000-square-foot structure constructed in 1987. The operator of highway travel centers will expand in empty offices in the building, Mr. Rebholz said, but it plans to retain outside tenants who rent portions of the structure. The seller of the five-story property was lender Investors Warranty Association of America, a unit of Dutch lender Aegon NV, which had
held it since June 30, 2009, Mr. Rebholz said. Vicki Maeder, a vice president in the Cleveland office of CB Richard Ellis, described TravelCenters as “the natural buyer” of the property because of its long tenancy there. Ms. Maeder was part of a threeperson CB team that represented the lender in the transaction. Cresco represented TravelCenters in the transaction. TravelCenters paid with cash. “We had the cash available and preferred to put it into the building rather than have debt for it,” Mr. Rebholz said. “We didn’t get the deal they got next door, but this building has us as a tenant.” McKnight Property Management of Pittsburgh in late 2009 bought the adjoining Point 6 building from the same lender for just $2 million. Even so, Cuyahoga County values the Point 5 building at $6.4 million; it had been valued at as much as $8.4 million in 2002, county records show. TravelCenters operates 165 diesel and gas refueling stations, truck repair centers, restaurants and associated stores and employs nearly 12,000 people. Of its 165 locations, 145 are owned by Hospitality Properties Trust of Newton, Mass., and are leased to TravelCenters. ■
The largest pediatric health care provider in NE Ohio. AKRONCHILDRENS.ORG
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■ TOA Technologies of Beachwood, a producer of scheduling and routing software for mobile work forces, has landed British retailer John Lewis as a client and will support a new appointment booking system across all John Lewis department stores. The new system is scheduled to be in John Lewis stores by this November. It will provide John Lewis with a unified way of booking and scheduling its mobile work force in 28 department stores. The appointment booking system eventually will be extended to support online bookings on the company’s website and appointments arranged through John Lewis’ smaller-format “at home” shops. “We are pleased to be supporting John Lewis in the UK and to introduce these innovations,” Mike Halley, vice president of TOA Technologies, said in a statement. “We
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GOING PLACES
are increasingly finding that our solution resonates highly with companies that have strong service philosophies, so it is no coincidence that we are now working with John Lewis, one of the UK’s most forwardthinking brands when it comes to customer service.”
Bergdorf and retirement plan consultant Christabelle Cook. Trinity partner Anthony Warren said the company plans to “continue to grow our business throughout Ohio and even regionally. Opening the Columbus office has shown that we can still keep the local, personalized relationships we pride ourselves on while having more than one location.”
■ Kevin Bergdorf, a founding partner of Trinity Pension Consultants of Copley, said he has moved to the company’s newly established Columbus office. Trinity is a thirdparty administration firm specializing in retirement administration and actuarial services. “As this is Trinity’s first expansion effort, we felt it was important that a partner should go out on the frontier,” Mr. Bergdorf said in a statement. “Things in Columbus have been going very well, and we are on track to meeting the goals we set for our first year here. The idea is to make sure Trinity is secure in this market, and use it as a launch pad for future growth.” The new office is managed by Mr.
■ Troubadour Coffee Co. of Cleveland said it has added an espresso catering division. The company will set up an espresso bar at most events and serve lattes, cappuccinos, espressos and other espresso-based beverages to guests. “A lot of people having parties, weddings and other events want something different to add to the mix of other offerings for their guests,” said Troubadour Coffee owner Tony DiCorpo in a statement. Mr. DiCorpo said customers can add tea, smoothies, Italian sodas, single serve pourover coffee and Italian cookie tray packages to any espresso service level package. Troubadour started in 2010 “to bring a better artisanroasted coffee to market,” Mr. DiCorpo said. He said Troubadour roasts in small batches to ensure an even roast.
CHARTER ONE: Michelle Bosak to business development officer, YourPlace Banking; Jeff M. Hall to vice president, private wealth manager.
BRIGHT SPOTS It’s not all bad out there. Here’s the latest installment of a weekly feature on CrainsCleveland.com that highlights positive developments in the Northeast Ohio business community.
WWW.CRAINSCLEVELAND.COM
JOB CHANGES ENGINEERING BARBER & HOFFMAN INC.: Brad Boomer to associate; Jon T. Leuthaeuser to senior associate.
FINANCE
Glover
Davis
Laci
Hahn
Kimbell
Cika
Recker
Oliver
Vesely
Koha
White
Yoder
FIFTH THIRD BANK, NORTHEASTERN OHIO: Emmanuel Glover to senior vice president, director of community development.
FINANCIAL SERVICE CORNERSTONE CONSULTING GROUP LLC: Michael J. Zeleznik to new business developer.
INSURANCE ALEX N. SILL CO.: Thomas Radel to manager, contents appraisal department; Chris Jensen to building consultant; Larry Gabbard to regional manager.
LEGAL ULMER & BERNE LLP: Joshua A. Klarfeld to associate. WALTER & HAVERFIELD LLP: Kate V. Davis to associate.
MANUFACTURING CLEVELAND PLASTIC FABRICATORS & SUPPLIERS INC.: Kasey A. Krebs to outside sales.
TECHNOLOGY
SIFCO INDUSTRIES INC.: Reed Kimbell to production manager, Applied Surface Concepts.
MCPC INC.: Todd Pigram to virtualization engineer; Gregg Belsito to customer care supervisor; Sarah Abella to solution developer; Damian Miller to technical recruiter; John Murtaugh to IT project manager; Reid Ditzler to delivery engineer.
MARKETING
PARAGON CONSULTING: Larry Yoder to engagement manager.
FABER-CASTELL USA: Danielle Laci to buyer; Meredith Hahn to product developer.
PECCHIA COMMUNICATIONS LLC: Aundrea Cika to public relations strategist.
BOARDS
GREATER CLEVELAND PARTNERSHIP: Robert Recker to senior vice president, marketing, communications and membership development.
CLEVELAND METROPOLITAN BAR FOUNDATION: Raymond M. Malone (Baker & Hostetler LLP) to president; Lynn A. Lazzaro to vice president; Sherri L. Dahl to vice president of development; Ginger F. Mlakar to treasurer.
HATTIE LARLHAM: Lori Oliver to vice president, center and group home services.
ENGINEERS FOUNDATION OF OHIO: Russ Critelli (Mannik & Smith Group Inc.) to president.
NEIGHBORHOOD PROGRESS INC.: Sheri Dozier to senior program officer; Jennifer Porter Grasso to grants and communications manager.
LAKEWOOD CHAMBER OF COMMERCE: Diane Helbig (Seize This Day Coaching) to chairperson; Steven R. Clark to treasurer; Lucinda Einhouse, Nicole Hatem Farley and Dan Carney to vice chairs.
NONPROFIT
PATHWAYS INC.: Susan Vesely to clinical director. ST. AUGUSTINE HEALTH MINISTRIES: Andrew Koha to president, CEO.
REAL ESTATE CB RICHARD ELLIS: Jason Effner to associate project manager. KING GROUP: Julie White to vice president, leasing. TRANSACTION REALTY: Matthew Wheeler and Wayne Wheeler to sales associates.
SERVICE
NEIGHBORHOOD PROGRESS INC.: Mark Nasca (JDI Realty Inc.) to chairman; Paul Clark to vice chairman, treasurer; Colleen Gilson to secretary. ST. AUGUSTINE HEALTH MINISTRIES: Edward Hack (Egert & Hack) to chairperson; Karen McCarthy to vice chairperson; Linda Sheehan to secretary; William Beargie to tresurer.
AWARDS
RADCOM INC.: Kevin Halaburda to senior project writer; Jo Ellen Frost to project writer; Suzi Hrubik to associate writer; Christy Esau to writing assistant.
SOCIETY OF FINANCIAL SERVICE PROFESSIONALS OF CLEVELAND: N. Lindsey Smith (Smith and Condeni LLP) received the 2011 Financial Service Professional of the Year Award.
WAVERLY PARTNERS LLC: Matt Clemens to managing director and principal.
Send information for Going Places to dhillyer@crain.com.
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INSIDE
15 SOME CLEVELAND-AREA COMPANIES ARE OUT TO PROVE THAT IT’S POSSIBLE TO EAT RIGHT AT WORK.
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HEALTHAND WELLNESS Programs’ effectiveness now easier to measure ROI tracking methods become more prevalent By JAY MILLER jmiller@crain.com
I
Sherwin-Williams’ downtown fitness center rivals what its employees could access if they joined a nice health club. More than 50 modern exercise machines dominate the center’s 10,000 square feet of space — where members can either work out on their own or sign up for classes in yoga, kickboxing, aerobics or some other group activity. Permanent lockers are available to gym members — who pay $300 a year to use the facility — but they must keep coming regularly to keep their storage space, as there always is a waiting list, said Sherwin-Williams’ senior fitness specialist, Vicki Barone. Like NASA, Sherwin-Williams believes the center keeps its employees healthier and more productive than they would be otherwise. Having employees pay something to use the facility — about $15 per paycheck — results in employees
t’s taken the better part of 25 years, from the earliest employee fitness centers, but businesses and insurance companies have started to embrace wellness programs as investments with returns, says Shanna Dunbar, an occupational health nurse. The reason, explained Diane Shields, vice president for human resources for Elyria-based Bendix Commercial Vehicle Systems LLC, is simple: “We’re starting to get better results.” It doesn’t require a degree in occupational health or medicine to understand that some lifestyle choices incur higher medical costs than others. However, measuring the return on investment for programs that encourage better health decisions has not been easy to achieve. Ms. Dunbar, who has a Strongsvillebased private practice, Workplace Health Inc., said a reduction in a company’s health care costs is “the be-all, end-all, but it can take five to 10 years to see it, so that’s not a good thing to look at and measure year after year.” Over the last few years, however, better methods have been developed to gather data for employers in such a way that protects employee privacy while still satisfying the bean counter. “Employers have been indicating they’ve been interested in these programs for five or six years,” said Christopher Herbruck, area senior vice president for the Cleveland office of Gallagher Benefit Services. “Six years ago you had some employers who said, ‘Yeah, this makes sense, let’s get started.’ But some said, ‘This is malarkey, you can’t measure return on investment; we’re not going to do anything.’ “But now those metrics have been established; and that’s changed attitudes. Now, they’re saying, ‘Hmm, this makes sense,’” he said. At Bendix, which started its wellness program more than a decade ago, the results are dramatic. “Directionally, we’ve seen a 10%
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JANET CENTURY PHOTOS
Diana Strongosky, a vice president of research and development in Sherwin-Williams’ paint coatings division, said she exercises every day at lunch. With small children at home, Ms. Strongosky said exercising at that time is a good way for her to stay fit.
HERE AND HEALTHY Employers adopting exercise into culture in hopes of more productive workers Let’s get physical
By DAN SHINGLER dshingler@crain.com
F
oosball and pingpong tables might be popular among the high-tech development crowd, but some organizations around Northeast Ohio want to give their employees a better workout than that. Their goal, though, is largely the same. They want to attract and keep the best and brightest employees and keep them healthy and productive once they’re aboard. Of course, the Northeast climate almost requires that companies here provide a few more ways to stretch and work muscles indoors than is needed in sunny Silicon Valley, but the results of giving employees a chance to move around is the same, they say. “We believe that people who exercise and work out are more productive,” said Renee Barrett, who for 12 years has served as the fitness director for the NASA Glenn Research Center in Brook Park.
Sherwin-Williams’ fitness center members can work out on their own or sign up for classes in yoga, kickboxing, aerobics or other group activities. You might expect an outfit that employs astronauts to see the value in having their employees stay in shape. And you would be correct. Not only does NASA maintain an indoor fitness center, ball fields and running track at its facility near Cleveland Hopkins International Airport, but every major NASA center has some sort of exercise facility, Ms. Barrett said.
Usually, between 175 and 200 people use the Cleveland-area fitness center each day, she said. But companies with lawyers, product developers, accountants, marketing professionals and other more run-of-the-mill workers share NASA’s belief that both an organization and its employees benefit when exercise is readily available at the workplace.
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Measure: Employees become more accepting continued from PAGE 13
(lowering) of cholesterol levels (among employees) since 2008,” Ms. Shields said. “Now we’re focusing on hypertension.” The Bendix employee wellness program, which started with a fitness center, now also includes weight management, tobacco cessation, stress management and a variety of early detection efforts, including annual physicals. Bendix employs 460 people in Elyria and 1,200 worldwide. Ms. Shields said 60% of Bendix employees participate in the wellness program and that percentage continues to grow. On the corporate side, the company is seeing the fruits of its efforts. “Our average (health care) cost per employee is 20% less (because of the program) on a cost-per-employee basis,” Ms. Shields said.
By the numbers A 2010 survey by Gallagher Benefit Services — it was then called Herbruck Alder — found that of 160 companies surveyed, 30% had comprehensive wellness programs, up from 23% a year earlier. In addition, 25% were developing programs and another 49% said they intended to start a wellness program in the near future. The programs are gaining acceptance because employees and employers are seeing the value and making concessions. Employees are accepting the idea of allowing an outside third party to gather medical information and report that information in aggregate to their employers in exchange for incentives and even some savings. In turn, business owners and their insurance companies are translating that medical information into a variety of savings for the companies and their employees. Early on, management may see fewer days lost for sickness or health reasons. As the programs
build they see a reduction in the use of medical services that can translate into lower health care costs. Varbros LLC, a metal stamper in Brook Park with 105 employees, uses five of the most common measurements to benchmark its employee wellness, said George Drapcho, a floor supervisor and the company’s wellness leader. Those five are smoking cessation. measurable reductions in blood pressure, glucose and cholesterol levels, and a reduction in body mass index, a relationship between height and weight.
The carrots To lure employees into wellness programs companies offer workers incentives. Initially, at companies such as Varbros that have young programs, employees may only get gym bags or water bottles. Eventually, however, they are seeing their share of their medical costs reduced. Mr. Drapcho said nearly 90% of Varbros employees participate in the wellness program. At Bendix, employees who make headway in the wellness program see their out-of-pocket cost for their health care benefits discounted. In another example, UnitedHealthcare, a leading health insurance company, offers a program called Vital Measures that has the effect of pushing wellness. If employees select a highdeductible medical plan, they can choose to take a wellness screening to see if they meet the specific targets for body mass index, cholesterol and blood pressure. It also takes note of whether the employee smokes. Employees can get a $500 credit off their deductibles for each target met, up to $2,000. Because the plans carry high deductibles, employers can save up to 20% on their current plans, lowering the out-of-pocket cost for employers and workers needing health insurance. ■
WORKOUT WARRIORS BLONDIE HINTON Administrative assistant Sherwin-Williams/Remediation Services
B
londie Hinton has worked at Sherwin-Williams for 36 years, which is by far most of her life — and for most of that time she’s been a member of the company’s gym. More than a member, she’s been a regular, she says. In her first 12 years at the company, she was a couch potato by night and a sidewalk smoker by day. Now she has kicked the habit and is a runner of marathons and regular user of the company’s exercise machines — especially the treadmills. “Me, I use it twice a day,” she says of the company’s downtown fitness center, which she hits at about 5:30 a.m. and again at noon most days. Ms. Hinton says she’s a changed woman as a result of the center — thin, fit and confident . She said she doesn’t know if she would have done it, had her company not encouraged and enabled her to work out. After all, she didn’t before, she points out.
JOHN DI CHIRO Master craftsman GrafTech International
J
ohn Di Chiro has worked for Parmabased GrafTech for more than 36 years, but recently he’s been breaking a sweat a little more often than in the past. And that’s a good thing, he says, because he’s lost more than 30 pounds and has picked up the habit of exercising regularly. “It’s so convenient and of course, free,” he said. “Working out is a
NICHOLAS GEORGIADIS Aerospace engineer NASA Glenn Research Center
Y
ou don’t have to be a rocket scientist to figure out that watching what you eat and exercising will drop your weight and improve your health. But if you were a rocket scientist, that’s probably the conclusion you would reach — just like NASA’s Nicholas Georgiadis. Mr. Georgiadis, an aerospace engineer at Cleveland’s NASA Glenn Research Center, says he’s been a member of the fitness center for all of the 21 years he has worked at the facility, but stepped up his usage early this year when he entered a team weight-loss competition at NASA. He lost about 30 pounds and dramatically reduced
routine part of my workday. On the days that I don’t exercise at GrafTech, I’ll walk four miles outside near my house or at the mall.” He does cardio and strength training five to six days a week, usually at the end of his workday — taking advantage of the fitness center’s showers before heading home. He says he’s happier, sleeps better and feels less stress because of the workouts. He does have at least one regret, though. “I wish I had started 20 years ago,” he said.
his body fat percentage, he said. He usually exercises at lunch, he said, and uses one of the stationary bikes for his cardio. “But it’s not just for the biking — it clears my head,” he said. Apparently, even if you are thinking about complex scientific stuff, a little exercise can help the thinking process. He has belonged to other gyms, but with two kids and a very engaging job, it would be tough to find time to work out outside of office hours, he said. “If you took this place away, certainly a lot of the people who come here would exercise less,” he said. And that would lead to a rocket scientist’s worst fear — larger and larger payloads to get into space.
Healthy: Companies see lower care costs continued from PAGE 13
being more serious and sticking to their exercise plans, Ms. Barone said. The fee hasn’t stopped 700 employees from joining the center, which is still seen as a company-provided benefit since it’s less expensive than most health clubs would be. “A lot of managers, in their interviews (of new hires) will bring people down — it’s definitely a selling feature,” Ms. Barone said. Employees even ask for the benefit specifically, say some companies. Take GrafTech International in Parma, for example. In 2007, the producer of graphite electrodes and other carbon-based products started asking employees what they would appreciate most
in terms of “soft benefits” the company could provide. “Probably 80% of the responses we got back were based around having some more health and wellness types of offerings,” said Tracy Albers, the company’s external interactions manager. That included a fitness center — and today the company has one. It occupies about 3,000 feet of space that used to just house unused equipment and office furnishings, Ms. Albers said. Today, it houses more than 60 pieces of exercise equipment alongside space for yoga and aerobics classes.
No pain, no gain The cost of these facilities is not
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cheap, but companies say the return on investment makes it worth the money. A typical facility with 40 or more pieces of commercial-grade equipment easily can cost six figures, companies say. “But some studies say the return on investment is about three to one,” in terms of things like productivity gains and reduced health care costs, Ms. Albers said. GrafTech, already has seen a decrease in its health care costs since it implemented both the fitness center and an overall wellness program that helps employees through programs such as smoking cessation and weight management. “We’ve already seen some benefits. If you look at our health care costs for 2010 versus 2009, we had a decline of 20%,” Ms. Albers said. Sherwin-Williams also credits its fitness centers and wellness programs with helping it lower health care costs — and, like GrafTech, it says the two programs go hand in hand. The company has been able to keep its health care costs below national averages since adopting a more proactive approach to employee health and fitness, said Sherwin-Williams spokesman Mike Conway. That’s one reason that, since it opened its first fitness center in Cleveland in 1987, SherwinWilliams has opened 10 others at facilities around the world — including some with soccer fields in Mexico and badminton intramurals at a facility in China. ■
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HEALTH AND WELLNESS
Healthy workplace eating attainable, some firms prove Health care systems lead way in showing options are available
FOOD INSPIRATION Here are some ideas for quick, easy and healthy packed lunches: ■ 100% whole grain pita and hummus with a piece of fruit and low-fat milk or soy milk. ■ Spinach and romaine salad with grilled chicken breast with lots of veggies drizzled with extra virgin olive oil dressing and balsamic vinegar, whole grain crackers and natural peanut butter and yogurt with fresh fruit pieces. ■ Whole grain pasta salad with low-calorie Italian dressing with frozen mango chunks for something different. ■ Low-fat/low-salt lunch meat on whole wheat bread or whole wheat wrap. ■ If you cook healthy at home, you always can cook extra at meal times and pack leftovers for lunches throughout the week.
By CHRISSY KADLECK clbfreelancer@crain.com
T
he workplace can be an edible minefield of temptation: A co-worker’s birthday cake in the conference room, leftovers from a graduation party in the lunch room or a bowl of fun-size candy bars calling out from a nearby desk. Without a doubt, it can be tough to navigate the amount of calorieladen treats that are deposited and donated for community consumption at the office to celebrate just about any occasion. And even though nutrition and work aren’t the most likely companions, it’s not impossible to make smart decisions during the daily grind, according to nutritionists and health-conscious employers around Northeast Ohio. Take Donley’s Inc., a design/ build and construction management firm in Cleveland, which has been partnering with Blue Sky Green Fields since February to deliver fresh produce directly to its employees during the work week. Katie McClain, wellness coordinator at Donley’s, said she heard of Blue Sky Green Fields from the Wellness Council of Northeast Ohio and was interested in the company’s farmers market produce available via online shopping and group delivery. “Every single one of my employees that has gone through the service has said just how amazing the produce is,” said Ms. McClain, adding that her company has a base of five to 10 employees who order every week in addition to other employees who order at various times throughout the month. “I’ll also order a box of fruit just to keep in our kitchen for our employees to have as well.” Ms. McClain said employees are able to go online and create their own order and pay for everything with no risk to the company. The items are delivered every Wednesday afternoon. “I have definitely seen an increase in the number of fruits and vegetables that are in our community fridge,” she said. “You see just really colorful breakfasts and people walking through the halls with their produce. And Blue Sky’s prices are very comparable to organic and even conventional items at Giant Eagle.” Indeed, more corporations are looking toward promoting better eating because nutrition plays such a huge role in the health of their workers, said Vicki LaGanke, an outpatient dietitian at MetroHealth Medical Center. “You’re talking about sick time,
SOURCES: AMY JAMIESON-PETONIC, VICKI LAGANKE RUGGERO FATICA
Katie McClain, wellness coordinator at Cleveland design/build and construction company Donley’s Inc., organizes weekly produce deliveries from Blue Sky Green Fields. down time and productivity, and nutrition plays a huge role in all of that,” Ms. LaGanke said.
Walking the walk Not surprisingly, the area’s health care systems have been among the employers leading the charge in providing healthy food in the workplace. The Cleveland Clinic, well-known for such initiatives, has made it very inconvenient to eat unhealthy foods, said Amy Jamieson-Petonic, director of wellness coaching for the health system. Cleveland Clinic dietitians and wellness experts even developed GO! Foods, which are designated by a special green label. The foods meet nutritional criteria and contain minimal saturated fats, added sugars and sodium, no trans fats and are 100% whole grain, when applicable. “The GO! Foods are available in our cafeterias, catering and vending machines,” Ms. Jamieson-Petonic said. “We also trying to create a ‘culture of wellness’ for our employees, patients and visitors, and GO! Foods are also available at Heinen’s and Buehler’s grocery stores, so that folks can identify healthy foods quickly.” MetroHealth also has made significant changes to offerings in its cafeteria, which serves an average of 2,000 people a day. “In the last year we started a program called ‘A Good Choice for a Healthier You,’ which features a complete meal every day that is low fat, low sodium and lower calories,” said Tony Sfiligoj, director of food and nutrition services at MetroHealth, which in 2003 was ahead of the curve in going trans-
fat free. “It’s gone over very well,” he said. “We have incorporated a lot more whole grains in our offerings such as barley pilaf, wild rice, brown rice, and we offer vegetarian and vegan options every day.” MetroHealth no longer sells candy bars, fountain drinks or regular chips. (It does offer the baked variety.) The health system also has reconfigured coolers so people are encouraged to make better selections. “We used a strategy like how supermarkets market their items. We greatly reduced the percentage of sugared drinks and put those at the bottom of the coolers, and what you see at eye level is all the healthier options … the SoBe Lifewaters, Diet Pepsi, healthier juices and water,” he said. “We are not trying to take peoples’ choices away, but we’re trying to educate them about healthier choices,” Mr. Sfiligoj said. “It’s kind of like smoking. It took years for that to change, and I think it’s going to take years for people to make healthier choices but we see it happening already.”
Not impossible Kim Horvath, a registered dietitian with EMH Regional Healthcare System, said many workplaces also are offering healthier snacks in vending machines, such as peanuts, yogurt, fruit cups and low-fat granola bars. “It can be hard to eat healthy at work because often people bring foods they are trying to get rid of from home,” Ms. Horvath said. If you’re trying to watch your diet, “allow yourself a couple of days a month to eat something that
someone brings in to the office in small portions.” Other strategies include tucking healthy snacks in your desk or locker so you’re less tempted. And make sure you eat a well-balanced breakfast and lunch, Ms. Horvath said.
“Probably the most important thing is if you are a person who is trying to eat healthy, you have to plan ahead. It’s not going to happen on its own,” Ms. LaGanke said. “If there is a lot of food around (the office) you want to make sure to pack your own food. It’s always 10 times harder to say no to something if you’re hungry.” ■
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20110815-NEWS--16-NAT-CCI-CL_--
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
AUGUST 15 - 21, 2011
LARGEST SUBURBAN OFFICE PROPERTIES RANKED BY NET RENTABLE SQUARE FOOTAGE Net rentable square feet Name Address Rank Phone
Square feet available
Rent per square foot (in dollars)
Major tenants
Owner
Management company
Leasing agent Phone number
CB Richard Ellis Inc.
Mary Izant, (216) 363-6417 Brian Hurtuk, (216) 363-6446
1
Summit Office Park 4700 Rockside Road, Independence 44131 (216) 642-1105
525,000 151,575
14.00-19.95
Cigna, Oracle, SAI Global, Mutual of Omaha, AJ Aegon USA Realty Gallagher, Verizon Advisors LLC
2
Embassy Corporate Park 4000 Embassy Pkwy., Suite 400, Akron 44333 (330) 668-4000
467,363 109,362
16.50-21.00
RJF, Hanna Campbell & Powell, Virtual Hold, Crystal Clinic
3
Park Center Plaza I, II & III 6100-6150-6050 Oak Tree Blvd., Independence 44131 (216) 643-6000
417,071 13,000
23.00-25.00
Jackson Lewis, IBM, Scientific Image, CBiz Inc., Ownership Advisors, Lifeline Screening, Duke Realty Ohio Farmers Insurance
CB Richard Ellis Inc.
Doug Leary, (216) 363-6424; Bob Leibold, (216) 363-6449
4
Landerbrook Corporate Center I, II, III 5900-5910-5920 Landerbrook Drive, Mayfield Hts. 44124 (216) 831-9330
333,171 58,789
22.50-23.50
Progressive Casualty Insurance, Linsalata Capital, Primus Venture Partners, Dinn Hochman & Potter
Gotham King
The King Group
Linda Short, (216) 245-0686; Julie White, (216) 245-0689
5
Crown Centre 5005 Rockside Road, Independence 44131 (216) 447-9200
275,000 47,000
22.00
University of Phoenix, The Fedeli Group, EMS, Hewitt & Associates, GSA, Zurich, Neace Lukens
M. West, (216) Rockside 77 Properties Prestige Management Thomas 525-1475; Rico A. Pietro, LP (216) 525-1473
6
Great Northern Corporate Center I & II & III 24950-25000-25050 Country Club Blvd., North Olmsted 44070 (216) 643-6000
269,686 6,500
21.50
General Motors Acceptance Corp., Cingular Wireless, Factory Mutual, Advanstar
Duke Realty Ohio
CB Richard Ellis Inc.
Doug Leary, (216) 363-6424; Bob Leibold, (216) 363-6449
7
Lakewood Center North 14600 Detroit Road, Lakewood 44107 (216) 221-6925
259,117 17,375
12.00-14.00
United Transportation Union, Kaiser Permanente, New York Life Insurance
CW Financial Services
CB Richard Ellis Inc.
Brian Hurtuk (216) 363-6446
8
4125 Medina Road Akron 44321
251,802 1,119
20.00-22.00
LifeStyles, Emergency Department, Ambulatory Akron General Health Surgery Center, Radiology, Northeast Ohio System Orthopedic Associates Inc.
NA
Adam Gruly (330) 665-8285
9
Commerce Park IV & V 23240-23250 Chagrin Blvd., Beachwood 44122 (216) 504-4820
230,000 12,645
20.00
NAI Daus Inc, Howard, Wershbale & Co., Dorsky Hodgson Parrish Yue, Prime Conduit, Point to Point Marketing, University Hospitals
Commerce Park IV & V Associates LLC
Munsell Realty Advisors Inc.
Mark R. Munsell (216) 504-4820
10
6200 Oaktree Blvd. 6200 Oaktree Blvd., Independence 44131 (216) 453-3000
228,837 22,137
17.50
Clear Channel Communications, T Mobile, TransUnion, Sirva, Vox Mobile, Apple American
JDI Oak Tree Holdings LLC
Grubb & Ellis Co.
Terry Coyne, (216) 453-3001; David Hollister, (216) 453-3089
11
Freedom Square I, II & III 4401 & 4511 Rockside; 6000 Freedom Square, Independence 44131 (216) 643-6000
227,897 70,000
18.95-21.95
Independence Bank, Hurricane Labs, Zig Marketing, Hylant Group Inc., Xerox Corp., Ohio Duke Realty Ohio Farmers Insurance
CB Richard Ellis Inc.
Doug Leary, (216) 363-6424; Bob Leibold, (216) 363-6449
12
One and Two Chagrin Highlands 2000-3000 Auburn Drive, Beachwood 44122 (440) 871-4800
224,019 30,000
25.00
Penske Logistics, Regus/HQ Global, Intellicorp, Chagrin Headquarters KeyBank, Ancora Advisors, RAV Financial, Venture Inverness Investment
Jacobs Real Estate Services
John L. Klayman Cindy Greiner (440) 808-7492
13
Corporate Plaza I & II 6450-6480 Rockside Woods Blvd. South, Independence 44131 (216) 643-6000
220,271 15,000
19.95-21.95
Alcoa, Fleet Response, ING, Talus Brokerage Services, Ratliff & Taylor, Benefit Resource Group, Licata
CB Richard Ellis Inc.
Doug Leary, (216) 363-6424; Bob Leibold, (216) 363-6449
14
INA/Bailey Building 14701 Detroit Ave., Lakewood 44107 (216) 514-5100
215,000 50,000
12.00-21.00
University of Akron, Panera Bread, Eliza Jennings, Jimmy John's Subs, Cleveland Clinic, 14701 Detroit LLC Neighborhood Pediatrics
Beachwood Property Management
Myrna Previte (216) 514-5100
15
South Hills Office Park-Bldgs I, II, III South Hills Blvd., Broadview Heights 44147 (216) 861-3040
207,000 75,000
20.00-23.00
Ceridian Corp., Millisor & Nobil, Janik & Dorman LLP, Fox Sports, MetLife, ComDoc
NA
Grubb & Ellis Co.
Jeffrey D. Cristal (216) 453-3050
16
EastPoint I & II 6085 & 6095 Parkland Blvd., Mayfield Heights 44124 (216) 687-1800
187,810 12,379
21.00
Austin Building & Design Inc., NCA Financial, Danaher Power Solutions, Moreland Management
Piedmont Office Realty Trust
CB Richard Ellis Inc.
Mary Izant (216) 363-6417
17
Tower East 20600 Chagrin Blvd., Shaker Heights 44122 (216) 861-7200
173,087 40,650
15.50
Equity Engineering, Joseph Mann & Creed, Dingus & Daga, Dise & Co.
NA
Ostendorf-Morris Co.
Gregory B. West, (216) 861-5379; David R Horowitz., (216) 861-5931
18
Euclid Office & Medical Plaza(1) 26250-26300 Euclid Ave., Euclid 44132 (216) 289-8500
168,092 102,406
18.00
Medical and dental offices
CM Realty
NA
Rico A. Pietro (216) 525-1473
19
King James Office Park Bldgs. III and IV 24500-24600 Center Ridge Road, Westlake 44145
167,650 30,030
10.50
NA
Ogle Properties
Ogle Properties
Myrna Previte (216) 514-5100
20
Signature Square I & II 25201 & 25101 Chagrin Blvd., Beachwood 44122 (216) 831-6100
161,196 15,786
Negotiable
Pro Ed Communications, Ciuni & Panichi Inc., Liberty Bank, PCC Airfoils, Cleveland Clinic Opthamology, Resilience Capital Management
Goldberg Cos.
Goldberg Cos.
Dennis M. Bush (216) 831-6100 x237
21
Metropolitan Plaza 22901 Millcreek Blvd., Highland Hills 44122 (216) 831-9330
160,366 8,628
22.50-23.50
Victoria Fire & Casualty, Pfizer Inc., Sedlak Management Consultants, Metlife
Gotham King
The King Group
Linda Short, (216) 245-0686; Julie White, (216) 245-0689
22
Rockside Square Office Park 6133-6155 Rockside Road, Independence 44131 (216) 831-9330
156,966 35,000
16.50-18.50
Wells Fargo Bank, Qwest, Berlitz International, Pinkerton Insurance
NA
The King Group
Julie White (216) 245-0689
23
Crocker Park Crocker & Detroit Roads, Westlake 44145 (216) 464-2860
150,000 2,500
20.00-26.00
Morgan Stanley, Wells Fargo, Merrill Lynch, Huntington Bank Wealth Management, KeyBank Crocker Park LLC Wealth Management, MetLife
Stark Enterprises
Carla Lally, (216) 292-0248 Jeremy Bates (216) 292-0239
23
Plaza South Office Park 7251-7261-7271 Engle Road, Middleburg Heights 44130 (440) 838-1400
150,000 49,000
16.25
Associated Software Consultants, Crawford & Co., McCarthy Burgess & Wolff, Dial America, Zin Technologies, Verantis Corp.
Plaza South Consolidated LP
Flair Management
Marc Braun (216) 453-3014
25
LA Centre Office Plaza I & II 25651/25777 Detroit Road, Westlake 44115
149,401 23,000
11.00-17.00
Houlihan's, University Hospitals, Brick 4 Kidz, R.E. Warner, Premier Banquet/Catering, St. Jude
Carpenters Hospital and Pension Fund
Carpenters Hospital and Pension Fund
Myrna Previte (216) 514-5100
26
Genesis Building 6000 Lombardo Center Drive, Seven Hills 44131 (216) 447-0070
138,492 34,900
22.50-23.50
New York Life
Genesis Building Ltd.
Dalad Realty
Jason Laver (216) 447-0070
27
Great Northern Technology Park 25111 & 25249 Country Club Blvd., North Olmsted 44070 (216) 533-1415
138,241 21,824
17.50
Moen, Heartland Payroll Services, Star Processing/First Data
Tech Park Associates Ltd.
Kennedy Wilson of Ohio
Mike Sekerak (216) 533-1415
28
Developers Diversified Realty Building 3333 Richmond Road, Beachwood 44122
134,722 25,128
26.50-28.50
Singerman, Mills, Desberg & Kauntz, The Malrite Co., TOA Technologies, Chase Properties, Mid-America Management
Developers Diversified Realty Corp.
Leary, (216) Developers Diversified Doug 363-6424; Bob Leibold, Realty Corp. (216) 363-6449
29
Beacon Place 6055 Rockside Woods Blvd., Independence 44131 (216) 447-0070
134,000 6,369
24.00
AGA Gas Inc., Wegman, Hessler, Vanderburg
6055 Properties Ltd.
Dalad Realty
Munsell Realty Advisors John Dellagnese & Inc. Associates Inc.
Duke Realty Corp.
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. The Book of Lists and enhanced versions of most lists, with more companies, are available to purchase at www.crainscleveland.com. (1) Information is from CoStar Group Inc., www.costar.com.
Tom Karcher (330) 668-4000
Lloyd Mazur (216) 447-0070
RESEARCHED BY Deborah W. Hillyer
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
17
Buy: General investors Steris: Company still on solid ground not yet jumping aboard continued from PAGE 3
continued from PAGE 1
$223,000 of Cliffs shares Aug. 1, and RPM International chairman and CEO Frank C. Sullivan, a Timken director, who bought $99,660 of Timken shares last Monday. That day — Aug. 8 — was the first trading day after Standard & Poor’s downgraded the credit rating of the U.S. government and sent the market reeling. Ralph M. Della Ratta Jr. is another buyer: He bought 1,000 shares for nearly $20,000 in Olympic Steel, for which he’s a director. “When I saw that the market had plummeted, I thought, ‘Well, I’m a long-term owner of this company, and it’s probably a good time to buy,’” said Mr. Della Ratta, managing director for Western Reserve Partners LLC, a Cleveland investment banking firm. “I think the reason (company) directors are buying stock is they understand … whatever negative stuff’s in the marketplace isn’t really related to their company,” he said. The insider stock purchases are not at all shocking, say local finance pros. Many companies’ stock, they note, is bargain-priced, and insiders who are buying likely believe those declines are an overreaction. The closing stock prices of Cliffs, Olympic Steel, Timken, Parker Hannifin Corp. and FirstMerit Corp. all had dropped by more than 20% in the period from July 22, when the S&P 500 Index was near a recent peak, to Aug. 9. “Stocks are cheap,” said Joe Arnold, founder and president of Foundation Wealth Advisors LLC in Westlake. “It’s that simple. Corporate earnings and balance sheets for the most part are very strong, and the executives who are in charge know it firsthand. “(Insider buying) isn’t just happening here in Cleveland, but is happening all across the country,” Mr. Arnold added.
Individuals don’t follow suit It isn’t that the insider buying in Northeast Ohio companies is huge, said Brent Luce, portfolio manager for Lakefront Partners, a Cleveland hedge fund. However, it’s noteworthy that there are insider buys at all, Mr. Luce said, because insiders typically already have a lot invested in their companies. “In multiple industries, multiple market caps, I’ve noticed a pretty distinct difference between (the buying) now and what’s been normal,” Mr. Luce said. Mr. Luce has seen a lot of buying two other times in the 14 years he’s been involved in the markets: 2002 to 2003 and 2008 to 2009. In Mr. Luce’s experience, insider buying sometimes encourages others to buy stock. Most observers are confident that insiders’ purchases are a good sign. “These people know their companies better than anybody else, and if they’re that comfortable with the future of their companies — no matter what their stock is doing — that should be encouraging for us,” said Tom McDonald, president and CEO of McDonald Partners LLC, a Cleveland investment advisory firm. Asked whether his individual clients are investing similarly, Mr. McDon-
“There are tremendous buys in many industries.” – Umberto P. Fedeli, active investor and board member in some area banks ald replied, “No, unfortunately. “By and large, if you speak of general investors, it’s a pretty unusual … investor who has the gumption to buy into a sell-off like what we’ve got going on right now,” he said.
Picking up the beaten down Umberto P. Fedeli, an active investor in and a board member for a few local banks, says he bought stock every day in early August, though his most recent purchases have not been insider buys. He identified Cincinnati Financial Corp., an insurance company, and Berkshire Hathaway Inc. as two companies in which he has increased his investment in recent weeks. He declined to say by how much. “There are tremendous buys in many industries,” said Mr. Fedeli, president and CEO of The Fedeli Group, an insurance brokerage firm in Independence. “Certain businesses are not in bad shape, but everything’s being beaten up price-wise.” Mr. Fedeli is among those who view the increased insider buys as a positive sign. “I think they’re looking at their businesses and saying, ‘Our businesses are OK, and these are good values for us,’” he said. “I think simultaneously, they also want to provide some leadership.” Adam Fleck, an equity analyst with Morningstar Inc., an independent investment research firm in Chicago, said he doesn’t believe insiders are trying to time the market. “If they were to know their orders are slowing materially and the next several quarters look terrible, it would be foolish for them to go in and buy shares,” he said. Instead, Mr. Fleck says the increased buying is a “pretty positive indication that they believe this (downturn) is temporary in nature.”
‘A big sale going on’ The people doing the insider buying run the risk of catching a falling knife, so to speak, by buying well before the market reaches bottom. Nonetheless, some observers expect insider buying won’t die down immediately. “Insider buying will continue until those insiders feel like their stock is fairly priced,” Mr. McDonald said. “You’ve just got a big sale going on.” Fred Cummings, president of Elizabeth Park Capital Management, a Beachwood hedge fund, said he anticipates the insider buying probably will last through midSeptember, when insiders will be restricted from trading during what’s called a quiet period prior to quarterly earnings reports. “If the markets continue to be weak, I think you’re going to see insiders continue to buy,” he said. As for Mr. Fedeli, he says he’ll continue to buy stock as long as he has the means. “I don’t have unlimited resources,” he said with a laugh. “If you had unlimited resources, you could go on a buying binge.” ■
from the fourth quarter, Steris CEO Walter Rosebrough said some customers delayed purchases after learning that they had another six months to replace the System 1. Steris announced last March 21 that the FDA had pushed back the deadline for replacing the System 1 to Feb. 2, 2012, from Aug. 2, 2011. “When people have more time, sometimes they take more time,” Mr. Rosebrough said. Steris expects sales of the System 1E, which is made in Mentor, to pick up in the second and third quarters of fiscal 2012 as companies prepare to meet the deadline. Robert Goldman doesn’t think that will happen. Mr. Goldman, a medical devices and supplies analyst for C.L. King & Associates of New York, estimates Steris will have sold a total of about 4,300 System 1E machines by the end of its fiscal year. Mr. Goldman said he doesn’t expect a big increase in System 1E sales, citing the drop in sales in the first quarter. He described early System 1E buyers as “low-hanging fruit. “That sale becomes more difficult as time goes on,” he said.
Biological clock Mr. Goldman also cited as a reason for his expectations the FDA’s hesitance to give Steris approval to begin selling its biological indicator; it’s a product meant to tell customers that the System 1E successfully killed all living organisms inside the machine during a sterilization cycle. Steris three weeks ago filed to have the biological indicator approved through the FDA’s De Novo process, which provides a way for low-risk products to receive approval through the agency’s 510(k) program, even if there is no other similar product already on the market. Receiving 510(k) approval, which normally is reserved for products that are similar to something that’s already sold, would allow Steris to avoid conducting more studies on the indicator. Mr. Rosebrough acknowledged in the Aug. 2 conference call that an inability to sell the biological indicator has had a “real impact” on System 1E sales. However, sales figures for the System 1E should fall within Steris’ estimated range even if the FDA never approves the product, Mr. Rosebrough said. Many customers use the System 1E without the biological indicator because they have alternatives: The System 1E contains a mechanism designed to monitor the machine’s effectiveness, and the FDA has approved a chemical indicator that checks the strength of the liquid chemical sterilant the machine uses. The FDA by law is required to respond to Steris’ filing within 60 days, but the response could come in the form of more questions. Mr. Goldman said it is “unlikely” that the FDA will approve the biological indicator before the February 2012 deadline, noting that other companies have had to wait several months before receiving approval through the De Novo process. Mr. Rosebrough said he expects the FDA to approve the biological indicator before the Feb. 2 deadline, though he noted that he can’t be sure. “I feel as good or better than I’ve ever felt in terms of our interactions with the agency,” he said.
A ‘formidable competitor’
Even if the indicator is approved, sales ramp up and Steris comes close to selling 9,300 System 1E machines by the end of its current fiscal year, the company may need to live with a smaller installed base of sterilization machines than it previously had. Steris estimates that there are 20,000 System 1 machines at health care facilities in the United States. Half of the machines are more than 10 years old, and many could be out of commission, said Julie Winter, director of investor relations for Steris. Steris doesn’t expect to get back to that level anytime soon, Ms. Winter said. Once the rush to replace the System 1 is long over, Steris likely will sell fewer than 1,200 System 1E machines per year, and some of those will be replacement units, she said. The installed base could be somewhat smaller because the System 1E is 20% faster than the System 1, meaning that hospitals will need fewer machines to process the same amount of medical equipment, Ms. Winter said. Plus, a company owned by Johnson & Johnson has used Steris’ troubles with the FDA to get hospitals to replace the System 1 with its own product. A spokesman for the company, Advanced Sterilization Products of Irvine, Calif., did not respond to two phone messages seeking comment.
In a February conversation with Crain’s, a company executive said that 8,000 of its Sterrad-brand machines were in use at the time, up from 6,000 in December 2009. Competition from a company owned by Johnson & Johnson should worry Steris, said C.L. King’s Mr. Goldman, who follows Johnson & Johnson as well as Steris. In news releases and conference calls, Johnson & Johnson frequently has been mentioning Advanced Sterilization Products as a strongperforming business unit, Mr. Goldman said. He expects that, if Advanced Sterilization Products can get a hospital to replace a System 1 with a Sterrad machine, the company will be able to sell them other products they normally might buy from Steris. “That’s the danger of letting a formidable competitor in any of your markets,” he said. Morris Ajzenman, a senior research analyst for Griffin Securities Inc. of New York, said he was “disappointed” by the drop in first quarter System 1E sales. Sales of the machine will improve, he said, but Steris will lose some of the market share System 1 had held, at least initially. Regardless, the overall company — which sells a long list of other medical products — is in good shape, Mr. Ajzenman said, noting that it produces strong cash flow and can finance expansions without relying heavily on debt. “There’s still a lot more to this company than System 1E,” he said. ■
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NOTICE TO VENDORS Notice is hereby given that sealed proposals will be received in the Cuyahoga County Office of Procurement & Diversity, County Administration Building, 1219 Ontario Street, Room 110, Cleveland, Ohio 44114 until 11:00 A.M. local time on September 16, 2011 for lease of approximately 4,500 to 5,500 square feet of office space for The Cuyahoga County Department of Public Works of behalf of The Cuyahoga County Juvenile Court for a Regional Juvenile Court Probation office for the period April 01, 2012 to March 31, 2017.
BANKRUPTCY!
Required geographic location: The space must be in an area bounded by: North: A horizontal line starting westerly at Triskett / W 140th traveling east towards Berea, no further north than the intersection of Berea and West 117th for the western edge of the northern line South: A horizontal line starting westerly at Puritas / W 140th traveling east towards Memphis, no further south than the intersection of Memphis and ridge for the western edge of the southern line East: West 65th street West: West 140th Street The official closing time shall be determined by the wall clock located in the Office of Procurement & Diversity. (SAME ADDRESS). Late proposals will be returned unopened. There will be a Pre-proposal Conference on August 31, 2011 at 10:00 A.M. local time at The Department of Public Works, 2nd floor conference room, 1642 Lakeside Avenue, Cleveland, Ohio 44114. IT IS STRONGLY RECOMMENDED THAT INTERESTED VENDORS ATTEND.
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
CITY OF INDEPENDENCE, OHIO, USA Requesting Ideas, Concepts, Plans for the redevelopment of the Old Middle School building and/or land in the Downtown Historical District at 6565 Brecksville Rd., Independence, OH 44131 through an RFP process. Receive a copy of the RFP for review and response at the City’s Website
www.independenceohio.org/CommercialLife/MiddleSchool.aspx RFP due by 9/2/11 Questions, comments, or additional information requests contact: Ron White, Economic Development Department 216-524-4131 whiter@independenceohio.org
AUCTION Unreserved Bankruptcy
Real Estate Auction
23K SF of industrial space (20K Warehouse, 3K Office) with 2 cranes at 30 Industry Dr. in Bedford Heights. $450,000!
Sept. 28 • 11:00 AM On-Site
Call Jerry Fiume or Tom Fox NAI Cummins
10830 Brookpark Rd. Cleveland
330-535-2661
INVESTMENT PROPERTY Invest in Assisted Living Facilities 16-40 Bed Facility Investors Wanted for NE Ohio Properties
Chris Foley Oreste Realty LLC
(614) 915-8835
77,000 sq.ft. Retail Building Built 2000 - 5.8 Acres Cuyahoga Co. Parcel No. 433-16-018 Bambeck Auctioneers Inc. Call Dave 330-260-0192
www.bambeck.com
For daily on-line updates, sign up @ CrainsCleveland.com/Daily
Specifications and proposal blanks may be obtained at the Office of Procurement & Diversity. (SAME ADDRESS) The Cuyahoga County reserves the right to accept or reject any proposals or any part or all parts of any proposal submitted, and waive all technicalities. Each proposal must state in full the name and address of each person, firm or corporation interested in the proposal submitted. BY ORDER OF CUYAHOGA COUNTY LENORA M. LOCKETT, DIRECTOR Office of Procurement & Diversity Advertise in the Crain’s Cleveland Business on August 15, 2011 This notice may also be viewed at the following Cuyahoga County Internet Web site www.opd.cuyahogacounty.us by clicking on the “Show Events” tab. A list of open bids will appear on the next screen. Click on the bid due date to view the legal notice.
CLASSIFIED BUSINESS OPPORTUNITY NOTICE OF BUSINESS OPPORTUNITY
Crain’s Cleveland Business Online Property Search
The Cleveland Airport System of the City of Cleveland is soliciting proposals from experienced, professional commercial parking operators to manage and operate Airport owned and operated public and employee parking facilities and associated shuttle services at Cleveland Hopkins INternational Airport, Burke Lakefront Airport and other Department of Port Control (“Department”) managed facilities. Interested parties may obtain a copy of the Request for Proposal, free of charge, under the Business Information section at www.clevelandairport.com; by calling (216) 265-6086; by written request addressed to Procurement Section, Department of Port Control, 5300 Riverside Drive, P. O. Box 81009, Cleveland, Ohio 44181-0009 or by email to dcartellone@clevelandairport.com. Proposals are due by 4:00 p.m. EDT Friday, October 14, 2011.
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All County contracts are subject to all applicable County ordinances, including, but not limited to, the Cuyahoga County Ethics Ordinance, Cuyahoga County Inspector General Ordinance, and Cuyahoga County Board of Control, Contracting and Purchasing Ordinance, and the successful bidder shall comply with all such ordinances as an integral part of all County contracts. Copies of all County ordinances are available on the County Council’s web site at http://council.cuyahogacounty.us/.
Looking for property? Search thousands of local listings Selling or leasing a property? Get your property featured through Crain’s www.CrainsCleveland.com/LoopNet
For advertising opportunities contact Toni Coleman tcoleman@crain.com 216-522-1383
List your Industrial, commercial or Retail Space Here! Crain’s Cleveland Business’ classifieds will help you fill that space..
Contact Toni Coleman at 216.522-1383 TColeman@Crain.com
We are interested in acquiring /assuming a smaller web marketing firm or working with freelance marketers & consultants who want to change careers without disappointing their customers. If you would like to speak confidentially, contact Mark: 330-220-6100 ext. 222. MarkP@proximitymarketing.com www.ProximityMarketing.com
BUSINESS FOR SALE TAVERN Business Westpark Area
Located in free standing building. Well known establishment. Sunday Liquor License. Large kitchen with pizza oven.
Contact Wayne 216-476-1999
FOR SALE Bulk Lubricants & Chemical Sale Local distributor selling remaining Inventory of engine oils, gear oils, ATF, and antifreeze. In 330 Gallon Totes & 55 Gallon Drums
Email arin@CAS-GRP.com for bid and sale instructions Phone 330-777-5205
INVESTMENT OPPORTUNITY
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INVESTMENT OPPORTUNITY
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(Accredited Investors Only) Cleveland based company is seeking an equity capital investment, to develop their new business model. Projected revenue, is a combination of sales of our unique kitchen appliance and ad sales from major food and beverage companies. Detailed business plans and forecasts are available. If interested, please call Rick at 440-821-5322 to learn more.
Crain’s Executive Recruiter Vice President of MSO Operations We are a rapidly growing MSO serving multiple regions and our main office is in the Cleveland area. Reporting to the CEO, the VP of MSO Operations will oversee the continued development and implementation of short and long term operational plans, and aligns regional goals with company-wide objectives. The VP will manage team performance, financial budgets and departmental contribution levels within the MSO. You will play an active role in envisioning and implementing EMR/revenue cycle implementation strategies, assuring high levels of project management effectiveness and providing outstanding customer satisfaction. You will also be responsible for and inspiring excellent associate performance that aligns with our customer oriented goals and values. Significant related experience in healthcare is required. Qualified candidates should submit resumes, salary requirements and references to: medicalpresentations@roadrunner.com
Director of IT (Healthcare) The Director of IT will be responsible for leading the efforts at the Managed Services Organization (MSO) to ensure client satisfaction with the practice management and electronic medical records systems. The position manages the Service Line IT vendor relationships including software, services and hardware contracts and service level agreements. Strong project management skills, budgeting and team management is required. Candidates must be creative and follow through in a timely manner. The position ensures appropriate implementation methodologies and support strategies for these applications to effectively enhance the strategic posture of the MSO. This position reports to the company Vice President of Operations and the CEO. Qualified candidates should send a resume, cover letter, salary requirements via email to medicalpresentations@roadrunner.com.
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AUGUST 15 - 21, 2011
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
19
THEINSIDER
THEWEEK AUGUST 8 - 14 The big story: Ohio’s higher education czar, Jim Petro, released a proposal he said would help free the state’s public universities of swathes of red tape, though the schools in exchange may need to forego as much as 20% of their state support, which then would be pumped into a state-run scholarship fund. The proposal, which is designed to be implemented in two phases, would create so-called “enterprise universities,” often dubbed “charter universities.” The proposal now heads to the state Legislature for approval. Read the proposal at tinyurl.com/4xdzzcc.
On frozen pond:
The Cleveland Indians confirmed that a college hockey showdown between Ohio State University and the University of Michigan will take place next Jan. 15 at Progressive Field as the culminating event of Snow Days, the team’s package of winter entertainment attractions staged at the ballpark. The meeting on the ice between Ohio State and Michigan is advertised by the Indians as the first outdoor college hockey game in Ohio. The Indians are calling the game “The Frozen Diamond Faceoff.” It will take place on a regulation-size skating rink that would be built on the infield of Progressive Field.
Space exploration: Cuyahoga County’s new charter government is tackling a thorny issue left over from the prior county commission system by hiring Allegro Realty Advisors Ltd. to conduct a comprehensive study of the county’s space needs and to develop a plan for the future. The county employs about 8,000 people and owns or leases space at about 50 different locations countywide. County offices are spread throughout downtown Cleveland.
Ready to roll: The largest private component in downtown Kent’s massive rejuvenation plan formally kicked off construction. Fairmount Properties of Cleveland and its partners joined with city of Kent and Kent State University officials to break ground for the $27 million, mixeduse portion of a $100 million update of downtown Kent. The mixed-use project has been in the planning stages for more than three years. The 185,000-square-foot development includes previously announced new offices for corporate units of Davey Tree Expert Co. of Kent and Ametek Technical & Industrial Products Co., headquartered in Berwyn, Pa. Not so hot: Operations at Phoenix Coffee’s café on West Ninth Street in downtown Cleveland are about to grind to a halt. The company announced on its website that it will close the store later this month. Its last day of operation will be Wednesday, Aug. 24. In a letter posted on the site to “Phoenix customers and fans,” Sarah Wilson-Jones, the company’s CEO and “superbarista,” wrote that “our West 9th café has not yet been able to operate at a profit, and 12 months of astronomically high coffee prices have made it unfeasible for us to continue to invest in the cafe.” This and that: U-Store-It Trust of Wayne, Pa., said it sold 18 self-storage warehouses in Cleveland, Canton and Indianapolis for $43.5 million. The real estate investment trust, formerly based in Cleveland, said it sold all its properties in Canton and reduced its Northeast Ohio portfolio outside Canton by 30% in terms of square footage. … Associated Estates Realty Corp. acquired a 250-unit apartment complex in Fairfax, Va. The real estate investment trust that specializes in apartment properties did not disclose the purchase price, but said it has renamed the property Dwell Vienna Metro. It was built in 2008.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Suing the hand that once fed him ■ The former general counsel for Lubrizol Corp. is suing the company he spent nearly two decades representing. Joseph W. Bauer, who retired from Lubrizol last Jan. 3, has sued the Wickliffe specialty chemicals company for $75,000, claiming it refused him severance and benefits to which he says he’s entitled in light of the pending sale of Lubrizol to Warren Buffett’s Berkshire Hathaway Inc. According to Mr. Bauer’s lawsuit filed Aug. 5 in U.S. District Court in Cleveland, his employment agreement states that the termination of an executive after the commencement of any discussion with a third person that results in a change in control would be deemed to be a termination after a change in control. According to the lawsuit, on or before Dec. 17, 2010, a discussion occurred between Lubrizol chairman, CEO and president James Hambrick and an investment banker acting as an intermediary between Lubrizol and Berkshire Hathaway, and that discussion commenced a process that led to the sale of Lubrizol. Thus, Mr. Bauer argues that his Jan. 3 retirement “must be treated as if it occurred after a change in control for purposes of determining his rights, benefits and severance payments.” However, Lubrizol’s May 5 proxy statement explicitly repudiated any obligations to Mr. Bauer by stating that he did not have a change-in-control agreement.
WHAT’S NEW
According to his lawsuit, Mr. Bauer was a Lubrizol employee for more than 25 years and had served as vice president and general counsel since 1992. Emails sent to Mr. Bauer’s attorneys were not returned last week. A Lubrizol spokeswoman said the company doesn’t comment on pending litigation. — Michelle Park
The name isn’t the same, and that’s good ■ The medical school in Rootstown formerly known as NEOUCOM (or if you can stumble through it, the Northeastern Ohio Universities Colleges of Medicine and Pharmacy) officially is putting its old name to rest. The school — now known as (the more palatable) Northeast Ohio Medical University — will unveil its new signage and branding campaign at an event on campus this morning, Aug. 15. The university’s new logo dons a blue and gray flame above a book, which, according to the university, reflects “the idea that knowledge is power.” As for the colors, they “bring through the tradition of the existing look and feel of the university.” Today’s event caps a lengthy process for a name change that required the approval of the state Legislature and the governor, as well as an extensive branding review. Besides changing the signage campuswide, the university also will launch a new website. Employees can pick up new business cards and letterhead, but are encouraged to use their old materials for inner-
office purposes. — Timothy Magaw
Why type when you can talk? ■ Pecking away at a keyboard to input data into a patient’s electronic medical record is a time-consuming chore, some doctors say, and doesn’t lend itself to the efficient flow of patients. So, dozens of doctors at MetroHealth have embraced new voice recognition software the hospital system is installing as part of its electronic medical records system. What started as a pilot project a year ago with about 10 doctors now is used by about 100 physicians throughout the system, said Dr. David Kaelber, chief informatics officer. Though MetroHealth doesn’t have quantitative data about the system’s success, Dr. Kaelber said doctors using the software believe it has sliced in half the time they spend documenting patient data. Dr. Kaelber said the voice recognition technology — dubbed Dragon — is part of a suite of tools the system recently installed into its electronic medical records, or EMR, system to simplify the often-confusing system that worked more as a billing and compliance tool than one to facilitate patient care. “The problem that needed to be fixed is how do you make the EMR a tool for improving quality and efficiency of patient care,” Dr. Kaelber said. “One of the keys was overcoming the obstacles of a keyboard, which was the bottleneck for getting information from doctor’s head into the medical record.” — Timothy Magaw
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com
such as OverDrive Inc. in Valley View should be good with words, so a recent story from EarlyWord.com came as no surprise. The website reported that the big question for librarians at OverDrive’s recently completed Digipalooza was when Kindle users will be able to download library mate■ Fractional ownership of private jets and use rial via OverDrive. of so-called “jet cards” is on the rise as “Throughout the conference, CEO Steve commercial travel frustrates fliers, and Potash, looking like a kid with a Flight Options LLC in Richmond delicious secret, kept saying ‘soon’ Heights is one of the beneficiaand ‘I’m not allowed to announce ries, according to Bloomberg. a date yet,’” EarlyWord.com re“Fractional sales increased ported. But during the final almost sixfold in the first quarter session, he delivered a hint by compared with a year earlier at summarizing the main points of Flight Options, while sales of jet his “Crystal Ball Report”: cards, a prepaid lease of flight ■ Streamlining (both downtime in 25-hour segments, rose loading and ordering) 46%,” the news service reported. ■ Explosion (we have gone Two other big players in the fracfrom two reading devices to 85 tional jet business — NetJets Inc. FILE PHOTO/ and more are coming) and Flexjet — reported similar MARC GOLUB ■ Premium (the library catalog increases. “To some people it’s worth it Spelling bee champ as the most premium, valueadded site on the web) to avoid all the security lines and Steve Potash ■ Traffic (enormous growth the inconvenience because aircoming by year’s end) line travel right now is this commodity,” said Vitaly Guzhva, associate professor of finance at Embry-Riddle Aeronautical University in Daytona Beach, Fla. For travelers looking for less commitment ■ A University Hospitals Case Medical Center than partial ownership and jet access for one doctor popped up in a Money magazine story year, a jet card is a better choice, said Mike offering five things you need to know before Silvestro, CEO of Flight Options, which has you have a major joint replacement surgery. more than 1,300 customers. Dr. Matthew Kraay, director of joint recon“Flight Options, NetJets and Flexjet all struction and arthritis surgery at UH Case offer jet cards,” according to Bloomberg. “The Medical Center in Cleveland, appears in the purchase price for 25 flight hours ranges section that says “experience is paramount.” from $100,000 to about $300,000 depending Money reported that studies show that on the type of jet, and jet-card users also patients of surgeons who do lots of hip and have to pay hourly flight rates for fuel.” knee replacements tend to have fewer complications. Dr. Kraay’s advice is to “choose a doctor who does at least 100 annually and has completed a joint-replacement fellowship.” ■ The CEO of a major digital book distributor
Do the math: Fractional jet ownership is surging
COMPANY: Audio-Technica, Stow PRODUCTS: Player’s Line headphones The company says its new headphones are designed for people who like to run, jog, exercise and work out in the gym or at home. Player’s Line models include the ATH-CKP300 Sport Fit In-ear Headphones (suggested retail price: $39.95) and the ATH-CP300 Sport Fit Ear-bud Headphones (SRP: $34.95). Audio-Technica says its ATH-CKP300 in-ear headphones have a sweat-proof design with a high moisture protection grade, and an angled housing that keeps the cord out of the way during workouts. The headphones are available in blue, red, white, yellow and black, and they include a two-foot extension cord, a cable clip and earclips in four sizes: XS, S, M and L. The headphones’ 10.7-millimeter drivers “provide wide-range frequency response and clear, immersive sound with powerful bass, a detailed midrange and extended highs,” Audio-Technica says. The Player’s Line ATH-CP300 ear-bud headphones have ear clips that go around the ear to provide a secure fit even during strenuous exercise. The headphones come in white, pink, black or yellow. For information, visit www.ShopAudio Technica.com.
Here’s a way to get hip to your medical future
OverDrive Inc. CEO spells it out for us
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©2011 Porsche Cars North America, Inc. Porsche recommends seat belt usage and observance of all traffic laws at all times. Vehicle shown includes optional equipment available at additional cost.
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